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Business Combination
 12 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Business Combination

Note 4 – Business Combination

 

During the first ten months of 2019, the Company entered into three Common Stock Purchase Agreements (the “SportBLX Purchase Agreement”) with SportBLX, Inc., a Delaware corporation (“SportBLX”), purchasing a total of 13,519 shares of SportBLX common stock for total consideration of $1,788,379.

 

On December 12, 2019, the Company acquired a controlling interest of 50.7% in SportBLX by purchasing an additional 55,000 shares for total consideration of $19.5 million, in two separate stock purchase agreements. The Company entered into a Common Stock Purchase Agreement with Joseph A. De Perio (the “De Perio Agreement”) pursuant to which the Company purchased 17,076 shares of SportBLX common stock in exchange for consideration of $6,061,980. On the same date, the Company entered into a Common Stock Purchase Agreement with George E. Hall (the “Hall Agreement” and, together with the De Perio Agreement, the “Stock Purchase Agreements”) pursuant to which the Company purchased 37,924 shares of SportBLX common stock for consideration of $13,463,020. Joseph De Perio is a member of the Board of Directors of the Company, owns 2.47% of the Company’s outstanding common stock and is SportBLX’s president. George E. Hall is the beneficial holder of approximately 31.1% of the Company’s outstanding common stock and is the Executive Chairman and CEO of SportBLX.

 

The aggregate consideration paid by the Company in the business combination is $21,313,378.72.

 

Date   Description   Shares Acquired     Per Share Price     Consideration  
January 4, 2019   SportBLX Purchase Agreement     10,526     $ 95.0029     $ 1,000,000  
September 16, 2019   SportBLX Purchase Agreement     679       263.4074       178,854  
October 18, 2019   SportBLX Purchase Agreement     2,314       263.4074       609,525  
          13,519               1,788,379  
                             
December 12, 2019   De Perio Agreement     17,076       355.0000       6,061,980  
December 12, 2019   Hall Agreement     37,924       355.0000       13,463,020  
          55,000               19,525,000  
Total shares and consideration     68,519             $ 21,313,379  

 

The following table presents the fair value of the assets acquired and liabilities assumed at the date of acquisition:

 

Cash and cash equivalents   $ 3,365  
Sundry receivable     14,772  
Investment – Race Horses     220,000  
Investment – BLX Trading Corp     4,600  
TANGIBLE ASSETS ACQUIRED     242,737  
         
Accounts payable   $ 712,160  
Accrued expenses     50,000  
Accrued interest payable     27,796  
Note payable     2,000,000  
LIABILITIES ASSUMED     2,789,956  
NET LIABILITIES ASSUMED     (2,547,219 )
         
Goodwill     50,552,094  
INTANGIBLE ASSETS ACQUIRED     50,552,094  
         
Consideration     21,313,379  
Unrealized gain     3,010,866  
Total GlassBridge Enterprises, Inc. interest     24,324,245  
Noncontrolling interests     23,680,630  
    $ 48,004,875  

 

The following table provides unaudited pro forma information for the periods presented as if the SportBLX acquisition had occurred January 1, 2019:

 

    Year ended December 31,  
    2019  
      (in millions)  
Revenues   $ (0.1 )
Loss from continuing operations   $ (10.6 )

 

As a result of the acquisition, the Company, will seek revenues by creating an online marketplace for sports assets, including revenue share interests in player and racehorse earnings and equity interests in teams. SportBLX partners with a registered broker-dealer to effect transactions in sports assets constituting securities. SportBLX enables enthusiasts to use their knowledge to engage passionately and invest in the athletes and sports teams they love, giving investors opportunities to participate in the value creation that success in sports brings.

 

SportBLX is offering a new asset class and is the first company to bring it to the market. Sports are a multi-billion dollar industry with economic and non-economic factors that make it very unique. The leadership at SportBLX brings over thirty years of experience in the financial industry with experience in securitizing, structuring and trading. This unique combination accounts for the goodwill of $50,552,094 arising from the acquisition.

 

None of the goodwill recognized is expected to be deductible for income tax purposes. The fair value allocation was completed and it was determined that $50.6 million was attributable to goodwill.

 

In December 2020, the Company recorded an impairment charge of $42.3 million to goodwill. See Note 7 – Goodwill for more information.