Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

v3.8.0.1
Related Party Transactions
 3 Months Ended
Sep. 30, 2017
Related Party Transactions [Abstract]  
Related Party Transactions
RELATED PARTY TRANSACTIONS
Sales and Purchases Made to Affiliated Companies
During the three months ended September 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
 
 
 
 
 
Three Months Ended September 30,
 
2017
 
2016
 
 
Sales
 
Purchases
 
Sales
 
Purchases
 
Former Parent
 
$
4,432

 
$
2,389

 
$
6,668

 
$
11,199

 
Equity method investee
 
81,971

 
358

 
129,076

 
89

 
SilverTowne
 
3,150

 
99

 
6,789

 
2,612

 
 
 
$
89,553

 
$
2,846

 
$
142,533

 
$
13,900

 
Balances with Affiliated Companies or Persons
As of September 30, 2017 and June 30, 2017, the Company had related party receivables and payables balances as set forth below:
 in thousands
 
 
 
 
 
 
 
 
 
 
 
September 30, 2017
 
June 30, 2017
 
 
 
Receivables
 
Payables
 
Receivables
 
Payables
 
Former Parent
 
$
2,854

(1) 
$
—

 
$
—

 
$
27

 
Equity method investee
 
2,373

(2) 
—

 
—

 
558

 
SilverTowne
 
—

 
851

(3) 
—

 
1,768

 
Goldline Lenders
 
—

 
8,092

(4) 
—

 
—

 
 
 
$
5,227

 
$
8,943

 
—

 
$
2,353

 
 
 
 
 
 
 
 
 
 
 
_________________________________
 
1) Balance includes a secured line of credit with a balance of $2.2 million.
 
2) Balance represents mostly open trade receivables.
 
3) Balance includes: (a) a short-term earn-out liability of $0.5 million (included as a component of the accrued liabilities balance), (b) a trade receivables of $0.3 million (shown as a component of receivables), and (c) a contingent earn-out liability of $0.5 million (shown as a component of other long-term liabilities).
 
4) Balance includes: the face value the Goldline Credit Facility ($7.5 million), the associated estimated debt funding fees payable ($0.5 million) and accrued interest ($0.1 million). The Goldline Credit facility and the debt funding fee is payable in August 2020.
 
 
 
 
 
 
 
 
 
 
 

Secured Loans Made to an Affiliated Company
On September 29, 2017, 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 September 30, 2017 and June 30, 2017, the aggregate carrying value of this loan was $2.2 million and $0.0 million, respectively, and is shown on the condensed consolidated balance sheets as a component of secured loans receivable (see Note 5).
Note payable to SilverTowne
On August 31, 2016, the Company signed a $500,000 promissory note with SilverTowne that was payable in one year related to our acquisition of AMST. This note was paid in full in August 2017.
Long Term Debt Obligations with Goldline Lenders
As of September 30, 2017, the carrying value of the long term debt obligation payable to Goldline Lenders totaled $6,818,000, and is shown in the condensed consolidated balance sheets as debt obligations (related party). The face value of this debt obligation is $7,500,000 and the related unamortized loan funding fee, a contra-liability, totaled $682,000 as of September 30, 2017 (see Note 14). The estimated loan funding fee payable to Goldline Lenders as of September 30, 2017 totaled $534,000 and is shown on the condensed consolidated balance sheets as component of other long-term liabilities.
Activity with Affiliated Companies or Persons
Interest Income Earned from Affiliated Companies
During the three months ended September 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
 
 
 
Three Months Ended September 30,
 
2017
 
2016
 
Interest income from secured loan receivables
 
$
2

 
$
10

 
Interest income from finance products
 
544

 
668

 
 
 
$
546

 
$
678

 
 
 
 
 
 
 

Interest Expense Incurred Related to Notes Payable and Long-Term Debt Obligation
During the three months ended September 30, 2017 and 2016, the Company incurred interest related to notes payable due to SilverTowne and a long-term debt payable to the Goldline Lenders, as set forth below:
in thousands
 
 
 
Three Months Ended September 30,
 
2017
 
2016
 
Interest expense incurred related to notes payable
 
$
2

 
$
10

 
Interest expense incurred related to long-term debt obligation
 
73

 
—

 
 
 
$
75

 
$
10

 
 
 
 
 
 
 

Other Income Earned from Equity Method Investee
During the three months ended September 30, 2017 and 2016, the Company recorded its proportional share of its equity method investee's net income (loss) as other income (expense) that total $57,000 and $(14,000), respectively. As of September 30, 2017 and June 30, 2017, the carrying balance of the equity method investment was $7.5 million and $7.5 million, respectively.