Annual report pursuant to Section 13 and 15(d)

FAIR VALUE MEASUREMENTS

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FAIR VALUE MEASUREMENTS
12 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

Note 18 – 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 March 31, 2020 and March 31, 2019 were as follows:  

 

    March 31, 2020  
    Total     Level 1     Level 2     Level 3  
Liabilities:                                
Derivative liability   $     $     $     $  
Total liabilities at fair value   $     $     $     $  

 

 

    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 year ended March 31, 2020.

 

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 12 – Merger Agreement and Divestiture” , during the year ended March 31, 2020, 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 during the period. The fair value of these instruments was estimated as part of the accounting for the Lineal Plan of Merger described in “Note 12 – 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 Lineal Divestiture, 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. No Series E and Series F Preferred Stock was outstanding as of March 31, 2020.