Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2015 | Feb. 10, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | S&W Seed Co | |
Entity Central Index Key | 1,477,246 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 14,687,984 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 5,221,238 | $ 3,535,458 |
Accounts receivable, net | 12,654,321 | 26,728,741 |
Inventories, net | 37,066,631 | 25,521,747 |
Prepaid expenses and other current assets | 1,189,941 | 797,199 |
Deferred tax asset | 280,280 | 286,508 |
TOTAL CURRENT ASSETS | 56,412,411 | 56,869,653 |
Property, plant and equipment, net | 11,861,970 | 11,476,936 |
Intangibles, net | 36,536,619 | 38,004,916 |
Goodwill | 9,496,202 | 9,630,279 |
Crop production costs, net | 0 | 212,231 |
Deferred tax asset | 7,303,609 | 4,060,156 |
Other assets | 2,617,830 | 2,088,896 |
TOTAL ASSETS | 124,228,641 | 122,343,067 |
CURRENT LIABILITIES | ||
Accounts payable | 14,982,183 | 13,722,900 |
Accounts payable - related parties | 5,287,224 | 1,128,630 |
Deferred revenue | 218,023 | 0 |
Accrued expenses and other current liabilities | 1,340,706 | 2,328,349 |
Foreign exchange contract liabilities | 0 | 59,116 |
Lines of credit | 11,732,202 | 13,755,800 |
Current portion of long-term debt | 2,657,687 | 2,223,465 |
Current portion of convertible debt, net | 9,461,477 | 9,265,929 |
TOTAL CURRENT LIABILITIES | 45,679,502 | 42,484,189 |
Contingent consideration obligation | 2,030,527 | 2,078,000 |
Long-term debt, less current portion | 10,585,363 | 10,682,072 |
Convertible debt, net, less current portion | 4,143,209 | 8,777,041 |
Derivative warrant liabilities | 4,776,000 | 6,258,000 |
Other non-current liabilities | 141,385 | 188,160 |
TOTAL LIABILITIES | 67,355,986 | 70,467,462 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 50,000,000 shares authorized; 14,697,903 issued and 14,672,903 outstanding at December 31, 2015; 13,479,101 issued and 13,454,101 outstanding at June 30, 2015 | 14,698 | 13,479 |
Treasury stock, at cost, 25,000 shares | (134,196) | (134,196) |
Additional paid-in capital | 68,421,774 | 62,072,379 |
Accumulated deficit | (5,491,918) | (4,979,471) |
Accumulated other comprehensive loss | (5,937,703) | (5,096,586) |
TOTAL STOCKHOLDERS' EQUITY | 56,872,655 | 51,875,605 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 124,228,641 | $ 122,343,067 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Jun. 30, 2015 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value | $ .001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ .001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 14,697,903 | 13,479,101 |
Common stock, shares outstanding | 14,672,903 | 13,454,101 |
Treasury stock, shares | 25,000 | 25,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||||
Revenue | $ 24,141,257 | $ 13,793,766 | $ 36,396,169 | $ 21,957,999 |
Cost of revenue | 20,109,824 | 11,832,557 | 30,389,855 | 18,682,998 |
Gross profit | 4,031,433 | 1,961,209 | 6,006,314 | 3,275,001 |
Operating expenses | ||||
Selling, general and administrative expenses | 2,306,144 | 2,991,501 | 4,780,121 | 4,788,628 |
Research and development expenses | 732,607 | 217,180 | 1,422,980 | 431,838 |
Depreciation and amortization | 791,242 | 310,552 | 1,580,038 | 630,311 |
Impairment charges | 0 | 500,198 | 0 | 500,198 |
Total operating expenses | 3,829,993 | 4,019,431 | 7,783,139 | 6,350,975 |
Income (loss) from operations | 201,440 | (2,058,222) | (1,776,825) | (3,075,974) |
Other expense | ||||
Foreign currency (gain) loss | (335,159) | 35,148 | (251,813) | 82,889 |
Change in derivative warrant liabilities | (943,000) | 0 | (1,482,000) | 0 |
Change in contingent consideration obligation | 47,811 | 0 | (47,473) | 0 |
Loss on equity method investment | 129,341 | 0 | 223,703 | 0 |
Gain on sale of marketable securities | (123,038) | 0 | (123,038) | 0 |
Interest expense - amortization of debt discount | 1,055,202 | 13,107 | 1,961,454 | 26,142 |
Interest expense - convertible debt and other | 537,749 | 174,635 | 1,233,984 | 408,250 |
Loss before income taxes | (167,466) | (2,281,112) | (3,291,642) | (3,593,255) |
Benefit from income taxes | (1,529,252) | (738,452) | (2,779,195) | (1,176,279) |
Net income (loss) | $ 1,361,786 | $ (1,542,660) | $ (512,447) | $ (2,416,976) |
Net loss per common share: | ||||
Basic | $ 0.10 | $ (0.13) | $ (0.04) | $ (0.21) |
Diluted | $ 0.10 | $ (0.13) | $ (0.04) | $ (0.21) |
Weighted average number of common shares outstanding: | ||||
Basic | 14,120,650 | 11,634,469 | 13,792,002 | 11,629,766 |
Diluted | 14,120,650 | 11,634,469 | 13,792,002 | 11,629,766 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements Of Comprehensive Income Loss | ||||
Net income (loss) | $ 1,361,786 | $ (1,542,660) | $ (512,447) | $ (2,416,976) |
Foreign currency translation adjustment, net of income tax | 595,832 | (1,244,152) | (841,117) | (2,586,183) |
Comprehensive income (loss) | $ 1,957,618 | $ (2,786,812) | $ (1,353,564) | $ (5,003,159) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning balance, shares at Jun. 30, 2014 | 11,665,093 | (25,000) | ||||
Beginning balance, amount at Jun. 30, 2014 | $ 11,666 | $ (134,196) | $ 55,121,876 | $ (1,816,344) | $ (1,668,767) | $ 51,514,235 |
Stock-based compensation - options, restricted stock and RSU's | $ 0 | $ 0 | 447,075 | 0 | 0 | 447,075 |
Net issuance to settle RSU's, shares | 18,708 | 0 | ||||
Net issuance to settle RSU's, amount | $ 19 | $ 0 | (43,130) | 0 | 0 | (43,111) |
Proceeds from sale of common stock, net of fees and expenses, shares | 1,294,000 | 0 | ||||
Proceeds from sale of common stock, net of fees and expenses, amount | $ 1,294 | $ 0 | 4,235,649 | 0 | 0 | 4,236,943 |
Other comprehensive income (loss) | 0 | 0 | 0 | 0 | (2,586,183) | (2,586,183) |
Net income (loss) | $ 0 | $ 0 | 0 | (2,416,976) | 0 | (2,416,976) |
Ending balance, shares at Dec. 31, 2014 | 12,977,801 | (25,000) | ||||
Ending balance, amount at Dec. 31, 2014 | $ 12,979 | $ (134,196) | 59,761,740 | (4,233,320) | (4,254,950) | 51,151,983 |
Beginning balance, shares at Jun. 30, 2015 | 13,479,101 | (25,000) | ||||
Beginning balance, amount at Jun. 30, 2015 | $ 13,479 | $ (134,196) | 62,072,379 | (4,979,471) | (5,096,586) | 51,875,605 |
Stock-based compensation - options, restricted stock and RSU's | 0 | 0 | 628,173 | 0 | 0 | 628,173 |
Beneficial conversion feature | $ 0 | $ 0 | 871,862 | 0 | 0 | 871,862 |
Net issuance to settle RSU's, shares | 29,329 | 0 | ||||
Net issuance to settle RSU's, amount | $ 29 | $ 0 | (56,810) | 0 | 0 | (56,781) |
Proceeds from sale of common stock, net of fees and expenses, shares | 1,180,722 | 0 | ||||
Proceeds from sale of common stock, net of fees and expenses, amount | $ 1,181 | $ 0 | 4,871,613 | 0 | 0 | 4,872,794 |
Exercise of employee stock options, net of withholding taxes, shares | 8,751 | 0 | ||||
Exercise of employee stock options, net of withholding taxes, amount | $ 9 | $ 0 | 34,557 | 0 | 0 | 34,566 |
Other comprehensive income (loss) | 0 | 0 | 0 | 0 | (841,117) | (841,117) |
Net income (loss) | $ 0 | $ 0 | 0 | (512,447) | 0 | (512,447) |
Ending balance, shares at Dec. 31, 2015 | 14,697,903 | (25,000) | ||||
Ending balance, amount at Dec. 31, 2015 | $ 14,698 | $ (134,196) | $ 68,421,774 | $ (5,491,918) | $ (5,937,703) | $ 56,872,655 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (512,447) | $ (2,416,976) |
Adjustments to reconcile net loss to net cash provided by operating activities | ||
Stock-based compensation | 628,173 | 447,075 |
Change in allowance for doubtful accounts | (7,350) | 8,632 |
Impairment charges | 0 | 500,198 |
Depreciation and amortization | 1,580,038 | 630,311 |
Change in deferred tax asset | (3,243,453) | (1,138,394) |
Change in foreign exchange contracts | (55,845) | 173,977 |
Change in derivative warrant liabilities | (1,482,000) | 0 |
Change in contingent consideration obligation | (47,473) | 0 |
Amortization of debt discount | 1,961,454 | 26,142 |
Gain on sale of marketable securities | (123,038) | 0 |
Loss on equity method investment | 223,703 | 0 |
Changes in: | ||
Accounts receivable | 13,712,154 | 7,071,072 |
Inventories | (12,016,814) | 4,838,843 |
Prepaid expenses and other current assets | (389,135) | 32,855 |
Crop production costs | 0 | (1,567,276) |
Other non-current assets | (140,569) | 0 |
Accounts payable | 1,764,241 | (5,832,578) |
Accounts payable - related parties | 4,174,847 | 912,721 |
Deferred revenue | 218,023 | 0 |
Accrued expenses and other current liabilities | (945,516) | 296,580 |
Other non-current liabilities | (42,731) | 4,445 |
Net cash provided by operating activities | 5,256,262 | 3,987,627 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Additions to property, plant and equipment | (903,825) | (693,311) |
Acquisition of business | 0 | (27,000,000) |
Investment in Bioceres | 0 | (4,982) |
Purchase of marketable securities | (316,000) | 0 |
Sale of marketable securities | 439,038 | 0 |
Equity method investment | (439,038) | 0 |
Net cash used in investing activities | (1,219,825) | (27,698,293) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net proceeds from sale of common stock | 4,872,794 | 4,236,943 |
Net proceeds from exercise of common stock options | 34,566 | 0 |
Taxes paid related to net share settlements of stock-based compensation awards | (56,781) | (43,111) |
Borrowings and repayments on line of credit, net | (1,820,939) | (1,763,375) |
Borrowings of long-term convertible debt | 0 | 27,000,000 |
Debt issuance costs | 0 | (1,726,543) |
Borrowings of long-term debt | 440,179 | 0 |
Repayments of long-term debt | (104,463) | (211,724) |
Repayments of convertible debt | (5,471,724) | 0 |
Net cash (used in) provided by financing activities | (2,106,368) | 27,492,190 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (244,289) | (28,906) |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 1,685,780 | 3,752,618 |
CASH AND CASH EQUIVALENTS, beginning of the period | 3,535,458 | 1,167,503 |
CASH AND CASH EQUIVALENTS, end of period | 5,221,238 | 4,920,121 |
Cash paid during the period for: | ||
Interest | 1,331,288 | 424,037 |
Income taxes | $ 212,926 | $ 254,803 |
NOTE 1 - BACKGROUND AND ORGANIZ
NOTE 1 - BACKGROUND AND ORGANIZATION | 6 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 1 - BACKGROUND AND ORGANIZATION | NOTE 1 - BACKGROUND AND ORGANIZATION Organization S&W Seed Company, a Nevada corporation (the "Company"), began as S&W Seed Company, a general partnership in 1980 and was originally in the business of breeding, growing, processing and selling alfalfa seed. We then incorporated a corporation with the same name in Delaware in October 2009, which is the successor entity to Seed Holding, LLC, having purchased a majority interest in the general partnership between June 2008 and December 2009. Following the Company's initial public offering in May 2010, the Company purchased the remaining general partnership interests and became the sole owner of the general partnership's original business. Seed Holding, LLC remains a consolidated subsidiary of the Company. In December 2011, the Company reincorporated in Nevada as a result of a statutory short-form merger of the Delaware corporation into its wholly-owned subsidiary, S&W Seed Company, a Nevada corporation. On April 1, 2013, the Company, together with its wholly-owned subsidiary, S&W Seed Australia Pty Ltd, an Australia corporation ("S&W Australia"), consummated an acquisition of all of the issued and outstanding shares of Seed Genetics International Pty Ltd, an Australia corporation ("SGI"), from SGI's shareholders. Business Overview Since its establishment, the Company, including its predecessor entities, has been principally engaged in breeding, growing, processing and selling agricultural seeds, primarily alfalfa seed. The Company owns seed cleaning and processing facilities, which are located in Five Points, California and Nampa, Idaho. The Company's seed products are primarily grown under contract by farmers. The Company began its stevia initiative in fiscal 2010 and is currently focused on breeding improved varieties of stevia and developing marketing and distribution programs for its stevia products. The Company has also been actively engaging in expansion initiatives through a combination of organic growth and strategic acquisitions, including most recently when on December 31, 2014, the Company purchased certain alfalfa research and production facilities and conventional (non-GMO) alfalfa germplasm assets and assumed certain related liabilities ("the Pioneer Acquisition") of Pioneer Hi-Bred International, Inc. ("DuPont Pioneer"). The Company's operations span the world's alfalfa seed production regions with operations in the San Joaquin and Imperial Valleys of California, five other U.S. states, Australia, and three provinces in Canada, and the Company sells its seed products in more than 30 countries around the globe. |
NOTE 2 - SUMMARY OF SIGNIFICANT
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The Company maintains its accounting records on an accrual basis in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The consolidated financial statements include the accounts of Seed Holding, LLC and its other wholly-owned subsidiaries, S&W Australia, which owns 100% of SGI, and Stevia California, LLC. All significant intercompany balances and transactions have been eliminated. Unaudited Interim Financial Information The Company has prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated financial statements are unaudited and, in the Company's opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the Company's consolidated balance sheets, statements of operations, comprehensive loss, cash flows and stockholders' equity for the periods presented. Operating results for the periods presented are not necessarily indicative of the results to be expected for the full year ending June 30, 2016. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended June 30, 2015, as filed with the SEC. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration, derivative liabilities, contingencies and litigation. Significant estimates and assumptions are also used to establish the fair value and useful lives of depreciable tangible and certain intangible assets, goodwill as well as valuing stock-based compensation. Actual results may differ from those estimates and assumptions, and such results may affect income, financial position or cash flows. Certain Risks and Concentrations The Company's revenue is principally derived from the sale of alfalfa seed, the market for which is highly competitive. The Company depends on a core group of significant customers. One customer accounted for 58% of its revenue for the three months ended December 31, 2015, and two customers accounted for 23% of its revenue for the three months ended December 31, 2014. One customer accounted for 40% of its revenue for the six months ended December 31, 2015, and three customers accounted for 37% of its revenue for the six months ended December 31, 2014. Three customers accounted for 43% of the Company's accounts receivable at December 31, 2015. Three customers accounted for 53% of the Company's accounts receivable at June 30, 2015. In addition, the Company sells a substantial portion of its products to international customers. Sales direct to international customers represented 35% and 87% of revenue during the three months ended December 31, 2015 and 2014, respectively. Sales direct to international customers represented 52% and 87% of revenue during the six months ended December 31, 2015 and 2014, respectively. The net book value of fixed assets located outside the United States were 15% and 11% at December 31, 2015 and June 30, 2015, respectively. Cash balances located outside of the United States may not be insured and totaled $892,877 and $1,039,326 at December 31, 2015 and June 30, 2015, respectively. The following table shows revenue from external sources by destination country: Three Months Ended December 31, Six Months Ended December 31, 2015 2014 2015 2014 United States $ 15,703,406 65% $ 1,797,904 13% United States $ 17,648,226 48% $ 2,926,019 13% Saudi Arabia 4,344,035 18% 5,896,468 43% Saudi Arabia 10,831,552 30% 9,021,558 41% Mexico 1,548,990 6% 2,117,161 15% Mexico 3,086,790 8% 4,116,969 19% Argentina 907,070 4% 1,379,623 10% Argentina 1,498,908 4% 1,379,623 6% Peru 315,381 1% 95,428 1% Peru 925,382 3% 276,938 1% South Africa 283,554 1% 264,096 2% Australia 448,899 1% 287,587 1% China 219,321 1% - 0% Malaysia 287,500 1% 188,125 1% Sudan 143,750 1% 135,250 1% South Africa 283,554 1% 268,276 1% Other 675,750 3% 2,107,836 15% Other 1,385,358 4% 3,492,904 15% Total $ 24,141,257 100% $ 13,793,766 100% Total $ 36,396,169 100% $ 21,957,999 100% International Operations The Company translates its foreign operations' asset and liabilities denominated in foreign currencies into U.S. dollars at the current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of accumulated other comprehensive income. Gains or losses from foreign currency transactions are included in the consolidated statement of operations. Revenue Recognition The Company derives its revenue primarily from sale of seed and other crops and milling services. Revenue from seed and other crop sales is recognized when risk and title to the product is transferred to the customer. No customer has a right of return. The Company recognizes revenue from milling services according to the terms of the sales agreements and when delivery has occurred, performance is complete and pricing is fixed or determinable at the time of sale. Additional conditions for recognition of revenue for all sales include the requirements that the collection of sales proceeds must be reasonably assured based on historical experience and current market conditions, the sales price is fixed and determinable and that there must be no further performance obligations under the sale. Cost of Revenue The Company records purchasing and receiving costs, inspection costs and warehousing costs in cost of revenue. When the Company is required to pay for outward freight and/or the costs incurred to deliver products to its customers, the costs are included in cost of revenue. Cash and Cash Equivalents For financial statement presentation purposes, the Company considers time deposits, certificates of deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At times, cash and cash equivalents balances exceed amounts insured by the Federal Deposit Insurance Corporation. Accounts Receivable The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer's trade accounts receivable. The allowance for doubtful trade receivables was $162,945 and $155,595 at December 31, 2015 and June 30, 2015, respectively. Inventories Inventory Inventories consist of alfalfa seed purchased from the Company's growers under production contracts, alfalfa seed produced from its own farming operations and packaging materials. Inventories are stated at the lower of cost or market, and an inventory reserve permanently reduces the cost basis of inventory. Inventories are valued as follows: Actual cost is used to value raw materials such as packaging materials, as well as goods in process. Costs for substantially all finished goods, which include the cost of carryover crops from the previous year, are valued at actual cost. Actual cost for finished goods includes plant conditioning and packaging costs, direct labor and raw materials and manufacturing overhead costs based on normal capacity. The Company records abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) as current period charges and allocates fixed production overhead to the costs of finished goods based on the normal capacity of the production facilities. The Company's subsidiary, SGI, does not fix the final price for seed payable to its growers until the completion of a given year's sales cycle pursuant to its standard contract production agreement. SGI records an estimated unit price; accordingly, inventory, cost of revenue and gross profits are based upon management's best estimate of the final purchase price to growers. Inventory is periodically reviewed to determine if it is marketable, obsolete or impaired. Inventory that is determined to be obsolete or impaired is written off to expense at the time the impairment is identified. Because the germination rate, and therefore the quality, of alfalfa seed improves over the first year of proper storage, inventory obsolescence for alfalfa seed is not a material concern. The Company sells its inventory to distributors, dealers and directly to growers. Growing Crops Expenditures on growing crops are valued at the lower of cost or market and are deferred and charged to cost of products sold when the related crop is harvested and sold. The deferred growing costs included in inventories in the consolidated balance sheets consist primarily of labor, lease payments on land, interest expense on farmland, cultivation and on-going irrigation, harvest and fertilization costs. Costs included in growing crops relate to the current crop year. Costs that are to be realized over the life of the crop are reflected in crop production costs. Components of inventory are: December 31, June 30, 2015 2015 Raw materials and supplies $ 325,314 $ 276,339 Work in progress and growing crops 472,903 5,415,402 Finished goods 36,268,414 19,830,006 $ 37,066,631 $ 25,521,747 Crop Production Costs Expenditures on crop production costs are deferred and charged to cost of products sold when the related crop is harvested and sold. The deferred crop production costs included in the consolidated balance sheets consist primarily of the cost of plants and the transplanting, stand establishment costs, intermediate life irrigation equipment and land amendments and preparation. Crop production costs are estimated to have useful lives of three to five years depending on the crop and nature of the expenditure and are amortized to growing crop inventory each year over the estimated life of the crop. The Company has exited all internal farming operations and accordingly, there are no crop production costs as of December 31, 2015. Components of crop production costs are: December 31, June 30, 2015 2015 Alfalfa hay $ - $ 92,037 Other crops - 120,194 Total crop production costs, net $ - $ 212,231 Property, Plant and Equipment Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of 18-28 years for buildings, 3-10 years for machinery and equipment, and 3-5 years for vehicles. Intangible Assets Intangible assets acquired in business acquisitions are reported at their initial fair value less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated useful life of the asset. Periods of 10-30 years for technology/IP/germplasm, 20 years for customer relationships and trade names and 2-20 for other intangible assets. The weighted average estimated useful lives are 24 years for technology/IP/germplasm, 20 years for customer relationships and trade names and 22 years for other intangible assets. Goodwill Goodwill originated from acquisitions of Imperial Valley Seeds, Inc. ("IVS") and SGI during the fiscal year 2013 and the acquisition of the alfalfa business from DuPont Pioneer in fiscal year 2015. Goodwill is assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires various judgmental assumptions including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on the Company's budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. The Company determined it has two reporting units for goodwill impairment testing purposes. Its reporting units are the United States operations and the Australia operations. The Company conducted a qualitative assessment of goodwill and determined that it was more likely than not there was no impairment at June 30, 2015 Equity Method Investments Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee company's board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company's accounts are not reflected within the Company's consolidated balance sheets and statements of operations; however, the Company's share of the earnings or losses of the investee company is reflected in the caption ``Loss on equity method investment'' in the consolidated statements of operations. The Company's carrying value in an equity method investee company is included in the Company's consolidated balance sheets. Loss on equity method investment totaled $129,341 and $223,703 for the three months and six months ended December 31, 2015, respectively. This represents the Company's 50% share of losses incurred by the joint corporation (S&W Semillas S.A.) in Argentina during the two periods. Cost Method Investments Investee companies not accounted for under the consolidation or the equity method of accounting are accounted for under the cost method of accounting. Under this method, the Company's share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or statement of operations. However, impairment charges are recognized in the consolidated statement of operations. If circumstances suggest that the value of the investee company has subsequently recovered, such recovery is not recorded. Research and Development Costs The Company is engaged in ongoing research and development ("R&D") of proprietary seed and stevia varieties. All R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or constructed for R&D activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset. Income Taxes Deferred tax assets and liabilities are determined based on differences between the financial statement and tax bases of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Impairment of Long-Lived Assets The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. A triggering event during the quarter ended December 31, 2014 prompted a review of certain farmland-related costs. The carrying value of these assets was deemed in excess of fair value, and the Company recorded an impairment charge of $500,198 in the consolidated statement of operations during the quarter ended December 31, 2014. Derivative Financial Instruments Foreign Exchange Contracts The Company's subsidiary, SGI, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company at times manages through the use of foreign currency forward contracts. The Company has entered into certain derivative financial instruments (specifically foreign currency forward contracts), and accounts for these instruments in accordance with ASC Topic 815, "Derivatives and Hedging", which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The Company's foreign currency contracts are not designated as hedging instruments under ASC 815; accordingly, changes in the fair value are recorded in current period earnings. Derivative Liabilities The Company reviews the terms of the common stock, warrants and convertible debt it issues to determine whether there are embedded derivative instruments, including embedded conversion options and redemption options, which are required to be bifurcated and accounted for separately as derivative financial instruments. Fair Value of Financial Instruments The Company discloses assets and liabilities that are recognized and measured at fair value, presented in a three-tier fair value hierarchy, as follows: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The assets acquired and liabilities assumed in the Pioneer Acquisition were valued at fair value on a non-recurring basis as of December 31, 2014. No assets or liabilities were valued at fair value on a non-recurring basis as of December 31, 2015 or June 30, 2015. The carrying value of cash and cash equivalents, accounts payable, short-term and all long-term borrowings other than the convertible debentures, as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments or interest rates commensurate with market rates. There have been no changes in operations and/or credit characteristics since the date of issuance that could impact the relationship between interest rate and market rates. At December 31, 2015, the fair value and carrying value of the convertible debentures was $16,418,646 and $13,604,686, respectively. The fair value was calculated using a discounted cash flow model and utilized a 10% discount rate that is commensurate with market rates given the remaining term, principal repayment schedule and outstanding balance. The convertible debentures are categorized as Level 3 in the fair value hierarchy. The Company used a discounted cash flows approach to measure the fair value using Level 3 inputs. Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows: Fair Value Measurements as of December 31, 2015 Using: Level 1 Level 2 Level 3 Foreign exchange contract asset $ - $ 23,264 $ - Contingent consideration obligation - - 2,030,527 Derivative warrant liabilities - - 4,776,000 Total $ - $ 23,264 $ 6,806,527 Fair Value Measurements as of June 30, 2015 Using: Level 1 Level 2 Level 3 Foreign exchange contract liability $ - $ 59,116 $ - Contingent consideration obligation - - 2,078,000 Derivative warrant liabilities - - 6,258,000 Total $ - $ 59,116 $ 8,336,000 Reclassifications Certain reclassifications have been made to prior period amounts to conform to classifications adopted in the current period. The reclassifications had no effect on net loss, cash flows or stockholders' equity. |
NOTE 3 - BUSINESS COMBINATIONS
NOTE 3 - BUSINESS COMBINATIONS | 6 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
NOTE 3 – BUSINESS COMBINATIONS | NOTE 3 - BUSINESS COMBINATIONS On December 31, 2014, the Company purchased certain alfalfa research and production facilities and conventional (non-GMO) alfalfa germplasm assets (and assumed certain related liabilities) of DuPont Pioneer. The DuPont Pioneer Acquisition was consummated pursuant to the terms of an asset purchase and sale agreement. The purchase price under the Agreement was up to $42,000,000, consisting of $27,000,000 in cash (payable at closing), a three year secured promissory note (the "Pioneer Note") payable by the Company to DuPont Pioneer in the initial principal amount of $10,000,000 (issued at closing), and a potential earn-out payment (payable as an increase in the principal amount of the Note) of up to $5,000,000 based on S&W sales under distribution and production agreements as well as other Company sales of products containing the acquired germplasm in the three-year period following the closing. The Pioneer Note accrues interest at a rate of 3% per annum, and interest is payable in three annual installments, in arrears, commencing on December 31, 2015. Principal on the Pioneer Note is payable at maturity on December 31, 2017. The DuPont Pioneer Acquisition has been accounted for as a business combination, and the Company valued and recorded all assets acquired and liabilities assumed at their estimated fair values on the date of the DuPont Pioneer Acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of December 31, 2014: December 31, 2014 Inventory $ 22,055,300 Property, plant and equipment 6,712,535 Distribution agreement 7,690,000 Production agreement 670,000 Grower relationships 76,000 Technology/IP - germplasm 13,340,000 Technology/IP - seed varieties 5,040,000 Goodwill 5,353,317 Current liabilities (12,248,506) Total acquisition cost allocated $ 48,688,646 The acquisition-date fair value of the consideration transferred consisted of the following: Cash $ 27,000,000 Secured three-year promissory note 10,000,000 Contingent earn-out 2,004,000 Amount payable to seller 9,684,646 $ 48,688,646 The excess of the purchase price over the fair value of the net assets acquired, amounting to $5,353,317, was recorded as goodwill on the consolidated balance sheet. The primary item that generated goodwill was the premium paid by the Company for the ability to control the acquired business, technology and the assembled workforce of DuPont Pioneer. Goodwill is not amortized for financial reporting purposes, but is amortized for tax purposes. Management assigned fair values to the identifiable intangible assets through a combination of the relief from royalty method and the multi-period excess earnings method. The contingent consideration requires the Company to increase the principal amount of the Seller note by up to an additional $5,000,000 if the Company meets certain performance metrics during the three-year period following the acquisition. The fair value of the contingent consideration arrangement at the acquisition date was $2,004,000. The fair value of the contingent consideration was estimated using a probability-weighted cash flow model. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. The key assumptions in applying the income approach were as follows: 24% present value discount factor and probability adjusted revenue assumptions based on the number of expected units produced. As of December 31, 2015, the estimated fair value of the contingent consideration is $2,030,527. The values and useful lives of the acquired DuPont Pioneer intangibles are as follows: Estimated Useful Life (Years) Estimated Fair Value Distribution agreement 20 $ 7,690,000 Production agreement 3 670,000 Grower relationships 10 76,000 Technology/IP - germplasm 30 13,340,000 Technology/IP - seed varieties 15 5,040,000 Total identifiable intangible assets $ 26,816,000 The Company incurred $863,048 of acquisition costs associated with the DuPont Pioneer Acquisition that have been recorded in selling, general and administrative expenses on the consolidated statement of operations during the year ended June 30, 2015. The newly acquired business generated revenue of approximately $14.1 million during the six months ended December 31, 2015. In the transaction, DuPont Pioneer retained ownership of its GMO (genetically modified) alfalfa germplasm and related intellectual property assets, as well as the right to develop new GMO-traited alfalfa germplasm. The retained GMO germplasm assets incorporate certain GMO traits that are licensed to DuPont Pioneer from third parties (the "Third Party GMO Traits"). The Company was interested in acquiring the GMO assets at the time it acquired the conventional (non-GMO) alfalfa seed assets, and DuPont Pioneer was interested in selling those assets, but terms could not be agreed-upon, in part because of the need for agreements with the third parties from whom the Third Party GMO Traits are licensed. The agreements related to the DuPont Pioneer Acquisition provide that both the Company and DuPont Pioneer will work towards obtaining the necessary consents from and agreements with third parties such that the GMO assets can be transferred from DuPont Pioneer to the Company. If such consents and agreements are obtained before November 30, 2017, the Company has committed to buy and DuPont Pioneer has committed to sell the GMO assets at a price of $7,000,000 on or before December 29, 2017. The following unaudited pro forma financial information presents results as if the DuPont Pioneer Acquisition occurred on July 1, 2014. Three months ended Six months ended December 31, December 31, (Unaudited) 2014 2014 Revenue $ 16,385,672 $ 32,844,355 Net loss $ (2,518,786) $ (2,454,844) Net loss per share basic and diluted share $ (0.19) $ (0.19) The primary adjustments for the three months ended December 31, 2014 include: (i) the reduction of DuPont Pioneer historical revenue to reflect the shift from end customer to wholesale pricing; (ii) the reduction of cost of revenue to remove DuPont Pioneer's historical sales incentives included in cost of sales; (iii) amortization of acquired intangibles of $349,025; (iv) depreciation of acquired property, plant and equipment of $110,942; (v) additional interest expense on the convertible notes issued concurrent to the acquisition, including non-cash amortization of debt issuance costs and accretion of debt discount of $1,935,943; (vi) additional interest expense of $75,000 for the Pioneer Note included in total consideration for the Pioneer Acquisition; and (vii) adjustments to reflect the additional income tax expense assuming a combined effective tax rate of 32.4%. The primary adjustments for the six months ended December 31, 2014 include: (i) the reduction of DuPont Pioneer historical revenue to reflect the shift from end customer to wholesale pricing; (ii) the reduction of cost of revenue to remove DuPont Pioneer's historical sales incentives included in cost of sales; (iii) amortization of acquired intangibles of $698,050; (iv) depreciation of acquired property, plant and equipment of $221,884; (v) additional interest expense on the convertible notes issued concurrent to the acquisition, including non-cash amortization of debt issuance costs and accretion of debt discount of $3,097,299; (vi) additional interest expense of $150,000 for the Pioneer Note included in total consideration for the DuPont Pioneer Acquisition; and (vii) adjustments to reflect the additional income tax expense assuming a combined effective tax rate of 32.7%. |
NOTE 4 - INTANGIBLE ASSETS
NOTE 4 - INTANGIBLE ASSETS | 6 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 4 - INTANGIBLE ASSETS | NOTE 4 - INTANGIBLE ASSETS The following table summarizes the activity of goodwill for the six months ended December 31, 2015 and the year ended June 30, 2015, respectively. Balance at Foreign Currency Balance at July 1, 2015 Additions Translation December 31, 2015 Goodwill - United States $ 6,755,317 $ - $ - $ 6,755,317 Goodwill - Australia 2,874,962 - (134,077) 2,740,885 $ 9,630,279 $ - $ (134,077) $ 9,495,202 Balance at Foreign Currency Balance at July 1, 2014 Additions Translation June 30, 2015 Goodwill - United States $ 1,402,000 $ 5,353,317 $ - $ 6,755,317 Goodwill - Australia 3,537,462 - (662,500) 2,874,962 $ 4,939,462 $ 5,353,317 $ (662,500) $ 9,630,279 Intangible assets consist of the following: Balance at Foreign Currency Balance at July 1, 2015 Additions Amortization Translation December 31, 2015 Intellectual property $ 4,805,951 $ - $ (127,890) $ (225,307) $ 4,452,754 Trade name 1,377,840 - (40,861) (11,847) 1,325,132 Technology/IP 924,107 - (59,480) - 864,627 Non-compete 301,354 - (62,526) (6,541) 232,287 GI customer list 93,131 - (3,582) - 89,549 Grower relationships 2,183,485 - (59,982) (98,979) 2,024,524 Supply agreement 1,304,679 - (37,816) - 1,266,863 Customer relationships 968,619 - (28,307) (10,933) 929,379 Distribution agreement 7,497,750 - (192,250) - 7,305,500 Production agreement 558,334 - (111,664) - 446,670 Technology/IP - germplasm 13,117,666 - (222,332) - 12,895,334 Technology/IP - seed varieties 4,872,000 - (168,000) - 4,704,000 $ 38,004,916 $ - $ (1,114,690) $ (353,607) $ 36,536,619 Balance at Foreign Currency Balance at July 1, 2014 Additions Amortization Translation June 30, 2015 Intellectual property $ 6,246,572 $ - $ (295,844) $ (1,144,777) $ 4,805,951 Trade name 1,521,864 - (83,830) (60,194) 1,377,840 Technology/IP 1,043,067 - (118,960) - 924,107 Non-compete 471,768 - (132,353) (38,061) 301,354 GI customer list 100,295 - (7,164) - 93,131 Grower relationships 2,744,164 76,000 (133,770) (502,909) 2,183,485 Supply agreement 1,380,311 - (75,632) - 1,304,679 Customer relationships 1,082,730 - (58,557) (55,554) 968,619 Distribution agreement - 7,690,000 (192,250) - 7,497,750 Production agreement - 670,000 (111,666) - 558,334 Technology/IP - germplasm - 13,340,000 (222,334) - 13,117,666 Technology/IP - seed varieties - 5,040,000 (168,000) - 4,872,000 $ 14,590,771 $ 26,816,000 $ (1,600,360) $ (1,801,495) $ 38,004,916 Amortization expense totaled $556,849 and $228,468 for the three months ended December 31, 2015 and 2014, respectively. Amortization expense totaled $1,114,690 and $467,660 for the six months ended December 31, 2015 and 2014, respectively. Estimated aggregate remaining amortization is as follows: 2016 2017 2018 2019 2020 Thereafter Amortization expense $ 1,116,704 $ 2,224,765 $ 2,224,765 $ 2,224,765 $ 2,224,765 $ 26,520,855 |
NOTE 5 - PROPERTY, PLANT AND EQ
NOTE 5 - PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 5 - PROPERTY, PLANT AND EQUIPMENT | NOTE 5 - PROPERTY, PLANT AND EQUIPMENT Components of property, plant and equipment were as follows: December 31, June 30, 2015 2015 Land and improvements $ 2,236,842 $ 2,247,379 Buildings and improvements 6,168,914 5,439,712 Machinery and equipment 3,663,347 3,520,168 Vehicles 953,227 940,627 Construction in progress 1,087,982 1,113,137 Total property, plant and equipment 14,110,312 13,261,023 Less: accumulated depreciation (2,248,342) (1,784,087) Property, plant and equipment, net $ 11,861,970 $ 11,476,936 Depreciation expense totaled $234,393 and $82,084 for the three months ended December 31, 2015 and 2014, respectively. Depreciation expense totaled $465,348 and $162,651 for the six months ended December 31, 2015 and 2014, respectively. |
NOTE 6 - DEBT
NOTE 6 - DEBT | 6 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 6 - DEBT | NOTE 6 - DEBT Total debt outstanding, excluding convertible debt addressed in Note 7, are presented on the consolidated balance sheet as follows: December 31, June 30, 2015 2015 Working capital lines of credit KeyBank $ 11,169,814 $ - Wells Fargo - 10,000,000 National Australia Bank Limited 562,388 3,755,800 Total working capital lines of credit 11,732,202 13,755,800 Current portion of long-term debt Term loan - Ally 9,127 8,994 Keith facility (machinery & equipment loan) - National Australia Bank Limited 562,028 154,657 Unsecured subordinate promissory note - related party 100,000 100,000 Promissory note - SGI selling shareholders 2,000,000 2,000,000 Debt discount - SGI (13,468) (40,186) Total current portion 2,657,687 2,223,465 Long-term debt, less current portion Term loan - Ally 10,993 15,590 Term loan (Keith building) - National Australia Bank Limited 474,370 466,482 Unsecured subordinate promissory note - related party 100,000 200,000 Promissory note - Dupont Pioneer 10,000,000 10,000,000 Total long-term portion 10,585,363 10,682,072 Total debt $ 13,243,050 $ 12,905,537 From 2011 until September 22, 2015, the Company had one or more revolving credit facility agreements with Wells Fargo Bank, National Association ("Wells Fargo"). From February 21, 2014 through September 22, 2015, the Company had two working capital facilities with Wells Fargo (collectively, the "Wells Facilities"), both of which terminated as of September 22, 2015. The Wells Facilities included (i) a domestic revolving facility of up to $4,000,000 for working capital purposes, and (ii) an export-import revolving facility of up to $10,000,000 for financing export-related accounts receivable and inventory (the "Ex-Im Revolver"). The availability of credit under the Ex-Im Revolver was limited to an aggregate of 90% of the eligible accounts receivable (as defined under the credit agreement for the Ex-Im Revolver) plus 75% of the value (as reported under generally accepted accounting principles) of eligible inventory (also as defined under the credit agreement for the Ex-Im Revolver. Pursuant to the terms of a Borrower Agreement between the Company and the Export-Import Bank of the United States (the "Ex-Im Bank"), the Ex-Im Bank agreed to guarantee 90% of amounts outstanding and owing under the Ex-Im Revolver. The Wells Facilities were secured by a first priority lien on accounts receivable and other rights to payment, general intangibles, inventory and equipment, subject to the priority rights of the senior secured debentures issued by the Company in December 2014 and Pioneer Hi-Bred International, Inc. The Wells Facilities were further secured by a lien on, and a pledge of, 65% of the stock of the Company's wholly-owned subsidiary, S&W Australia Pty Ltd. The Wells Facilities were subject to customary representations and warranties, affirmative and negative covenants and customary events of default. The interest rate on the Wells Facilities was either (i) at a fluctuating rate per annum determined by Wells Fargo to be 2.75% above the daily one-month LIBOR Rate in effect from time to time (increased from 2.25%), or (ii) at a fixed rate per annum determined to be 2.75% (increased from 2.25%) above LIBOR in effect on the first day of the applicable fixed rate term. On September 22, 2015, the Company paid all outstanding principal and accrued interest owing under the Wells Facilities. On September 22, 2015, the Company and KeyBank National Association ("KeyBank") entered into a credit and securities agreement and related agreements with respect to a $20,000,000 aggregate principal amount revolving credit facility (the "KeyBank Credit Facility"). In addition to paying off the Wells Facility, the proceeds from advances under the KeyBank Credit Facility are to be used for ongoing working capital requirements and to provide for general corporate purposes. All amounts of unpaid principal and interest due under the KeyBank Credit Facility must be paid in full on or before September 21, 2017. The KeyBank Credit Facility generally establishes a borrowing base of up to 85% of eligible accounts receivable (90% if insured), plus up to 65% of eligible inventory, subject to lender reserves. Loans may be based on a Base Rate or Eurodollar Rate (which is increased by an applicable margin of 2% per annum), generally at the Company's option. In the event of a default, at the option of KeyBank, the interest rate on all obligations owing will increase by 3% per annum over the rate otherwise applicable. The Company shall maintain one or more lockbox or cash collateral accounts at KeyBank, in KeyBank's name, which shall provide for the collection and remittance of all proceeds from sales of Company product (which is collateral for the KeyBank Credit Facility) on a daily basis. Subject to certain exceptions, the KeyBank Credit Facility is secured by a first priority perfected security interest in all the Company's now owned and after acquired tangible and intangible assets as well as the assets of the Company's domestic subsidiaries, which have guaranteed the Company's obligations under the KeyBank Credit Facility. The KeyBank Credit Facility is further secured by a lien on, and a pledge of, 65% of the stock of S&W Australia Pty Ltd., the Company's wholly-owned subsidiary. With respect to its security interest and/or lien, KeyBank has entered into an intercreditor and subordination agreement with Hudson Bay Fund LP (as agent for the holders of the senior secured debentures issued by the Company in December 2014) and DuPont Pioneer. The KeyBank Credit Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default. The Company was in compliance with all covenants at December 31, 2015. The outstanding balance on the KeyBank Credit Facility was $11,169,814 at December 31, 2015. On October 1, 2012, the Company issued a five-year subordinated promissory note to IVS in the principal amount of $500,000 (the "IVS Note"), with a maturity date of October 1, 2017. The IVS Note accrues interest at a rate equal to one-month LIBOR at closing plus 2%, which equals 2.2%. Interest is payable in five annual installments, in arrears, on October 1 of each year. Amortizing payments of the principal of $100,000 will also be made on each October 1, with any remaining outstanding principal and accrued interest payable on the maturity date of the IVS Note. The outstanding balance on the IVS Note was $200,000 at December 31, 2015. In March 2013, the Company entered into a term loan for a vehicle purchase. The loan is payable in 59 monthly installments and matures in February 2018. The loan bears interest at a rate of 2.94% per annum. On April 1, 2013, the Company issued a three-year subordinated promissory note to the selling shareholders of SGI in the principal amount of USD $2,482,317 (the "SGI Note"), with a maturity date of April 1, 2016 (the "SGI Maturity Date"). The SGI note is non-interest bearing. A principal payment of $482,317 was made in October 2013, and the remaining $2,000,000 will be paid at maturity. Since the note is non-interest bearing, the Company recorded a debt discount of $156,880 at the time of issuance for the estimated net present value of the obligation and accretes the net present value of the SGI Note obligation up to the face value of the SGI Note obligation using the effective interest method as a component of interest expense. Accretion of the debt discount totaled $26,717 and $26,142 for the six months ended December 31, 2015 and 2014, respectively. On December 31, 2014, the Company issued a three-year secured promissory note to DuPont Pioneer in the initial principal amount of $10,000,000 (the "Pioneer Note"), with a maturity date of December 31, 2017. The Pioneer Note accrues interest at 3% per annum. Interest is payable in three annual installments, in arrears, commencing on December 31, 2015. SGI finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility with NAB. The current facility, referred to as the 2015 NAB Facilities, was amended as of March 31, 2015 and expires on March 31, 2016. As of December 31, 2015, AUD $770,605 (USD $562,388) was outstanding under the 2015 NAB Facilities. The 2015 NAB Facilities, as currently in effect, comprises two distinct facility lines: (i) an overdraft facility (the "Overdraft Facility"), having a credit limit of AUD $980,000 (USD $715,204 at December 31, 2015) and a trade refinance facility (the "Trade Refinance Facility"), having a credit limit of AUD $12,000,000 (USD $8,757,600 at December 31, 2015). The Trade Refinance Facility permits SGI to borrow funds for periods of up to 180 days, at SGI's discretion, provided that the term is consistent with its trading terms. Interest for each drawdown is set at the time of the drawdown as follows: (i) for Australian dollar drawings, based on the Australian Trade Refinance Rate plus 1.5% per annum and (ii) for foreign currency drawings, based on the British Bankers' Association Interest Settlement Rate for the relevant foreign currency for the relevant period, or if such rate is not available, the rate reasonably determined by NAB to be the appropriate equivalent rate, plus 1.5% per annum. As of December 31, 2015, the Trade Refinance Facility accrued interest on Australian dollar drawings at approximately 5.19%, calculated daily. The Trade Refinance Facility is secured by a lien on all the present and future rights, property and undertakings of SGI, the mortgage on SGI's Keith, South Australia property and the Company's corporate guarantee (up to a maximum of USD $13,000,000). The Overdraft Facility permits SGI to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the balance owing at the end of the day and is payable monthly in arrears. As of December 31, 2015, the Overdraft Facility accrued interest at approximately 7.12% calculated daily. For both the Overdraft Facility and the Trade Refinance Facility, interest is payable each month in arrears. In the event of a default, as defined in the NAB Facility Agreement, the principal balance due under the facilities will thereafter bear interest at an increased rate per annum above the interest rate that would otherwise have been in effect from time to time under the terms of each facility ( i.e. Both facilities constituting the 2015 NAB Facilities are secured by a fixed and floating lien over all the present and future rights, property and undertakings of SGI and are guaranteed by the Company as noted above. The 2015 NAB Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the NAB facility agreements. SGI was in compliance with all NAB debt covenants at December 31, 2015. In January 2015, NAB and SGI entered into a new business markets - flexible rate loan (the "Keith Building Loan") in the amount of AUD $650,000 (USD $474,370 at December 31, 2015), and a machinery and equipment facility (the "Keith Machinery and Equipment Facility") of up to AUD $1,350,000 (USD $985,230 at December 31, 2015). The Keith Building Loan and the Keith Machinery and Equity Facility, collectively referred to as the Keith Credit Facilities, have a combined maximum credit amount of AUD $2,000,000 (USD $1,459,600 at December 31, 2015). The Keith Credit Facilities are being used for the construction of a new building on SGI's Keith, South Australia property and for the machinery and equipment to be purchased for use in the operations of the new building. The Keith Building Loan matures on November 30, 2024. The interest rate on the Keith Building Loan varies from pricing period to pricing period (each such period approximately 30 days), based on the weighted average of a specified basket of interest rates (5.96% as of December 31, 2015). Interest is payable each month in arrears. The Keith Machinery and Equipment Facility permits SGI to draw down amounts up to the maximum of AUD $1,350,000 (USD $985,230) for periods of up to 180 days, in SGI's discretion, provided the term is consistent with SGI's trading terms. The Keith Machinery and Equipment Facility bears interest, payable in arrears, based on the Australian Trade Refinance Rate quoted by NAB at the time of the drawdown, plus 2.9%. The two Keith Credit Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the facility agreement. They are secured by a lien on all the present and future rights, property and undertakings of SGI, the Company's corporate guarantee and a mortgage on SGI's Keith, South Australia property. At December 31, 2015, the principal balance on the Keith Building Loan was AUD $650,000 (USD $474,370), and the principal balance on the Keith Machinery and Equipment Facility was AUD $770,113 (USD $562,028). The annual maturities of short-term and long-term debt (excluding debt discount), excluding convertible debt addressed in Note 7, are as follows: Fiscal Year Amount 2016 $ 2,566,558 2017 145,752 2018 10,161,063 2019 76,629 2020 76,629 Thereafter 229,887 Total $ 13,256,518 |
NOTE 7 - SENIOR CONVERTIBLE NOT
NOTE 7 - SENIOR CONVERTIBLE NOTES AND WARRANTS | 6 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
NOTE 7 - SENIOR CONVERTIBLE NOTES AND WARRANTS | NOTE 7 - SENIOR CONVERTIBLE NOTES AND WARRANTS On December 31, 2014, the Company consummated the sale of senior secured convertible debentures (the "Debentures") and common stock purchase warrants (the "Warrants") to various institutional investors ("Investors") pursuant to the terms of a securities purchase agreement among the Company and the Investors. At closing, the Company received $27,000,000 in gross proceeds. Offering expenses of $1,931,105 attributed to the Debentures were recorded as deferred financing fees and recorded as a debt discount and offering expenses of $424,113 attributed to the Warrants were expensed during the year ended June 30, 2015. The net proceeds were paid directly to DuPont Pioneer in partial consideration for the purchase of certain DuPont Pioneer assets, the closing for which also took place on December 31, 2014. See Note 3 for further discussion of the DuPont Pioneer Acquisition. Debentures The Debentures are due and payable on November 30, 2017, unless earlier converted or redeemed. The Debentures bear interest on the aggregate unconverted and then outstanding principal amount at 8% per annum, payable in arrears monthly beginning February 2, 2015. Commencing on the occurrence of any Event of Default (as defined in the Debentures) that results in the eventual acceleration of the Debentures, the interest rate will increase to 18% per annum. The monthly interest is payable in cash, or in any combination of cash or shares of the Company's common stock at the Company's option, provided certain "equity conditions" defined in the Debentures are satisfied. Beginning on July 1, 2015, the Company was required to make monthly payments of principal as well, payable in cash or any combination of cash or shares of its common stock at the Company's option, provided all of the applicable equity conditions are satisfied. The Debentures contain certain rights of acceleration and deferral at the holder's option in the event a principal payment is to be made in stock and contains certain limited acceleration rights of the Company, provided certain conditions are satisfied. As required under the terms of the Debentures, following the sale of 759 acres of farmland property in the Imperial Valley of California in March 2015, which resulted in sale proceeds of $7,100,000, the Company redeemed $5,000,000 in principal amount of the Debentures. The reduction in principal was applied on the back end of the term, moving the final scheduled payment from November 30, 2017 to June 1, 2017. As of December 31, 2015, the scheduled principal payments on the Debentures are as follows: Fiscal Year Amount 2016 $ 8,633,005 2017 7,849,754 2018 - 2019 - 2020 - Thereafter - Total $ 16,482,759 The Debentures were initially convertible, at the holder's option, into the Company's common stock at a conversion price of $5.00. Pursuant to the terms of the Debentures, the conversion price was reset to $4.63 on September 30, 2015. As of December 31, 2015, the remaining outstanding Debentures were potentially convertible into 3,559,991 shares. No further adjustments of the conversion price are provided for, except in the case of stock splits and similar recapitalization events. The Company has a one-time optional forced conversion right, exercisable if specified conditions are satisfied. The Debentures are the Company's senior secured obligations, subject only to certain secured obligations of KeyBank and DuPont Pioneer (limited to a purchase money security interest in the purchased assets). The rights of KeyBank, DuPont Pioneer and the holders of the Debentures are set forth in an intercreditor and subordination agreement that was initially entered into in connection with the closing of the issuance of the Debentures. Warrants The Warrants entitle the holders to purchase, in the aggregate, 2,699,999 shares of the Company's common stock. The Warrants are exercisable through their expiration on June 30, 2020, unless earlier redeemed. The Warrants were initially exercisable at an exercise price equal to $5.00. On September 30, 2015, pursuant to the terms of the Warrants, the exercise price has been reset to $4.63. In addition, if the Company issues or is deemed to have issued securities at a price lower than the then applicable exercise price during the three-year period ending December 31, 2017, the exercise price of the Warrants will adjust based on a weighted average anti-dilution formula ("down-round protection"). On November 24, 2015, the Company closed on a private placement transaction in which 1,180,722 common shares were sold at $4.15 per share. Pursuant to the down-round protection terms of the Warrants, the exercise price was adjusted to $4.59 on November 24, 2015. The Warrants may be exercised for cash, provided that, if there is no effective registration statement available registering the exercise of the Warrants, the Warrants may be exercised on a cashless basis. At any time that (i) all equity conditions set forth in the Warrants have been satisfied, and (ii) the closing sales price of the common stock equals or exceeds $12.00 for 15 consecutive trading days (subject to adjustment for stock splits, reverse stock splits and other similar recapitalization events), the Company may redeem all or any part of the Warrants then outstanding for cash in an amount equal to $0.25 per Warrant. Accounting for the Conversion Option and Warrants Due to the down-round price protection included in the terms of the Warrants, the Warrants are treated as a derivative liability in the consolidated balance sheet, measured at fair value and marked to market each reporting period until the earlier of the Warrants being fully exercised or December 31, 2017, when the down-round protection expires. The initial fair value of the Warrants on December 31, 2014 was $4,862,000. At December 31, 2015, the fair value of the Warrants was estimated at $4,776,000. The Warrants were valued at December 31, 2015 using the Monte Carlo simulation model, under the following assumptions: (i) remaining expected life of 4.5 years, (ii) volatility of 50.7%, (iii) risk-free interest rate of 1.76% and (iv) dividend rate of zero. $22,138,000 of the initial proceeds was allocated to the Debentures. The required redemption contingent upon the real estate sale was determined to be an embedded derivative not clearly and closely related to the borrowing. As such, it was bifurcated and treated as a derivative liability, recorded initially at its fair value of $150,000, leaving an allocation to the host debt of $21,988,000. The difference between the initial amount allocated to the borrowing and the face value of the Debentures is being amortized over the term of the Debentures using the effective interest method. Debt issuance costs totaling $1,931,105 are also being amortized over the term of the Debentures using the effective interest method. In addition, the reduction in the conversion price of the Debentures as of September 30, 2015 resulted in a beneficial conversion feature of $871,862, which was recognized as additional debt discount and an increase to additional paid-in capital. Accounting for the Redemption The redemption of $5,000,000 in principal amount of the Debentures was accounted for as a partial extinguishment of the borrowing, as well as the settlement of the derivative recognized initially. The redemption resulted in a loss of $1,183,687, which was included in the interest expense - amortization of debt discount line item on the consolidated statement of operations for the three months ended March 31, 2015. Total convertible debt outstanding, excluding debt addressed in Note 6, is presented on the consolidated balance sheet as follows: December 31, 2015 June 30, 2015 Current portion of convertible debt, net Senior secured convertible notes payable $ 11,463,054 $ 11,274,678 Debt discount (2,001,577) (2,008,749) Total current portion 9,461,477 9,265,929 Convertible debt, net, less current portion Senior secured convertible notes payable 5,019,704 10,679,804 Debt discount (876,495) (1,902,763) Total long-term portion 4,143,209 8,777,041 Total convertible debt, net $ 13,604,686 $ 18,042,970 |
NOTE 8 - WARRANTS
NOTE 8 - WARRANTS | 6 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 8 - WARRANTS | NOTE 8 - WARRANTS The following table summarizes the total warrants outstanding at December 31, 2015: Issue Date Exercise Price Per Share Expiration Date Outstanding as of June 30, 2015 New Issuances Expired Outstanding as of December 31, 2015 Underwriter warrants May 2012 $ 6.88 Feb 2017 50,000 - - 50,000 Warrants Dec 2014 $ 4.59 Jun 2020 2,699,999 - - 2,699,999 2,749,999 - - 2,749,999 The warrants issued in December 2014 are subject to down-round price protection. See Note 7 for further discussion. |
NOTE 9 - FOREIGN CURRENCY CONTR
NOTE 9 - FOREIGN CURRENCY CONTRACTS | 6 Months Ended |
Dec. 31, 2015 | |
Note 9 - Foreign Currency Contracts | |
NOTE 9 - FOREIGN CURRENCY CONTRACTS | NOTE 9 - FOREIGN CURRENCY CONTRACTS The Company's subsidiary, SGI, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company manages through the use of foreign currency forward contracts. These foreign currency contracts are not designated as hedging instruments; accordingly, changes in the fair value are recorded in current period earnings. These foreign currency contracts had a notional value of $2,145,495 at December 31, 2015 and their maturities range from January 2016 to April 2016. The Company records an asset or liability on the consolidated balance sheet for the fair value of the foreign currency forward contracts. The foreign currency contract assets totaled $23,264 at December 31, 2015 compared to foreign currency contract liabilities of $59,116 at June 30, 2015. The Company recorded a gain on foreign exchange contracts of $330,007 and a loss of $385,465, which is reflected in cost of revenue for the three and six months ended December 31, 2015, respectively. The Company recorded a loss on foreign exchange contracts of $289,754 and $329,463, which is reflected in cost of revenue for the three and six months ended December 31, 2014, respectively. |
NOTE 10 - COMMITMENTS AND CONTI
NOTE 10 - COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 10 - COMMITMENTS AND CONTINGENCIES | NOTE 10 - COMMITMENTS AND CONTINGENCIES Commitments In the DuPont Pioneer Acquisition, DuPont Pioneer retained ownership of its GMO (genetically modified) alfalfa germplasm and related intellectual property assets, as well as the right to develop new GMO-traited alfalfa germplasm. The retained GMO germplasm assets incorporate certain GMO traits that are licensed to DuPont Pioneer from third parties (the "Third Party GMO Traits"). Pursuant to the terms of the Asset Purchase and Sale Agreement for the DuPont Pioneer Acquisition, if required third party consents are received prior to November 30, 2017 and subject to the satisfaction of certain other conditions specified in the Asset Purchase and Sale Agreement, either the Company or DuPont Pioneer has the right to enter into (and require the other party to enter into) on December 29, 2017 (or such earlier date as the parties agree) a proposed form of asset purchase and sale agreement, as the same may be updated in accordance with the terms of the Asset Purchase and Sale Agreement, pursuant to which Company would acquire additional GMO germplasm varieties and other related assets from DuPont Pioneer for a purchase price of $7,000,000. Contingencies The Company is not currently a party to any pending or threatened legal proceedings. Based on information currently available, management is not aware of any matters that would have a material adverse effect on the Company's financial condition, results of operations or cash flows. |
NOTE 11 - RELATED PARTY TRANSAC
NOTE 11 - RELATED PARTY TRANSACTIONS | 6 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 11 - RELATED PARTY TRANSACTIONS | NOTE 11 - RELATED PARTY TRANSACTIONS Glen D. Bornt, a member of the Company's Board of Directors, is the founder and President of Imperial Valley Milling Co. ("IVM"). He is its majority shareholder and a member of its Board of Directors. Fred Fabre, the Company's Vice President of Sales and Marketing, is a minority shareholder of IVM. IVM had a 15-year supply agreement with IVS, and this agreement was assigned by IVS to the Company when it purchased the assets of IVS in October 2012. IVM contracts with alfalfa seed growers in California's Imperial Valley and sells its growers' seed to the Company pursuant to a supply agreement. Under the terms of the supply agreement, IVM's entire certified and uncertified alfalfa seed production must be offered and sold to the Company, and the Company has the exclusive option to purchase all or any portion of IVM's seed production. The Company paid $5,104,745 to IVM during the six months ended December 31, 2015. Amounts due to IVM totaled $5,287,224 and $834,158 at December 31, 2015 and June 30, 2015, respectively. Simon Pengelly, SGI's Chief Financial Officer as of December 31, 2015, has a non-controlling ownership interest in the partnership Bungalally Farms ("BF"). BF is one of SGI's contract alfalfa seed growers. SGI currently has entered into seed production contracts with BF on the same commercial terms and conditions as with the other growers with whom SGI contracts for alfalfa seed production. During six months ended December 31, 2015, the Company purchased a total of $12,105 of alfalfa seed that BF grew and sold to SGI under contract seed production agreements. SGI currently has seed production agreements with BF for 123 hectares of various seed varieties as part of its contract production for which SGI paid BF the same price it agreed to pay its other growers. Mr. Pengelly did not personally receive any portion of these funds. Amounts due to BF totaled $0 and $293,772 at December 31, 2015 and June 30, 2015, respectively. |
NOTE 12 - EQUITY-BASED COMPENSA
NOTE 12 - EQUITY-BASED COMPENSATION | 6 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 12 - EQUITY-BASED COMPENSATION | NOTE 12 - EQUITY-BASED COMPENSATION 2009 Equity Incentive Plan In October 2009 and January 2010, the Company's Board of Directors and stockholders, respectively, approved the 2009 Equity Incentive Plan (as amended and/or restated from time to time, the "2009 Plan"). The plan authorized the grant and issuance of options, restricted shares and other equity compensation to the Company's directors, employees, officers and consultants, and those of the Company's subsidiaries and parent, if any. In October 2012 and December 2012, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,250,000 shares. In September 2013 and December 2013, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,700,000 shares. In September 2015 and December 2015, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 2,450,000 shares. The term of incentive stock options granted under the 2009 Plan may not exceed ten years, or five years for incentive stock options granted to an optionee owning more than 10% of the Company's voting stock. The exercise price of options granted under the 2009 Plan must be equal to or greater than the fair market value of the shares of the common stock on the date the option is granted. An incentive stock option granted to an optionee owning more than 10% of voting stock must have an exercise price equal to or greater than 110% of the fair market value of the common stock on the date the option is granted. The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Stock options issued to non-employees are accounted for at their estimated fair value. The fair value of options granted to non-employees is re-measured as they vest. The Company amortizes stock-based compensation expense on a straight-line basis over the requisite service period. Beginning with the quarter ended December 31, 2014, the Company began utilizing a Black-Scholes-Merton option pricing model, which includes assumptions regarding the risk-free interest rate, dividend yield, life of the award, and the volatility of the Company's common stock to estimate the fair value of employee options grants. The fair value of grants issued prior to the quarter ended December 31, 2014 were estimated using a lattice model. The weighted average assumptions used in the Black-Scholes-Merton model are: (i) 1.5% - 1.6% risk free rate of interest; (ii) 0% dividend yield and (iii) 50.4% - 50.8% volatility of common stock. The Company applied forfeiture assumptions averaging 3.3% to the estimated fair values to determine the net expense to record in the consolidated financial statements. On December 8, 2012, the Company granted 175,000 stock options to its directors, officers, and employees at an exercise price of $7.20, which was the closing price for the Company's common stock on the date of grant. These options vest in equal quarterly installments over one- and three-year periods, commencing on January 1, 2013, and expire five years from the date of grant. During the year ended June 30, 2014, the Company granted 270,000 stock options to its officers and employees at exercise prices ranging from $5.94 to $8.29, which was the closing price for the Company's common stock on the respective dates of grant. These options vest in equal quarterly installments over periods ranging from six months to three years and expire five years from the date of grant. During the year ended June 30, 2015, the Company granted 227,197 stock options to its directors, officers and employees at exercise prices ranging from $3.61 to $6.25. These options vest in equal quarterly installments over periods ranging from one to three years and expiration dates range from five to ten years from the date of grant. During the six months ended December 31, 2015, the Company granted 203,500 stock options to its directors and officers at exercise prices ranging from $4.25 to $4.76. These options vest in quarterly installments over periods ranging from one to three years and expire ten years from the date of grant. A summary of stock option activity for the six months ended December 31, 2015 and year ending June 30, 2015 is presented below: Weighted - Weighted - Average Average Remaining Aggregate Number Exercise Price Contractual Intrinsic Outstanding Per Share Life (Years) Value Outstanding at June 30, 2014 1,087,000 $ 5.17 2.5 $ 1,562,712 Granted 227,197 3.89 9.5 - Exercised (400,000) 4.00 - - Canceled/forfeited/expired (12,500) 7.75 - - Outstanding at June 30, 2015 901,697 5.33 4.1 392,850 Granted 203,500 4.56 9.7 - Exercised (8,751) 3.95 - - Canceled/forfeited/expired (25,500) - - - Outstanding at December 31, 2015 1,071,446 5.12 4.8 82,267 Options vested and exercisable at December 31, 2015 676,336 5.44 2.7 39,501 Options vested and expected to vest as of December 31, 2015 1,069,587 $ 5.12 4.8 $ 81,987 The weighted average grant date fair value of options granted and outstanding at December 31, 2015 was $1.09. At December 31, 2015, the Company had $546,720 of unrecognized stock compensation expense, net of estimated forfeitures, related to the options under the 2009 Plan, which will be recognized over the weighted average remaining service period of 1.83 years. The Company settles employee stock option exercises with newly issued shares of common stock. On March 16, 2013, the Company issued 280,000 restricted stock units to certain members of the executive management team. The restricted stock units have varying vesting periods whereby 34,000 restricted stock units vested on July 1, 2013 and the remaining 246,000 restricted stock units vest quarterly in equal installments over a four and one-half year period, commencing on July 1, 2013. The fair value of the award was $2,984,800 and was based on the closing stock price on the date of grant. On July 15, 2015, the Company issued 88,333 restricted stock units to certain members of the executive management team. The restricted stock units have varying vesting periods whereby 13,250 restricted stock units vest on October 1, 2015 and the remaining 75,083 restricted stock units vest quarterly in equal installments over a three-year period, commencing on July 1, 2015. The fair value of the award was $420,465 and was based on the closing stock price on the date of grant. On December 11, 2015, the Company issued 28,059 restricted stock units to certain members of the executive management team and other employees. The restricted stock units have varying vesting periods whereby 500 restricted stock units vest on December 11, 2015, 4,259 restricted stock units vest in quarterly installments over a one-year period, and the remaining 23,300 restricted stock units vest annually in equal installments over a three year period. The fair value of the award was $119,251 and was based on the closing stock price on the date of grant. The Company recorded $186,786 and $145,511 of stock-based compensation expense associated with grants of restricted stock units made under the 2009 Plan during the three months ended December 31, 2015 and 2014, respectively. The Company recorded $393,845 and $290,846 of stock-based compensation expense associated with grants of restricted stock units made under the 2009 Plan during the six months ended December 31, 2015 and 2014, respectively. A summary of activity related to non-vested restricted stock units is presented below: Six Months Ended December 31, 2015 Weighted - Number of Weighted - Average Nonvested Average Remaining Restricted Grant Date Contractual Stock Units Fair Value Life (Years) Beginning nonvested restricted units outstanding 136,672 $ 10.66 - Granted 116,392 4.64 - Vested (41,082) 10.66 - Forfeited - - - Ending nonvested restricted units outstanding 211,982 $ 7.74 2.0 At December 31, 2015, the Company had $1,448,357 of unrecognized stock compensation expense related to the restricted stock units, which will be recognized over the weighted average remaining service period of 2.0 years. At December 31, 2015, there were 684,001 shares available under the 2009 Plan for future grants and awards. Stock-based compensation expense recorded for stock options, restricted stock grants and restricted stock units for the three months ended December 31, 2015 and 2014 totaled $303,614 and $228,063, respectively. Stock-based compensation expense recorded for stock options, restricted stock grants and restricted stock units for the six months ended December 31, 2015 and 2014 totaled $628,173 and $447,075, respectively. |
NOTE 13 - NON-CASH ACTIVITIES F
NOTE 13 - NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS | 6 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
NOTE 13 - NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS | NOTE 13 - NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS The below table represents supplemental information to the Company's consolidated statements of cash flows for non-cash activities during the six months ended December 31, 2015 and 2014, respectively. Six months ended December 31, 2015 2014 Net assets acquired in business acquisitions $ - $ 12,200,000 Debt discount from warrant liability - 4,862,000 Increase in non-cash net assets of subsidiary due to foreign currency translation loss, net of income tax (841,117) (2,586,183) |
NOTE 14 - SUBSEQUENT EVENTS
NOTE 14 - SUBSEQUENT EVENTS | 6 Months Ended |
Dec. 31, 2015 | |
Note 14 - Subsequent Events | |
Note 14 - SUBSEQUENT EVENTS | NOTE 14 - SUBSEQUENT EVENTS On January 1, 2016, the Company issued 15,081 shares of common stock in the settlement of previously granted restricted stock units that vested on January 1, 2016. On January 25, 2016, the Company commenced a $10,375,000 rights offering. Under the terms of the rights offering, the Company is distributing to holders of its common stock, convertible notes and accompanying warrants, at no charge, non-transferable subscription rights to purchase shares of its common stock at $4.15 per share. The rights offering is currently planned to be closed in late February 2016. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Principles of Consolidation | Basis of Presentation and Principles of Consolidation The Company maintains its accounting records on an accrual basis in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The consolidated financial statements include the accounts of Seed Holding, LLC and its other wholly-owned subsidiaries, S&W Australia, which owns 100% of SGI, and Stevia California, LLC. All significant intercompany balances and transactions have been eliminated. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The Company has prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated financial statements are unaudited and, in the Company's opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the Company's consolidated balance sheets, statements of operations, comprehensive loss, cash flows and stockholders' equity for the periods presented. Operating results for the periods presented are not necessarily indicative of the results to be expected for the full year ending June 30, 2016. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended June 30, 2015, as filed with the SEC. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration, derivative liabilities, contingencies and litigation. Significant estimates and assumptions are also used to establish the fair value and useful lives of depreciable tangible and certain intangible assets, goodwill as well as valuing stock-based compensation. Actual results may differ from those estimates and assumptions, and such results may affect income, financial position or cash flows. |
Certain Risks and Concentrations | Certain Risks and Concentrations The Company's revenue is principally derived from the sale of alfalfa seed, the market for which is highly competitive. The Company depends on a core group of significant customers. One customer accounted for 58% of its revenue for the three months ended December 31, 2015, and two customers accounted for 23% of its revenue for the three months ended December 31, 2014. One customer accounted for 40% of its revenue for the six months ended December 31, 2015, and three customers accounted for 37% of its revenue for the six months ended December 31, 2014. Three customers accounted for 43% of the Company's accounts receivable at December 31, 2015. Three customers accounted for 53% of the Company's accounts receivable at June 30, 2015. In addition, the Company sells a substantial portion of its products to international customers. Sales direct to international customers represented 35% and 87% of revenue during the three months ended December 31, 2015 and 2014, respectively. Sales direct to international customers represented 52% and 87% of revenue during the six months ended December 31, 2015 and 2014, respectively. The net book value of fixed assets located outside the United States were 15% and 11% at December 31, 2015 and June 30, 2015, respectively. Cash balances located outside of the United States may not be insured and totaled $892,877 and $1,039,326 at December 31, 2015 and June 30, 2015, respectively. The following table shows revenue from external sources by destination country: Three Months Ended December 31, Six Months Ended December 31, 2015 2014 2015 2014 United States $ 15,703,406 65% $ 1,797,904 13% United States $ 17,648,226 48% $ 2,926,019 13% Saudi Arabia 4,344,035 18% 5,896,468 43% Saudi Arabia 10,831,552 30% 9,021,558 41% Mexico 1,548,990 6% 2,117,161 15% Mexico 3,086,790 8% 4,116,969 19% Argentina 907,070 4% 1,379,623 10% Argentina 1,498,908 4% 1,379,623 6% Peru 315,381 1% 95,428 1% Peru 925,382 3% 276,938 1% South Africa 283,554 1% 264,096 2% Australia 448,899 1% 287,587 1% China 219,321 1% - 0% Malaysia 287,500 1% 188,125 1% Sudan 143,750 1% 135,250 1% South Africa 283,554 1% 268,276 1% Other 675,750 3% 2,107,836 15% Other 1,385,358 4% 3,492,904 15% Total $ 24,141,257 100% $ 13,793,766 100% Total $ 36,396,169 100% $ 21,957,999 100% |
International Operations | International Operations The Company translates its foreign operations' asset and liabilities denominated in foreign currencies into U.S. dollars at the current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of accumulated other comprehensive income. Gains or losses from foreign currency transactions are included in the consolidated statement of operations. |
Revenue Recognition | Revenue Recognition The Company derives its revenue primarily from sale of seed and other crops and milling services. Revenue from seed and other crop sales is recognized when risk and title to the product is transferred to the customer. No customer has a right of return. The Company recognizes revenue from milling services according to the terms of the sales agreements and when delivery has occurred, performance is complete, and pricing is fixed or determinable at the time of sale. Additional conditions for recognition of revenue for all sales include the requirements that the collection of sales proceeds must be reasonably assured based on historical experience and current market conditions, the sales price is fixed and determinable and that there must be no further performance obligations under the sale. |
Cost of Revenue | Cost of Revenue The Company records purchasing and receiving costs, inspection costs and warehousing costs in cost of revenue. When the Company is required to pay for outward freight and/or the costs incurred to deliver products to its customers, the costs are included in cost of revenue. |
Cash and Equivalents | Cash and Cash Equivalents For financial statement presentation purposes, the Company considers time deposits, certificates of deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At times, cash and cash equivalents balances exceed amounts insured by the Federal Deposit Insurance Corporation. |
Accounts Receivable | Accounts Receivable The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer's trade accounts receivable. The allowance for doubtful trade receivables was $162,945 and $155,595 at December 31, 2015 and June 30, 2015, respectively. |
Inventories | Inventories Inventory Inventories consist of alfalfa seed purchased from the Company's growers under production contracts, alfalfa seed produced from its own farming operations and packaging materials. Inventories are stated at the lower of cost or market, and an inventory reserve permanently reduces the cost basis of inventory. Inventories are valued as follows: Actual cost is used to value raw materials such as packaging materials, as well as goods in process. Costs for substantially all finished goods, which include the cost of carryover crops from the previous year, are valued at actual cost. Actual cost for finished goods includes plant conditioning and packaging costs, direct labor and raw materials and manufacturing overhead costs based on normal capacity. The Company records abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) as current period charges and allocates fixed production overhead to the costs of finished goods based on the normal capacity of the production facilities. The Company's subsidiary, SGI, does not fix the final price for seed payable to its growers until the completion of a given year's sales cycle pursuant to its standard contract production agreement. SGI records an estimated unit price; accordingly, inventory, cost of revenue and gross profits are based upon management's best estimate of the final purchase price to growers. Inventory is periodically reviewed to determine if it is marketable, obsolete or impaired. Inventory that is determined to be obsolete or impaired is written off to expense at the time the impairment is identified. Because the germination rate, and therefore the quality, of alfalfa seed improves over the first year of proper storage, inventory obsolescence for alfalfa seed is not a material concern. The Company sells its inventory to distributors, dealers and directly to growers. Growing Crops Expenditures on growing crops are valued at the lower of cost or market and are deferred and charged to cost of products sold when the related crop is harvested and sold. The deferred growing costs included in inventories in the consolidated balance sheets consist primarily of labor, lease payments on land, interest expense on farmland, cultivation and on-going irrigation, harvest and fertilization costs. Costs included in growing crops relate to the current crop year. Costs that are to be realized over the life of the crop are reflected in crop production costs. Components of inventory are: December 31, June 30, 2015 2015 Raw materials and supplies $ 325,314 $ 276,339 Work in progress and growing crops 472,903 5,415,402 Finished goods 36,268,414 19,830,006 $ 37,066,631 $ 25,521,747 |
Crop Production Costs | Crop Production Costs Expenditures on crop production costs are deferred and charged to cost of products sold when the related crop is harvested and sold. The deferred crop production costs included in the consolidated balance sheets consist primarily of the cost of plants and the transplanting, stand establishment costs, intermediate life irrigation equipment and land amendments and preparation. Crop production costs are estimated to have useful lives of three to five years depending on the crop and nature of the expenditure and are amortized to growing crop inventory each year over the estimated life of the crop. The Company has exited all internal farming operations and accordingly, there are no crop production costs as of December 31, 2015. Components of crop production costs are: December 31, June 30, 2015 2015 Alfalfa hay $ - $ 92,037 Other crops - 120,194 Total crop production costs, net $ - $ 212,231 |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of 18-28 years for buildings, 3-10 years for machinery and equipment, and 3-5 years for vehicles. |
Intangible Assets | Intangible Assets Intangible assets acquired in business acquisitions are reported at their initial fair value less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated useful life of the asset. Periods of 10-30 years for technology/IP/germplasm, 20 years for customer relationships and trade names, and 2-20 for other intangible assets. The weighted average estimated useful lives are 24 years for technology/IP/germplasm, 20 years for customer relationships and trade names, and 22 years for other intangible assets. |
Goodwill | Goodwill Goodwill originated from acquisitions of Imperial Valley Seeds, Inc. ("IVS") and SGI during the fiscal year 2013 and the acquisition of the alfalfa business from DuPont Pioneer in fiscal year 2015. Goodwill is assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires various judgmental assumptions including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on the Company's budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. The Company determined it has two reporting units for goodwill impairment testing purposes. Its reporting units are the United States operations and the Australia operations. The Company conducted a qualitative assessment of goodwill and determined that it was more likely than not there was no impairment at June 30, 2015 |
Equity Method Investments | Equity Method Investments Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee company's board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company's accounts are not reflected within the Company's consolidated balance sheets and statements of operations; however, the Company's share of the earnings or losses of the investee company is reflected in the caption ``Loss on equity method investment'' in the consolidated statements of operations. The Company's carrying value in an equity method investee company is included in the Company's consolidated balance sheets. Loss on equity method investment totaled $129,341 and $223,703 for the three months and six months ended December 31, 2015, respectively. This represents the Company's 50% share of losses incurred by the joint corporation (S&W Semillas S.A.) in Argentina during the two periods. |
Cost Method Investments | Cost Method Investments Investee companies not accounted for under the consolidation or the equity method of accounting are accounted for under the cost method of accounting. Under this method, the Company's share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or statement of operations. However, impairment charges are recognized in the consolidated statement of operations. If circumstances suggest that the value of the investee company has subsequently recovered, such recovery is not recorded. |
Research and Development Costs | Research and Development Costs The Company is engaged in ongoing research and development ("R&D") of proprietary seed and stevia varieties. All R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or constructed for R&D activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are determined based on differences between the financial statement and tax bases of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. A triggering event during the quarter ended December 31, 2014 prompted a review of certain farmland-related costs. The carrying value of these assets was deemed in excess of fair value, and the Company recorded an impairment charge of $500,198 in the consolidated statement of operations during the quarter ended December 31, 2014. |
Foreign Exchange Contracts | Derivative Financial Instruments Foreign Exchange Contracts The Company's subsidiary, SGI, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company at times manages through the use of foreign currency forward contracts. The Company has entered into certain derivative financial instruments (specifically foreign currency forward contracts), and accounts for these instruments in accordance with ASC Topic 815, "Derivatives and Hedging", which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The Company's foreign currency contracts are not designated as hedging instruments under ASC 815; accordingly, changes in the fair value are recorded in current period earnings. |
Derivative Liabilities | Derivative Financial Instruments Derivative Liabilities The Company reviews the terms of the common stock, warrants and convertible debt it issues to determine whether there are embedded derivative instruments, including embedded conversion options and redemption options, which are required to be bifurcated and accounted for separately as derivative financial instruments. |
Fair Values of Financial Instruments | Fair Value of Financial Instruments The Company discloses assets and liabilities that are recognized and measured at fair value, presented in a three-tier fair value hierarchy, as follows: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The assets acquired and liabilities assumed in the Pioneer Acquisition were valued at fair value on a non-recurring basis as of December 31, 2014. No assets or liabilities were valued at fair value on a non-recurring basis as of December 31, 2015 or June 30, 2015. The carrying value of cash and cash equivalents, accounts payable, short-term and all long-term borrowings other than the convertible debentures, as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments or interest rates commensurate with market rates. There have been no changes in operations and/or credit characteristics since the date of issuance that could impact the relationship between interest rate and market rates. At December 31, 2015, the fair value and carrying value of the convertible debentures was $16,418,646 and $13,604,686, respectively. The fair value was calculated using a discounted cash flow model and utilized a 10% discount rate that is commensurate with market rates given the remaining term, principal repayment schedule and outstanding balance. The convertible debentures are categorized as Level 3 in the fair value hierarchy. The Company used a discounted cash flows approach to measure the fair value using Level 3 inputs. Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows: Fair Value Measurements as of December 31, 2015 Using: Level 1 Level 2 Level 3 Foreign exchange contract asset $ - $ 23,264 $ - Contingent consideration obligation - - 2,030,527 Derivative warrant liabilities - - 4,776,000 Total $ - $ 23,264 $ 6,806,527 Fair Value Measurements as of June 30, 2015 Using: Level 1 Level 2 Level 3 Foreign exchange contract liability $ - $ 59,116 $ - Contingent consideration obligation - - 2,078,000 Derivative warrant liabilities - - 6,258,000 Total $ - $ 59,116 $ 8,336,000 |
Reclassifications | Reclassifications Certain reclassifications have been made to prior period amounts to conform to classifications adopted in the current period. The reclassifications had no effect on net loss, cash flows, or stockholders' equity. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Certain Risks and Concentrations) (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Summary Of Significant Accounting Policies Certain Risks And Concentrations Tables | |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | The following table shows revenue from external sources by destination country: Three Months Ended December 31, Six Months Ended December 31, 2015 2014 2015 2014 United States $ 15,703,406 65% $ 1,797,904 13% United States $ 17,648,226 48% $ 2,926,019 13% Saudi Arabia 4,344,035 18% 5,896,468 43% Saudi Arabia 10,831,552 30% 9,021,558 41% Mexico 1,548,990 6% 2,117,161 15% Mexico 3,086,790 8% 4,116,969 19% Argentina 907,070 4% 1,379,623 10% Argentina 1,498,908 4% 1,379,623 6% Peru 315,381 1% 95,428 1% Peru 925,382 3% 276,938 1% South Africa 283,554 1% 264,096 2% Australia 448,899 1% 287,587 1% China 219,321 1% - 0% Malaysia 287,500 1% 188,125 1% Sudan 143,750 1% 135,250 1% South Africa 283,554 1% 268,276 1% Other 675,750 3% 2,107,836 15% Other 1,385,358 4% 3,492,904 15% Total $ 24,141,257 100% $ 13,793,766 100% Total $ 36,396,169 100% $ 21,957,999 100% |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Inventories) (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Summary Of Significant Accounting Policies Inventories Tables | |
Inventories (Tables) | Components of inventory are: December 31, June 30, 2015 2015 Raw materials and supplies $ 325,314 $ 276,339 Work in progress and growing crops 472,903 5,415,402 Finished goods 36,268,414 19,830,006 $ 37,066,631 $ 25,521,747 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Crop Production Costs) (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Summary Of Significant Accounting Policies Crop Production Costs Tables | |
Crop Production Costs (Tables) | Components of crop production costs are: December 31, June 30, 2015 2015 Alfalfa hay $ - $ 92,037 Other crops - 120,194 Total crop production costs, net $ - $ 212,231 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Fair Value Measurement) (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Summary Of Significant Accounting Policies Fair Value Measurement Tables | |
Fair Value of Financial Instrumements (Tables) | Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows: Fair Value Measurements as of December 31, 2015 Using: Level 1 Level 2 Level 3 Foreign exchange contract asset $ - $ 23,264 $ - Contingent consideration obligation - - 2,030,527 Derivative warrant liabilities - - 4,776,000 Total $ - $ 23,264 $ 6,806,527 Fair Value Measurements as of June 30, 2015 Using: Level 1 Level 2 Level 3 Foreign exchange contract liability $ - $ 59,116 $ - Contingent consideration obligation - - 2,078,000 Derivative warrant liabilities - - 6,258,000 Total $ - $ 59,116 $ 8,336,000 |
Business Combination (Tables)
Business Combination (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Business Combination Tables | |
Purchase price allocation | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of December 31, 2014: December 31, 2014 Inventory $ 22,055,300 Property, plant and equipment 6,712,535 Distribution agreement 7,690,000 Production agreement 670,000 Grower relationships 76,000 Technology/IP - germplasm 13,340,000 Technology/IP - seed varieties 5,040,000 Goodwill 5,353,317 Current liabilities (12,248,506) Total acquisition cost allocated $ 48,688,646 |
Purchase price components of business combination | The acquisition-date fair value of the consideration transferred consisted of the following: Cash $ 27,000,000 Secured three-year promissory note 10,000,000 Contingent earn-out 2,004,000 Amount payable to seller 9,684,646 $ 48,688,646 |
Useful lives of acquired intangibles in business combination | The values and useful lives of the acquired DuPont Pioneer intangibles are as follows: Estimated Useful Life (Years) Estimated Fair Value Distribution agreement 20 $ 7,690,000 Production agreement 3 670,000 Grower relationships 10 76,000 Technology/IP - germplasm 30 13,340,000 Technology/IP - seed varieties 15 5,040,000 Total identifiable intangible assets $ 26,816,000 |
Business Acquisition, Pro Forma Information [Table Text Block] | The following unaudited pro forma financial information presents results as if the Pioneer Acquisition occurred on July 1, 2014. Three months ended Six months ended December 31, December 31, (Unaudited) 2014 2014 Revenue $ 16,385,672 $ 32,844,355 Net loss $ (2,518,786) $ (2,454,844) Net loss per share basic and diluted share $ (0.19) $ (0.19) |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Intangible Assets Tables | |
Goodwill | The following table summarizes the activity of goodwill for the six months ended December 31, 2015 and the year ended June 30, 2015, respectively. Balance at Foreign Currency Balance at July 1, 2015 Additions Translation December 31, 2015 Goodwill - United States $ 6,755,317 $ - $ - $ 6,755,317 Goodwill - Australia 2,874,962 - (134,077) 2,740,885 $ 9,630,279 $ - $ (134,077) $ 9,495,202 Balance at Foreign Currency Balance at July 1, 2014 Additions Translation June 30, 2015 Goodwill - United States $ 1,402,000 $ 5,353,317 $ - $ 6,755,317 Goodwill - Australia 3,537,462 - (662,500) 2,874,962 $ 4,939,462 $ 5,353,317 $ (662,500) $ 9,630,279 |
Carrying values of intangible assets (Tables) | Intangible assets consist of the following: Balance at Foreign Currency Balance at July 1, 2015 Additions Amortization Translation December 31, 2015 Intellectual property $ 4,805,951 $ - $ (127,890) $ (225,307) $ 4,452,754 Trade name 1,377,840 - (40,861) (11,847) 1,325,132 Technology/IP 924,107 - (59,480) - 864,627 Non-compete 301,354 - (62,526) (6,541) 232,287 GI customer list 93,131 - (3,582) - 89,549 Grower relationships 2,183,485 - (59,982) (98,979) 2,024,524 Supply agreement 1,304,679 - (37,816) - 1,266,863 Customer relationships 968,619 - (28,307) (10,933) 929,379 Distribution agreement 7,497,750 - (192,250) - 7,305,500 Production agreement 558,334 - (111,664) - 446,670 Technology/IP - germplasm 13,117,666 - (222,332) - 12,895,334 Technology/IP - seed varieties 4,872,000 - (168,000) - 4,704,000 $ 38,004,916 $ - $ (1,114,690) $ (353,607) $ 36,536,619 Balance at Foreign Currency Balance at July 1, 2014 Additions Amortization Translation June 30, 2015 Intellectual property $ 6,246,572 $ - $ (295,844) $ (1,144,777) $ 4,805,951 Trade name 1,521,864 - (83,830) (60,194) 1,377,840 Technology/IP 1,043,067 - (118,960) - 924,107 Non-compete 471,768 - (132,353) (38,061) 301,354 GI customer list 100,295 - (7,164) - 93,131 Grower relationships 2,744,164 76,000 (133,770) (502,909) 2,183,485 Supply agreement 1,380,311 - (75,632) - 1,304,679 Customer relationships 1,082,730 - (58,557) (55,554) 968,619 Distribution agreement - 7,690,000 (192,250) - 7,497,750 Production agreement - 670,000 (111,666) - 558,334 Technology/IP - germplasm - 13,340,000 (222,334) - 13,117,666 Technology/IP - seed varieties - 5,040,000 (168,000) - 4,872,000 $ 14,590,771 $ 26,816,000 $ (1,600,360) $ (1,801,495) $ 38,004,916 |
Finite-lived intangible assets - future amortization expense | Estimated aggregate remaining amortization is as follows: 2016 2017 2018 2019 2020 Thereafter Amortization expense $ 1,116,704 $ 2,224,765 $ 2,224,765 $ 2,224,765 $ 2,224,765 $ 26,520,855 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Property Plant And Equipment Tables | |
Components of Property, Plant and Equipment | Components of property, plant and equipment were as follows: December 31, June 30, 2015 2015 Land and improvements $ 2,236,842 $ 2,247,379 Buildings and improvements 6,168,914 5,439,712 Machinery and equipment 3,663,347 3,520,168 Vehicles 953,227 940,627 Construction in progress 1,087,982 1,113,137 Total property, plant and equipment 14,110,312 13,261,023 Less: accumulated depreciation (2,248,342) (1,784,087) Property, plant and equipment, net $ 11,861,970 $ 11,476,936 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Debt Tables | |
Debt Components | Total debts outstanding, excluding convertible debt addressed in Note 7, are presented on the consolidated balance sheet as follows: December 31, June 30, 2015 2015 Working capital lines of credit KeyBank $ 11,169,814 $ - Wells Fargo - 10,000,000 National Australia Bank Limited 562,388 3,755,800 Total working capital lines of credit 11,732,202 13,755,800 Current portion of long-term debt Term loan - Ally 9,127 8,994 Keith facility (machinery & equipment loan) - National Australia Bank Limited 562,028 154,657 Unsecured subordinate promissory note - related party 100,000 100,000 Promissory note - SGI selling shareholders 2,000,000 2,000,000 Debt discount - SGI (13,468) (40,186) Total current portion 2,657,687 2,223,465 Long-term debt, less current portion Term loan - Ally 10,993 15,590 Term loan (Keith building) - National Australia Bank Limited 474,370 466,482 Unsecured subordinate promissory note - related party 100,000 200,000 Promissory note - Dupont Pioneer 10,000,000 10,000,000 Total long-term portion 10,585,363 10,682,072 Total debt $ 13,243,050 $ 12,905,537 |
Schedule of Annual Maturities | The annual maturities of short-term and long-term debt (excluding debt discount), excluding convertible debt addressed in Note 7, are as follows: Fiscal Year Amount 2016 $ 2,566,558 2017 145,752 2018 10,161,063 2019 76,629 2020 76,629 Thereafter 229,887 Total $ 13,256,518 |
Convertible Notes (Tables)
Convertible Notes (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Convertible Notes Tables | |
Schedule of Convertible Notes | As of December 31, 2015, the scheduled principal payments on the convertible notes are as follows: Fiscal Year Amount 2016 $ 8,633,005 2017 7,849,754 2018 - 2019 - 2020 - Thereafter - Total $ 16,482,759 Total convertible debt outstanding, excluding debt addressed in Note 6, is presented on the consolidated balance sheet as follows: December 31, 2015 June 30, 2015 Current portion of convertible debt, net Senior secured convertible notes payable $ 11,463,054 $ 11,274,678 Debt discount (2,001,577) (2,008,749) Total current portion 9,461,477 9,265,929 Convertible debt, net, less current portion Senior secured convertible notes payable 5,019,704 10,679,804 Debt discount (876,495) (1,902,763) Total long-term portion 4,143,209 8,777,041 Total convertible debt, net $ 13,604,686 $ 18,042,970 |
Stockholders' Equity (Warrants
Stockholders' Equity (Warrants Outstanding) (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Stockholders Equity Warrants Outstanding Tables | |
Warrants Outstanding (Tables) | The following table summarizes the warrants outstanding at December 31, 2015: Issue Date Exercise Price Per Share Expiration Date Outstanding as of June 30, 2015 New Issuances Expired Outstanding as of December 31, 2015 Underwriter warrants May 2012 $ 6.88 Feb 2017 50,000 - - 50,000 Warrants Dec 2014 $ 4.59 Jun 2020 2,699,999 - - 2,699,999 2,749,999 - - 2,749,999 |
Equity-Based Compensation (Plan
Equity-Based Compensation (Plan Activity) (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Stock Options | |
Summary of Share-Based Compensation Arrangements By Share-Based Payment Award (Tables) | A summary of stock option activity for the six months ended December 31, 2015 and the year ended June 30, 2015 is presented below: Weighted - Weighted - Average Average Remaining Aggregate Number Exercise Price Contractual Intrinsic Outstanding Per Share Life (Years) Value Outstanding at June 30, 2014 1,087,000 $ 5.17 2.5 $ 1,562,712 Granted 227,197 3.89 9.5 - Exercised (400,000) 4.00 - - Canceled/forfeited/expired (12,500) 7.75 - - Outstanding at June 30, 2015 901,697 5.33 4.1 392,850 Granted 203,500 4.56 9.7 - Exercised (8,751) 3.95 - - Canceled/forfeited/expired (25,500) - - - Outstanding at December 31, 2015 1,071,446 5.12 4.8 82,267 Options vested and exercisable at December 31, 2015 676,336 5.44 2.7 39,501 Options vested and expected to vest as of December 31, 2015 1,069,587 $ 5.12 4.8 $ 81,987 |
Nonvested restricted stock | |
Summary of Share-Based Compensation Arrangements By Share-Based Payment Award (Tables) | A summary of activity related to non-vested restricted share units is presented below: Six Months Ended December 31, 2015 Weighted - Number of Weighted - Average Nonvested Average Remaining Restricted Grant Date Contractual Stock Units Fair Value Life (Years) Beginning nonvested restricted units outstanding 136,672 $ 10.66 - Granted 116,392 4.64 - Vested (41,082) 10.66 - Forfeited - - - Ending nonvested restricted units outstanding 211,982 $ 7.74 2.0 |
Non-Cash Investing and Financin
Non-Cash Investing and Financing Activities for Statements of Cash Flows (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Non-cash Investing And Financing Activities For Statements Of Cash Flows Tables | |
Schedule of Cash Flow, Supplemental Disclosures | The below table represents supplemental information to the Company's consolidated statements of cash flows for non-cash activities during the six months ended December 31, 2015 and 2014, respectively. Six months ended December 31, 2015 2014 Net assets acquired in business acquisitions $ - $ 12,200,000 Debt discount from warrant liability - 4,862,000 Increase in non-cash net assets of subsidiary due to foreign currency translation loss, net of income tax (841,117) (2,586,183) |
Background and Organization (Na
Background and Organization (Narrative) (Details) | Dec. 31, 2015 |
Background And Organization Narrative Details | |
Number of Countries in which S&W Operates | 30 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Concentrations Narrative) (Details) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | |
Summary Of Significant Accounting Policies Concentrations Narrative Details | |||||
Sales revenue, major customer, percentage | 58.00% | 23.00% | 40.00% | 37.00% | |
Accounts receivable from major customers, percentage of total | 43.00% | 43.00% | 53.00% | ||
International sales revenue, percentage | 35% | 87% | 52% | 87% | |
Cash balances located outside of the United States | Cash balances located outside of the United States may not be insured and totaled $892,877 and $1,039,326 at December 31, 2015 and June 30, 2015, respectively. |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Revenue Recognition Narrative) (Details) | 6 Months Ended |
Dec. 31, 2015 | |
Summary Of Significant Accounting Policies Revenue Recognition Narrative Details | |
Number of customers with right of return | 0 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Revenues from External Customers By Country Of Domicile) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from external customers | $ 24,141,257 | $ 13,793,766 | $ 36,396,169 | $ 21,957,999 |
Revenue from external customers by country, percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Disclosure on Geographic Areas, Fixed Assets | The net book value of fixed assets located outside the United States were 11% at September 30, 2015 and June 30, 2015, respectively. | |||
United States | ||||
Revenues from external customers | $ 15,703,406 | $ 1,797,904 | $ 17,648,226 | $ 2,926,019 |
Revenue from external customers by country, percentage | 65.00% | 13.00% | 48.00% | 13.00% |
Saudi Arabia | ||||
Revenues from external customers | $ 4,344,035 | $ 5,896,468 | $ 10,831,552 | $ 9,021,558 |
Revenue from external customers by country, percentage | 18.00% | 43.00% | 30.00% | 41.00% |
Mexico | ||||
Revenues from external customers | $ 1,548,990 | $ 2,117,161 | $ 3,086,790 | $ 4,116,969 |
Revenue from external customers by country, percentage | 6.00% | 15.00% | 8.00% | 19.00% |
Agrentina | ||||
Revenues from external customers | $ 907,070 | $ 1,379,623 | $ 1,498,908 | $ 1,379,623 |
Revenue from external customers by country, percentage | 4.00% | 10.00% | 4.00% | 6.00% |
Peru | ||||
Revenues from external customers | $ 315,381 | $ 95,428 | $ 925,382 | $ 276,938 |
Revenue from external customers by country, percentage | 1.00% | 1.00% | 3.00% | 1.00% |
South Africa | ||||
Revenues from external customers | $ 283,554 | $ 264,096 | $ 283,554 | $ 268,276 |
Revenue from external customers by country, percentage | 1.00% | 2.00% | 1.00% | 1.00% |
China | ||||
Revenues from external customers | $ 219,321 | $ 0 | ||
Revenue from external customers by country, percentage | 1.00% | 0.00% | ||
Sudan | ||||
Revenues from external customers | $ 143,750 | $ 135,250 | ||
Revenue from external customers by country, percentage | 1.00% | 1.00% | ||
Other | ||||
Revenues from external customers | $ 675,750 | $ 2,107,836 | $ 1,385,358 | $ 3,492,904 |
Revenue from external customers by country, percentage | 3.00% | 15.00% | 4.00% | 15.00% |
Australia | ||||
Revenues from external customers | $ 448,899 | $ 287,587 | ||
Revenue from external customers by country, percentage | 1.00% | 1.00% | ||
Malaysia | ||||
Revenues from external customers | $ 287,500 | $ 188,125 | ||
Revenue from external customers by country, percentage | 1.00% | 1.00% |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Accounts Receivable Narrative) (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Summary Of Significant Accounting Policies Accounts Receivable Narrative Details | ||
Allowance for doubtful trade receivables | $ 162,945 | $ 155,595 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Inventories by Component) (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Summary Of Significant Accounting Policies Inventories By Component Details | ||
Raw materials and supplies | $ 325,314 | $ 276,339 |
Work in progress and growing crops | 472,903 | 5,415,402 |
Finished goods | 36,268,414 | 19,830,006 |
Inventories | $ 37,066,631 | $ 25,521,747 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies (Crop Production Cost by Component) (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Summary Of Significant Accounting Policies Crop Production Cost By Component Details | ||
Alfalfa seed production | $ 0 | $ 0 |
Alfalfa hay | 0 | 92,037 |
Other crops | 0 | 120,194 |
Total crop production costs | $ 0 | $ 212,231 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies (Crop Production Useful Life Narrative) (Details) | 6 Months Ended |
Dec. 31, 2015 | |
Summary Of Significant Accounting Policies Crop Production Useful Life Narrative Details | |
Crop Production Costs, Useful Life, Minimum | 3 |
Crop Production Costs, Useful Life, Maximum | 5 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies (Property, Plant and Equipment Useful Life Narrative) (Details) | 6 Months Ended |
Dec. 31, 2015 | |
Building | Minimum | |
Estimated Useful Lives | 18 years |
Building | Maximum | |
Estimated Useful Lives | 28 years |
Equipment | Minimum | |
Estimated Useful Lives | 3 years |
Equipment | Maximum | |
Estimated Useful Lives | 10 years |
Vehicles | Minimum | |
Estimated Useful Lives | 3 years |
Vehicles | Maximum | |
Estimated Useful Lives | 5 years |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Intangible Assets Useful Life Narrative) (Details) | 6 Months Ended |
Dec. 31, 2015 | |
Technology/IP | Minimum | |
Useful life | 10 years |
Technology/IP | Maximum | |
Useful life | 30 years |
GI Customer list | Maximum | |
Useful life | 20 years |
Other Intangibles | Minimum | |
Useful life | 2 years |
Other Intangibles | Maximum | |
Useful life | 20 years |
Summary of Significant Accoun45
Summary of Significant Accounting Policies (Impairment of Long-Lived Assets Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary Of Significant Accounting Policies Impairment Of Long-lived Assets Narrative Details | |||
Impairment of Long-lived Assets | $ 500,198 | $ 0 | $ 500,198 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies (Equity Method Investments Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary Of Significant Accounting Policies Equity Method Investments Narrative Details | ||||
Loss on equity method investment | $ 129,341 | $ 0 | $ 223,703 | $ 0 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies (Fair Value of Financial Instruments) (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Foreign exchange contract asset | $ 23,264 | $ 0 |
Contingent consideration obligation | 2,030,527 | 2,078,000 |
Derivative warrant liabilities | 4,776,000 | 6,258,000 |
(Level 1) | ||
Foreign exchange contract asset | 0 | |
Total | 0 | |
Foreign exchange contract liability | 0 | |
Contingent consideration obligation | 0 | 0 |
Derivative warrant liabilities | 0 | 0 |
Total | 0 | 0 |
(Level 2) | ||
Foreign exchange contract asset | 23,264 | |
Total | 23,264 | |
Foreign exchange contract liability | 59,116 | |
Contingent consideration obligation | 0 | 0 |
Derivative warrant liabilities | 0 | 0 |
Total | 0 | 59,116 |
(Level 3) | ||
Foreign exchange contract asset | 0 | |
Total | 0 | |
Foreign exchange contract liability | 0 | |
Contingent consideration obligation | 2,030,527 | 2,078,000 |
Derivative warrant liabilities | 4,776,000 | 6,258,000 |
Total | $ 6,806,527 | $ 8,336,000 |
Business Combinations (Purchase
Business Combinations (Purchase Price Data) (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Purchase price components | |||
Cash | $ 0 | $ 27,000,000 | |
(as adjusted) | |||
Purchase Price Allocation | |||
Inventory | $ 22,055,300 | 22,055,300 | |
Property, Plant and Equipment | 6,712,535 | 6,712,535 | |
Distribution agreement | 7,690,000 | 7,690,000 | |
Production agreement | 670,000 | 670,000 | |
Grower relationships | 76,000 | 76,000 | |
Technology/IP - germplasm | 13,340,000 | 13,340,000 | |
Technology/IP - seed varieties | 5,040,000 | 5,040,000 | |
Goodwill | 5,353,317 | 5,353,317 | |
Current liabilities | (12,248,506) | (12,248,506) | |
Total acquisition cost allocated | 48,688,646 | $ 48,688,646 | |
Purchase price components | |||
Cash | 27,000,000 | ||
Secured three-year promissory note | 10,000,000 | ||
Fair value of contingent consideration | 2,004,000 | ||
Amount payable to seller | $ 48,688,646 |
Business Combinations (Purcha49
Business Combinations (Purchase Price Components Narrative) (Details) - USD ($) | 1 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | |
Business Combinations Purchase Price Components Narrative Details | ||
Acquisition costs | $ 831,737 | |
Business Acquisition, Description of Acquired Entity | On December 31, 2014, the Company purchased certain alfalfa research and production facilities and conventional (non-GMO) alfalfa germplasm assets (and assumed certain related liabilities) of DuPont Pioneer. The DuPont Pioneer Acquisition was consummated pursuant to the terms of an asset purchase and sale agreement. The purchase price under the Agreement was up to $42,000,000, consisting of $27,000,000 in cash (payable at closing), a three year secured promissory note (the "Pioneer Note") payable by the Company to DuPont Pioneer in the initial principal amount of $10,000,000 (issued at closing), and a potential earn-out payment (payable as an increase in the principal amount of the Note) of up to $5,000,000 based on S&W sales under distribution and production agreements as well as other Company sales of products containing the acquired germplasm in the three-year period following the closing. The Pioneer Note accrues interest at a rate of 3% per annum, and interest is payable in three annual installments, in arrears, commencing on December 31, 2015. Principal on the Pioneer Note is payable at maturity on December 31, 2017. The DuPont Pioneer Acquisition has been accounted for as a business combination, and the Company valued and recorded all assets acquired and liabilities assumed at their estimated fair values on the date of the DuPont Pioneer Acquisition. The excess of the purchase price over the fair value of the net assets acquired, amounting to $5,353,317, was recorded as goodwill on the consolidated balance sheet. The primary item that generated goodwill was the premium paid by the Company for the ability to control the acquired business, technology and the assembled workforce of DuPont Pioneer. Goodwill is not amortized for financial reporting purposes, but is amortized for tax purposes. Management assigned fair values to the identifiable intangible assets through a combination of the relief from royalty method and the multi-period excess earnings method. The contingent consideration requires the Company to increase the principal amount of the Seller note by up to an additional $5,000,000 if the Company meets certain performance metrics during the three-year period following the acquisition. The fair value of the contingent consideration arrangement at the acquisition date was $2,004,000. The fair value of the contingent consideration was estimated using a probability-weighted cash flow model. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. The key assumptions in applying the income approach were as follows: 24% present value discount factor and probability adjusted revenue assumptions based on the number of expected units produced. As of December 31, 2015, the estimated fair value of the contingent consideration is $2,030,527. The Company incurred $863,048 of acquisition costs associated with the DuPont Pioneer Acquisition that have been recorded in selling, general and administrative expenses on the consolidated statement of operations during the year ended June 30, 2015. The newly acquired business generated revenue of approximately $14.1 million during the six months ended December 31, 2015. In the transaction, DuPont Pioneer retained ownership of its GMO (genetically modified) alfalfa germplasm and related intellectual property assets, as well as the right to develop new GMO-traited alfalfa germplasm. The retained GMO germplasm assets incorporate certain GMO traits that are licensed to DuPont Pioneer from third parties (the "Third Party GMO Traits"). The Company was interested in acquiring the GMO assets at the time it acquired the conventional (non-GMO) alfalfa seed assets, and DuPont Pioneer was interested in selling those assets, but terms could not be agreed-upon, in part because of the need for agreements with the third parties from whom the Third Party GMO Traits are licensed. The agreements related to the DuPont Pioneer Acquisition provide that both the Company and DuPont Pioneer will work towards obtaining the necessary consents from and agreements with third parties such that the GMO assets can be transferred from DuPont Pioneer to the Company. If such consents and agreements are obtained before November 30, 2017, the Company has committed to buy and DuPont Pioneer has committed to sell the GMO assets at a price of $7,000,000 on or before December 29, 2017. |
Business Combinations (Pro Form
Business Combinations (Pro Forma Financial Information with Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Dec. 31, 2014 | Dec. 31, 2014 | |
Business Combinations Pro Forma Financial Information With Narrative Details | ||
Revenue | $ 16,385,672 | $ 32,844,355 |
Net loss | $ (2,518,786) | $ (2,454,844) |
Business Acquisition, Pro Forma loss Per Share, Basic and Diluted | $ (0.19) | $ (0.19) |
Business Acquisition, Pro Forma Information, Description | The primary adjustments for the three months ended December 31, 2014 include: (i) the reduction of DuPont Pioneer historical revenue to reflect the shift from end customer to wholesale pricing; (ii) the reduction of cost of revenue to remove DuPont Pioneer's historical sales incentives included in cost of sales; (iii) amortization of acquired intangibles of $349,025; (iv) depreciation of acquired property, plant and equipment of $110,942; (v) additional interest expense on the convertible notes issued concurrent to the acquisition, including non-cash amortization of debt issuance costs and accretion of debt discount of $1,935,943; (vi) additional interest expense of $75,000 for the Pioneer Note included in total consideration for the Pioneer Acquisition; and (vii) adjustments to reflect the additional income tax expense assuming a combined effective tax rate of 32.4%. The primary adjustments for the six months ended December 31, 2014 include: (i) the reduction of DuPont Pioneer historical revenue to reflect the shift from end customer to wholesale pricing; (ii) the reduction of cost of revenue to remove DuPont Pioneer's historical sales incentives included in cost of sales; (iii) amortization of acquired intangibles of $698,050; (iv) depreciation of acquired property, plant and equipment of $221,884; (v) additional interest expense on the convertible notes issued concurrent to the acquisition, including non-cash amortization of debt issuance costs and accretion of debt discount of $3,097,299; (vi) additional interest expense of $150,000 for the Pioneer Note included in total consideration for the DuPont Pioneer Acquisition; and (vii) adjustments to reflect the additional income tax expense assuming a combined effective tax rate of 32.7%. |
Business Combinations (Acquired
Business Combinations (Acquired Intangibles Useful Lives) (Details) | 1 Months Ended |
Dec. 31, 2014USD ($) | |
Fair value of asset | $ 26,816,000 |
Distribution Agreement | |
Intangible Assets Useful Life | 20 years |
Fair value of asset | $ 7,690,000 |
Production agreement | |
Intangible Assets Useful Life | 3 years |
Fair value of asset | $ 670,000 |
Grower Relationships | |
Intangible Assets Useful Life | 10 years |
Fair value of asset | $ 76,000 |
Technology/IP germplasm | |
Intangible Assets Useful Life | 30 years |
Fair value of asset | $ 1,334,000 |
Technology/IP seed varieties | |
Intangible Assets Useful Life | 15 years |
Fair value of asset | $ 5,040,000 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill by Location (Detail) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Jun. 30, 2015 | |
Goodwill, Beginning Balance | $ 9,630,279 | $ 4,939,462 |
Goodwill additions | 0 | 5,353,317 |
Foreign Currency Translation | (134,077) | (662,500) |
Goodwill, Ending Balance | 9,496,202 | 9,630,279 |
United States | ||
Goodwill, Beginning Balance | 6,755,317 | 1,402,000 |
Goodwill additions | 0 | 5,353,317 |
Foreign Currency Translation | 0 | 0 |
Goodwill, Ending Balance | 6,755,317 | 6,755,317 |
Australia | ||
Goodwill, Beginning Balance | 2,874,962 | 3,537,462 |
Goodwill additions | 0 | 0 |
Foreign Currency Translation | (134,077) | (662,500) |
Goodwill, Ending Balance | $ 2,740,885 | $ 2,874,962 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Intangible asset | $ 36,536,619 | $ 36,536,619 | $ 38,004,916 | $ 14,590,771 | ||
Intangible addition | 0 | 26,816,000 | ||||
Intangible amortization expense | (556,849) | $ (228,468) | (1,114,690) | $ (467,660) | (1,600,360) | |
Foreign currency translation | (353,607) | (1,801,495) | ||||
Intellectual Property | ||||||
Intangible asset | 4,452,754 | 4,452,754 | 4,805,951 | 6,246,572 | ||
Intangible addition | 0 | 0 | ||||
Intangible amortization expense | (127,890) | (295,844) | ||||
Foreign currency translation | (225,307) | (1,144,777) | ||||
Trade name | ||||||
Intangible asset | 1,325,132 | 1,325,132 | 1,377,840 | 1,521,864 | ||
Intangible addition | 0 | 0 | ||||
Intangible amortization expense | (40,861) | (83,830) | ||||
Foreign currency translation | (11,847) | (60,194) | ||||
TechnologyIP | ||||||
Intangible asset | 864,627 | 864,627 | 924,107 | 1,043,067 | ||
Intangible addition | 0 | |||||
Intangible amortization expense | (59,480) | |||||
Foreign currency translation | 0 | |||||
Technology/IP | ||||||
Intangible addition | 0 | |||||
Intangible amortization expense | (118,960) | |||||
Foreign currency translation | 0 | |||||
Non-compete | ||||||
Intangible asset | 232,287 | 232,287 | 301,354 | 471,768 | ||
Intangible addition | 0 | 0 | ||||
Intangible amortization expense | (62,526) | (132,353) | ||||
Foreign currency translation | (6,541) | (38,061) | ||||
GI Customer list | ||||||
Intangible asset | 89,549 | 89,549 | 93,131 | 100,295 | ||
Intangible addition | 0 | 0 | ||||
Intangible amortization expense | (3,582) | (7,164) | ||||
Foreign currency translation | 0 | 0 | ||||
Grower Relationships | ||||||
Intangible asset | 2,024,524 | 2,024,524 | 2,183,485 | 2,744,164 | ||
Intangible addition | 0 | 76,000 | ||||
Intangible amortization expense | (59,982) | (133,770) | ||||
Foreign currency translation | (98,979) | (502,909) | ||||
Supply Agreement | ||||||
Intangible asset | 1,266,863 | 1,266,863 | 1,304,679 | 1,380,311 | ||
Intangible addition | 0 | 0 | ||||
Intangible amortization expense | (37,816) | (75,632) | ||||
Foreign currency translation | 0 | 0 | ||||
Customer relationships | ||||||
Intangible asset | 929,379 | 929,379 | 968,619 | 1,082,730 | ||
Intangible addition | 0 | 0 | ||||
Intangible amortization expense | (28,307) | (58,557) | ||||
Foreign currency translation | (10,933) | (55,554) | ||||
Distribution agreement | ||||||
Intangible asset | 7,305,500 | 7,305,500 | 7,497,750 | |||
Intangible addition | 0 | |||||
Intangible amortization expense | (192,250) | |||||
Foreign currency translation | 0 | |||||
Distribution Agreement | ||||||
Intangible asset | 0 | |||||
Intangible addition | 7,690,000 | |||||
Intangible amortization expense | (192,250) | |||||
Foreign currency translation | 0 | |||||
Production agreement | ||||||
Intangible asset | 446,670 | 446,670 | 558,334 | 0 | ||
Intangible addition | 0 | 670,000 | ||||
Intangible amortization expense | (111,664) | (111,666) | ||||
Foreign currency translation | 0 | 0 | ||||
Technology/IP germplasm | ||||||
Intangible asset | 12,895,334 | 12,895,334 | 13,117,666 | 0 | ||
Intangible addition | 0 | 13,340,000 | ||||
Intangible amortization expense | (222,332) | (222,334) | ||||
Foreign currency translation | 0 | 0 | ||||
Technology/IP seed varieties | ||||||
Intangible asset | $ 4,704,000 | 4,704,000 | 4,872,000 | $ 0 | ||
Intangible addition | 0 | 5,040,000 | ||||
Intangible amortization expense | (168,000) | (168,000) | ||||
Foreign currency translation | $ 0 | $ 0 |
Intangible Assets (Future Amort
Intangible Assets (Future Amortization) (Details) | Dec. 31, 2015USD ($) |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |
2,016 | $ 1,116,704 |
2,017 | 2,224,765 |
2,018 | 2,224,765 |
2,019 | 2,224,765 |
2,020 | 2,224,765 |
Thereafter | $ 26,520,855 |
Intangible Assets (Amortization
Intangible Assets (Amortization Expense Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | |
Intangible Assets Amortization Expense Narrative Details | |||||
Amortization expense | $ 556,849 | $ 228,468 | $ 1,114,690 | $ 467,660 | $ 1,600,360 |
Property, Plant and Equipment56
Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Balance Sheet Related Disclosures [Abstract] | ||
Land and improvements | $ 2,236,842 | $ 2,247,379 |
Buildings and improvements | 6,168,914 | 5,439,712 |
Machinery and equipment | 3,663,347 | 3,520,168 |
Vehicles | 953,227 | 940,627 |
Construction in progress | 1,087,982 | 1,113,137 |
Property and equipment, gross | 14,110,312 | 13,261,023 |
Less: accumulated depreciation | (2,248,342) | (1,784,087) |
Property, plant and equipment, net | $ 11,861,970 | $ 11,476,936 |
Property, Plant and Equipment57
Property, Plant and Equipment (Depreciation Expense Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property Plant And Equipment Depreciation Expense Narrative Details | ||||
Depreciation expense | $ 234,393 | $ 82,084 | $ 465,348 | $ 162,651 |
Debt (Details)
Debt (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Working capital lines of credit | ||
Key Bank | $ 11,169,814 | $ 0 |
Wells Fargo | 0 | 10,000,000 |
National Australia Bank Limited | 562,388 | 3,755,800 |
Total working capital line of credit | 11,732,202 | 13,755,800 |
Current portion of long-term debt | ||
Term loan - Ally | 9,127 | 8,994 |
Keith facility (machinery & equipment loan) - National Australia Bank Limited | 562,028 | 154,657 |
Unsecured subordinate promissory note - related party | 100,000 | 100,000 |
Promissory note – SGI selling shareholders | 2,000,000 | 2,000,000 |
Debt discount - SGI | (13,468) | (40,186) |
Total current portion | 2,657,687 | 2,223,465 |
Long-term debt, less current portion | ||
Term loan - Ally | 10,993 | 15,590 |
Term loan - National Australia Bank Limited | 474,370 | 466,482 |
Unsecured subordinate promissory note - related party | 100,000 | 200,000 |
Promissory note - DuPont Pioneer | 10,000,000 | 10,000,000 |
Total long-term portion | 10,585,363 | 10,682,072 |
Total debt | 13,243,050 | $ 12,905,537 |
Fiscal Year | ||
2,016 | 2,566,558 | |
2,017 | 145,752 | |
2,018 | 10,161,063 | |
2,019 | 76,629 | |
2,020 | 76,629 | |
Thereafter | 229,887 | |
Total | $ 13,256,518 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | 1 Months Ended | 6 Months Ended | ||||
Dec. 31, 2014 | Apr. 28, 2013 | Mar. 31, 2013 | Oct. 31, 2012 | Apr. 30, 2011 | Dec. 31, 2015 | |
Credit Agreement | ||||||
Line of Credit Facility, Description | From 2011 until September 22, 2015, the Company had one or more revolving credit facility agreements with Wells Fargo Bank, National Association ("Wells Fargo"). | |||||
New Facilities | ||||||
Line of Credit Facility, Description | From February 21, 2014 through September 22, 2015, the Company had two working capital facilities with Wells Fargo (collectively, the "Wells Facilities"), both of which terminated as of September 22, 2015. The Wells Facilities included (i) a domestic revolving facility of up to $4,000,000 for working capital purposes, and (ii) an export-import revolving facility of up to $10,000,000 for financing export-related accounts receivable and inventory (the "Ex-Im Revolver"). The availability of credit under the Ex-Im Revolver was limited to an aggregate of 90% of the eligible accounts receivable (as defined under the credit agreement for the Ex-Im Revolver) plus 75% of the value (as reported under generally accepted accounting principles) of eligible inventory (also as defined under the credit agreement for the Ex-Im Revolver. Pursuant to the terms of a Borrower Agreement between the Company and the Export-Import Bank of the United States (the "Ex-Im Bank"), the Ex-Im Bank agreed to guarantee 90% of amounts outstanding and owing under the Ex-Im Revolver. The Wells Facilities were secured by a first priority lien on accounts receivable and other rights to payment, general intangibles, inventory and equipment, subject to the priority rights of the senior secured debentures issued by the Company in December 2014 and Pioneer Hi-Bred International, Inc. The Wells Facilities were further secured by a lien on, and a pledge of, 65% of the stock of the Company's wholly-owned subsidiary, S&W Australia Pty Ltd. The Wells Facilities were subject to customary representations and warranties, affirmative and negative covenants and customary events of default. The interest rate on the Wells Facilities was either (i) at a fluctuating rate per annum determined by Wells Fargo to be 2.75% above the daily one-month LIBOR Rate in effect from time to time (increased from 2.25%), or (ii) at a fixed rate per annum determined to be 2.75% (increased from 2.25%) above LIBOR in effect on the first day of the applicable fixed rate term. On September 22, 2015, the Company paid all outstanding principal and accrued interest owing under the Wells Facilities. | |||||
KeyBank | ||||||
Line of Credit Facility, Description | On September 22, 2015, the Company and KeyBank National Association ("KeyBank") entered into a credit and securities agreement and related agreements with respect to a $20,000,000 aggregate principal amount revolving credit facility (the "KeyBank Credit Facility"). In addition to paying off the Wells Facility, the proceeds from advances under the KeyBank Credit Facility are to be used for ongoing working capital requirements and to provide for general corporate purposes. All amounts of unpaid principal and interest due under the KeyBank Credit Facility must be paid in full on or before September 21, 2017. The KeyBank Credit Facility generally establishes a borrowing base of up to 85% of eligible accounts receivable (90% if insured), plus up to 65% of eligible inventory, subject to lender reserves. Loans may be based on a Base Rate or Eurodollar Rate (which is increased by an applicable margin of 2% per annum), generally at the Company's option. In the event of a default, at the option of KeyBank, the interest rate on all obligations owing will increase by 3% per annum over the rate otherwise applicable. The Company shall maintain one or more lockbox or cash collateral accounts at KeyBank, in KeyBank's name, which shall provide for the collection and remittance of all proceeds from sales of Company product (which is collateral for the KeyBank Credit Facility) on a daily basis. Subject to certain exceptions, the KeyBank Credit Facility is secured by a first priority perfected security interest in all the Company's now owned and after acquired tangible and intangible assets as well as the assets of the Company's domestic subsidiaries, which have guaranteed the Company's obligations under the KeyBank Credit Facility. The KeyBank Credit Facility is further secured by a lien on, and a pledge of, 65% of the stock of S&W Australia Pty Ltd., the Company's wholly-owned subsidiary. With respect to its security interest and/or lien, KeyBank has entered into an intercreditor and subordination agreement with Hudson Bay Fund LP (as agent for the holders of the senior secured debentures issued by the Company in December 2014) and DuPont Pioneer. The KeyBank Credit Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default. The Company was in compliance with all covenants at December 31, 2015. The outstanding balance on the KeyBank Credit Facility was $11,169,814 at December 31, 2015. | |||||
IVS Note | ||||||
Line of Credit Facility, Description | On October 1, 2012, the Company issued a five-year subordinated promissory note to IVS in the principal amount of $500,000 (the "IVS Note"), with a maturity date of October 1, 2017. The IVS Note accrues interest at a rate equal to one-month LIBOR at closing plus 2%, which equals 2.2%. Interest is payable in five annual installments, in arrears, on October 1 of each year. Amortizing payments of the principal of $100,000 will also be made on each October 1, with any remaining outstanding principal and accrued interest payable on the maturity date of the IVS Note. The outstanding balance on the IVS Note was $200,000 at December 31, 2015. | |||||
Vehicle Term Loan | ||||||
Line of Credit Facility, Description | In March 2013, the Company entered into a term loan for a vehicle purchase. The loan is payable in 59 monthly installments and matures in February 2018. The loan bears interest at a rate of 2.94% per annum. | |||||
SGI Note | ||||||
Line of Credit Facility, Description | On April 1, 2013, the Company issued a three-year subordinated promissory note to the selling shareholders of SGI in the principal amount of USD $2,482,317 (the "SGI Note"), with a maturity date of April 1, 2016 (the "SGI Maturity Date"). The SGI note is non-interest bearing. A principal payment of $482,317 was made in October 2013, and the remaining $2,000,000 will be paid at maturity. Since the note is non-interest bearing, the Company recorded a debt discount of $156,880 at the time of issuance for the estimated net present value of the obligation and accretes the net present value of the SGI Note obligation up to the face value of the SGI Note obligation using the effective interest method as a component of interest expense. Accretion of the debt discount totaled $26,717 and $26,142 for the six months ended December 31, 2015 and 2014, respectively. | |||||
NAB Facility | ||||||
Line of Credit Facility, Description | SGI finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility with NAB. The current facility, referred to as the 2015 NAB Facilities, was amended as of March 31, 2015 and expires on March 31, 2016. As of December 31, 2015, AUD $770,605 (USD $562,388) was outstanding under the 2015 NAB Facilities. The 2015 NAB Facilities, as currently in effect, comprises two distinct facility lines: (i) an overdraft facility (the "Overdraft Facility"), having a credit limit of AUD $980,000 (USD $715,204 at December 31, 2015) and a trade refinance facility (the "Trade Refinance Facility"), having a credit limit of AUD $12,000,000 (USD $8,757,600 at December 31, 2015). The Trade Refinance Facility permits SGI to borrow funds for periods of up to 180 days, at SGI's discretion, provided that the term is consistent with its trading terms. Interest for each drawdown is set at the time of the drawdown as follows: (i) for Australian dollar drawings, based on the Australian Trade Refinance Rate plus 1.5% per annum and (ii) for foreign currency drawings, based on the British Bankers' Association Interest Settlement Rate for the relevant foreign currency for the relevant period, or if such rate is not available, the rate reasonably determined by NAB to be the appropriate equivalent rate, plus 1.5% per annum. As of December 31, 2015, the Trade Refinance Facility accrued interest on Australian dollar drawings at approximately 5.19%, calculated daily. The Trade Refinance Facility is secured by a lien on all the present and future rights, property and undertakings of SGI, the mortgage on SGI's Keith, South Australia property and the Company's corporate guarantee (up to a maximum of USD $13,000,000). The Overdraft Facility permits SGI to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the balance owing at the end of the day and is payable monthly in arrears. As of December 31, 2015, the Overdraft Facility accrued interest at approximately 7.12% calculated daily. For both the Overdraft Facility and the Trade Refinance Facility, interest is payable each month in arrears. In the event of a default, as defined in the NAB Facility Agreement, the principal balance due under the facilities will thereafter bear interest at an increased rate per annum above the interest rate that would otherwise have been in effect from time to time under the terms of each facility ( i.e. Both facilities constituting the 2015 NAB Facilities are secured by a fixed and floating lien over all the present and future rights, property and undertakings of SGI and are guaranteed by the Company as noted above. The 2015 NAB Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the NAB facility agreements. SGI was in compliance with all NAB debt covenants at December 31, 2015. In January 2015, NAB and SGI entered into a new business markets - flexible rate loan (the "Keith Building Loan") in the amount of AUD $650,000 (USD $474,370 at December 31, 2015), and a machinery and equipment facility (the "Keith Machinery and Equipment Facility") of up to AUD $1,350,000 (USD $985,230 at December 31, 2015). The Keith Building Loan and the Keith Machinery and Equity Facility, collectively referred to as the Keith Credit Facilities, have a combined maximum credit amount of AUD $2,000,000 (USD $1,459,600 at December 31, 2015). The Keith Credit Facilities are being used for the construction of a new building on SGI's Keith, South Australia property and for the machinery and equipment to be purchased for use in the operations of the new building. The Keith Building Loan matures on November 30, 2024. The interest rate on the Keith Building Loan varies from pricing period to pricing period (each such period approximately 30 days), based on the weighted average of a specified basket of interest rates (5.96% as of December 31, 2015). Interest is payable each month in arrears. The Keith Machinery and Equipment Facility permits SGI to draw down amounts up to the maximum of AUD $1,350,000 (USD $985,230) for periods of up to 180 days, in SGI's discretion, provided the term is consistent with SGI's trading terms. The Keith Machinery and Equipment Facility bears interest, payable in arrears, based on the Australian Trade Refinance Rate quoted by NAB at the time of the drawdown, plus 2.9%. The two Keith Credit Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the facility agreement. They are secured by a lien on all the present and future rights, property and undertakings of SGI, the Company's corporate guarantee and a mortgage on SGI's Keith, South Australia property. At December 31, 2015, the principal balance on the Keith Building Loan was AUD $650,000 (USD $474,370), and the principal balance on the Keith Machinery and Equipment Facility was AUD $770,113 (USD $562,028). | |||||
Pioneer Note | ||||||
Line of Credit Facility, Description | On December 31, 2014, the Company issued a three-year secured promissory note to DuPont Pioneer in the initial principal amount of $10,000,000 (the "Pioneer Note"), with a maturity date of December 31, 2017. The Pioneer Note accrues interest at 3% per annum. Interest is payable in three annual installments, in arrears, commencing on December 31, 2015. |
Senior Convertible Notes and Wa
Senior Convertible Notes and Warrants (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Current portion of convertible debt, net | ||
Senior secured convertible notes payable | $ 11,274,678 | |
Debt discount | (2,008,749) | |
Total current portion | $ 9,461,477 | 9,265,929 |
Convertible debt, net, less current portion | ||
Senior secured convertible notes payable | 10,679,804 | |
Debt discount | (1,902,763) | |
Total long-term portion | 4,143,209 | 8,777,041 |
Total convertible debt, net | $ 18,042,970 | |
Fiscal Year | ||
2,016 | 2,566,558 | |
2,017 | 145,752 | |
2,018 | 10,161,063 | |
2,019 | 76,629 | |
2,020 | 76,629 | |
Thereafter | 229,887 | |
Total gross debt | 13,256,518 | |
Senior Convertible Notes | ||
Current portion of convertible debt, net | ||
Senior secured convertible notes payable | 11,463,054 | |
Debt discount | (2,001,577) | |
Total current portion | 9,461,477 | |
Convertible debt, net, less current portion | ||
Senior secured convertible notes payable | 5,019,704 | |
Debt discount | (876,495) | |
Total long-term portion | 4,143,209 | |
Total convertible debt, net | 13,604,686 | |
Fiscal Year | ||
2,016 | 8,633,005 | |
2,017 | 7,849,754 | |
2,018 | 0 | |
2,019 | 0 | |
2,020 | 0 | |
Thereafter | 0 | |
Total gross debt | $ 16,482,759 |
Senior Convertible Notes and 61
Senior Convertible Notes and Warrants (Narrative) (Details) | 6 Months Ended |
Dec. 31, 2015 | |
Senior Convertible Notes And Warrants Narrative Details | |
Long-term Debt, Description | On December 31, 2014, the Company consummated the sale of senior secured convertible debentures (the "Debentures") and common stock purchase warrants (the "Warrants") to various institutional investors ("Investors") pursuant to the terms of a securities purchase agreement among the Company and the Investors. At closing, the Company received $27,000,000 in gross proceeds. Offering expenses of $1,931,105 attributed to the Debentures were recorded as deferred financing fees and recorded as a debt discount and offering expenses of $424,113 attributed to the Warrants were expensed during the year ended June 30, 2015. The net proceeds were paid directly to DuPont Pioneer in partial consideration for the purchase of certain DuPont Pioneer assets, the closing for which also took place on December 31, 2014. See Note 3 for further discussion of the DuPont Pioneer Acquisition. Debentures The Debentures are due and payable on November 30, 2017, unless earlier converted or redeemed. The Debentures bear interest on the aggregate unconverted and then outstanding principal amount at 8% per annum, payable in arrears monthly beginning February 2, 2015. Commencing on the occurrence of any Event of Default (as defined in the Debentures) that results in the eventual acceleration of the Debentures, the interest rate will increase to 18% per annum. The monthly interest is payable in cash, or in any combination of cash or shares of the Company's common stock at the Company's option, provided certain "equity conditions" defined in the Debentures are satisfied. Beginning on July 1, 2015, the Company was required to make monthly payments of principal as well, payable in cash or any combination of cash or shares of its common stock at the Company's option, provided all of the applicable equity conditions are satisfied. The Debentures contain certain rights of acceleration and deferral at the holder's option in the event a principal payment is to be made in stock and contains certain limited acceleration rights of the Company, provided certain conditions are satisfied. As required under the terms of the Debentures, following the sale of 759 acres of farmland property in the Imperial Valley of California in March 2015, which resulted in sale proceeds of $7,100,000, the Company redeemed $5,000,000 in principal amount of the Debentures. The reduction in principal was applied on the back end of the term, moving the final scheduled payment from November 30, 2017 to June 1, 2017. The Debentures were initially convertible, at the holder's option, into the Company's common stock at a conversion price of $5.00. Pursuant to the terms of the Debentures, the conversion price was reset to $4.63 on September 30, 2015. As of December 31, 2015, the remaining outstanding Debentures were potentially convertible into 3,559,991 shares. No further adjustments of the conversion price are provided for, except in the case of stock splits and similar recapitalization events. The Company has a one-time optional forced conversion right, exercisable if specified conditions are satisfied. The Debentures are the Company's senior secured obligations, subject only to certain secured obligations of KeyBank and DuPont Pioneer (limited to a purchase money security interest in the purchased assets). The rights of KeyBank, DuPont Pioneer and the holders of the Debentures are set forth in an intercreditor and subordination agreement that was initially entered into in connection with the closing of the issuance of the Debentures. Warrants The Warrants entitle the holders to purchase, in the aggregate, 2,699,999 shares of the Company's common stock. The Warrants are exercisable through their expiration on June 30, 2020, unless earlier redeemed. The Warrants were initially exercisable at an exercise price equal to $5.00. On September 30, 2015, pursuant to the terms of the Warrants, the exercise price has been reset to $4.63. In addition, if the Company issues or is deemed to have issued securities at a price lower than the then applicable exercise price during the three-year period ending December 31, 2017, the exercise price of the Warrants will adjust based on a weighted average anti-dilution formula ("down-round protection"). On November 24, 2015, the Company closed on a private placement transaction in which 1,180,722 common shares were sold at $4.15 per share. Pursuant to the down-round protection terms of the Warrants, the exercise price was adjusted to $4.59 on November 24, 2015. The Warrants may be exercised for cash, provided that, if there is no effective registration statement available registering the exercise of the Warrants, the Warrants may be exercised on a cashless basis. At any time that (i) all equity conditions set forth in the Warrants have been satisfied, and (ii) the closing sales price of the common stock equals or exceeds $12.00 for 15 consecutive trading days (subject to adjustment for stock splits, reverse stock splits and other similar recapitalization events), the Company may redeem all or any part of the Warrants then outstanding for cash in an amount equal to $0.25 per Warrant. Accounting for the Conversion Option and Warrants Due to the down-round price protection included in the terms of the Warrants, the Warrants are treated as a derivative liability in the consolidated balance sheet, measured at fair value and marked to market each reporting period until the earlier of the Warrants being fully exercised or December 31, 2017, when the down-round protection expires. The initial fair value of the Warrants on December 31, 2014 was $4,862,000. At December 31, 2015, the fair value of the Warrants was estimated at $4,776,000. The Warrants were valued at December 31, 2015 using the Monte Carlo simulation model, under the following assumptions: (i) remaining expected life of 4.5 years, (ii) volatility of 50.7%, (iii) risk-free interest rate of 1.76% and (iv) dividend rate of zero. $22,138,000 of the initial proceeds was allocated to the Debentures. The required redemption contingent upon the real estate sale was determined to be an embedded derivative not clearly and closely related to the borrowing. As such, it was bifurcated and treated as a derivative liability, recorded initially at its fair value of $150,000, leaving an allocation to the host debt of $21,988,000. The difference between the initial amount allocated to the borrowing and the face value of the Debentures is being amortized over the term of the Debentures using the effective interest method. Debt issuance costs totaling $1,931,105 are also being amortized over the term of the Debentures using the effective interest method. In addition, the reduction in the conversion price of the Debentures as of September 30, 2015 resulted in a beneficial conversion feature of $871,862, which was recognized as additional debt discount and an increase to additional paid-in capital. Accounting for the Redemption The redemption of $5,000,000 in principal amount of the Debentures was accounted for as a partial extinguishment of the borrowing, as well as the settlement of the derivative recognized initially. The redemption resulted in a loss of $1,183,687, which was included in the interest expense - amortization of debt discount line item on the consolidated statement of operations for the three months ended March 31, 2015. |
Warrants Outstanding (Details)
Warrants Outstanding (Details) | 6 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Warrants outstanding, beginning | 2,749,999 |
Warrant issuances | 0 |
Warrants expired | 0 |
Warrants outstanding. ending | 2,749,999 |
Underwriter warrants | |
Warrant issue date | 2012-05 |
Warrants outstanding, beginning | 50,000 |
Exercise price per share | $ / shares | $ 6.88 |
Warrant expiration date | 2017-02 |
Warrant issuances | 0 |
Warrants expired | 0 |
Warrants outstanding. ending | 50,000 |
Warrants | |
Warrant issue date | 2014-12 |
Warrants outstanding, beginning | 0 |
Exercise price per share | $ / shares | $ 4.59 |
Warrant expiration date | 2020-06 |
Warrant issuances | 0 |
Warrants expired | 0 |
Warrants outstanding. ending | 2,699,999 |
Foreign Currency Contract (Narr
Foreign Currency Contract (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | |
Foreign Currency Contract Narrative Details | |||||
Foreign Currency Transactions, Description | The Company's subsidiary, SGI, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company manages through the use of foreign currency forward contracts. These foreign currency contracts are not designated as hedging instruments; accordingly, changes in the fair value are recorded in current period earnings. These foreign currency contracts had a notional value of $2,145,495 at December 31, 2015 and their maturities range from January 2016 to April 2016. The Company records an asset or liability on the consolidated balance sheet for the fair value of the foreign currency forward contracts. The foreign currency contract assets totaled $23,264 at December 31, 2015 compared to foreign currency contract liabilities of $59,116 at June 30, 2015. The Company recorded a gain on foreign exchange contracts of $330,007 and a loss of $385,465, which is reflected in cost of revenue for the three and six months ended December 31, 2015, respectively. The Company recorded a loss on foreign exchange contracts of $289,754 and $329,463, which is reflected in cost of revenue for the three and six months ended December 31, 2014, respectively. | ||||
Foreign exchange contract asset | $ 23,264 | $ 23,264 | $ 0 | ||
Foreign exchange contract liability | 0 | 0 | $ 59,116 | ||
Gain on foreign exchange contracts | $ 330,007 | ||||
Loss on foreign exchange contracts | $ 289,754 | $ 385,465 | $ 329,463 |
Commitments and Contingencies (
Commitments and Contingencies (Operating Leases) (Details) | Dec. 31, 2015USD ($) |
Commitments And Contingencies Operating Leases Details | |
Purchase commitments | $ 7,000,000 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2015 | Jun. 30, 2015 | |
Accounts Receivable, Related Parties, Current | $ 0 | $ 0 |
Accounts Payable, Related Parties, Current | $ 5,287,224 | 1,128,630 |
IVM | ||
Related Party Transaction, Description of Transaction | Glen D. Bornt, a member of the Company's Board of Directors, is the founder and President of Imperial Valley Milling Co. ("IVM"). He is its majority shareholder and a member of its Board of Directors. Fred Fabre, the Company's Vice President of Sales and Marketing, is a minority shareholder of IVM. IVM had a 15-year supply agreement with IVS, and this agreement was assigned by IVS to the Company when it purchased the assets of IVS in October 2012. IVM contracts with alfalfa seed growers in California's Imperial Valley and sells its growers' seed to the Company pursuant to a supply agreement. Under the terms of the supply agreement, IVM's entire certified and uncertified alfalfa seed production must be offered and sold to the Company, and the Company has the exclusive option to purchase all or any portion of IVM's seed production. The Company paid $5,104,745 to IVM during the six months ended December 31, 2015. Amounts due to IVM totaled $5,287,224 and $834,158 at December 31, 2015 and June 30, 2015, respectively. | |
Related Party Transaction, Purchases from Related Party | $ 5,104,745 | |
Accounts Payable, Related Parties, Current | $ 5,287,224 | 834,158 |
Bungalally Farms | ||
Related Party Transaction, Description of Transaction | Simon Pengelly, SGI's Chief Financial Officer as of December 31, 2015, has a non-controlling ownership interest in the partnership Bungalally Farms ("BF"). BF is one of SGI's contract alfalfa seed growers. SGI currently has entered into seed production contracts with BF on the same commercial terms and conditions as with the other growers with whom SGI contracts for alfalfa seed production. During six months ended December 31, 2015, the Company purchased a total of $12,105 of alfalfa seed that BF grew and sold to SGI under contract seed production agreements. SGI currently has seed production agreements with BF for 123 hectares of various seed varieties as part of its contract production for which SGI paid BF the same price it agreed to pay its other growers. Mr. Pengelly did not personally receive any portion of these funds. Amounts due to BF totaled $0 and $293,772 at December 31, 2015 and June 30, 2015, respectively. | |
Related Party Transaction, Purchases from Related Party | $ 12,105 | |
Accounts Payable, Related Parties, Current | $ 0 | $ 293,772 |
Equity-Based Compensation (2009
Equity-Based Compensation (2009 Equity Incentive Plan Narrative) (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015 | Jul. 31, 2015 | Mar. 31, 2013 | Dec. 31, 2012 | May. 31, 2012 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | |
Stock option exercise price | $ 4.56 | $ 3.89 | ||||||
Share-based compensation | $ 324,561 | $ 219,012 | ||||||
Unvested restricted shares outstanding | 48,666 | |||||||
2009 Plan | ||||||||
Description of the 2009 Equity Incentive Plan | 2009 Equity Incentive Plan In October 2009 and January 2010, the Company's Board of Directors and stockholders, respectively, approved the 2009 Equity Incentive Plan (as amended and/or restated from time to time, the "2009 Plan"). The plan authorized the grant and issuance of options, restricted shares and other equity compensation to the Company's directors, employees, officers and consultants, and those of the Company's subsidiaries and parent, if any. In October 2012 and December 2012, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,250,000 shares. In September 2013 and December 2013, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,700,000 shares. In September 2015 and December 2015, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 2,450,000 shares. The term of incentive stock options granted under the 2009 Plan may not exceed ten years, or five years for incentive stock options granted to an optionee owning more than 10% of the Company's voting stock. The exercise price of options granted under the 2009 Plan must be equal to or greater than the fair market value of the shares of the common stock on the date the option is granted. An incentive stock option granted to an optionee owning more than 10% of voting stock must have an exercise price equal to or greater than 110% of the fair market value of the common stock on the date the option is granted. | |||||||
Plan Modification, Description and Terms | Beginning with the quarter ended December 31, 2014, the Company began utilizing a Black-Scholes-Merton option pricing model, which includes assumptions regarding the risk-free interest rate, dividend yield, life of the award, and the volatility of the Company's common stock to estimate the fair value of employee options grants. The fair value of grants issued prior to the quarter ended December 31, 2014 were estimated using a lattice model. The weighted average assumptions used in the Black-Scholes-Merton model are: (i) 1.5% - 1.6% risk free rate of interest; (ii) 0% dividend yield and (iii) 50.4% - 50.8% volatility of common stock. The Company applied forfeiture assumptions averaging 3.3% to the estimated fair values to determine the net expense to record in the consolidated financial statements. | |||||||
Number of shares reserved for issuance under the plan | 2,400,000 | |||||||
Shares available for future grants and awards | 225,000 | |||||||
Terms of awards and other restrictions | The term of incentive stock options granted under the 2009 Plan may not exceed ten years, or five years for incentive stock options granted to an optionee owning more than 10% of the Company's voting stock. The exercise price of options granted under the 2009 Plan must be equal to or greater than the fair market value of the shares of the common stock on the date the option is granted. An incentive stock option granted to an optionee owning more than 10% of voting stock must have an exercise price equal to or greater than 110% of the fair market value of the common stock on the date the option is granted. | |||||||
May 2012 Grants | ||||||||
Stock option or RSU vesting period | 3 years | |||||||
Restricted stock units granted | 73,000 | |||||||
December 2012 Grants | ||||||||
Description of the 2009 Equity Incentive Plan | On December 8, 2012, the Company granted 175,000 stock options to its directors, officers, and employees at an exercise price of $7.20, which was the closing price for the Company's common stock on the date of grant. These options vest in equal quarterly installments over one- and three-year periods, commencing on January 1, 2013, and expire five years from the date of grant. During the year ended June 30, 2014, the Company granted 270,000 stock options to its officers and employees at exercise prices ranging from $5.94 to $8.29, which was the closing price for the Company's common stock on the respective dates of grant. These options vest in equal quarterly installments over periods ranging from six months to three years and expire five years from the date of grant. During the year ended June 30, 2015, the Company granted 227,197 stock options to its directors, officers and employees at exercise prices ranging from $3.61 to $6.25. These options vest in equal quarterly installments over periods ranging from one to three years and expiration dates range from five to ten years from the date of grant. During the six months ended December 31, 2015, the Company granted 203,500 stock options to its directors and officers at exercise prices ranging from $4.25 to $4.76. These options vest in quarterly installments over periods ranging from one to three years and expire ten years from the date of grant. | |||||||
Stock options granted | 175,000 | |||||||
Stock option exercise price | $ 7.20 | |||||||
Stock option or RSU vesting period | 3 years | |||||||
Stock option expiration date | Dec. 8, 2017 | |||||||
March 2013 Grants | ||||||||
Description of the 2009 Equity Incentive Plan | On March 16, 2013, the Company issued 280,000 restricted stock units to certain members of the executive management team. The restricted stock units have varying vesting periods whereby 34,000 restricted stock units vested on July 1, 2013 and the remaining 246,000 restricted stock units vest quarterly in equal installments over a four and one-half year period, commencing on July 1, 2013. The fair value of the award was $2,984,800 and was based on the closing stock price on the date of grant. | |||||||
Stock option or RSU vesting period | 4 years 6 months | |||||||
Stock option expiration date | Jan. 1, 2018 | |||||||
Restricted stock units granted | 280,000 | |||||||
Share-based compensation | $ 207,059 | $ 145,511 | ||||||
Fiar value of RSU on date of grant | $ 2,984,800 | |||||||
July 2015 Grants | ||||||||
Description of the 2009 Equity Incentive Plan | On July 15, 2015, the Company issued 88,333 restricted stock units to certain members of the executive management team. The restricted stock units have varying vesting periods whereby 13,250 restricted stock units vest on October 1, 2015 and the remaining 75,083 restricted stock units vest quarterly in equal installments over a three-year period, commencing on July 1, 2015. The fair value of the award was $420,465 and was based on the closing stock price on the date of grant. | |||||||
Fiar value of RSU on date of grant | $ 420,465 | |||||||
December 2015 Grants | ||||||||
Description of the 2009 Equity Incentive Plan | On December 11, 2015, the Company issued 28,059 restricted stock units to certain members of the executive management team and other employees. The restricted stock units have varying vesting periods whereby 500 restricted stock units vest on December 11, 2015, 4,259 restricted stock units vest in quarterly installments over a one-year period, and the remaining 23,300 restricted stock units vest annually in equal installments over a three year period. The fair value of the award was $119,251 and was based on the closing stock price on the date of grant. |
Equity-Based Compensation (Weig
Equity-Based Compensation (Weighted Average Assumptions Narrative) (Details) - Stock Options | 6 Months Ended |
Dec. 31, 2015$ / shares | |
Risk Free Interest Rate, minimum | 1.50% |
Risk Free Interest Rate, maximum | 1.60% |
Dividend yield | 0.00% |
Volatility of common stock, minimum | 50.40% |
Volatility of common stock, maximum | 50.80% |
Forfeiture assumption | 3.30% |
Exit / attrition rates, minimum | 5.2% |
Exit / attrition rates, maximum | 14.9% |
Weighted average grant date fair value of options granted and outstanding | $ 1.09 |
Stock-based compensation, total compensation cost not yet recognized, period for recognition | 1 year 299 days |
Equity-Based Compensation (Sche
Equity-Based Compensation (Schedule Of Stock Option Activity) (Details) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2015USD ($)$ / sharesshares | Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($) | |
Equity-based Compensation Schedule Of Stock Option Activity Details | |||
Options, Outstanding as of beginning of period | shares | 901,697 | 1,087,000 | |
Options, Granted | shares | 203,500 | 227,197 | |
Options, Exercised | shares | (8,751) | (400,000) | |
Options, Forfeited, cancelled or expired | shares | (25,000) | (12,500) | |
Options, Outstanding as of end of period | shares | 1,071,446 | 901,697 | |
Options, vested and exercisable at end of period | shares | 676,336 | ||
Options, vested and expected to vest | shares | 1,069,587 | ||
Weighted-Average Exercise Prices, Outstanding as of beginnig of period | $ / shares | $ 5.33 | $ 5.17 | |
Weighted-Average Exercise Prices, Granted | $ / shares | 4.56 | 3.89 | |
Weighted-Average Exercise Prices, Exercised | $ / shares | 3.95 | 4 | |
Weighted-Average Exercise Prices, Forfeited, cancelled or expired | $ / shares | 0 | 7.75 | |
Weighted-Average Exercise Prices, Outstanding as of end of period | $ / shares | 5.12 | $ 5.33 | |
Weighted-Average Exercise Prices, Vested and Exercisable | $ / shares | 5.44 | ||
Weighted-Average Exercise Price, Vested and expected to vest | $ / shares | $ 5.12 | ||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 4 years 288 days | 4 years 36 days | |
Weighted-Average Remaining Contractual Term (in years), Vested and Exercisable | 2 years 252 days | ||
Options Granted, Weighted-Average Remaining Contractual Term (in years) | 9.7 | 4.5 | |
Weighted-Average Remaining Contractual Term (in years), Vested and expected to vest | 4 years 288 days | ||
Options, Outstanding, Aggregate Intrinsic Value | $ | $ 82,267 | $ 392,850 | $ 1,562,712 |
Options, vested and xxercisable, Aggregate Intrinsic Value | $ | 39,501 | ||
Options, Vested and expected to vest, Aggregate Intrinsic Value | $ | $ 81,987 |
Equity-Based Compensation (Sc69
Equity-Based Compensation (Schedule Of Other Than Option Plan Activity) (Details) - Nonvested RSU's | 6 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Nonvested units outstanding at beginning | 136,672 |
Units granted | 116,392 |
Units vested | (41,082) |
Units forfeited | 0 |
Nonvested units outstanding at end | 211,982 |
Units granted, weighted average grant date fair value per unit | $ / shares | $ 4.64 |
Units vested, weighted average grant date fair value per unit | $ / shares | 10.66 |
Nonvested units outstanding, weighted average grant date fair value per unit | $ / shares | $ 7.74 |
Weighted-average remaining contractual life (years) | 2 years |
Equity-Based Compensation (Narr
Equity-Based Compensation (Narrative) (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-based compensation | $ 324,561 | $ 219,012 |
Stock Options | ||
Unrecognized stock compensation expense, net of estimated forfeitures, related to options | $ 546,720 | |
Stock Options | ||
Stock-based compensation, total compensation cost not yet recognized, period for recognition | 1 year 299 days | |
Nonvested restricted stock | ||
Stock-based compensation | $ 207,059 | $ 145,511 |
Nonvested RSU's | ||
Unrecognized stock compensation expense related to restricted stock grants | $ 1,448,357 | |
Stock-based compensation, total compensation cost not yet recognized, period for recognition | 2 years |
Non-Cash Investing Activities f
Non-Cash Investing Activities for Statements of Cash Flows (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Non-cash Investing Activities For Statements Of Cash Flows Details | ||
Net assets acquired in business acquisitions | $ 0 | $ 12,200,000 |
Debt discount from warranty liability | 0 | 4,862,000 |
Increase in non-cash net assets of subsidiary due to foreign currency translation loss, net of income tax | $ (841,117) | $ (2,586,183) |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) | 6 Months Ended |
Dec. 31, 2015 | |
Subsequent Events Narrative Details | |
Subsequent Event, Description | On January 1, 2016, the Company issued 15,081 shares of common stock in the settlement of previously granted restricted stock units that vested on January 1, 2016. On January 25, 2016, the Company commenced a $10,375,000 rights offering. Under the terms of the rights offering, the Company is distributing to holders of its common stock, convertible notes and accompanying warrants, at no charge, non-transferable subscription rights to purchase shares of its common stock at $4.15 per share. The rights offering is currently planned to be closed in late February 2016. |