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Entry into Management Service Agreement
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3 Months Ended |
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Dec. 31, 2011
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| Entry into Management Service Agreement [Abstract] | |
| Entry into Management Service Agreement |
3. Entry into Management Service Agreement In conjunction with the Asset Purchase Agreement for DMCC and RFFG of Cleveland, BMP, an Ohio corporation and a wholly-owned subsidiary of the Company, entered into a management service agreement (the “Management Agreement”) with RFFG effective November 1, 2010.
Pursuant to the Management Agreement, BMP agreed to provide services to RFFG to operate its day-to-day business, including services related to accounting, sales, finance, workers' compensation, benefits, physical locations, information technologies and employees. The Management Agreement provided that additional services may be added if BMP and RFFG mutually agree to the cost to be charged by BMP for such services and as long as BMP has the resources to provide such services.
In consideration of the services provided under the Management Agreement, RFFG, LLC agreed to pay BMP monthly fees that approximate 6% of its gross revenues on an annual basis. For the quarter ended December 31, 2010, approximately $162,000 of revenues were recorded related to this agreement. Due to an unresolved issue with the Ohio Bureau of Workers Compensation, RFFG, LLC ceased operations as of July 15, 2011 and, as a result, the Management Service Agreement was effectively terminated. No future revenues are expected related to this agreement. As a result, the Company recorded a loss on impairment of intangible assets in September 2011of $1,126,000, offset by income of $1,276,000 for the reduction of an associated earn-out liability.
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