In conjunction with the Spin-Off and IPO, notes payable to certain former stockholders of MMREIS that were issued in settlement of restricted stock and SARs awards that were redeemed by MMREIS upon the termination of employment by these former stockholders (“the Notes”), which had been previously assumed by MMC, were transferred to the Company. The Notes are unsecured and bear interest at 5% with annual principal and interest installments and a final principal payment in April 14, 2020 and June 30, 2020. Accrued interest pertaining to the Notes was $396,000 and $425,000 as of December 31, 2014 and 2013, respectively and was recorded in accounts payable and accrued expenses caption in the accompanying consolidated balance sheets. During the years ended December 31, 2014 and 2013, interest expense in the amount of $591,000 and $103,000, respectively was recorded in interest expense in the accompanying consolidated statements of net and comprehensive income. During the year ended December 31, 2013, accrued interest expense prior to the IPO date of October 31, 2013 in the amount of $318,000 was recorded in additional paid-in capital in the accompanying statements of stockholders’ equity. During the year ended December 31, 2014, the Company made payments of $1.5 million and of this amount, $851,000 pertained to principal and $618,000 pertained to interest.

As of December 31, 2014, the future minimum principal payments for the Notes for restricted stock and SARs were as follows (in thousands):