Correction of Errors

6 Months Ended

Jun. 30, 2014

Accounting Changes and Error Corrections [Abstract]

Accounting Changes and Error Corrections [Text Block]

5. Correction of Errors

The Company’s previously issued June 30, 2014 financial statements have been amended to:

· reclassify its Series B Redeemable Convertible Preferred Stock from Stockholders’ Equity (Deficit) to temporary equity due to the stock’s redemption features. This adjustment resulted in a reclassification at June 30, 2014 of $1,337,000 of Stockholders’ Equity (Deficit) to Series B Redeemable Convertible Preferred Stock, including the par value of these shares of $87,000 and the accretion of the stock’s redemption value of $1,250,000.

· recognize deferred revenue and deferred costs related certain sub-licensing agreements. This change resulted in a reduction in revenues of $209,000 and a reduction in G&A expense of $164,000 in the second quarter of 2014 and a reduction in revenues of $105,000 and a reduction in G&A expense of $103,000 for the six months ended June 30, 2014.

· reclassify certain warrants issued in 2011 as liability instruments. These warrants were previously recorded by error as equity instruments. This adjustment resulted in the in the recording of a liability of $460,000 as of June 30, 2014.

· adjust goodwill for the acquisitions of Biocontrol and SPH for acquired deferred tax liabilities and errors in previous reporting. This change resulted in an increase of $1,685,000 in goodwill related to the Biocontrol acquisition and $1,548,000 in goodwill related to the acquisition of SPH.

· modify the key assumptions employed to value the compound derivative associated with the Series B Redeemable Convertible Preferred Stock and the Company’s 2013 warrants, under a Monte Carlo valuation model. The change in assumptions resulted in a $7,298,000 increase in the compound derivative liability and a $158,000 reduction in the warrant liability related to 2013 warrants. Gain on derivative liabilities was reduced by $1,499,000 and $844,000 for the second quarter of 2014 and the six months ended June 30, 2014, respectively.

As a result of these corrections, the Company’s net income attributable to common stockholders for the second quarter of 2014, as amended, was reduced by $1,848,000 to $13,555,000. Net income per share attributable to common stockholders fell by $0.01 per share to $0.07 per share. Net income attributable to common stockholders for the six months ended June 30, 2014, as amended, fell by $1,440,000 to $1,934,000. Net income per share attributable to common stockholders was reduced by $0.01 per share to $0.01 per share for the period.

The Company’s net loss attributable to common stockholders for the second quarter of 2013, as amended, increased by $(1,933,000) to $(14,746,000). The net loss per share attributable to common stockholders increased by $(0.02) per share to $(0.16) per share. The net loss attributable to common stockholders for the six months ended June 30, 2013, as amended, increased by $(1,959,000) to $(16,391,000). The net loss per share attributable to common stockholders increased by $(0.03) per share to $(0.21) per share for the period.