Asset Acquisition

9 Months Ended

Sep. 30, 2018

Business Combination Disclosure [TextBlock]

(3) Asset Acquisition

On June 12, 2018, the Company completed the acquisition of Saban Properties’ Power Rangers and other Entertainment Assets. The Company accounted for the acquisition as an asset acquisition based on the guidance in ASU 2017-01, which uses the cost accumulation and allocation method. As such, the Company included acquisition costs in its calculation of the purchase price to be allocated to the assets acquired.

The total purchase price for the assets was $535,850, consisting of the following:


Cash Consideration:
To seller ⁽¹⁾	$	152,000
Held in escrow ⁽²⁾		25,000
Market value of stock issued to seller ⁽³⁾		280,397
Deferred purchase price due in January 2019 ⁽⁴⁾		75,000
		532,397
Acquisition costs		1,973
Other adjustment		1,480
Total Purchase Price to be allocated	$	535,850

1. The Company previously paid Saban Brands $22,250 for the Power Rangers master toy license agreement announced in February 2018 and those amounts were credited to, and included above, in the purchase price.

2. The $25,000 was placed into an escrow account to support customary indemnification obligations of Saban Properties, and is considered restricted cash within cash and cash equivalents on the balance sheet with an offsetting liability included in other current liabilities. One-half of the $25,000 in escrow is scheduled to be released on January 3, 2019, and the remaining half to be released on the one-year anniversary of the closing date, less any claim amounts deducted from the escrow prior to those dates.

3. The Company issued 3,074,190 shares of Hasbro common stock to Saban Properties, valued at $280,397.

4. An additional $75,000 will be paid in January 2019 with no contingencies.

The total purchase price was allocated on a relative fair value basis as follows:

• $534,370 was recorded as an intangible asset – Power Rangers IP rights, which will be amortized over a period of 25 years;

• $7,884 as current assets;

• $325 as capitalized production costs; and

• $6,729 as other current liabilities.