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, 2016

RELATED PARTY TRANSACTIONS

Sales and Purchases Made to Affiliated Companies

During the years ended June 30, 2016 and 2015, the Company made sales and purchases to various companies, which have been deemed to be related parties.



in thousands
Years Ended June 30,	2016				2015
	Sales		Purchases		Sales		Purchases
Former Parent	$	30,544	$	42,264	$	7,521	$	9,201
Equity method investee	717,309		6,867		—		—
	$	747,853	$	49,131	$	7,521	$	9,201

Balances with Affiliated Companies

As of June 30, 2016 and June 30, 2015, the Company had related party receivables and payables balances as set forth below:



in thousands
	June 30, 2016				June 30, 2015
	Receivables		Payable		Receivables		Payable
Former Parent	$	1,913	$	138	$	1,097	$	10
Equity method investee	$	2,396	$	—	$	279	$	—
	$	4,309	$	138	$	1,376	$	10

Secured Loans Made to Affiliated Companies

On October 9, 2014, CFC entered into a loan agreement with Former Parent providing for a secured line of credit in the maximum principal amount of up to $16.0 million, bearing interest at a competitive rate per annum. Advances under the line of credit were secured by numismatic and semi-numismatic products. This secured loan was paid off in full, plus accrued interest, on April 15, 2015. As of June 30, 2016 and June 30, 2015, the aggregate carrying value of this loan was $0.0 million.

On July 23, 2015, CFC entered into a loan agreement with Former Parent providing a secured line of credit in the maximum principal amount of up to $2.5 million, bearing interest at a competitive rate per annum. The loan is secured by numismatic and semi-numismatic products. As of June 30, 2016 and June 30, 2015, the aggregate carrying value of this loan was $1.4 million and $0.0 million, respectively.

Interest Income Earned from Affiliated Companies

During the years ended June 30, 2016 and 2015, the Company earned interest income related to loans made to Former Parent and related to financing products sold to Former Parent and to the equity method investee, as set forth below:



in thousands
Years Ended June 30,	2016		2015
Interest income from loan receivables	$	65	$	229
Interest income from finance products	2,302		890
	$	2,367	$	1,119

Other Income Earned from Equity Method Investee

During the years ended June 30, 2016 and 2015, the Company recorded its proportional share of its equity method investee's net income as other income that total $0.7 million and $0, respectively. As of June 30, 2016 and June 30, 2015 the carrying balance of the equity method investment was $7.4 million and $2.0 million, respectively.

Secondment Agreement Fees and Reimbursements

In connection with the Distribution, SGI and the Company entered into a secondment agreement (the "Secondment Agreement"). Under the terms of the Secondment Agreement, A-Mark agreed to make Gregory N. Roberts, our Chief Executive Officer, and Carol Meltzer, our Executive Vice President, General Counsel and Secretary, available to SGI for the performance of specified management and professional services following the spinoff in exchange for an annual secondment fee of $150,000 and reimbursement of certain bonus payments. The Secondment Agreement terminated on June 30, 2016.

The Company recorded the accrual of secondment fees as a reduction to selling, general and administration expense. During the years ended June 30, 2016 and 2015, the Company recognized approximately $150,000 and $150,000, respectively, of secondment fees. As of June 30, 2016 and June 30, 2015 the outstanding balance of secondment fees due from SGI was $0 and $0, respectively.

Income Tax Sharing Obligations

The amount receivable under the Company's income tax sharing obligation due from our Former Parent totaled $0.2 million, and $1.1 million as of June 30, 2016 and June 30, 2015 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 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.

Royalties to Former Owner

As part of the sales agreement dated July 1, 2005, a former owner of the Company receives a portion of the finance income earned with a specific customer through July 2015. The Company incurred $21,000 and $254,000 in selling, general and administrative expenses (royalty expense) during the years ended June 30, 2016 and 2015, respectively. The total amount due to the former owner of $0 and $254,000 are included in accrued liabilities as of June 30, 2016 and June 30, 2015, respectively.