As of July 31, 2018 and 2017, approximately $101.8 million and $8.6 million
of the Companys long-lived assets, respectively, were located in the U.S.A.
For the fiscal year ended July 31,
2018, the Companys net revenues within U.S.A., China, Netherlands and Czech Republic were $358.3 million, $112.3 million, $59.5 million and $48.7 million, respectively. For the fiscal year ended July 31, 2017, the
Companys net revenues within U.S.A., China, Netherlands and Czech Republic were $95.1 million, $128.3 million, $70.8 million and $79.8 million, respectively. For the fiscal year ended July 31, 2016, the Companys
net revenues within U.S.A., China, Netherlands and Czech Republic were $110.9 million, $140.2 million, $68.1 million and $75.7 million, respectively.
(21) RELATED PARTY TRANSACTIONS
As of February 20, 2018, SPHG Holdings and
its affiliates beneficially owned approximately 52% of our outstanding capital stock. As of July 31, 2018, SPHG Holdings held $14.9 million principal amount of the Companys 5.25% Convertible Senior Notes. SPHG Holdings has confirmed to the
Company that it will not require a cash payment on the Notes when they mature and for a period of twelve months from the date of this filing.
Preferred Stock Transaction and Warrant Repurchase
On December 15, 2017, the Company entered into a Preferred Stock Purchase Agreement with SPHG Holdings, pursuant to which the Company issued 35,000 shares of the Companys newly created Series C
Convertible Preferred Stock, par value $0.01 per share (the Preferred Stock), to SPHG Holdings at a price of $1,000 per share, for an aggregate purchase consideration of $35.0 million (the Preferred Stock Transaction). The terms, rights,
obligations and preferences of the Preferred Stock are set forth in a Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock of the Company (the a Series C Certificate of Designations), which has been filed with
the Secretary of State of the State of Delaware.
Under the Series C Certificate of Designations, each share of Preferred
Stock can be converted into shares of the our Common Stock, at an initial conversion price equal to $1.96 per share, subject to appropriate adjustments for any stock dividend, stock split, stock combination, reclassification or similar transaction.
Holders of the Preferred Stock will also receive dividends at 6% per annum payable, at the Companys option, in cash or Common Stock. If at any time the closing bid price of the Companys Common Stock exceeds 170% of the conversion price
for at least five consecutive trading days (subject to appropriate adjustments for any stock dividend, stock split, stock combination, reclassification or similar transaction), the Company has the right to require each holder of Preferred Stock to
convert all, or any whole number, of shares of the Preferred Stock into Common Stock.
The Preferred Stock Transaction was
approved and recommended to the Board by a special committee of the Board (the Special Committee). Each member of the Special Committee was independent and not affiliated with Steel Holdings GP, which controls the power to vote and
dispose of the securities held by SPHG Holdings and its affiliates.
On December 15, 2017, contemporaneously with the
closing of the Preferred Stock Transaction, the Company entered into a Warrant Repurchase Agreement with Steel Holdings, an affiliate of SPHG Holdings, pursuant to which the Company repurchased for $100 the warrant to acquire 2,000,000 shares of the
Common Stock (the Warrant) that the Company had previously issued to Steel Holdings. The Warrant, which was to expire in 2018, was terminated by the Company upon repurchase.
Management Services Agreement
On December 24, 2014, the Company
entered into a Management Services Agreement with SP Corporate Services LLC (SP Corporate), effective as of January 1, 2015 (as amended, the Management Services Agreement). SP Corporate is an indirect wholly owned
subsidiary of Steel Holdings and is a related party. Pursuant to the Management Services Agreement, SP Corporate provided the Company and its subsidiaries with the services of certain employees, including certain executive officers, and other
corporate services.
The Management Services Agreement had an initial term of six months. On June 30, 2015, the Company
entered into an amendment that extended the term of the Management Services Agreement to December 31, 2015 and provided for automatic renewal for successive one year periods, unless and until terminated in accordance with the terms set forth
therein, which include, under certain circumstances, the payment by the Company of certain termination fees to SP Corporate. On March 10, 2016, the Company entered into a Second Amendment to the Management Services Agreement with SPH Services,
Inc. (SPH Services), the parent of SP Corporate and an affiliate of SPHG Holdings, pursuant to which SPH Services assumed rights and responsibilities of SP Corporate and the services provided by SPH Services to the Company were modified
pursuant to the terms of the amendment. On March 10, 2016, the Company entered into a Transfer Agreement with SPH Services pursuant to which the parties
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