Acquisitions (Tables) - Eyelock [Member]

9 Months Ended

Nov. 30, 2016

Business Combination Disclosure [Text Block]

(2)    Acquisitions

EyeLock

Effective September 1, 2015 ("the Closing Date"), Voxx completed its acquisition of a 54% voting equity interest in substantially all of the assets and certain specified liabilities of Eyelock, Inc. and Eyelock Corporation (collectively the “Seller”), a market leader of iris-based identity authentication solutions, through a newly-formed entity, Eyelock LLC.  Eyelock LLC acquired substantially all of the assets and certain specified liabilities of the Seller for a total purchase consideration of $31,880, which consisted of a cash payment of $15,504, assignment of the fair value of the indebtedness owed to the Company by the Seller of $4,676 and the fair value of the non-controlling interest of $12,900, reduced by $1,200 for amounts owed to the LLC by the selling shareholders. Additionally, units in Eyelock LLC were issued to certain executives of EyeLock LLC. The fair value of these units is recorded as compensation expense over the requisite service period of two years. This acquisition allows the Company to enter into the growing biometrics market. The fair value of the non-controlling interest was determined, with the assistance of a third party valuation expert, by grossing up the consideration transferred for the controlling interest by the voting equity interest percentage (adjusted for certain distribution thresholds required until a return of capital is achieved). The Company considered all the rights and preferences of the different classes of security holders and determined that there was no evidence of any disproportionate allocation of cash flow between the controlling and non-controlling interest at the date of acquisition. The adjusted controlling interest percentage in the fair value calculation amounted to 61%. The non-controlling interest of $12,900, valued at 39%, did not contain any further discount for lack of control. The Company believes the bargain gain implied in the transaction would eliminate any further discount for lack of control.

In connection with the closing, the Company entered into a loan agreement with Eyelock LLC. The terms of the loan agreement allowed Eyelock LLC to borrow up to $12,000 at an interest rate of 10%. During the second and third quarters of Fiscal 2017, the Company issued two convertible promissory notes to EyeLock LLC, allowing the entity to borrow up to a total of $12,000 in additional funds. The outstanding principal balance of these two promissory notes are convertible at the sole option of Voxx into units of EyeLock LLC. The convertible promissory notes bear interest at 10%, and can be used for working capital purposes related to new business opportunities. If Voxx chooses not to convert into equity, the outstanding loan principal will be repaid at a multiple ranging from 1.35 to 1.45 based on the repayment date. Amounts outstanding under the first loan agreement, as well as the convertible promissory note executed during the second quarter of Fiscal 2017 are due on September 1, 2017, while the convertible promissory note executed during the third quarter of Fiscal 2017 is due on November 1, 2017. All three agreements include customary events of default and are collateralized by all of the property of Eyelock LLC.

The following table summarizes the allocation of the purchase price over the fair values of the assets acquired and liabilities assumed, as of the Closing Date:

	September 1, 2015
Assets acquired:
Accounts receivable	$	77
Inventory	304
Property, plant and equipment	259
Intangible assets	43,780
Total assets acquired	$	44,420
Liabilities assumed:
Accounts payable and accrued expenses	729
Deferred tax liability	2,756
Bridge loans payable to Voxx	3,176
Other long-term liabilities	1,200
Net assets acquired	36,559
Less: purchase price	31,880
Gain on bargain purchase	$	4,679

The acquisition of substantially all of the assets and certain specified liabilities of Eyelock, Inc. and Eyelock Corporation resulted in a bargain purchase gain of $4,679, which was recognized in the Company's Consolidated Statement of Operations and Comprehensive Income (Loss) during the third quarter of Fiscal 2016. Prior to the recognition of the bargain purchase gain, the Company reassessed the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in the acquisition. The Company believes it was able to acquire those assets of Eyelock LLC for less than their fair value due to the distressed financial position of the company, its inability to secure additional financing to support its ongoing operations, and the lack of potential bidders for the entity prior to Voxx's acquisition.

The fair values assigned to the intangible assets acquired and their related amortization periods are as follows:

	September 1, 2015		Amortization Period (Years)
Developed technology	$	31,290	11.5 years
Tradename	8,435		Indefinite
Customer relationships	3,470		15.5 years
Non-compete agreement	585		5 years
	$	43,780

The fair values of the intangible assets acquired were measured using Level 3 inputs and were determined using variations of the income approach, such as the discounted cash flows and relief of royalty valuation methods. Significant inputs and assumptions used in determining the fair values of the intangible assets acquired included management’s projections of future revenues, earnings and cash flows from Eyelock LLC, a weighted average cost of capital and distributor rates, customer attrition rates, royalty rates and technological obsolescence rates.

Acquisition related costs relating to this transaction of $800 were expensed as incurred during the year ended February 29, 2016. Net sales attributable to EyeLock LLC in the Company's consolidated statements of operations for the three and nine months endedNovember 30, 2016 were approximately $100 and $211, respectively.

The results of EyeLock LLC's operation have been included in the Company's consolidated financial statements since the date of acquisition.

Pro-forma Financial Information

The following unaudited pro-forma financial information for the three and nine months ended November 30, 2015 represents the results of the Company's operations as if EyeLock LLC was included in these periods of Fiscal 2016. The unaudited pro-forma financial information does not necessarily reflect the results of operations that would have occurred had the companies constituted a single entity during the period.

	Three Months Ended November 30,		Nine Months Ended November 30,
	2015		2015
Net sales:
As reported	$	192,506	$	511,063
Pro forma	192,506		512,178
Net income (loss) attributable to Voxx International Corporation:
As reported	$	7,777	$	2,669
Pro forma	6,116		(4,152		)
Basic income (loss) per share:
As reported	$	0.32	$	0.11
Pro forma	0.25		(0.17		)
Diluted income (loss) per share:
As reported	$	0.32	$	0.11
Pro forma	0.25		(0.17		)
Average shares - basic	24,183,791		24,177,061
Average shares - diluted	24,219,555		24,211,651

The above pro-forma results include certain adjustments for the periods presented to adjust the financial results and give consideration to the assumption that the acquisition occurred on the first day of Fiscal 2015. These adjustments include costs such as an estimate for amortization associated with intangible assets acquired, the adjustment of interest expense, the reversal of rent and utility expenses on debt and property leases not assumed, as well as the movement of expenses and gains specific to the acquisition from Fiscal 2016 to Fiscal 2015. These pro-forma results of operations have been estimated for comparative purposes only and may not reflect the actual results of operations that would have been achieved had the transaction occurred on the date presented or be indicative of results to be achieved in the future.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

	September 1, 2015
Assets acquired:
Accounts receivable	$	77
Inventory	304
Property, plant and equipment	259
Intangible assets	43,780
Total assets acquired	$	44,420
Liabilities assumed:
Accounts payable and accrued expenses	729
Deferred tax liability	2,756
Bridge loans payable to Voxx	3,176
Other long-term liabilities	1,200
Net assets acquired	36,559
Less: purchase price	31,880
Gain on bargain purchase	$	4,679

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

	September 1, 2015		Amortization Period (Years)
Developed technology	$	31,290	11.5 years
Tradename	8,435		Indefinite
Customer relationships	3,470		15.5 years
Non-compete agreement	585		5 years
	$	43,780

Business Acquisition, Pro Forma Information [Table Text Block]

	Three Months Ended November 30,		Nine Months Ended November 30,
	2015		2015
Net sales:
As reported	$	192,506	$	511,063
Pro forma	192,506		512,178
Net income (loss) attributable to Voxx International Corporation:
As reported	$	7,777	$	2,669
Pro forma	6,116		(4,152		)
Basic income (loss) per share:
As reported	$	0.32	$	0.11
Pro forma	0.25		(0.17		)
Diluted income (loss) per share:
As reported	$	0.32	$	0.11
Pro forma	0.25		(0.17		)
Average shares - basic	24,183,791		24,177,061
Average shares - diluted	24,219,555		24,211,651