The adoption of this standard did not have a significant impact on the company's condensed consolidated financial statements. The adoption of the new instructions did not have a significant impact on the condensed consolidated financial statements of the company.
Related Party Transactions
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The changes are intended to reduce the potential burden of accounting for or recognizing the effects of the benchmark interest rate reform on financial reporting.
Inventories
The amendments provide optional relief and exemptions to the application of generally accepted accounting principles for contracts, hedging relationships and other transactions affected by benchmark interest rate reform, if certain criteria are met.
Other Current Assets
Property and Equipment
Goodwill and Intangible Assets
Other Assets
Accrued and Other Current Liabilities
Debt
As of March 31, 2021, there was $264.6 million outstanding under the Revalued Revolving Facility and no balance outstanding under the Revalued Revolving Facility. On March 31, 2021, the Company evaluated the amount recorded under the recalculated term loan and determined the fair value to be approximately $263.9 million. As of the Closing Date, the Company had approximately $12.9 million of debt issuance costs related to the Collateral Facility and $1.3 million of costs related to the Revolving Facility.
Interest expense related to the amortization of term loan issuance costs during the three months ended March 31, 2020 was approximately $0.6 million. During the three months ended March 31, 2020, an unrealized loss of $0.9 million was recognized in connection with this swap. As such, in accordance with IAS 20 "Accounting for Government Grants and Disclosure of State Aid", the company has recognized the entire loan amount as grant income during the three months ended 30 June 2020.
Leases
The Company entered into an interest rate swap contract in January 2018 to hedge interest rate risk associated with the Term Loan. As part of the Coronavirus Relief, Relief, and Economic Security Act (the "CARES Act"), the Company received a Paycheck Protection Program ("PPP") loan to cover eligible expenses incurred during the period calculate. As of March 31, 2021, the Company used the entire loan proceeds to fund its eligible payroll expenses and mortgage interest, to avoid furloughs of office employees.
As a result, the Company believes it has met the PPP eligibility criteria for forgiveness and has concluded that the loan essentially constitutes a government subsidy that is expected to be forgiven. The Company does not anticipate that any portion of the Loan will be ineligible for discharge. The table below shows the contractual maturities of the company's lease obligations as of March 31, 2021.
Other Noncurrent Liabilities
Severance
Redeemable Non-Controlling Interest
Series B Convertible Preferred Stock and Stockholders’ Equity Series B Convertible Preferred Stock
The transaction closed on July 27, 2020, and a total of 150,000 shares of the Company's newly designated Series B-1 convertible preferred stock, par value $0.0001 per stock ("Series B-1 Preferred Stock") was purchased in such transaction ("Private Placement"). Accordingly, effective as of the Exchange Date, the Company issued 150,000 shares of Series B Convertible Preferred Stock, par value $0.0001 per share. share, to the investor and all the shares of Series B-1 Preferred Stock and Series B-2 Preferred Stock. of the investor was cancelled. During the three months ended March 31, 2021, the Company redeemed 4,954 shares of Series B Preferred Stock for $5.3 million.
Holders of common shares of the Company are entitled to one vote for each common share. In connection with and as a condition to the completion of the business combination, the Company has issued one share of Series A preferred stock to R&H. The Company's Board of Directors approved the sale of up to an aggregate offering of the Company's common shares under the ATM Facility.
Stock-based Compensation
In connection with the completion of the Investment Agreement, the Company and the Investor have entered into a Registration Rights Agreement (the “Registration Rights Agreement”) dated July 27, 2020. The recordable securities generally include all shares of the Company's common stock. shares into which the Series B preferred stock is convertible, and any other securities issued or to be issued with respect to such shares of common stock by way of stock split, stock dividend, distribution, recapitalization, merger, exchange, substitution or similar event or otherwise. R&H, which votes as a separate class, has the right to appoint one director to the board of directors of the Company, so long as R&H beneficially owns 10% or more of the aggregate amount of the outstanding common shares and non-voting common shares of the Partnership. Company.
In December 2018, the Company filed a registration statement (File No. the “Form S-3 Shelf”) with the Securities and Exchange Commission, which became effective in February 2019. market offering facility (the “ATM Facility”) under Form S-3 Shelf, with Virtu Americas LLC acting as sales agent with support from H.C. Effective August 7, 2020, the Company suspended sales under its ATM facility, in light of the Company's recent completion of its refinancing and current market conditions.
Earnings Per Share
The effect of share-based awards including options and restricted shares outstanding for the three months ended March 31, 2020 was excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. Therefore, the effect of stock-based awards, including options, restricted stock, restricted stock units and warrants outstanding on March 31, 2020, was excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive. The following represents the weighted average number of shares that could potentially dilute the basic earnings per share in the future:.
Income Taxes
Segment Information
Commitments and Contingencies
The following table shows the fair value of the Company's financial instruments measured at fair value on a recurring basis as of 31 March 2021. The following table presents the fair value of the Company's financial instruments measured at fair value on on a recurring basis from 31 December 2020. There were no transfers between Level 1 and Level 2 and no transfers outside Level 3 of the fair value hierarchy during the three months ended 31 March 2021.
On March 31, 2021, the Company evaluated the amount recorded under the Restated Term Loan and determined that the fair value was approximately. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximate fair value. The following table presents the changes during the periods presented in our Level 3 financial instruments that are measured at fair value on a periodic basis.
Other Income
Correction of Prior Period Errors
2020, and a previously reported additional paid-in capital charge to increase the carrying amount of repurchased NCI during the three months ended March 31, 2020 by $0.2 million, which has been applied as an adjustment to net income (loss ) previously reported attributed to AgroFresh Solutions, Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Due to the nature of the agricultural industry, weather patterns can affect overall production and the resulting business opportunities for a company. A company's services are priced based on the value they provide to the company's customers. The Company's operations are subject to seasonal changes due to growth periods around the world.
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 associated with the amortization of debt issuance costs under the Revised Credit Facility during the three months ended March 31, 2021 was $0.5 million. On July 31, 2015, in connection with the completion of the business combination by and between the Company and Dow, AgroFresh Inc.
As of the Closing Date, the Company had approximately $12.9 million in debt issuance costs associated with the Term Loan and $1.3 million in costs associated with the Revolving Loan. In connection with the Series B preferred stock, the company paid $6.0 million in total dividends, including $3.0 million in additional preferred stock and $3.0 million in cash for the three months ended March 31, 2021.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, we are not required to provide the information required by this Item
CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures
The Company is currently in the process of remediating the material weaknesses and has taken and is taking steps to address the root causes of the material weaknesses, including improving the sufficiency of the review of the information underlying the income tax provision and improving the review steps related to significant and non-recurring transactions . The company has also introduced quarterly assessments of the accounting implications of significant and one-off transactions in the current and prior periods that affect the company's consolidated financial statements. The company has implemented enhanced controls, including review processes and reconciliations related to the tax provision.
The Company intends to remedy these deficiencies as soon as possible and believes that these actions will be sufficient to address the identified material weaknesses and strengthen the Company's internal control over financial reporting; however, there is no guarantee that such remedy will be sufficient. The Company will continue to monitor the effectiveness of its controls and will make any additional changes that management deems appropriate. There were no changes in the Company's internal control over financial reporting that took place in the Company's most recent accounting quarter, which have significantly affected or can reasonably be expected to significantly affect the Company's internal control over financial reporting.
OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS
- UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Not applicable
- DEFAULTS UPON SENIOR SECURITIES Not applicable
- MINE SAFETY DISCLOSURES Not applicable
- OTHER INFORMATION Not applicable
- EXHIBITS
3.1 (1) Second Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on July 31, 2015. In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, duly authorized thereto. Based on my knowledge, the financial statements and other financial information contained in this report present fairly, in all material respects, the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report; .
The registrant's other certification officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:. The registrant's other certifying officers and I have, based on our most recent evaluation of internal control over financial reporting, advised the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions fulfill) published:. A). Any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information ; And.
