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Acquisition of Funverse | 9 Months Ended
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Sep. 30, 2024
Acquisition of Funverse [Abstract] |
ACQUISITION OF FUNVERSE | 4. ACQUISITION OF FUNVERSE On January 7, 2024, the Company acquired 60% of the equity interest of FunVerse at the cost of issuance of 1,500,000 ordinary shares. The fair value of the share consideration was $2,265,000 by reference to the closing price on January 7, 2024. The Company has allocated the purchase price of FunVerse based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities assumed at the acquisition date in accordance with the business combination standard issued by FASB. The Company used carrying amount of assets and liabilities as fair value, which approximate the fair value, and used cost approach to estimate the fair value of content assets which was primarily comprised software and copyrights. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and content assets identified as of the acquisition date and considered a number of factors including valuations from an independent appraiser firm. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in other operating expenses. The following table summarizes the estimated fair values of the identifiable assets acquired at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of FunVerse based on a valuation performed by an independent valuation firm engaged by the Company.
|  | January 7, |
|  | 2024 |
ASSETS |  |  |
Net tangible liabilities (1) |  | $ | (466,400 | )
Copyrights (2) |  |  | 581,000 |
Software (2) |  |  | 1,048,200 |
Goodwill |  |  | 2,889,200 |
Deferred tax liabilities |  |  | (277,000 | )
Non-controlling interest |  |  | (1,510,000 | )
Total purchase consideration |  | $ | 2,265,000 |
(1) | The following is a reconciliation of the fair value of major classes of assets acquired and liabilities assumed which comprised of net tangible liabilities on January 7, 2024.
|  | January 7, |
|  | 2024 |
ASSETS |  |  |
Cash and cash equivalents |  | $ | 118,300 |
Accounts receivable |  |  | 323,500 |
Prepayments |  |  | 25,200 |
Prepaid expenses and other assets |  |  | 359,400 |
Content assets |  |  | 165,300 |
Total assets |  | $ | 991,700 |
LIABILITIES |  |  |  |
Accounts payable |  | $ | 43,400 |
Contract liabilities |  |  | 395,000 |
Other current liabilities and accrued expenses |  |  | 1,019,700 |
Total liabilities |  | $ | 1,458,100 |
Net tangible liabilities |  | $ | (466,400 | )
(2) | The copyrights and software are both applied to produce short dramas. The useful lives of these content assets ranged between 6 and 12 months.
On August 15, 2024, the Company closed its acquisition of 40% equity interest in FunVerse and Yuder, at share consideration of 1,500,000 Class A Ordinary Shares of the Company, at per share price of $1.51. Upon the acquisition, the Company owned 100% equity interest in FunVerse and Yuder. The acquisition of 40% equity interest in FunVerse does not result in a change in control of FunVerse and Yuder, which was accounted for as equity transactions. The difference between the carrying amount of the noncontrolling interest as of August 15, 2024 and the fair value of 1,500,000 share consideration was recognized in additional paid-in capital.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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