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

Annual report pursuant to Section 13 and 15(d)

Related Party Transactions

Related Party Transactions

12 Months Ended

Jun. 30, 2017

RELATED PARTY TRANSACTIONS

Sales and Purchases Made to Affiliated Companies

During the years ended June 30, 2017 and 2016, the Company made sales and purchases to various companies, which have been deemed to be related parties, as follows:



in thousands
Years Ended June 30,	2017				2016
	Sales		Purchases		Sales		Purchases
Former Parent	$	47,384	$	47,979	$	30,544	$	42,264
Equity method investee	477,477		2,979		717,309		6,867
SilverTowne	27,834		4,648		4,697		26,789
	$	552,695	$	55,606	$	752,550	$	75,920

Balances with Affiliated Companies

As of June 30, 2017 and June 30, 2016, the Company had related party receivables and payables balances as set forth below:



in thousands
	June 30, 2017					June 30, 2016
	Receivables		Payables			Receivables			Payables
Former Parent	$	—	$	27		$	1,775	⁽¹⁾	$	—
Equity method investee	—		558			2,396			—
SilverTowne	—		1,768		⁽²⁾	—			282
	$	—	$	2,353		$	4,171		$	282

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1) Balance includes a secured line of credit balance of $1.4 million.
2) Balance includes: (a) a short-term earn-out liability of $0.2 million (included as a component of the accrued liabilities balance), (b) a notes payable of $0.5 million (shown as notes payable - related party), and (c) a contingent earn-out liability of $1.1 million (shown as 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 June 30, 2017 and June 30, 2016, the aggregate carrying value of this loan was $0.0 million and $1.4 million, respectively, and is shown on the consolidated balance sheets as a component "secured loans receivable" (see Note 5).

Interest Income Earned from Affiliated Companies

During the years ended June 30, 2017 and 2016, 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
Years Ended June 30,	2017		2016
Interest income from loan receivables	$	171	$	65
Interest income from finance products	2,787		2,302
	$	2,958	$	2,367

Other Income Earned from Equity Method Investee

During the years ended June 30, 2017 and 2016, the Company recorded its proportional share of its equity method investee's net income as other income that total $94,000 and $701,000, respectively. As of June 30, 2017 and June 30, 2016, the carrying balance of the equity method investment was $7.5 million and $7.4 million, respectively.

Interest Expense Incurred to SilverTowne

During the years ended June 30, 2017 and 2016, the Company incurred interest expense of $3,000 and $0, respectively, related to its $0.5 million short-term note payable to SilverTowne, which is shown on the consolidated balance sheets as Note Payable - Related Party (see Note 1).

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 June 30, 2017 and June 30, 2016 respectively, and is shown on the face of the consolidated balance sheets as Income taxes receivable from Former Parent (see Note 12).

Transaction with Affiliate Board Member

In February 2015, Logistics entered into various agreements with W. A. Richardson Builders, LLC ("WAR"), as amended, for the buildout of and improvements to the Las Vegas premises. A principal of WAR, which acted as general contractor for the project, is William A. Richardson, who holds a 50% ownership interest in Silver Bow Ventures, LLC., a principal stockholder of the Company. In addition, the spouse of the Chairman of the Company’s Audit Committee is an owner and managing member of WAR. For the years ended June 30, 2017 and June 30, 2016, the Company paid $12,000 and $820,000, respectively, for the construction work under the agreements; WAR received a fee equal to 5% of such amounts.