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Business Combinations | 12 Months Ended
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Mar. 31, 2022
Disclosure of Asset Acquistion [Abstract] |
BUSINESS COMBINATIONS | 4. BUSINESS COMBINATIONS FoundationTV, Inc. On May 12, 2021, the Company entered into a stock purchase agreement (the “Foundation Stock Purchase Agreement”) with FoundationTV, Inc. (“FoundationTV”), to buy all of FoundationTV´s issued and outstanding stock in consideration of an aggregate of $5.2 million, of which $0.7 million was paid in cash and 1,483,129 shares of Common Stock, which were valued at $2.5 million, were issued at closing stock price of $1.69 on the closing date of June 9, 2021, and an additional $2.0 million will be paid in eight equal installments of one installment on each six month anniversary of closing over forty-eight months, and a final lump sum payment of $225 thousand on the four year anniversary of the closing, reduced by $0.2 million settlement of a prior relationship. The Foundation Stock Purchase Agreement contained certain conditions to closing, including that the Company obtain approval of its stockholders, applicable lenders, and regulatory authorities, as applicable, and representations and warranties and covenants as are customary for transactions of this type. On June 9, 2021, the FoundationTV acquisition was consummated. The Company incurred transaction costs of $36 thousand during the year ended March 31, 2022. As of March 31, 2022, the deferred consideration initially measured by bringing to present value the agreed-upon cash payments discounted by a 3% rate, includes a $0.5 million short-term payable and a long-term payable for $1.5 million. FoundationTV is included as a part of the Content & Entertainment segment.
Purchase Price |  |  |
Purchase Price |  | $ | 5,237 |
Total purchase price |  | $ | 5,237 |
Allocation of purchase price |  |  |  |
Developed technology |  |  | 3,200 |
Deferred tax liability |  |  | (888 | )
Goodwill |  |  | 2,925 |
Total allocation of purchase price |  | $ | 5,237 |
The developed technology acquired in this transaction has a useful life of 10 years. During the year ended March 31, 2022, the Company recorded $240 thousand in amortization expense related to the developed technology acquired in the acquisition. Below is the amortization expense per year for the developed technology acquired in the business combination:
2023 |  | $ | 320 |
2024 |  |  | 320 |
2025 |  |  | 320 |
2026 |  |  | 320 |
2027 |  |  | 320 |
2028 |  |  | 320 |
2029 |  |  | 320 |
2030 |  |  | 320 |
2031 |  |  | 320 |
2032 |  |  | 80 |
Total |  | $ | 2,960 |
Bloody Disgusting, LLC On September 17, 2021, the Company entered into an asset purchase agreement (the “Bloody Disgusting Asset Purchase Agreement”) with Bloody Disgusting, LLC (“Bloody Disgusting”), to buy substantially all of the assets of Bloody Disgusting, in consideration of an aggregate of $7.8 million, of which $4.0 million was paid in cash and 1,039,501 shares of Common Stock, which were valued at $2.3 million, were issued at closing stock price of $2.23 on the closing date of September 17, 2021, and $1.7 million as of the fair value of the earnout liability, related to earnout targets, as defined, to be met as of March 2022, March 2023 and March 2024. The fair value of the earnout liability was estimated considering the weighted probability of scenarios on the earnout metrics possible outcomes during the earnout period. The Bloody Disgusting Asset Purchase Agreement contained certain conditions to closing and representations and warranties and covenants as are customary for transactions of this type. On September 17, 2021, the Bloody Disgusting acquisition was consummated. Bloody Disgusting, LLC is included as a part of the Content & Entertainment segment.
Purchase Price |  |  |
Purchase Price |  | $ | 7,780 |
Total purchase price |  | $ | 7,780 |
Allocation of purchase price |  |  |  |
Current assets |  |  | 9 |
Advertiser relationships |  |  | 3,750 |
Trade name |  |  | 1,100 |
Goodwill |  |  | 2,921 |
Total allocation of purchase price |  | $ | 7,780 |
The advertiser relationships acquired in this transaction has a useful life of 12 years and the trade name acquired has a useful life of 10 years. During the year months ended March 31, 2022, the Company recorded $211 thousand in amortization expense related to the intangible assets acquired. Below is the amortization expense per year for the intangible assets acquired in the business combination:
|  | Advertiser relationships |  |  | Trade name |  |  | Total |
2023 |  | $ | 313 |  |  | $ | 110 |  |  | $ | 423 |
2024 |  |  | 313 |  |  |  | 110 |  |  |  | 423 |
2025 |  |  | 313 |  |  |  | 110 |  |  |  | 423 |
2026 |  |  | 313 |  |  |  | 110 |  |  |  | 423 |
2027 |  |  | 313 |  |  |  | 110 |  |  |  | 423 |
2028 |  |  | 313 |  |  |  | 110 |  |  |  | 423 |
2029 |  |  | 313 |  |  |  | 110 |  |  |  | 423 |
2030 |  |  | 313 |  |  |  | 110 |  |  |  | 423 |
2031 |  |  | 313 |  |  |  | 110 |  |  |  | 423 |
2032 |  |  | 313 |  |  |  | 55 |  |  |  | 368 |
2033 |  |  | 313 |  |  |  | — |  |  |  | 313 |
2034 |  |  | 151 |  |  |  | — |  |  |  | 151 |
Total |  |  | 3,594 |  |  |  | 1,045 |  |  | $ | 4,639 |
DMR The Company entered into an Equity Purchase Agreement among the Company, and David Chu, Augustine Hong, Helen Hong, Michael Hong, Justin Lee, Steven Park, and Kingsoon Ong (collectively, the “Sellers”) and David Chu as representative of the Sellers (the “DMR Agreement”) to acquire all of the outstanding membership interests of Asian Media Rights, LLC d/b/a Digital Media Rights (“DMR”), a diversified specialty streaming, advertising, and content distribution company with significant expertise in building audiences for global content in North America (the “Transaction”). On March 25, 2022, the Company executed the Amended and Restated Equity Purchase Agreement (the “A&R DMR Agreement”) among the Company, the Sellers and David Chu as representative of the Sellers that amended and restated the DMR Agreement. Pursuant to the A&R DMR Agreement, the purchase price for the Transaction is $14,794,000 , subject to working capital and other adjustments, consisting of (1) $8,000,000 in cash paid at the closing of the Transaction and (ii) $8,400,000 paid, at the Company’s option, in either cash or Common Stock at its then market value, as follows: (a) $3,000,000 on the first anniversary of the closing of the Transaction, (b) $3,000,000 on the second anniversary of the closing of the Transaction, and (c) $2,400,000 on the third anniversary of the closing of the Transaction. DMR is included as a part of the Content & Entertainment segment.
Purchase Price |  |  |
Purchase Price |  | $ | 14,794 |
Total purchase price |  | $ | 14,794 |
Allocation of purchase price |  |  |  |
Cash and cash equivalents |  |  | 862 |
Accounts receivable |  |  | 1,531 |
Prepaid expense |  |  | 55 |
Other receivables |  |  | 3 |
Right of use asset - operating |  |  | 841 |
Furniture & fixtures |  |  | 6 |
Computers and related equipment |  |  | 28 |
Deposits |  |  | 43 |
Channel & platform |  |  | 6,300 |
Content rights |  |  | 299 |
Investment in Kor TV |  |  | 300 |
Goodwill |  |  | 6,537 |
Short term liabilities |  |  | (1,450 | )
Long term liabilities |  |  | (561 | )
Total allocation of purchase price |  | $ | 14,794 |
The content library acquired in this transaction has a useful life of 13 years and channel acquired has a useful life of 13 years. During the year ended March 31, 2022, the Company recorded $0 in amortization expense related to the intangible assets acquired. Below is the amortization expense per year for the intangible assets acquired in the business combination:
|  | Content Library |  |  | Channel |  |  | Total |
2023 |  | $ | 23 |  |  | $ | 485 |  |  | $ | 508 |
2024 |  |  | 23 |  |  |  | 485 |  |  |  | 508 |
2025 |  |  | 23 |  |  |  | 485 |  |  |  | 508 |
2026 |  |  | 23 |  |  |  | 485 |  |  |  | 508 |
2027 |  |  | 23 |  |  |  | 485 |  |  |  | 508 |
2028 |  |  | 23 |  |  |  | 485 |  |  |  | 508 |
2029 |  |  | 23 |  |  |  | 485 |  |  |  | 508 |
2030 |  |  | 23 |  |  |  | 485 |  |  |  | 508 |
2031 |  |  | 23 |  |  |  | 485 |  |  |  | 508 |
2032 |  |  | 23 |  |  |  | 485 |  |  |  | 508 |
2033 |  |  | 23 |  |  |  | 485 |  |  |  | 508 |
2034 |  |  | 23 |  |  |  | 485 |  |  |  | 508 |
2035 |  |  | 23 |  |  |  | 480 |  |  |  | 503 |
Total |  | $ | 299 |  |  | $ | 6,300 |  |  | $ | 6,599 |
Combined The amounts of revenue and net loss for the acquired companies included in the Company's consolidated statement of operations for the period ending in March 31, 2022 are as follows:
(In thousands) |  | Total |
|  | 2022 |
Revenue |  | $ | 1,319 |
Net Loss |  | $ | (133 | )
The unaudited proforma information in the table below summarizes the combined results of operations for the Company and its acquisitions of Foundation TV, Inc., Bloody Disgusting, LLC and DMR as if these acquisitions had been included in the consolidated results of the Company since April 1, 2020 for the each of the two entire years ended March 31, 2022 and 2021:
(In thousands) |  | Proforma |
|  | 2022 |  |  | 2021 |
Revenue |  | $ | 64,158 |  |  | $ | 39,513 |
Net Income (Loss) |  | $ | 945 |  |  | $ | (53,570 | )

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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 https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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