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14. RELATED PARTY TRANSACTIONS.
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12 Months Ended | ||
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Dec. 31, 2011
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| Related Party Transactions Disclosure [Text Block] |
Preferred
Dividends – The Company had accrued and unpaid
dividends in respect of its Series B Preferred Stock of
$7,315,000 and $6,050,000 as of December 31, 2011 and 2010,
respectively.
Notes
Payable to Related Parties – The Company had
notes payable to its Chairman of the Board and its Chief
Executive Officer totaling $750,000 and $1,250,000 as of
December 31, 2011 and 2010, respectively. On November 30,
2011, the Company paid $500,000 in principal under these
notes. On October 29, 2010, the Company paid all accrued
interest and $750,000 in principal under these notes. On
November 5, 2010, the Company entered into amendments to
these notes, extending the maturity date to March 31, 2012.
On March 7, 2012, the maturity date was further extended to
March 31, 2013.
Notes
Payable to Related Party – In November 2008, the
Company restructured certain construction related loans of
$30,000,000 in the aggregate with Lyles United by paying all
accrued and unpaid interest thereon and issuing an amended
and restated promissory note in the principal amount of
$30,000,000. The amended and restated promissory note was due
March 15, 2009 and accrued interest at the Prime Rate of
interest, plus 3.00%.
In
October 2008, upon completion of the Stockton facility, the
Company converted final unpaid construction costs to an
unsecured note payable. The note payable was between the
Company and Lyles Mechanical Co. in the principal amount of
$1,500,000 and was due with accrued interest on March 31,
2009. Interest accrued at the Prime Rate of interest, plus
2.00%.
In
February 2009, the Company notified Lyles United and Lyles
Mechanical Co. (collectively, “Lyles”) that it
would not be able to pay off its notes due March 15 and March
31, 2009 and as a result, entered into a forbearance
agreement. Under the terms of the forbearance agreement,
Lyles agreed to forbear from exercising rights and remedies
against the Company through April 30, 2009. These
forbearances were not extended.
In
March 2010, the Company announced agreements designed to
satisfy its indebtedness to Lyles. Socius CG II, Ltd.
(“Socius”) entered into purchase agreements with
Lyles under which Socius would purchase claims in respect of
the Company’s indebtedness in tranches of up to
$5,000,000, which claims Socius would then settle in exchange
for shares of the Company’s common stock. Each tranche
was to be settled in exchange for the Company’s common
stock valued at a 20% discount to the volume weighted average
price of the Company’s common stock over a
predetermined trading period, which ranged from five to 20
trading days, immediately following the date on which the
shares were first issued to Socius.
Under
this arrangement, the Company issued shares to Socius which
settled outstanding debt previously owed to Lyles in four
successive transactions. For the year ended December 31,
2010, the Company issued an aggregate of 3,441,000 shares
with an aggregate fair value of $21,159,000 in exchange for
$19,000,000 in debt extinguishment, resulting in an aggregate
loss of $2,159,000. The Company determined fair value based
on the closing price of its shares on the last day of the
applicable trading period, which was the date the net shares
to be issued were determinable by the Company.
On
October 6, 2010, the Company paid in full all remaining
principal, accrued interest and fees owed to Lyles using the
proceeds from the sale of its interest in Front Range and the
issuance and sale of the convertible notes and 2010
Warrants.
Consulting
Agreement – Ryan Turner – In
November 2009, the Company entered into a consulting
agreement with Ryan W. Turner, who is the son-in-law of the
Company’s Chairman of the Board, at $20,000 per month
for consulting services relating to the Company’s
restructuring efforts. The Company paid Mr. Turner an
aggregate of $23,100 for the year ended December 31, 2010. As
of December 31, 2010, the Company had no outstanding accounts
payable to Mr. Turner. The Company’s consulting
relationship with Mr. Turner was terminated in connection
with his appointment to the Company’s Board of
Directors in February 2010. Mr. Turner did not seek
reelection in 2011 and is no longer a member of the
Company’s Board of Directors.
Consulting
Agreement – Michael Kandris – On
December 30, 2011, the Company entered into an Independent
Contractor Services Agreement with Michael Kandris, a member
of the Company’s Board of Directors, appointing him as
a consultant to the Company with supervisory responsibility
for ethanol plant operations, under the direction of the
Company’s Chief Executive Officer. The agreement became
effective as of January 1, 2012. Mr.
Kandris is to receive compensation as set forth in each
statement of work. The current statement of work provides
that Mr. Kandris shall receive bi-weekly payments in the
amount of approximately $8,500. The agreement has an initial
term of one year, and may be renewed by mutual agreement for
successive one-year terms.
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