UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017 March 31, 2022
or
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission File Number: 001-36316
AgroFresh Solutions, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware46-4007249
(State or other jurisdiction of incorporation)(IRS Employer Identification Number)
One Washington Square
510-530 Walnut Street, Suite 1350
Philadelphia, PA 19106
(Address of principal executive offices)
(267) 317-9139
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.0001 per shareAGFSThe NASDAQ Global Select Market


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of large"large accelerated filer,” “accelerated filer”filer,” “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨
☐
Accelerated filer x
☐
Non-accelerated filer
¨
☒
Smaller reporting company ¨
☒
Emerging growth company x
(Do not check if a
smaller reporting company)
☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). ¨☐ Yes x No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
The number of shares of common stock outstanding as of November 3, 2017April 27, 2022 was 50,337,382.52,649,897.

Table of Contents


TABLE OF CONTENTS
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INDEX TO EXHIBITS
36



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PART I - FINANCIAL INFORMATION

AgroFresh Solutions, Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share data)par value amounts)

March 31,
2022		December 31,
2021
September 30,
2017		December 31, 2016
ASSETS 
 
ASSETS  
Current Assets: Current Assets:
Cash and cash equivalents$75,418
$77,312
Cash and cash equivalents$59,266$61,930
Accounts receivable, net of allowance for doubtful accounts of $1,502 and $1,242, respectively78,787
63,675
Accounts receivable, net of allowance for doubtful accounts of $1,640 and $2,143, respectivelyAccounts receivable, net of allowance for doubtful accounts of $1,640 and $2,143, respectively55,75453,538
Inventories16,952
15,467
Inventories22,35719,780
Other current assets14,319
14,047
Other current assets23,54919,878
Total current assets185,476
170,501
Total Current AssetsTotal Current Assets160,926155,126
Property and equipment, net9,299
8,048
Property and equipment, net11,69911,986
Intangible assets, net748,793
776,584
Intangible assets, net535,970546,652
Deferred income tax assets7,694
8,459
Deferred income tax assets7,4027,392
Other assets2,043
2,252
Other assets12,89211,406
TOTAL ASSETS$953,305
$965,844
TOTAL ASSETS$728,889$732,562
 
LIABILITIES AND STOCKHOLDERS’ EQUITY 
 
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITYLIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY  
Current Liabilities: Current Liabilities:
Accounts payable$14,438
$12,133
Accounts payable$17,124$16,969
Current portion of long-term debt5,313
15,250
Current portion of long-term debt3,3783,362 
Income taxes payable6,017
3,121
Income taxes payable2,2972,382
Accrued expenses and other current liabilities48,094
66,366
Accrued expenses and other current liabilities27,27726,994
Total current liabilities73,862
96,870
Total Current LiabilitiesTotal Current Liabilities50,07649,707
Long-term debt402,333
392,996
Long-term debt253,807254,194
Other noncurrent liabilities70,397
140,833
Other noncurrent liabilities8,1186,256
Deferred income tax liabilities22,790
—
Deferred income tax liabilities33,66334,833
Total liabilities569,382
630,699
Total LiabilitiesTotal Liabilities345,664344,990
 
Commitments and contingencies (see Note 17)


Stockholders’ equity: 
 
Common stock, par value $0.0001; 400,000,000 shares authorized, 51,001,395 and 50,698,587 shares issued and 50,340,014 and 50,037,206 shares outstanding at September 30, 2017 and December 31, 2016, respectively5
5
Preferred stock; par value $0.0001, 1 share authorized and outstanding at September 30, 2017 and December 31, 2016—
—
Treasury stock; par value $0.0001, 661,381 shares at September 30, 2017 and December 31, 2016(3,885)(3,885)
Commitments and contingencies (see Note 20)Commitments and contingencies (see Note 20)00
Temporary Equity:Temporary Equity:
Series B convertible preferred stock, par value $0.0001; 150 shares authorized and designated and 145 shares outstanding at March 31, 2022 and December 31, 2021, respectivelySeries B convertible preferred stock, par value $0.0001; 150 shares authorized and designated and 145 shares outstanding at March 31, 2022 and December 31, 2021, respectively151,800149,386
Redeemable non-controlling interestRedeemable non-controlling interest7,7057,787
Stockholders’ Equity:Stockholders’ Equity:  
Common stock, par value $0.0001; 400,000 shares authorized, 53,244 and 53,080 shares issued and 52,583 and 52,418 outstanding at March 31, 2022 and December 31, 2021, respectivelyCommon stock, par value $0.0001; 400,000 shares authorized, 53,244 and 53,080 shares issued and 52,583 and 52,418 outstanding at March 31, 2022 and December 31, 2021, respectively55
Preferred stock, par value $0.0001; 0.001 share authorized and outstanding at March 31, 2022 and December 31, 2021Preferred stock, par value $0.0001; 0.001 share authorized and outstanding at March 31, 2022 and December 31, 2021——
Treasury stock, par value $0.0001; 661 shares at March 31, 2022 and December 31, 2021Treasury stock, par value $0.0001; 661 shares at March 31, 2022 and December 31, 2021(3,885)(3,885)
Additional paid-in capital532,337
475,598
Additional paid-in capital523,544529,303
Accumulated deficit(132,076)(132,200)Accumulated deficit(251,747)(248,660)
Accumulated other comprehensive loss(12,458)(4,373)Accumulated other comprehensive loss(44,197)(46,364)
Total stockholders' equity383,923
335,145
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$953,305
$965,844
Total Stockholders' EquityTotal Stockholders' Equity223,720230,399
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITYTOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY$728,889$732,562


 See accompanying notes to unaudited condensed consolidated financial statements.


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AgroFresh Solutions, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)OPERATIONS
(In thousands, except share and per share data)


Three Months Ended March 31,

Three Months Ended
September 30, 2017		Three Months Ended
September 30, 2016		 Nine Months Ended
September 30, 2017		Nine Months Ended
September 30, 2016		20222021
Net sales$60,772
$61,200
 $109,891
$107,996
Net sales$39,889$38,992
Cost of sales (excluding amortization, shown separately below)11,620
8,905
 21,365
48,558
Cost of sales (excluding amortization, shown separately below)11,92310,314
Gross profit49,152
52,295
 88,526
59,438
Gross profit27,96628,678
Research and development expenses3,071
2,983
 10,103
11,220
Research and development expenses3,0513,298
Selling, general, and administrative expenses14,462
15,173
 44,328
49,385
Selling, general and administrative expensesSelling, general and administrative expenses11,89213,551
Amortization of intangibles10,445
10,080
 31,335
29,878
Amortization of intangibles10,71810,763
Change in fair value of contingent consideration(1,424)(1,569) (2,420)(4,969)
Operating income (loss)22,598
25,628
 5,180
(26,076)
Other (expense) income(295)(38) (40)16
Operating incomeOperating income2,3051,066
Other incomeOther income50514,398
(Loss) gain on foreign currency exchange(487)924
 10,584
682
(Loss) gain on foreign currency exchange(1,196)433
Interest expense, net(8,638)(14,526) (27,495)(43,850)Interest expense, net(4,947)(5,890)
Income (loss) before income taxes13,178
11,988
 (11,771)(69,228)
Income tax expense (benefit)3,632
4,676
 (11,895)(26,239)
Net income (loss)$9,546
$7,312
 $124
$(42,989)
(Loss) income before income taxes(Loss) income before income taxes(3,333)10,007
Income taxes (benefit) expenseIncome taxes (benefit) expense(164)1,823
Net (loss) income including non-controlling interestNet (loss) income including non-controlling interest(3,169)8,184
Less: Net loss attributable to non-controlling interestsLess: Net loss attributable to non-controlling interests(82)(239)
Net (loss) income attributable to AgroFresh Solutions, Inc.Net (loss) income attributable to AgroFresh Solutions, Inc.(3,087)8,423
Less: Dividends on convertible preferred stockLess: Dividends on convertible preferred stock6,4366,005
Net (loss) income attributable to AgroFresh Solutions, Inc. common stockholdersNet (loss) income attributable to AgroFresh Solutions, Inc. common stockholders($9,523)$2,418
 
 
 



Net income (loss) per share:   
(Loss) earnings per share of common shares:(Loss) earnings per share of common shares:
Basic$0.19
$0.15
 $—
$(0.87)Basic($0.18)$0.03
Diluted$0.19
$0.15
 $—
$(0.87)Diluted($0.18)$0.03
Weighted average shares outstanding: 
 
  


Weighted average shares of common stock outstanding:Weighted average shares of common stock outstanding:
Basic49,676,923
49,567,735
 49,852,337
49,385,733
Basic51,736 51,031 
Diluted50,169,434
49,627,800
 50,134,591
49,385,733
Diluted51,736 52,296 
 
See accompanying notes to unaudited condensed consolidated financial statements.




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AgroFresh Solutions, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (LOSS)
(Unaudited)
(In thousands)


 Three Months Ended
September 30, 2017		Three Months Ended
September 30, 2016		 Nine Months Ended
September 30, 2017		Nine Months Ended
September 30, 2016
Net income (loss)$9,546
$7,312
 $124
$(42,989)
Other comprehensive income (loss): 
   
 
Foreign currency translation adjustments2,200
(114) (8,085)4,619
Comprehensive income (loss)$11,746
$7,198
 $(7,961)$(38,370)
Three Months Ended March 31,
20222021
Net (loss) income($3,169)$8,184
Other comprehensive (loss) income: 
Foreign currency translation adjustments2,167(6,558)
Comprehensive (loss) income, net of tax($1,002)$1,626 
 
See accompanying notes to unaudited condensed consolidated financial statements.




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AgroFresh Solutions, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(Unaudited)
(In thousands, except share and per share data)thousands)


Preferred StockCommon StockTreasury StockAdditional Paid-in CapitalAccumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity
SharesAmountSharesAmountAmount
Balances, December 31, 2021— $—53,080 $5($3,885)$529,303($248,660)($46,364)$230,399
Stock-based compensation— — — — — 902——902
Issuance of stock, net of forfeitures— — 182 — — ————
Shares withheld for taxes— — (18)— — (225)——(225)
Convertible preferred dividend— — — — — (6,436)——(6,436)
Net loss attributable to AgroFresh Solutions, Inc.— — — — — —(3,087)—(3,087)
Comprehensive income— — — — — ——2,1672,167
Balances, March 31, 2022— $—53,244 $5($3,885)$523,544($251,747)($44,197)$223,720
 Preferred StockCommon StockTreasury StockAdditional Paid-in Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
 SharesAmountSharesAmountAmount
Balance at December 31, 20151
$—
49,940,548
$5
$(2,397)$472,494
$(20,640)$(5,559)$443,903
Stock-based compensation—
—
—
—
—
2,901
—
—
2,901
Issuance of restricted stock—
—
644,395
—
—
—
—
—
—
Repurchase of stock for treasury—
—
—
—
(1,488)—
—
—
(1,488)
Comprehensive loss—
—
—
—
—
—
(42,989)4,619
(38,370)
Balance at September 30, 20161
$—
50,584,943
$5
$(3,885)$475,395
$(63,629)$(940)$406,946




 Preferred StockCommon StockTreasury StockAdditional Paid-in Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
 SharesAmountSharesAmountAmount
Balance at December 31, 20161
$—
50,698,587
$5
$(3,885)$475,598
$(132,200)$(4,373)$335,145
Stock-based compensation—
—
—
—
—
1,318
—
—
1,318
Transfer of director compensation from liability to equity—
—
—
—
—
332
—
—
332
Issuance of restricted stock—
—
302,808
—
—
—
—
—
—
Settlement of Dow liabilities, net of income tax—
—
—
—
—
55,089
—
—
55,089
Comprehensive loss—
—
—
—
—
—
124
(8,085)(7,961)
Balance at September 30, 20171
$—
51,001,395
$5
$(3,885)$532,337
$(132,076)$(12,458)$383,923
Preferred StockCommon StockTreasury StockAdditional Paid-in CapitalAccumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity
SharesAmountSharesAmountAmount
Balances, December 31, 2020— $—53,092 $5($3,885)$552,776($244,836)($31,667)$272,393
Stock-based compensation— — — — — 752——752
Issuance of stock, net of forfeitures— — (20)— — ————
Shares withheld for taxes— — (21)— — (43)——(43)
Convertible preferred dividend— — — — — (6,005)——(6,005)
Net loss attributable to AgroFresh Solutions, Inc.— — — — — —8,423—8,423
Comprehensive loss— — — — — ——(6,558)(6,558)
Balances, March 31, 2021— $—53,051 $5($3,885)$547,480($236,413)($38,225)$268,962



See accompanying notes to unaudited condensed consolidated financial statements.



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AgroFresh Solutions, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
(in thousands)20222021
Cash flows from operating activities:
Net (loss) income($3,169)$8,184
Adjustments to reconcile net (loss) income to net cash provided in operating activities:
Depreciation and amortization11,44411,423
Stock-based compensation902752
Amortization of deferred financing costs511774
Deferred income taxes(981)937
Provision for bad debts138396
Loss on sales of property and equipment57
Changes in operating assets and liabilities:
Accounts receivable(321)5,576
Inventories(2,312)1,256
Prepaid expenses and other current assets(3,401)(1,645)
Accounts payable14(2,584)
Accrued expenses and other liabilities(292)(607)
Income taxes payable(214)447
Other assets and liabilities163(1,590)
Net cash provided by operating activities2,48723,326
Cash flows from investing activities:
Capital expenditures(596)(430)
Net cash used in investing activities(596)(430)
Cash flows from financing activities:
Repayment of long-term debt(823)(9,904)
Payment of preferred dividends(4,023)(3,002)
Payment for redemption of convertible preferred stock—(5,330)
Net cash used in financing activities(4,846)(18,236)
Effect of exchange rate changes on cash and cash equivalents291(1,822)
Net (decrease) increase in cash and cash equivalents(2,664)2,838
Cash and cash equivalents, beginning of period61,93050,030
Cash and cash equivalents, end of period$59,266$52,868
Supplemental disclosures of cash flow information:
Cash paid for:
Cash paid for interest$4,788$5,012
Cash paid for income taxes$1,945$842
Supplemental schedule of non-cash investing and financing activities:
Accrued purchases of property and equipment$96$95
(in thousands)Nine Months Ended
September 30, 2017		Nine Months Ended
September 30, 2016
Cash flows from operating activities:



Net income (loss)$124
$(42,989)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
 
Depreciation and amortization33,102
31,777
Provision for bad debts260
—
Stock-based compensation for equity classified awards1,318
2,901
Pension expense227
—
Amortization of inventory fair value adjustment—
30,377
Amortization of deferred financing costs1,764
1,696
Accretion of contingent consideration7,297
22,931
Decrease in fair value of contingent consideration(2,420)(4,969)
Deferred income taxes(16,445)(24,910)
Loss on sales of property81
21
Other93
850
Changes in operating assets and liabilities:

 
Accounts receivable(8,699)(8,520)
Inventories(1,363)(2,191)
Prepaid expenses and other current assets(321)(19,627)
Accounts payable(9,486)341
Accrued expenses and other liabilities7,691
5,272
Income taxes payable3,050
1,206
Other assets and liabilities(1,354)711
Net cash provided by (used in) operating activities14,919
(5,123)
Cash flows from investing activities:

 
Cash paid for property and equipment(5,281)(5,449)
Proceeds from sale of property99
8
Other investments(1,050)—
Net cash used in investing activities(6,232)(5,441)
Cash flows from financing activities:

 
Payment of Dow liabilities settlement(10,000)—
Repayment of long term debt(2,125)(3,188)
Repurchase of stock for treasury—
(1,488)
Net cash used in financing activities(12,125)(4,676)
Effect of exchange rate changes on cash and cash equivalents1,544
2,152
Net decrease in cash and cash equivalents(1,894)(13,088)
Cash and cash equivalents, beginning of period77,312
57,765
Cash and cash equivalents, end of period$75,418
$44,677
   
Supplemental disclosures of cash flow information:  
Cash paid for:  
Cash paid for interest$12,309
$18,460
Cash paid for income taxes$1,811
$2,487
Supplemental schedule of non-cash investing and financing activities:  
Accrued purchases of property and equipment$1,422
$35
Settlement of Dow liabilities not resulting from cash payment, net of deferred income taxes$55,089
$—


See accompanying notes to unaudited condensed consolidated financial statements.


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AgroFresh Solutions, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.Description of Business

1.Description of Business

AgroFresh Solutions, Inc. (the “Company”) is aan agriculture technology innovator and global leader inwith a mission to prevent food loss and waste and conserve the planet’s resources by providing a range of science-based solutions, data-driven digital technologies and high-touch customer services. The Company supports growers, packers and retailers with solutions across the food supply chain to enhance the quality preservation and waste reduction space, providing proprietary advanced technologies and innovative data-driven specialty solutions aimed at enabling growers and packersextend the shelf life of fresh produce to preserveproduce. The Company has 40 years of post-harvest experience across a broad range of crops, including revolutionizing the apple industry with the SmartFresh™ Quality System more than 20 years ago. The AgroFresh platform is powered by the Company's comprehensive portfolio that includes plant-based coatings, equipment and enhance itsproprietary solutions that help improve the freshness quality and value to maximize the percentage of produce suppliedsupply chain from harvest to the market relativehome.

The Company has an extensive portfolio of solutions to extend freshness across the produce supply chain from near-harvest up to the amount of produce grown, as well as increase consumer appeal of product at retail.point-of sale. These include Harvista™ for near-harvest optimization and the SmartFresh™ Quality System, the Company's flagship post-harvest freshness solutions. Additional post-harvest freshness solutions include fungicides that can be applied to meet various customer operational requirements in both foggable (ActiMist™) and liquid (ActiSeal™) delivery options. The Company currently offers SmartFreshTM applications at customer sites through a direct service model and provides advisory services relying on its extensive knowledge on the use of its products over thousands of monitored applications. The Company operates in over 40 countries and currently derives the majority of its revenue working with customers to protect the value of apples, pears, and other produce during storage. Additionally the Company has a numbercontrolling interest in AgroFresh Fruit Protection S.A. ("AgroFresh Fruit Protection") (formerly Tecnidex Fruit Protection, S.A.), a leading regional provider of different solutionspost-harvest fungicides, disinfectants, coatings and application technologies that have either been launched (Harvista, RipeLock, LandSpring) or will be launchedpackinghouse equipment for the citrus market. Beyond apples and pears, SmartFresh technology can provide ready-to-eat freshness for other fruits and vegetables including avocados, bananas, melons, tomatoes, broccoli and mangos. The Company has key products registered in the future that will seek to extend its footprint to other cropsapproximately 50 countries, and steps of the global produce supply chain.supports customers by protecting over 25,000 storage rooms globally.


The end marketsend-markets that the Company serves are seasonal and are generally aligned with the seasonal growing patterns of the Company’s customers. For those customers growing, harvesting or storing apples and pears, the Company’s primary target market,core crops, the peak season in the southern hemisphere is the first and second quarters of each year, while the peak season in the northern hemisphere is the third and fourth quarters of each year. Within each half-year period (i.e., January through June for the southern hemisphere, and July through December for the northern hemisphere) the apple growing season has historically occurred during both quarters. A variety of factors, including weather, may affect the timing of the growing, harvesting and storing patterns of the Company’s customers and therefore shift the consumption of the Company’s services and products between the first and second quarters primarily in the southern hemisphere or between the third and fourth quarters primarily in the northern hemisphere.


The Company was originally incorporated as Boulevard Acquisition Corp. (“Boulevard”), a blank check company, in Delaware on October 24, 2013,
2.Basis of Presentation and was formed for the purposeSummary of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination. On July 31, 2015, the Company completed a business combination (the "Business Combination") with The Dow Chemical Company ("Dow") and changed its name to AgroFresh Solutions, Inc. Prior to consummation of the Business Combination, the Company’s efforts were limited to organizational activities, its initial public offering and related financings, and the search for suitable business acquisition transactions.Significant Accounting Policies

2.Basis of Presentation and Summary of Significant Accounting Policies


The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America("GAAP") for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. These financial statements include all adjustments that are necessary for a fair presentation of the Company's condensed consolidated results of operations, financial condition and cash flows for the periods shown, including normal, recurring accruals and other items. The condensed consolidated results of operations for the interim periods presented are not necessarily indicative of results for the full year.

For additional information, these condensed consolidated financial statements should be read in conjunction with the consolidated and combined financial statements and notes included in the Company'sCompany’s Annual Report filed on Form 10-K for the year ended December 31, 2016.2021. Certain prior period amounts have been reclassified to conform to the current year presentation.


COVID-19

The global health crisis caused by COVID-19 and the related government actions and stay at home orders have negatively impacted economic activity and increased political instability across the globe. The outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. There have been numerous obstacles presented and some localized financial impacts of the pandemic, including fluctuations in foreign currency exchange rates and customer demand and spending pattern changes. During the three months ended March 31, 2022, the COVID-19 pandemic did not have a significant adverse impact on the Company’s results of operations. While the Company is following the requirements of governmental authorities and taking additional preventative and protective measures to ensure the safety of its workforce, including remote working arrangements and varying procedures for essential workforce, the outbreak presents some uncertainty and risk with respect to the Company and its performance and financial results.

Adoption of Highly Inflationary Accounting in Argentina

GAAP requires the use of highly inflationary accounting for countries whose cumulative three-year inflation rate exceeds 100 percent. The Company closely monitors the inflation data and currency volatility in Argentina, where there are multiple data

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sources for measuring and reporting inflation. In the second quarter of 2018, the Argentine peso rapidly devalued relative to the U.S. dollar, which along with increased inflation, indicated that the three-year cumulative inflation rate in that country exceeded 100 percent as of June 30, 2018. As a result, the Company elected to adopt highly inflationary accounting as of July 1, 2018 for its subsidiary in Argentina. Under highly inflationary accounting, the functional currency of the Company's subsidiary in Argentina became the U.S. dollar, and its income statement and balance sheet will be measured in U.S. dollars using both current and historical rates of exchange. The effect of changes in exchange rates on Argentine peso-denominated monetary assets and liabilities are reflected in earnings. As the three-year cumulative inflation rate exceeded 100 percent as of March 31, 2022, there is no change to highly inflationary accounting. As of March 31, 2022, the Company’s subsidiary in Argentina had net assets of ($8.7) million. Net sales attributable to Argentina were approximately 10.5% and 11% of the Company’s consolidated net sales for the three months ended March 31, 2022 and 2021, respectively.

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers into geographic region, product and timing of transfer of goods and services. The Company determined that disaggregating revenue into these categories achieves the disclosure objective of depicting how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Revenues for the three months ended March 31, 2022
(in thousands)
RegionNorth America
 (1)		EMEA
(2)		Latin America
(3)		Asia Pacific
(4)		Total Revenues
Product
1-MCP based$1,531$6,567$16,539$6,114$30,751
Fungicides, disinfectants and coatings—5,8532,120—7,973
Other*314398384691,165
$1,845$12,818$19,043$6,183$39,889
Pattern of Revenue Recognition
Products transferred at a point in time$1,656$12,431$18,935$6,140$39,162
Services transferred over time18938710843727
$1,845$12,818$19,043$6,183$39,889

Revenues for the three months ended March 31, 2021
(in thousands)
RegionNorth America
 (1)		EMEA
(2)		Latin America
(3)		Asia Pacific
(4)		Total Revenues
Product
1-MCP based$1,764$5,362$18,741$5,963$31,830
Fungicides, disinfectants and coatings144,5461,547—6,107
Other*156400451481,055
$1,934$10,308$20,739$6,011$38,992
Pattern of Revenue Recognition
Products transferred at a point in time$1,767$9,908$20,627$5,972$38,274
Services transferred over time16740011239718
$1,934$10,308$20,739$6,011$38,992

*Other includes FreshCloud, technical services and sales-type equipment leases related to AgroFresh Fruit Protection.

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(1)North America includes the United States and Canada.
(2)EMEA includes Europe, the Middle East and Africa.
(3)Latin America includes Argentina, Brazil, Chile, Costa Rica, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Peru and Uruguay.
(4)Asia Pacific includes Australia, China, India, Japan, New Zealand, the Philippines, South Korea, Taiwan and Thailand.

Contract Assets and Liabilities

Accounting Standards Codification ("ASC") 606 Revenue from contracts with Customers requires an entity to present a revenue contract as a contract asset when the entity performs its obligations under the contract by transferring goods or services to a customer before the customer pays consideration or before payment is due. ASC 606 also requires an entity to present a revenue contract as a contract liability in instances when a customer pays consideration, or an entity has a right to an amount of consideration that is unconditional (e.g., receivable), before the entity transfers a good or service to the customer. The following table presents changes in the Company’s contract assets and liabilities during the three months ended March 31, 2022 and the year ended December 31, 2021:
(in thousands)Balance at
December 31, 2021		AdditionsDeductionsBalance at
March 31, 2022
Contract assets:
Unbilled revenue$7954,244(2,587)$2,452
Contract liabilities:   
Deferred revenue$6351,766(702)$1,699
(in thousands)Balance at
December 31, 2020		AdditionsDeductionsBalance at
December 31, 2021
Contract assets:
Unbilled revenue$1,48417,617(18,306)$795
Contract liabilities:
Deferred revenue$1,4744,123(4,962)$635

The Company recognizes contract assets in the form of unbilled revenue in instances where services are performed by the Company but not billed by period end. The Company recognizes contract liabilities in the form of deferred revenue in instances where a customer pays in advance for future services to be performed by the Company. The Company generally receives payments from its customers based on standard terms and conditions. No significant changes or impairment losses occurred to contract balances during the three months ended March 31, 2022. Amounts reclassified from unbilled revenue to accounts receivable for the three months ended March 31, 2022 and for the year ended December 31, 2021 were $2.6 million and $18.3 million, respectively. Amounts reclassified from deferred revenue to revenue for the three months ended March 31, 2022 and for the year ended December 31, 2021 were $0.7 million and $5.0 million, respectively.

Recently Issued Accounting GuidanceStandards and Pronouncements


In May 2017,December 2019, the FinancialFASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. ASU 2017-09 addressesfor Income Taxes. The amendments simplify the changesaccounting for income taxes by removing certain exceptions to the termsgeneral principles of Topic 740, "Income Taxes" and conditions of share-based awards.also improve consistent application by clarifying and amending existing guidance. The ASUnew standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 20172020. The Company adopted the new guidance on January 1, 2021. The adoption of the new guidance did not have a material impact on the condensed consolidated financial statements of the Company.

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 amendments provide optional expedients and interim periods thereinexceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are intended to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. The new standard is effective on a modified retrospective basis.date selected by the Company between March 12, 2020 and December 31, 2022. The Company is currently evaluating the impact of adopting this guidance will have on its financial statements.guidance.


In May 2014,

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3.Related Party Transactions
On June 13, 2020, in connection with the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which has been updated through several revisionsexecution of the Investment Agreement (as defined in Note 15 - Series B Convertible Preferred Stock and clarifications since its original issuance. The standard will require revenue recognized to represent the transfer of promised goods or services to customers at an amount that reflects the consideration which a company expects to receive in exchange for those goods or services. The standard also requires new, expanded disclosures regarding revenue recognition. The standard will be effective January 1, 2018 with early adoption permissible beginning January 1, 2017.

The Company is continuing to evaluate the impact that ASU 2014-09 will have on its consolidated financial statements and related disclosures. AsStockholders’ Equity), the Company, continues the evaluationPSP AGFS Holdings, L.P. (“PSP”) and implementation process, it expects that there will be an impact to the Company’s financial reporting disclosures as well as any related business operations processes and internal controls over financial reporting. As part of the assessment performed through the date of this filing, the Company has created an implementation working group, which includes internal and third-party resources. As part of its implementation plan, the Company has adopted implementation controls that will allow it to properly and timely adopt the new revenue accounting standard on its effective date. In particular, the Company adopted implementation controls related to the following:
Developed a detailed project plan with key milestone dates;
Performed education of the new accounting standard;
Outlined the revenue generating activities that fall within the scope of ASU 2014-09, and is continuing to assess what impact the new accounting standard will have on those activities; and
Monitoring and assessment of the impact of changes to ASU 2014-09 and its interpretations as they become available.

Specific considerations made to date on the impact of adopting ASU 2014-09 include:
Collectibility - The valuation of revenue and accounts receivable, including whether negotiated contractual prices constitute price concessions or acceptance of the customer’s credit risk and how this impacts the timing of the Company’s revenue recognition. Currently, the Company recognizes revenue for the entire sales price and separately records a provision for bad debt as a component of operating expenses.
Performance Obligations - The treatment of the Company’s customer contracts, including whether the various goods and services promised in these contracts are distinct performance obligations, and the timing of revenue recognition for these goods and services. Currently, revenue is recognized at the time the product is applied to the fruits or vegetables as this represents the point at which the Company’s performance obligation to the customer has been completed.
Variable Consideration - The estimation and constraining of variable consideration, including rebates and how the Company will allocate these items to the performance obligations to its customer contracts. Currently, revenue is recognized net of estimated payments that are expected to be paid under rebate programs.
Significant Financing Component - Assessing whether certain contracts with customers provide a service of financing in addition to the delivery of the goods or services. In addition, the Company is assessing whether it can apply the practical expedient alleviating the application of the significant financing component requirements if the period between when the transfers of promised goods or services to a customer and when the customer pays for that good or service is one year or less. Currently, the Company does not recognize imputed interest on its accounts receivables due to its customary trade terms that do not exceed one year.
Contract Costs - The Company is continuing to assess the impact of ASU 2014-09 on the costs to acquire and fulfill its customer contracts, including whether the Company can apply the practical expedient of expensing contract costs when incurred if the amortization period of the asset that the Company would have recognized is one year or less. Currently, the Company’s accounting policy is to expense contract costs as they are incurred.
Transition Method - The Company is expecting to use a modified retrospective method of adoption, which would require a cumulative adjustment to opening retained earnings at the date of adoption (January 1, 2018), as opposed to a full retrospective application which would require a restatement of each comparable period presented within the financial statements. The Company is continuing to assess whether a material cumulative adjustment is necessary.

The significant assessment and implementation matters to be addressed prior to adopting ASU 2014-09 are as follows:
Completing the Company’s review of customer contracts in scope of ASU 2014-09;
Calculating the transition method adjustment;
Determining the impact that the new accounting standard will have on the Company’s consolidated financial statements and related disclosures; and
Updating, as needed, the Company’s business processes, systems and controls required to comply with ASU 2014-09 upon its effective date of January 1, 2018.

The Company anticipates completing its evaluation of the impact of ASU 2014-09 during the next three months and will adopt ASU 2014-09 when it becomes effective on January 1, 2018.

In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” ASU No. 2017-07 requires employers to separate the service cost component from other components of net periodic benefit costs and to disclose the amounts of net periodic benefit costs that are included in each income statement line item. The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently in the process of assessing the impact this guidance will have on its financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of this guidance is not expected to have a material impact on the Company's financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Company is currently evaluating the impact this guidance will have on its financial statements.

In February 2015, the FASB issued ASU 2016-2, “Leases.” This update requires management to recognize lease assets and lease liabilities by lessees for all operating leases. The ASU is effective for periods beginning after December 15, 2018 and interim periods therein on a modified retrospective basis. The Company is currently evaluating the impact this guidance will have on its financial statements.

3.Settlement with Dow

On April 4, 2017, the Company entered into an agreement (the “Amendment Agreement”) with Dow, Rohm and Haas Company (“("R&H”&H"), Boulevard Acquisition Sponsor, LLC (the “Sponsor”), AgroFresh Inc., entered into a wholly-owned subsidiaryside agreement, pursuant to which the parties agreed that if PSP or its affiliates has the right to designate at least 50% of the Company, Avenue Capital Management II, L.P. (“Avenue”) and, solely as to certain sections of the Amendment Agreement, Joel Citron, Darren Thompson and Robert J. Campbell (collectively, the “Founding Holders”), Marc Lasry and Stephen Trevor. Pursuant to the Amendment Agreement and certain related agreements entered intototal directors on the same date (as described below), among other things, the Company and Dow agreed to modify certain obligations of the Company pursuant to (i) the Stock Purchase Agreement, dated April 30, 2015 (the “Purchase Agreement”), between the Company and Dow, (ii) the Tax Receivables Agreement, dated July 31, 2015 (the “Tax Receivables Agreement”), among the Company, Dow, R&H and AgroFresh Inc., and (iii) the Warrant Purchase Agreement, dated July 31, 2015 (the “Warrant Purchase Agreement”), among the Company, Dow, R&H and the Sponsor. Each of Mr. Campbell and Mr. Lasry is a member of the Company's board of directors, Mr. Trevor was a member of the Company’s board of directors at the time the Amendment Agreement was entered into, and each of Dow and the Sponsor is a significant stockholder of the Company.

Amendment Agreement

Pursuantpursuant to the AmendmentInvestment Agreement, the Company agreed to pay Dow the aggregate amount of $20.0 million, of which $10.0 million was paid on April 4, 2017 and the remaining $10.0 million is payable onso long as R&H or before January 31, 2018, in full satisfactionits affiliates beneficially owns at least 20% of the Company’s obligations with respect to (i) the working capital adjustment under the Purchase Agreement, (ii) certain transfer and value added tax reimbursement obligations under the Purchase Agreement, and (iii) the amount payable to Dow pursuant to the Tax Receivables Agreement on account of the 2015 tax year. As of March 31, 2017, these liabilities, inclusive of accrued interest, were approximately $17.0 million, $9.3 million, and $12.0 million, respectively. During the nine months ended September 30, 2017, the liabilities were reduced by approximately $18.2 million.

Also pursuant to the Amendment Agreement, each of Avenue and Dow agreed to make available to the Companyoutstanding common stock (on a credit facility, providing for loans of up to $50.0 million each, for use to complete one or more potential acquisitions prior to December 31, 2019, in each case subject to approval by both Avenue and Dow.

First Amendment to Tax Receivables Agreement

The Company, Dow, R&H and AgroFresh Inc. entered into a First Amendment to the Tax Receivables Agreement (the “TRA Amendment”). The TRA Amendment reduces, from 85% to 50%fully diluted, “as converted” basis), the percentage that the Company is required to pay to Dow pursuant to the Tax Receivables Agreement of the annual tax savings, if any, in U.S. Federal, state and local income tax or franchise tax that the Company actually realizes as a result of the increase in tax basis of the AgroFresh assets resulting from a Section 338(h)(10) election that the Company and Dow made in connection with the transactions contemplated byboard of directors will increase the Purchase Agreement. During the nine months ended September 30, 2017 the liability to Dow was reduced by approximately $75.3 million as a resultsize of the TRA Amendment.





Stock Buyback Agreement

The Companyboard of directors by 1 member and Dow entered intothe board will elect a letter agreement (the “Stock Buyback Agreement”),designee selected by R&H to fill the newly-created vacancy. Such right is in addition to any right that R&H has to appoint a member of the board pursuant to which Dow agreed to use its reasonable best efforts to purchase up to 5,070,358 sharesownership of the Company’s commonSeries A preferred stock in the open market (representing approximately 10% of the total number of shares of the Company’s common stock then outstanding), over a period of up to 18 months.(see Note 15 - Series B Convertible Preferred Stock and Stockholders’ Equity).


Termination of Warrant Purchase Agreement

The Company, Dow, R&H and the Sponsor entered into a letter agreement, pursuant to which the Warrant Purchase Agreement was terminated effective immediately.

As a result of the Amendment Agreement, the TRA Amendment and the termination of the Warrant Purchase Agreement, the Company reduced the related liabilities during the first nine months of 2017 as follows:

(amounts in millions)Nine Months Ended
September 30, 2017
Amendment Agreement$18.2
Warrant Purchase Agreement1.6
TRA Amendment75.3
Deferred tax adjustment related to Dow settlement(40.0)
Total reduction in related liabilities$55.1

The Company recorded an increase to additional paid in capital, net of deferred income taxes of $40.0 million, as an offset to the reduction in related liabilities, as the Company entered into the April 4, 2017 agreements with related parties and the transaction has been treated as a capital transaction.

4.Related Party Transactions

Pursuant to the Business Combination the Company consummated on April 30, 2015 with Dow, a related party, the Company agreed to certain obligations with Dow pursuant to the Purchase Agreement, the Tax Receivables Agreement, and the Warrant Purchase Agreement, dated July 31, 2015. On April 4, 2017 the Company and Dow amended the Purchase Agreement and the Tax Receivables Agreement pursuant to the Amendment Agreement and TRA Amendment, and entered into the Stock Buyback Agreement, each as described under Note 3 above.

The Company is also a party to ongoing agreements with Dow, including, but not limited to, operating-related agreements for certain transition services, seconded employees and occupancy. In connection with a transition services agreement entered into in connection with the Business Combination, the Company paid Dow a $5.0 million set-up fee which is being amortized from September 2015 through December 2017, which is the period during which the services are expected to be provided.

The Company incurred expenses for such services for the nine months ended September 30, 2017 and September 30, 2016 as follows:

(amounts in thousands)Nine Months Ended
September 30, 2017		Nine Months Ended
September 30, 2016
Amortization of prepayment related to set-up of transition services$620
$1,319
Ongoing costs of transition services agreement2,228
3,604
Rent expense693
951
Amortization of prepayment related to Dow importation services—
397
Other expenses379
835
Total incurred expenses$3,920
$7,106


As of September 30, 2017 and September 30,During 2016, the Company had an outstanding payable to Dow of $0.7 million and $2.5 million, respectively. See Notes 9 and 11 for other related party disclosures.

The Company hasmade a minority investment in RipeLocker, LCCLLC ("RipeLocker"), a company led by George Lobisser who was formerly a director of AgroFresh. On November 29, 2016,the Company. In February 2019, the Company entered intomade a Mutual Services Agreement (the “Services Agreement”) with George Lobisserfurther minority investment in RipeLocker. As of and RipeLocker, LLC. Pursuant tofor the Services Agreement, Mr. Lobisser is entitled to receive a consulting fee of $5,000 per full day for time spent performing consulting services under this Agreement (pro-rated for any partial day), plus reimbursement for out-of-pocket expenses. In February 2017, the Company and Mr. Lobisser agreed to substantially curtail any mutual consulting services to be provided under the Services Agreement, and that any further services would be provided at no charge. For the ninethree months ended September 30, 2017,March 31, 2022, there were no material amounts paid and as of September 30, 2017, there were no material amountsor owed to RipeLocker or Mr. Lobisser. Mr. Lobisser for consulting services.resigned as a director of the Company on February 18, 2021.


5.Inventories

4.Inventories
Inventories at September 30, 2017March 31, 2022 and December 31, 20162021 consisted of the following:
(in thousands)March 31, 2022December 31, 2021
Raw material$3,237$2,726
Work-in-process4,9563,746
Finished goods13,21912,520
Supplies945788
Total inventories$22,357$19,780


(in thousands)September 30,
2017		December 31, 2016
Raw material$1,143
$1,649
Work-in-process6,323
7,963
Finished goods8,694
5,132
Supplies792
723
Total inventories$16,952
$15,467
5.     Other Current Assets

6.Other Current Assets

The Company's other current assets at September 30, 2017March 31, 2022 and December 31, 20162021 consisted of the following:
(in thousands)March 31, 2022December 31, 2021
VAT receivable$12,371$10,220
Income tax receivable7,4616,256
Prepaid and other current assets3,7173,402
Total other current assets$23,549$19,878


(in thousands)September 30,
2017		December 31, 2016
VAT receivable$9,783
$9,306
Prepaid income tax asset2,066
1,910
Other2,470
2,831
Total other current assets$14,319
$14,047
6.Property and Equipment

7.Property and Equipment

Property and equipment at September 30, 2017March 31, 2022 and December 31, 20162021 consisted of the following:
(in thousands, except for useful life data)Useful life
(years)		March 31, 2022December 31, 2021
Buildings and leasehold improvements7-20$7,275$6,967
Machinery & equipment1-1213,80513,158
Furniture1-122,9422,927
Construction in progress1,1961,780
25,21824,832
Less: accumulated depreciation(13,519)(12,846)
Total property and equipment, net$11,699$11,986

(in thousands, except for useful life data)
Useful life
(years)
September 30,
2017		December 31,
2016
Leasehold improvements7-20$1,775
$1,463
Machinery & equipment1-127,105
6,066
Furniture1-12967
843
Construction in progress 1,463
781
  11,310
9,153
Less: accumulated depreciation (2,011)(1,105)
Total property and equipment, net $9,299
$8,048


Depreciation expense was $0.7 million for each of the three and nine months ended September 30, 2017 was $0.3 millionMarch 31, 2022 and $0.9 million, respectively.
Depreciation expense for the three and nine months ended September 30, 2016 was $0.2 million and $0.6 million, respectively.
2021. Depreciation expense is recorded in cost of sales, selling, general and administrative expense and research and development expense in the unaudited condensed consolidated statements of income (loss).operations.




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7.Goodwill and Intangible Assets

Changes in the carrying amount of goodwill for the year ended December 31, 2021 were as follows:
8.(in thousands)Intangible AssetsDecember 31, 2021
Beginning balance$6,925
Foreign currency translation
(545)
Impairment of goodwill(6,380)
Ending balance$—


As a result of the operating segment realignment discussed in Note 19 - Segment Information, the composition of the Company's reporting units for the evaluation of goodwill impairment has changed. Historically, the Company's reporting units were identified at the operating segment level, which consisted of AgroFresh Core and AgroFresh Fruit Protection and all of the Company's goodwill was assigned to the AgroFresh Fruit Protection reporting unit. Effective December 31, 2021, the Company concluded that it has 1 operating segment and 1 reporting unit, which resulted in the reassignment of its goodwill to its stand-alone reporting unit. Prior to the change, the Company tested goodwill for impairment at the previous reporting unit, which did not result in any impairment charge. Based upon the Company's impairment assessment at the new reporting unit (consolidated AgroFresh), the Company determined the carrying amount of the consolidated entity exceeded its fair value. As a result, the Company recorded $6.4 million in goodwill impairment charges during the year ended December 31, 2021.

The Company’s intangible assets at September 30, 2017March 31, 2022 and December 31, 20162021 consisted of the following:

March 31, 2022December 31, 2021
(in thousands)Gross Carrying
Amount		Accumulated
Amortization		NetGross Carrying
Amount		Accumulated
Amortization		Net
Intangible assets with finite lives:
Developed technology$798,640($303,707)$494,933$798,669($293,920)$504,749
Customer relationships19,583(7,242)12,34119,778(6,948)12,830
Software11,175(10,386)78910,992(10,235)757
Trade name3,576(1,073)2,5033,635(727)2,908
Other100(96)4100(92)8
Total intangible assets with finite lives833,074(322,504)510,570833,174(311,922)521,252
Intangible assets with indefinite lives:
Trade name23,400—23,40023,400—23,400
Service provider network2,000—2,0002,000—2,000
Total intangible assets with indefinite lives25,400—25,40025,400—25,400
Total intangible assets$858,474($322,504)$535,970$858,574($311,922)$546,652
 September 30, 2017 December 31, 2016
(in thousands)Gross Carrying AmountAccumulated AmortizationNet Gross Carrying AmountAccumulated AmortizationImpairmentNet
Other intangible assets:        
Developed technology$757,000
$(85,071)$671,929
 $757,000
$(55,623)$—
$701,377
In-process research and development39,000
(2,347)36,653
 39,000
(722)—
38,278
Trade name26,000
—
26,000
 35,500
—
(9,500)26,000
Service provider network2,000
—
2,000
 2,000
—
—
2,000
Customer relationships8,000
(722)7,278
 8,000
(472)—
7,528
Software1,200
(320)880
 660
(104)—
556
Software not yet placed in service3,974
—
3,974
 753
—
—
753
Other100
(21)79
 100
(8)—
92
Total intangible assets$837,274
$(88,481)$748,793
 $843,013
$(56,929)$(9,500)$776,584


At September 30, 2017, the weighted-average amortization period remaining for the finite-lived intangible assets was 17.6 years. At September 30, 2017,March 31, 2022, the weighted-average amortization periods remaining for developed technology, customer relationships, in-process R&D, software, trade name and other was 17.6, 21.9, 17.0, 3.3,13.2, 11.3, 2.2, 1.8 and 4.80.3 years, respectively.respectively, and the weighted-average amortization periods remaining for these finite-lived intangible assets was 13.1 years.


Estimated annual amortization expense for finite-lived intangible assets excluding amounts not placed in service, subsequent to September 30, 2017March 31, 2022 is as follows:
(in thousands)Amount
2022 (remaining)$31,783
202342,329
202440,729
202540,525
202640,286
Thereafter314,918
Total$510,570



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(in thousands)Amount
2017 (remaining)$10,518
201842,071
201942,052
202041,919
202141,814
Thereafter538,445
Total$716,819
Amortization expense for intangible assets was $10.7 million and $10.8 million for the three months ended March 31, 2022 and 2021, respectively.



9.Accrued and Other Current Liabilities

8.    Other Assets

The Company’s other assets at March 31, 2022 and December 31, 2021 consisted of the following:

(in thousands)March 31, 2022December 31, 2021
Right-of-use asset$7,831$6,258
Long-term sales-type lease receivable2,8922,860
Other long-term receivable2,1692,288
Total other assets$12,892$11,406

Other long-term receivable of $0.8 million was deemed uncollectible and was written off to other expense during the year ended December 31, 2021.

9.Accrued and Other Current Liabilities
The Company’s accrued and other current liabilities at September 30, 2017March 31, 2022 and December 31, 20162021 consisted of the following:


(in thousands)March 31, 2022December 31, 2021
Accrued taxes$10,491$8,267
Accrued compensation and benefits6,6228,227
Bank overdraft2,2741,612
Deferred revenue1,699635
Lease liability1,4001,624
Accrued rebates payable887756
Severance3831,259
Accrued interest7472
Other3,4474,542
Total accrued and other current liabilities$27,277$26,994

Other current liabilities include primarily professional services and research and development accruals.

10.Debt
(in thousands)September 30,
2017		December 31, 2016
Warrant consideration$—
$1,080
Tax amortization benefit contingency3,744
17,535
Working capital settlement—
17,000
Additional consideration due seller—
9,263
Dow settlement liability10,000
—
Accrued compensation and benefits7,628
6,352
Accrued rebates payable5,931
4,701
Insurance premium financing payable953
578
Severance412
1,564
Accrued taxes8,561
4,598
Other10,865
3,695
Total accrued and other current liabilities$48,094
$66,366

Refer to Note 3 regarding the contingent consideration owed to Dow as partThe Company’s debt, net of unamortized deferred issuance costs, at March 31, 2022 and December 31, 2021 consisted of the Business Combination.following:

(in thousands)March 31, 2022December 31, 2021
Total term loan outstanding$261,813$262,501
Unamortized deferred issuance costs(5,955)(6,434)
AgroFresh Fruit Protection loan outstanding1,3271,489
Less: Amounts due within one year3,3783,362
Total long-term debt due after one year$253,807$254,194
10.Debt


Amended Credit Facility


On July 31, 2015, in connection27, 2020, the Company completed a comprehensive refinancing (the “Refinancing”) by (i) entering into an Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with the consummationother loan parties party thereto, Bank of Montreal, as administrative agent and the lenders party thereto, and (ii) consummating the transactions contemplated by the Investment Agreement (as defined and described in Note 15 – Series B Convertible Preferred Stock and Stockholders’ Equity). The Amended

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Credit Agreement amends and restates in its entirety the Credit Agreement a subsidiary of the Business Combination,Company had with Bank of Montreal that was entered into on July 31, 2015.

The Amended Credit Agreement provides for a $25.0 million revolving credit facility (the “Amended Revolving Loan”), which matures on June 30, 2024, and a $275.0 million term credit facility (the “Amended Term Loan” and, together with the Amended Revolving Loan, the “Amended Credit Facility”), which matures on December 31, 2024. The Amended Credit Facility includes a $5.0 million swingline commitment and a $10.0 million letter of credit sub-limit. Loans under the Amended Term Loan bear interest at a rate equal to, at the Company’s option, either the Adjusted Eurodollar Rate for the interest period in effect for such borrowing plus an Applicable Rate of 6.25% per annum, or the Alternate Base Rate plus an Applicable Rate of 5.25% per annum. Loans under the Amended Revolving Loan bear interest at a rate equal to, at the Company’s option, the Adjusted Eurodollar Rate for the interest period in effect for such borrowing plus the Applicable Rate ranging from 6.25% to 6.0% per annum, based on certain ratios. The interest rate was 7.25% for the three months ended March 31, 2022. The Company is also required to pay a commitment fee on the unused portion of the Amended Revolving Loan at a rate ranging from 0.5% to 0.375%, based on certain ratios. The Company is required to make mandatory prepayments of outstanding indebtedness under the Amended Credit Agreement under certain circumstances. During the three months ended March 31, 2021, a prepayment of principal of $9.1 million was made.

The obligations of AgroFresh Inc. as the borrower and its parent, AF Solutions Holdings LLC (“AF Solutions Holdings”), a wholly-owned subsidiary of the Company as the guarantor, entered into a Credit Agreement with Bank of Montreal, as administrative agent (the “Credit Facility”). The Credit Facility consists of a $425 million term loan (the “Term Loan”), with an amortization equal to 1.00% per year, and a $25 million revolving loan facility (the “Revolving Loan”). The Revolving Loan includes a $10 million letter-of-credit sub-facility, issuances against which reduce the available capacity for borrowing. As of September 30, 2017, the Company has issued $0.5 million of letters of credit, against which no funds have been drawn. The Term Loan has a scheduled maturity date of July 31, 2021, and the Revolving Loan has a scheduled maturity date of July 31, 2019. The interest rates on borrowingsborrower under the facilities are either the alternate base rate plus 3.75% or LIBOR plus 4.75% per annum, with a 1.00% LIBOR floor (with step-downs in respect of borrowings under the Revolving Loan dependent upon the achievement of certain financial ratios). At September 30, 2017, the effective interest rate was 6.68%. The obligations under theAmended Credit Facility, are securedinitially guaranteed by liens on substantially all of the assets of (a)Company and the Company’s wholly-owned subsidiary, AF Solutions Holdings LLC (together with AgroFresh Inc. and its direct wholly-ownedthe Company, the “Loan Parties”) and may in the future be guaranteed by certain other domestic subsidiaries of the Company. The obligations of the Loan Parties under the Amended Credit Agreement and (b) AF Solutions Holdings, includingother loan documents are secured, subject to customary permitted liens and other agreed upon exceptions, by a perfected security interest in all tangible and intangible assets of the common stockLoan Parties, except for certain excluded assets, and equity interests of AgroFresh Inc.certain foreign subsidiaries of the Loan Parties held by the Loan Parties (subject to certain exclusions and limitations).


Certain restrictive covenants are contained inThe interest expense related to the amortization of the Amended Credit Facility whichdebt issuance costs during each of the Companythree months ended March 31, 2022 and 2021 was in compliance with as$0.5 million. As of September 30, 2017. The Credit Facility imposes an overall cap on the total amount of dividends the Company can pay, together with the total amount of shares and warrants the Company can repurchase, of $12March 31, 2022, there were $6.0 million per fiscal year, and imposes certain other conditions on the Company’s ability to pay dividends.

The Company’s debt, net of unamortized discounts and deferred financing fees, at September 30, 2017 and December 31, 2016 consisted of the following:issuance costs.

(in thousands)September 30,
2017		December 31,
2016
Total Term Loan outstanding$407,646
$408,246
Less: Amounts due within one year5,313
15,250
Total long-term debt due after one year$402,333
$392,996



At September 30, 2017,March 31, 2022, there was $261.8 million outstanding under the Amended Term Loan and no balance outstanding under the Amended Revolving Loan. At March 31, 2022, the Company evaluated the amount recorded under the Amended Term Loan and determined that the fair value was approximately $416.5$260.5 million. The fair value of the debt is based on quoted inactive market prices and is therefore classified as Level 2 within the fair valuevaluation hierarchy.


Certain restrictive covenants are contained in the Amended Credit Agreement, and the Company was in compliance with these covenants as of March 31, 2022.

AgroFresh Fruit Protection Debt

On March 23, 2020, AgroFresh Fruit Protection entered into a €1.0 million loan agreement with Banco Santander, S.A., which provides funding through March 2023 at a 1.5% interest rate. In May 2020, AgroFresh Fruit Protection entered into a €0.3 million loan agreement with BBVA, which provides funding through May 2025 at a 2.2% interest rate. In July 2020, AgroFresh Fruit Protection entered into a €0.6 million loan agreement with Banco Santander, S.A., which provides funding through July 2025 at a 2.5% interest rate.

Scheduled principal repayments of the Company's debt subsequent to March 31, 2022 are as follows:
(in thousands)Amount
2022 (remaining)$2,527
20233,092
2024257,242
2025279
Total$263,140

11.    Leases
The Term LoanCompany enters into lease agreements for certain facilities and vehicles that are primarily used in the ordinary course of business. These leases are accounted for as operating leases, whereby lease expense is presented net of deferred issuance costs, which are amortized using the effective interest methodrecognized on a straight-line basis over the term of the Term Loan. Gross deferred issuance costslease.

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Most leases include an option to extend or renew the lease term. The exercise of the renewal option is at the inception ofCompany's discretion. The operating lease liability includes lease payments related to options to extend or renew the Term Loan were $12.9 million and as of September 30, 2017 there were $8.9 million of unamortized deferred issuance costs.

Scheduled principal repayments under the Term Loan subsequent to September 30, 2017 are as follows:

(in thousands)Amount
2017 (remaining)$2,125
20184,250
20194,250
20204,250
2021401,625
Total$416,500

Beginning with the year ended December 31, 2016,lease term if the Company is required to prepay Term Loan Borrowings and Incremental Term Loan Borrowingsreasonably certain of exercising those options. The Company, in an aggregate amount equal to 50%determining the present value of lease payments, uses the Company’s incremental secured borrowing rate commensurate with the term of the Excess Cash Flow forunderlying lease.

Lease expense is primarily included in general and administrative expenses in the fiscal year; provided that such amountunaudited condensed consolidated statements of operations. Additional information regarding the Company's operating leases is as follows:

Three Months Ended March 31,
(in thousands)20222021
Operating Lease Cost
Operating leases$502$555
Short-term leases (1)
87190
Total lease expense$589$745
(1)    Leases with an initial term of twelve months or less are not recorded on the balance sheet.

Other information on operating leases:
Three Months Ended March 31,
20222021
Cash payments included in operating cash flows$487$601
Right-of-use assets obtained in exchange for new lease$2,757$123
Weighted average discount rate7.69 %8.77 %
Weighted average remaining lease term in years6.3 years4.5 years

The following table presents the contractual maturities of the Excess Cash Flow in any fiscal year shall be reduced by (i) the aggregate amount of prepayments of Term Loans and Incremental Term Loans made, (ii) to the extent accompanied by permanent reductions of Revolving Commitments, the aggregate amount of prepayments of Revolving Loans (other than prepayments financed with the proceeds of Indebtedness), (iii) repaid borrowings of Revolving Loans made on the Effective Date to account for any additional original issue discount or upfront fees that are implemented pursuant to the Fee Letter and (iv) the aggregate amount of cash dividends paid by the Company or Holdings to Holdings or Boulevard for the payment of the Seller Earnout; provided further that, prepayments of Term Loan Borrowings and Incremental Term Loan Borrowings shall only be required if 50% of the Excess Cash Flow for such fiscal year exceeds $5 million. The amount due under this provision for the year ended December 31, 2016 was originally estimated to be $11.0 million, but it was subsequently determined that no amount was payable for such year. There are no amounts due under this provisionCompany's lease liabilities as of September 30, 2017.March 31, 2022.


At September 30, 2017, there was $416.5 million outstanding under the Term Loan and no balance outstanding under the Revolving Loan.
(in thousands)Lease Liability
Remainder of 2022$1,515
20231,748
20241,507
20251,326
20261,226
Thereafter2,879
Total undiscounted lease payments10,201
Less: present value adjustment2,092
Operating lease liability$8,109


In July 2015, the Company incurred approximately $12.9 million in debt issuance costs related to the Term Loan and $1.3 million in costs related to the Revolving Loan. The debt issuance costs associated with the Term Loan were capitalized against the principal balance of the debt, and the Revolving Loan costs were capitalized in
12.Other Assets. All issuance costs will be accreted through interest expense for the duration of each respective debt facility. The interest expense related to the amortization of the debt issuance costs during the three and nine months ended September 30, 2017 was approximately $0.6 million and $1.8 million, respectively.Noncurrent Liabilities

11.Other Noncurrent Liabilities

The Company’s other noncurrent liabilities at September 30, 2017March 31, 2022 and December 31, 20162021 consisted of the following:
(in thousands)March 31, 2022December 31, 2021
Lease liability$6,709$4,790
Other (1)
1,4091,466
Total other noncurrent liabilities$8,118$6,256


(1) Other noncurrent liabilities include long-term rebates and pension liabilities.


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(in thousands)September 30,
2017		December 31, 2016
Tax amortization benefit contingency$65,855
$132,724
Deferred payment—
2,498
Other4,542
5,611
Total other noncurrent liabilities$70,397
$140,833
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13.    Severance




12.Severance

ThereSeverance expense was $0.2$0.1 million and $0.3$0.02 million severance expense for the three and nine months ended September 30, 2017,March 31, 2022 and 2021, respectively. For the three and nine months ended September 30, 2016, there was $1.2 million and $2.6 million of severance expense, respectively. This amount,These amounts, which doesdo not include stock compensation expense, waswere recorded in selling, general and administrative expense in the unaudited condensed consolidated statements of income (loss).operations. As of September 30, 2017,March 31, 2022 and December 31, 2021, the Company had $0.6$0.4 million and $1.3 million of severance liability, respectively.

14.     Redeemable Non-Controlling Interest ("NCI")

On November 7, 2017, the Company entered into a definitive agreement to acquire a controlling-interest in AgroFresh Fruit Protection. The transaction was closed on December 1, 2017. At the effective date of the acquisition, the Company acquired 75% of the outstanding capital stock of AgroFresh Fruit Protection. In connection with the acquisition of AgroFresh Fruit Protection, the Company concurrently entered into option agreements ("Option Agreement") with the Seller related to the remaining 25% equity interest. The Option Agreement permits the residual interest to be "put" by the Seller to the Company, or to allow the Company to "call" the residual interest gradually over time as outlined in the agreement. The Seller's ownership of AgroFresh Fruit Protection represents a NCI to the Company, which is classified outside of stockholders' equity as the option of the Seller is redeemable. As of March 31, 2022 the carrying amount of the NCI was $7.7 million in the unaudited condensed consolidated balance sheet. Any changes in the redemption value of the NCI are included as an adjustment to Additional paid-in capital on the balance sheet.

The following table summarizes the changes to the Company's redeemable NCI.
(in thousands)March 31, 2022December 31, 2021
Beginning balance($7,787)($8,446)
Net loss attributable to redeemable non-controlling interest822,258
Adjustment of NCI to redemption value—(1,599)
Ending balance($7,705)($7,787)

15.    Series B Convertible Preferred Stock and Stockholders’ Equity
Series B Convertible Preferred Stock
On June 13, 2020, the Company entered into an Investment Agreement (the “Investment Agreement”) with PSP, an affiliate of Paine Schwartz Partners, LLC, pursuant to which, subject to certain closing conditions, PSP agreed to purchase in a private placement an aggregate of $150,000,000 of convertible preferred equity of the Company. The transaction closed on July 27, 2020 (the "Closing Date"), and a total of 150,000 shares of the Company’s newly-designated Series B-1 Convertible Preferred Stock, par value $0.0001 per share (the “Series B-1 Preferred Stock”), were purchased in such transaction (the “Private Placement”). On September 22, 2020, following the approval of the transactions contemplated by the Investment Agreement by the necessary regulatory body, the Company issued to PSP, for no additional consideration, a total of 150,000 shares of the Company’s newly-designated Series B-2 Convertible Preferred Stock, par value $0.0001 per share (the “Series B-2 Preferred Stock”). On September 25, 2020 (the "Exchange Date"), PSP elected to exchange the shares of the Company’s Series B-1 Convertible Preferred Stock and Series B-2 Preferred Stock held by it for a total of 150,000 shares of the Company’s newly-designated Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”). 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, to PSP and all of the shares of Series B-1 Preferred Stock and Series B-2 Preferred Stock held by PSP were cancelled. No shares of Series B-1 Preferred Stock or Series B-2 Preferred Stock were outstanding as of March 31, 2022.

The Series B Preferred Stock ranks senior to the shares of the Company’s common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Series B Preferred Stock has a liquidation preference of $1,000 per share (the “Stated Value”). Holders of the Series B Preferred Stock are entitled to a cumulative dividend at a rate of 16% per annum, of which $0.450% was payable in cash and 50% was payable in kind until the first anniversary of the Closing Date, after which 50% is payable in cash, 37.5% is payable in kind, and the remaining 12.5% is payable in cash or in kind, at the Company’s option, subject in each case to adjustment under certain circumstances. Dividends on the Series B Preferred Stock are cumulative and payable quarterly in arrears. All dividends that are paid in kind will accrete to, and increase, the Stated Value. The applicable dividend rate is subject to increase by 2% per annum during any period that the Company is in breach of certain provisions of the Certificate of Designation of the Series B Preferred Stock. The Series B Preferred Stock has been classified as temporary equity as it may be contingently redeemable in the event of a change of control, which is outside of the Company's control.

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Associated with the Series B Preferred Stock, the Company paid dividends of $2.4 million in kind and $4.0 million in cash during the three months ended March 31, 2022. The Company paid dividends of $3.0 million in kind and $3.0 million in cash during the three months ended March 31, 2021 associated with the Series B Preferred Stock. As of March 31, 2022 and December 31, 2021, the Company had no accrued dividends.

The Series B Preferred Stock is convertible into Common Stock at the election of the holder at any time at an initial conversion price of $5.00 (“Conversion Price”). The Conversion Price is subject to customary adjustments, including for stock splits and other reorganizations affecting the Common Stock and pursuant to certain anti-dilution provisions for below market issuances. As of March 31, 2022 and December 31, 2021, the maximum number of shares of common stock that could be issued upon conversion of the outstanding shares of Series B Preferred Stock was 32.7 million and 32.2 million shares, respectively.

During the three months ended March 31, 2021, the Company redeemed 4,954 shares of Series B Preferred Stock for $5.3 million. The below table outlines the change in Series B Preferred Stock during the three months ended March 31, 2022 and the year ended December 31, 2021.
Series B Convertible Preferred Stock
(in thousands)SharesAmount
Balance at December 31, 2020150 $143,728
Redemption of shares(5)(5,330)
In kind dividend— 10,988
Balance at December 31, 2021145 149,386
In kind dividend— 2,414
Balance at March 31, 2022145 $151,800

In connection with the consummation of the Investment Agreement, the Company and PSP entered into a Registration Rights Agreement (as amended, the “Registration Rights Agreement”), dated as of July 27, 2020. The Registration Rights Agreement provides that the Company will use its commercially reasonable efforts to prepare and file a shelf registration statement with the SEC within 30 days following a written request by PSP, and will use its commercially reasonable efforts to cause such shelf registration statement to be paid out overdeclared effective as promptly as is reasonably practicable after its filing to permit the next year.public resale of registrable securities covered by the Registration Rights Agreement. The registrable securities generally include any shares of the Company’s common stock into which the Series B Preferred Stock is convertible, and any other securities issued or issuable with respect to any such shares of common stock by way of share split, share dividend, distribution, recapitalization, merger, exchange, replacement or similar event or otherwise.


Common Stock
13.Stockholders’ Equity


The authorized common stock of the Company consists of 400,000,000400 million shares with a par value of $0.0001 per share. Holders of the Company’s common stock are entitled to one1 vote for each share of common stock. As of September 30, 2017,March 31, 2022, there were 50,340,014approximately 52.6 million shares of common stock outstanding. As of September 30, 2017, there were warrants to purchase 15,983,072 shares of the Company’s common stock outstanding at a strike price of $11.50. Of the 15,983,072 warrants, 9,823,072 were issued as part of the units sold in the Company's initial public offering in February 2014 and 6,160,000 warrants were sold in a private placement at the time of such public offering.


In connection with and as a condition to the consummation of the Business Combination, theSeries A Preferred Stock

The Company issued Rohm and Haas onehas 1 share of Series A Preferred Stock. Rohm and Haas,Stock outstanding, which is owned by R&H. R&H, voting as a separate class, is entitled to appoint one1 director to the Company’s board of directors for so long as Rohm and HaasR&H beneficially holds 10% or more of the aggregate amount of the outstanding shares of common stock and non-voting common stock of the Company. The Series A Preferred Stock has no other rights.


16.Stock-based Compensation
The Company's stock-based compensation is in accordance with the Company's amended 2015 Incentive Compensation Plan (the “Plan”), pursuant to which the Compensation Committee of the Company is authorized to grant up to 13.65 million shares to officers and employees of the Company, in the form of equity-based awards, including time or performance based options and restricted stock. In addition, the Company may grant cash-settled awards, including stock-appreciation rights (SARs) and phantom stock awards.


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14.Stock-based Compensation

In June 2019, the Company's shareholders approved the 2019 Employee Stock Purchase Plan (the "ESPP"), which was effective July 1, 2019. In August 2021, the number of shares reserved for issuance under the ESPP was increased to 1.25 million. The ESPP allows eligible employees to purchase shares of common stock at a discount of up to 15% through payroll deductions of their eligible compensation, subject to any plan limitations. The ESPP provides for six-month offering periods beginning January 1 and July 1 of each year, and each offering period consists of a six-month purchase period. On each purchase date, eligible employees may purchase the Company's common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the common stock on the offering date or (2) the fair market value of the common stock on the purchase date. As of March 31, 2022, 468,384 shares had been issued under the ESPP.

Stock compensation expense for both equity-classified and liability-classified awards was $1.0 million and $0.9 million for the three and nine months ended September 30, 2017 was $0.5 millionMarch 31, 2022 and $1.7 million, respectively. Stock compensation expense for both equity-classified and liability-classified awards for the three and nine months ended September 30, 2016 was $1.3 million and $3.2 million,2021, respectively. Stock compensation expense is recognized in cost of goods sold, selling, general and administrative expenses and research and development expenses. At September 30, 2017,March 31, 2022, there was $5.0 million of unrecognized compensation cost relating to outstanding unvested equity instruments expected to be recognized over the weighted average period of 2.031.8 years.



15.Earnings Per Share

Basic income17.Earnings Per Share
The Company computes (loss) earnings per share ("EPS") using the two-class method. The two-class method is calculatedan earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. The outstanding shares of Series B Preferred Stock are participating securities because holders have non-forfeitable dividend rights and participate in undistributed earnings with common stock.

Basic EPS was computed by dividing net (loss) income (loss) allocable to common stockholders, after deducting undistributed earnings allocated to participating securities,by the weighted averageweighted-average number of shares of common shares outstandingstock outstanding.

For the calculation of diluted EPS, net income for basic EPS is adjusted by the period. In computingeffect of dilutive securities. Diluted EPS attributable to common stockholders is computed by dividing the resulting net income (loss) per share,for basic income (loss) per share isEPS adjusted by the effect of dilutive preferred stock by the weighted-average number of shares adjusted for the assumed issuanceeffect of all potentially dilutive share-basedshares. The Company also applied the if-converted method to calculate dilution on the Series B Preferred Stock, which resulted in 31.0 million additional shares. This calculation was anti-dilutive.

The Company had a net loss for the three months ended March 31, 2022. Therefore, the effect of stock-based awards including stock options, restricted stock and warrants.restricted stock units outstanding at March 31, 2022 were excluded in the computation of diluted loss per share because their inclusion would have been anti-dilutive.


The following is a reconciliation of the weighted-average common shares outstanding used fortable sets forth the computation of basic and diluted net income (loss) perEPS of common share:stock for the three months ended March 31, 2022 and 2021:


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 Three Months Ended
September 30, 2017		Three Months Ended
September 30, 2016		 Nine Months Ended
September 30, 2017		Nine Months Ended
September 30, 2016
Basic weighted-average common shares outstanding49,676,923
49,567,735
 49,852,337
49,385,733
Effect of dilutive options, performance stock units and restricted stock492,511
60,065
 282,254
—
Dilute weighted-average shares outstanding50,169,434
49,627,800
 50,134,591
49,385,733
Three Months Ended March 31,
(in thousands, except per share data)20222021
Basic (loss) earnings per share:
NumeratorNet (loss) income attributable to common stockholders($9,523)$2,418
Less: Net income allocable to participating preferred stock—914
Net (loss) income allocable to common stockholders(9,523)1,504
DenominatorWeighted average number of common stock outstanding51,736 51,031 
Basic (loss) earnings per share:($0.18)$0.03 
Diluted (loss) earnings per share:
NumeratorNet (loss) income allocable to common stockholder($9,523)$1,504
DenominatorWeighted average number of shares
Common stock outstanding51,736 51,031 
Dilutive effect of restricted stock and restricted stock units— 1,265 
Weighted number of shares used for diluted (loss) earnings per share51,736 52,296 
Diluted (loss) earnings per share($0.18)$0.03 


SecuritiesThe following represents the weighted average number of shares that could potentially be dilutive are excluded from the computation of diluteddilute basic earnings per share when a lossin the future:
Three Months Ended March 31,
(in thousands)20222021
Convertible preferred stock32,186 — 
Stock-based compensation awards(1):
Stock options1,507 800 
Restricted stock awards and restricted stock units3,668 22 
(1) SARs and Phantom stocks are payable in cash and will therefore have no impact on number of shares.

18.Income Taxes
The provision for income taxes consists of provisions for federal, state and foreign income taxes. The effective tax rates for the periods ended March 31, 2022 and March 31, 2021, reflect the Company’s expected tax rate on reported income (loss) from continuing operations exists or whenbefore income tax and tax adjustments. The Company operates in a global environment with significant operations in the exercise price exceedsU.S. and various other jurisdictions outside the average closing priceU.S. Accordingly, the consolidated income tax rate is a composite rate reflecting the Company’s earnings and the applicable tax rates in the various jurisdictions where the Company operates.

The Company's U.S. operations have incurred cumulative taxable losses through March 31, 2022. The Company’s U.S. net operating loss carry forwards and carry forwards of other tax attributes are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. The utilization of the Company's common stock during the period,tax attributes have become restricted because their inclusion would result in an anti-dilutive effect on per share amounts.

The following amounts were not includedof certain cumulative changes in the calculationownership interest of netsignificant shareholders over a three-year period in excess of 50%, as defined under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, as well as similar state tax provisions. This limits the amount of the tax attributes that the Company can utilize annually to offset future taxable income (loss) per diluted share because their effects were anti-dilutive:

(in thousands, except share data)Three Months Ended
September 30, 2017		Three Months Ended
September 30, 2016		 Nine Months Ended
September 30, 2017		Nine Months Ended
September 30, 2016
Stock-based compensation awards(1):
     
Stock options577,500
584,375
 577,500
584,375
Warrants:     
Private placement warrants6,160,000
6,160,000
 6,160,000
6,160,000
Public warrants9,823,072
9,823,072
 9,823,072
9,823,072

———————————————————————————————
(1)SARs and Phantom Shares are payable in cash and will, therefore, have no impact on numberor tax liabilities. The amount of shares.

Warrants and options are considered anti-dilutive and excluded when the exercise price exceedsannual limitation, if any, was determined based on the average market value of the Company’s common stock price duringCompany immediately prior to the applicable period. Performance share units are considered anti-dilutive ifownership change. Subsequent ownership changes may further affect the performance targets upon whichlimitation in future years. Please refer to Note 3 - Related Party Transactions regarding the issuance ofownership change in the shares is contingent have not been achieved and the respective performance period has not been completed as of the end of the current period.

16.Income Taxes

The effective tax rate for the three and nine monthsquarter ended September 30, 2017 was 27.6%2020. The Company completed a Section 382 study and 101.1%, respectively, compareddetermined the ownership change gave rise to the effectiverestrictions that will limit the realizability of certain U.S. tax rate for

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attributes and built-in losses related to future intangible amortization tax deductions. These limitations apply to the threecorresponding tax attributes and nine months ended September 30, 2016 of 39.0% and 37.9%, respectively.built-in losses incurred before the ownership change.


The effective tax rate for the three months ended September 30, 2017March 31, 2022 differs from the USU.S. statutory tax rate of 35%21%, primarily due tobecause of foreign exchange currency gains and losses and certain intercompany transactions that did not have a tax effect.

non-taxable items. The Company's effective tax rate for the three months ended March 31, 2022 was 4.9%, compared to the effective tax rate for the three months ended March��31, 2021 of 18.2%.

19.Segment Information
ASC 280 requires use of the management approach for segment reporting. The management approach is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Through the nine months ended September 30, 2017 differs from31, 2021, the US statutory tax rateCompany had operated and managed our business as 2 reportable segments, AgroFresh Core and AgroFresh Fruit Protection (formerly Tecnidex). Due to changes in senior management, as well as the integration of 35% due toAgroFresh Fruit Protection with the releaseCompany's Core business operational and reporting structure, during the fourth quarter of 2021, the valuation allowance related to net deferred tax assetsCompany determined that it has 1 reportable segment as of December 31, 2021. Since the Company operates in 1 operating segment, all required financial segment information can be found in the U.S. tax jurisdiction. There were a series of tax adjustments as a result of the April 2017 settlement with Dow that resulted in $40.0 million additional U.S. deferred tax liabilities. The reduction of the Company's obligations to Dow on the balance sheet impacted purchase price consideration, ultimately decreasing the Company’s intangible’s tax basis determined for ASC 740 purposes. The Company considered these future sources of taxable income as additional positive evidence when concluding the deferred tax assets within the U.S. were more likely than not to be realizedunaudited condensed consolidated financial statements.

20.Commitments and reversed a valuation allowance of $15.4 million.

17.Commitments and Contingencies

Contingencies
The Company is currently involved in various claims and legal actions that arise in the ordinary course of business. The Company has recorded reserves for loss contingencies based on the specific circumstances of each case. Such reserves are recorded when it is probable that a loss has been incurred as of the balance sheet date and can be reasonably estimated. Although the results of litigation and claims can never be predicted with certainty, the Company does not believe that the ultimate resolution of these actions will have a material adverse effect on the Company’s business, financial condition or results of operations.


On October 14, 2019, the Company was awarded a verdict of $31.1 million in damages, related to, among other things, trade secret misappropriation and willful patent infringement, in its litigation against Decco Post-Harvest, Inc. ("Decco") and Decco's parent company, UPL Limited. The award was subsequently reduced by $18 million in connection with post-verdict review by the Court. During the three months ended March 31, 2021, the lawsuit was settled, paid and is considered closed.
Purchase Commitments

The Company has various purchasing contracts for contract manufacturing and research and development services which are based on the requirements of the business. Generally, the contracts are at prices not in excess of current market pricesprice and do not commit the business to obligations outside the normal customary terms for similar contracts.contracts, and these payment obligations are considered insignificant.


18.
21.    Fair Value Measurements

Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the fair value of the Company’sCompany's financial instruments that are measured at fair value on a recurring basis as of September 30, 2017:March 31, 2022.

(in thousands)Level 3
Liability-classified stock compensation (1)
$275
(in thousands)Level 1Level 2Level 3Total
Tax amortization benefit contingency(2)
—
—
69,599
69,599
Deferred acquisition payment(3)
—
—
624
624
Stock appreciation rights(4)
—
—
57
57
Phantom shares(5)
—
—
32
32
Total$—
$—
$70,312
$70,312


The following table presents the fair value of the Company’sCompany's financial instruments that are measured at fair value on a recurring basis as of December 31, 2016:2021.

(in thousands)Level 3
Liability-classified stock compensation (1)
$241

(1) The fair values of performance-based phantom shares granted in 2020 were estimated using a Monte Carlo simulation pricing model with the assumptions described below:

20

(in thousands)Level 1Level 2Level 3Total
Warrant consideration(1)
$—
$1,080
$—
$1,080
Tax amortization benefit contingency(2)
—
—
150,260
150,260
Deferred acquisition payment(3)
—
—
2,498
2,498
Stock appreciation rights(4)
—
—
22
22
Phantom shares(5)
—
—
4
4
Total$—
$1,080
$152,784
$153,864

———————————————————————————————
(1)This liability relates to warrants to purchase the Company's common stock and future obligations to deliver additional such warrants in relation to the Business Combination. The inputs used in theGrant date fair value measurement were directly observable quoted prices for identical assets in an inactive market. Refer to Note 3 for additional details.
$1.70
(2)Risk-free interest rateThe fair value of the tax amortization benefit contingency is measured using an income approach based on the Company's best estimate of the undiscounted cash payments to be made, tax effected at 37% and discounted to present value utilizing an appropriate market discount rate. The valuation technique used did not change during the nine months ended September 30, 2017. Refer to Note 3 for additional details.0.27%
(3)Expected life (years)The fair value of the deferred acquisition payment is measured using a Black-Scholes option pricing model and based on the Company's best estimate of the Company's average Business EBITDA, as defined in the Purchase Agreement (as defined in Note 3), over the two year period from January 1, 2016 to December 31, 2017. The valuation technique used did not change during the nine months ended September 30, 2017.2.71

(4)Estimated volatility factorThe fair value of the stock appreciation rights were measured using a Black Scholes pricing model during the nine months ended September 30, 2017. The valuation technique used did not change during the nine months ended September 30, 2017.65.8%
(5)Expected dividendsThe fair value of phantom shares are based on the fair value of the Company's common stock. The valuation technique used did not change during the nine months ended September 30, 2017.None


There were no transfers between Level 1 and Level 2 and no transfers out of Level 3 of the fair value hierarchy during the ninethree months ended September 30, 2017.March 31, 2022.

At September 30, 2017,March 31, 2022, the Company evaluated the amount recorded under the Amended Term Loan and determined that the fair value was approximately $416.5$260.5 million. The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value.


Changes in Financial Instruments Measured at Level 3 Fair Value on a Recurring Basis

The following table presents the changes during the periodperiods presented in our Level 3 financial instruments that are measured at fair value on a recurring basis. These instruments relate to contingent consideration payable to Dow in connection to the Business Combination.

(in thousands)Tax amortization benefit contingencyDeferred acquisition paymentStock appreciation rightsPhantom sharesTotal
Balance, December 31, 2016$150,260
$2,498
$22
$4
$152,784
Awards granted—
—
—
—
—
Settlement of Dow liabilities(86,931)—
—
—
(86,931)
Accretion7,297
—
—
—
7,297
Mark to market adjustment(1,027)(1,874)35
28
(2,838)
Balance, September 30, 2017$69,599
$624
$57
$32
$70,312

(in thousands)Liability-classified stock compensation
Balance, December 31, 2021$241
 Stock compensation activity34 
19.Balance, March 31, 2022Subsequent Events$275

On November 7, 2017,
22.    Other Income

During the three months ended March 31, 2022, the Company entered into a definitive agreementhad other income of $0.5 million which related primarily to acquire a controlling-interest in Tecnidex Fruit Protection, S.A.U. ("Tecnidex"). Tecnidex, a privately-held international company, is a leading providerthe receipt of post-harvest fungicides, waxes, and biocides for the citrus market, with clients in 18 countries. For over 35 years, Tecnidex has been helping fruit and vegetable producers offer clean, safe and high-quality products to its regional clients.

The purchase price is approximately €22.5 million (or approximately $26.1 million based on the exchange rate as of November 7, 2017), subject to customary purchase price adjustments, payable in cash.data sharing income. The Company expects to fundhad other income of $14.4 million during the acquisition with cash on hand, and following the acquisition the Company will own 75 percent of the outstanding Tecnidex shares. The Company has an option to purchase the remaining shares over time. The acquisition will be treated as a business combination.

Duethree months ended March 31, 2021 related primarily to the timingreceipt of the acquisition, the Company has not yet completed its initial accounting analysis. As a result, the Company is unable to provide amounts recognized as of the acquisition date for major classes of assets and liabilities acquired and resultingproceeds from the transaction including any intangible assets or goodwill. The transaction is expected to close as soon as the fourth quartersettlement of 2017.a litigation matter.




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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), the terms “Company,” “AgroFresh,” “we,” “us” and “our” refer to AgroFresh Solutions, Inc. and its consolidated subsidiaries, unless the context otherwise requires or it is otherwise indicated.


The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Report.


This MD&A contains the financial measuremeasures EBITDA and Adjusted EBITDA, which isare not presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”("GAAP"). ThisThese non-GAAP financial measure ismeasures are being presented because management believes that it providesthey provide readers with additional insight into the Company’s operational performance relative to earlier periods and relative to its competitors. EBITDA is acompetitors and they are key measuremeasures used by the Company to evaluate its performance. The Company does not intend for thisthese non-GAAP financial measuremeasures to be a substitute for any GAAP financial information. Readers of this MD&A should use thisthese non-GAAP financial measuremeasures only in conjunction with the comparable GAAP financial measure.measures. A reconciliation of EBITDA and Adjusted EBITDA to the most comparable GAAP measure is provided in this MD&A.


Note Regarding Forward-Looking Statements

All statements other than statements of historical fact included in this Report including, without limitation, statements in this MD&A regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to the Company or its management, identify forward looking statements. Such forward looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, management. Actual results and/or the timing of events could differ materially from those contemplated by these forward-looking statements due to a number of factors, including those discussed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 20162021 (the "2016"2021 Form 10-K") as well as the update to those Risk Factors disclosed in Part II, Item 1A of this Report. Any forward-looking statements included in this Report are based only on information currently available to the Company bandand speak only as of the date on which such statements are made. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are qualified in their entirety by this paragraph.


Business Overview

AgroFresh is a global leader in delivering innovative food preservation and waste reduction solutions for fresh produce. The Company is empowering the food industry with a range of integrated solutions designed to help growers, packers and retailers improve produce freshness and quality while reducing waste. AgroFresh has key products registered in over 50 countries, and supports customers by protecting approximately 25,000 storage rooms globally. AgroFresh's solutions range from near-harvest with Harvista™ and LandSpring™ to its flagship post-harvest SmartFresh™ Quality System. Additional post-harvest freshness solutions include fungicides that can be applied to meet various customer operational requirements, in either a foggable (ActiMist™) or liquid (ActiSeal™) delivery form. To supplement our near- and post-harvest product solutions, our FreshCloud™ digital technology platform includes analytical, diagnostic and tracking services that provide a range of value-added capabilities to help customers optimize the quality of their produce. Beyond apples, SmartFresh technology can provide ready-to-eat freshness for other fruits and vegetables including avocados, bananas, melons, tomatoes, broccoli and mangos.

In December 2017, AgroFresh acquired a controlling interest in AgroFresh Fruit Protection (formerly known as Tecnidex). With this acquisition, AgroFresh expanded its industry-leading post-harvest presence into additional crops and increased its penetration of the produce market in southern Europe, Latin America and Africa. For over 35 years, AgroFresh Fruit Protection has been helping fruit and vegetable producers offer clean, safe and high-quality products to customers in 18 countries. AgroFresh Fruit Protection offers a portfolio of post-harvest fungicides, coatings and disinfectants, packinghouse equipment and associated consulting and after-sale services to improves the quality and value of customers’ fruit and vegetables while respecting the environment. AgroFresh Fruit Protection further diversified AgroFresh’s revenue by allowing the Company to provide solutions and service to the citrus industry.

Freshness is the most important driver of consumer satisfaction when it comes to produce and, at the same time, food waste is a major issue in the industry. About one thirdone-third of the total food produced worldwide is lost or wasted each year. Nearly 45 percent50% of all

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fresh fruits and vegetables 40 percent of apples and 20 percent of bananas, are lost to spoilage. AgroFresh plays a key role in the value chain by offering products and services that maintain produce freshness and reduce waste.


At the core of theAgroFresh’s flagship SmartFresh Quality SystemSM is AgroFresh’s principal product, SmartFresh, which regulates the post-harvest ripening effects of ethylene, the naturally occurring plant hormone that triggers ripening in certain fruits and vegetables. SmartFresh isdegrades naturally, biodegradable, leaves no detectable residue and has been approved for use by many domestic and global regulatory organizations. Harvista extends the Company’s proprietary technology into pre-harvestthe field, including treatment of cherries early in the growing season and near-harvest management of pome fruit such as apples, pears and pears. StoreEdgeTM blueberries. FreshCloud™ is our digital technology services platform, which continues to expand. Launched in 2020, FreshCloud Quality Inspection is a proprietary cloud-based mobile quality management service that digitizes what was formerly a manual quality control process and AdvanStoreTM are atmospheric monitoring systems that leverage the Company’s extensive understanding of fruit physiology, fruit respiration, current controlled atmosphere technology,captures, organizes and new proprietary diagnostic tools to provide improved andanalyzes quality metrics in real time guidance to producers and packers of fresh produce regarding storage conditions so corrective measures can be made on a more timely basis.

Beyond the SmartFresh Quality System, RipeLockTM combines the technology behind SmartFresh with modified atmosphere packaging designed specifically to preserve quality during transportation and to extend the yellow shelf life of bananas and other fruits. LandSpringTMtime. LandSpring™ is an innovative 1-MCP technology fortargeted to transplanted vegetable seedlings thatseedlings. It is currently registered for use on tomatoes, peppers and 14 other crops in the U.S. (except California), most notably tomatoes and peppers.US. It reduces transplant shock, resulting in less seedling mortality and faster crop establishment, which leads to a healthier crop and improved yields. EthylBlocTM technology is an ethylene action inhibitor that works naturally with flowers and plants to keep them fresh during shipping and distribution. The negative effects of ethylene have been estimated by the industry to cause up to 30 percent of losses among all flowers and plants.

AgroFresh’s business is highly seasonal, driven by the timing of the apple and pear harvests in the northern and southern hemispheres. The first half of the year is when the southern hemisphere harvest occurs, and the second half of the year is when the northern hemisphere harvest occurs. Since the northern hemisphere harvest of our two core crops of apples and pears is typically larger, a significant portion of our sales and profits are historically generated in the second half of the year. In addition to this seasonality, factors such as weather patterns may impact the timing of the harvest within the two halves of the year.

AgroFresh is a former blank check company that completed its initial public offering on February 19, 2014. Upon the closing of the Business Combination with Dow on July 31, 2015, the Company changed its name to AgroFresh Solutions, Inc. The Company paid Dow cash consideration of $635 million and issued Dow 17.5 million shares of common stock at a deemed value of $12 per share. The transaction included a liability to Dow to deliver a variable number of warrants between the closing and April 2016, which obligation was terminated pursuant to a letter agreement entered into on April 4, 2017. The cash consideration was funded through our initial public offering, a term loan, and a private placement of 4.9 million shares of common stock that yielded $50 million of proceeds. The transaction also has an earn-out feature whereby Dow is entitled to receive a deferred payment of $50 million in March 2018 if AgroFresh achieves a specified average level of Business EBITDA (as defined in the Stock Purchase Agreement related to the Business Combination) over 2016 and 2017. In addition, pursuant to a tax receivables agreement entered into in connection with the Business Combination, Dow was originally entitled to receive 85% of the tax savings, if any, that the Company realizes as a result of the increase in the tax basis of assets acquired pursuant to the Business Combination. Pursuant to an amendment to the tax receivables agreement entered into on April 4, 2017, the percentage was reduced from 85% to 50% for all tax years ending after December 31, 2015.

In connection with the closing of the Business Combination, AgroFresh entered into a transition services agreement with Dow. Under the agreement, Dow provides AgroFresh a suite of services for a period of time ranging from six months to five years depending on the service. However, the Company expects to terminate these services by December 31, 2017. The agreement also provided for a $5 million execution fee that was paid to Dow at the closing of the Business Combination.

Recent Development

On November 7, 2017, AgroFresh signed a definitive agreement to acquire a controlling-interest in Tecnidex, a leading provider of post-harvest fungicides, waxes, and biocides for the citrus market. With this acquisition, AgroFresh expands its industry-leading post-harvest presence into additional crops, and increases its penetration of the produce market in southern Europe, Latin America and Africa.

For over 35 years, Tecnidex has been helping fruit and vegetable producers offer clean, safe and high-quality products to its regional clients in 18 countries. Through its portfolio of post-harvest products, technology, consulting, and after-sale services, Tecnidex improves the quality and value of its clients’ fruit and vegetables while respecting the environment. Tecnidex is based in Valencia, Spain.

Factors Affecting the Company’s Results of Operations

The Company’s results of operations are affected by a number of external factors. Some of the more important factors are briefly discussed below.


Impact of COVID-19

In March 2020, the COVID-19 outbreak was declared a National Public Health Emergency which continues to spread throughout the world and has adversely impacted global activity and contributed to significant volatility in financial markets. The outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. During the three months ended March 31, 2022, the COVID-19 pandemic did not have a significant adverse impact on our results of operations. However, there were numerous obstacles presented and some localized financial impacts of the pandemic, including fluctuations in foreign currency exchange rates and customer demand and spending pattern changes. While the Company is following the requirements of governmental authorities and taking additional preventative and protective measures to ensure the safety of its workforce, including implementing remote working arrangements and varying procedures for essential workforce, we cannot be 100% certain that there will not be any incidents across our global operations that may cause service interruptions. The rapid development and fluidity of this situation precludes any prediction as to the ultimate impact of the coronavirus outbreak, although the Company operates in an industry that thus far has not been as severely impacted as others. Nevertheless, the outbreak presents some uncertainty and risk with respect to the Company and its performance and financial results.

Demand for the Company’s Offerings


The Company services over 3,000sells to customers in over 40approximately 50 countries and derives its revenue by assisting growers and packers and retailers to maximizeoptimize the value of their crops brought to marketprimarily in the near and consumers.post-harvest periods. The Company's products and services add value to customers by reducing food spoilage and extending the life of perishable fruits. The U.S. Food and Agriculture Organization of the United Nations has estimated that a growing global population will require a near doubling of food production in developing countries by 2050 to meet the expected demand of a worldwide population ofexpected to reach 9 billion people.

This global trend, among others, creates demand for the Company’s solutions. The Company’s offerings are currently protected by patents on, among other things, the encapsulation of the active ingredient, 1-MCP.patent filings in 45 countries.

The global produce market is a function of both the size and the yield of the crop harvested; variations in either will affect total production. Given the nature of the agricultural industry, weather patterns may impact total production and the Company's resulting commercial opportunities. The Company supports a diverse customer base whose end markets vary due to the type of fruit and quality of the product demanded in their respective markets. Such variation across end markets also affects demand for the Company’s services.




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Customer Pricing

The Company’s offerings are priced based on the value they provide to the Company’s customers. From time to time, the Company adjusts the pricing of its offering depending on the volume of fruit treated, or in orderofferings to address specific market trends. The SmartFresh Quality System continues to expand its platform of services, which may have an impact on price. The Company provides a value added service and does not typically price its products in relation to any underlying cost of materials;materials or services; therefore, its margins can fluctuate with changes in the costs to provide its services to customers.these costs. The Company’s pricing may include rebate arrangements with customers in exchange for mutually beneficial long-term relationships and growth.


Integrated Direct Service Model

AgroFresh offers a direct service model for the Company’s commercially available products, including SmartFresh and Harvista.Harvista, primarily through a direct service model. Sales and sales support personnel maintain direct face-to-face relationships with customers year round. Technical sales and support personnel work directly with customers to provide value-added advisory services regarding the application of SmartFresh. The actual application of SmartFresh is performed by service providers that are typically third-party contractors. The Harvista application service,is applied through both ground and aerial and ground application, is alsowhich are administered by third-party service providers or made by our customers directly. The combination of SmartFresh and Harvista treatments are designed to provide the best results to customers.

The Company is shifting the terms of its contracts with service providers from annual renewal periods to two or three year durations in order to have greater certainty that experienced applicators will be available for upcoming harvest seasons. Most of the Company’s service providers are operating under multi-year contracts. Management believes the quality and experience of its service providers deliver clear commercial benefits.


Seasonality

The Company’s operations are subject to seasonal variation due to the timing of the growing seasons around the world. Northern HemisphereFor our core crops of apples and pears, southern hemisphere growers typically harvest from August through November, and Southern Hemisphere growers typically harvest from late January to early May.May, and northern hemisphere growers harvest from August through November. For citrus crops, there are seasonal variations in this business due to the northern hemisphere citrus harvest, which spans from October to March. Since the majority of the Company’s sales are in Northern Hemispherenorthern hemisphere countries, a proportionately greater share of its revenue is realized during the second half of the year. There are also variations in the seasonal demands from year to year depending on weather patterns and crop size. This seasonality and variations in seasonal demand could impact the ability to compare results between periods. As the Company diversifies into other crops and becomes less dependent on pome fruit, the Company expects that the impacts of seasonality will lessen.

Foreign Currency Exchange Rates

With a global customer base and geographic footprint, the Company generates revenue and incurs costs in a number of different currencies, with the Euro comprising the most significant non-U.S. currency. Fluctuations in the value of these currencies relative to the U.S. dollar can increase or decrease the Company’s overall revenue and profitability as stated in U.S. dollars, which is the Company’s reporting currency. In certain instances, if sales in a given geography have been adversely impacted on a long-term basis due to foreign currency depreciation, the Company has been able to adjust its pricing so as to mitigate the impact on profitability.


Domestic and Foreign Operations

The Company has both domestic and foreign operations. Fluctuations in foreign exchange rates, regional growth-related spending in research and development (“R&D”)&D and marketing expenses, and changes in local selling prices, among other factors, may impact the profitability of foreign operations in the future.


Critical Accounting Policies and Use of Estimates

Critical accounting policies are those accounting policies that can have a significant impact on the presentation of our financial condition and results of operations and that require the use of complex and subjective estimates based upon management’s judgment. Because of the uncertainty inherent in such estimates, actual results may differ materially from these estimates. There have been no material changes to our critical accounting policies and estimates previously disclosed in our 2016the 2021 Form 10-K for the year ended December 31, 2016.10-K. For a description of our critical accounting policies and estimates as well as a listing of our significant accounting policies, see “Management's Discussion and Analysis of Financial Condition and Results of

Operations - Critical Accounting Policies and Use of Estimates” and “Note 2 - Basis of Presentation and Summary of Significant Accounting Policies” in our 2016the 2021 Form 10-K.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. Management believes these critical accounting policies reflect its most significant estimates and assumptions used in the preparation of the financial statements.

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Results of Operations

The following table summarizes the results of operations for both the three and nine months ended September 30, 2017March 31, 2022 and September 30, 2016:March 31, 2021:

Three Months Ended March 31,
(in thousands)20222021
Net sales$39,889$38,992
Cost of sales (excluding amortization, shown separately below)11,92310,314
Gross profit27,96628,678
Research and development expenses3,0513,298
Selling, general and administrative expenses11,89213,551
Amortization of intangibles10,71810,763
Operating income2,3051,066
Other income50514,398
(Loss) gain on foreign currency exchange(1,196)433
Interest expense, net(4,947)(5,890)
(Loss) income before income taxes(3,333)10,007
Income taxes (benefit) expense(164)1,823
Net (loss) income including non-controlling interest(3,169)8,184
Less: Net loss attributable to non-controlling interest(82)(239)
Net (loss) income attributable to AgroFresh Solutions, Inc.(3,087)8,423
Less: Dividends on convertible preferred stock6,4366,005
Net (loss) income attributable to AgroFresh Solutions, Inc. common stockholders($9,523)$2,418
(in thousands)Three Months Ended
September 30, 2017		Three Months Ended
September 30, 2016		 Nine Months Ended
September 30, 2017		Nine Months Ended
September 30, 2016
Net sales$60,772
$61,200
 $109,891
$107,996
Cost of sales (excluding amortization, shown separately below)11,620
8,905
 21,365
48,558
Gross profit49,152
52,295
 88,526
59,438
Research and development expenses3,071
2,983
 10,103
11,220
Selling, general, and administrative expenses14,462
15,173
 44,328
49,385
Amortization of intangibles10,445
10,080
 31,335
29,878
Change in fair value of contingent consideration(1,424)(1,569) (2,420)(4,969)
Operating income (loss)22,598
25,628
 5,180
(26,076)
Other (expense) income(295)(38) (40)16
(Loss) gain on foreign currency exchange(487)924
 10,584
682
Interest expense, net(8,638)(14,526) (27,495)(43,850)
Income (loss) before income taxes13,178
11,988
 (11,771)(69,228)
Income tax expense (benefit)3,632
4,676
 (11,895)(26,239)
Net income (loss)$9,546
$7,312
 $124
$(42,989)


Comparison of Results of Operations for the three months ended September 30, 2017 compared toMarch 31, 2022 versus the three months ended September 30, 2016.March 31, 2021.


Net Sales


Net sales were $60.8$39.9 million for the three months ended September 30, 2017March 31, 2022, as compared to net sales of $61.2$39.0 million for the three months ended September 30, 2016.March 31, 2021, an increase of 2.3%. The decreaseimpact of the change in net sales wasforeign currency exchange rates compared to the first quarter of 2021 decreased revenue by $1.2 million. Excluding this impact, revenue increased approximately 5.5%, primarily driven by lower volume on SmartFreshleveraging a portfolio of diverse solutions. Each of the Company's diversification categories generated growth in the first quarter. Growth within Fungicides & Disinfectants was driven by a late cropmarket penetration and product expansion in the U.S.,Middle East. The Other 1-MCP category was supported by Harvista, which experienced strong growth in South Africa, supported by an early harvest and larger crop size. This was partially offset by an increase of $1.1 millionSmartFresh for Apple declines in Harvista sales.the Latin America region due to unfavorable weather events.


Cost of Sales


Cost of sales was $11.6$11.9 million for the three months ended September 30, 2017March 31, 2022, as compared to $8.9$10.3 million for the three months ended September 30, 2016.March 31, 2021. Gross profit margin was 85.4 percent in70.1% for the third quarter of 2016three months ended March 31, 2022 versus 80.9 percent in73.5% for the third quarter of 2017. This decrease inthree months ended March 31, 2021. The lower gross margin was primarily driven by an unfavorable mix towards lower marginreflects the Company’s strategic transition to a more diversified product portfolio, as well as higher materials costs associated with the decrease in SmartFresh and increase in Harvista sales.inflationary pressures.


Research and Development Expenses


Research and development expenses were $3.1 million and $3.3 million, respectively, for the three months ended September 30, 2017 as comparedMarch 31, 2022 and March 31, 2021. The decrease was primarily related to $3.0 million for the three months ended September 30, 2016.timing of projects.



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Selling, General and Administrative Expenses


Selling, general and administrative expenses were $14.5$11.9 million for the three months ended September 30, 2017March 31, 2022, compared to $15.2$13.6 million for the three months ended September 30, 2016. ThisMarch 31, 2021, a decrease of 12.2%. Included in selling, general and administrative expenses was primarily driven by efficiencywere $0.3 million in the current year and productivity improvements as we begin$0.8 million in the transition off the Dow systems,prior year of costs associated with non-recurring items that include M&A and litigation, along with lower severance costs, partially offsetseverance. Excluding these items, selling general and administrative expenses decreased approximately 9.0% in the first quarter versus the prior year period, driven primarily by higher expenses relating to mergers and acquisitions ("M&A")-related activities.the timing of expenses.





Amortization of Intangibles


Amortization of intangible assets was $10.4$10.7 million for the three months ended September 30, 2017March 31, 2022, compared to $10.1$10.8 million for the three months ended September 30, 2016. The increase in amortization of intangibles is primarily due to the amortization of in-process research and development for our LandSpring product line, which started in September 2016.March 31, 2021.


Change in Fair Value of Contingent ConsiderationOther Income

The Company recorded a $1.4 million gain in the three months ended September 30, 2017 related to a change in the fair value of contingent consideration, as compared to a $1.6 million gain in the three months ended September 30, 2016. As discussed in Note 3 to the 2016 audited consolidated financial statements, pursuant to the Business Combination, the Company entered into various forms of contingent consideration, including the warrant consideration, the deferred payment, and the tax amortization benefit contingency. These liabilities are measured at fair value each reporting date and any mark-to-market fluctuations are recognized in earnings. For the three months ended September 30, 2017, the deferred payment and the tax amortization benefit contingency gains were $0.6 million and $0.8 million, respectively.

Interest Expense, Net
Interest expenseOther income was $8.6$0.5 million for the three months ended September 30, 2017,March 31, 2022, as compared to $14.5income of $14.4 million for the three months ended September 30, 2016. AccretionMarch 31, 2021. Other income in 2021 was due to the receipt of proceeds from the settlement of a litigation matter.

(Loss) Gain on the potential deferred payment to DowForeign Currency

Loss on foreign currency was $3.6$1.2 million for the three months ended September 30, 2016, withoutMarch 31, 2022, as compared to a comparable expense in 2017. Lower accretiongain of the Tax Receivables Agreement of $2.2 million also contributed to the decrease in interest expense.

Income taxes

Income tax expense was $3.6$0.4 million for the three months ended September 30, 2017March 31, 2021. During the first quarter of 2022, foreign currency losses were recognized related to U.S. dollar intercompany receivables from the euro and Argentinian peso, which grew weaker relative to the U.S. dollar.

Interest Expense, Net

Interest expense was $4.9 million for the three months ended March 31, 2022, as compared to $5.9 million for the three months ended March 31, 2021. The decrease was primarily due to higher interest income on investments of $0.3 million, lower debt amortization of $0.3 million and to lower interest on the long-term debt due to a lower principal balance of $0.2 million.

Income Taxes

Income tax benefit was $0.2 million for the three months ended March 31, 2022, compared to income tax expense of $4.7$1.8 million for the three months September 30, 2016. The effective tax rate forended March 31, 2021. For the three months ended September 30, 2017 differs fromMarch 31, 2022, the U.S. statutoryquarter’s largest effective tax rate of 35% due to certain intercompany transactions that did not have a tax effect.

Comparison of Results of Operations for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.

Net Sales

Net sales were $109.9 million for the nine months ended September 30, 2017 as compared to net sales of $108.0 million for the nine months ended September 30, 2016. The increase in net sales was primarily driven by SmartFresh growth in Brazil and France and significant Harvista growth in Argentina and the U.S. We also saw slight revenue increases on sales of RipeLock, LandSpring, and EthylBloc.

Cost of Sales

Cost of sales was $21.4 million for the nine months ended September 30, 2017 as compared to $48.6 million for the nine months ended September 30, 2016. The amount in the prior year period includes $30.4 million of amortization of inventory step up. If the amortization of inventory step-upmodification is excluded, gross profit margin would have been 83.2 percent in the first nine months of 2016 versus 80.6 percent in the first nine months of 2017. The decrease in margin was primarily driven by an unfavorable mix towards lower margin with the decrease in SmartFresh and increase in Harvista sales.

Research and Development Expenses

Research and development expenses were $10.1 million for the nine months ended September 30, 2017 as compared to $11.2 million for the nine months ended September 30, 2016. The decrease in research and development expenses reflects more targeted research activities in 2017.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $44.3 million for the nine months ended September 30, 2017 compared to $49.4 million for the nine months ended September 30, 2016. This decrease in selling, general and administrative expenses was primarily driven by lower non-recurring costs to establish ourselves as a separate public company, lower severance costs and

lower stock-based compensation, which was partially offset by legal fees associated with the MirTech litigation described below and M&A-related expenses.

Amortization of Intangibles

Amortization of intangible assets was $31.3 million for the nine months ended September 30, 2017 compared to $29.9 million for the nine months ended September 30, 2016. The increase in amortization of intangibles is primarily due to the amortization of in-process research and development for our LandSpring product line, which started in September 2016.

Change in Fair Value of Contingent Consideration
The Company recorded a $2.4 million gain in the nine months ended September 30, 2017 related to a change in the fair valueforeign exchange currency gains and losses and certain non-taxable items.




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Table of contingent consideration, as compared to a $5.0 million gain in the nine months ended September 30, 2016. As discussed in Note 3 to the 2016 audited consolidated financial statements, pursuant to the Business Combination, the Company entered into various forms of contingent consideration, including the warrant consideration, the deferred payment, and the tax amortization benefit contingency. These liabilities are measured at fair value each reporting date and any mark-to-market fluctuations are recognized in earnings. For the nine months ended September 30, 2017, the warrant consideration, the deferred payment, and the tax amortization benefit contingency losses (gains) were $0.5 million, $(1.9) million, and $(1.0) million, respectively.Contents

Interest Expense, Net
Interest expense was $27.5 million for the nine months ended September 30, 2017, as compared to $43.9 million for the nine months ended September 30, 2016. Accretion on the potential deferred payment to Dow was $10.7 million for the nine months ended September 30, 2016, without a comparable expense in 2017. Interest on the working capital settlement with Dow was $0.6 million for the nine months ended September 30, 2016, without a comparable expense in 2017. Lower accretion of the Tax Receivables Agreement of $4.9 million also contributed to the decrease in interest expense.

Income taxes

The income tax benefit was $11.9 million for the nine months ended September 30, 2017 compared to income tax benefit of $26.2 million for the nine months September 30, 2016. During the nine months ended September 30, 2017, in accordance with ASC 740, Income Taxes, we released the full valuation allowance against the net deferred tax assets in the U.S. tax jurisdiction, including net operating loss deferred tax assets. During the nine months ended September 30, 2017, we increased our deferred tax liabilities associated with intangibles due to the April 2017 settlement with Dow. The reduction of our obligations to Dow reduced purchase price consideration, which had a corresponding decrease to the tax basis of intangibles determined for ASC 740 purposes leading to the deferred tax liability increase. We considered these future sources of taxable income as positive evidence when concluding whether the deferred tax assets within the U.S. were more likely than not to be realized. We will continue to monitor the realizability of the U.S. deferred tax assets.

Non-GAAP MeasureMeasures


The following table setstables set forth the non-GAAP financial measuremeasures of EBITDA.EBITDA, Adjusted EBITDA and non-GAAP constant currency net sales. The Company believes thisthese non-GAAP financial measure providesmeasures provide meaningful supplemental information as it isthey are used by the Company’s management to evaluate the Company’s performance is(including for incentive bonuses and bank covenant reporting), are more indicative of future operating performance of the Company, and facilitatesfacilitate a better comparison among fiscal periods, as the non-GAAP measure excludes items that are not considered core to the Company’s operations.periods. These non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for the financial information presented in accordance with GAAP.

The following is a reconciliation between the non-GAAP financial measuremeasures of EBITDA and Adjusted EBITDA to itstheir most directly comparable GAAP financial measure, net (loss) income (loss):including non-controlling interest:

Three Months Ended March 31,
(in thousands)20222021
GAAP net (loss) income including non-controlling interest($3,169)$8,184
Depreciation and amortization11,44411,423
Interest expense (1)
4,9475,890
Income taxes (benefit) expense(164)1,823
Non-GAAP EBITDA13,05827,320
Share-based compensation988891
Severance related costs (2)
73—
Other non-recurring costs (3)
186766
Loss (gain) on foreign currency exchange (4)
1,196(433)
Other income (5)
(515)—
Litigation settlement—(14,392)
Total Adjustments1,928(13,168)
Non-GAAP Adjusted EBITDA$14,986$14,152

(1)    Interest on debt and accretion for debt discounts.
(2)    Severance costs related to restructuring and cost optimization initiatives.
(3)    Costs related to certain professional and other infrequent or non-recurring fees, including those associated with restructuring, litigation and M&A related fees.
(4)    Loss (gain) on foreign currency exchange relates to net gains and losses resulting from transactions denominated in a currency other than the Company's functional currency.
(5)     Other income relates to non-recurring data compensation income.

The following is a reconciliation between net sales on a non-GAAP constant currency basis to GAAP net sales:
Three Months Ended March 31,
(in thousands)20222021
GAAP net sales$39,889$38,992
Impact from changes in foreign currency exchange rates1,231—
Non-GAAP constant currency net sales (1)
$41,120$38,992

(1)     The Company provides net sales on a constant currency basis to enhance investors’ understanding of underlying business trends and operating performance, by removing the impact of foreign currency exchange rate fluctuations. The impact from foreign currency, calculated on a constant currency basis, is determined by applying prior period average exchange rates to current year results.

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(in thousands)Three Months Ended
September 30, 2017		Three Months Ended
September 30, 2016		 Nine Months Ended
September 30, 2017		Nine Months Ended
September 30, 2016
GAAP net income (loss)$9,546
$7,312
 $124
$(42,989)
Income tax expense (benefit)3,632
4,676
 (11,895)(26,239)
Amortization of inventory step-up(1)
—
—
 —
30,377
Interest expense(2)
8,638
14,526
 27,495
43,850
Depreciation and amortization11,056
10,438
 33,102
31,777
Non-GAAP EBITDA$32,872
$36,952
 $48,826
$36,776

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(1)The amortization of inventory step-up related to the acquisition of AgroFresh was charged to income based on the pace of inventory usage.
(2)Interest on the term loan and accretion for debt discounts, debt issuance costs and contingent consideration.



Liquidity and Capital Resources

Cash Flows
Three Months Ended March 31,
(in thousands)20222021
Net cash provided by operating activities$2,487$23,326
Net cash used in investing activities($596)($430)
Net cash used in financing activities($4,846)($18,236)
Cash Flow

(in thousands)Nine Months Ended
September 30, 2017		Nine Months Ended
September 30, 2016
Net cash provided by (used in) operating activities14,919
(5,123)
Net cash (used in) investing activities(6,232)(5,441)
Net cash (used in) financing activities(12,125)(4,676)


Cash provided by (used in) operating activities was $14.9$2.5 million for the ninethree months ended September 30, 2017,March 31, 2022, as compared to $(5.1)cash provided by operating activities of $23.3 million for the ninethree months ended September 30, 2016.March 31, 2021. In 2017,2022, net income before non-cash depreciation and amortization and changes in fair value of contingent consideration (including accretion) was $38.1$8.3 million. Other non-cash charges included stock-based compensation on equity-classified awards of $1.3$0.9 million, $1.8$0.5 million of deferred financing costs and a $16.4$1.0 million increasedecrease in the net deferred tax asset, and other non-cash items of $0.7 million.taxes. Additionally, the change in net operating assets was $(10.5)$6.4 million in 2017.2022. For the ninethree months ended September 30, 2016,March 31, 2021, net income before non-cash depreciation and amortization amortization of inventory step-up, and changes in the fair value of contingent consideration (including accretion) was $37.1$19.6 million. Other non-cash charges included stock-based compensation on equity-classified awards of $2.9$0.8 million, $0.8 million of deferred financing costs and a $24.9$0.9 million increase in the net deferred tax asset, and other non-cash items of $2.6 million.taxes. Additionally, the change in net operating assets was $(22.8)$0.9 million for the ninethree months ended September 30, 2016.March 31, 2021.
Cash (used in)used in investing activities was $(6.2)$0.6 million and $0.4 million for the ninethree months ended September 30, 2017, as compared to $(5.4) million for the nine months ended September 30, 2016.March 31, 2022 and 2021, respectively. Cash used in investing activities in 2017both periods was for the purchase of fixed assets, and leasehold improvements of $(5.3) million, and technology investments of $(1.1) million. software.

Cash used in 2016 was for the purchase of fixed assets and leasehold improvements, of $(5.4) million.

Cash (used in) financing activities was $(12.1)$4.8 million for the ninethree months ended September 30, 2017,March 31, 2022, as compared to $(4.7)$18.2 million for the ninethree months ended September 30, 2016.March 31, 2021. Cash used in financing activities in 20172022 was for the payment of dividends of $4.0 million and the repayment of debt in the amount of $0.8 million. Cash used in financing activities in 2021 was for the repayment of debt in the amount of $(2.1)$9.9 million, redemption of preferred stock of $5.3 million and the $(10.0) million payment related to the Dow liabilities settlement. Cash used in 2016 was for the repayment of debt in the amountdividends of $(3.2) million and the purchase of treasury stock in the amount of $(1.5)$3.0 million.


Liquidity


Since the consummation of the Business Combination, we have financed our operations primarily through the sale of stock, debt financings, and sales of our products and services. At September 30, 2017,March 31, 2022, we had $75.4$59.3 million of cash and cash equivalents, compared to $77.3$61.9 million at December 31, 2016.2021.


Amended Credit Facility

On July 31, 2015,27, 2020, the Company consummated the Business Combination, pursuant to which the Company issued 17,500,000 shares of common stock atcompleted a deemed value of $12.00 per sharecomprehensive refinancing (the “Refinancing”) by (i) entering into an Amended and paid cash consideration of $635.0 million at the closing. The cash consideration was funded through the Company's initial public offering, the Term Loan (defined below) and the sale of our PIPE shares (defined below).

Term Loan

On July 31, 2015, certain of our subsidiaries entered into aRestated Credit Agreement (the “Amended Credit Agreement”) with the other loan parties party thereto, Bank of Montreal, as administrative agent (the “Credit Facility”)and the lenders party thereto, and (ii) consummating the transactions contemplated by the Investment Agreement (as defined and described in Note 15 – Series B Convertible Preferred Stock and Stockholders’ Equity). The Amended Credit Agreement amends and restates in its entirety the Credit Agreement a subsidiary of the Company had with Bank of Montreal that was entered into on July 31, 2015.

The Amended Credit Agreement provides for a $25.0 million revolving credit facility (the “Amended Revolving Loan”) which matures on June 30, 2024, and a $275.0 million term credit facility (the “Amended Term Loan” and, together with the Amended Revolving Loan, the “Amended Credit Facility”), which matures on December 31, 2024. The Amended Credit Facility consists ofincludes a $425$5.0 million term loan (the “Term Loan”), with an amortization equal to 1.00% per year,swingline commitment and a $25 million revolving loan facility (the “Revolving Loan”). The Revolving Loan includes a $10.0 million letter-of-credit sub-facility, issuances against which reduceletter of credit sub-limit. Loans under the available capacityAmended Term Loan bear interest at a rate equal to, at the Company’s option, either the Adjusted Eurodollar Rate for borrowing. Asthe interest period in effect for such borrowing plus an Applicable Rate of September 30, 2017,6.25% per annum, or the Alternate Base Rate plus an Applicable Rate of 5.25% per annum. Loans under the Amended Revolving Loan bear interest at a rate equal to, at the Company’s option, the Adjusted Eurodollar Rate for the interest period in effect for such borrowing plus the Applicable Rate ranging from 6.25% to 6.0% per annum, based on certain ratios. The interest rate was 7.25% for the three months ended March 31, 2022. The Company is also required to pay a commitment fee on the unused portion of the Amended Revolving Loan at a rate ranging from 0.5% to 0.375%, based on certain ratios. The Company is required to make mandatory prepayments of outstanding indebtedness under the Amended Credit Agreement under certain circumstances. During the three months ended March 31, 2021, a prepayment of principal of $9.1 million was made.

The obligations of AgroFresh Inc., a wholly-owned subsidiary of the Company had issued $0.5 million of letters of credit, against which no funds have been drawn. The Term Loan has a scheduled maturity date of July 31, 2021, and the Revolving Loan has a scheduled maturity date of July 31, 2019. The interest rates on borrowingsborrower under the facilities are either the alternate base rate plus 3.75%, or LIBOR plus 4.75% per annum, with a 1.00% LIBOR floor (with step-downs in respect of borrowings under the Revolving Loan dependent upon the achievement of certain financial ratios). The obligations under theAmended Credit Facility, are securedinitially guaranteed by liens on substantially all of the assets of (a) AgroFresh Inc.Company and its directthe Company’s wholly-owned domestic subsidiaries and (b)subsidiary, AF Solutions Holdings LLC including(together with AgroFresh Inc. and the common stockCompany, the “Loan Parties”) and may in the future be guaranteed by certain other

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Table of AgroFresh Inc.Contents

domestic subsidiaries of the Company. The obligations of the Loan Parties under the Amended Credit Agreement and other loan documents are secured, subject to customary permitted liens and other agreed upon exceptions, by a perfected security interest in all tangible and intangible assets of the Loan Parties, except for certain excluded assets, and equity interests of certain foreign subsidiaries of the Loan Parties held by the Loan Parties (subject to certain exclusions and limitations).


The net proceedsinterest expense related to the amortization of the Amended Credit Facility debt issuance costs during each of the three months ended March 31, 2022 and 2021 was $0.5 million. As of March 31, 2022 there were $6.0 million of unamortized deferred issuance costs.

At March 31, 2022, there was $261.8 million outstanding under the Amended Term Loan and no balance outstanding under the Amended Revolving Loan. Due to the prepayment, an additional $0.3 million of deferred financing costs were used to fund aexpensed based on the portion of debt paid. At March 31, 2022, the purchase price payable to Rohm and Haas in connection withCompany evaluated the Business Combination. Amounts availableamount recorded under the RevolvingAmended Term Loan may also be used for working capital, general corporate purposes, and other uses, alldetermined that the fair value was approximately $260.5 million. The fair value of the debt is based on quoted inactive market prices and is therefore classified as more fully set forthLevel 2 within the valuation hierarchy.

Certain restrictive covenants are contained in the Amended Credit Facility.Agreement, and the Company was in compliance with these covenants as of March 31, 2022.


AsAgroFresh Fruit Protection Debt

On March 23, 2020, AgroFresh Fruit Protection entered into a €1.0 million loan agreement with Banco Santander, S.A., which provides funding through March 2023 at a 1.5% interest rate. In May 2020, AgroFresh Fruit Protection entered into a €0.3 million loan agreement with BBVA, which provides funding through May 2025 at a 2.2% interest rate. In July 2020, AgroFresh Fruit Protection entered into a €0.6 million loan agreement with Banco Santander, S.A., which provides funding through July 2025 at a 2.5% interest rate.

Preferred Stock Financing

On June 13, 2020, the Company entered into an Investment Agreement (the “Investment Agreement”) with PSP AGFS Holdings, L.P. ("PSP"), an affiliate of Paine Schwartz Partners, LLC, pursuant to which, subject to certain closing conditions, PSP agreed to purchase in a private placement an aggregate of $150,000,000 of convertible preferred equity of the ClosingCompany. The transaction closed on July 27, 2020 (the "Closing Date") and a total of 150,000 shares of the Company’s newly-designated Series B-1 Convertible Preferred Stock, par value $0.0001 per share (the “Series B-1 Preferred Stock”) were purchased in such transaction (the “Private Placement”). On September 22, 2020, following the approval of the transactions contemplated by the Investment Agreement by the necessary regulatory body, the Company issued to PSP, for no additional consideration, a total of 150,000 shares of the Company’s newly-designated Series B-2 Convertible Preferred Stock, par value $0.0001 per share (the “Series B-2 Preferred Stock”). On September 25, 2020 (the "Exchange Date"), PSP elected to exchange the shares of the Company’s Series B-1 Convertible Preferred Stock and Series B-2 Preferred Stock held by it for a total of 150,000 shares of the Company’s newly-designated Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”). Accordingly, effective as of the Exchange Date, the Company incurred approximately $12.9issued 150,000 shares of Series B Convertible Preferred Stock, par value $0.0001 per share, to PSP and all of the shares of Series B-1 Preferred Stock and Series B-2 Preferred Stock held by PSP were cancelled. No shares of Series B-1 Preferred Stock or Series B-2 Preferred Stock are outstanding as of March 31, 2022.

The Series B Preferred Stock ranks senior to the shares of the Company’s common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Series B Preferred Stock has a liquidation preference of $1,000 per share (the “Stated Value”). Holders of the Series B Preferred Stock are entitled to a cumulative dividend at a rate of 16% per annum, of which 50% was payable in cash and 50% was payable in kind until the first anniversary of Closing Date, after which 50% is payable in cash, 37.5% is payable in kind, and the remaining 12.5% is payable in cash or in kind, at the Company’s option, subject in each case to adjustment under certain circumstances. Dividends on the Series B Preferred Stock are cumulative and payable quarterly in arrears. All dividends that are paid in kind will accrete to, and increase, the Stated Value. The applicable dividend rate is subject to increase by 2% per annum during any period that the Company is in breach of certain provisions of the Certificate of Designation of the Series B Preferred Stock. The Series B Preferred Stock has been classified as temporary equity as it may be contingently redeemable in the event of a change of control, which is outside of the Company's control.

Associated with the Series B Preferred Stock, the Company paid dividends of $2.4 million in debt issuance costs related to the Term Loankind and $1.3$4.0 million in costs related tocash during the Revolving Loan.three months ended March 31, 2022. The debt issuance costs associated with the Term Loan were capitalized against the principal balanceCompany paid dividends of the debt,$3.0 million in kind and the Revolving Loan costs were capitalized$3.0 million in Other Assets. All issuance costs will be accreted through interest expense for the duration of each respective debt facility. The accretion in interest expensecash during the three and ninethree months ended September 30, 2017 was approximately $0.6 million and $1.8 million.

PIPE Shares

In connectionMarch 31, 2021 associated with the closingSeries B Preferred Stock. As of March 31, 2022 and December 31, 2021, the Company had no accrued dividends.

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Table of Contents

The Series B Preferred Stock is convertible into Common Stock at the election of the Business Combination,holder at any time at an initial conversion price of $5.00 (the “Conversion Price”). The Conversion Price is subject to customary adjustments, including for stock splits and other reorganizations affecting the Company issued an aggregateCommon Stock and pursuant to certain anti-dilution provisions for below market issuances. As of 4,878,000March 31, 2022 and December 31, 2021, the maximum number of shares of common stock for an aggregate purchase price of $50.0 million, in a private placement (“PIPE”).

Stock Repurchase Program

In November 2015, the Company’s board of directors approved a Stock Repurchase Program totaling $10 millionthat could be issued upon conversion of the Company’s publicly-tradedoutstanding shares of common stock. The Repurchase ProgramSeries B Convertible Preferred Stock was to remain in effect for a periodapproximately 32.7 million and 32.2 million shares, respectively.




30
Table of one year, until November 17, 2016. During the nine months ended September 30, 2016, the Company repurchased 249,047 shares of common stock at an average market price of $5.95.Contents

Off-Balance Sheet Arrangements

As of September 30, 2017, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations other than detailed below. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Contingent Consideration

In connection with the Business Combination pursuant to the Purchase Agreement and subsequently modified by the Amendment Agreement, Dow is entitled to receive future contingent consideration and other payments from the Company in relation to (i) in 2018, a deferred payment from the Company of $50 million, subject to the Company’s achievement of a specified average Business EBITDA level over the two year period from January 1, 2016 to December 31, 2017; (ii) a Tax Receivables Agreement under which the Company is required to pay annually to Dow 50% of the amount of the tax savings, if any, in U.S. Federal, state and local income tax or franchise tax that the Company actually realizes as a result of the increase in tax basis of the AgroFresh Inc. assets resulting from a section 338(h)(10) election that the Company and Dow made in connection with the Business Combination; and (iii) the final working capital settlement where the Company agreed to pay Dow an aggregate amount of $20.0 million in full satisfaction of the Company’s obligations with respect to (i) the working capital adjustment under the Purchase Agreement, (ii) certain transfer and value added tax reimbursement obligations under the Purchase Agreement, and (iii) amounts owed under the Tax Receivables Agreement for the 2015 tax year.

See Note 3 to the unaudited condensed consolidated financial statements contained in this Report for further discussion of contingent consideration in connection with the Business Combination.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Interest Rate Risk

Our exposure to interest rate risk for changes in interest rates relates primarily to our Term Loan and Revolving Loan. We have not used derivative financial instruments in our investment portfolio. The Term Loan and Revolving Loan bear interest at floating rates. For variable rate debt, interest rate changes generally do not affect the fair market value of such debt, but do impact future earnings and cash flows, assuming other factors are held constant. Holding debt levels constant, a 100 basis point increase in the effective interest rates would have increased the Company’s interest expense by $3.1 million for the nine months ended September 30, 2017.

Foreign Currency Risk

A portion of the Company’s operations consists of manufacturing and sales activities in foreign jurisdictions. As a result,smaller reporting company, we are not required to provide the Company’s financial results could be significantly affectedinformation required by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which the Company distributes its products or services. The Company’s operating results are exposed to changes in exchange rates between the US dollar and various foreign currencies. As we expand internationally, our results of operations and cash flows will become increasingly subject to changes in foreign currency exchange rates.this Item.


We have not used forward contracts or currency borrowings to hedge our exposure to foreign currency risk. Foreign currency risk can be quantified by estimating the change in results of operations or financial position resulting from a hypothetical 10% adverse change in foreign exchange rates. We believe such a change would generally not have a material impact on our financial position, but could have a material impact on our results of operations. Holding other variables constant (such as interest rates and debt levels), if the U.S. dollar appreciated by 10% against the foreign currencies used by our operations in the first nine months of 2017, revenues would have decreased by approximately $8.0 million and EBITDA would have decreased by approximately $4.8 million for the nine months ended September 30, 2017.


ITEM 4. CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures


An evaluation was carried outThe Company maintains disclosure controls and procedures within the meaning of Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The Company's disclosure controls are designed to ensure that information required to be disclosed by us in the reports we file or submit under the supervisionExchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and withreported within the participation oftime periods specified in the Securities and Exchange Commission's rules and forms. The Company's disclosure controls are also designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer ("CEO") and our Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our Disclosure Controls, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily applied its judgment in evaluating and implementing possible controls and procedures.

As of March 31, 2022, our management, with the participation of our CEO and CFO, has conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.procedures. Based on thethat evaluation, of our disclosure controlsCEO and procedures, our Chief Executive Officer and Chief Financial Officer haveCFO concluded that our disclosure controls and procedures were effective to ensure that the information required to be disclosed by usas of March 31, 2022.

Management's Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the reports that we file or submit underRule 13a-15(f) and 15d-15(f) of the Exchange Act wasAct. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of published financial statements in accordance with generally accepted accounting principles.

Our internal control over financial reporting include those policies and procedures that:

•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
•provide reasonable assurance that transactions are recorded processed, summarized and reported within the time periods specifiedas necessary to permit preparation of financial statements in the SEC’s rules and formsaccordance with U.S. generally accepted accounting principles and that such information required to be disclosed is accumulatedour receipts and communicated toexpenditures are being made only in accordance with authorizations of the Company’s management includingand directors; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.assets that could have a material effect on the financial statements.


Changes in Internal Controls

There have been no changes toManagement assessed the effectiveness of our internal control over financial reporting as of March 31, 2022. In making this assessment, management used the criteria in Internal Control-Integrated Framework (2013) set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment using those criteria, management concluded that our internal control over financial reporting as of March 31, 2022 was effective.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Controls

There were no changes in the Company's internal control over financial reporting that occurred during the quarter ended September 30, 2017March 31, 2022 that has materially affected, or areis reasonably likely to materially affect ourthe Company's internal control over financial reporting.


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Table of Contents
PART II- OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS


From time to time we are named as a defendant in legal actions arising from our normal business activities. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, we do not believe any currently pending legal proceeding to which we are a party will have a material adverse effect on our business, prospects, financial condition, cash flows or results of operations.


ITEM 1A. RISK FACTORS


Ownership of our securities involves a high degree of risk. Holders of our securities should carefully consider, in addition to the historical financial statements and related notes and other information set forth in this Report, the risk factors discussed in Part I - Item 1A - Risk Factors included in our 20162021 Form 10-K, and the factors set forth below, all of which could materially affect our business or future results. Except with respect to the amended and restated risk factors set forth below, there have been noWe are not currently aware of any material changes to the risk factors disclosed in our 20162021 Form 10-K. If any of the risks or uncertainties described in any of such risk factors actually occur, our business, financial condition and operating results could be adversely affected in a material way. This could cause the trading prices of our securities to decline, perhaps significantly, and you may lose part or all of your investment.


We are required to pay Dow for certain tax benefits we may claim, and these amounts are expected to be material.

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Pursuant to the Tax Receivables Agreement we entered into with Dow upon the consummation
Table of the Business Combination, as amended in April 2017 (the “Tax Receivables Agreement”), we are required to pay annually to Dow 50% of the amount of any tax savings, if any, in U.S. federal, state and local income tax that we actually realize as a result of the increase in tax basis of our assets resulting from a section 338(h)(10) election that we and Dow made in connection with the Business Combination.Contents

We expect that the payments that we may make under the Tax Receivables Agreement could be substantial. It is possible that future transactions or events could increase or decrease the actual tax benefits realized and the corresponding Tax Receivables Agreement payments. There may be a material negative effect on our liquidity if we do not have sufficient funds to make payments under the Tax Receivables Agreement after we have paid taxes.

Dow andBoulevard Acquisition Sponsor, LLC (the “Sponsor”)have significant influence over us, which could limit your ability to influence the outcome of key transactions, including a change of control.
As of June 30, 2017, Dow and the Sponsor (and its affiliates) owned approximately 35% and 7%, respectively, of our outstanding common stock. In addition, each of Dow and the Sponsor currently beneficially owns a significant percentage of our outstanding warrants. Because of the degree of concentration of voting power (and the potential for such power to increase upon the purchase of additional stock or the exercise of warrants), your ability to elect members of our board of directors and influence our business and affairs, including any determinations with respect to mergers or other business combinations, the acquisition or disposition of assets, the incurrence of indebtedness, the issuance of any additional common stock or other equity securities, the repurchase or redemption of common stock and the payment of dividends, may be diminished.

Warrants are exercisable for our common stock, which, if exercised, would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
As of December 31, 2016, outstanding warrants to purchase an aggregate of 15,983,072 shares of our common stock were exercisable in accordance with the terms of the warrant agreement governing those securities. All of these warrants will expire at 5:00 p.m., New York time, on July 31, 2020, or earlier upon redemption or liquidation. The exercise price of these warrants is $11.50 per share. To the extent such warrants are exercised, additional shares of our common stock will be issued, which will result in dilution to the holders of our common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of our common stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


Not applicable.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES


Not applicable.


ITEM 4. MINE SAFETY DISCLOSURES


Not applicable.


ITEM 5. OTHER INFORMATION


On November 2, 2017, the Company’s BoardNot applicable.

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Table of Directors amended Section 2.5(d) of the Company’s Amended and Restated Bylaws (the “Bylaws”) to implement a majority voting standard in uncontested director elections, which amendment became effective immediately. Under the amended provision, in a contested election, directors will continue to be elected by a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors.Contents
The foregoing description of the amendment to the Bylaws does not purport to be complete, and is qualified in its entirety by reference to the full text of the amendment to the Bylaws, a copy of which is filed as Exhibit 3.6 to this Report and incorporated in this Item by reference.


ITEM 6. EXHIBITS

Exhibit No. DescriptionExhibit No. Description
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.
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.
3.2(4)Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation.
3.2
(4)Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation.
3.3(1)Series A Certificate of Designation.
3.3
(1)Series A Certificate of Designation.
3.4(2)Amended and Restated Bylaws.
3.4
(6)Certificate of Designation of Series B Convertible Preferred Stock.
3.5(3)Amendment to the Amended and Restated Bylaws of AgroFresh Solutions, Inc., effective as of September 3, 2015.
3.5
(2)Amended and Restated Bylaws.
3.6*Amendment to the Amended and Restated Bylaws of AgroFresh Solutions, Inc., effective as of November 2, 2017.
3.6
3.6
(3)Amendment to the Amended and Restated Bylaws of AgroFresh Solutions, Inc., effective as of September 3, 2015.
3.7
3.7
(5)Amendment to the Amended and Restated Bylaws of AgroFresh Solutions, Inc., effective as of November 2, 2017.
4.1(1)Specimen Common Stock Certificate.
4.1
(1)Specimen Common Stock Certificate.
4.2(1)Specimen Warrant Certificate.
4.2
(1)Specimen Warrant Certificate.
31.1*Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
31.1
*Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
31.2*Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Act of 1934, as amended.
31.2
*Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Act of 1934, as amended.
32.1*Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1
*Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*XBRL Instance Document101.INS*XBRL Instance Document
101.SCH*XBRL Taxonomy Extension Schema Document101.SCH*XBRL Taxonomy Extension Schema Document
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document101.DEF*XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*XBRL Taxonomy Extension Label Linkbase Document101.LAB*XBRL Taxonomy Extension Label Linkbase Document
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document


———————————————————————————————
*Filed herewith.
*(1)Filed herewith.
(1)Incorporated by reference to an exhibit to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on August 6, 2015.
(2)Incorporated by reference to Annex A to the Company’s definitive proxy statement (File No. 001-36197) filed with the Securities and Exchange Commission on July 16, 2015.
(3)Incorporated by reference to an exhibit to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on September 10, 2015.
(4)
(4)Incorporated by reference to an exhibit to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on June 7, 2017.
(5)Incorporated by reference to an exhibit to the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission on November 9, 2017.
(6)Incorporated by reference to an exhibit to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on September 28, 2020.






34
SIGNATURES


Pursuant to 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 thereunto duly authorized.

AgroFresh Solutions, Inc.
Date:May 11, 2022
AgroFresh Solutions, Inc./s/ Clinton A. Lewis, Jr.
Date:By:November 9, 2017Clinton A. Lewis, Jr.
Title:
/s/ Jordi Ferre
By:Jordi Ferre
Title:Chief Executive Officer
/s/ Katherine Harper
By:Katherine Harper
Title:Chief Financial Officer


EXHIBIT INDEX
Exhibit No. Description
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.
3.2(4)
Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation.
3.3(1)
Series A Certificate of Designation.
3.4(2)
Amended and Restated Bylaws.
3.5(3)
Amendment to the Amended and Restated Bylaws of AgroFresh Solutions, Inc., effective as of September 3, 2015.
3.6*
Amendment to the Amended and Restated Bylaws of AgroFresh Solutions, Inc., effective as of November 2, 2017.
4.1(1)
Specimen Common Stock Certificate.
4.2(1)
Specimen Warrant Certificate.
31.1*
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
31.2*
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Act of 1934, as amended.
32.1*
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*XBRL Instance Document
101.SCH*XBRL Taxonomy Extension Schema Document
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*XBRL Taxonomy Extension Label Linkbase Document
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document

———————————————————————————————
*Filed herewith./s/ Graham Miao
By:Graham Miao
(1)Incorporated by reference to an exhibit to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on August 6, 2015.Title:Chief Financial Officer
(2)Incorporated by reference to Annex A to the Company’s definitive proxy statement (File No. 001-36197) filed with the Securities and Exchange Commission on July 16, 2015.
(3)Incorporated by reference to an exhibit to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on September 10, 2015.
(4)Incorporated by reference to an exhibit to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on June 7, 2017.




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