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Note 6 - Related Party Transactions
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3 Months Ended |
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Nov. 30, 2012
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| Related Party Transactions Disclosure [Text Block] |
NOTE
6 – 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 three months
ended November 30, 2012, the Company provided $1,000 of
funding to the District pursuant to the Participation
Agreement. During the three months ended
November 30, 2011, the Company provided $25,400 of funding
to the District pursuant to the Participation
Agreement. The $1,000 and $25,400 of funding
were expensed during the three months ended November 30,
2012, and 2011, respectively.
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 November 30, 2012)
and matures on December 31, 2013. The $546,900
balance of the note receivable at November 30, 2012,
includes borrowings of $229,300 and accrued interest of
$317,600. The $543,900 balance of the note
receivable at August 31, 2012, includes borrowings of
$229,300 and accrued interest of $314,600.
Foreclosure
Sale of Common Stock Pledged by HP A&M
As
further described in Note 4 – Long Term
Obligations and Operating Lease above, during the
fiscal year ended August 31, 2012, HP A&M defaulted on
the promissory notes secured by the Company’s
Arkansas River properties, and the Company foreclosed on
the Pledged Shares owned by HP A&M. On
September 27, 2012, the Pledged Shares were sold at an
auction open only to pre-qualified accredited investors for
$2.35 per share yielding approximately $3.42 million (net
of expenses of $110,000).
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