Shared and Transition Services

Prior to October 2013, the Company operated under a shared services arrangement with MMC where by the Company was charged for actual costs specifically incurred on behalf of the Company or allocated to the Company on a pro rata basis. These costs included reimbursement for health insurance premiums, shared services and other general and administrative costs. The Company was charged $4.3 million (including $3.2 million for reimbursement for health insurance premiums) during the year ended December 31, 2013. Beginning in October 2013, certain services are provided to the Company under a Transition Services Agreement (“TSA”) between MMC and the Company, which replaced the pre-IPO shared services arrangement. The TSA is intended to provide certain services until the Company can acquire the services separately. In April 2014, the Company established its own health insurance plan significantly reducing the reliance on the TSA. During the years ended December 31, 2015, 2014 and 2013, the Company incurred $257,000, $1.3 million and $824,000 under the TSA of which $0, $1.0 million and $687,000 was incurred for reimbursement of health insurance premiums for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts are included in selling, general and administrative expense in the accompanying consolidated statements of net and comprehensive income. As of December 31, 2015 and 2014, $96,000 and $97,000, respectively, remains unpaid and is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.

Brokerage and Financing Services with the Subsidiaries of MMC

MMC has wholly or majority owned subsidiaries that buy and sell commercial real estate properties. The Company performs certain brokerage and financing services related to transactions of the subsidiaries of MMC. For the years ended December 31, 2015, 2014 and 2013, the Company recorded real estate brokerage commissions and financing fees of $2.7 million, $1.3 million and $735,000, respectively, from subsidiaries of MMC related to these services. The Company incurred cost of services of $1.6 million, $816,000 and $441,000, respectively, related to these revenues.

Operating Lease with MMC

The Company has an operating lease with MMC for a single story office building located in Palo Alto, California, which was amended in 2015 with a new expiration date of May 31, 2022. Rent expense for this lease totaled $693,500, $438,000 and $398,000 for the years ended December 31, 2015, 2014 and 2013, respectively. Rent expense is included in selling, general and administrative expense in the accompanying consolidated statements of net and comprehensive income.

Other

The Company makes advances to non-executive employees from time-to-time. At December 31, 2015 and 2014, the aggregate principal amount for employee loans outstanding was $382,000 and $378,000, respectively, which is included in other assets, net current and other assets non-current captions in the accompanying consolidated balance sheets.

See Note 9 – “Stockholders’ Equity” for information on pre-IPO dividends to MMC.

As of December 31, 2015, George M. Marcus, the Company’s founder and Co-Chairman, beneficially owned approximately 56% of the Company’s issued and outstanding common stock, including shares owned by Phoenix Investments Holdings, LLC (“Phoenix”) and the George and Judy Marcus Family Foundation.

On February 6, 2015, the Company filed a shelf Registration Statement on Form S-3, registering for future sale 4,600,000 shares of common stock, including common stock beneficially owned by George M. Marcus. No new shares were offered, and the Company did not receive any proceeds from the sale of common stock by the selling stockholders. On March 13, 2015, the Company filed a Prospectus Supplement offering for sale by certain selling stockholders 4,000,000 shares of common stock including an option to sell up to an additional 600,000 shares pursuant to an option granted to the underwriters. On March 18, 2015, 4,000,000 shares were sold at a price per share of $31.9925 and the underwriters exercised their option to purchase an additional 600,000 shares at a price per share of $31.9925. In connection with the Registration Statement and Prospectus Supplement, during the first quarter of 2015, the Company incurred approximately $113,000 of costs, which were reimbursed by the selling stockholders during the second quarter of 2015.

Prior to its termination on June 30, 2013, the Company was subject to a cash sweep arrangement with MMC. Under the arrangement, the Company’s cash was swept daily into an MMC money market account. The Company received interest on the balances held in the sweep accounts. The Company earned interest of $74,000 on the balances for the years ended December 31, 2013.