Attached files
| file | filename |
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| EXCEL - IDEA: XBRL DOCUMENT - Soy Energy, LLC | Financial_Report.xls |
| EX-32.2 - CERTIFICATION - Soy Energy, LLC | certification-0443013.htm |
| EX-31.2 - CERTIFICATION - Soy Energy, LLC | certification-0243013.htm |
| EX-32.1 - CERTIFICATION - Soy Energy, LLC | certification-0343013.htm |
| EX-31.1 - CERTIFICATION - Soy Energy, LLC | certification-0143013.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
For the quarterly period ended April 30, 2013 | |
OR | |
o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
For the transition period from to . | |
COMMISSION FILE NUMBER 000-53112 | |
SOY ENERGY, LLC
(Exact name of registrant as specified in its charter)
Iowa | 20-4026473 | |||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
4172 19th Street SW, Mason City, Iowa 50401 | ||||
(Address of principal executive offices) | ||||
(641) 421-7590 | ||||
(Registrant's telephone number, including area code) | ||||
Securities registered pursuant to Section 12(b) of the Act: None | ||||
Securities registered pursuant to Section 12(g) of the Act: Membership Units | ||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
x Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer o | Accelerated Filer o |
Non-Accelerated Filer o | Smaller Reporting Company x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
o Yes x No
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of June 27, 2013, we had 33,348 membership units outstanding.
1
INDEX
Page Number | |
2
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
SOY ENERGY, LLC
Condensed Balance Sheets
ASSETS | April 30, 2013 | October 31, 2012 | ||||||
(Unaudited) | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 7,014 | $ | 64,331 | ||||
Restricted cash | 462,332 | — | ||||||
Accounts receivable | 8,882 | 239,015 | ||||||
Inventories | 47,651 | 216,962 | ||||||
Prepaid cost and other | 87,352 | 134,625 | ||||||
Total current assets | 613,231 | 654,933 | ||||||
Property, Plant and Equipment | ||||||||
Land and improvements | — | 431,801 | ||||||
Buildings | — | 3,682,629 | ||||||
Equipment | — | 13,613,377 | ||||||
Accumulated depreciation | — | (1,418,211 | ) | |||||
Net property, plant and equipment | — | 16,309,596 | ||||||
Other Assets | ||||||||
Assets held for sale | 16,706,213 | 650,262 | ||||||
Escrow deposit | — | 379,979 | ||||||
Debt service reserve | — | 151,021 | ||||||
Total other assets | 16,706,213 | 1,181,262 | ||||||
Total Assets | $ | 17,319,444 | $ | 18,145,791 | ||||
Notes to Unaudited Condensed Financial Statements are an integral part of this Statement.
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SOY ENERGY, LLC
Condensed Balance Sheets
LIABILITIES AND MEMBERS' EQUITY | April 30, 2013 | October 31, 2012 | ||||||
(Unaudited) | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 4,512,878 | $ | 4,387,831 | ||||
Accrued expenses | 565,235 | 330,166 | ||||||
Notes payable | 370,000 | 250,000 | ||||||
Current maturities of long-term debt | 5,606,432 | 5,606,432 | ||||||
Total current liabilities | 11,054,545 | 10,574,429 | ||||||
. | ||||||||
Long-Term Debt, Net of Current Maturities | 1,109,767 | 1,048,111 | ||||||
Members' Equity, 33,348 Units Issued and Outstanding | 5,155,132 | 6,523,251 | ||||||
Total Liabilities and Members’ Equity | $ | 17,319,444 | $ | 18,145,791 | ||||
Notes to Unaudited Condensed Financial Statements are an integral part of this Statement.
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SOY ENERGY, LLC
Condensed Statements of Operations
Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | ||||||||||||
April 30, 2013 | April 30, 2012 | April 30, 2013 | April 30, 2012 | ||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Sales | $ | 21,726 | $ | 1,993,704 | $ | 71,131 | $ | 3,935,641 | |||||||
Costs of Goods Sold | 58,107 | 3,324,997 | 106,292 | 6,331,542 | |||||||||||
Gross Loss | (36,381 | ) | (1,331,293 | ) | (35,161 | ) | (2,395,901 | ) | |||||||
Operating Expenses | |||||||||||||||
General and administrative | 330,259 | 570,621 | 697,488 | 1,024,956 | |||||||||||
Professional fees | 223,388 | 145,108 | 310,327 | 276,929 | |||||||||||
Total operating expenses | 553,647 | 715,729 | 1,007,815 | 1,301,885 | |||||||||||
Operating Loss | (590,028 | ) | (2,047,022 | ) | (1,042,976 | ) | (3,697,786 | ) | |||||||
Other Income (Expense) | |||||||||||||||
Interest income | 1,137 | 103 | 1,201 | 966 | |||||||||||
Other income | 332 | 144 | 2,119 | 1,537 | |||||||||||
Interest expense | (163,496 | ) | (241,945 | ) | (328,463 | ) | (273,555 | ) | |||||||
Total other income (expense), net | (162,027 | ) | (241,698 | ) | (325,143 | ) | (271,052 | ) | |||||||
Net Loss | $ | (752,055 | ) | $ | (2,288,720 | ) | $ | (1,368,119 | ) | $ | (3,968,838 | ) | |||
Weighted Average Units Outstanding - Basic and Diluted | 33,348 | 33,111 | 33,348 | 33,064 | |||||||||||
Net Loss Per Unit - Basic and Diluted | $ | (22.55 | ) | $ | (69.12 | ) | $ | (41.03 | ) | $ | (120.04 | ) | |||
Notes to Unaudited Condensed Financial Statements are an integral part of this Statement.
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SOY ENERGY, LLC
Condensed Statements of Cash Flows
Six Months Ended | Six Months Ended | ||||||
April 30, 2013 | April 30, 2012 | ||||||
(Unaudited) | (Unaudited) | ||||||
Cash Flows from Operating Activities | |||||||
Net loss | $ | (1,368,119 | ) | $ | (3,968,838 | ) | |
Adjustments to reconcile net loss to net cash used for operating activities: | |||||||
Depreciation and amortization | — | 557,292 | |||||
Write-off of loan costs | — | 120,914 | |||||
Other | 56,170 | 1,265 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 230,133 | (112,234 | ) | ||||
Inventories | 169,311 | 353,887 | |||||
Prepaid costs and other | 47,273 | (152,797 | ) | ||||
Accounts payable | 125,047 | 773,924 | |||||
Accrued expenses | 235,069 | (74 | ) | ||||
Net cash used for operating activities | (505,116 | ) | (2,426,661 | ) | |||
Cash Flows from Investing Activities | |||||||
Capital expenditures | — | (585,533 | ) | ||||
Proceeds from disposal of property and equipment | 259,131 | 400 | |||||
Proceeds from maturing certificates of deposit | — | 255,923 | |||||
Net cash provided by (used for) investing activities | 259,131 | (329,210 | ) | ||||
Cash Flows from Financing Activities | |||||||
Proceeds from line-of-credit, net | — | 1,487,258 | |||||
Proceeds from notes payable | 370,000 | — | |||||
Payments on notes payable | (250,000 | ) | — | ||||
Proceeds from long-term debt | — | 770,000 | |||||
Payments on long-term debt | — | (271,287 | ) | ||||
Restricted cash, net | 68,668 | — | |||||
Capital contributions | — | 163,750 | |||||
Net cash provided by financing activities | 188,668 | 2,149,721 | |||||
Net Decrease in Cash and Cash Equivalents | (57,317 | ) | (606,150 | ) | |||
Cash and Cash Equivalents at Beginning of Period | 64,331 | 662,946 | |||||
Cash and Cash Equivalents at End of Period | $ | 7,014 | $ | 56,796 | |||
Notes to Unaudited Condensed Financial Statements are an integral part of this Statement.
SOY ENERGY, LLC
Condensed Statements of Cash Flows
Six Months Ended | Six Months Ended | ||||||
April 30, 2013 | April 30, 2012 | ||||||
(Unaudited) | (Unaudited) | ||||||
Supplemental Cash Flow Information | |||||||
Interest expense paid | $ | 9,294 | $ | 132,998 | |||
Capitalized interest paid | — | 81,910 | |||||
Supplemental Schedule of Noncash Investing and Financing Activities | |||||||
Property, plant and equipment, net, reclassified to assets held for sale | $ | 16,309,596 | $ | — | |||
Escrow deposit and debt service reserve reclassified to restricted cash | 524,993 | — | |||||
Property, plant and equipment in accounts payable | — | 268,955 | |||||
Amortization of loan fees, discounts and prepaid costs capitalized as construction-in-progress | — | 5,318 | |||||
Notes to Unaudited Condensed Financial Statements are an integral part of this Statement.
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SOY ENERGY, LLC
Notes to Unaudited Condensed Financial Statements
April 30, 2013
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company's audited financial statements for the year ended October 31, 2012, contained in the Company's Form 10-K.
In the opinion of management, the condensed financial statements reflect all adjustments, consisting of only normal recurring adjustments, considered necessary for fair presentation of the Company's financial position as of April 30, 2013 and the results of operations and cash flows for all periods present.
Nature of Business
Soy Energy, LLC, an Iowa limited liability company, (the Company) operates a 30 million gallon per year (MGY) production biodiesel facility in Mason City, Iowa. The Company produces and sells biodiesel, glycerin and soap stock. The Company commenced operations in January 2012. Prior to January 2012, the Company was in the development stage. On October 22, 2012, the Company shut down its biodiesel facility due to market conditions and continued production challenges.
Accounting Estimates
Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported revenues and expenses. The Company uses estimates and assumptions in accounting for significant matters, among others, the carrying value of long-lived assets and the assumptions related to impairment testing and inventory valuation. Actual results may differ from previously estimated amounts and such differences may be material to the financial statements.
Revenue Recognition
The Company generally sells biodiesel and related products pursuant to marketing agreements. Revenues are recognized when the marketing company (the "customer") has taken title and has assumed the risks and rewards of ownership, prices are fixed or determinable and collectibility is reasonably assured.
On August 16, 2012, the Company entered into a tolling agreement with an unrelated party. The Company's revenue from the agreement is based on a processing fee which is earned as biodiesel is produced. Additionally, the Company shares in related profits/losses associated with the sale of biodiesel produced for the unrelated party based on the terms defined within the tolling agreement.
Accounts Receivable
Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral.
Accounts receivable are recorded at estimated net realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company's credit terms. Accounts considered uncollectible are written off. The Company's estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any. At April 30, 2013 and October 31, 2012, the Company was of the belief that such accounts would be collectible and thus an allowance was not considered necessary.
Inventories
Inventories consists of raw materials, work in process and finished goods. Raw materials are stated at the lower of cost or market on a first-in, first-out (FIFO) basis. Work in process and finished goods are stated at the lower of average cost or market.
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SOY ENERGY, LLC
Notes to Unaudited Condensed Financial Statements
April 30, 2013
Property, Plant and Equipment
Property, Plant and equipment is stated at cost and depreciated over estimated service lives of related assets using the straight-line method of accounting. As of April 30, 2013, the Company has classified property, plant and equipment as assets held for sale based on the estimated sale as described in Note 9.
Long-Lived Assets
The Company reviews its long-lived assets, such as property, plant and equipment and other assets, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.
In accordance with the Company's policy for evaluating impairment of long-lived assets described above, management evaluated the recoverability of the facilities based on projected future cash flows from operations over the facilities' estimated useful lives. Management determined that the projected future undiscounted cash flows from operations of these facilities exceed their carrying value at April 30, 2013; therefore, no impairment loss was indicated or recognized. In determining the projected future undiscounted cash flows, the Company has made significant assumptions concerning the future of the renewable fuels industry, the potential uses of the property and current discussions to sell the Mason City, Iowa facility. Given the uncertainties in the renewable fuels industry, should management be required to adjust the carrying value of these assets at some future point in time, the adjustment could be significant and could significantly impact the Company's financial position and results of operations. No adjustment has been made to these financial statements for this uncertainty.
Fair Value of Financial Instruments
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety.
The Company believes the carrying value of cash and cash equivalents, escrow deposit, debt service reserve, accounts payable, and other financial working capital items approximate fair value due to the short maturity nature of these instruments. The Company believes the carrying amount of the long-term debt approximates the fair value due to terms of the debt approximating the current market interest rates including the default interest being charged.
2. GOING CONCERN
The financial statements have been prepared on a going concern basis, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. On January 1, 2012, the Company commenced operations and transitioned from a "development stage company" to an "operating company". The Company incurred losses of approximately $13,129,000 in 2012 including impairment charges of approximately $4,375,000 and had previously incurred losses in fiscal 2011 while it was in the development stage that were larger than anticipated. These factors raise substantial doubt about the Company's ability to continue as a going concern. Additionally, the Company is out of compliance with certain provisions of the term loan agreements as described in Note 5. As a result, the Company reclassified its term loans to current. If the Company's lenders exercised their rights to accelerate debt maturities, the Company would not have adequate available cash to repay amounts outstanding.
On October 22, 2012, the Company shut down its biodiesel facility due to market conditions, continued production challenges and negative working capital.
In May 2013, the Company entered into a sale agreement to sell substantially all plant assets in exchange for $11,000,000 in cash and a note for $5,600,000. The sale is contingent on member approval and certain closing conditions. The buyer agreed to advance
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SOY ENERGY, LLC
Notes to Unaudited Condensed Financial Statements
April 30, 2013
up to $750,000 as part of the purchase price for working capital needs. Should the sale not close, the Company would owe amounts advanced under the agreement. See Note 9 for additional details surrounding the sale agreement.
3. INVENTORIES
Inventories consisted of the following:
April 30, 2013 | October 31, 2012 | ||||||
Raw materials | $ | 37,036 | $ | 166,053 | |||
Finished goods | 10,615 | 50,909 | |||||
$ | 47,651 | $ | 216,962 | ||||
4. ASSETS HELD FOR SALE
The Company is actively working to sell the assets held for sale. These assets have been recorded at their estimated selling price, less estimated selling costs. The fair value of these assets was determined based on recent sales of similar assets.
Amounts included in assets held for sale are as follows:
April 30, 2013 | October 31, 2012 | ||||||
Land and improvements | $ | 419,700 | $ | 250,262 | |||
Buildings | 3,457,915 | — | |||||
Equipment | 12,828,598 | 400,000 | |||||
Total assets held for sale | $ | 16,706,213 | $ | 650,262 | |||
5. LONG-TERM DEBT
Term Loans
The Company has a term loan with a financial institution at a fixed rate of 5.0% until October 2016. The interest rate will then adjust to the greater of the five-year LIBOR swap rate plus 3.5% or 5.0%. Upon Event of Default, the interest rate will adjust to the lesser of 4.0% plus the otherwise applicable rate and the maximum interest rate which borrower may pay by law. At April 30, 2013, the Company was in default on the loan, related to both financial and non-financial covenant violations more fully described below, and the default rate of interest was 9.0%. The Company made monthly interest only payments on the term loan until November 1, 2011, followed by 120 monthly principal and interest payments of approximately $64,000 until maturity at maturity in September 2021.
The Company has a non-interest bearing note with the same financial institution for $77,595 which will be due in full in September 2021. Upon Event of Default, the interest rate will be 4.0% per annum until the Event of Default is cured or until the loan is paid in full. As of April 30, 2013 and in 2012, the Company was in default on the loan, related to both financial and non-financial covenant violations.
The term loans are secured by substantially all business assets and are subject to various financial and non-financial covenants that limit distributions, capital expenditures, and require minimum debt service coverage requirements. The Company received written notices of default (the "Notices") from the lender in which the Company was not in compliance with the provisions of its term loan agreements related to properly naming its lender as an insured party, delivery of fully executed copies of subordinated intercreditor agreements satisfactory to the lender prior to obtaining any subordinated loan, allowing mechanics liens to be filed against the property and untimely submission of monthly financial information. Additionally, the Company is not in compliance with its debt to equity ratio requirement.
Since the Company has not received waivers for actual or future violations, the Company has classified the term loans to current. The Company is currently operating under a forbearance agreement with the lender until July 31, 2013.
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SOY ENERGY, LLC
Notes to Unaudited Condensed Financial Statements
April 30, 2013
Convertible Subordinate Notes
The Company issued convertible subordinated notes with a 12.0% interest rate. The Company owes semiannual interest payments beginning May 2012 until the notes become due and payable in October 2017. The Company has the right to defer all interest payments until the notes are redeemed, converted, or mature. The notes are convertible any time after October 31, 2015 and prior to the maturity date at book value per unit at the time of the conversion. The Company does have convertible debt, which if it were exercisable would result in an additional approximately 7,178 member units at April 30, 2013. The notes may be redeemed by the Company any time after April 30, 2014 without penalty or premium. The Company's borrowings through the convertible subordinated notes include $480,000 from related parties.
Amounts included in long-term debt are as follows:
April 30, 2013 | October 31, 2012 | ||||||
Term loan | $ | 5,528,837 | $ | 5,528,837 | |||
Term loan | 77,595 | 77,595 | |||||
Subordinated debt | 1,109,767 | 1,048,111 | |||||
Total long-term debt | 6,716,199 | 6,654,543 | |||||
Less current maturities | 5,606,432 | 5,606,432 | |||||
$ | 1,109,767 | $ | 1,048,111 | ||||
The estimated maturities of long-term debt at April 30, 2013 are as follows:
2014 | $ | 5,606,432 | |
2015 | — | ||
2016 | — | ||
2017 | 1,109,767 | ||
Total | $ | 6,716,199 | |
6. NOTES PAYABLE
The Company has a note payable with an availability of up to $320,000 from a financial institution initially scheduled to mature May 21, 2013 bearing 4.5% interest. The Company owed $320,000 at April 30, 2013. The note is secured by certain assets held for sale and personal guarantees by all eight members of the Company's Board of Directors. The Company anticipates using proceeds from the asset sale agreement to settle the note.
The Company has a note payable for $50,000 with a financial institution bearing interest at 4.5% and maturing on July 27, 2013. The company owed $50,000 on the note at April 30, 2013. The note is secured by certain assets held for sale and guaranteed by all eight members of the Company's Board of Directors. The Company anticipates using proceeds from the asset sale agreement to settle the note.
7. MEMBERS' EQUITY
The Company's operating agreement authorizes the Board of Directors to issue up to 48,750 units without consent of a majority of its membership voting interests. The Company has one class of membership unit which, under its operating agreement, gives a member one vote for each unit owned, provided no member, related party and/or affiliate of a member may vote more than 5% of the Company's outstanding membership interests. The Company's operating agreement restricts transfer of membership units generally to operation of law, such as upon death, without approval of a majority of its Directors.
Income, losses, and distributions are allocated to members based upon their respective percentage of units owned.
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SOY ENERGY, LLC
Notes to Unaudited Condensed Financial Statements
April 30, 2013
8. COMMITMENTS AND CONTINGENCIES
Construction Agreement
On August 11, 2010, the Company entered into a construction agreement with an unrelated party (contractor) for the design and construction of modifications of the Mason City, Iowa biodiesel facility allowing for the use of multiple feed stocks. The initial Guaranteed Maximum Price of the project was $8,000,000. The plant was put into service in January 2012. The retainage payable related to this contract approximates $374,000 at April 30, 2013 and is included in accounts payable in the balance sheet.
Legal Proceedings
The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. While the ultimate outcome of these matters is not presently determinable, it is in the opinion of management that the resolution of outstanding claims will not have a material adverse effect on the financial position or results of operations of the Company. Due to the uncertainties in the settlement process, it is at least reasonably possible that management's view of outcomes will change in the near term.
In May and August 2012, subcontractors of the general contractor that performed the conversion to allow corn oil processing and maintenance of the plant filed mechanics liens and a lawsuit to foreclose on the mechanics lien against the Company seeking payment of retainage amounts as well as other costs beyond the scope of the original contract totaling approximately $850,000. As of April 30, 2013, the Company has accrued approximately $850,000 related to the subcontractors claim.
The Company is involved with other claims and lien disputes related to the construction at the plant and operational issues. The Company is working to settle these vendor payables with the anticipated proceeds from the sale of the plant assets.
9. SUBSEQUENT EVENT
Asset Sale Agreement
On May 1, 2013, the Company entered into an asset sale agreement with a buyer for the sale of substantially all assets of the Company. The estimated sales price is $16,600,000, of which $11,000,000 would be paid in cash and $5,600,000 would be issued in the form of a term note. The term note includes interest at 5%. The term note requires the buyer to pay interest only for the first eight months of the term with principal and interest owed thereafter to fully amortize the note by 2019. The note may be repaid prior to maturity based on excess cash flows generated by the assets sold to the buyer during the term of the promissory note. The Company would use the proceeds from the close of the asset sale agreement to settle substantially all of its liabilities. The remaining proceeds and the subsequent term note payments would be pro-ratably distributed amongst its members.
The buyer has provided up to $750,000, which the Company can access to pay working capital expenses of the Company through August 15, 2013, which in the event of close, would be deducted from the net sales proceeds. In the event of the termination of the agreement, any advances made to the Company would be due and payable to the buyer with interest accrued from the date of the advance until paid in full at a rate of 8% per annum, plus the cost of collection.
The sale agreement includes a termination fee of between $500,000 and $1,000,000 under certain conditions if the sale is terminated. In the event that the sale does not close by July 15, 2013, the Company is subject to penalties initially at $5,000 per day, but increasing over time, limited to $1,050,000.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
We prepared the following discussion and analysis to help you better understand our financial condition, changes in our financial condition, and results of operations for the three and six month periods ended April 30, 2013. This discussion should be read in conjunction with the financial statements and notes and the information contained in our annual report on Form 10-K for the fiscal year ended October 31, 2012. Unless otherwise stated, references in this report to particular years or quarters refer to our fiscal years ended in October and the associated quarters of those fiscal years.
Forward Looking Statements
This report contains forward-looking statements that involve future events, our future performance and our expected future operations and actions. In some cases you can identify forward-looking statements by the use of words such as "may," "will," "should," "anticipate," "believe," "expect," "plan," "future," "intend," "could," "estimate," "predict," "hope," "potential," "continue," or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties, including, but not limited to, those business risks and factors described elsewhere in this report, in our other Securities and Exchange Commission filings, as well as those listed below.
• | Our ability to secure member approval to sell the Mason City biodiesel production facility; |
• | Or ability to maintain our liquidity until we can close on a sale of the biodiesel production facility; |
• | The price that we receive for the sale of our biodiesel production facility; |
• | Our ability to work with our creditors to avoid foreclosure and forced sale of our biodiesel production facility; |
• | Availability and costs of feedstock, particularly soy oil, animal fats and corn oil; |
• | Changes in or elimination of governmental laws, tariffs, trade or other controls or enforcement practices such as national, state or local energy policy; federal biodiesel tax incentives; or environmental laws and regulations that apply to the Mason City biodiesel production facility; |
• | Changes in the weather or general economic conditions impacting the availability and price of vegetable oils and animal fats; |
• | Total U.S. consumption of diesel; |
• | Weather changes, strikes, transportation or production problems causing supply interruptions or shortages affecting the availability and price of feedstock; |
• | Changes in interest rates or the availability of credit; |
• | Our potential liability resulting from future litigation; |
• | General economic conditions; |
• | Our ability to sell assets held for sale at their carrying value minus selling costs; |
• | Changes and advances in biodiesel production technology; |
• | Restrictive covenants in our loan agreement; |
• | Competition from other alternative fuels; and |
• | Other factors described elsewhere in this report. |
We undertake no duty to update these forward looking statements, even though our situation may change in the future. Furthermore, we cannot guarantee future results, events, levels of activity, performance or achievements. We caution you not to put undue reliance on any forward-looking statements which speak only as of the date of this report. You should read this report completely and with the understanding that our actual future results may be materially different from what we currently expect. We qualify all of our forward looking statements by these cautionary statements.
Overview
Soy Energy, LLC (referred to herein as “Soy Energy” the “Company” “us” or “we”) is an Iowa limited liability company, which was organized by filing articles of organization with the Iowa Secretary of State on December 15, 2005. We sold our first batch of biodiesel in January 2012 and we sold our first batch of corn stillage oil based biodiesel in March 2012.
Asset Sale Transaction
We are in the process of pursuing a sale of our assets to REG Mason City, LLC (“REG Mason City”), a wholly owned subsidiary of Renewable Energy Group, Inc. (“REG”). We are pursuing the asset sale because we have had multiple setbacks since purchasing the Mason City biodiesel production facility which have negatively impacted our ability to continue to operate. These setbacks include general conditions in the biodiesel industry; the time and cost to commission and install the new feedstock pre-treatment front end; the methanol tank rupture and fire in May 2012, which closed the facility; and pending legal issues. We have incurred significant losses since our inception and we continue to incur losses. We have not operated since October 2012
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and have had only limited sales of remaining inventory since that time. As a result of our losses and the fact that the biodiesel production facility has not been operational since October 2012, we are in default of our loan with our primary lender, OSM-REO FF, LLC (“OSM”). We owe OSM approximately $5.7 million and have an obligation to pay certain subordinated creditors approximately $1.1 million. Further, we have accrued approximately $4.5 million in accounts payable and several lawsuits are pending by companies seeking payments for amounts they claim we owe. We currently have less than $10,000 in cash compared to more than $11 million in liabilities.
As a result of our financial condition, in September 2012, our board of directors started to evaluate its options for either raising additional capital or selling our assets. Our board of directors determined that it would not be feasible to raise a sufficient amount of capital in order to make the necessary repairs to the biodiesel production facility and secure the working capital necessary to restart operations. Therefore, in November 2012, the board determined that it was in the best interests of our members to find a purchaser for our assets in order to repay our outstanding liabilities and attempt to return a portion of our members' investments.
Effective May 1, 2013, we executed an Asset Purchase Agreement (the “Asset Purchase Agreement”) with REG and REG Mason City. Pursuant to the Asset Purchase Agreement, we agreed to sell substantially all of our assets to REG Mason City. The purchase price (which is subject to reduction for delays, certain expenses advanced by REG to us and liabilities related to our indemnification obligations under the Asset Purchase Agreement) for our assets is $16.6 million, which is divided between $11 million in cash and a $5.6 million promissory note issued by REG Mason City and secured by REG Mason City's equipment and fixtures, a mortgage on the real property related to the Mason City biodiesel production facility and certain general intangibles (the “Promissory Note”). However, REG Mason City's payment obligations under the Promissory Note are subordinated to up to $6 million of debt REG Mason City plans to borrow from REG for repair and improvement of the facility. REG Mason City's obligations under the Promissory Note are not guaranteed by REG.
Due to our current financial condition and lack of liquid assets, if our members do not approve the Asset Sale, we will likely be forced to file bankruptcy. Also, if our members do not approve the Asset Sale, it is likely that OSM, our primary lender, will institute a foreclosure action and take our assets. We are planning to hold a member meeting in July 2013 in order to seek the approval of our members to proceed with the sale of the biodiesel production facility and to dissolve and liquidate Soy Energy.
Results of Operations for the Fiscal Quarters Ended April 30, 2013 and 2012
The following table shows the results of our operations for the fiscal quarters ended April 30, 2013 and 2012:
Fiscal Quarter Ended | Fiscal Quarter Ended | |||||||
Statement of Operations Data | April 30, 2013 | April 30, 2012 | ||||||
(Unaudited) | (Unaudited) | |||||||
Revenues | $ | 21,726 | $ | 1,993,704 | ||||
Cost of Goods Sold | 58,107 | 3,324,997 | ||||||
Gross Loss | (36,381 | ) | (1,331,293 | ) | ||||
Operating Expenses | 553,647 | 715,729 | ||||||
Operating Loss | (590,028 | ) | (2,047,022 | ) | ||||
Other Income (Expense), Net | (162,027 | ) | (241,698 | ) | ||||
Net Loss | $ | (752,055 | ) | $ | (2,288,720 | ) | ||
We had approximately $22,000 in revenue for our second fiscal quarter of 2013 related to sales of remaining inventory after we had ceased operating the biodiesel production facility. We had approximately $2.0 million in revenue for our second fiscal quarter of 2012 related to sales of biodiesel and its related co-products since we were operating the biodiesel production facility during that time. We had approximately $58,000 in cost of goods sold during our second fiscal quarter of 2013 which was primarily for glycerin and co-products sales. These costs were significantly less than our second quarter of 2012 as we were no longer operating during the 2013 period. Our cost of goods sold was significantly higher than our revenue during our second quarter of 2012 due to costs we incurred in ramping up production and due to the fact that we were not operating at full capacity. Our cost of goods sold during the 2012 period was primarily related to the use of feedstock and other raw materials necessary for the biodiesel production process as well as having a full production staff.
Our operating expenses, including professional fees, were lower during our second quarter of 2013 compared to the same period of 2012 due to the fact that we had ceased operating the biodiesel production facility during 2013 which resulted in less staff and lower costs associated with operating our business.
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We had significantly more interest expense during our second quarter of 2013 compared to the same period of 2012 due to having more debt outstanding with our subordinated promissory notes, as well as the fact that we are paying interest at a higher rate on our primary debt due to our loan defaults. In 2012, interest expense included approximately $121,000 of loan cost amortization when the OSM term loans were reclassified to current.
Results of Operations for the Six Months Ended April 30, 2013 and 2012
The following table shows the results of our operations for the six months ended April 30, 2013 and 2012:
Six Months Ended | Six Months Ended | |||||||
Statement of Operations Data | April 30, 2013 | April 30, 2012 | ||||||
(Unaudited) | (Unaudited) | |||||||
Revenues | $ | 71,131 | $ | 3,935,641 | ||||
Cost of Goods Sold | 106,292 | 6,331,542 | ||||||
Gross Loss | (35,161 | ) | (2,395,901 | ) | ||||
Operating Expenses | 1,007,815 | 1,301,885 | ||||||
Operating Loss | (1,042,976 | ) | (3,697,786 | ) | ||||
Other Income (Expense), Net | (325,143 | ) | (271,052 | ) | ||||
Net Loss | $ | (1,368,119 | ) | $ | (3,968,838 | ) | ||
We had approximately $71,000 in revenue for the six months ended April 30, 2013 related to sales of remaining inventory after we had ceased operating the biodiesel production facility. We had approximately $3.9 million in revenue for the same period of 2012 related to sales of biodiesel and its related co-products since we were operating the biodiesel production facility during that time. We had approximately $106,000 in cost of goods sold during the six months ended April 30, 2013 which was primarily related to glycerin and co-products sales. These costs were significantly less than the six months ended April 30, 2012 as we were no longer operating the biodiesel production facility during the 2013 period. Our cost of goods sold was significantly higher than our revenue during the six months ended April 30, 2012 due to costs we incurred in ramping up production and due to the fact that we were not operating at full capacity. Our cost of goods sold during the 2012 period was primarily related to the use of feedstock and other raw materials necessary for the biodiesel production process as well as having a full production staff.
Our operating expenses, including professional fees, were lower during the six months ended April 30, 2013 compared to the same period of 2012 due to the fact that we had ceased operating the biodiesel production facility during 2013 which resulted in less staff and lower costs associated with operating our business.
We had significantly more interest expense during the six months ended April 30, 2013 compared to the same period of 2012 due to having more debt outstanding with our subordinated promissory notes, as well as the fact that we are paying interest at a higher rate on our primary debt due to our loan defaults. In 2012, interest expense included approximately $121,000 of loan cost amortization when the OSM term loans were reclassified to current.
Changes in Financial Condition at April 30, 2013 Compared to October 31, 2012
The information below shows the changes in our financial condition during the six months ended April 30, 2013.
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ASSETS | April 30, 2013 | October 31, 2012 | ||||||
(Unaudited) | ||||||||
Current Assets | $ | 613,231 | $ | 654,933 | ||||
Net Property, Plant and Equipment | — | 16,309,596 | ||||||
Other Assets | 16,706,213 | 1,181,262 | ||||||
Total Assets | $ | 17,319,444 | $ | 18,145,791 | ||||
LIABILITIES | ||||||||
Current Liabilities | $ | 11,054,545 | $ | 10,574,429 | ||||
Long-Term Debt Net of Current Maturities | 1,109,767 | 1,048,111 | ||||||
Members' Equity | 5,155,132 | 6,523,251 | ||||||
Total Liabilities and Members' Equity | $ | 17,319,444 | $ | 18,145,791 | ||||
Our cash and cash equivalents were lower as of April 30, 2013 compared to October 31, 2012 due to cash we used to maintain our business as we worked to sell the Mason City biodiesel production facility. We had restricted cash as of April 30, 2013 of approximately $462,000, which previously had been classified with other assets. Our accounts receivable was lower at April 30, 2013 compared to October 31, 2012 due to payments we received for sales of our products that were received during our first six months of 2013. The value of our inventory was lower at April 30, 2013 compared to October 31, 2012 due to sales of inventory and returns made to vendors with a reduction of accounts payable. Our property, plant and equipment were reclassified to assets held for sale as of April 30, 2013 based on the anticipated sale of the biodiesel production facility to REG Mason City.
We had more accounts payable at April 30, 2013 compared to October 31, 2012 as we continued to incur costs for the period ending April 30, 2013 and we were not generating enough cash to pay these costs. We had more accrued expenses at April 30, 2013 compared to October 31, 2012 primarily due to additional accrued and unpaid interest. We had a balance on our notes payable with Farmer State Bank of approximately $370,000 at April 30, 2013 which was used to pay for our operating expenses. In January 2013, we sold real estate we owned in Marcus, Iowa and repaid a $250,000 note payable to Farmers State Bank in March 2013. All of our long-term debt with OSM is classified as current due to covenant violations and loan agreement defaults we have experienced on our long-term debt. We had more long-term debt outstanding at April 30, 2013 compared to October 31, 2012 due to interest that accrued on our subordinated debt.
Liquidity and Capital Resources
Our primary sources of liquidity are cash and cash equivalents we have on hand, collection of accounts receivable, and the notes payable we obtained. As of April 30, 2013, we had cash and cash equivalents of approximately $7,000 and we have no ability to borrow additional funds on any of our notes payable.
Concerns have been raised regarding our ability to continue as a going concern due to the losses we incurred from construction delays and difficulties operating the plant at full production, the fact that we have very little cash available, the default notices we received from our primary lender, OSM, along with the mechanics lien foreclosure proceeding with Wolin. These factors may continue to negatively impact our liquidity and may cause us to fail.
The following table shows our cash flows for the six months ended April 30, 2013 and 2012
Six Months Ended | Six Months Ended | |||||||
April 30, 2013 | April 30, 2012 | |||||||
Net cash used for operating activities | $ | (505,116 | ) | $ | (2,426,661 | ) | ||
Net cash provided by (used for) investing activities | 259,131 | (329,210 | ) | |||||
Net cash provided by financing activities | 188,668 | 2,149,721 | ||||||
Cash beginning of period | 64,331 | 662,946 | ||||||
Cash end of period | $ | 7,014 | $ | 56,796 | ||||
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Cash Flow from Operating Activities
Our operating activities used less cash during the six months ended April 30, 2013 compared to the same period of 2012, primarily due to having a smaller net loss during the 2013 period, collection of accounts receivable, and the sale and return of inventory.
Cash Flow from Investing Activities
Our investing activities provided us cash during the six months ended April 30, 2013 due to proceeds we received from the sale of real estate we owned in Marcus, Iowa. We used cash for investing activities during the six months ended April 30, 2012 for capital expenditures related to bringing the plant into full production. We also received cash during the 2012 period related to proceeds from certain certificates of deposit which matured during the 2012 period.
Cash Flow from Financing Activities
We received less cash from our financing activities for the six months ended April 30, 2013 compared to the same period of 2012, primarily due to the fact that we received significant funds during 2012 from our line of credit and subordinated debt we issued. Our line of credit was subsequently repaid in 2012.
Long-term and Short-term Debt Sources
On April 2, 2010, we entered into a loan agreement with OSM. Subject to the terms of the loan agreement, OSM agreed to lend us $6,000,000. The initial interest rate is 5.0%. In October 2016, the interest rate is scheduled to adjust to the 5-year London Inter-bank Offered Rate (LIBOR) swap rate plus 3.5%, with a minimum annual interest rate of 5.0%. During the first year of the loan, we were required to only pay interest on outstanding amounts. Beginning in November 2011, we agreed to make scheduled principal and interest payments amortized over a ten-year period. The maturity date of the loan is in September 2021.
At closing, we executed a mortgage and security agreement in favor of OSM creating a first lien on the Mason City biodiesel production facility. As a result, we must obtain OSM's permission to sell these assets, which could limit our operating flexibility. The loan agreement provides that certain actions will constitute defaults, which would allow OSM to demand immediate repayment of the entire loan amount and foreclose its lien on our property.
We stopped making payments on our term loan with OSM in October 2012 due to our lack of funds necessary to continue making our debt payments. As discussed below, OSM sent several written notices of default with respect to this loan. We have reclassified our OSM debt as a current liability since OSM has the right to accelerate our loans due to the defaults. As of April 30, 2013, we had approximately $5.6 million outstanding pursuant to our OSM loan which accrued interest at a rate of 5.0% per year plus default interest of 4.0% which began accruing in 2012.
We have received various written notices of default from OSM. We are out of compliance with each of the financial loan covenants in our loan agreements with OSM and we have failed to make payments on our OSM loan since October 2012, amongst other defaults under our loans. In order to address these events of default, we executed a Forbearance Agreement with OSM on February 15, 2013 (the "Forbearance Agreement"). Pursuant to the Forbearance Agreement, OSM agreed not to proceed with its remedies under the loan agreement until the earlier of April 30, 2013 or the termination of the Forbearance Agreement. On April 25, 2013, we executed the First Amendment to Forbearance Agreement which extended the deadline of the forbearance until July 31, 2013. On May 8, 2013, we executed the Second Amendment to Forbearance Agreement which addressed certain defaults related to us executing the Asset Purchase Agreement. During the time that the Forbearance Agreement is in effect, OSM has agreed not to proceed with any of its rights and remedies under the loan agreement, including its ability to institute a foreclosure action. The Forbearance Agreement can be terminated by OSM in the event our negotiations with REG regarding a sale of the biodiesel production facility are abandoned, if our financial condition materially deteriorates, if we violate any of the agreements we made in the Forbearance Agreement, and for other reasons included in the Forbearance Agreement. If the Forbearance Agreement terminates, OSM could pursue any of its rights or remedies under the loan agreements, including pursuing a foreclosure of its interest in the Mason City biodiesel production facility. If OSM were to proceed with a foreclosure, we may lose the biodiesel production facility and the other assets which are pledged as collateral for the OSM loan.
In addition, we raised $1,038,000 through the private sale of subordinated unsecured debt securities during our 2012 fiscal year. We used the capital we raised through these debt securities to continue the development and startup of our biodiesel production facility.
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On February 3, 2011, we entered into a development agreement with the City of Mason City, Iowa. This agreement provides that the City of Mason City, Iowa will make certain incentive payments to us based on the increased property tax revenue for 5 years, beginning December 1, 2012, related to the initial construction of the Mason City biodiesel production facility and 8 years, beginning December 1, 2013, based on the equipment installation at the Mason City biodiesel production facility, totaling up to, but not to exceed, approximately $623,000. The agreement also provides for a new water main extension to our site estimated to cost approximately $120,000, of which 25% of the cost will be paid by the City of Mason City and the remaining 75% will be paid using funds held in our escrow account. Additionally under the development agreement, we have agreed to meet certain employment requirements related to hiring and retention through December 31, 2021.
In November 2012, we entered into a note payable with Farmers State Bank, advanced in multiple installments, totaling approximately $320,000 at April 30, 2013, including interest at 4.5%, maturing on May 21, 2013. The note is secured by certain equipment we are in the process of selling and guaranteed by all eight members of our board of directors. As of the date of this report, the note payable remains due in addition to the accrued interest on the note. We anticipate using proceeds from the asset sales agreement to settle this note.
In March 2013, we entered into a note payable with Farmers State Bank for $50,000 including interest at 4.5%, maturing on July 27, 2013. The note is secured by certain equipment we are in the process of selling and guaranteed by all eight members of our board of directors. We anticipate using proceeds from the asset sales agreement to settle the note.
Critical Accounting Estimates
Management uses various estimates and assumptions in preparing our financial statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Accounting estimates that are the most important to the presentation of our results of operations and financial condition, and which require the greatest use of judgment by management, are designated as our critical accounting estimates. We have the following critical accounting estimate:
We review long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Impairment testing for assets requires various estimates and assumptions, including an allocation of cash flows to those assets and, if required, an estimate of the fair value of those assets. We review assets held for sale at each reporting date to determine that the carrying value is equal to or greater than the estimated net selling price. The carrying value of assets held for sale is based on the ability to sell or utilize these assets. Our estimates are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. These valuations require the use of management's assumptions, which do not reflect unanticipated events and circumstances that may occur. Our assumptions relate to the future of the renewable fuels industry, the potential uses of assets, and value of the assets to a buyer. Given the uncertainties with these assumptions, the actual results could be different than expected and these changes could be significant.
We are involved with claims and lawsuits from vendors related to the payment for services related to the construction and operation of the biodiesel facility. We record provisions in the financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of loss can be reasonably estimated. The claims and liens we are currently involved with involve the payment and settlement of vendor payables. It is possible that our results of operations, cash flows and financial position could be materially adversely affected by an unfavorable outcome of certain pending or future litigation.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is not required to provide the information required by this item because it is a smaller reporting company.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of the Company's management, the Company's principal executive officer and interim principal financial officer, Jeff Oestmann, has concluded that the Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act") were not effective as of April 30, 2013 to ensure that information required to be disclosed by the Company in
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reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. More specifically, the Company has a limited number of personnel in finance and accounting functions. Were there a larger staff, it would be possible to provide for enhanced segregation of duties. Management recognizes that this is a material weakness. We continue to evaluate internal control improvements to provide greater segregation and internal controls.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the second quarter of our 2013 fiscal year which were identified in connection with management's evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Wolin & Associates, Inc.
On August 21, 2012 we were served with a foreclosure lawsuit by Wolin & Associates, Inc. ("Wolin") which seeks to foreclose on two mechanics liens it filed against the Mason City biodiesel production facility. This foreclosure lawsuit was filed on August 16, 2012 in Cerro Gordo County District Court, in the State of Iowa. The total amount of these mechanics liens is approximately $850,000. Management has answered Wolin's claims in the foreclosure lawsuit. Management anticipates that our lenders will join in the foreclosure lawsuit if we are unable to reach an agreement with Wolin. If we are unable to successfully resolve the foreclosure lawsuit, we may lose our interest in the Mason City biodiesel production facility which could reduce or eliminate the value of our units.
Brenntag Great Lakes LLC
On January 30, 2013, Brenntag Great Lakes LLC (“Brenntag”) filed a lawsuit against Soy Energy in Cerro County District Court, in the State of Iowa. Brenntag is seeking amounts that it claims are owed by Soy Energy. Brenntag received a default judgment which was subsequently reversed by the Cerro Gordo County District Court.
Item 1A. Risk Factors
The Company is not required to provide the information required by this item because it is a smaller reporting company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
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Item 6. Exhibits.
(a) | The following exhibits are filed as part of this report. |
Exhibit No. | Exhibit | ||
31.1 | Certificate Pursuant to 17 CFR 240.13a-14(a)* | ||
31.2 | Certificate Pursuant to 17 CFR 240.13a-14(a)* | ||
32.1 | Certificate Pursuant to 18 U.S.C. Section 1350* | ||
32.2 | Certificate Pursuant to 18 U.S.C. Section 1350* | ||
101 | The following financial information from Soy Energy, LLC's Quarterly Report on Form 10-Q for the quarter ended April 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Balance Sheets as of April 30, 2013 and October 31, 2012, (ii) Condensed Statements of Operations for the three and six months ended April 30, 2013 and 2012, (iii) Condensed Statements of Cash Flows for the six months ended April 30, 2013 and 2012, and (iv) the Notes to Financial Statements.** | ||
* Filed herewith.
** Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
SOY ENERGY, LLC | |||
Date: | June 27, 2013 | /s/ Jeff Oestmann | |
Jeff Oestmann | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: | June 27, 2013 | /s/ Jeff Oestmann | |
Jeff Oestmann | |||
Interim Chief Financial Officer | |||
(Principal Financial Officer) | |||
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