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Note 14 - Related Party Transactions
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12 Months Ended |
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Aug. 31, 2012
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| Related Party Transactions Disclosure [Text Block] |
NOTE
14: RELATED
PARTY TRANSACTIONS
On
December 16, 2009, the Company entered into a Participation
Agreement with the District, whereby the Company agreed to
provide funding to the District in connection with the
District joining the South Metro Water Supply Authority
(“SMWSA”). During the year ended
August 31, 2012, the Company provided funding of
$115,500. During the year ended August 31, 2011,
the Company provided funding of
$25,000. The $115,500 and $25,000 of
funding were expensed in the general and administrative
expenses lines in the accompanying statements of operations
for the years ended August 31, 2012, and 2011,
respectively.
The
Company incurred an expense related to HP A&M
in the amount of $8,100, $7,100, and $16,700
during the fiscal years ended August 31, 2012, 2011 and 2010,
respectively. This is predominately due to the
Company paying 50% of the salary and expenses for work
performed by an HP A&M employee on behalf of the Company
related to operations of the agricultural property owned by
the Company in the Arkansas River Valley. The
amount paid to HP A&M in fiscal 2012 versus fiscal 2011
decreased $7,000 and the amount paid to HP A&M in fiscal
2011 versus fiscal 2010 decreased $9,600, due mainly to the
HP A&M employee becoming an employee of the Company on
January 1, 2010, and on that date HP A&M began
reimbursing the Company for half of said employee’s
salary and expenses. Effective as of the first
quarter 2013, HP A&M will no longer be considered a
related party due to the foreclosure sale of the Pledged
Shares. See additional information regarding the
HP A&M default and sale of the Pledged Shares in Note
15 – Subsequent
Events.
In
1995, the Company extended a loan to the District, a related
party. The loan provided for borrowings of up to $250,000, is
unsecured, bears interest based on the prevailing prime rate
plus 2% (5.25% at August 31, 2012) and matures on December
31, 2012. The $543,900 balance of the note receivable at
August 31, 2012 includes borrowings of $229,300 and accrued
interest of $314,600. The $531,900 balance of the
note receivable at August 31, 2011 includes borrowings of
$229,300 and accrued interest of $302,600. The Company
extended the due date to December 31, 2013, and accordingly
the note has been classified as non-current.
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