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Note 7 - Commitments and Contingencies
 9 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
Note
7
- Commitments and Contingencies
 
Under the terms of the Infitrak Agreement, we are required to pay contingent consideration if the gross profit (as defined in the Infitrak Earn-Out Agreement) for our cold chain packaging business for the
two
years subsequent to the acquisition meets certain levels. The potential undiscounted consideration payable ranges from
$0
to
$15,000,000
CDN and is based upon a sliding scale of growth in gross profit (as defined in the Infitrak Earn-Out Agreement) for year
one
and year
two
of
30
to
70
percent and
15
to
75
percent, respectively. Based upon both historical and projected growth rates, we recorded
$9,271,000
of contingent consideration payable which represented our best estimate of the then current fair value of the amount that would ultimately be paid. In
July
2016
we made the
first
Earn-Out payment in the amount of
$6,000,000
CDN
($4,594,000).
As a result of this payment, the remaining potential undiscounted consideration payable ranges from
$0
to
$9,000,000
CDN (approximately
$0
to
$6,682,000
as of
December
31,
2016).
We have recorded
$4,436,000
in our condensed consolidated balance sheet as of
December
31,
2016,
which represents our best estimate of the then current fair value of the amount that will ultimately be paid. Any changes to the contingent consideration ultimately paid will result in additional income or expense in our condensed consolidated statements of income. We will continue to monitor the results of our cold chain packaging business and we will adjust the contingent liability on a go forward basis, based on then current information. The remaining contingent consideration is payable in the
second
quarter of our year ending
March
31,
2018.
 
Under the terms of the PCD Agreement, we are required to pay contingent consideration if the cumulative revenues for our process challenge device business for the
three
years subsequent to the acquisition meet certain levels. The potential consideration payable ranges from
$0
to
$1,500,000
and is based upon a sliding scale of
three
-year cumulative revenues between
$9,900,000
and
$12,600,000.
Based upon both historical and projected growth rates, we initially recorded
$300,000
of contingent consideration payable which represented our best estimate of the amount that would ultimately be paid. We paid
$150,000
of the contingent consideration during the year ended
March
31,
2016
(based upon the then current run rate projected over the entire
three
-year contingent consideration period). Since the initial payment, the revenues have significantly increased and as a result, during the
three
months ended
September
30,
2016
we recorded an additional
$450,000
accrual (which is included in other expense, net in our condensed consolidated statements of income for the
nine
months ended
December
31,
2016).
We paid
$450,000
of the contingent consideration in our
third
quarter ending
December
31,
2016.
The remaining contingent consideration amount is also subject to modification at the end of the
third
year of the earn-out period based upon the actual revenues earned over the contingent consideration period. Any changes to the contingent consideration ultimately paid will result in additional income or expense in our condensed consolidated statements of income. We will continue to monitor the results of our process challenge device business and we will adjust the contingent liability on a go forward basis, based on then current information.
 
In
October
2015,
we entered into a settlement agreement (the “Amato Settlement”) whereby we paid Amato
$3,165,000.
In exchange, Amato agreed to dismiss the complaint, release Mesa of any and all claims by Amega and Amato, and relieve us of any future payment obligation under the Amega Earn-Out. Insurance covered
$415,000
of the settlement payment while we had
$1,041,000
accrued on our condensed consolidated balance sheet remaining from the original hold back and contingent consideration payable. The remaining
$1,709,000
was recorded as general and administrative expense in the accompanying condensed consolidated statements of income for the
nine
months ended
December
31,
2015.