Note 4 - Business Combinations

12 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note 4 — Business Combinations

Gramophone

On October 17, 2021, the Company’s wholly owned subsidiary, LiveXLive PR, Inc., acquired 100% of the equity interests of Gramophone for net consideration of $0.4 million consisting of 79,365 shares of the Company’s common stock with a fair value of $0.1 million net of a 25% discount for lack of marketability described below, contingent consideration with a fair value of $0.2 million comprised of shares held in escrow and a cash earnout, and cash of $0.2 million. The shares of the Company’s common stock were subject to a twelve-month lock-up period and remain subject to sales volume restrictions.

Fair Value of Consideration Transferred:
Cash	$	150
Common stock		89
Contingent consideration		174
Total	$	413

Contingent consideration in the form of a cash earnout of $0.3 million was to be paid to the seller of Gramophone if, during the period commencing June 1, 2021 and ending on May 31, 2022 (“First Year Target”), Gramophone reported GAAP revenues of $1.4 million and EBITDA (as defined in the purchase agreement) of $0.3 million. If the First Year Target was not met, the cash earnout was to be paid to the seller of Gramophone if, during the period commencing June 1, 2022 and ending on May 31, 2023 (“Second Year Target”), Gramophone reported GAAP revenues of $2 million and EBITDA of $0.5 million.  The contingent consideration liability of $0.2 million was written off as of   March 31, 2024  as the earnout was not met (see Note 14 – Other Long-Term Liabilities). 

Goodwill resulted from acquisition as it is intended to augment and diversify the Company’s reportable segments. The Company accounted for the acquisition as a business combination. As a result of the acquisition of the stock of Gramophone, the goodwill is not deductible for tax purposes.

The following table summarizes the fair value of the assets assumed in the Gramophone acquisition (in thousands):

	Amortization
	Period
Asset Type	(Years)	Fair Value
Cash and cash equivalents		$	4
Accounts receivable			4
Trade name	5		73
Customer list	2		94
Goodwill			459
Deferred revenue			(51	)
Deferred tax liability			(41	)
Accrued liabilities			(129	)
Net assets acquired		$	413