The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. These financial statements include all adjustments that are necessary for a fair presentation of the Company's condensed consolidated results of operations, financial condition and cash flows for the periods shown, including normal, recurring accruals and other items. The condensed consolidated results of operations for the interim periods presented are not necessarily indicative of results for the full year. For additional information, these condensed consolidated financial statements should be read in conjunction with the consolidated and combined financial

GAAP requires the use of highly inflationary accounting for countries whose cumulative three-year inflation rate exceeds 100 percent. The Company has been closely monitoring the inflation data and currency volatility in Argentina, where there are multiple data sources for measuring and reporting inflation. In the second quarter of 2018, the Argentine peso rapidly devalued relative to the U.S. dollar, which along with increased inflation, indicated that the three-year cumulative inflation rate in that country exceeded 100 percent as of June 30, 2018. As a result, the Company has elected to adopt highly inflationary accounting as of July 1, 2018 for its subsidiary in Argentina. Under highly inflationary accounting, the functional currency of the Company's subsidiary in Argentina became the U.S. dollar, and its income statement and balance sheet will be measured in U.S. dollars using both current and historical rates of exchange. The effect of changes in exchange rates on Argentine peso-denominated monetary assets and liabilities will be reflected in earnings. As of June 30, 2019, the Company’s subsidiary in Argentina had a net asset position of $7.5 million. Net sales attributable to Argentina were approximately 11% of the Company’s consolidated net sales for each of the six months ended June 30, 2019 and 2018.

The Company disaggregates revenue from contracts with customers into geographic region, product and timing of transfer of goods and services. The Company determined that disaggregating revenue into these categories achieves the disclosure objective of depicting how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.


Revenues for the three months ended June 30, 2019
(in thousands)
Region	North America (1)		EMEA (2)		Latin America (3)		Asia Pacific (4)		Total Revenue
Product
1-MCP based	$	1,191	$	3,412	$	6,385	$	5,300	$	16,288
Fungicides, waxes, coatings, sanitizers	—		3,621		695		—		4,316
Other*	177		224		103		75		579
	$	1,368	$	7,257	$	7,183	$	5,375	$	21,183

Pattern of Revenue Recognition
Products transferred at a point in time	$	1,286	$	7,062	$	7,140	$	5,314	$	20,802
Services transferred over time	82		195		43		61		381
	$	1,368	$	7,257	$	7,183	$	5,375	$	21,183


Revenues for the three months ended June 30, 2018
(in thousands)
Region	North America (1)		EMEA (2)		Latin America (3)		Asia Pacific (4)		Total Revenue
Product
1-MCP based	$	691	$	4,040	$	4,432	$	4,688	$	13,851
Fungicides, waxes, coatings, sanitizers	—		3,345		—		—		3,345
Other*	284		191		90		659		1,224
	$	975	$	7,576	$	4,522	$	5,347	$	18,420

Pattern of Revenue Recognition
Products transferred at a point in time	$	943	$	7,516	$	4,501	$	4,688	$	17,648
Services transferred over time	32		60		21		659		772
	$	975	$	7,576	$	4,522	$	5,347	$	18,420


Revenues for the six months ended June 30, 2019
(in thousands)
Region	North America (1)		EMEA (2)		Latin America (3)		Asia Pacific (4)		Total Revenue
Product
1-MCP based	$	3,358	$	9,587	$	25,824	$	9,620	$	48,389
Fungicides, waxes, coatings, sanitizers	—		8,508		1260		—		9,768
Other*	735		842		273		116		1,966
	$	4,093	$	18,937	$	27,357	$	9,736	$	60,123

Pattern of Revenue Recognition
Products transferred at a point in time	$	3,576	$	18,136	$	27,284	$	9,642	$	58,638
Services transferred over time	517		801		73		94		1,485
	$	4,093	$	18,937	$	27,357	$	9,736	$	60,123


Revenues for the six months ended June 30, 2018
(in thousands)
Region	North America (1)		EMEA (2)		Latin America (3)		Asia Pacific (4)		Total Revenue
Product
1-MCP based	$	2,587	$	9,163	$	25,379	$	9,081	$	46,210
Fungicides, waxes, coatings, biocides	—		8,932		—		—		8,932
Other*	383		279		207		760		1,629
	$	2,970	$	18,374	$	25,586	$	9,841	$	56,771

Pattern of Revenue Recognition
Products and equipment transferred at a point in time	$	2,925	$	18,311	$	25,560	$	9,081	$	55,877
Services transferred over time	45		63		26		760		894
	$	2,970	$	18,374	$	25,586	$	9,841	$	56,771

ASC 606 requires an entity to present a revenue contract as a contract asset when the entity performs its obligations under the contract by transferring goods or services to a customer before the customer pays consideration or before payment is due. ASC 606 also requires an entity to present a revenue contract as a contract liability in instances when a customer pays consideration, or an entity has a right to an amount of consideration that is unconditional (e.g. receivable), before the entity transfers a good or service to the customer. The following table presents changes in the Company’s contract assets and liabilities during the six months ended June 30, 2019 and the twelve months ended December 31, 2018:

The Company recognizes contract assets in the form of unbilled revenue in instances where services are performed by the Company but not billed by period end. The Company recognizes contract liabilities in the form of deferred revenue in instances where a customer pays in advance for future services to be performed by the Company. The Company generally receives payments from its customers based on standard terms and conditions. No significant changes or impairment losses occurred to contract balances during the three months ended June 30, 2019. Amounts reclassified from unbilled revenue to accounts receivable for the six months ended June 30, 2019 and for the year ended December 31, 2018 were $5.7 million and $5.9 million, respectively. Amounts reclassified from deferred revenue to revenue for the six months ended June 30, 2019 and the year ended December 31, 2018 were $1.8 million and $3.2 million, respectively.

In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12 Targeted Improvements to Accounting for Hedging Activities. This update makes more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. This update will be effective for the Company for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted upon its issuance. The Company adopted the new ASU as of January 1, 2019 and it did not have a material impact on the Company's financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation, Scope of Modification Accounting. ASU 2017-09 addresses the changes to the terms and conditions of share-based awards. ASU 2017-09 is effective for periods beginning after December 15, 2017 and interim periods therein on a modified retrospective basis. The Company adopted the new ASU as of January 1, 2018, and it did not have a material impact on the financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations, Clarifying the Definition of a Business. The new accounting guidance clarifies the definition of a business and provides additional guidance to assist entities with evaluating whether transactions should be accounted for as asset acquisitions (or asset disposals) or business combinations (or disposals of a business). Under the new guidance, an entity first determines whether substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this criterion is met, the transaction should be accounted for as an asset acquisition as opposed to a business combination. This distinction is important because the accounting for an asset acquisition significantly differs from the accounting for a business combination. The new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. During the second quarter of 2018, the Company adopted this standard in connection with the acquisition of Verigo (refer to Note 3).

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, which simplifies the test for goodwill impairment. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted for interim or annual goodwill impairments tests after January 1, 2017. This standard will impact future financial statements when adopted if the Company has impairment to its goodwill.

In February 2016, the FASB issued ASU 2016-02, Leases. The main objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including