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Subsequent Events
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12 Months Ended | ||||
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Jun. 30, 2014
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| Subsequent Events [Abstract] | |||||
| Subsequent Events |
Investment in a Noncontrolled Entity
On September 19, 2014, the Company entered into an agreement with one of its customers, an online retailer of generic gold and silver coins and bullion, to purchase up to 9% of its issued and outstanding common stock, on a fully diluted basis, in two tranches, for an aggregate purchase price of $2.0 million. The closing of the first tranche, for 5% of the retailer's issued and outstanding common stock at a purchase price equal to $1.1 million, took place on September 19, 2014. The closing of the second tranche, for 4% of the retailer's issued and outstanding common stock at a purchase price equal to $0.9 million, will take place on prior to December 31, 2014; provided that A-Mark’s obligation to close the second tranche will be subject to the condition, among others, that the retailer's sales of precious metals shall have exceeded $100.0 million and at a gross profit (as defined) of 2% or more for the preceding six months. The parties also entered into an exclusive supplier agreement, pursuant to which the retailer will purchase all bullion products required for its business exclusively from A-Mark for a period of 3.0 years (subject to renewal and earlier termination under certain circumstances). A-Mark will continue to provide fulfillment services to the retailer under the terms of a previously existing fulfillment agreement. A-Mark will have the right to appoint a board member to the board of directors of the retailer.
The Company intends to record this investments of its ownership interest in a noncontrolled entity that does not have readily determinable fair values (i.e., non-marketable equity securities) under Cost Method Investments of ASC 325-20. For the year ended June 30, 2014 the Company had $152.3 million and $114.2 million of sales and purchases, respectively, with this entity. As of June 30, 2014, the receivable balance due from this entity totaled $2,100.
Increase in the Lines of Credit
Effective September 12, 2014, the Company obtained a permanent increase in its demand Trading Credit Facility through the addition of a sixth institutional participant, which is providing $50.0 million in demand lines. As a result, the aggregate lines available to the Company under the facility has increased from $170.0 million to $220.0 million. In connection with the new line, the minimum tangible net worth financial covenant under the Trading Credit Facility has increased from $25.0 million to $35.0 million.
Financing Arrangement with Customer
On July 1, 2014, CFC assumed the rights to a portfolio of short-term loan receivables totaling $3.7 million for the aggregate principal amount of the loan portfolio from the same customer from whom it had entered into similar arrangements on June 5, 2014 (see Note 3). This transaction resulted in the assignment of the customer's portfolio of loan receivables to CFC, which are collateralized by each of the customer's borrowers' underlying precious metals. The customer has retained certain rights to repurchase these loans at a price equal to the then-outstanding principal balance, plus accrued and unpaid interest. Additionally, the customer retains the responsibility for the servicing and administration of the loans. As a result of the terms of this arrangement, the Company reflects this as a financing arrangement with this customer, secured by the transfer of the portfolio of short-term loan receivables, which is collateralized by precious metal products.
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