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ACQUISITION | 3 Months Ended
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Mar. 31, 2018
ACQUISITION | NOTE C —ACQUISITION On December 22, 2017, the Company entered into an agreement providing for the acquisition of Filament by the Company. At a special meeting of stockholders held on February 28, 2018, stockholders approved the issuance of shares pursuant to the agreement and the acquisition was completed on March 2, 2018. The aggregate consideration for Filament was $295.8 million, $218.9 million of cash consideration and 5,593,116 newly issued shares of the Company’s common stock, with a value equal to $76.9 million, based on the market value of the Company’s common stock as of March 2, 2018. The estimated cash portion of the consideration is subject to adjustments as defined in the agreement. The acquisition is being accounted for as a business combination using the acquisition method of accounting in accordance with FASB ASC Topic 805, which established a new basis of accounting for all identifiable assets acquired and liabilities assumed at fair value. The purchase price has been determined to be as follows (in thousands):
Cash |  | $ | 218,917 |
Share consideration |  |  | 76,905 |
Total purchase price |  | $ | 295,822 |
The purchase price was allocated based on the Company’s preliminary estimate of the fair value of the assets acquired and liabilities assumed, as follows (in thousands):
Accounts receivable |  | $ | 26,453 |
Inventory |  |  | 26,696 |
Other assets |  |  | 10,086 |
Other liabilities |  |  | (24,393 | )
Deferred income tax |  |  | (26,633 | )
Goodwill and other intangibles |  |  | 283,613 |
Total allocated value |  | $ | 295,822 |
Goodwill results from such factors as an assembled workforce. The total amount of goodwill is not expected to be deductible for tax purposes. The goodwill and other intangible assets are primarily included in the U.S. Wholesale segment. Customer relationships are amortized on a straight-line basis over their estimated useful lives (see Note E). The three months ended March 31, 2018 includes the operations of Filament for the period from March 2, 2018, the date of acquisition, to March 31, 2018. The condensed consolidated statement of operations for the three months ended March 31, 2018, include $9.3 million of net sales and $1.1 million net loss from operations contributed by Filament. Unaudited Pro forma Results The following table presents the Company’s pro forma consolidated net sales, loss before income taxes and equity in earnings and net loss for the three months ended March 31, 2018 and March 31, 2017. The unaudited pro forma results include the historical statement of operations information of the Company and of Filament, giving effect to the Filament acquisition and related financing as if they had occurred at the beginning of the periods presented.
|  | Unaudited pro forma results |
|  | Three Months Ended |
|  | March 31, 2018 |  |  | March 31, 2017 |
|  | (In thousands, except per share data) |
Net sales |  | $ | 143,980 |  |  | $ | 158,270 |
Loss before income taxes and equity in earnings |  |  | (15,844 | ) |  |  | (4,962 | )
Net loss |  |  | (11,868 | ) |  |  | (2,566 | )
Basic and diluted loss per common share |  |  | (0.58 | ) |  |  | (0.13 | )
The pro forma results, prepared in accordance with U.S. GAAP, include the following pro forma adjustments related to the Filament acquisition:
| (1) | as a result of a $1.5 million increase in the fair value of acquired inventory at the acquisition date, the Company recorded a $0.3 million charge in cost of sales in the three months ended March 31, 2018 condensed consolidated financial statements. The pro forma adjustments reflect the elimination of this charge;
| (2) | a net increase in amortization expense related to the fair value of the identifiable intangible assets of $0.3 million for the three months ended March 31, 2018 and a net decrease in amortization expense related to the fair value of the identifiable intangible assets of $0.2 million in the three months ended March 31, 2017;
| (3) | the elimination of acquisition costs recorded in the three months ended March 31, 2018 of $0.8 million incurred by the Company;
| (4) | an adjustment to reflect the refinancing of the Company’s debt in connection with the acquisition. The three months ended March 31, 2018 and 2017 reflects a net decrease of $0.9 million and $1.4 million, respectively, for the change in interest expense, amortization of debt issuance costs and elimination of historical debt and preferred interest expense of Filament;
| (5) | an adjustment to reflect additional compensation for a key executive as a result of the acquisition;
| (6) | an increase in the weighted average shares outstanding to reflect the issuance of consideration shares.
The unaudited pro forma results do not include any revenue or cost reductions that may be achieved through the business combination, or the impact of non-recurring items directly related to the business combination. The unaudited pro forma results are not necessarily indicative of the operating results that would have occurred if the Filament acquisition had been completed as of the date for which the pro forma financial information is presented. In addition, the unaudited pro forma results do not purport to project the future condensed consolidated operating results of the combined company.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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