A-Mark Precious Metals, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

Related Party Transactions

6 Months Ended

Dec. 31, 2016

RELATED PARTY TRANSACTIONS

Sales and Purchases Made to Affiliated Companies

During the three and six months ended December 31, 2016 and 2015, the Company made sales and purchases to various companies, which have been deemed to be related parties.



in thousands
	Three Months Ended								Six Months Ended
	December 31, 2016				December 31, 2015				December 31, 2016				December 31, 2015
	Sales		Purchases		Sales		Purchases		Sales		Purchases		Sales		Purchases
Former Parent	$	14,999	$	12,137	$	8,418	$	3,564	$	21,667	$	23,336	$	18,900	$	30,568
Equity method investee	137,460		408		157,087		1,114		266,536		497		403,956		4,425
Silvertowne	12,030		130		582		13,589		18,819		2,742		3,691		24,572
	$	164,489	$	12,675	$	166,087	$	18,267	$	307,022	$	26,575	$	426,547	$	59,565

Balances with Affiliated Companies

As of December 31, 2016 and June 30, 2016, the Company had related party receivables and payables balances as set forth below:



in thousands
	December 31, 2016					June 30, 2016
	Receivables		Payable			Receivables		Payable
Former Parent	$	3,017	$	—		$	1,913	$	138
Equity method investee	—		884			2,396		—
Silvertowne	—		2,107		⁽¹⁾	—		282
	$	3,017	$	2,991		$	4,309	$	420

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1) Includes a short-term earn-out liability of $0.4 million (recorded in accrued liabilities) and a payable of $0.5 million (recorded as short-term notes payable) , and a long-term earn-out liability $1.1 million (recorded in other long-term liabilities).

Secured Loans Made to Affiliated Companies

On July 23, 2015, CFC entered into a loan agreement with Former Parent providing a secured line of credit, bearing interest at a competitive rate per annum. The loan is secured by numismatic and semi-numismatic products. As of December 31, 2016 and June 30, 2016, the aggregate carrying value of this loan was $2.8 million and $1.4 million, respectively, and is shown on the condensed consolidated balance sheets as a component "secured loans receivable" (see Note 5).

Interest Income Earned from Affiliated Companies

During the three and six months ended December 31, 2016 and 2015, the Company earned interest income related to loans made to Former Parent and related to financing products sold to affiliated companies, as set forth below:



in thousands
	Three Months Ended				Six Months Ended
	December 31, 2016		December 31, 2015		December 31, 2016		December 31, 2015
Interest income from loan receivables	$	22	$	11	$	32	$	32
Interest income from finance products	687		654		1,355		1,148
	$	709	$	665	$	1,387	$	1,180

Other Income Earned from Equity Method Investee

During the three months ended December 31, 2016 and 2015, the Company recorded its proportional share of its equity method investee's net income as other income that total $93,000 and $94,000, respectively. During the six months ended December 31, 2016 and 2015, the Company recorded its proportional share of its equity method investee's net income as other income that total $79,000 and $506,000, respectively. As of December 31, 2016 and June 30, 2016, the carrying balance of the equity method investment was $7.5 million and $7.4 million, respectively.

Income Tax Sharing Obligations

The amount receivable under the Company's income tax sharing obligation due from our Former Parent totaled $0.0 million, and $0.2 million as of December 31, 2016 and June 30, 2016 respectively, and is shown on the face of the condensed consolidated balance sheets as "income taxes receivable from Former Parent" (see Note 12.)

Transaction with Affiliate of Board Member

In February 2015, A-M Global Logistics, LLC ("Logistics"), a wholly owned subsidiary of the Company that was formed to operate the Company's logistics fulfillment center in Las Vegas, Nevada, entered into various agreements with W. A. Richardson Builders, LLC ("WAR"), for the buildout of and improvements to the Las Vegas premises. The spouse of the Chairman of the Company's Audit Committee, Ellis Landau, is an owner and a managing member of WAR. The agreements were amended in January 2016. The amounts involved under the WAR contract, as amended, were approximately $1.5 million. WAR is entitled to a fee equal to 5.0% of the contract work.