GFSI » Topics » 16. RELATED PARTY TRANSACTIONS

These excerpts taken from the GFSI 10-K filed Mar 31, 2009.

19. RELATED PARTY TRANSACTIONS

        In conjunction with the acquisition of GTI discussed in Note 1, the Company issued two notes payable to the former President of GTI, as a portion of the consideration paid to him for executing an employment agreement with the Company. The notes had original principal balances of $850,000 (due June 15, 2006) and $150,000 (due April 30, 2007), were unsecured and carried interest at the prime rate as published in The Wall Street Journal (8.25% at April 30, 2007). On June 15, 2006, $350,000 of the $850,000 note was paid and the remaining $500,000 was paid on July 15, 2006. The remaining

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Table of Contents


GOLDLEAF FINANCIAL SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

19. RELATED PARTY TRANSACTIONS (Continued)


$150,000 was paid to the former President of GTI on April 30, 2007. These notes were included as a component of the GTI purchase price.

        The Company executed convertible notes of $7.0 million delivered to the Alogent shareholders on January 17, 2008, having a 24 month term and a 7.0% annual interest rate payable quarterly in arrears. The principal under the notes is convertible, at the option of the holder, into shares of our common stock at a conversion price of $4.50 per share.

19. RELATED PARTY TRANSACTIONS




        In conjunction with the acquisition of GTI discussed in Note 1, the Company issued two notes payable to the former President of GTI, as a portion of the consideration paid to him
for executing an employment agreement with the Company. The notes had original principal balances of $850,000 (due June 15, 2006) and $150,000 (due April 30, 2007), were unsecured and
carried interest at the prime rate as published in The Wall Street Journal (8.25% at April 30, 2007). On June 15, 2006, $350,000 of the $850,000 note was paid and the remaining $500,000
was paid on July 15, 2006. The remaining



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HREF="#bg75901a_main_toc">Table of Contents





GOLDLEAF FINANCIAL SOLUTIONS, INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



19. RELATED PARTY TRANSACTIONS (Continued)






$150,000
was paid to the former President of GTI on April 30, 2007. These notes were included as a component of the GTI purchase price.



        The
Company executed convertible notes of $7.0 million delivered to the Alogent shareholders on January 17, 2008, having a 24 month term and a 7.0% annual interest
rate payable quarterly in arrears. The principal under the notes is convertible, at the option of the holder, into shares of our common stock at a conversion price of $4.50 per share.



This excerpt taken from the GFSI 10-K filed Mar 29, 2007.

21.     RELATED PARTY TRANSACTIONS

          During the years ended December 31, 2006, 2005 and 2004, the Company paid fees of approximately $965,000, $25,000, and $15,000, respectively, for legal services to a law firm in which a former director and shareholder of the Company is a partner.  Additionally, this former director held a material membership interest in Captiva prior to the Company’s acquisition of Captiva.  Because of this ownership interest, the acquisition of Captiva required a shareholder vote, which was held on December 9, 2005.  The former director received approximately $1.1 million cash, 57,454 common shares of the Company’s common stock and 134,000 common stock options with a $6.60 exercise price as his portion of the total consideration paid for Captiva.

          During the year ended December 31, 2004, the Company received proceeds of $266,000 for the repayment of notes receivable owed to the Company by two former officers of Towne Services.  The Company had previously written these notes off as uncollectible, therefore collection of these notes resulted in a gain.  This gain was recorded in 2004 as a non-operating gain in the accompanying consolidated statement of income.

          In conjunction with the acquisition of GTI discussed in Note 3, the Company issued two notes payable to Paul McCulloch, the President of GTI, as a portion of the consideration paid to him for executing an employment agreement with the Company.  The notes had original principal balances of $850,000 (due June 15, 2006) and $150,000 (due April 30, 2007), are unsecured and carry interest at prime rate as published in The Wall Street Journal (8.25% at June 30, 2006).  On June 15, 2006, $350,000 of the $850,000 note was paid and the remaining $500,000 was paid on July 15, 2006.  These notes were classified as additional purchase price.

This excerpt taken from the GFSI 10-K filed Mar 23, 2006.

20.    RELATED PARTY TRANSACTIONS

          During the years ended December 31, 2005, 2004 and 2003, the Company paid fees of approximately $0, $15,000, and $25,000, respectively, for legal services to a law firm in which a former director and shareholder of the Company is a partner.  Additionally, this former director held a material membership interest in Captiva prior to the Company’s acquisition of Captiva.  Because of this ownership interest, the acquisition of Captiva required a shareholder vote, which was held on December 9, 2005.  The former director received approximately $1.1 million cash, 287,272 common shares of the Company’s common stock and 670,000 common stock options with a $1.32 exercise price as his portion of the total consideration paid for Captiva.

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          During the year ended December 31, 2004, the Company received proceeds of $266,000 for the repayment of notes receivable owed to the Company by two former officers of Towne Services.  The Company had previously written these notes off as uncollectible, therefore collection of these notes resulted in a gain.  This gain was recorded in 2004 as a non-operating gain in the accompanying consolidated statement of income.

This excerpt taken from the GFSI DEF 14A filed Nov 17, 2005.

16.     RELATED PARTY TRANSACTIONS

          During the years ended December 31, 2004, 2003 and 2002, the company paid fees of approximately $15,000, $25,000 and $105,000, respectively for legal services to a law firm in which a director and shareholder of the company is a partner.

This excerpt taken from the GFSI 10-K filed Mar 18, 2005.

16.     RELATED PARTY TRANSACTIONS

          During the years ended December 31, 2004, 2003 and 2002, the Company paid fees of approximately $15,000, $25,000 and $105,000, respectively for legal services to a law firm in which a director and shareholder of the Company is a partner.

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