Document

Reconciliation of net loss for reportable segments, net of income taxes to consolidated net loss from continuing operations, net of income taxes:



	For The Three Months Ended March 31,
	Wetpaint				Choose Digital				DDGG			Total
In thousands of U.S. dollars	2016		2015		2016		2015		2016		2015	2016		2015
External revenues	228		707		161		222		98		—	487		929
Inter-segment revenues (1)	—		—		66		350		—		—	66		350

Net loss, net of income taxes (2)	(839	)	(1,987	)	(401	)	(1,005	)	(1,201	)	—	(2,441	)	(2,992	)


	For The Nine Months Ended March 31,
	Wetpaint (Revised)				Choose Digital (Revised)				DDGG			Total
In thousands of U.S. dollars	2016		2015		2016		2015		2016		2015	2016		2015
External revenues	1,274		2,788		576		676		424		—	2,274		3,464
Inter-segment revenues (1)	—		—		1,285		448		—		—	1,285		448

Net loss, net of income taxes (2)	(25,919	)	(7,074	)	(5,548	)	(3,922	)	(2,708	)	—	(34,175	)	(10,996	)

Notes:
(1) The Choose Digital business provides digital content to the Viggle business. These inter-segment revenues are presented at Choose Digital's cost in this schedule and in the consolidated statements of operations.
(2) The net loss figures presented exclude certain corporate expenses detailed in the reconciliation to the consolidated net loss below.
(3) Assets and liabilities are not presented as they are reviewed at the consolidated level by management and not accounted for by segment.



In thousands of U.S. dollars	Three Months Ended March 31, 2016		Three Months Ended March 31, 2015		Nine Months Ended March 31, 2016		Nine Months Ended March 31, 2015
Net loss for reportable segments, net of income taxes	(2,441	)	(2,992	)	(34,175	)	(10,996	)
Other net gain (loss)	157		(176	)	(140	)	(629	)
	(2,284	)	(3,168	)	(34,315	)	(11,625	)

Stock compensation related to corporate financing activities (1)	(2,517	)	(5,437	)	(11,017	)	(16,976	)
Corporate expenses allocated to discontinued operations (2)	(124	)	(894	)	(1,915	)	(3,021	)
Interest expense (3)	(1,083	)	(935	)	(2,866	)	(1,415	)
Consolidated net loss from continuing operations, net of income taxes	(6,008	)	(10,434	)	(50,113	)	(33,037	)

Notes:
(1) Stock compensation expense related to RSUs, options and warrants issues in connection with financing activities. Expenses related to financing activities are considered to be corporate expenses and are not allocated to reportable segments.
(2) Certain corporate expenses were allocated to the Viggle segment, however such expenses are not classified as discontinued operations because they are fixed and are not affected by the sales transaction.
(3) Interest expense related to corporate debt instruments is not allocated to reportable segments.

Segments

Historically, the Company had one operating segment. However, in connection with the sale of the Viggle rewards business (discontinued operations) to Perk in February 2016, which represents a significant portion of the Company's assets and revenues, the Company's remaining operations were divided into two operating segments. These segments offer different products and services are separately reviewed in internal management reports, and managed separately.


•	Wetpaint: a media channel reporting original news stories and publishing information content covering top television shows, music, celebrities, entertainment news and fashion.


•	Choose Digital: a business-to-business platform for delivering digital content.

Reconciliation of revenues attributable to reportable segments to consolidated revenues from continuing operations:



	For The Year Ended June 30,
	Wetpaint						Choose Digital				Total
In thousands of U.S. dollars	2015			2014			2015		2014		2015		2014
External revenues	$	3,454		$	1,259		848		22		4,302		1,281
Inter-segment revenues (1)				—			855		—		855		—

Net loss, net of income taxes (2)	$	(8,747	)	$	(6,151	)	(6,744	)	(395	)	(15,491	)	(6,546	)

Notes:
(1) In September 2014, the Choose Digital business began providing digital content to the Viggle business. These inter-segment revenues are presented at Choose Digital's cost in this schedule and in the consolidated statements of operations.
(2) The net loss figures presented exclude certain corporate expenses detailed in the reconciliation to the consolidated net loss below.



In thousands of U.S. dollars	Year Ended June 30, 2015		Year Ended June 30, 2014

Revenues attributable to reportable segments	$	5,157	$	1,281
Licensing revenues related to SFX licensing agreement	507		159
Other revenues	10		711
Revenues per Consolidated Statements of Operations	$	5,674	$	2,151

Reconciliation of net loss for reportable segments, net of income taxes to consolidated net loss from continuing operations, net of income taxes:



In thousands of U.S. dollars	Year Ended June 30, 2015			Year Ended June 30, 2014

Net loss for reportable segments, net of income taxes	$	(15,491	)	$	(6,546	)
Other (loss) gain, net	(659		)	1,087
	(16,150		)	(5,459		)

Stock compensation related to corporate financing activities (1)	(21,141		)	(27,069		)
Corporate (expenses) income, net allocated to discontinued operations (2)	(3,262		)	(5,847		)
Interest expense (3)	(2,050		)	(2,805		)
Loss (gain) on contingent consideration (4)	(2,222		)	2,064
Corporate financing expenses	(702		)	—
Consolidated net loss from continuing operations, net of tax	$	(45,527	)	$	(39,116	)
Notes:
(1) Stock compensation expense related to RSUs, options and warrants issued in connection with financing activities. Expenses related to financing activities are considered to be corporate expenses and are not allocated to reportable segments.
(2) Certain corporate expenses were allocated to the Viggle segment, however such expenses are not classified as discontinued operations because they are fixed and are not affected by the sales transaction.
(3) Interest expense related to corporate debt instruments is not allocated to reportable segments.
(4) Additional contingent consideration loss (gain) related to Choose Digital (see Note 6, Acquisitions).

Total assets for reportable segments:



	June 30,
	Wetpaint				Choose Digital		Total
In thousands of U.S. dollars	2015		2014		2015	2014	2015	2014
Total assets for reportable segments	$	35,272	$	37,786	10,587	15,052	45,859	52,838

Reconciliation of assets attributable to reportable segments to consolidated assets of continuing operations:



In thousands of U.S. dollars	June 30, 2015		June 30, 2014

Total assets for reportable segments	$	45,859	$	52,838
Other assets	8,723		9,108
Total consolidated assets, net of current and non-current assets of discontinued operations	$	54,582	$	61,946

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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XML 28 R14.htm IDEA: XBRL DOCUMENT

Discontinued Operations

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

On February 8, 2016, the Company completed the sale of assets related to the Company’s rewards business, including the Viggle App, in accordance with the Asset Purchase Agreement with Perk.com, Inc. entered into on December 13, 2015. Management entered into this binding sales agreement following a strategic decision to divest the operations related to the Viggle App and place greater focus on its remaining businesses. The Company has classified the Viggle assets, liabilities and operations as discontinued operations in the accompanying consolidated financial statements for all periods presented. In accordance with ASC No. 205, Presentation of Financial Statements, the inter-segment revenues and expenses related to services provided by Choose Digital to the Viggle rewards business (discontinued operations) are presented at cost in the Consolidated Statements of Operations.


•	1,370,000 shares of Perk common stock, a portion of which was placed in escrow to satisfy any potential indemnification claims;


•	2,000,000 shares of Perk common stock if Perk’s total revenues exceed USD $130,000 for the year ended December 31, 2016 or December 31, 2017;


•	a warrant entitling the Company to purchase 1,000,000 shares of Perk common stock at a strike price of CDN $6.25 per share in the event the volume weighted average price (“VWAP”) of shares of Perk common stock is greater than or equal to CDN $12.50 for 20 consecutive trading days in the two year period following the closing of the transaction;


•	a warrant entitling the Company to purchase 1,000,000 shares of Perk common stock at a strike price of CDN $6.25 per share in the event that the VWAP of Perk common stock is greater than or equal to CDN $18.75 for 20 consecutive trading days in the two year period following the closing of the transaction, and


•	Perk assumed certain liabilities of the Company, consisting of the Viggle points liability.

The Company recognized a gain of $2,738 on this transactions, net of transaction fees.

Results of operations classified as discontinued operations:



In thousands of U.S. dollars	Three Months Ended March 31, 2016 (Revised)			Three Months Ended March 31, 2015			Nine Months Ended March 31, 2016 (Revised)			Nine Months Ended March 31, 2015
Revenues	$	376		$	3,617		$	6,285		$	14,387
Cost of watchpoints and engagement points	(203		)	(2,758		)	(3,434		)	(6,948		)
Selling, general and administrative expenses	(1,307		)	(11,014		)	(13,715		)	(34,766		)
Other income	4,508			—			4,508			—
Income (loss) before income taxes	3,374			(10,155		)	(6,356		)	(27,327		)

Income taxes (see Note 13, Income Taxes)	—			(22		)	(43		)	(80		)
Net income (loss)	$	3,374		$	(10,177	)	$	(6,399	)	$	(27,407	)

Assets and liabilities of discontinued operations:



In thousands of U.S. dollars	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015			Nine Months Ended March 31, 2016			Nine Months Ended March 31, 2015
Net cash used in operating activities	$	(1,322	)	$	(4,502	)	$	(5,716	)	$	(13,130	)
Net cash used in investing activities	—			(151		)	—			(422		)
Net cash used in discontinued operations	$	(1,322	)	$	(4,653	)	$	(5,716	)	$	(13,552	)



In thousands of U.S. dollars	March 31, 2016		June 30, 2015
Assets
Accounts receivable	$	450	$	3,281
Prepaid expenses	—		150
Property & equipment, net	—		114
Intangibles assets, net	—		2,630
Goodwill	—		9,432
Other assets	—		40
	450		15,647
Liabilities
Accounts payable and accrued expenses	4,174		4,249
Reward points payable	—		9,029
Deferred tax liabilities	—		538
	$	4,174	$	13,816

Discontinued Operations


•	1,370,000 shares of Perk common stock, a portion of which was placed in escrow to satisfy any potential indemnification claims;


•	2,000,000 shares of Perk common stock if Perk’s total revenues exceed USD $130,000 for the year ended December 31, 2016 or December 31, 2017;


•	a warrant entitling the Company to purchase 1,000,000 shares of Perk common stock at a strike price of CDN $6.25 per share in the event the volume weighted average price (“VWAP”) of shares of Perk common stock is greater than or equal to CDN $12.50 for 20 consecutive trading days in the two year period following the closing of the transaction;


•	Perk assumed certain liabilities of the Company, consisting of the Viggle points liability.

Results of operations classified as discontinued operations:



In thousands of U.S. dollars	Year Ended June 30, 2015			Year Ended June 30, 2014

Revenues	$	19,852		$	15,834
Cost of watch points and engagement points	(9,574		)	(2,310		)
Selling, general and administrative expenses	(43,203		)	(42,730		)
Loss before income taxes	(32,925		)	(29,206		)

Other expense:
Other expense, net	—			(28		)
Total other expense, net	—			(28		)

Net loss before provision for income taxes	(32,925		)	(29,234		)

Income tax expense	(87		)	(86		)

Net loss from discontinued operations, net of tax	$	(33,012	)	$	(29,320	)

Current assets and Non-current assets used in discontinued operations:



In thousands of U.S. dollars	Year Ended June 30, 2015			Year Ended June 30, 2014
Net cash used in operating activities	$	(17,984	)	$	(19,976	)
Net cash used in investing activities	(843		)	(905		)
Net cash used in discontinued operations	$	(18,827	)	$	(20,881	)



In thousands of U.S. dollars	June 30, 2015		June 30, 2014

Current assets:
Accounts receivable, net	$	3,281	$	3,118
Prepaid expenses	150		560
Current assets of discontinued operations	$	3,431	$	3,678

Non-current assets:
Property and equipment, net	$	114	$	97
Intangible assets, net	2,630		3,693
Goodwill	9,432		9,641
Other assets	40		44
Non-current assets of discontinued operations	$	12,216	$	13,475

Current liabilities and Non-current liabilities used in discontinued operations:



In thousands of U.S. dollars	June 30, 2015		June 30, 2014

Current liabilities:
Accounts payable and accrued expenses	$	4,249	$	3,001
Reward points payable	9,029		4,927
Current liabilities of discontinued operations	$	13,278	$	7,928

Non-current liabilities:
Other long-term liabilities	$	538	$	152
Non-current liabilities of discontinued operations	$	538	$	152

The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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XML 29 R15.htm IDEA: XBRL DOCUMENT

Acquisitions

Business Combinations [Abstract]

Acquisitions

Acquisition of Choose Digital

Acquisition of DraftDay.com

Accordingly, the Company issued a total of 1,353,975 shares of Common Stock in connection with the acquisition of the DraftDay Business.

The Company contributed the assets of the DraftDay Business to DDGG, such that the Company now owns a total of 11,250,000 shares of DDGG common stock.



Consideration transferred:
Shares of Viggle common stock on closing market price at issuance	$	1,760
Shares of DDGG common stock	963
Notes issued to sellers	2,250
DDGG warrants	62
Total consideration transferred	5,035

Preliminary allocation:
Goodwill	2,622
Intangible assets	2,396
Other Assets	803
Total liabilities	(786		)
	$	5,035

The operations of this acquisition are not material, and thus, pro forma disclosure are not presented. Goodwill related to the acquisition is expected to be deductible for income tax purposes.

Acquisitions

Acquisition of Wetpaint

On December 16, 2013, the Company and Viggle Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of Viggle (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Wetpaint, certain stockholders of Wetpaint and Shareholder Representative Services LLC, a Colorado limited liability company (solely in its capacity as the Stockholders’ Agent) ("the Acquisition"). On December 16, 2013, Merger Sub merged with and into Wetpaint, with Wetpaint continuing as the surviving corporation and the Company's wholly-owned subsidiary. The Acquisition is intended to qualify as a tax-free reorganization under Section 368(a) of the Code.

A summary of the fair value of consideration transferred for the Acquisition and the fair value of the assets and liabilities at the date of acquisition is as follows (amounts in thousands):



Consideration transferred:	Amount
Shares of Viggle common stock and restricted stock units based on closing market price at issuance	$	31,554
Cash paid to sellers	1,619
Contingent consideration	6,100
Total consideration transferred	39,273

Final allocation:
Goodwill	23,788
Intangible assets	19,009
Other assets	1,659
Total liabilities, including acquired accrued expenses	(5,183		)
	$	39,273

Acquisition of Choose Digital



Consideration transferred:	Amount
Shares of Viggle common stock and restricted stock units based on closing market price at issuance	$	8,893
Cash paid at closing	782
Contingent consideration	2,570
Total consideration transferred	12,245

Final allocation:
Goodwill	6,921
Intangible assets	4,660
Other assets	1,033
Total liabilities, including acquired accrued expenses	(369		)
	$	12,245

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).

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XML 30 R16.htm IDEA: XBRL DOCUMENT

Property and Equipment

Property, Plant and Equipment [Abstract]

Property and Equipment



	March 31, 2016			June 30, 2015

Leasehold Improvements	$	2,710		$	2,886
Furniture and Fixtures	588			588
Computer Equipment	456			458
Software	163			5
Total	3,917			3,937
Accumulated Depreciation and Amortization	(2,088		)	(1,603		)
Property and Equipment, net	$	1,829		$	2,334

Property and Equipment

Depreciation and amortization charges included in Selling, general and administrative expenses for the years ended June 30, 2015 and 2014 amounted to $656 and $567, respectively.



Description	June 30, 2015			June 30, 2014

Leasehold Improvements	$	2,886		$	2,454
Furniture and Fixtures	588			593
Computer Equipment	458			715
Software	5			12
Total	3,937			3,774
Accumulated Depreciation and Amortization	(1,603		)	(1,258		)
Property and Equipment, net	$	2,334		$	2,516

XML 31 R17.htm IDEA: XBRL DOCUMENT

Intangible Assets and Goodwill

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill



		March 31, 2016										June 30, 2015
Description	Amortization Period	Amount			Accumulated Amortization				Carrying Value			Amount			Accumulated Amortization				Carrying Value

Wetpaint technology	60 months		$	4,932		$	(3,184	)		$	1,748		$	10,600		$	(2,336	)		$	8,264
Wetpaint trademarks	276 months		1,423			(404		)		1,019			5,800			(296		)		5,504
Wetpaint customer relationships	60 months		917			(822		)		95			2,000			(617		)		1,383
Wetpaint non-compete agreements	36 months		—			—				—			609			(313		)		296
Choose Digital licenses	60 months		829			(544		)		285			1,740			(355		)		1,385
Choose Digital software	60 months		627			(190		)		437			550			(112		)		438
DraftDay technology	120 months		2,396			(130		)		2,266			—			—				—
Internally generated capitalized software	36 months		—			—				—			1,610			(515		)		1,095
Other	various		326			(16		)		310			326			(8		)		318

Total			$	11,450		$	(5,290	)		$	6,160		$	23,235		$	(4,552	)		$	18,683



Years ending June 30,

2016	$	208
2017	$	831
2018	$	834
2019	$	834
2020	$	834

Goodwill consists of the following:



Description	Amount
Balance at July 1, 2015	$	26,401
DraftDay preliminary purchase price allocation	2,622
Wetpaint impairment loss	(10,249		)
Choose Digital impairment loss	(3,122		)
Balance at March 31, 2016	$	15,652

Intangible Assets and Goodwill

Intangible assets consist of the following:



		June 30, 2015							June 30, 2014

	Amortization			Accumulated			Carrying				Accumulated			Carrying
Description	Period	Amount		Amortization			Value		Amount		Amortization			Value
Wetpaint technology	84 months	$	10,600	$	(2,336	)	$	8,264	$	10,600	$	(820	)	$	9,780
Wetpaint trademarks	360 months	5,800		(296		)	5,504		5,800		(103		)	5,697
Wetpaint customer relationships	60 months	2,000		(617		)	1,383		2,000		(217		)	1,783
Wetpaint non-compete agreements	36 months	609		(313		)	296		609		(110		)	499
Choose Digital intangible assets	84 months	—		—			—		5,797		(14		)	5,783
Choose Digital licenses	60 months	1,740		(355		)	1,385		—		—			—
Choose Digital software	60 months	550		(112		)	438		—		—			—
Internally generated capitalized software	36 months	1,610		(515		)	1,095		1,297		(48		)	1,249
Other	various	326		(8		)	318		333		(7		)	326

Total		$	23,235	$	(4,552	)	$	18,683	$	26,436	$	(1,319	)	$	25,117



Years Ending June 30	Amount
2016	$	3,414
2017	3,304
2018	2,687
2019	2,339
2020	1,707

The activity in the goodwill balance consists of the following:



Description	Amount
Balance at June 30, 2014	$	26,986
Choose Digital final purchase price adjustment	(1,160		)
Other	575
Balance at June 30, 2015	$	26,401

XML 32 R18.htm IDEA: XBRL DOCUMENT

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Loans Payable

Debt Disclosure [Abstract]

Loans Payable



			Outstanding Balances
Facility Name	Maturity Date	Total Facility Amount	March 31, 2016		June 30, 2015

Line of Credit Promissory Note (the "Note")	10/24/17	$20,000	$	19,666	$	19,516
Unsecured Demand Loans (the "Loans")	On Demand	—	—		1,575
Line of Credit Grid Note (the "Grid Note")	12/31/16	10,000	4,563		3,000
Secured Line of Credit (the "Secured Revolving Loan")	12/31/16	1,500	1,500		—
Secured Line of Credit (the "Secured Revolving Line of Credit")	12/31/16	500	88		—
MGT Promissory Notes (the "MGT Promissory Notes")	07/31/16	2,109	941		$	—
Kuusamo Promissory Notes (the Kuusamo Promissory Notes")	03/08/16	141	124		$	—
Total Loans Payable			$	26,882	$	24,091

Line of Credit Promissory Note

The Note provides a right for the Company to request advances under the Note from time to time. The Note bears interest at a rate of 12% per annum, payable in cash on a quarterly basis. The Note matures on October 24, 2017. On October 24, 2014, SIC III made an initial advance under the Note in the principal amount of $4,500. On December 15, 2014, SIC III made an additional advance in the principal amount of $15,500 pursuant to the terms of the Note (the proceeds of which were used to repay amounts outstanding under the DB Line, as discussed above). As of March 31, 2016, the total outstanding principal amount of the Note was $20,000. The Note provides for a 3% discount, such that the amount advanced by SIC III was 3% less than the associated principal amount of the advances. Therefore, the net amount actually outstanding under the Note at March 31, 2016, was $19,666, which includes accretion of the discount of $266 (the 3% discount of $600 is being accreted to the principal balance over the life of the Note). From and after the occurrence and during the continuance of any event of default under the Note, the interest rate is automatically increased to 17% per annum.

In connection with the first drawdown of $4,500 under the Note, the Company issued SIC III warrants to purchase 225,000 shares of the Company’s common stock. These warrants have an exercise price of $3.51, representing a price equal to 10% above the closing price of the Company’s common stock on the day prior to issuance. In connection with the additional drawdown of $15,500 under the Note, the Company issued SIC III warrants to purchase 775,000 shares of the Company's common stock. These warrants have an exercise price of $3.63, representing a price equal to 10% above the closing price of the Company's common stock on the day prior to issuance. The warrants are exercisable for a period of five years from issuance. Stock compensation expense related to the issuances of warrants to SIC III was $2,049 during the year ended June 30, 2015.

The Note is not convertible into equity securities of the Company.

Interest expense on the Note was $607 and $1,834 for the three and nine months ended March 31, 2016, respectively, and $593 and $785 for the three and nine months ended March 31, 2015, respectively.

Unsecured Demand Loans

During the year ended June 30, 2015, Mr. Sillerman made the following demand loans (the "Loans") to the Company:



Date	Amount

12/19/2014	$	2,000
1/14/2015	2,000
1/30/2015	2,000
2/13/2015	750
2/26/2015	1,000
3/2/2015	1,000
3/16/2015	3,000
4/20/2015	1,000
5/5/2015	500
5/14/2015	325

Total	$	13,575

As discussed in Note 11, Stockholders' Equity, on March 16, 2015, SIC III purchased 7,000 shares of Series C Convertible Preferred Stock pursuant to the Securities Purchase Agreement, for a purchase price of $7,000. The Company used the $7,000 proceeds from the sale of 7,000 shares of Series C Convertible Stock to repay $7,000 in principal amount of the Loans. In addition, the Company used $798 of the proceeds of the Loan on March 16, 2015 to pay all accrued and unpaid interest on the Loans. On June 1, 2015, the Company repaid an additional $5,000 in principal amount of the Loans. On July 1, 2015, the Company repaid the remaining $1,575 in principal amount of the Loans. Accordingly, after the transactions described herein, the total outstanding principal amount of the Loans at March 31, 2016 and June 30, 2015 was $0 and $1,575, respectively.

Interest expense on the Loans was $0 and $1 for the three and nine months ended March 31, 2016, respectively, and $171 and $179 for the three and nine months ended March 31, 2015, respectively.

Line of Credit Grid Note

The Grid Note is not convertible into equity securities of the Company.

The Company made requests for advances under the Grid Note, and SIC IV made advances to the Company as follows:



Date	Amount

6/11/2015	$	1,000
6/24/2015	2,000
7/31/2015	1,000
8/31/2015	2,000
9/15/2015	1,000
9/29/2015	1,000
10/13/2015	500
10/30/2015	600
11/25/2015	1,000

Total	$	10,100

On July 1, 2015, the Company repaid $1,425 of the Grid Note.

Accordingly, the principal amount of the Line of Credit was therefore reduced to $4,563.

Therefore, the outstanding balance of the Grid Note at March 31, 2016 was $4,563.

Interest expense on the Grid Note for the three and nine months ended March 31, 2016 was $138 and $435, respectively.

Secured Line of Credit

$500 Line of Credit

Related Approvals

Loan from Perk

During the three months ended December 31, 2015, Perk made two advances to the Company as follows:



Date	Amount

12/14/2015	$	667
12/23/2015	333

Total	$	1,000

Therefore, the outstanding balance of the loan from Perk was $0 at March 31, 2016. No interest expense was recorded by the Company for the three and nine months ended March 31, 2016.

Promissory Notes

The outstanding balance of the MGT Promissory Notes was $941 at March 31, 2016. The company recorded interest expense of $51 for the three and nine months ended March 31, 2016.

The outstanding balance of the Kuusamo Promissory Notes was $124 at March 31, 2016. No interest expense was recorded by the company for the three and nine months ended March 31, 2016.

Loans Payable



		Total		Outstanding Balances
Facility Name	Maturity Date	Facility Amount		June 30, 2015		June 30, 2014

Term Loan Agreement ("DB Line")	Retired	$	15,000	$	—	$	15,000
Line of Credit Promissory Note (the "Note")	10/24/17	20,000		19,516		—
Unsecured Demand Loans (the "Loans")	On Demand	1,575		1,575		—
Line of Credit Grid Note (the "Grid Note")	12/31/16	10,000		3,000		—

Total Loans Payable				$	24,091	$	15,000

Term Loan Agreement

The Company may make prepayments, in whole or in part, under the DB Line at any time, as long as all accrued and unpaid interest thereon is paid through the prepayment date.

The DB Line did not contain any financial covenants.

Repayment of the DB Line was guaranteed by Mr. Sillerman. In consideration for the guarantee, Mr. Sillerman's designee, Sillerman Investment Company II LLC ("SIC II"), which was the lender under the Amended and Restated $25,000 Line of Credit described below, received a warrant for 125,000 shares of common stock of Viggle, which may be exercised at any time within 60 months of the issuance date at $80.00 a share, (subject to adjustment in the event of stock splits and combination, reclassification, merger or consolidation)(the “Guarantee Warrant”). The Guarantee Warrant contains a piggyback registration right with respect to the underlying common shares which may be issued if it is exercised. The Guarantee Warrant was issued in a transaction exempt from registration under the Securities Act of 1933, as amended, in reliance on Section 4(a)(2) thereunder and Rule 506 of Regulation D promulgated thereunder. The Company recorded compensation expense during the year ended June 30, 2013 of $5,559 related to the Guarantee Warrant issued to SIC II, as Mr. Sillerman's designee.

The Company used the proceeds from the DB Line to fund working capital requirements and for general corporate purposes.

Interest expense on the DB Line for the year ended June 30, 2015 was $185.

Line of Credit Promissory Note

The Note provides a right for the Company to request advances under the Note from time to time. The Note bears interest at a rate of 12% per annum, payable in cash on a quarterly basis. The Note matures on October 24, 2017. On October 24, 2014, SIC III made an initial advance under the Note in the principal amount of $4,500. On December 15, 2014, SIC III made an additional advance in the principal amount of $15,500 pursuant to the terms of the Note (the proceeds of which were used to repay amounts outstanding under the DB Line, as discussed above). As of June 30, 2015, the total outstanding principal amount of the Note was $20,000. The Note provides for a 3% discount, such that the amount advanced by SIC III was 3% less than the associated principal amount of the advances. Therefore, the net amount actually outstanding under the Note at June 30, 2015, was $19,516, which includes accretion of the discount of $116 (the 3% discount of $600 is being accreted to the principal balance over the life of the Note). From and after the occurrence and during the continuance of any event of default under the Note, the interest rate is automatically increased to 17% per annum.

In connection with the first drawdown of $4,500 under the Note, the Company issued SIC III warrants to purchase 225,000 shares of the Company’s common stock. These warrants have an exercise price of $3.51, representing a price equal to 10% above the closing price of the Company’s common stock on the day prior to issuance. In connection with the additional drawdown of $15,500 under the Note, the Company issued SIC III warrants to purchase 775,000 shares of the Company's common stock. These warrants have an exercise price of $3.63, representing a price equal to 10% above the closing price of the Company's common stock on the day prior to issuance. The Warrants are exercisable for a period of five years from issuance. Stock compensation expense related to the issuances of warrants to SIC III was $2,049 during the year ended June 30, 2015.

The Note is not convertible into equity securities of the Company.

Interest expense on the Note was $1,391 for the year ended June 30, 2015.

Unsecured Demand Loans

During the year ended June 30, 2015, Mr. Sillerman made the following demand loans (the "Loans") to the Company:



Date	Amount

December 19, 2014	$	2,000
January 14, 2015	2,000
January 30, 2015	2,000
February 13, 2015	750
February 26, 2015	1,000
March 2, 2015	1,000
March 16, 2015	3,000
April 20, 2015	1,000
May 5, 2015	500
May 14, 2015	325

Total	$	13,575

Interest expense on the Loans was $306 for the year ended June 30, 2015.

Line of Credit Grid Note

The Grid Note is not convertible into equity securities of the Company.

On June 11, 2015 and June 24, 2015, the Company made requests for advances under the Grid Note, and SIC IV made advances to the Company in the amounts of $1,000 and $2,000, respectively.

Interest expense on the Grid Note for the year ended June 30, 2015 was $10.

Related Approvals

XML 33 R19.htm IDEA: XBRL DOCUMENT

Commitments and Contingencies

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Litigation

Commitments and Contingencies

Operating Leases



Years Ending June 30,	Amount
2016	$	894
2017	877
2018	887
2019	709
2020	729
Thereafter	1,389
Total	$	5,485

Litigation

On August 17, 2012, the Company was served with a patent infringement lawsuit filed on August 13, 2012 by Blue Spike, LLC ("Blue Spike") in the United States District Court for the Eastern District of Texas, Tyler Division (Civil Action No. 6:12-CV-526). The lawsuit claims patent infringement under U.S. Patent numbers 7,346,472, 7,660,700, 7,949,494, and 8,214,715 in connection with the Company's audio recognition technology. Blue Spike has commenced suits against numerous other companies involving the same patent family. The Company settled the lawsuit with Blue Spike on April 22, 2015, and issued 50,000 shares of common stock to Blue Spike in connection with the settlement, and based on a closing price of $2.77 on that date, such shares had a fair value of $139.

XML 34 R20.htm IDEA: XBRL DOCUMENT

Stockholders' Equity

Equity [Abstract]

Series A Convertible Redeemable Preferred Stock


•	The shares of Series A Convertible Redeemable Preferred Stock have an initial stated value of 1,000 per share (the "Stated Value").


•	Each share of Series A Convertible Redeemable Preferred Stock is convertible, at the option of the holders, into shares of Company common stock at a conversion price of $1.15.


•	The Company is required to redeem the Series A Convertible Redeemable Preferred Stock on the fifth anniversary of its issuance.


•	The shares of Series A Convertible Redeemable Preferred Stock are senior in liquidation preference to the shares of Company common stock.


•	The shares of Series A Convertible Redeemable Preferred Stock shall have no voting rights except as required by law.

Series B Convertible Preferred Stock


•	The shares of Series B Convertible Preferred Stock have an initial stated value of $1,000 per share.

The shares of Series B Convertible Preferred Stock are convertible, at the option of the holders, into shares of Company common stock at a conversion price of $1.15. The shares of Series B Convertible Preferred Stock may only be converted from and after the earlier of either of: (x) the first trading day immediately following (i) the closing sale price of the Company's common stock being equal to or greater than $1.67 per share (as adjusted for stock dividends, stock splits, stock combinations and other similar transactions occurring with respect to the Company's common stock from and after the initial issuance date) for a period of five consecutive trading days following the initial issuance date and (ii) the average daily trading volume of the Company's common stock (as reported on Bloomberg) on the principal securities exchange or trading market where the Company's common stock is listed or traded during the measuring period equaling or exceeding 25,000 shares of Company's common stock per trading day (the conditions set forth in the immediately preceding clauses (i) and (ii) are referred to herein as the “Trading Price Conditions”) or (y) immediately prior to the consummation of a “fundamental transaction”, regardless of whether the Trading Price Conditions have been satisfied prior to such time. A “fundamental transaction” is defined as (i) a sale of all or substantially all of the assets of the Company, (ii) a sale of at least 90% of the shares of capital stock of the Company or (iii) a merger, consolidation or other business combination as a result of which the holders of capital stock of the Company prior to such merger, consolidation or other business combination (as the case may be) hold in the aggregate less than 50% of the Voting Stock of the surviving entity immediately following the consummation of such merger, consolidation or other business combination (as the case may be), in each case of clauses (i), (ii) and (iii), the Board has determined that the aggregate implied value of the Company's capital stock in such transaction is equal to or greater than $125,000.


•	The shares of Series B Convertible Preferred Stock are not redeemable by either the Company or the holders thereof.


•	The shares of Series B Convertible Preferred Stock are on parity in dividends and liquidation preference with the shares of Company common stock, which shall be payable only if then convertible into common stock.


•	The shares of Series B Convertible Preferred Stock shall have no voting rights except as required by law.


•	The consent of the holders of 51% of the outstanding shares of Series B Convertible Preferred Stock shall be necessary for the Company to alter, amend or change any of the terms of the Series B Convertible Preferred Stock.

At March 31, 2016 and June 30, 2015, there were no shares of Series A Convertible Redeemable Preferred Stock and Series B Convertible Preferred Stock outstanding.

Series C Convertible Redeemable Preferred Stock


•	The shares of Series C Convertible Redeemable Preferred Stock have a stated value of $1,000 per share.


•	Each share of Series C Convertible Redeemable Preferred Stock is convertible, at the option of the holders, on the basis of its stated value and accrued, but unpaid dividends, into shares of Company common stock at a conversion price of $4.00 per common share.


•	The Company may redeem any or all of the outstanding Series C Convertible Redeemable Preferred Stock at any time at the then current Stated Value plus accrued Dividends thereon plus a redemption premium equal to the Stated Value multiplied by 6%. However, no premium shall be due on the use of up to 33% of proceeds of a public offering of common shares at a price of $5.00 or more per share.

Series D Convertible Preferred Stock


•	The shares of Series C Convertible Redeemable Preferred Stock are senior in liquidation preference to all shares of capital stock of the Company unless otherwise consented to by a majority of the holders of shares of Series C Convertible Redeemable Preferred Stock.


•	The shares of Series C Convertible Redeemable Preferred Stock shall have no voting rights except as required by law.


•	The consent of the holders of a majority of the shares of Series C Convertible Redeemable Preferred Stock is necessary for the Company to amend the Series C certificate of designation.


•	The shares of Series D Convertible Preferred Stock have a stated value of $1,000 per share.


•	Each share of Series D Convertible Preferred Stock is convertible, at the option of the holders, at a rate of 3,333 shares of common stock for one share of converted Series D Convertible Preferred Stock.


•	Shares of Series D Convertible Preferred Stock are not entitled to a liquidation preference.


•	Conversions of the Series D Convertible Preferred Stock shall be limited such that any given conversion shall not cause the holder's aggregate beneficial ownership of the shares of common stock to exceed 9.99% of the Company’s outstanding common stock.


•	The shares of Series D Convertible Preferred Stock shall have no voting rights except as required by law.


•	The consent of the holders of a majority of the shares of Series D Convertible Preferred Stock is necessary for the Company to amend the Series D certificate of designation.

Securities Purchase Agreement

Subscription Agreement

Non-controlling Interest

Stockholders’ Equity

Series A Convertible Redeemable Preferred Stock


•	The shares of Series A Convertible Redeemable Preferred Stock had an initial stated value of $1,000 per share (the "Stated Value").


•	Each share of Series A Convertible Redeemable Preferred Stock was convertible, at the option of the holders, into shares of Company common stock at a conversion price of $1.15.


•	The Company was required to redeem the Series A Convertible Redeemable Preferred Stock on the fifth anniversary of its issuance.


•	The shares of Series A Convertible Redeemable Preferred Stock were senior in liquidation preference to the shares of Company common stock.


•	The shares of Series A Convertible Redeemable Preferred Stock had no voting rights except as required by law.

Series B Convertible Preferred Stock


•	At June 30, 2015 and 2014, there were no shares of Series A Convertible Redeemable Preferred Stock and Series B Convertible Preferred Stock outstanding.


•	The shares of Series B Convertible Preferred Stock had an initial stated value of $1,000 per share.

Series C Convertible Redeemable Preferred Stock


•	The shares of Series B Convertible Preferred Stock were not redeemable by either the Company or the holders thereof.


•	The shares of Series B Convertible Preferred Stock were on parity in dividends and liquidation preference with the shares of Company common stock, which were payable only if then convertible into common stock.


•	The shares of Series B Convertible Preferred Stock had no voting rights except as required by law.


•	The consent of the holders of 51% of the outstanding shares of Series B Convertible Preferred Stock was necessary for the Company to alter, amend or change any of the terms of the Series B Convertible Preferred Stock.


•	The shares of Series C Convertible Redeemable Preferred Stock have a stated value of $1,000 per share.


•	Each share of Series C Convertible Redeemable Preferred Stock is convertible, at the option of the holders, on the basis of its stated value and accrued, but unpaid dividends, into shares of Company common stock at a conversion price of $4.00 per common share.


•	The Company may redeem any or all of the outstanding Series C Convertible Redeemable Preferred Stock at any time at the then current Stated Value plus accrued Dividends thereon plus a redemption premium equal to the Stated Value multiplied by 6%. However, no premium shall be due on the use of up to 33% of proceeds of a public offering of common shares at a price of $5.00 or more per share.

Securities Purchase Agreement


•	The shares of Series C Convertible Redeemable Preferred Stock are senior in liquidation preference to all shares of capital stock of the Company unless otherwise consented to by a majority of the holders of shares of Series C Convertible Redeemable Preferred Stock.


•	The shares of Series C Convertible Redeemable Preferred Stock shall have no voting rights except as required by law.


•	The consent of the holders of a majority of the shares of Series C Convertible Redeemable Preferred Stock is necessary for the Company to amend the Series C certificate of designation.

Public Offerings of Common Stock

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 6
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 505
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
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-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
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XML 35 R21.htm IDEA: XBRL DOCUMENT

Share-Based Payments

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Payments

Equity Incentive Plan

Restricted Stock

The following table summarizes the Company's RSU activity for nine months ended March 31, 2016:



	Shares		Weighted Average Grant Date Fair Value
Nonvested at July 1, 2015	466,257		$	52.23
Granted	351,427		1.63
Vested	(330,489	)	54.10
Forfeited and canceled	(261,019	)	3.65
Nonvested at March 31, 2016	226,176		$	4.71

Stock Options

The following table summarizes the Company's stock option activity for nine months ended March 31, 2016:



	Number of Options		Weighted average exercise price
Outstanding at July 1, 2015	1,181,818		$	11.19
Granted	235,333		0.46
Exercised	—		—
Forfeited and canceled	(359,518	)	6.01
Outstanding at March 31, 2016	1,057,633		$	10.63
Exercisable at March 31, 2016	959,561		$	11.20



	Nine Months Ended March 31, 2016			Nine Months Ended March 31, 2015
Expected volatility	80		%	80		%
Risk-free interest rate	1.94		%	2.04		%
Expected dividend yield	—			—
Expected life (in years)	6.50			6.50
Estimated fair value per option granted	$	0.33		$	2.55

Share-Based Payments

Equity Incentive Plan

The 2011 Executive Incentive Plan (the "Plan") of the Company was approved on February 21, 2011 by the written consent of the holder of a majority of the Company's outstanding common stock. The Plan provides the Company the ability to grant to any officer, director, employee, consultant or other person who provides services to the Company or any related entity, options, stock appreciation rights, restricted stock awards, dividend equivalents and other stock-based awards and performance awards, provided that only employees are entitled to receive incentive stock options in accordance with IRS guidelines. The Company reserved 3,750,000 shares of common stock for delivery under the Plan. Pursuant to the Plan and the employment agreements, between February 15, 2011 and June 30, 2015, the Compensation Committee of the Company's Board of Directors authorized the grants of restricted stock and stock options described below.

Restricted Stock



Description	Shares		Weighted Average Grant Date Fair Value
Nonvested at June 30, 2014	396,370		$	95.57
Granted	1,794,841		3.20
Vested	(1,512,496	)	17.10
Forfeited and canceled	(212,458	)	3.20
Nonvested at June 30, 2015	466,257		$	41.00

Stock Options

The following table summarizes the Company's stock option activity for year ended June 30, 2015:



Description	Number of Options		Weighted average exercise price		Weighted average remaining contractual life (years)	Aggregate intrinsic value
Outstanding at June 30, 2014	989,066		$	30.09	9.44	$	—
Granted	610,335		2.97		—	—
Exercised	(35,000	)	2.33		—	27
Forfeited and canceled	(382,583	)	47.75		—	4
Outstanding at June 30, 2015	1,181,818		11.19		8.97	15
Exercisable at June 30, 2015	818,097		$	13.59	8.97	$	—



Description	Year Ended June 30, 2015			Year Ended June 30, 2014
Expected volatility	80		%	80		%
Risk-free interest rate	1.82		%	1.92		%
Expected dividend yield	—			—
Expected life (in years)	6.50			6.49
Estimated fair value per option granted	$	2.11		$	3.73

XML 36 R22.htm IDEA: XBRL DOCUMENT

Income Taxes

Income Tax Disclosure [Abstract]

Income Taxes

A reconciliation of the statutory U.S. federal tax rate and our effective tax rate is as follows:



Description	Year Ended June 30, 2015		Year Ended June 30, 2014
Statutory U.S. federal tax rate	35.00	%	35.00	%
State and local income taxes - net of federal benefit	10.37	%	10.37	%
Valuation allowance	(45.37	)%	(45.37	)%

Effective tax rate	—	%	—	%

The components of deferred taxes as of June 30, 2015, are as follows:



Deferred tax assets:	(in thousands)
Share based compensation	$	86,546
Start-up expenditures	5,236
Other	1,575
Operating loss carryforward	71,616
Total deferred tax assets	164,973
Deferred tax liabilities:
Depreciation and amortization	(6,156		)
Valuation allowance	(158,817		)
Deferred tax asset, net	$	—

The components of deferred taxes as of June 30, 2014, are as follows:



Deferred tax assets:	(in thousands)
Share based compensation	$	71,848
Start-up expenditures	5,674
Other	1,574
Operating loss carryforward	40,679
Total deferred tax asset	119,775
Deferred tax liabilities:
Depreciation and amortization	—
Valuation allowance	(119,775		)
Deferred tax asset, net	$	—

XML 37 R23.htm IDEA: XBRL DOCUMENT

Related Party Transactions	9 Months Ended	12 Months Ended
Related Party Transactions	Mar. 31, 2016	Jun. 30, 2015
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Shared Services Agreements In an effort to economize on costs and be efficient in its use of resources, the Company entered into a shared services agreement with Circle Entertainment Inc. (“Circle”) as of February 15, 2011, pursuant to which it shares costs for legal and administrative services in support of Mitchell J. Nelson, its then-General Counsel and General Counsel to Circle. The shared services agreement provides, in general, for sharing of the applicable support provided by either company to Mr. Nelson in connection with his capacity as General Counsel. The Company is responsible for advancing the salary to legal and administrative personnel supporting Mr. Nelson for both companies and will be reimbursed by Circle for such salary and benefits (but not for any bonus, option or restricted share grant made by either company, which will be the responsibility of the company making such bonus, option or restricted share grant). The agreement provides for the Chief Executive Officer or President of each Company to meet periodically to assess whether the services have been satisfactorily performed and to discuss whether the allocation has been fair. The Audit Committee of each company's Board of Directors will then review and, if appropriate, approve the allocations made and whether payments need to be adjusted or reimbursed, depending on the circumstances. Because this transaction is subject to certain rules regarding “affiliate” transactions, the Audit Committee and a majority of the independent members of the Company's Board of Directors have approved the shared services agreement. This is deemed to be an affiliate transaction because Mr. Sillerman is the former Chairman, a Board member, and a greater than 10% stockholder of Circle and Mr. Nelson is Executive Vice President and General Counsel of Circle. For the nine months ended March 31, 2016 and 2015, the Company billed Circle $14 and $20, respectively. Such billings primarily relate to support consisting of legal and administrative services. These services are to be reviewed and, if appropriate, approved by Circle's Audit Committee and the Company's Audit Committee. The balance due from Circle as of March 31, 2016 and June 30, 2015 was $0 and $113, respectively. The Company wrote-off the accounts receivable balance of $127 in the quarter ended March 31, 2016, the write-off appears as a bad debt expense on the consolidated statements of operation. The parties terminated the Circle Shared Services Agreement effective as of January 1, 2016. Circle is in the process of liquidation and any claim to be made under the Circle Shared Services Agreement will survive the termination of the Circle Shared Services Agreement. The Company also entered into a shared services agreement ("SFX Shared Services Agreement") with SFX Entertainment Inc. ("SFX) , pursuant to which it shares costs for services provided by several of the Company's and/or SFX's employees. Such employees will continue to be paid by their current employers, and SFX will reimburse the Company directly for its portion of such salary and benefits and Company will reimburse SFX directly for its portion of such salary and benefits (but not for any bonus, option or restricted share grant made by either company, which will be the responsibility of the company making such bonus, option or restricted share grant). The Audit Committee of each company's Board of Directors reviews and, if appropriate, approves the allocations made and whether payments need to be adjusted or reimbursed, depending on the circumstances. The Company entered into an amendment (the “Amendment”) to the shared services agreement on January 22, 2015, pursuant to which the Company may provide additional services to SFX, and SFX may provide certain services to the Company. In particular, the shared services agreement provides that, in addition to services already provided, certain employees of the Company may provide human resources, content and programming, and facilities services to SFX, subject to reimbursement based on salary and benefits for the employees providing the services, plus 20% for miscellaneous overhead, based on a reasonable estimate of time spent. In addition, the Amendment provides that SFX may provide certain tax services to the Company, subject to reimbursement based on salary and benefits for the employees providing the services, plus 20% for miscellaneous overhead, based on a reasonable estimate of time spent. The parties terminated the SFX Shared Services Agreement effective as of January 1, 2016. We continue to try to settle amounts remaining outstanding. For the three and nine months ended March 31, 2016, the Company was billed by SFX $42 and $167, net of amounts billed by the Company to SFX, respectively. The net balance due (to)/from SFX, including amounts related to the Sales Agency Agreement, discussed below, as of March 31, 2016 and June 30, 2015 was $(139) and $135, respectively. Sales Agency Agreement On January 22, 2015, the Company entered into a sales agency agreement (the “Sales Agreement”) with SFX-94 LLC (“SFX-94”), a subsidiary of SFX, pursuant to which the Company appoints SFX-94 as its exclusive sales agent for the sale of advertising and sponsorships. Pursuant to the Sales Agreement, the Company consented to SFX-94’s hiring of 25 members of the Company’s sales team, and SFX-94 agreed that it will sell advertising and sponsorships on behalf of the Company during the term of the Sales Agreement. SFX-94 also agreed that it will maintain adequate staffing levels, generally consistent with staffing levels currently maintained by the Company, for the Company’s sale of advertising and sponsorships. The Company will pay SFX-94 a 25% commission on sales made by SFX-94. For barter transactions, the Company will reimburse SFX-94 for any out of pocket and direct costs incurred by SFX-94 with respect to such barter sales (rather than the commission set forth above), and third party ad networks will be excluded from the Sales Agreement. For the nine months ended March 31, 2016, the Company was billed $424 in connection with the Sales Agreement. On September 22, 2015, the parties terminated the Sales Agreement, and the Company subsequently hired 8 members of the SFX sales team as of that date. Advertising Revenue For the nine months ended March 31, 2016, the Company provided credits on certain advertising and related services provided to SFX and its subsidiaries during the prior year. The total amount of such credits $37 and such amount increased the payable due to SFX at March 31, 2016. Marketing Expense During the year ended June 30, 2015, SFX, and certain subsidiaries of SFX, provided certain marketing and related services to the Company. The total amount of marketing expense was $450 and such amount was due to SFX at June 30, 2015. DraftDay In October 2015 the Company entered into an agreement with DDGG to expand its rewards catalog and offer to its users the opportunity to redeem Viggle points for entry to DDGG’s fantasy sports contests. The Company agreed to pay DDGG the value of the entry fees for which points were redeemed. For the nine months ended March 31, 2016, $39 worth of Viggle points were redeemed for DDGG contest entry fees. License Agreement On March 10, 2014, the Company entered into an audio recognition and related loyalty program software license and services agreement with SFX. Pursuant to the terms of the license agreement, SFX paid the Company $5,000 to license its audio recognition software and related loyalty platform for a term of 10 years. The amount was deferred and is being amortized over the ten years period. For the three months ended March 31, 2016 and 2015, the Company recognized $125 and $125, respectively, of revenue related to this agreement. For the nine months ended March 31, 2016 and 2015, the Company recognized $375 and $375, respectively, of revenue related to this agreement. Lines of Credit See Note 9, Loans Payable, for a description of certain loans which have been provided by related parties. In addition, see Note 16, Subsequent Events, for additional discussion of certain related party transactions. As described in Note 9, Loans Payable, on December 3, 2015, the Company and SIC IV entered into a Subscription Agreement pursuant to which SIC IV subscribed for 8,750,000 shares of the Company’s common stock at a price of $0.47 per share. Accordingly, the aggregate purchase price for such shares was $4,112. The Company and SIC IV agreed that SIC IV would pay the purchase price for such shares by reducing the amounts outstanding under the Line of Credit. As of December 3, 2015, there was $8,675 in outstanding principal amount under the Line of Credit. Accordingly, the principal amount of the Line of Credit was therefore reduced to $4,563. Secured Line of Credit On January 27, 2016, Sillerman Investment Company VI LLC (“SIC VI”), an affiliate of Robert F.X. Sillerman, the Executive Chairman and Chief Executive Officer of the Company, entered into a secured revolving loan agreement (the “Secured Revolving Loan”) with the Company and its subsidiaries, Wetpaint and Choose Digital (collectively, the “Subsidiaries”), pursuant to which the Company can borrow up to $1,500. The Secured Revolving Loan bears interest at the rate of 12% per annum. In connection with the Secured Revolving Loan, the Company and the Subsidiaries have entered into a Security Agreement (the “Security Agreement”) with SIC VI, under which the Company and the Subsidiaries have granted SIC VI a continuing security interest in all assets of the Company and the Subsidiaries, with the exception of the Company’s interest in DraftDay Gaming Group, Inc. The Company intends to use the proceeds from the Secured Revolving Loan to fund working capital requirements and for general corporate purposes in accordance with a budget to be agreed upon by SIC VI and the Company. As of March 31, 2016, $1,500 has been advanced thereunder. Because Mr. Sillerman is a director, executive officer and greater than 10% stockholder of the Company, a majority of the Company’s independent directors approved the transaction. $500 Line of Credit The Company and its subsidiaries entered into a secured, revolving Line of Credit on March 29, 2016 with SIC VI (the “Secured Revolving Line of Credit”), pursuant to which the Company can borrow up to $500. The Secured Revolving Line of Credit bears interest at the rate of 12% per annum. In connection with the Secured Revolving Line of Credit, the Company and the Subsidiaries have entered into a Security Agreement (the “Security Agreement”) with SIC VI, under which the Company and the Subsidiaries have granted SIC VI a continuing security interest in all assets of the Company and the Subsidiaries, with the exception of the Company’s interest in DraftDay Gaming Group, Inc. The Company intends to use the proceeds from the Secured Revolving Line of Credit to fund working capital requirements and for general corporate purposes in accordance with a budget to be agreed upon by SIC VI and the Company. At March 31, 2016, $88 had been advanced thereunder. Related Approvals Because the above transactions were subject to certain rules regarding “affiliate” transactions, the Company's Audit Committee and a majority of the independent members of the Company's Board of Directors approved each of these transactions.	Related Party Transactions Shared Services Agreements In an effort to economize on costs and be efficient in its use of resources, the Company entered into a shared services agreement with Circle Entertainment Inc. (“Circle”) as of February 15, 2011, pursuant to which it shares costs for legal and administrative services in support of Mitchell J. Nelson, its then-General Counsel and General Counsel to Circle. The shared services agreement provides, in general, for sharing of the applicable support provided by either company to Mr. Nelson in connection with his capacity as General Counsel, and an allocation generally based on the services provided by Mr. Nelson, which were initially estimated to be divided evenly between the companies. The Company is responsible for advancing the salary to Mr. Nelson for both companies and will be reimbursed by Circle for such salary and benefits (but not for any bonus, option or restricted share grant made by either company, which will be the responsibility of the company making such bonus, option or restricted share grant). The agreement provides for the Chief Executive Officer or President of each Company to meet periodically to assess whether the services have been satisfactorily performed and to discuss whether the allocation has been fair. The Audit Committee of each company's Board of Directors will then review and, if appropriate, approve the allocations made and whether payments need to be adjusted or reimbursed, depending on the circumstances. Because this transaction is subject to certain rules regarding “affiliate” transactions, the Audit Committee and a majority of the independent members of the Company's Board of Directors have approved the shared services agreement. This is deemed to be an affiliate transaction because Mr. Sillerman is the former Chairman, a Board member, and a greater than 10% stockholder of Circle and Mr. Nelson is Executive Vice President and General Counsel of Circle. For the years ended June 30, 2015 and June 30, 2014, the Company billed Circle $27 and $73, respectively. Such billings primarily relate to support consisting of legal and administrative services. These services are to be reviewed and, if appropriate, approved by Circle's Audit Committee and the Company's Audit Committee. The balance due from Circle as of June 30, 2015 and June 30, 2014 was $113 and $86, respectively. The Company also entered into a shared services agreement with SFX Entertainment Inc. ("SFX"), pursuant to which it shares costs for services provided by several of the Company's and/or SFX's employees. Such employees will continue to be paid by their current employers, and SFX will reimburse the Company directly for its portion of such salary and benefits and Company will reimburse SFX directly for its portion of such salary and benefits (but not for any bonus, option or restricted share grant made by either company, which will be the responsibility of the company making such bonus, option or restricted share grant). The agreement provides for the Chief Executive Officer or President of each company to meet periodically to assess whether the services have been satisfactorily performed and to discuss whether the allocation has been fair. The Audit Committee of each company's Board of Directors will then review and, if appropriate, approve the allocations made and whether payments need to be adjusted or reimbursed, depending on the circumstances. The Company entered into an amendment (the “Amendment”) to the shared services agreement on January 22, 2015, pursuant to which the Company may provide additional services to SFX, and SFX may provide certain services to the Company. In particular, the shared services agreement provides that, in addition to services already provided, certain employees of the Company may provide human resources, content and programming, and facilities services to SFX, subject to reimbursement based on salary and benefits for the employees providing the services, plus 20% for miscellaneous overhead, based on a reasonable estimate of time spent. In addition, the Amendment provides that SFX may provide certain tax services to the Company, subject to reimbursement based on salary and benefits for the employees providing the services, plus 20% for miscellaneous overhead, based on a reasonable estimate of time spent. For the years ended June 30, 2015 and 2014, the Company billed SFX $978 and $398, net of amounts billed by SFX to the Company, respectively. The net balance due from SFX, including amounts related to the Sales Agency Agreement, discussed below, as of June 30, 2015 and June 30, 2014 was $146 and $0, respectively. Certain Company accounting personnel provided personal accounting services to Mr. Sillerman. To the extent that such services were rendered, Mr. Sillerman reimbursed the Company. For the year ended June 30, 2014, the Company billed Mr. Sillerman $7. The balance due from Mr. Sillerman as of June 30, 2014 was $6. No such services were provided during the year ended June 30, 2015. Sales Agency Agreement On January 22, 2015, the Company entered into a sales agency agreement (the “Sales Agreement”) with SFX-94 LLC (“SFX-94”), a subsidiary of SFX, pursuant to which the Company appoints SFX-94 as its exclusive sales agent for the sale of advertising and sponsorships. Pursuant to the Sales Agreement, the Company consented to SFX-94’s hiring of 25 members of the Company’s sales team, and SFX-94 agreed that it will sell advertising and sponsorships on behalf of the Company during the term of the Sales Agreement. SFX-94 also agreed that it will maintain adequate staffing levels, generally consistent with staffing levels currently maintained by the Company, for the Company’s sale of advertising and sponsorships. The Company will pay SFX-94 a 25% commission on sales made by SFX-94. For barter transactions, the Company will reimburse SFX-94 for any out of pocket and direct costs incurred by SFX-94 with respect to such barter sales (rather than the commission set forth above), and third party ad networks will be excluded from the Sales Agreement. For the year ended June 30, 2015, the Company was billed $471 in connection with the Sales Agreement. The Sales Agreement has a three-year term, and can be terminated by the Company on 90 days’ notice. Advertising Revenue During the year ended June 30, 2015, the Company provided certain advertising and related services to SFX and its subsidiaries. The total amount of net revenue was $487 and such amount was due from SFX at June 30, 2015. Marketing Expense During the year ended June 30, 2015, SFX, and certain subsidiaries of SFX, provided certain marketing and related services to the Company. The total amount of marketing expense was $490 and such amount was due to SFX at June 30, 2015. License Agreement On March 10, 2014, the Company entered into an audio recognition and related loyalty program software license and services agreement with SFX. Pursuant to the terms of the license agreement, SFX paid the Company $5,000 to license its audio recognition software and related loyalty platform for a term of ten years. The amount was deferred and is being amortized over the ten year period. For the years ended June 30, 2015 and 2014, the Company recognized $500 and $146, respectively, of revenue related to this agreement. Loans Payable and Stockholders' Equity Transactions See Note 9, Loans Payable, and Note 11, Stockholders' Equity for a description of certain loans and equity transactions with related parties. Recapitalization Note In Fiscal 2011, Mr. Sillerman (and his spouse and entities controlled by him), executed a promissory note in accordance with his subscription agreement for the payment of the purchase price of certain shares of common stock, in the amount of $3,242. The note was an unsecured five-year note with interest accruing at the annual rate equal to the long-term Applicable Federal Rate in effect as of the date of the Recapitalization Agreement (which was 4.15% per annum). Interest income recorded on this note for the year ended June 30, 2014 was $85. The Recapitalization Note was repaid by Mr. Sillerman on February 16, 2014. Related Approvals Because the above transactions were subject to certain rules regarding “affiliate” transactions, the Company's Audit Committee and a majority of the independent members of the Company's Board of Directors approved each of these transactions.

XML 38 R24.htm IDEA: XBRL DOCUMENT

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References + Details

Fair Value Measurement

Fair Value Disclosures [Abstract]

Fair Value Measurement

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

Non-financial Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis

The following table presents a reconciliation of assets measured at fair value on a recurring basis using unobservable inputs (level 3):



	(in thousands)

Balance at July 1, 2015	$	—
Perk warrants	1,023
Unrealized (gains) losses for the period included in other income (expense), net	68
Balance at March 31, 2016	$	1,091

The following table presents a reconciliation of liabilities measured at fair value on a recurring basis using unobservable inputs (level 3):



	(in thousands)

Balance at July 1, 2015	$	10
Additions to Level 3	—
Balance at March 31, 2016	$	10

Fair Value Measurement

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The Company issued 21,364 warrants in connection with the May 10, 2012 PIPE. Each warrant has a sale price of $440.00 and is exercisable into 1 share of common stock at a price of $640.00 over a term of three years. Further, the exercise price of the warrants is subject to "down round" protection, whereby any issuance of shares at a price below the current price resets the exercise price equal to a the price of newly issued shares (the "Warrants"). In connection with the PIPE Exchanges described in Note 9, Stockholders' Equity, the exercise price of the Warrants was reset to $92.00 on September 16, 2013. The fair value of such warrants has been determined utilizing the Binomial Lattice Model in accordance with ASC 820-10. The fair value of the warrants when issued was $5,281 and was $443 as of June 30, 2013. As described in Note 9, Loans Payable, 6,818 warrants were exchanged on September 16, 2013. The remaining 14,545 warrants were marked to market as of June 30, 2015 and 2014 to a fair value of $10 and $15, respectively. The Company recorded gains of $5 and $305 to other income, net in the Consolidated Statements of Operations for the years ended June 30, 2015 and June 30, 2014, respectively. The fair value of the warrant is classified as a current liability on the Consolidated Balance Sheet as of June 30, 2015, due to the Company's intention to retire a significant portion of these warrants in a future round of financing. The Company's warrants were classified as a Level 3 input within the fair value hierarchy because they were valued using unobservable inputs and management's judgment due to the absence of quoted market prices and inherent lack of liquidity.

Non-financial Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis

On a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment. Long-lived assets and certain identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair value. Measurements based on undiscounted cash flows are considered to be Level 3 inputs. During the fourth quarter of each year, the Company evaluates goodwill and indefinite-lived intangibles for impairment at the reporting unit level. For each acquisition, the Company performed a detailed review to identify intangible assets and a valuation is performed for all such identified assets. The Company used several market participant measurements to determine estimated value. This approach includes consideration of similar and recent transactions, as well as utilizing discounted expected cash flow methodologies, and/or revenue or earnings before interest, taxes, depreciation and amortization ("EBITDA") multiples, among other methods. The amounts allocated to assets acquired and liabilities assumed in the acquisitions were determined using Level 3 inputs. Fair value for property and equipment was based on other observable transactions for similar property and equipment. Accounts receivable represents the best estimate of balances that will ultimately be collected, which is based in part on allowance for doubtful accounts reserve criteria and an evaluation of the specific receivable balances.

The following table presents a reconciliation of items measured at fair value on a recurring basis using unobservable inputs

(Level 3):



Description	Amount
Balance at June 30, 2013	$	4,313
Additions to Level 3	9,196
Gains for the period	(2,508		)
Extinguishments	(8,416		)
Balance at June 30, 2014	2,585

Additions to Level 3	—
Gains for the period	(5		)
Extinguishments	(2,570		)
Balance at June 30, 2015	$	10

XML 39 R25.htm IDEA: XBRL DOCUMENT

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Subsequent Events

Subsequent Events [Abstract]

Subsequent Events

Secured Lines of Credit

On April 29, 2016, SIC VI entered into an additional secured revolving loan agreement with the Company and the Subsidiaries, pursuant to which the Company can borrow up to $500. Loans under this loan agreement bear interest at the rate of 12% per annum and mature on December 31, 2016, barring any events of default or a change of control of the Company. As of April 1, 2016 and through the date of this filing $500 had been advanced thereunder.

Because the above transactions were subject to certain rules regarding “affiliate” transactions, the independent members of the Company's Board of Directors approved each of these transactions.

Rant Term Sheet

As consideration for the assets, Rant will receive the following consideration:


•	$5,000 Purchase Money note earning 10% interest and due in 1 year of the closing of the Transaction, convertible at holder’s option into shares of common stock at a price of $0.31 cents a share or, if less, at the lowest price Robert FX Sillerman may convert any debt or preferred shares into common shares.


•	Shares of Function(x) common stock equal to an amount between 20% and 24% of our total outstanding common stock (the “Share Consideration”). The Share Consideration shall be determined by the mutual agreement of the parties.

Additionally, the Binding Term Sheet provides for the following:


•	$500 of Rant payables will be satisfied at the closing by FNCX using cash.


•	If the Company does not proceed to execution of definitive documents for any reason except (i) a breach by Rant of its obligations under the Binding Term Sheet or (ii) if information regarding Rant’s 2015 revenues, cost of goods sold exclusive of non-cash items) and traffic statistics previously provided to us by Rant is materially incorrect, the Company must pay Rant a $1,000 break-up fee.

Legal Proceedings

Coda Search LLC, a former vendor of the Company, served the Company with a lawsuit on May 9, 2016 to collect $27 owed to it. The Company settled the litigation with Coda Search on May 13, 2016.

NASDAQ Delisting

Preferred Stock Conversion

Amendment to Forbearance Agreement

In connection with the Company's acquisition of Choose Digital, the Company was required to make a contingent payment, which was due within five business days after June 24, 2015, of $4,792. On July 31, 2015, the Company entered into a Forbearance Agreement with AmossyKlein Family Holdings, LLLP, as representative of the former shareholders of Choose Digital Inc. The Forbearance Agreement provided that the Company will make monthly installment payments to the Stockholders, beginning on July 31, 2015 and ending on January 29, 2016. Specifically, the Company agreed to pay $668 on July 31, 2015; $532 on August 31, 2015; $528 on September 30, 2015; $524 on October 31, 2015; $521 on November 30, 2015; $517 on December 31, 2015; and $1,754 on January 29, 2016. The Company agreed to deliver an affidavit of confession of judgment to be held in escrow by AmossyKlein’s counsel in the event the Company did not make such installment payments. The Company made the installment payments through December 2015, but failed to make the payment due on January 29, 2016.

Additional Investment in DraftDay Gaming Group, Inc.

Conversion of MGT Series D Preferred Shares to Common Stock

Conversion of the MGT Note to Common Stock

Name Change

Subsequent Events

DraftDay.com

In addition, in exchange for the release of various liens and encumbrances, the Company also agreed to issue to third parties: (a) 84,633 shares of its Common Stock, (b) a promissory note in the amount of $15,625 due September 29, 2015 and (c) a promissory note in the amount of $125 due March 8, 2016, and DDGG issued: (i) 150,000 shares of its common stock and (ii) a warrant to purchase 350,000 shares of DDGG common stock at $0.40 per share.

Accordingly, the Company issued a total of 1,353,975 shares of Common Stock in connection with the acquisition of the DraftDay Business.

The Company contributed the assets of the DraftDay Business to DDGG, such that the Company now owns a total of 11,250,000 shares of DDGG common stock.

Sales Agency Agreement

Forbearance Agreement

Line of Credit Draws

Amendments to Articles of Incorporation

Perk.com Transaction

Asset Purchase Agreement

Purchase Price and Adjustments

As consideration for the assets sold, we received the following consideration:


•	1,500,000 shares of Perk common shares free and clear of all liens, less the number of shares of Perk common shares applied to the repayment of principal and interest of the credit facility described below (the “Initial Perk Shares”);


•	2,000,000 shares of Perk common shares if Perk’s combined revenue, as calculated pursuant to the Asset Purchase Agreement, is at least USD $130,000 for the calendar year commencing on January 1, 2016 or January 1, 2017 (the “Earn-Out”);


•	A warrant (“Warrant 1”) entitling us to purchase 1,000,000 shares of Perk common shares at a strike price of CDN $6.25 per share in the event the volume weighted average price (“VWAP”) of shares of Perk common shares is greater than or equal to CDN $12.50 per share for 20 consecutive trading days in the two year period following the closing of the Acquisition;


•	A warrant (“Warrant 2”, and together with Warrant 1, the “Warrants”) entitling us to purchase 1,000,000 shares of Perk common shares at a strike price of CDN $6.25 per share in the event that the VWAP of Perk common shares is greater than or equal to CDN $18.75 per share for 20 consecutive trading days in the two year period following the closing of the Acquisition; and


•	Perk also assumed certain liabilities of ours, including points liability.

Escrow

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Segments Segments (Tables)

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Reconciliation of net loss for reportable segments, net of income taxes to consolidated net loss from continuing operations, net of income taxes:



	For The Three Months Ended March 31,
	Wetpaint				Choose Digital				DDGG			Total
In thousands of U.S. dollars	2016		2015		2016		2015		2016		2015	2016		2015
External revenues	228		707		161		222		98		—	487		929
Inter-segment revenues (1)	—		—		66		350		—		—	66		350

Net loss, net of income taxes (2)	(839	)	(1,987	)	(401	)	(1,005	)	(1,201	)	—	(2,441	)	(2,992	)


	For The Nine Months Ended March 31,
	Wetpaint (Revised)				Choose Digital (Revised)				DDGG			Total
In thousands of U.S. dollars	2016		2015		2016		2015		2016		2015	2016		2015
External revenues	1,274		2,788		576		676		424		—	2,274		3,464
Inter-segment revenues (1)	—		—		1,285		448		—		—	1,285		448

Net loss, net of income taxes (2)	(25,919	)	(7,074	)	(5,548	)	(3,922	)	(2,708	)	—	(34,175	)	(10,996	)

Notes:
(1) The Choose Digital business provides digital content to the Viggle business. These inter-segment revenues are presented at Choose Digital's cost in this schedule and in the consolidated statements of operations.
(2) The net loss figures presented exclude certain corporate expenses detailed in the reconciliation to the consolidated net loss below.
(3) Assets and liabilities are not presented as they are reviewed at the consolidated level by management and not accounted for by segment.



In thousands of U.S. dollars	Three Months Ended March 31, 2016		Three Months Ended March 31, 2015		Nine Months Ended March 31, 2016		Nine Months Ended March 31, 2015
Net loss for reportable segments, net of income taxes	(2,441	)	(2,992	)	(34,175	)	(10,996	)
Other net gain (loss)	157		(176	)	(140	)	(629	)
	(2,284	)	(3,168	)	(34,315	)	(11,625	)

Stock compensation related to corporate financing activities (1)	(2,517	)	(5,437	)	(11,017	)	(16,976	)
Corporate expenses allocated to discontinued operations (2)	(124	)	(894	)	(1,915	)	(3,021	)
Interest expense (3)	(1,083	)	(935	)	(2,866	)	(1,415	)
Consolidated net loss from continuing operations, net of income taxes	(6,008	)	(10,434	)	(50,113	)	(33,037	)

Notes:
(1) Stock compensation expense related to RSUs, options and warrants issues in connection with financing activities. Expenses related to financing activities are considered to be corporate expenses and are not allocated to reportable segments.
(2) Certain corporate expenses were allocated to the Viggle segment, however such expenses are not classified as discontinued operations because they are fixed and are not affected by the sales transaction.
(3) Interest expense related to corporate debt instruments is not allocated to reportable segments.

Reconciliation of revenues attributable to reportable segments to consolidated revenues from continuing operations:



	For The Year Ended June 30,
	Wetpaint						Choose Digital				Total
In thousands of U.S. dollars	2015			2014			2015		2014		2015		2014
External revenues	$	3,454		$	1,259		848		22		4,302		1,281
Inter-segment revenues (1)				—			855		—		855		—

Net loss, net of income taxes (2)	$	(8,747	)	$	(6,151	)	(6,744	)	(395	)	(15,491	)	(6,546	)

Notes:
(1) In September 2014, the Choose Digital business began providing digital content to the Viggle business. These inter-segment revenues are presented at Choose Digital's cost in this schedule and in the consolidated statements of operations.
(2) The net loss figures presented exclude certain corporate expenses detailed in the reconciliation to the consolidated net loss below.



In thousands of U.S. dollars	Year Ended June 30, 2015		Year Ended June 30, 2014

Revenues attributable to reportable segments	$	5,157	$	1,281
Licensing revenues related to SFX licensing agreement	507		159
Other revenues	10		711
Revenues per Consolidated Statements of Operations	$	5,674	$	2,151

Reconciliation of net loss for reportable segments, net of income taxes to consolidated net loss from continuing operations, net of income taxes:



In thousands of U.S. dollars	Year Ended June 30, 2015			Year Ended June 30, 2014

Net loss for reportable segments, net of income taxes	$	(15,491	)	$	(6,546	)
Other (loss) gain, net	(659		)	1,087
	(16,150		)	(5,459		)

Stock compensation related to corporate financing activities (1)	(21,141		)	(27,069		)
Corporate (expenses) income, net allocated to discontinued operations (2)	(3,262		)	(5,847		)
Interest expense (3)	(2,050		)	(2,805		)
Loss (gain) on contingent consideration (4)	(2,222		)	2,064
Corporate financing expenses	(702		)	—
Consolidated net loss from continuing operations, net of tax	$	(45,527	)	$	(39,116	)
Notes:
(1) Stock compensation expense related to RSUs, options and warrants issued in connection with financing activities. Expenses related to financing activities are considered to be corporate expenses and are not allocated to reportable segments.
(2) Certain corporate expenses were allocated to the Viggle segment, however such expenses are not classified as discontinued operations because they are fixed and are not affected by the sales transaction.
(3) Interest expense related to corporate debt instruments is not allocated to reportable segments.
(4) Additional contingent consideration loss (gain) related to Choose Digital (see Note 6, Acquisitions).

Total assets for reportable segments:



	June 30,
	Wetpaint				Choose Digital		Total
In thousands of U.S. dollars	2015		2014		2015	2014	2015	2014
Total assets for reportable segments	$	35,272	$	37,786	10,587	15,052	45,859	52,838

Reconciliation of assets attributable to reportable segments to consolidated assets of continuing operations:



In thousands of U.S. dollars	June 30, 2015		June 30, 2014

Total assets for reportable segments	$	45,859	$	52,838
Other assets	8,723		9,108
Total consolidated assets, net of current and non-current assets of discontinued operations	$	54,582	$	61,946

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Discontinued Operations (Tables)

Discontinued Operations and Disposal Groups [Abstract]

Summary of Discontinued Operations

Results of operations classified as discontinued operations:



In thousands of U.S. dollars	Three Months Ended March 31, 2016 (Revised)			Three Months Ended March 31, 2015			Nine Months Ended March 31, 2016 (Revised)			Nine Months Ended March 31, 2015
Revenues	$	376		$	3,617		$	6,285		$	14,387
Cost of watchpoints and engagement points	(203		)	(2,758		)	(3,434		)	(6,948		)
Selling, general and administrative expenses	(1,307		)	(11,014		)	(13,715		)	(34,766		)
Other income	4,508			—			4,508			—
Income (loss) before income taxes	3,374			(10,155		)	(6,356		)	(27,327		)

Income taxes (see Note 13, Income Taxes)	—			(22		)	(43		)	(80		)
Net income (loss)	$	3,374		$	(10,177	)	$	(6,399	)	$	(27,407	)

Assets and liabilities of discontinued operations:



In thousands of U.S. dollars	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015			Nine Months Ended March 31, 2016			Nine Months Ended March 31, 2015
Net cash used in operating activities	$	(1,322	)	$	(4,502	)	$	(5,716	)	$	(13,130	)
Net cash used in investing activities	—			(151		)	—			(422		)
Net cash used in discontinued operations	$	(1,322	)	$	(4,653	)	$	(5,716	)	$	(13,552	)



In thousands of U.S. dollars	March 31, 2016		June 30, 2015
Assets
Accounts receivable	$	450	$	3,281
Prepaid expenses	—		150
Property & equipment, net	—		114
Intangibles assets, net	—		2,630
Goodwill	—		9,432
Other assets	—		40
	450		15,647
Liabilities
Accounts payable and accrued expenses	4,174		4,249
Reward points payable	—		9,029
Deferred tax liabilities	—		538
	$	4,174	$	13,816

Results of operations classified as discontinued operations:



In thousands of U.S. dollars	Year Ended June 30, 2015			Year Ended June 30, 2014

Revenues	$	19,852		$	15,834
Cost of watch points and engagement points	(9,574		)	(2,310		)
Selling, general and administrative expenses	(43,203		)	(42,730		)
Loss before income taxes	(32,925		)	(29,206		)

Other expense:
Other expense, net	—			(28		)
Total other expense, net	—			(28		)

Net loss before provision for income taxes	(32,925		)	(29,234		)

Income tax expense	(87		)	(86		)

Net loss from discontinued operations, net of tax	$	(33,012	)	$	(29,320	)

Current assets and Non-current assets used in discontinued operations:



In thousands of U.S. dollars	Year Ended June 30, 2015			Year Ended June 30, 2014
Net cash used in operating activities	$	(17,984	)	$	(19,976	)
Net cash used in investing activities	(843		)	(905		)
Net cash used in discontinued operations	$	(18,827	)	$	(20,881	)



In thousands of U.S. dollars	June 30, 2015		June 30, 2014

Current assets:
Accounts receivable, net	$	3,281	$	3,118
Prepaid expenses	150		560
Current assets of discontinued operations	$	3,431	$	3,678

Non-current assets:
Property and equipment, net	$	114	$	97
Intangible assets, net	2,630		3,693
Goodwill	9,432		9,641
Other assets	40		44
Non-current assets of discontinued operations	$	12,216	$	13,475

Current liabilities and Non-current liabilities used in discontinued operations:



In thousands of U.S. dollars	June 30, 2015		June 30, 2014

Current liabilities:
Accounts payable and accrued expenses	$	4,249	$	3,001
Reward points payable	9,029		4,927
Current liabilities of discontinued operations	$	13,278	$	7,928

Non-current liabilities:
Other long-term liabilities	$	538	$	152
Non-current liabilities of discontinued operations	$	538	$	152

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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Acquisitions (Tables)

12 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Schedule of Business Acquisitions

A summary of the fair value of consideration transferred for the Acquisition and the fair value of the assets and liabilities at the date of acquisition is as follows (amounts in thousands):



Consideration transferred:	Amount
Shares of Viggle common stock and restricted stock units based on closing market price at issuance	$	31,554
Cash paid to sellers	1,619
Contingent consideration	6,100
Total consideration transferred	39,273

Final allocation:
Goodwill	23,788
Intangible assets	19,009
Other assets	1,659
Total liabilities, including acquired accrued expenses	(5,183		)
	$	39,273



Consideration transferred:	Amount
Shares of Viggle common stock and restricted stock units based on closing market price at issuance	$	8,893
Cash paid at closing	782
Contingent consideration	2,570
Total consideration transferred	12,245

Final allocation:
Goodwill	6,921
Intangible assets	4,660
Other assets	1,033
Total liabilities, including acquired accrued expenses	(369		)
	$	12,245

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Property and Equipment (Tables)

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment



	March 31, 2016			June 30, 2015

Leasehold Improvements	$	2,710		$	2,886
Furniture and Fixtures	588			588
Computer Equipment	456			458
Software	163			5
Total	3,917			3,937
Accumulated Depreciation and Amortization	(2,088		)	(1,603		)
Property and Equipment, net	$	1,829		$	2,334

XML 45 R31.htm IDEA: XBRL DOCUMENT



Description	June 30, 2015			June 30, 2014

Leasehold Improvements	$	2,886		$	2,454
Furniture and Fixtures	588			593
Computer Equipment	458			715
Software	5			12
Total	3,937			3,774
Accumulated Depreciation and Amortization	(1,603		)	(1,258		)
Property and Equipment, net	$	2,334		$	2,516

Intangible Assets and Goodwill (Tables)

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets



		March 31, 2016										June 30, 2015
Description	Amortization Period	Amount			Accumulated Amortization				Carrying Value			Amount			Accumulated Amortization				Carrying Value

Wetpaint technology	60 months		$	4,932		$	(3,184	)		$	1,748		$	10,600		$	(2,336	)		$	8,264
Wetpaint trademarks	276 months		1,423			(404		)		1,019			5,800			(296		)		5,504
Wetpaint customer relationships	60 months		917			(822		)		95			2,000			(617		)		1,383
Wetpaint non-compete agreements	36 months		—			—				—			609			(313		)		296
Choose Digital licenses	60 months		829			(544		)		285			1,740			(355		)		1,385
Choose Digital software	60 months		627			(190		)		437			550			(112		)		438
DraftDay technology	120 months		2,396			(130		)		2,266			—			—				—
Internally generated capitalized software	36 months		—			—				—			1,610			(515		)		1,095
Other	various		326			(16		)		310			326			(8		)		318

Total			$	11,450		$	(5,290	)		$	6,160		$	23,235		$	(4,552	)		$	18,683

Intangible assets consist of the following:



		June 30, 2015							June 30, 2014

	Amortization			Accumulated			Carrying				Accumulated			Carrying
Description	Period	Amount		Amortization			Value		Amount		Amortization			Value
Wetpaint technology	84 months	$	10,600	$	(2,336	)	$	8,264	$	10,600	$	(820	)	$	9,780
Wetpaint trademarks	360 months	5,800		(296		)	5,504		5,800		(103		)	5,697
Wetpaint customer relationships	60 months	2,000		(617		)	1,383		2,000		(217		)	1,783
Wetpaint non-compete agreements	36 months	609		(313		)	296		609		(110		)	499
Choose Digital intangible assets	84 months	—		—			—		5,797		(14		)	5,783
Choose Digital licenses	60 months	1,740		(355		)	1,385		—		—			—
Choose Digital software	60 months	550		(112		)	438		—		—			—
Internally generated capitalized software	36 months	1,610		(515		)	1,095		1,297		(48		)	1,249
Other	various	326		(8		)	318		333		(7		)	326

Total		$	23,235	$	(4,552	)	$	18,683	$	26,436	$	(1,319	)	$	25,117

Future Annual Amortization Expense

Future annual amortization expense expected is as follows:



Years ending June 30,

2016	$	208
2017	$	831
2018	$	834
2019	$	834
2020	$	834

Future annual amortization expense expected is as follows:



Years Ending June 30	Amount
2016	$	3,414
2017	3,304
2018	2,687
2019	2,339
2020	1,707

Schedule of Goodwill

Goodwill consists of the following:



Description	Amount
Balance at July 1, 2015	$	26,401
DraftDay preliminary purchase price allocation	2,622
Wetpaint impairment loss	(10,249		)
Choose Digital impairment loss	(3,122		)
Balance at March 31, 2016	$	15,652

The activity in the goodwill balance consists of the following:



Description	Amount
Balance at June 30, 2014	$	26,986
Choose Digital final purchase price adjustment	(1,160		)
Other	575
Balance at June 30, 2015	$	26,401

XML 46 R32.htm IDEA: XBRL DOCUMENT

Loans Payable (Tables)

Debt Disclosure [Abstract]

Schedule of Loans Payable



			Outstanding Balances
Facility Name	Maturity Date	Total Facility Amount	March 31, 2016		June 30, 2015

Line of Credit Promissory Note (the "Note")	10/24/17	$20,000	$	19,666	$	19,516
Unsecured Demand Loans (the "Loans")	On Demand	—	—		1,575
Line of Credit Grid Note (the "Grid Note")	12/31/16	10,000	4,563		3,000
Secured Line of Credit (the "Secured Revolving Loan")	12/31/16	1,500	1,500		—
Secured Line of Credit (the "Secured Revolving Line of Credit")	12/31/16	500	88		—
MGT Promissory Notes (the "MGT Promissory Notes")	07/31/16	2,109	941		$	—
Kuusamo Promissory Notes (the Kuusamo Promissory Notes")	03/08/16	141	124		$	—
Total Loans Payable			$	26,882	$	24,091



		Total		Outstanding Balances
Facility Name	Maturity Date	Facility Amount		June 30, 2015		June 30, 2014

Term Loan Agreement ("DB Line")	Retired	$	15,000	$	—	$	15,000
Line of Credit Promissory Note (the "Note")	10/24/17	20,000		19,516		—
Unsecured Demand Loans (the "Loans")	On Demand	1,575		1,575		—
Line of Credit Grid Note (the "Grid Note")	12/31/16	10,000		3,000		—

Total Loans Payable				$	24,091	$	15,000

Schedule of Long-term Debt Instruments

During the year ended June 30, 2015, Mr. Sillerman made the following demand loans (the "Loans") to the Company:



Date	Amount

12/19/2014	$	2,000
1/14/2015	2,000
1/30/2015	2,000
2/13/2015	750
2/26/2015	1,000
3/2/2015	1,000
3/16/2015	3,000
4/20/2015	1,000
5/5/2015	500
5/14/2015	325

Total	$	13,575

During the year ended June 30, 2015, Mr. Sillerman made the following demand loans (the "Loans") to the Company:



Date	Amount

December 19, 2014	$	2,000
January 14, 2015	2,000
January 30, 2015	2,000
February 13, 2015	750
February 26, 2015	1,000
March 2, 2015	1,000
March 16, 2015	3,000
April 20, 2015	1,000
May 5, 2015	500
May 14, 2015	325

Total	$	13,575

Schedule of Line of Credit Facilities

The Company made requests for advances under the Grid Note, and SIC IV made advances to the Company as follows:



Date	Amount

6/11/2015	$	1,000
6/24/2015	2,000
7/31/2015	1,000
8/31/2015	2,000
9/15/2015	1,000
9/29/2015	1,000
10/13/2015	500
10/30/2015	600
11/25/2015	1,000

Total	$	10,100

During the three months ended December 31, 2015, Perk made two advances to the Company as follows:



Date	Amount

12/14/2015	$	667
12/23/2015	333

Total	$	1,000

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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