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Business Combinations

12 Months Ended

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	)