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Acquisitions (Tables) | 12 Months Ended
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Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract] |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The fair values of assets acquired, liabilities assumed and noncontrolling interest as of the date of the acquisition, are as follows:
Trade receivables | $ | 6 |
Inventory | 630 |
Prepaid expenses and other current assets | 78 |
Property and equipment, net | 93 |
Operating lease right-of-use assets | 430 |
Intangible assets | 7,695 |
Trade and other payables | (1,218) |
Deferred tax liability | (2,272) |
Current tax liabilities | (407) |
Operating lease liabilities | (430) |
Total net assets acquired | 4,605 |
Fair value of noncontrolling interest | (8,314) |
Goodwill | 24,214 |
Total purchase price, net of cash acquired of $2,109 | $ | 20,505 |
The following table sets forth the allocation of the total consideration to the identifiable tangible and intangible assets acquired and liabilities assumed, as of the date of the acquisition, with the excess recorded to goodwill:
Purchase consideration: |
Total purchase price, net of cash acquired of $8,831 | $ | 227,053 |
Fair value of noncontrolling interest | 142,717 |
Total consideration | $ | 369,770 |
Identifiable net assets acquired: |
Account receivable, net | $ | 625 |
Inventory (1) | 62,937 |
Prepaid expenses and other current assets | 4,800 |
Property and equipment, net | 8,048 |
Intangible assets, net (2) | 73,209 |
Operating lease right-of-use assets | 24,299 |
Accounts payable | (13,449) |
Deferred revenue | (141) |
Income taxes payable | (1,778) |
Other current liabilities | (2,533) |
Operating lease liabilities | (24,299) |
Deferred income taxes, net | (25,439) |
Accrued liabilities, non-current | (1,058) |
Net assets acquired | 105,221 |
Goodwill | $ | 264,549 |
The purchase price allocation includes significant judgments, assumptions and estimates to determine the fair value of assets acquired and liabilities assumed. The valuations involving the most significant assumptions, estimates and judgment are: (1)Inventory was adjusted by $15.1 million to step-up inventory cost to estimated fair value. The fair value of the inventory was determined utilizing the net realizable value method, which was based on the expected selling price of the inventory to customers adjusted for related disposal costs and a profit allowance for the post-acquisition selling effort. (2)The fair value of the acquired intangible assets was determined with the assistance of a valuation specialist and include:
| Estimated Fair Value |  | Annual Amortization Expense |  | Estimated Useful Life in Years
Brand names | $ | 68,354 |  |  | $ | 6,835 |  |  | 10 years
Customer relationships | 4,855 |  |  | 1,214 |  |  | 4 years
Total | $ | 73,209 |  |  |  |  |
The estimated fair values of assets acquired and liabilities assumed as of the date of the acquisition, are as follows:
Accounts receivable, net | $ | 68 |
Inventory (1) | 7,321 |
Prepaid expenses and other current assets | 2,178 |
Other assets | 15 |
Intangible assets (2) | 14,300 |
Accounts payable | (504) |
Deferred income | (164) |
Accrued liabilities | (1,794) |
Assumed loan | (1,312) |
Sales and use tax liability | (1,100) |
Deferred income taxes, net | (3,159) |
Total net assets acquired | 15,849 |
Goodwill | 29,650 |
Total purchase price, net of cash acquired of $605 | $ | 45,499 |
The cash purchase consideration is subject to working capital adjustments that will be concluded before the one-year anniversary of the close of the transaction. The preliminary purchase price allocation includes significant judgments, assumptions and estimates to determine the fair value of assets acquired and liabilities assumed. The valuations involving the most significant assumptions, estimates and judgment are: (1)Inventory was adjusted by $1.9 million to step-up inventory cost to estimated fair value. The fair value of the inventory was determined utilizing the net realizable value method, which was based on the expected selling price of the inventory to customers adjusted for related disposal costs and a profit allowance for the post-acquisition selling effort. (2)The fair value of the acquired intangible assets was determined with the assistance of a valuation specialist and include:
| Fair Value at Acquisition Date |  | Amortization Period
Brand | $ | 11,800 |  |  | 10 years
Customer relationships | 2,500 |  |  | 3 years
Total intangible assets | $ | 14,300 |  |  |
Schedule of Acquired Finite-Lived Intangible Assets | The following table summarizes the identifiable intangible assets acquired as of the date of the acquisition:
| Fair Value at Acquisition Date |  | Amortization Period
Brand | $ | 5,112 |  |  | 10 years
Customer relationships | 2,583 |  |  | 4 years
Total intangible assets | $ | 7,695 |  |  |
The fair value of the acquired intangible assets was determined with the assistance of a valuation specialist and include:
| Estimated Fair Value |  | Annual Amortization Expense |  | Estimated Useful Life in Years
Brand names | $ | 68,354 |  |  | $ | 6,835 |  |  | 10 years
Customer relationships | 4,855 |  |  | 1,214 |  |  | 4 years
Total | $ | 73,209 |  |  |  |  |
The fair value of the acquired intangible assets was determined with the assistance of a valuation specialist and include:
| Fair Value at Acquisition Date |  | Amortization Period
Brand | $ | 11,800 |  |  | 10 years
Customer relationships | 2,500 |  |  | 3 years
Total intangible assets | $ | 14,300 |  |  |
The gross amounts and accumulated amortization of acquired identifiable intangible assets with finite useful lives as of December 31, 2021 and 2020, included in intangible assets, net in the accompanying consolidated balance sheets, are as follows:
| December 31,
| Useful life |  | Weighted Average Amortization Period 2021 |  | 2021 |  | Weighted Average Amortization Period 2020 |  | 2020
Customer relationships | 4 years |  | 2.5 years |  | $ | 24,516 |  |  | 1.8 years |  | $ | 17,100 |
Brands | 10 years |  | 8.9 years |  | 100,315 |  |  | 7.8 years |  | 26,680 |
Website design and software system | 3 years |  | 2.2 years |  | 1,883 |  |  | 2.4 years |  | 903 |
Trademarks | 5 years |  | 3.3 years |  | 114 |  |  | 4.5 years |  | 103 |
Total intangible assets |  |  |  |  | 126,828 |  |  |  |  | 44,786 |
Less accumulated amortization |  |  |  |  | (28,541) |  |  |  |  | (15,684) |
Total intangible assets, net |  |  |  |  | $ | 98,287 |  |  |  |  | $ | 29,102 |
Condensed Income Statement | The following amounts are included in the accompanying consolidated statement of income for the year ended December 31, 2021:
| Year Ended December 31, 2021
Net sales | $ | 196,471 |
Net loss | $ | (5,899) |
Business Acquisition, Pro Forma Information | The unaudited pro forma financial information below is presented to illustrate the estimated effects of the acquisition of Culture Kings and the associated financing as if they had occurred on January 1, 2020:
| Year Ended December 31,
| 2021 |  | 2020
Net sales | $ | 613,390 |  |  | $ | 385,048 |
Net income attributable to a.k.a. Brands Holding Corp. | $ | 16,781 |  |  | $ | 9,238 |
Net income per share, basic and diluted: | $ | 0.17 |  |  | $ | 0.11 |

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- Definition Tabular disclosure of the characteristics, including initial carrying value, residual amount, weighted average useful life, of finite-lived intangible assets acquired during the period by major class. A major class is composed of intangible assets that can be grouped together because they are similar, either by nature or by their use in the operations of the company. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16265-109275 + Details
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- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=123413009&loc=d3e4845-128472 + Details
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