Related Party Transactions
|3 Months Ended|
Sep. 30, 2019
|Related Party Transactions [Abstract]|
|Related Party Transactions||
RELATED PARTY TRANSACTIONS
Related parties are entities that the Company controls or has the ability to significantly influence. Related parties also include persons who are affiliated with related entities or the Company that are in a position to influence corporate decisions (such as owners, executives, board members and their families). In the normal course of business, we enter into transactions with our related parties. Below is a list of related parties with whom we have had significant transactions during the comparable periods:
Our related party transactions include (i) sales and purchases of precious metals (ii) financing activity (iii) repurchase arrangements, and (iv) hedging transactions.
Below is a summary of our related party transactions. Reported transactions from the comparable prior period have been updated, as needed, to include the balances and activity according to our current list of related parties.
Balances with Related Parties
As of September 30, 2019 and June 30, 2019, the Company had related party receivables and payables balances as set forth below:
Secured Lines of Credit
On September 19, 2017, CFC entered into a loan agreement with Stack's Bowers Galleries providing a secured line of credit, bearing interest at a competitive rate per annum, with a maximum borrowing line (subject to temporary increases) of $5.3 million. The loan is secured by precious metals and numismatic products. As of September 30, 2019 and June 30, 2019, the outstanding principal balance of this loan was $4.1 million and $6.4 million, respectively.
On March 1, 2018, CFC entered into a loan agreement with Stack's Bowers Galleries providing a secured line of credit on the wholesale value (i.e., the excess over the spot value of the metal), of numismatic products bearing interest at a competitive rate per annum, with a maximum borrowing line (subject to temporary increases) of $10.0 million. In addition to the annual rate of interest, the Company is entitled to receive a participation interest equal to 10% of the net profits realized by Stack's Bowers Galleries on the ultimate sale of the products. As of September 30, 2019 and June 30, 2019, the outstanding principal balance this loan was $4.8 million and $7.5 million, respectively.
Long Term Debt Obligation
On December 7, 2018, the Company repaid the $7.5 million principal amount outstanding under the Goldline Credit Facility to the Goldline Lenders in full. Under the terms of the principal repayment, the applicable credit and related agreements have been terminated and none of the parties thereto has any further rights or obligations thereunder. (See Note 14.)
Activity with Related Parties
Sales and Purchases
During the three months ended September 30, 2019 and 2018, the Company made sales and purchases to various companies, which have been deemed to be related parties, as follows:
During the three months ended September 30, 2019 and 2018, the Company earned interest income related to loans made to Stack's Bowers Galleries and to financing arrangements (including repurchase agreements) with affiliated companies, as set forth below:
During the three months ended September 30, 2019 and 2018, the Company incurred interest expense (including debt amortization costs) related to the debt payable to the Goldline Lenders that totaled $0.0 million and $0.2 million, respectively.
During the three months ended September 30, 2019 and 2018, the Company recorded its proportional share of its equity method investee's net income as other income that totaled $11,000 and $248,000, respectively. As of September 30, 2019 and June 30, 2019, the aggregate carrying balance of the equity method investments was $11.9 million and $11.9 million, respectively.
During the three months ended September 30, 2019 and 2018, the Company earned profit sharing income related to one of CFC's secured lending agreements with Stack's Bowers Galleries that totaled $42,000 and $0, respectively.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef