XML 29 R19.htm IDEA: XBRL DOCUMENT

Note 13 - Contingent Consideration

6 Months Ended

Sep. 30, 2022

Business Combination, Contingent Consideration [Text Block]

13. Contingent Consideration

Contingent Consideration

The Company evaluated the NEPSI Acquisition earnout payment set forth in the NEPSI Stock Purchase Agreement (see Note 2, "Acquisitions" for further details), which may require settlement in the Company's common stock, and determined the contingent consideration qualified for liability classification and derivative treatment under ASC 815, Derivatives and Hedging. As a result, for each period, the fair value of the contingent consideration will be remeasured and the resulting gain or loss will be recognized in operating expenses until the share amount is fixed.

Following is a summary of the key assumptions used in a Monte Carlo simulation to calculate the fair value of the contingent consideration related to the NEPSI Acquisition:

	*September 30,*			*June 30,*
Fiscal Year 2022	*2022*			*2022*
Revenue risk premium		5.20	%		6.60	%
Revenue volatility		25	%		30	%
Stock Price	$	4.38		$	5.18
Payment delay (days)		80			80
Fair value (millions)	$	1.1		$	1.4

	*March 31,*			*December 31,*			*September 30,*			*June 30,*			*March 31,*
Fiscal Year 2021	*2022*			*2021*			*2021*			*2021*			*2021*
Revenue risk premium		6.50	%		6.60	%		6.60	%		6.60	%		6.70	%
Revenue volatility		33	%		33	%		30	%		30	%		30	%
Stock Price	$	7.61		$	10.88		$	14.58		$	17.39		$	18.96
Payment delay (days)		80			80			80			80			80
Fair value (millions)	$	1.2		$	2.6		$	4.7		$	7.2		$	7.1

The Company recorded a net gain of $0.3 and $0.1 million resulting from the decrease in the fair value of the contingent consideration in the three and six months ended September 30, 2022. The Company recorded a net gain of $2.4 million and $2.3 million resulting from the decrease in the fair value of the contingent consideration in the three and six months ended September 30, 2021, respectively.