NOTE 12ACQUISITION On November 23, 2015, the Company acquired all of the outstanding capital stock of privately held MikaMonu Group Ltd. (MikaMonu), a development-stage, Israel-based company that specializes in in-place associative computing for markets including big data, computer vision and cyber security. MikaMonu, located in Tel Aviv, held 12 United States patents and a number of pending patent applications. The acquisition was accounted for as a purchase under authoritative guidance for business combinations. The purchase price of the acquisition was allocated to the intangible assets acquired, with the excess of the purchase price over the fair value of assets acquired recorded as goodwill. The Company performs a goodwill impairment test in February of each fiscal year. Consideration Under the terms of the acquisition agreement, the Company paid the former MikaMonu shareholders initial cash consideration of approximately $4.4 million at the closing on November 23, 2015. In addition, $484,000 was deposited in escrow to provide a fund for potential future indemnification claims by the Company. The majority of this escrow deposit, or $479,000, was paid to the former MikaMonu shareholders in May 2017. The Company is also required to pay the former MikaMonu shareholders future contingent consideration consisting of retention payments and earnout payments, as described below. The Company will make cash retention payments of up to an additional $2.5 million to the three former MikaMonu shareholders in installments over a four-year period, conditioned on the continued employment of Dr. Avidan Akerib, MikaMonus co-founder and chief technologist. The retention amount of $2.5 million has been deposited in escrow. Of this amount, $1.0 million is included in prepaid expenses and other current assets on the Consolidated Balance Sheet at March 31, 2019 and $743,000 and $750,000 was paid to the former MikaMonu shareholders during the quarters ended December 31, 2017 and 2018, respectively. The Company will also make earnout payments to the former MikaMonu shareholders in cash or shares of the Companys common stock, at the Companys discretion, during a period of up to ten years following the closing if certain product development milestones and revenue targets for products based on the MikaMonu technology are achieved. Earnout amounts of $750,000 were paid in the fiscal year ended March 31, 2019 based on the achievement of certain product development milestones. Additional earnout amounts of $2.8 million and $4.0 million will be payable if certain revenue milestones are achieved by January 1, 2021 and January 1, 2022, respectively; and additional payments, up to a maximum of $30.0 million, equal to 5% of net revenues from the sale of qualifying products in excess of certain thresholds, will be made quarterly through December 31, 2025. The portion of the retention payment contingently payable to Dr. Akerib (approximately $1.2 million) is being recorded as compensation expense over the period that his services are provided to the Company. The portion of the retention payment contingently payable to the other former MikaMonu shareholders (approximately $1.3 million) plus the maximum amount of the potential earnout payments totals approximately $38.8 million. The Company determined that the fair value of this contingent consideration liability was $5.8 million at the acquisition date. The contingent consideration liability is included in other accrued expenses on the Consolidated Balance Sheet at March 31, 2019 and 2018 in the amount of $3.7 million and $4.4 million, respectively, and is included in accrued expenses and other liabilities at March 31, 2019 and 2018 in the amount of $492,000 and $1.1 million, respectively. The fair value of the contingent consideration liability was initially determined as of the acquisition date using unobservable inputs. These inputs include the estimated amount and timing of future cash flows, the probability of success (achievement of the various contingent events) and a risk-adjusted discount rate of approximately 14.8% used to adjust the probability-weighted cash flows to their present value. Subsequent to the acquisition date, at each reporting period, the contingent consideration liability is re-measured to fair value with changes recorded in selling, general and administrative expenses in the Consolidated Statements of Operations. Re-measurement of the contingent consideration liability resulted in an increase (reduction) in fair value for the years ended March 31, 2019, 2018 and 2017 of ($326,000), ($466,000) and $182,000, respectively.