Acquisitions

3 Months Ended

Jun. 30, 2020

On December 18, 2017, the Company completed a purchase of a 40.0% interest in Criticality LLC ("Criticality"), a North Carolina-based industrial hemp company that is engaged in cannabidiol ("CBD") extraction and other applications for industrial hemp in accordance with a pilot program authorized under the federal Agriculture Act of 2014 and applicable North Carolina law. On April 22, 2020, the Company acquired the remaining 60.0% of the equity in Criticality in exchange for consideration consisting of $5,000 cash and the settlement of the Company's $7,450 note receivable from Criticality, subject to certain post-closing adjustments.

The acquisition of Criticality was a business combination achieved in stages, which required the Company to remeasure its previously held equity interest in Criticality at its acquisition date fair value. This remeasurement resulted in a loss of approximately $2,667 being recorded in other (expense) income, net within the condensed consolidated statements of operations for the three months ended June 30, 2020. The assets and liabilities were recorded at their fair value.

Following the acquisition, the Company recorded certain post-closing purchase price adjustments. The acquisition allowed the Company to expand its industrial hemp production and product portfolio. The following summarizes the fair values of the assets acquired and liabilities assumed as of April 22, 2020:


Cash and cash equivalents	$	195
Accounts receivable	1,528
Advances to suppliers	1,043
Inventories	3,823
Other current assets	181
Property, plant, and equipment	5,060
Goodwill	6,120

Total assets acquired	17,950
Accounts payable	1,654
Notes payable	7,450
Other current liabilities	513

Total liabilities	9,617
Fair value of equity interest	$	8,333

Revenue, operating loss, and net loss of Criticality in the consolidated statements of operations from and including April 22, 2020 to June 30, 2020 were $17, $(791), and $(910), respectively. As a result, the impact to basic and diluted earnings per share was $(0.09) and $(0.09), respectively. Unaudited pro forma information was not separately stated due to the close proximity of the acquisition date to the beginning of the Company's fiscal year.