payments due over 54 months commencing on September 30, 2021. The term loan bears interest at an annual rate equal to the greater of the prime rate announced by Wells Fargo Bank, N.A., or 3.3%, plus 8.6% per annum. The balance of this term loan at December 31, 2022 was $3.4 million, and is included as a component of business acquisition liabilities, of which $0.9 million represents the current portion. The Transaction was accounted for under the acquisition method of accounting. Accordingly, the fair value of the purchase consideration was measured and subsequently allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill. In determining the fair value of the purchase consideration as of March 10, 2021, the Company determined the term loan from PMC to be at market terms, and therefore the fair value to be equal to the stated contractual value of $4.5 million. With respect to the agreement with LO Entertainment, the $2.5 million in deferred payments and $10.0 million in contingent consideration was estimated to have a total fair value of $12.3 million, comprising $9.8 million of contingent consideration and $2.5 million of deferred payments to LO Entertainment as of the transaction date (see Contingent Consideration below for additional information). The following table details the purchase price allocation of the total consideration of $16.8 million: (In thousands) ASOF MARCH10, 2021 Inventories ...................................... $ 500 Propertyandequipment ........................... 3,577 Operating leases right-of-use assets . . . . . . . . . . . . . . . . . . 3,157 Totalidentifiableassets........................ $ 7,234 Operating lease labilities – current . . . . . . . . . . . . . . . . . . . $ 174 Operating lease labilities – non-current . . . . . . . . . . . . . . . 2,777 Totalliabilitiesassumed ....................... $ 2,951 Netidentifiableassetsacquired...................... $ 4,283 Goodwill ....................................... 12,486 Total purchase price allocation ................ $16,769 The goodwill recorded in this transaction is deductible for income tax purposes. The results of operations of the acquired co-manufacturing business from March 11, 2021 through December 31, 2022 have been reflected within the Company’s consolidated financial statements. For the year ended December 31, 2021, the Company recorded acquisition-related expenses associated with the Transaction of $34 thousand, as a component of administrative expense in the consolidated statements of operations. Disclosure of supplemental pro forma information for revenue and earnings related to the acquisition, assuming the acquisition was made at the beginning of the earliest period presented, has not been disclosed as the effects of the acquisition would not have been material to the results of operation for the periods presented given the intercompany nature of a substantial portion of the acquired business. Contingent Consideration The estimated fair value of the contingent consideration used as part of the purchase price allocation totaled $9.8 million, with $3.0 million being paid in 2021. After accreting $0.2 million of interest expense on that 65
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