SEC Comment Letter for Enlightify Inc. (ENFY) (CIK 0000857949) (ENFY) — Feb 16, 2018
Enlightify Inc. (ENFY) (CIK 0000857949)
Date: Feb. 16, 2018 · CIK: 0000857949 · Accession: 0000000000-18-005419
AI Filing Summary & Sentiment
Reasoning
Letter
February 1 6, 2018 Zhuoyu Li Chief Executive Officer China Green Agriculture, Inc. Third floor, Borough A, Block A. No. 181, South Taibai Road Xi’an, Shaanxi Province, PRC 710065
Re: China Green Agriculture, Inc. Form 10-K for the Fiscal Year Ended June 30, 2017 Filed October 19, 2017 Form 10 -Q for the Quarter Ended December 31, 2017 Filed February 14, 2018 File No. 001 -34260
Dear Mr. Li :
We have limited our review of your filing to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional comments.
Form 10 -K for the Fiscal Year Ended June 30, 2017
Financial Statements
Notes to Financial Statements
Note 3 – Inventories, page F -15
1. We note your disclosure that during 2017 you sold compound fert ilizers (finished goods) to certain parties at market prices, and purchased equivalent amount of simple fertilizers (raw material) from the same parties also at market price. Please clarify for us whether you recognized revenue on these sales of $58 milli on during fiscal 2017 . If you recognized revenue on these amounts, p lease provide us more details as to whether these purchase agreements and sale agreements were entered into in contemplation of one another. As part of your response, please tell us if t he purchase transaction is legally
Zhuoyu Li China Green Agriculture, Inc. February 1 6, 2018 Page 2
contingent upon the sale transaction. If there is no legal contingency, please tell us if the counterparties have a right to offset the obligations resulting from the purchase and sale transaction and if the purchase and sale transactions were entered into simultaneously. We may have further comment upon receipt of your response.
Note 9 – Loan Payables, page F -18
2. Please revise to conclude the last sentence before the second table which begins “The loans No. 2 is guaranteed by Jinong’s…”
Note 17 – Business Combinations, page F -25
3. We note from page F -27 that you paid cash for the VIE acquisitions of $6.8 million during fiscal 2017. Please tell us where this cash flow outflow is reflected in your statements of cas h flows. In this regard, it appears from Note 8 that the cash paid in the acquisition was included in Accrued Expenses and Other as of June 30, 2016 and was paid during fiscal 2017. It would appear that because this amount related to the payment for an a cquisition, the cash outflow during fiscal 2017 should be included in the investing activities section of the statement of cash flow. Please advise or revise accordingly.
Form 10 -Q for the Fiscal Quarter Ended December 31, 2017
Financial Statements
Notes to Financial Statements
Note 2 – Basis of Presentation and Summary of Significant Accounting Policies
Recent accounting pronouncements, page 7
4. We note your disclosure that ASU 2016 -10 is effective beginning January 1, 2018. Given that the ASU is effective for fiscal years beginning after December 15, 2017, it would appear as though the ASU applies to you beginning July 1, 2018. Your disclosure concerning the effectiveness of ASU 2016 -11, and 2016 -12 should be similarly revised.
Liquidity and Capital Resources
Inventories, page 34
5. We note that the primary reason for the increase in inventories since June 30, 2017 is due to the increase in Ji nong’s inventory of $329 ,000. However, the total increase in inventory f rom June 30, 2017 to December 31 , 2017 is $27.6 million. Please tell us and revise to disclose the other factors that resulted in the significant increase in inventory from June 30, 2017 to December 31, 2017. Also, we note that the allowance for doubtful
Zhuoyu Li China Green Agriculture, Inc. February 1 6, 2018 Page 3
accounts has increased $4.5 million in the first half of fiscal 2018 . In this regard, if there are material changes in the allowance for doubtful accounts or other valuation and qualifying a ccounts, please consider including Schedule II in your next Form 10 -K as required by Rule 5 -04 of Regulation S -X.
We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
You may contact Heather Clark at 202 -551-3624 or Claire Erlanger at 202 -551-3301 if you have questions regarding comments on the financial statements and related matters. Please contact me at 202 -551-3379 with any other questions.
Sincerely,
/s/ Melissa Raminpour
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February 1 6, 2018 Zhuoyu Li Chief Executive Officer China Green Agriculture, Inc. Third floor, Borough A, Block A. No. 181, South Taibai Road Xi’an, Shaanxi Province, PRC 710065 Re: China Green Agriculture, Inc. Form 10-K for the Fiscal Year Ended June 30, 2017 Filed October 19, 2017 Form 10 -Q for the Quarter Ended December 31, 2017 Filed February 14, 2018 File No. 001 -34260 Dear Mr. Li : We have limited our review of your filing to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Form 10 -K for the Fiscal Year Ended June 30, 2017 Financial Statements Notes to Financial Statements Note 3 – Inventories, page F -15 1. We note your disclosure that during 2017 you sold compound fert ilizers (finished goods) to certain parties at market prices, and purchased equivalent amount of simple fertilizers (raw material) from the same parties also at market price. Please clarify for us whether you recognized revenue on these sales of $58 milli on during fiscal 2017 . If you recognized revenue on these amounts, p lease provide us more details as to whether these purchase agreements and sale agreements were entered into in contemplation of one another. As part of your response, please tell us if t he purchase transaction is legally Zhuoyu Li China Green Agriculture, Inc. February 1 6, 2018 Page 2 contingent upon the sale transaction. If there is no legal contingency, please tell us if the counterparties have a right to offset the obligations resulting from the purchase and sale transaction and if the purchase and sale transactions were entered into simultaneously. We may have further comment upon receipt of your response. Note 9 – Loan Payables, page F -18 2. Please revise to conclude the last sentence before the second table which begins “The loans No. 2 is guaranteed by Jinong’s…” Note 17 – Business Combinations, page F -25 3. We note from page F -27 that you paid cash for the VIE acquisitions of $6.8 million during fiscal 2017. Please tell us where this cash flow outflow is reflected in your statements of cas h flows. In this regard, it appears from Note 8 that the cash paid in the acquisition was included in Accrued Expenses and Other as of June 30, 2016 and was paid during fiscal 2017. It would appear that because this amount related to the payment for an a cquisition, the cash outflow during fiscal 2017 should be included in the investing activities section of the statement of cash flow. Please advise or revise accordingly. Form 10 -Q for the Fiscal Quarter Ended December 31, 2017 Financial Statements Notes to Financial Statements Note 2 – Basis of Presentation and Summary of Significant Accounting Policies Recent accounting pronouncements, page 7 4. We note your disclosure that ASU 2016 -10 is effective beginning January 1, 2018. Given that the ASU is effective for fiscal years beginning after December 15, 2017, it would appear as though the ASU applies to you beginning July 1, 2018. Your disclosure concerning the effectiveness of ASU 2016 -11, and 2016 -12 should be similarly revised. Liquidity and Capital Resources Inventories, page 34 5. We note that the primary reason for the increase in inventories since June 30, 2017 is due to the increase in Ji nong’s inventory of $329 ,000. However, the total increase in inventory f rom June 30, 2017 to December 31 , 2017 is $27.6 million. Please tell us and revise to disclose the other factors that resulted in the significant increase in inventory from June 30, 2017 to December 31, 2017. Also, we note that the allowance for doubtful Zhuoyu Li China Green Agriculture, Inc. February 1 6, 2018 Page 3 accounts has increased $4.5 million in the first half of fiscal 2018 . In this regard, if there are material changes in the allowance for doubtful accounts or other valuation and qualifying a ccounts, please consider including Schedule II in your next Form 10 -K as required by Rule 5 -04 of Regulation S -X. We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. You may contact Heather Clark at 202 -551-3624 or Claire Erlanger at 202 -551-3301 if you have questions regarding comments on the financial statements and related matters. Please contact me at 202 -551-3379 with any other questions. Sincerely, /s/ Melissa Raminpour Melissa Raminpour Branch Chief Office of Transportation and L eisure