The inability to perform satisfactorily, switching to competitors or the loss of one or more of our distributors could have a material adverse effect on our business, financial condition and results of operations. Our success depends both on our customers' perception of the effectiveness of our products and on our end-users' perception of the safety of our products.
PROPERTIES
If we are unable to comply with the requirements of Section 404 in a timely manner or to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal control over financial reporting, if and when we cease to be a smaller reporting entity, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be adversely affected and we may be subject to investigations by NASDAQ (the exchange on which our securities are listed), the SEC or other regulatory authorities, which could require additional financial and management resources.
LEGAL PROCEEDINGS
MINE SAFETY DISCLOSURES Not applicable
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
SELECTED FINANCIAL DATA
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company recorded an impairment charge of $1.0 million for the year ended December 31, 2019 related to the Verigo software. During the year ended December 31, 2018, the Company recorded an impairment charge of $2.6 million related to the estimated decline in fair value of the SmartFresh trade name.
FINANCIAL INFORMATION
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation
The adoption of this standard did not have a material impact on the consolidated financial statements of the company. The adoption of this standard did not have a material impact on the financial statements of the company. The adoption of this standard is not expected to have a material impact on the financial statements of the company.
Business Combination
The guidance is effective for the company from the first quarter of fiscal 2020. The application of the updated guidance did not have a material impact on the company's results of operations or liquidity. The application of this standard had no material impact on the notes to the consolidated financial statements of the Company.
Related Party Transactions
In connection with the acquisition of Tecnidex, the company simultaneously entered into option agreements ("option agreement") with the seller regarding the remaining 25% ownership share. In accordance with the acquisition method of accounting, the company allocated the purchase price to the estimated fair values of acquired identifiable assets and assumed liabilities, and any excess to goodwill. Such right is in addition to any right that R&H may have to appoint a member of the board of directors pursuant to its ownership of the Company's Series A Preferred Stock (see Note 16 – Series B Convertible Preferred Stock and Shareholder's Equity).
Inventories
During 2016, the Company made a minority investment in RipeLocker, LLC ("RipeLocker"), a company headed by George Lobisser, a director of AgroFresh. On June 13, 2020, in connection with the implementation of the investment agreement (as defined in note 16- Series B convertible preferred stock and equity), the company, PSP AGFS Holdings, L.P. entered into "The Investor") and R&H a side agreement according to which the parties agree that if the Investor or its affiliated companies have the right to appoint at least 50% of the total board members of the Company's board pursuant to the Investment Agreement, as long as R&H or its affiliates beneficially own at least 20% of the Company's outstanding common stock (on a fully diluted, "as converted") basis, the Company and the Board of Directors will increase the size of the Board of Directors by one member, and the Board of Directors will select a nominee selected by R&H to occupy the newly created position.
Other Current Assets
Property and Equipment
Goodwill and Intangible Assets
Other Assets
Accrued and Other Current Liabilities
Debt
In total, the Company deferred debt issuance costs of $7.5 million related to the Revised Term Loan, $1.9 million related to the Term Loan modification and $0.5 million related to the Revised Revolving Loan. Interest expense related to the amortization of debt issuance costs under the Revised Credit Facility during the year ended December 31, 2020 was $0.8 million. Interest expense related to the amortization of term loan issuance costs during the years ended December 31, 2020 and 2019 was approximately $1.4 million and $2.5 million, respectively.
Leases
The Company entered into an interest rate swap in August 2019 to hedge interest rate risk remaining outstanding with the Rescheduled Credit Facility. The Company entered into an interest rate swap contract in January 2018 to hedge interest rate risk associated with the Term Loan. The following table shows the contractual maturity dates of the Company's lease obligations as of 31 December 2020:
Other Noncurrent Liabilities
Severance
Redeemable non-controlling interest
In the condensed consolidated statements of operations, rental costs are mainly included under general and administrative costs. Changes in the redemption value of NKI are included as a correction of additional paid-in capital in the balance sheet. The following table summarizes the changes in the company's realizable non-controlling interest. in thousands).
Series B Convertible Preferred Stock and Stockholders’ Equity Series B Convertible Preferred Stock
Holders of the Company's ordinary shares are entitled to one vote for each ordinary share. In connection with the business combination and as a condition for the implementation of the business combination, the company R&H issued one share of preferred stock series A. The board of directors of the company approved the sale of up to the maximum aggregate offer of the company's common shares under the ATM Facility.
Stock Compensation
During the year ended December 31, 2019, the Company's compensation committee approved time-based stock appreciation rights ("SARs") to be granted to employees of the Company outside the United States, which vest over three years. During the year ended December 31, 2019, the Company's compensation committee approved phantom stock awards to be granted to non-U.S. employees of the Company that vest over three years. The grant date fair value of the executive shares with performance conditions was estimated at their estimated grant date of January 31, 2014.
Earnings Per Share
The total fair value of the director's shares of $0.4 million was recognized as an expense upon completion of the business combination, at which point the performance conditions were met. Shares granted during the year ended December 31, 2020 and 2019 vest for a period of one year on the one-year anniversary of each holder's grant date, provided that the director continues to be a director of the Company. Warrants and options are considered compensatory and are excluded when the exercise price exceeds the average market value of the price of the Company's common stock during the applicable period.
Income Taxes
For the year ended December 31, 2020, the Company recorded a tax expense of $33.5 million for the net increase in valuation allowances related to deferred tax assets that will no longer be recoverable. For the year ended December 31, 2019, the Company recorded a tax benefit of $10.7 million to reduce valuation allowances related to deferred tax assets that will no longer be recoverable. For the year ended December 31, 2018, the Company recorded a tax expense of $6.0 million for the increase in valuation allowances related to deferred tax assets that will no longer be recoverable and other unrealized losses .
Segment and Geographical Information Segments
Commitments and Contingencies
On October 14, 2019, the company was awarded $31.1 million in damages, including in connection with trade secret misappropriation and willful patent infringement, in its lawsuit against Decco Post-Harvest, Inc. The Company did not recognize any revenue related to the award in the years ended December 31, 2020 and 2019. The Company has various procurement contracts for contract manufacturing and research and development services based on the Company's requirements.
Fair Value Measurements
The award was subsequently reduced by $18 million in connection with the Court's post-judgment review. The Court's post-trial opinion and ruling are subject to any appeals the parties may make in the future. In general, the contracts are concluded at prices no higher than the current market price and do not obligate the company to any obligations beyond the normal customary terms for similar contracts.
Quarterly Financial Data (Unaudited)
Correction of Prior Period Errors
The effect of the correction of the above errors on the Company's consolidated balance sheet as of 31 December 2019 is as follows: in the thousands). The effect of the correction of the above error on the Company's consolidated statement of comprehensive loss for the year ended December 31, 2019 is as follows: in the thousands). The effect of the correction of the above errors on the Company's consolidated statement of cash flows for the year ended December 31, 2019 is as follows: in the thousands).
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None
Based on our assessment against these criteria, management concluded that our internal control over financial reporting was ineffective as of December 31, 2020. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or semi-annual financial statements cannot be prevented or detected on a timely basis. Because of their inherent limitations, internal controls over financial reporting may not prevent or detect misstatements.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Directors
The role of Chairman of the Board of Directors is a non-executive position, and the roles of Chairman of the Board of Directors and Chief Executive Officer are split. The roles of chairman of the board and chief executive officer are held by separate persons. We have adopted a code of conduct applicable to the directors, officers and employees of the Company and its subsidiaries.
EXECUTIVE COMPENSATION Executive Summary
This option vests up to one-third of the shares subject to it on each of the first three anniversaries of the date of grant (March 29, 2018). This option vests up to one-third of the shares subject to it on each of the first three anniversaries of the date of grant (30 August 2018). The Company's obligation to pay any of the foregoing severance obligations (other than salary and benefits accrued through the date of termination of employment) will be subject to (i) Mr.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Since May 2016, we have adopted share ownership guidelines that apply to all our non-employee directors. No member of the committee has ever served as one of our officers or employees, except that Ms. Except as indicated in the footnotes to this table, the named persons or entities have exclusive voting and investment power with respect to all shares of our common stock indicated as beneficially owned by them.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The business address of each of the reporting persons is c/o Paine Schwartz Partners, LLC, 475 Fifth Avenue, 17 Floor, New York, NY 10017. The business address of each of the reporting persons is 100 E. 6) Includes 316,293 shares of stock ordinary issuable upon the exercise of options that are currently exercisable. Such right is in addition to any right Rohm & Haas has to appoint a member of the Board pursuant to its ownership of the Company's Series A Preferred Stock.
PRINCIPAL ACCOUNTING FEES AND SERVICES
On June 13, 2020, in connection with the implementation of the Investment Agreement, the Company, PSP and Rohm & Haas entered into a side agreement (the "Side Agreement"), pursuant to which the parties agree that if PSP or its affiliates have the right to to appoint at least 50% of the total board members pursuant to the investment agreement, so long as Rohm & Haas beneficially owns at least 20% of the outstanding Common Shares (on a fully diluted, "as converted" basis), the company and the board will increase the size of the board by one member, and the board will select an appointee of Rohm & Haas to fill the newly created vacancy.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
18) Incorporated by reference to the Exhibit to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2019. 19) Incorporated by reference to the Exhibit to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission Securities and Exchange Commission on June 26, 2020. 20) Incorporated by reference as an exhibit to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 6, 2019.
