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Acquisition Of Germany, Switzerland, And Austria Licensee | 9 Months Ended
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May 31, 2019
Acquisition Of Germany, Switzerland, And Austria Licensee [Abstract] |
Acquisition Of Germany, Switzerland, And Austria Licensee | ﻿ ﻿ NOTE 3 – ACQUISITION OF GERMANY, SWITZERLAND, AND AUSTRIA LICENSEE ﻿ On December 5, 2018, we purchased all of the equity of Leadership Institut GmbH, a Munich, Germany based company with wholly owned subsidiary companies in Switzerland and Austria. Leadership Institut GmbH previously operated as an independent licensee that provided our training and products to Germany, Switzerland, and Austria (GSA). We are transitioning the GSA licensee operation into a directly owned office operation similar to the fiscal 2017 transition of the licensee operation in China. The purchase price was $0.2 million in cash, plus $0.8 million in forgiveness of liabilities owed to the Company from the pre-existing relationship at the purchase date. There is no contingent or other additional consideration associated with the purchase of the former GSA licensee. We accounted for the acquisition of Leadership Institut Gmbh as a business combination in the second quarter of fiscal 2019. We also expect to incur additional costs for severance, legal, and other related acquisition expenses. These additional costs are expected to total approximately $0.8 million and will be expensed as incurred in selling, general, and administrative expense. The acquisition of the GSA licensee will provide us with the opportunity to operate a directly owned office in one of the world’s largest economic markets and is expected to provide significant future growth opportunities. The total purchase price consisted of the following (in thousands): ﻿
﻿ |  |  |
﻿ |  |  |
﻿Cash paid at closing |  | $ | 159
﻿Accounts receivable from GSA licensee |  |  | 798
﻿ Total purchase price |  | $ | 957
﻿ The major classes of assets and liabilities to which we have preliminarily allocated the purchase price were as follows (in thousands): ﻿
﻿ |  |  |
﻿ |  |  |
﻿Cash acquired |  | $ | 127
﻿Accounts receivable |  |  | 564
﻿Inventories |  |  | 80
﻿Prepaid and other current assets |  |  | 45
﻿Intangible assets |  |  | 741
﻿Property and equipment |  |  | 27
﻿Other long-term assets |  |  | 11
﻿ Assets acquired |  |  | 1,595
﻿Accounts payable |  |  | (208)
﻿Accrued liabilities |  |  | (383)
﻿Income taxes payable |  |  | (47)
﻿ Liabilities assumed |  |  | (638)
﻿ |  | $ | 957
﻿ The preliminary allocation of the purchase price to the intangible assets acquired was as follows (in thousands): ﻿
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿ |  |  |  |  | Weighted Average
﻿Description |  |  | Amount |  | Life
﻿Reacquisition of license rights |  | $ | 360 |  | 3 years
﻿Localized content |  |  | 202 |  | 3 years
﻿Customer relationships |  |  | 179 |  | 3 years
﻿ |  | $ | 741 |  |
﻿ We have included the financial results of the former GSA licensee in our financial results since the date of acquisition. Since the date of the acquisition, the new direct office that serves the GSA region had $1.1 million of sales and a $0.3 million operating loss. During the second and third quarters of the prior year, we recognized $0.4 million of royalty revenue from the GSA licensee. For the twelve months ended August 31, 2018, the former GSA licensee had $3.3 million of sales and a $1.3 million pre-tax tax loss.

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