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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED December 31, 2020.

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______.

001-13684
(Commission File Number)

Pyxus International, Inc.
(Exact name of registrant as specified in its charter)
Virginia 85-2386250
(State or other jurisdiction of incorporation)
(I.R.S. Employer
Identification No.)
 8001 Aerial Center Parkway
Morrisville, North Carolina 27560
(Address of principal executive offices) (Zip Code)
(919) 379-4300
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company' in Rule 12b-2 of the Exchange Act.   

Large Accelerated Filer       Accelerated Filer       Non-Accelerated filer   
Smaller Reporting Company       Emerging Growth Company   

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transaction period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes No

Indicate by check mark if the registrant has filed all documents and reports required to be filed under Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes No

As of January 31, 2021, the registrant had 24,999,947 shares outstanding of Common Stock (no par value).
-1-



Pyxus International, Inc. and Subsidiaries
Table of Contents
Page No.
3
3
3
Part I.
Item 1.
Financial Statements (Unaudited)
6
8
9
Item 2.
Item 3.
Item 4.
Part II.
Item 1.
Item 1A.
Item 6.

-2-



PRELIMINARY NOTE
This Form 10-Q is being filed by Pyxus International, Inc. (the “Company,” “Pyxus,” “we,” or “us”) as the successor issuer to Old Holdco, Inc. (“Old Pyxus”). The Company was formed in August 2020 to facilitate the Restructuring described below. The terms the “Company,” “Pyxus,” “we,” or “us” when used with respect to periods commencing prior to the effectiveness of the Plan (as defined below), refer to Old Pyxus, unless the context would indicate otherwise.
On June 15, 2020, Old Pyxus (then named Pyxus International, Inc.) and its then subsidiaries Alliance One International, LLC, Alliance One North America, LLC, Alliance One Specialty Products, LLC and GSP Properties, LLC (collectively, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code with the Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to implement a prepackaged Chapter 11 plan of reorganization to effectuate a financial restructuring (the “Restructuring”) of Old Pyxus’ secured debt. On August 21, 2020, the Bankruptcy Court issued an order (the “Confirmation Order”) confirming the Amended Joint Prepackaged Chapter 11 Plan of Reorganization (the “Plan”) filed by the Debtors in the Chapter 11 Cases. On August 24, 2020, the Plan became effective in accordance with its terms, and the Debtors emerged from the Chapter 11 Cases. In connection with the satisfaction of the conditions to effectiveness as set forth in the Confirmation Order and the Plan, Old Pyxus completed a series of transactions pursuant to which the business assets and operations of Old Pyxus were vested in a new Virginia corporation, Pyxus Holdings, Inc., which is an indirect subsidiary of the Company. Pursuant to the Confirmation Order and the Plan, at the effectiveness of the Plan all outstanding shares of common stock, and rights to acquire the common stock, of Old Pyxus were cancelled and the shares of common stock of the Company were delivered to certain creditors of Old Pyxus. These and other related matters are discussed in greater detail in the "Note 3. Emergence from Voluntary Reorganization under Chapter 11" to the "Notes to Condensed Consolidated Financial Statements" included herein.

On January 21, 2021, Canada's Island Garden Inc. (“Figr East”), Figr Norfolk Inc. (“Figr Norfolk”) and Figr Brands, Inc. (“Figr Brands”, and together with Figr East and Figr Norfolk, the “Canadian Cannabis Subsidiaries”), which are indirect subsidiaries of the Company, applied for relief from their respective creditors pursuant to Canada’s Companies’ Creditors Arrangement Act (the “CCAA”) in the Ontario Superior Court of Justice (Commercial List) (the “Canadian Court”) in Ontario, Canada as Court File No. CV-21-00655373-00CL (the “CCAA Proceeding”). On January 21, 2021 (the “Order Date”), upon application by the Canadian Cannabis Subsidiaries, the Canadian Court issued an order for creditor protection of the Canadian Cannabis Subsidiaries pursuant to the provisions of the CCAA and the appointment of FTI Consulting Canada Inc. to serve as the Canadian Court-appointed monitor of the Canadian Cannabis Subsidiaries during the pendency of the CCAA Proceeding (the “Monitor”). On January 29, 2021, the Canadian Court issued an order permitting the Canadian Cannabis Subsidiaries to initiate a sale and investment solicitation process to be conducted by the Monitor and its affiliate to solicit interest in, and opportunities for, a sale of, or investment in, all or substantially all, or one or more components, of the assets and/or the business operations of the Canadian Cannabis Subsidiaries. These and other related matters are discussed in greater detail in "Note 25. Subsequent Events" to the "Notes to the Condensed Consolidated Financial Statements" included herein.

FORWARD-LOOKING STATEMENTS
Readers are cautioned that the statements contained in this report regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements, which are based on current expectations of future events, may be identified by the use of words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets,” and other words of similar meaning. These statements also may be identified by the fact that they do not relate strictly to historical or current facts. If underlying assumptions prove inaccurate, or if known or unknown risks or uncertainties materialize, actual results could vary materially from those anticipated, estimated, or projected. These risks and uncertainties include those discussed in this Quarterly Report on Form 10-Q, including in "Part II. Item 1A Risk Factors". We do not undertake to update any forward-looking statements that we may make from time to time. In that regard, the Company has not updated any financial projections included in the disclosure statement of the Debtors distributed in the Chapter 11 Cases, and such financial projections are now stale and should no longer be relied upon as a forecast of expected results.

SUMMARY OF RISK FACTORS
This Quarterly Report on Form 10-Q includes, in "Part II, Item 1A. Risk Factors", a discussion of the most significant risks with respect to making or maintaining an investment in the Company. The following summarizes the principal risks presented in that discussion. Investors are urged to review the full discussion of risks presented in "Part II, Item 1A. Risk Factors".
Risks related to our indebtedness, including that:
we have substantial debt which may adversely affect us by limiting future sources of financing, interfering with our ability to pay interest, and principal on our indebtedness and subjecting us to additional risks;
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we require a significant amount of cash to service our indebtedness, and our ability to generate cash depends on many factors beyond our control;
we may not be able to refinance or renew our indebtedness, which may have a material adverse effect on our financial condition;
we may not be able to satisfy the covenants included in our financing arrangements, which could result in the default of our outstanding debt obligations; and
despite current indebtedness levels, we may still be able to incur substantially more debt, which could exacerbate further the risks associated with our significant leverage.
Risks related to the Chapter 11 Cases, our liquidity and our business strategy, including that:
our leaf tobacco customers, farmers and other suppliers might lose confidence in us as a result of the Chapter 11 Cases and may seek to establish alternative commercial relationships;
foreign lenders that have provided short-term operating credit lines to fund leaf tobacco operations at the local level may lose confidence in us and cease to provide such funding;
there continues to be uncertainty and risks associated with our ability to achieve our goals and continue as a going concern;
unanticipated developments with respect to our liquidity needs and sources of liquidity could result in a deficiency in liquidity; and
our Board of Directors, as reconstituted in connection with the Chapter 11 Cases, may implement changes in our business strategy that could affect the scope of our operations, including the countries in which we continue to operate and the business lines that we continue to pursue, and may result in the recognition of restructuring or asset impairment charges.
Risks related to the COVID-19 pandemic, including:
possible delays in shipments of leaf tobacco, including from the closure or restricted activities at ports or other channels, disruptions to our operations or the operations of suppliers and customers resulting from restrictions on the ability of employees and others in the supply chain to travel and work, border closures, determinations by us or shippers to temporarily suspend operations in affected areas;
whether operations at any of our facilities might be halted for some period of time; and
whether COVID-19 pandemic concerns may negatively affect consumer purchasing behavior with respect to our products or the products of our leaf tobacco customers.
Risks related to our leaf tobacco operations, including our reliance on a small number of significant customers, continuation of vertical integration, changes in the timing of anticipated shipments, changes in anticipated geographic product sourcing, uncertainties with respect to our ability to renew or refinance short-term seasonal financing, political instability and other risks associated with the scope of our international operations, currency and interest rate fluctuations, shifts in the global supply and demand position for tobacco products, competition, changes in tax laws and regulations or the interpretation of tax laws and regulations, resolution of tax matters, adverse weather conditions, the impact of disasters or other unusual events affecting international commerce, and changes in costs incurred in supplying products and related services.
Risks related to the CCAA Proceeding, including:
whether the proposed sales processes with respect to any of the Canadian Cannabis Subsidiaries will be successfully completed within the anticipated time frames;
the extent to which borrowings under the debtor-in-possession lending facility extended by a separate subsidiary of the Company to the Canadian Cannabis Subsidiaries will be repaid;
the extent to which Pyxus will incur liabilities with respect to certain obligations of the Canadian Cannabis Subsidiaries that Pyxus has guaranteed; and
the extent of impairment that Pyxus may recognize with respect to its investment in the Canadian Cannabis Subsidiaries.
Risks related to the continuing business lines in the Company's Other Products and Services segment, including that the new businesses have limited operating histories, are in newly developed markets, may not generate the results that we anticipate and have, and may continue to need significant investment to fund continued operations and expansion, that technologies, processes and formulations may become obsolete, the impact of increasing competition, uncertainties with respect to the development of the industries and markets of the business lines, including the level of consumer demand for such products, the potential for product liability claims, uncertainties with respect to the extent of consumer acceptance of the products offered by the business lines, and the impact of regulation associated with the business lines, including the risk of obtaining anticipated regulatory approvals for nicotine e-liquids products in the United States.
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Risks related to other aspects of our operations, including low investment performance by our defined benefit pension plan assets may increase our pension expense, requiring us to fund a larger portion of our pension obligations and diverting funds from other potential uses, the risk of potential disruption, failure, or security breaches of our internal and externally hosted information technology system, including as a result of cyber-attacks, as well as risks related to our continued maintenance of effective internal control over financial reporting, environmental matters, continued viability of derivative instrument counterparties and the impact of the termination of LIBOR.
Risks related to ownership of our common stock, including the concentration of ownership of our common stock, with two shareholders that, together with their respective affiliates, beneficially own approximately 56% of the outstanding shares of our common stock, as well as significant levels of our indebtedness, and may have the ability to exercise controlling influence on various corporate matters, volatility in the price of our common stock and the staleness of financial projections filed in the Chapter 11 Cases.
Risks related to the tobacco industry, including the decline in the overall consumer demand for tobacco products and the impact of litigation against manufacturers of tobacco products and governmental initiatives targeted at reducing consumer demand for tobacco products.
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Part I. Financial Information

Item 1. Financial Statements


Pyxus International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Successor Predecessor
(in thousands, except per share data) Three months ended December 31, 2020 Three months ended December 31, 2019
Sales and other operating revenues $ 379,560  $ 363,260 
Cost of goods and services sold 317,032  308,133 
Gross profit 62,528  55,127 
Selling, general, and administrative expenses 45,943  45,911 
Other income (expense), net 4,669  (401)
Restructuring and asset impairment charges 7,774  672 
Operating income 13,480  8,143 
Interest expense (includes debt amortization of $3,031 and $2,559, respectively)
24,898  32,200 
Interest income 126  442 
Loss before income taxes and other items (11,292) (23,615)
Income tax expense (benefit) 4,492  (914)
Income from unconsolidated affiliates 7,564  255 
Net loss (8,220) (22,446)
Net loss attributable to noncontrolling interests (55) (453)
Net loss attributable to Pyxus International, Inc. $ (8,165) $ (21,993)
Loss per share:
Basic $ (0.33) $ (2.40)
Diluted $ (0.33) $ (2.40)
Weighted average number of shares outstanding:
Basic 25,000  9,166 
Diluted 25,000  9,166 
See "Notes to Condensed Consolidated Financial Statements"


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Pyxus International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Successor Predecessor
(in thousands, except per share data) Four months ended December 31, 2020 Five months ended August 31, 2020 Nine months ended December 31, 2019
Sales and other operating revenues $ 497,394  $ 447,600  $ 1,022,911 
Cost of goods and services sold 424,498  402,594  867,852 
Gross profit 72,896  45,006  155,059 
Selling, general, and administrative expenses 61,627  87,858  142,551 
Other income (expense), net 2,736  (539) 4,061 
Restructuring and asset impairment charges 8,991  566  892 
Operating income (loss) 5,014  (43,957) 15,677 
Debt retirement expense —  828  — 
Interest expense (includes debt amortization of $4,307, $4,082, and $7,478, respectively)
33,101  46,616  101,346 
Interest income 180  1,426  2,966 
Reorganization items:
Gain on settlement of liabilities subject to compromise —  462,304  — 
Professional fees —  (30,526) — 
United States trustee fees —  (970) — 
Write-off of unamortized debt issuance costs and discount —  (5,303) — 
Issuance of exit facility shares and DIP financing fees —  (208,538) — 
Other debt restructuring costs —  (19,442) — 
Fresh start reporting adjustments —  (91,541) — 
(Loss) income before income taxes and other items (27,907) 16,009  (82,703)
Income tax (benefit) expense (6,091) 292  25,238 
Income from unconsolidated affiliates 7,798  2,358  6,728 
Net (loss) income (14,018) 18,075  (101,213)
Net loss attributable to noncontrolling interests (540) (962) (905)
Net (loss) income attributable to Pyxus International, Inc. $ (13,478) $ 19,037  $ (100,308)
(Loss) earnings per share:
Basic $ (0.54) $ 1.91  $ (10.98)
Diluted $ (0.54) $ 1.91  $ (10.98)
Weighted average number of shares outstanding:
Basic 25,000  9,976  9,137 
Diluted 25,000  9,992  9,137 
See "Notes to Condensed Consolidated Financial Statements"

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Pyxus International, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
Successor Predecessor
(in thousands) Three months ended December 31, 2020 Three months ended December 31, 2019
Net loss $ (8,220) $ (22,446)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment (145) 1,871 
Defined benefit pension amounts reclassified to income —  312 
Change in pension liability for settlements 47  799 
Cash flow hedges (619) — 
Amounts reclassified to income for derivatives —  576 
Total other comprehensive (loss) income, net of tax (717) 3,558 
Total comprehensive loss (8,937) (18,888)
Comprehensive loss attributable to noncontrolling interests (197) (405)
Comprehensive loss attributable to Pyxus International, Inc. $ (8,740) $ (18,483)


Successor Predecessor
(in thousands) Four months ended December 31, 2020 Five months ended August 31, 2020 Nine months ended December 31, 2019
Net (loss) income $ (14,018) $ 18,075  $ (101,213)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment (952) 4,377  (474)
Defined benefit pension amounts reclassified to income —  734  934 
Change in pension liability for settlements 47  —  (1,213)
Cash flow hedges (619) (531) (147)
Amounts reclassified to income for derivatives —  —  2,520 
Total other comprehensive (loss) income, net of tax (1,524) 4,580  1,620 
Total comprehensive (loss) income (15,542) 22,655  (99,593)
Comprehensive loss attributable to noncontrolling interests (661) (1,030) (846)
Comprehensive (loss) income attributable to Pyxus International, Inc. $ (14,881) $ 23,685  $ (98,747)
See "Notes to Condensed Consolidated Financial Statements"

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Pyxus International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
Successor Predecessor
(in thousands) December 31, 2020 December 31, 2019 March 31, 2020
Assets
Current assets
Cash and cash equivalents $ 123,167  $ 72,230  $ 170,208 
Restricted cash 3,779  2,359  2,486 
Trade receivables, net 177,556  180,404  226,742 
Other receivables 16,404  12,257  12,997 
Accounts receivable, related parties 3,344  6,418  5,030 
Notes receivable, related parties —  406  406 
Inventories, net 771,821  871,850  730,019 
Advances to tobacco suppliers, net 61,773  61,536  38,877 
Recoverable income taxes 12,023  9,751  7,562 
Prepaid expenses 31,082  22,447  23,383 
Other current assets 16,981  14,345  14,658 
Total current assets 1,217,930  1,254,003  1,232,368 
Restricted cash 389  389  389 
Long-term notes receivable, related parties 149  7,466  7,450 
Investments in unconsolidated affiliates 92,657  69,368  67,967 
Goodwill 37,935  34,570  — 
Other intangible assets, net 69,008  67,404  65,948 
Deferred income taxes, net 8,929  115,947 
Long-term recoverable income taxes 3,523  2,618  3,038 
Other noncurrent assets 42,870  49,954  48,434 
Right-of-use assets 39,416  43,372  41,471 
Property, plant, and equipment, net 183,249  303,956  295,996 
Total assets $ 1,696,055  $ 1,949,047  $ 1,763,063 
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable to banks $ 433,571  $ 580,346  $ 540,157 
Accounts payable 51,945  61,076  67,094 
Accounts payable, related parties 28,417  11,077  11,820 
Advances from customers 24,881  19,227  18,810 
Accrued expenses and other current liabilities 75,813  103,351  89,928 
Income taxes payable 2,220  15,444  5,049 
Operating leases payable 9,214  14,033  11,160 
Current portion of long-term debt 141  325  45,048 
Total current liabilities 626,202  804,879  789,066 
Long-term taxes payable 7,623  8,523  8,543 
Long-term debt 551,925  902,461  904,316 
Deferred income taxes 13,234  30,396  22,903 
Liability for unrecognized tax benefits 13,327  12,233  12,311 
Long-term leases 29,740  28,206  27,843 
Pension, postretirement, and other long-term liabilities 74,467  70,315  74,389 
Total liabilities 1,316,518  1,857,013  1,839,371 
Commitments and contingencies
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Successor Predecessor
(in thousands) December 31, 2020 December 31, 2019 March 31, 2020
Stockholders’ equity
Common Stock—no par value:
Authorized shares (250,000 for all periods)
Issued shares (25,000, 9,963, and 9,976, respectively)
391,089  469,450  469,677 
Retained deficit (13,478) (324,192) (488,545)
Accumulated other comprehensive loss (1,403) (59,781) (59,132)
Total stockholders’ equity (deficit) of Pyxus International, Inc. 376,208  85,477  (78,000)
Noncontrolling interests 3,329  6,557  1,692 
Total stockholders’ equity (deficit) 379,537  92,034  (76,308)
Total liabilities and stockholders’ equity $ 1,696,055  $ 1,949,047  $ 1,763,063 
See "Notes to Condensed Consolidated Financial Statements"

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Pyxus International, Inc. and Subsidiaries
Condensed Statements of Consolidated Stockholders' Equity
(Unaudited)
Attributable to Pyxus International, Inc.
Accumulated Other Comprehensive Loss
(in thousands) Common
Stock
Retained
(Deficit) Earnings
Currency Translation Adjustment Pensions,
Net of Tax
Derivatives, Net of Tax Noncontrolling
Interests
Total Stockholders' Equity
Balance, March 31, 2020 (Predecessor) $ 469,677  $ (488,545) $ (22,509) $ (37,154) $ 531  $ 1,692  $ (76,308)
Net loss —  (92,161) —  —  —  (648) (92,809)
Stock-based compensation 117  —  —  —  —  —  117 
Dividends paid —  —  —  —  —  (120) (120)
Other comprehensive (loss) income, net of tax —  —  (64) 494  (531) (76) (177)
Balance, June 30, 2020 (Predecessor) 469,794  (580,706) (22,573) (36,660) —  848  (169,297)
Net income —  111,198  —  —  —  (314) 110,884 
Stock-based compensation —  —  —  —  — 
Dividends paid —  —  —  —  —  (180) (180)
Change in investment in subsidiaries (1,655) —  —  —  —  (461) (2,116)
Other comprehensive income, net of tax —  —  4,509  240  —  4,757 
Cancellation of Predecessor equity (468,147) 469,508  18,064  36,420  —  99  55,944 
Balance, August 31, 2020 (Predecessor) $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Balance, September 1, 2020 (Successor) $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Issuance of Successor common stock 391,402  —  —  —  —  —  391,402 
Fresh start adjustment to noncontrolling interests —  —  —  —  —  4,359  4,359 
Net loss —  (5,313) —  —  —  (485) (5,798)
Dividends paid —  —  —  —  —  (123) (123)
Other comprehensive (loss) income, net of tax —  —  (828) —  —  21  (807)
Balance, September 30, 2020 (Successor) 391,402  (5,313) (828) —  —  3,772  389,033 
Net loss —  (8,165) —  —  —  (55) (8,220)
Fresh start adjustments (313) —  —  —  —  (246) (559)
Other comprehensive (loss) income, net of tax —  —  (3) 47  (619) (142) (717)
Balance, December 31, 2020 (Successor) $ 391,089  $ (13,478) $ (831) $ 47  $ (619) $ 3,329  $ 379,537 

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Pyxus International, Inc. and Subsidiaries
Condensed Statements of Consolidated Stockholders' Equity
(Unaudited)
Attributable to Pyxus International, Inc.
Accumulated Other Comprehensive Loss
(in thousands) Common
Stock
Retained
(Deficit) Earnings
Currency Translation Adjustment Pensions,
Net of Tax
Derivatives, Net of Tax Noncontrolling
Interests
Total Stockholders' Equity
Balance, March 31, 2019 (Predecessor) $ 468,936  $ (223,884) $ (21,979) $ (36,749) $ (2,614) $ 8,309  $ 192,019 
Net loss —  (61,797) —  —  —  (366) (62,163)
Stock-based compensation 429  —  —  —  —  —  429 
Other comprehensive (loss) income, net of tax —  —  (430) 311  369  30  280 
Balance, June 30, 2019 (Predecessor) 469,365  (285,681) (22,409) (36,438) (2,245) 7,973  130,565 
Net loss —  (16,518) —  —  —  (86) (16,604)
Restricted stock surrender (12) —  —  —  —  —  (12)
Stock-based compensation 383  —  —  —  —  —  383 
Dividends paid —  —  —  —  —  (480) (480)
Other comprehensive (loss) income, net of tax —  —  (1,925) (1,701) 1,428  (19) (2,217)
Balance, September 30, 2019 (Predecessor) 469,736  (302,199) (24,334) (38,139) (817) 7,388  111,635 
Net loss —  (21,993) —  —  —  (453) (22,446)
Stock-based compensation 242  —  —  —  —  —  242 
Purchase of noncontrolling interests in a subsidiary (528) —  33  —  —  (426) (921)
Other comprehensive loss, net of tax —  —  1,789  1,111  576  48  3,524 
Balance, December 31, 2019 (Predecessor) $ 469,450  $ (324,192) $ (22,512) $ (37,028) $ (241) $ 6,557  $ 92,034 
*Amounts may not equal column totals due to rounding
See "Notes to Condensed Consolidated Financial Statements"




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Pyxus International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Successor Predecessor
(in thousands) Four months ended December 31, 2020 Five months ended August 31, 2020 Nine months ended December 31, 2019
Operating Activities:
Net (loss) income $ (14,018) $ 18,075  $ (101,213)
Adjustments to reconcile net (loss) income to net cash used by operating activities:
Depreciation and amortization 13,301  16,580  26,003 
Debt amortization/interest 6,552  4,862  9,356 
Gain on foreign currency transactions (2,196) (11,077) (3,921)
Asset impairment charges 3,982  213  260 
(Income) loss from unconsolidated affiliates, net of dividends (7,600) 2,915  (128)
Reorganization items —  (130,215) — 
Changes in operating assets and liabilities, net (33,151) (67,544) (323,849)
Other, net 7,588  (15,870) 6,274 
Net cash used by operating activities (25,542) (182,061) (387,218)
Investing Activities:
Purchases of property, plant, and equipment (11,557) (7,757) (51,479)
Collections on beneficial interests on securitized trade receivables 49,562  74,328  174,741 
Loans to unconsolidated affiliates —  —  (5,250)
Payments to acquire businesses, net of cash acquired —  (4,805) — 
Other, net 116  (109) 1,604 
Net cash provided by investing activities 38,121  61,657  119,616 
Financing Activities:
Net repayments and proceeds from short-term borrowings (37,915) (99,969) 156,784 
Proceeds from DIP facility —  206,700  — 
Repayment of DIP facility —  (213,418) — 
Proceeds from term loan facility —  213,418  — 
Proceeds from 10.0% first lien notes
—  280,844  — 
Repayment of 8.5% first lien notes
—  (280,844) — 
Proceeds from revolving loans facilities 37,500  27,438  — 
Proceeds from long-term borrowings 462  2,568  — 
Repayment of revolving loans facilities —  (44,900) — 
Repayment of second lien notes —  (1,199) — 
Share repurchases —  (1,000) — 
Debt issuance costs (2,657) (8,486) (5,245)
DIP financing fees —  (9,344) — 
Purchase of noncontrolling interests in a subsidiary —  —  (921)
Other debt restructuring costs —  (7,574) — 
Other, net (241) (565) (571)
Net cash (used) provided by financing activities (2,851) 63,669  150,047 
Effect of exchange rate changes on cash (369) 1,628  (5,277)
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Successor Predecessor
(in thousands) Four months ended December 31, 2020 Five months ended August 31, 2020 Nine months ended December 31, 2019
Increase (decrease) in cash, cash equivalents, and restricted cash 9,359  (55,107) (122,832)
Cash and cash equivalents at beginning of period 93,138  170,208  192,043 
Restricted cash at beginning of period 24,838  2,875  5,767 
Cash, cash equivalents, and restricted cash at end of period $ 127,335  $ 117,976  $ 74,978 
Other information:
Cash paid for income taxes, net $ 8,409  $ 5,560  $ 13,768 
Cash paid for interest 17,451  54,233  80,191 
Cash received from interest (406) (1,356) (2,839)
Cash paid for reorganization items —  7,314  — 
Noncash investing and financing activities:
Purchases of property, plant, and equipment included in accounts payable $ 1,090  $ 1,759  $ 4,590 
Sales of property, plant, and equipment included in notes receivable 117  304  662 
Noncash amounts obtained as a beneficial interest in exchange for transferring trade receivables in a securitization transaction 59,501  66,821  151,149 
Cancellation of second lien notes —  (634,487) — 
See "Notes to Condensed Consolidated Financial Statements"

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Pyxus International, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)


1. Basis of Presentation and Significant Accounting Policies

The accompanying condensed consolidated financial statements represent the consolidation of Pyxus International, Inc. (the "Company" or "Pyxus") and all companies that Pyxus directly or indirectly controls, either through majority ownership or otherwise. The terms the “Company,” “Pyxus,” “we,” or “us” when used with respect to periods commencing prior to the effectiveness of the Plan (as defined below), refer to Old Pyxus (as defined below), unless the context would indicate otherwise. These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, the normal and recurring adjustments necessary for fair statement of financial position, results of operations, and cash flows at the dates and for the periods presented have been included. Intercompany accounts and transactions have been eliminated.
These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended March 31, 2020 of Old Holdco, Inc. filed on August 24, 2020. Due to the seasonal nature of the Company’s business, the results of operations for a fiscal quarter are not necessarily indicative of the operating results that may be attained for other quarters or a full fiscal year.
The Company applied Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 852 – Reorganizations (“ASC 852”) in preparing the condensed consolidated financial statements. For periods subsequent to the Chapter 11 filing, ASC 852 requires distinguishing transactions associated with the reorganization separate from activities related to the ongoing operations of the business. Upon the effectiveness of the Plan and the emergence of the Debtors from the
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Chapter 11 Cases, the Company determined it qualified for fresh start reporting under ASC 852, which resulted in the Company becoming a new entity for financial reporting purposes on the Effective Date (as defined below). The Company elected to apply fresh start reporting using a convenience date of August 31, 2020 (the “Fresh Start Reporting Date”). The Company evaluated and concluded that the events between August 24, 2020 and August 31, 2020 were not material to the Company's financial reporting on both a quantitative or qualitative basis. Refer to “Note 4. Fresh Start Reporting” for additional information.
Due to the application of fresh start reporting, the pre-emergence and post-emergence periods are not comparable. The lack of comparability is emphasized by the use of a “black line” to separate the Predecessor and Successor periods in the condensed consolidated financial statements and footnote tables. References to “Successor” relate to our financial position and results of operations after August 31, 2020. References to “Predecessor” relate to our financial position and results of operations on or before August 31, 2020.
Bankruptcy Proceedings
On June 15, 2020, Old Holdco, Inc. (then named Pyxus International, Inc.) (“Old Pyxus”) and its then subsidiaries Alliance One International, LLC, Alliance One North America, LLC, Alliance One Specialty Products, LLC, and GSP Properties, LLC (collectively, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code with the Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to implement a prepackaged Chapter 11 plan of reorganization to effectuate a financial restructuring (the “Restructuring”) of Old Pyxus’ secured debt. On August 21, 2020, the Bankruptcy Court issued an order (the “Confirmation Order”) confirming the Amended Joint Prepackaged Chapter 11 Plan of Reorganization (the “Plan”) filed by the Debtors in the Chapter 11 Cases. On August 24, 2020 (the “Effective Date”), the Plan became effective in accordance with its terms, and the Debtors emerged from the Chapter 11 Cases. In connection with the satisfaction of the conditions to effectiveness as set forth in the Confirmation Order and the Plan, Old Pyxus completed a series of transactions pursuant to which the business assets and operations of Old Pyxus were vested in a new Virginia corporation, Pyxus Holdings, Inc., which is a subsidiary of the Company. Pursuant to the Confirmation Order and the Plan, at the effectiveness of the plan all outstanding shares of common stock, and rights to acquire the common stock, of Old Pyxus were cancelled and the shares of common stock of the Company were delivered to certain creditors of Old Pyxus. Refer to “Note 3. Emergence from Voluntary Reorganization under Chapter 11” for additional information.
Reorganization Items
Expenditures, gains, and losses that were realized or incurred by the Debtors subsequent to the Petition Date and as a direct result of the Chapter 11 Cases are reported as reorganization items in the condensed consolidated statements of operations. Reorganization items are primarily composed of write-off of unamortized debt issuance costs and discount, fresh start reporting adjustments, legal, valuation, and consulting professional fees pertaining to the Chapter 11 Cases, United States trustee fees, DIP financing fees, other debt restructuring costs, gain on settlement of liabilities subject to compromise, and the issuance of exit facility shares.

Contract Balances
The Company generally records a receivable when revenue is recognized as the timing of revenue recognition may differ from the timing of payment from customers. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 60 days. The Company's trade receivables do not bear interest, and they are recorded at the invoiced amount less an estimated allowance for expected credit losses. In addition to estimating an allowance based on specific identification of certain receivables that have a higher probability of not being paid, the Company also records an estimate for expected credit losses for the remaining receivables in the aggregate using a loss-rate method that considers historical bad debts, age of customer receivable balances, and current customer receivable balances. Additionally, the Company considers future reasonable and supportable forecasts of economic conditions to adjust historical loss rate percentages as necessary. Balances are written-off when determined to be uncollectible. Refer to "Note 5. Revenue Recognition" for a summary of the activity in the allowance for expected credit losses.
Reclassifications
Prior period amounts have been reclassified to conform to the current year presentation of other noncurrent assets in the condensed consolidated balance sheets and certain items in the condensed consolidated statements of cash flows.

2. New Accounting Standards
Recently Adopted Accounting Pronouncements
In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 and its related amendments are intended to provide financial statement users with more decision-useful information about the expected credit losses on financial assets held at amortized cost and other commitments to extend credit held by a reporting entity at each reporting date. Based on the Company's scoping assessment, ASU 2016-13 primarily impacts trade receivables. This guidance was early adopted by the Company as of April 1, 2020 using the modified retrospective approach. The adoption of this new accounting standard did not have a material impact on the Company's financial condition, results of operations, or cash flows.
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In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 updates disclosure requirements for defined benefit plans. This guidance was adopted using a retrospective approach and was effective beginning in the first quarter of fiscal year 2021. This new accounting standard did not have a material impact on the Company's financial condition, results of operations, or cash flows; however, expanded disclosures will be required in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2021.
Recent Accounting Pronouncements Not Yet Adopted
In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. ASU 2019-12 eliminates certain exceptions related to the approach for intra-period tax allocations, the methodology for calculating income taxes during interim periods when there are changes in tax laws or when year-to-date losses exceed anticipated losses, and the recognition of deferred tax liabilities for outside basis differences in foreign investments. This guidance also simplifies aspects of the accounting for franchise taxes that are partially based on income, separate financial statements of legal entities not subject to tax, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for the Company on April 1, 2021, with early adoption permitted. The Company is currently evaluating the impact that this new accounting standard will have on its consolidated financial statements and related disclosures.

3. Emergence from Voluntary Reorganization under Chapter 11
Bankruptcy Proceedings
On June 15, 2020, the Debtors filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware to implement a prepackaged Chapter 11 plan of reorganization in order to effectuate a financial restructuring of the Debtors’ debt. On August 21, 2020, the Bankruptcy Court entered the Confirmation Order pursuant to the Bankruptcy Code, which approved and confirmed the Amended Joint Prepackaged Chapter 11 Plan of Reorganization of Pyxus International, Inc. and Its Affiliated Debtors.
Summary Features of the Plan of Reorganization
On August 24, 2020 (the “Effective Date”), the Plan became effective in accordance with its terms, and the Debtors emerged from the Chapter 11 Cases. In connection with the satisfaction of the conditions to effectiveness as set forth in the Confirmation Order and the Plan, Old Pyxus completed a series of transactions pursuant to which the business assets and operations of Old Pyxus were vested in a new Virginia corporation, Pyxus Holdings, Inc. (“Pyxus Holdings”), which is a subsidiary of the Company. Under the Plan, all suppliers, vendors, employees, trade partners, foreign lenders, and landlords were unimpaired and were to be satisfied in full in the ordinary course of business, and the existing trade and customer contracts and terms of Old Pyxus were to be maintained by the Company and its subsidiaries. Commencing upon the Effective Date, the Company, through its subsidiaries, continued to operate the Old Pyxus business in the ordinary course. Old Pyxus, which retained no assets, has commenced a dissolution process and is being wound down.

Treatment of Claims and Interests
The Plan treated claims against and interest in Old Pyxus upon the effectiveness of the Plan as follows:

Other Secured Claims (as defined in the Plan) were either (i) paid in full in cash, (ii) satisfied by delivery of collateral securing any such Claim (as defined in the Plan) and payment of any required interest, or (iii) reinstated.

Other Priority Claims (as defined in the Plan) were paid in full in cash.

Holders of First Lien Notes Claims (as defined in the Plan) received (i) payment in full in cash of all accrued and unpaid interest on such First Lien Notes, and (ii) the Notes (as defined below).

Holders (as defined in the Plan) of Second Lien Notes Claims (as defined in the Plan) received, at the Holder’s election, (i) their pro rata share of the Company's common stock distributed in connection with the effectiveness of the Plan or (ii) cash equal to 2.00% of the principal amount of all Second Lien Notes beneficially owned by such Holder.

Lenders under Foreign Credit Lines (as defined in the Plan) were paid in the ordinary course of business in accordance with the terms of the relevant agreement.

General Unsecured Claims (as defined in the Plan) were paid in the ordinary course of business.

The existing common stock, and rights to acquire common stock, of Old Pyxus was discharged, cancelled, released, and extinguished and of no further force or effect.

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Third Party Releases
Upon the effectiveness of the Plan, certain Holders of Claims and Interests (as such terms are defined in the Plan) with respect to the Debtors, except as otherwise specified in the Plan or Confirmation Order, were deemed to release and discharge the Released Parties (as defined in the Plan) from certain claims, obligations, rights, suits, damages, causes of action and liabilities in connection with the Chapter 11 Cases.

Transactions in Connection with Emergence
As contemplated by the Plan, certain transactions were effected on or prior to the effectiveness of the Plan, including the following:

Three new Virginia corporations (i.e., the Company (then known as “Pyxus One, Inc.”), Pyxus Parent, Inc. and Pyxus Holdings) were organized.

Pyxus Parent, Inc. issued all of its equity interests to the Company in exchange for 25.0 million shares of common stock, no par value, of the Company (such common stock is referred to as “New Common Stock” and the 25.0 million shares of which are referred to as the “Equity Consideration”). Pyxus Holdings then issued all of its equity interests to Pyxus Parent, Inc. in exchange for the Equity Consideration.

Pyxus Holdings entered into the ABL Credit Agreement (as defined below) to borrow cash under the ABL Credit Facility (as defined below) which together with cash on-hand was sufficient to fund (1) the distributions to holders of Allowed Second Lien Notes Claims (as defined in the Plan) that elected to take the Second Lien Notes Cash Option (as defined in the Plan) and (2) the Existing Equity Cash Pool (as defined in the Plan) (collectively such amount of cash is referred to as the “Cash Consideration”).

Pursuant to an Asset Purchase Agreement, Old Pyxus transferred to Pyxus Holdings all of its assets (including by assuming and assigning all of Old Pyxus’ Executory Contracts and Unexpired Leases (as such terms are defined in the Plan) to Pyxus Holdings in accordance with the Plan, other than those Executory Contracts and Unexpired Leases that were rejected) and Pyxus Holdings assumed all of Old Pyxus’ obligations that are not discharged under the Plan (including all of Old Pyxus’ obligations to satisfy Allowed Administrative Claims, Allowed Professional Fee Claims, Allowed Other Secured Claims, Allowed Other Priority Claims, Allowed Foreign Credit Line Claims, Allowed General Unsecured Claims, Allowed Debtor Intercompany Claims, and Allowed Debtor Intercompany Claims as set forth in the Plan (as such terms are defined in the Plan)) in exchange for (i) Pyxus Holdings transferring the Equity Consideration to Old Pyxus, (ii) Pyxus Holdings transferring the Cash Consideration to Old Pyxus, (iii) Pyxus Holdings issuing the Notes (as defined below) under the Indenture (as defined below) which, on behalf of Old Pyxus, was issued to the Holders of Allowed First Lien Notes Claims (as defined in the Plan) as set forth in the Plan, and (iv) Pyxus Holdings issuing the Term Loans (as defined below) under the Term Loan Credit Facility (as defined below) which, on behalf of Old Pyxus, was issued to the holders of the DIP Facility Claims (as defined in the Plan) as set forth in the Plan. In addition to the transfer of assets to Pyxus Holdings, Pyxus Holdings made an offer of employment to all employees of Old Pyxus and all such employees became employed by Pyxus Holdings, or a designated subsidiary, upon the effectiveness of the Plan on the same terms and conditions existing immediately prior to the effectiveness of the Plan.

The Company and Pyxus Parent, Inc., along with each applicable subsidiary of the Company, guaranteed the Notes, the Term Loan Credit Facility, and the ABL Credit Facility.

Old Pyxus provided for the distribution of (i) the Notes to the Holders of Allowed First Lien Notes Claims pursuant to the Plan, (ii) approximately 12.5 million shares of New Common Stock to Holders of Allowed Second Lien Notes Claims (as defined in the Plan) that elected to receive New Common Stock under the Second Lien Notes Stock Option (as defined in the Plan) pursuant to the Plan, (iii) cash to the Holders of Allowed Second Lien Notes Claims that elected to take or are deemed to elect to take the Second Lien Notes Cash Option (as defined in the Plan), (iv) cash to the Qualifying Holders (as defined in the Plan) of the common stock of Old Pyxus pursuant to the Plan, (v) the Term Loans under the Term Loan Credit Facility and approximately 11.1 million shares of New Common Stock to the Holders of the DIP Facility Claims pursuant to the Plan, and (vi) approximately 1.4 million shares of New Common Stock in satisfaction of the Second Lien Notes RSA Fee Shares (as defined in the Plan) and in satisfaction of the Backstop Fee Shares (as defined in the Plan) to the persons entitled thereto pursuant to the terms and conditions of the Restructuring Support Agreement, dated June 14, 2020, by and among Old Pyxus and certain of its creditors party thereto, which was filed as Exhibit 10.1 to the Current Report on Form 8-K of Old Pyxus filed on June 15, 2020.

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Old Pyxus changed its name to Old Holdco, Inc., and the Company changed its name to Pyxus International, Inc.

The Company elected a board of directors, initially comprising J. Pieter Sikkel, Holly Kim, and Patrick Fallon, and appointed as its officers the individuals serving as officers of Old Pyxus to the same offices held immediately prior to the effectiveness of the Old Plan.

The Company as Successor Issuer
As a result of these transactions, the Company is deemed to be the successor issuer to Old Pyxus under Rule 12g‑3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, the shares of New Common Stock were deemed to be registered under Section 12(g) of the Exchange Act and the Company was thereby deemed to be subject to the informational requirements of the Exchange Act, and the rules and regulations promulgated thereunder and, in accordance therewith, is required to file reports and other information with the Securities and Exchange Commission.

ABL Credit Facility
On the Effective Date, Pyxus Holdings entered into an Exit ABL Credit Agreement (the “ABL Credit Agreement”), dated as of August 24, 2020 by and among, amongst others, Pyxus Holdings, certain lenders party thereto and Wells Fargo Bank, National Association, as administrative agent and collateral agent to establish an asset-based revolving credit facility (the “ABL Credit Facility”). The ABL Credit Facility may be used for revolving credit loans and letters of credit from time to time up to an initial maximum principal amount of $75.0 million, subject to certain limitations. The ABL Credit Facility matures on February 24, 2023, subject to potential extension on terms and conditions set forth in the ABL Credit Agreement. Refer to “Note 15. Debt Arrangements” for a description of the ABL Credit Agreement and the ABL Credit Facility.

Term Loan Credit Facility
On the Effective Date, Pyxus Holdings entered into an Exit Term Loan Credit Agreement (the “Term Loan Credit Agreement”), dated as of August 24, 2020 by and among, amongst others, Pyxus Holdings, certain lenders party thereto and Alter Domus (US) LLC, as administrative agent and collateral agent to establish a term loan credit facility in an aggregate principal amount of approximately $213.4 million (the “Term Loan Credit Facility”). The aggregate principal amount of loans outstanding under Debtors’ debtor-in-possession financing facility (the "DIP Facility”), and related fees, were converted into, or otherwise satisfied with the proceeds of, the Term Loan Credit Facility. The loans made under the Term Loan Credit Facility (the “Term Loans”) and the Term Loan Credit Facility mature on February 24, 2025. Refer to “Note 15. Debt Arrangements” for a description of the Term Loan Credit Agreement, the Term Loan Credit Facility and the Term Loans.

Senior Secured First Lien Notes
On the Effective Date, Pyxus Holdings issued approximately $280.8 million in aggregate principal amount of its 10.00% Senior Secured First Lien Notes due 2024 (the “Notes”) to holders of Allowed First Lien Notes Claims (as defined in the Plan) pursuant to an Indenture (the “Indenture”) dated as of the Effective Date among Pyxus Holdings, the initial guarantors party thereto, and Wilmington Trust, National Association, as trustee, and collateral agent. The Notes mature on August 24, 2024. Refer to “Note 15. Debt Arrangements” for a description of the Notes and the Indenture.

Shareholders Agreement
On August 24, 2020, the Company entered into a Shareholders Agreement (the “Shareholders Agreement”), among the Company and the investors listed therein, each other beneficial owner of the Company's common stock as of the date of the Shareholder Agreement deemed to be a party thereto pursuant to the Plan and other persons that may from time to time become parties thereto (collectively, the “Investors”). The Shareholders Agreement provides that each of Glendon Capital Management LP (together with its affiliates, the “Glendon Investor”) and Monarch Alternative Capital LP (together with its affiliates, the “Monarch Investor”) shall be entitled to nominate two individuals to serve on the seven-member board of directors of the Company so long as it beneficially owns at least 20% of the outstanding shares of the Company's common stock, or one individual to serve as such a director if it beneficially owns fewer than 20% of the outstanding shares but at least 10% of the outstanding shares. The Shareholders Agreement provides that the Investors shall take all necessary action to elect such nominees of each of the Glendon Investor and the Monarch Investor as directors, as well as the election of the chief executive officer of the Company as a director and other individuals qualifying as independent directors to be selected by Investors that beneficially own 5% or more of the outstanding shares of common stock of the Company, as determined by a majority of the shares of the Company's common stock beneficially owned by such Investors. The Shareholders Agreement provides that the chairperson of the board of directors of the Company is to be elected by a majority of the directors that had been nominated by the Glendon Investor (the “Glendon Directors”) and those that had been nominated by the Monarch Investor (the “Monarch Directors”), with the chairperson of such board to be elected by the board of directors of the Company if the Glendon Directors and Monarch Directors are together fewer than three in number or fail to appoint a chairperson. The Shareholders Agreement also includes provisions for the removal and replacement of the Glendon Directors at the request of the Glendon Investor and the removal and replacement of the Monarch Directors at the request of the Monarch Director, as well as provisions with
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respect to the calling and quorum of meetings of the board of directors of the Company, membership of committees of the board of directors of the Company, and compensation and insurance of members of the board of directors of the Company.

The Shareholders Agreement also provides for tag-along rights for Investors beneficially owning 1% or more of the outstanding shares of the Company's common stock (the “1% Investors”) upon the transfer by an Investor or group of Investors of 20% or more of the outstanding shares of the Company's common stock, drag-along rights upon the transfer of shares by an Investor or group of Investors of 50% or more of the outstanding shares of the Company's common stock, rights of first offer with respect to the transfer by an Investor, subject to certain exceptions, of 1% or more of the outstanding shares of the Company common stock, pre-emptive rights to the 1% Investors upon issuance of new securities by the Company, and demand and piggyback registration rights.

The Shareholders Agreement includes the agreement of the Investors not to transfer shares of common stock of the Company (i) in violation of federal and state securities laws, (ii) in a transfer that would cause the Company to be regarded as an “investment company” under the Investment Company Act of 1940, as amended, (iii) in a transfer, at any time that the Company is not subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, that would cause the number of holders of the Company's common stock to exceed specified thresholds, or (iv) in a transfer that is, to the knowledge of the transferor after reasonable inquiry, (A) to any specified competitor of the Company (B) or to a person that would become either a beneficial owner of 5% of the outstanding common stock of the Company or a “5-percent shareholder” within the meaning of Section 382 of the Internal Revenue Code and the regulations promulgated thereunder (collectively, a “5% Holder”). The Shareholders Agreement provides that the board of directors may waive these restrictions, provided that any waiver of the restriction with respect to a person that would become a 5% Holder upon such transfer may be waived only if the transferee enters into a joinder agreeing to be bound by the Shareholders Agreement.

4. Fresh Start Reporting

In connection with the emergence from Chapter 11 Cases, the Company qualified for fresh start reporting as (i) the holders of existing voting shares of the Predecessor received less than 50% of the voting shares of the Successor Company and (ii) the preliminary reorganization value of the Company's assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims. In accordance with ASC 852, with the application of fresh start reporting, the Company allocated the preliminary reorganization value to its individual assets and liabilities based on their estimated fair values. The Effective Date estimated fair values of certain of the Company's assets and liabilities differed materially from their recorded values as reflected on the historical balance sheets.

Reorganization Value
The reorganization value represents the fair value of the Company’s total assets before considering liabilities and is intended to approximate the amount a willing buyer would pay for the Company’s assets immediately after restructuring. The reorganization value was derived from the enterprise value, which represents the estimated fair value of an entity’s long-term debt and equity. As set forth in the Plan, the enterprise value (excluding cash) of the Company was estimated to be in the range of $1,251,000 to $1,524,000 with a midpoint of $1,388,000. The Company estimated its enterprise value to be $1,252,379, which is near the low point of the range. The Company believes utilizing an estimated enterprise value near the low point of the range is appropriate due to the identification of Level 1 trading activity that indicated the estimated enterprise value was near the low point of the range, the Company's performance lagging behind plan (due in part to the continued impact of the COVID-19 pandemic), and the utilization of an increased discount rate for the Other Products and Services long-term projections.

The estimated enterprise value is not necessarily indicative of actual value or financial results. Changes in the economy or the financial markets could result in a different estimated enterprise value. The calculated enterprise value relies on the three methodologies listed below collectively. The actual value of the business is subject to certain uncertainties and contingencies that are difficult to predict and will fluctuate with changes in various factors affecting the financial conditions and prospects of the business.









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The following reconciles the estimated enterprise value to the estimated fair value of the Successor common stock as of the Fresh Start Reporting Date:

Enterprise value, excluding cash $ 1,252,379 
Plus: cash, cash equivalents, and restricted cash 117,587 
Less: fair value of debt (974,205)
Fair value of Successor stockholders’ equity $ 395,761 
Shares issued upon emergence 25,000 
Per share value $ 15.83 

The following reconciles estimated enterprise value to the reorganization value of the Successor assets to be allocated to individual assets as of the Fresh Start Reporting Date:

Enterprise value, excluding cash $ 1,252,379 
Plus: cash, cash equivalents, and restricted cash 117,587 
Plus: working capital liabilities 170,905 
Plus: other operating liabilities 54,700 
Plus: non-operating liabilities 113,954 
Reorganization value of Successor assets $ 1,709,525 

With the assistance of financial advisors, the Company determined the estimated enterprise value and the corresponding estimated equity value of the Successor by considering various valuation methods, including (i) discounted cash flow method, (ii) guideline public company method, and (iii) selected transaction analysis method. The use and reliability of each approach is dependent on the facts and circumstances of the business being valued.
In order to estimate the enterprise value using the discounted cash flow analysis approach, the Company’s estimated future cash flow projections through 2024, plus a terminal value calculated using a capitalization rate applied to normalized cash flows were discounted to an assumed present value using our estimated weighted average cost of capital (12%), which represents the internal rate of return.

Condensed Consolidated Balance Sheet
The adjustments set forth in the following condensed consolidated balance sheet as of August 31, 2020 reflect the effects of the transactions contemplated by the Plan and executed on the Fresh Start Reporting Date (reflected in the column entitled “Reorganization Adjustments”) as well as the fair value and other required accounting adjustments resulting from the adoption of fresh start reporting (reflected in the column entitled “Fresh Start Reporting Adjustments”).
(in thousands) As of August 31, 2020
Fresh Start Reporting Adjustments
Predecessor Reorganization Adjustments As Reported at September 30, 2020 As Adjusted at December 31, 2020 Successor
Assets
Current assets
Cash and cash equivalents $ 111,427  $ (18,289) (1) $ —  $ —  $ 93,138 
Restricted cash 2,949  21,500  (2) —  —  24,449 
Trade receivables, net 152,309  —  —  —  152,309 
Other receivables 13,227  —  —  —  13,227 
Accounts receivable, related parties 2,780  —  —  —  2,780 
Inventories, net 861,851  —  —  —  861,851 
Advances to tobacco suppliers, net 44,061  —  —  —  44,061 
Recoverable income taxes 5,830  —  —  —  5,830 
Prepaid expenses 34,350  —  —  —  34,350 
Other current assets 15,059  —  —  —  15,059 
Total current assets 1,243,843  3,211  —  —  1,247,054 
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Restricted cash 389  —  —  —  389 
Investments in unconsolidated affiliates 54,460  —  13,291  30,531  (13) 84,991 
Goodwill 6,120  —  48,756  31,815  (14) 37,935 
Other intangible assets, net 64,924  —  1,596  6,075  (15) 70,999 
Deferred income taxes, net 125  —  9,638  7,484  (16) 7,609 
Long-term recoverable income taxes 3,130  —  —  —  3,130 
Other noncurrent assets 45,821  3,139  (3) (310) (310) (17) 48,650 
Right-of-use assets 39,576  —  (4,281) (4,281) (18) 35,295 
Property, plant, and equipment, net 299,293  —  (124,965) (125,820) (19) 173,473 
Total assets $ 1,757,681  $ 6,350  $ (56,275) $ (54,506) $ 1,709,525 
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable to banks $ 461,783  $ —  $ —  $ —  $ 461,783 
DIP financing 206,700  (206,700) (4) —  —  — 
Accounts payable 58,813  334  (5) 25  25  59,172 
Accounts payable, related parties 26,125  —  —  —  26,125 
Advances from customers 23,967  —  —  —  23,967 
Accrued expenses and other current liabilities 113,118  (31,853) (6) (1,792) (1,792) (20) 79,473 
Income taxes payable 8,319  —  —  —  8,319 
Operating leases payable 11,083  —  (992) (992) (21) 10,091 
Current portion of long-term debt 90  —  —  —  90 
Total current liabilities 909,998  (238,219) (2,759) (2,759) 669,020 
Long-term taxes payable 7,623  —  —  —  7,623 
Long-term debt 277,090  250,546  (7) (15,304) (15,304) (22) 512,332 
Deferred income taxes 20,749  91  (8) (10,070) (7,742) (23) 13,098 
Liability for unrecognized tax benefits 13,420  —  —  —  13,420 
Long-term leases 25,728  —  (2,263) (2,263) (21) 23,465 
Pension, postretirement, and other long-term liabilities 71,898  —  3,467  3,467  (24) 75,365 
Total liabilities not subject to compromise 1,326,506  12,418  (26,929) (24,601) 1,314,323 
Liabilities subject to compromise
Debt subject to compromise 635,686  (635,686) (9) —  —  — 
Accrued interest on debt subject to compromise 26,156  (26,156) (9) —  —  — 
Total liabilities subject to compromise 661,842  (661,842) —  —  — 
Total liabilities 1,988,348  (649,424) (26,929) (24,601) 1,314,323 
Stockholders’ equity
Common Stock—no par value:
Predecessor common stock (shares) 9,976  (9,976) —  —  — 
Successor common stock (shares) —  25,000  —  —  25,000 
Predecessor additional paid-in capital 468,147  (468,147) (10) —  —  — 
Successor additional paid-in capital —  391,402  (11) —  (313) 391,089 
Retained deficit (644,250) 728,160  (12) (83,910) (83,910) (25) — 
Accumulated other comprehensive loss (54,484) —  54,484  54,484  (26) — 
Total stockholders’ equity (deficit) of Pyxus International, Inc. (230,587) 651,415  (29,426) (29,739) 391,089 
Noncontrolling interests (80) 4,359  80  (166) 4,113 
Total stockholders’ equity (deficit) (230,667) 655,774  (29,346) (29,905) 395,202 
Total liabilities and stockholders’ equity $ 1,757,681  $ 6,350  $ (56,275) $ (54,506) $ 1,709,525 
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(1) The following summarizes the change in cash and cash equivalents:
Proceeds from ABL Credit Facility, net of debt issuance costs $ 26,861 
Repayment of DIP Facility (213,418)
Proceeds from Term Loan Credit Facility 213,418 
Proceeds from 10.0% first lien notes
280,844 
Repayment of 8.5% first lien notes
(280,844)
Payment to fund professional fee escrow account (21,500)
Payment of other professional and administrative fees (11,828)
Payment of accrued interest on DIP Facility (494)
Payment to holders of Predecessor second lien notes that elected the cash option (1,199)
Payment to holders of Predecessor common stock (1,000)
Payment of accrued interest on prepetition Predecessor first lien notes (9,129)
$ (18,289)

(2) Represents the funding of an escrow account for professional fees associated with the Chapter 11 Cases.
(3) Represents the capitalization of debt issuance costs related to the ABL Credit Facility.
(4) Represents the conversion of the DIP Facility that was exchanged for the Term Loans, and accordingly reclassified to long-term debt.
(5) Reflects the recognition of payables for professional fees to be paid subsequent to the Company's emergence from Chapter 11 Cases.
(6) The following summarizes the net change in accrued expenses and other current liabilities:
Payment of accrued interest on the DIP Facility $ (494)
Payment of accrued interest on the Predecessor first lien notes (9,129)
Settlement of accrued backstop fee through the issuance of common stock (18,000)
Reclassification of DIP Facility exit fee to long-term debt (6,718)
Recognition of accrued interest from the Effective Date to the Convenience Date 1,044 
Accrual for professional fees 1,444 
$ (31,853)
(7) The following summarizes the changes in long-term debt:
Draw on the ABL Credit Facility $ 30,000 
Issuance of the Term Loans (1)
213,418 
Conversion of redemption fee on Predecessor first lien notes to Successor Notes 5,843 
Derecognition of the original issue discount and the debt issuance costs on Predecessor first lien notes 1,285 
$ 250,546 
(1) Includes $6,718 related to the DIP Facility exit fee

(8) Represents the recognition of deferred tax liabilities as a result of the cumulative tax impact of the reorganization adjustments herein.
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(9) Represents the settlement of liabilities subject to compromise in accordance with the Plan, which resulted in a gain on the discharge of the Predecessor second lien notes as follows:
Debt subject to compromise $ 635,686 
Accrued interest on debt subject to compromise 26,156 
     Total second lien notes discharged 661,842 
Payment to holders of second lien notes electing cash option (1,199)
Value of common stock issued to holders of second lien notes (198,339)
     Gain on discharge of second lien notes $ 462,304 

(10) Represents the cancellation of Predecessor common stock.
(11) The changes in Successor additional paid-in capital were as follows:
Value of Successor common stock, second lien notes $ 198,339 
Value of Successor common stock, other 193,063 
$ 391,402 

(12) Represents $260,013 of cumulative impact to Predecessor retained deficit as a result of the reorganization adjustments described above and $468,147 for the elimination of Predecessor common stock.
(13) Represents fair value adjustments to the Company's equity method investments.
(14) Represents reorganization value in excess of value allocable to tangible and intangible assets.
(15) Represents the fair value adjustments to recognize the customer relationships, licenses, technology (inclusive of patents and know how), trade names, and internally developed software intangible assets.
(16) Represents the recognition of deferred tax assets as a result of the cumulative tax impact of the fresh start adjustments herein.
(17) Represents an adjustment to pension assets of ($352), partially offset by other adjustments of $42.
(18) Represents the fair value adjustments to right-of-use lease assets.
(19) Represents the following fair value adjustments to property, plant, and equipment, net:
Predecessor
Historical Value
Fair Value
Adjustment
Successor
Fair Value
Land $ 33,562  $ (104) $ 33,458 
Buildings 259,255  (195,797) 63,458 
Machinery and equipment 198,708  (122,151) 76,557 
     Total 491,525  (318,052) 173,473 
Less: Accumulated Depreciation (192,232) 192,232  — 
     Total property, plant, and equipment, net $ 299,293  $ (125,820) $ 173,473 

(20) Represents the revaluation of the current pension liability of ($1,800), partially offset by an adjustment to financing leases of $8.
(21) Represents the Company's recalculation of lease obligations using a higher incremental borrowing rate applicable upon emergence from Chapter 11 Cases and commensurate with the new capital structure.
(22) Represents the fair value adjustment to the first lien notes.
(23) Represents the adjustment of deferred tax liabilities as a result of the cumulative tax impact of the fresh start valuation adjustments herein.
(24) Represents the recalculation of the present value of the Company's pension liability.
(25) Represents the cumulative impact of the remeasurement of assets and liabilities from fresh start reporting, $7,631 of tax effect of reorganization items, and the elimination of Predecessor's accumulated other comprehensive losses for the five months ended August 31, 2020.
(26) Represents the derecognition of accumulated other comprehensive loss as a result of reorganization pension adjustments, and the elimination of Predecessor's foreign currency translation adjustments.
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5. Revenue Recognition

Product revenue is primarily processed tobacco sold to the customer. Processing and other revenues are mainly contracts to process customer-owned green tobacco. During processing, ownership remains with the customers. Other products and services revenue is primarily composed of revenue from the sale of legal cannabis in Canada and e-liquids product revenue. The following disaggregates sales and other operating revenues by major source:

Successor Predecessor
Three months ended December 31, 2020 Three months ended December 31, 2019
Leaf - North America:
Product revenue $ 46,588  $ 39,148 
Processing and other revenues 13,956  13,868 
Total sales and other operating revenues 60,544  53,016 
Leaf - Other Regions:
Product revenue 298,376  293,564 
Processing and other revenues 12,007  12,936 
Total sales and other operating revenues 310,383  306,500 
Other Products and Services:
Total sales and other operating revenues 8,633  3,744 
Total sales and other operating revenues $ 379,560  $ 363,260 

Successor Predecessor
Four months ended December 31, 2020 Five months ended August 31, 2020 Nine months ended December 31, 2019
Leaf - North America:
Product revenue $ 63,693  $ 51,211  $ 114,548 
Processing and other revenues 16,828  6,523  24,873 
Total sales and other operating revenues 80,521  57,734  139,421 
Leaf - Other Regions:
Product revenue 387,785  355,902  825,522 
Processing and other revenues 19,586  24,595  42,316 
Total sales and other operating revenues 407,371  380,497  867,838 
Other Products and Services:
Total sales and other operating revenues 9,502  9,369  15,652 
Total sales and other operating revenues $ 497,394  $ 447,600  $ 1,022,911 
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The following summarizes activity in the allowance for expected credit losses:

Successor Predecessor
Three months ended December 31, 2020 Three months ended December 31, 2019
Balance, beginning of period $ (15,091) $ (7,242)
Additions (2,187) (5)
Write-offs —  — 
Balance, end of period $ (17,278) $ (7,247)
Trade receivables 194,834  187,651 
Trade receivables, net $ 177,556  $ 180,404 

Successor Predecessor
Four months ended December 31, 2020 Five months ended August 31, 2020 Nine months ended December 31, 2019
Balance, beginning of period $ (15,361) $ (15,893) $ (13,381)
Additions (2,187) —  — 
Write-offs 270  532  6,134 
Balance, end of period $ (17,278) $ (15,361) $ (7,247)
Trade receivables 194,834  167,670  187,651 
Trade receivables, net $ 177,556  $ 152,309  $ 180,404 

6. Restructuring and Asset Impairment Charges

In December 2020, the Company commenced actions to exit operations of the industrial hemp businesses, including the production and sale of products containing extracts of industrial hemp, including cannabidiol ("CBD") products, by its Criticality LLC subsidiary (“Criticality”). In addition, the Company continued its focus on cost saving initiatives. The employee separation and impairment charges are primarily related to continued restructuring of certain U.S. operations, which included Criticality, and certain African operations.

The following summarizes the Company's restructuring and asset impairment charges:

Successor Predecessor
Three months ended December 31, 2020 Three months ended December 31, 2019
Employee separation charges $ 4,087  $ 531 
Asset impairment and other non-cash charges 3,687  141 
Restructuring and asset impairment charges $ 7,774  $ 672 

Successor Predecessor
Four months ended December 31, 2020 Five months ended August 31, 2020 Nine months ended December 31, 2019
Employee separation charges $ 5,009  $ 353  $ 632 
Asset impairment and other non-cash charges 3,982  213  260 
Restructuring and asset impairment charges $ 8,991  $ 566  $ 892 

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The following summarizes the activity in the restructuring accrual for employee separation and other cash charges for the Company's Leaf - North America, Leaf - Other Regions, and Other Products and Services segments:

Successor Predecessor
Three months ended December 31, 2020 Three months ended December 31, 2019
Other Products and Services Leaf - North America Leaf - Other Regions Leaf - North America Leaf - Other Regions
Beginning balance $ —  $ 1,174  $ 229  $ 266  $ 214 
Period charges 2,105  584  1,398  —  531 
Payments —  (567) (922) (251) (646)
Ending balance $ 2,105  $ 1,191  $ 705  $ 15  $ 99 

Successor Predecessor
Four months ended December 31, 2020 Five months ended August 31, 2020 Nine months ended December 31, 2019
Other Products and Services Leaf - North America Leaf - Other Regions Leaf - North America Leaf - Other Regions Leaf - North America Leaf - Other Regions
Beginning balance $ —  $ 312  $ 255  $ —  $ 407  $ 1,621  $ 222 
Period charges 2,105  1,506  1,398  312  40  624 
Payments —  (627) (948) —  (192) (1,614) (747)
Ending balance $ 2,105  $ 1,191  $ 705  $ 312  $ 255  $ 15  $ 99 

The following summarizes the asset impairment and other non-cash charges for the Company's Leaf - North America, Leaf - Other Regions, and Other Products and Services segments:

Successor Predecessor
Three months ended December 31, 2020 Three months ended December 31, 2019
Leaf - North America $ —  $ — 
Leaf - Other Regions 733  141 
Other Products and Services 2,954  — 
Total 3,687  $ 141 

Successor Predecessor
Four months ended December 31, 2020 Five months ended August 31, 2020 Nine months ended December 31, 2019
Leaf - North America $ —  $ 17  $ — 
Leaf - Other Regions $ 1,028  196  260 
Other Products and Services 2,954  —  — 
Total $ 3,982  $ 213  $ 260 

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7. Income Taxes

As described in “Note 3. Emergence from Voluntary Reorganization under Chapter 11”, on August 24, 2020, as part of the Chapter 11 plan of reorganization, Old Pyxus completed a series of transactions pursuant to which the business assets and operations of Old Pyxus were vested in a new Virginia corporation, Pyxus Holdings, which is an indirect subsidiary of the Company. Under the Plan, all suppliers, vendors, employees, trade partners, foreign lenders and landlords were unimpaired and were to be satisfied in full in the ordinary course of business, and the existing trade and customer contracts and terms of Old Pyxus were to be maintained by the Company and its subsidiaries. Commencing upon the Effective Date, the Company, through its subsidiaries, continued to operate the Old Pyxus business in the ordinary course. Old Pyxus, which retained no assets, has commenced a dissolution and is being wound down.

The tax attributes generated by Old Pyxus’ foreign subsidiaries (net operating loss carryforwards and income tax credits) survived the Chapter 11 proceedings and we expect, to the extent that a valuation allowance is not applicable, to use these tax attributes to reduce future tax liabilities. For U.S. tax purposes, tax attributes not utilized as part of the Chapter 11 proceedings or asset sale to Pyxus Holdings pursuant to the Plan will expire unutilized.

The Company entered into a transfer agreement with Old Pyxus to transfer and assume the liability for unpaid installments payments of Old Pyxus under Internal Revenue Code Section 965(h) (i.e. transition tax) in the amount of $8,543.

Valuation allowances have been established against deferred tax assets if, based on the available positive and negative evidence, it is more likely than not such assets will not be realized. The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law of each applicable tax jurisdiction. The Company and Old Pyxus have considered the following possible sources of taxable income when assessing the realization of our and Old Pyxus’ deferred tax assets:

future reversals of existing taxable temporary differences;
future taxable income exclusive of reversing temporary differences and carryforwards;
tax income in prior carryback years; and
tax-planning strategies.

If, in the future, the Company overcomes negative evidence in tax jurisdictions where it has established valuation allowances, then the conclusions regarding the need for valuation allowances in these tax jurisdictions could change, resulting in the reversal of some or all of such valuation allowances. If the Company generates taxable income in tax jurisdictions prior to overcoming negative evidence, then it would reverse a portion of the valuation allowances related to the corresponding realized tax benefit for that period, without changing its conclusions on the need for the valuation allowance against the remaining net deferred tax assets.

For interim tax reporting, the Company estimates its annual effective tax rate and applies it to year-to-date ordinary income/loss pursuant to FASB ASC 740-270, “Accounting for Income Taxes in Interim Periods.” The Company reports the tax effect of unusual or infrequently occurring items, including changes in judgement about valuation allowances, uncertain tax positions, and effects of changes in tax laws or rates in the interim period in which they occur. The Company excludes tax jurisdictions where it has projected a year to date loss for which a tax benefit cannot be realized in accordance with FASB ASC 740, “Accounting for Income Taxes”. Old Pyxus reported on a discrete basis for the period April 1, 2020 through August 31, 2020.

The effective rate differs from the US statutory rate of 21% due to the impact of net foreign exchange effects, increases in non-deductible interest, foreign income taxed in the U.S., variations in the expected jurisdictional mix of earnings, and variations in included/excluded entities per adherence to FASB ASC 240-270. The Company has allocated $4,814 of the year-to-date tax benefit to a current tax receivable as it expects the year-to-date loss to offset current taxes payable throughout the remainder of the current year.

As of December 31, 2020, the Company’s unrecognized tax benefits totaled $15,958, of which $12,371 would impact the Company’s effective tax rate, if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. As of December 31, 2020, accrued interest and penalties totaled $1,353 and $669, respectively. The Company expects to continue accruing interest expense related to the unrecognized tax benefits described above. The Company may be subject to fluctuations in the unrecognized tax benefit due to currency exchange rate movements.

The Company does not expect significant changes in the amount of its unrecognized tax benefits in the next twelve months but acknowledges circumstances can change due to unexpected developments in the law. In certain jurisdictions, tax authorities have challenged positions taken by the Company that resulted in recognizing benefits that are material to its financial statements. The Company believes it is more likely than not that it will prevail in these situations and accordingly has not
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recorded liabilities for these positions. The Company expects the challenged positions to be settled at a time greater than twelve months from its balance sheet date.

The Company and its subsidiaries file a U.S. federal consolidated income tax return as well as returns in several U.S. states and a number of foreign jurisdictions. As of December 31, 2020, the Company’s earliest open tax year for U.S. federal income tax purposes is its fiscal year ended March 31, 2017. The Company's tax attributes from prior periods remain subject to adjustment. Open tax years in state and foreign jurisdictions generally range from three to six years.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act contains numerous corporate income tax provisions, some of which affect our calculation of income taxes, including providing for the carryback of certain net operating losses, modifications to the net interest deduction limitations, refundable payroll tax credits, and deferment of employer social security payments. However, the provisions did not have a material impact on our Predecessor or Successor financial statements.

8. (Loss) Earnings Per Share

The following summarizes the computation of (loss) earnings per share:

Successor Predecessor
(in thousands, except per share data) Three months ended December 31, 2020 Three months ended December 31, 2019
Basic loss per share:
Net loss attributable to Pyxus International, Inc. $ (8,165) $ (21,993)
Shares:
Weighted average number of shares outstanding(1)
25,000  9,166 
Basic loss per share $ (0.33) $ (2.40)
Diluted loss per share:
Net loss attributable to Pyxus International, Inc. $ (8,165) $ (21,993)
Shares:
Weighted average number of shares outstanding(1)
25,000  9,166 
Plus: Restricted shares issued and shares applicable to stock options and restricted stock units, net of shares assumed to be purchased from proceeds at average market price(2)
—  — 
Adjusted weighted average number of shares outstanding 25,000  9,166 
Diluted loss per share $ (0.33) $ (2.40)
(1) 0 and 785 shares of common stock were owned by a wholly owned subsidiary as of December 31, 2020 and 2019, respectively.
(2) Outstanding restricted shares, shares applicable to stock options, and restricted stock units are excluded because their inclusion would have an antidilutive effect on the loss per share. The dilutive shares would have been 10 for the three months ended December 31, 2019.
-29-



Successor Predecessor
(in thousands, except per share data) Four months ended December 31, 2020 Five months ended August 31, 2020 Nine months ended December 31, 2019
Basic (loss) earnings per share:
Net (loss) income attributable to Pyxus International, Inc. $ (13,478) $ 19,037  $ (100,308)
Shares:
Weighted average number of shares outstanding(1)
25,000  9,976  9,137 
Basic (loss) earnings per share $ (0.54) $ 1.91  $ (10.98)
Diluted (loss) earnings per share:
Net (loss) income attributable to Pyxus International, Inc. $ (13,478) $ 19,037  $ (100,308)
Shares:
Weighted average number of shares outstanding(1)
25,000  9,976  9,137 
Plus: Restricted shares issued and shares applicable to stock options and restricted stock units, net of shares assumed to be purchased from proceeds at average market price(2)
—  16  — 
Adjusted weighted average number of shares outstanding 25,000  9,992  9,137 
Diluted (loss) earnings per share $ (0.54) $ 1.91  $ (10.98)
(1) 0, 0, and 785 shares of common stock were owned by a wholly owned subsidiary as of December 31, 2020, August, 31, 2020, and December 31, 2019, respectively.
(2) Outstanding restricted shares, shares applicable to stock options, and restricted stock units are excluded because their inclusion would have an antidilutive effect on the loss per share. The dilutive shares would have been 28 for the nine months ended December 31, 2019.

Certain potentially dilutive options were not included in the computation of loss per diluted share because their effect would be antidilutive. Potential common shares are also considered antidilutive in the event of a net loss. The number of potential shares outstanding that were considered antidilutive and that were excluded from the computation of diluted loss per share, weighted for the portion of the period they were outstanding were as follows:
Successor Predecessor
Three months ended December 31, 2020 Three months ended December 31, 2019
Antidilutive stock options and other awards —  452 
Weighted average exercise price $ —  $ 56.66 

Successor Predecessor
Four months ended December 31, 2020 Five months ended August 31, 2020 Nine months ended December 31, 2019
Antidilutive stock options and other awards —  427  450 
Weighted average exercise price $ —  $ 56.86  $ 56.98