NOTE 16.  RELATED PARTY TRANSACTIONS



5% Unsecured Subordinated Notes due May 28, 2017



As part of the consideration payable to the stockholders of Gregory when the Company acquired Gregory, the Company issued 5% Unsecured Subordinated Notes due May 28, 2017 (the “Merger Consideration Subordinated Notes”) to members of the Board of Directors and five former employees of Gregory.  Given the below market interest rate for comparably secured notes and the relative illiquidity of the Merger Consideration Subordinated Notes, we discounted the notes at the date of acquisition.  We were accreting the discount on the Merger Consideration Subordinated Notes to interest expense using the effective interest method over the term of the Merger Consideration Subordinated Notes.  In February 2017, the Board of Directors approved the repayment of the Merger Consideration Subordinated Notes.  On February 13, 2017, the entire principal amounts and all accrued interest amounts were paid in full, at which time, the note discount of $814 was expensed and recognized as interest expense during the three months ended March 31, 2017.