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10. RELATED PARTY TRANSACTIONS
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6 Months Ended |
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Jun. 30, 2012
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| Notes to Financial Statements | |
| 10. RELATED PARTY TRANSACTIONS |
Preferred Dividends – The Company accrued and paid cash dividends in respect of its Series B Preferred Stock of $315,000 and $630,000 for the three and six months ended June 30, 2012, respectively, and accrued but did not pay cash dividends of $315,000 and $627,000 for the three and six months ended June 30, 2011. The Company had accrued and unpaid dividends in respect of its Series B Preferred Stock of $7,315,000 as of June 30, 2012 and December 31, 2011. In April 2012, the Company received a demand from three holders of its Series B Preferred Stock for payment in the aggregate amount of $2,436,700 of accrued and unpaid dividends. The Company does not currently have sufficient funds to pay the amount demanded. The Company is currently in discussions with all of the Series B Preferred stockholders to seek a resolution. Note Payable to Related Party – The Company had a note payable to its Chief Executive Officer totaling $750,000 as of June 30, 2012 and December 31, 2011. This note matures on March 31, 2013. 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. |