Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS

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FAIR VALUE MEASUREMENTS
9 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

NOTE 16 – FAIR VALUE MEASUREMENTS

 

When applying fair value principles in the valuation of assets and liabilities, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company has not changed its valuation techniques used in measuring the fair value of any financial assets or liabilities during the fiscal years presented. The fair value estimates take into consideration the credit risk of both the Company and its counterparties.

 

When active market quotes are not available for financial assets and liabilities, the Company uses industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including credit risk, interest rate curves, foreign currency rates and forward and spot prices for currencies. In circumstances where market-based observable inputs are not available, management judgment is used to develop assumptions to estimate fair value. Generally, the fair value of our Level 3 instruments are estimated as the net present value of expected future cash flows based on internal and external inputs.

 

Fair Value Measurements

 

The liabilities and mezzanine equity carried at fair value as of December 31, 2019 and March 31, 2019 were as follows:

 

    December 31, 2019  
      Total       Level 1       Level 2       Level 3  
Liabilities:                                
Derivative liability   $     $     $     $  
                                 
Mezzanine Equity:                                
Series E Preferred Stock     14,666,000                   14,666,000  
Series F Preferred Stock     2,434,000                   2,434,000  
Total liabilities and mezzanine equity at fair value   $ 17,100,000     $     $     $ 17,100,000  

 

 

    March 31, 2019  
      Total       Level 1       Level 2       Level 3  
Liabilities:                                
Derivative liability   $ 5     $     $     $ 5  
Total liabilities at fair value   $ 5     $     $     $ 5  

 

There were no transfers in or out of Level 3 for the nine months ended December 31, 2019.

 

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

 

In addition to the financial instruments that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a non-recurring basis as required by U.S. GAAP. Generally, assets are recorded at fair value on a non-recurring basis as a result of impairment charges or as part of a business combination. As discussed in “NOTE 10 – Merger Agreement and Divestiture, during the nine months ended December 31, 2019, the Company recorded non-recurring fair value measurements related to the Lineal Plan of Merger. These fair value measurements were classified as Level 3 within the fair value hierarchy.

  

Additionally, the Series E Preferred Stock and Series F Preferred Stock were considered contingently redeemable preferred stock and were classified as mezzanine equity. The fair value of these instruments was estimated as part of the accounting for the Lineal Plan of Merger described in “NOTE 10 – Merger Agreement and Divestiture”. Effective December 31, 2019, the Series E and Series F Preferred Stock were returned to the Company and cancelled as part of the Lineal Divestiture. Immediately prior to the Merger, the estimated fair value of the Series E and Series F Preferred Stock was determined using an income valuation approach to estimate the future cash flows of the Lineal business as of December 31, 2019, including an analysis of the terms and rights of each class of equity and their current value based on the disposition of the Lineal business.