Acquisitions, Joint Ventures and Investments (Tables)

9 Months Ended

Sep. 30, 2016

Investments In And Advances To Affiliates Schedule Of Investments [Abstract]

Recently Acquired Wholly Owned Subsidiaries

The following recent acquisitions are wholly owned subsidiaries of the Company:

Entity Name	Date of Original Formation / Investment
Iconix China Holdings Limited(1)(2)	September 2008
Shortcake IP Holdings, LLC	March 2015
Scion, LLC(2)	March 2009

⁽¹⁾ Through our ownership of Iconix China Holdings Limited, we have equity interests in certain private companies.  See the “Investments - Equity Method Investments” section below for further details of these investments.  Additionally, as part of the Iconix China Holdings Limited acquisition, the Company acquired other assets which consist primarily of securities of a company publicly traded on the Hong Kong Stock Exchange.  These assets are being accounted for as available-for-sale securities.  As such, any increase or decrease in fair value is recorded within accumulated other comprehensive income and is not included on the Company’s consolidated statement of operations.  Refer to Note 5 for further details on these securities.

⁽²⁾ During the year ended December 31, 2015, the Company purchased the remaining 50% interest in the entity, effectively increasing the Company’s ownership interest to 100%.

Consolidated Joint Ventures

As of September 30, 2016, the following joint ventures are consolidated with the Company:

Entity Name	Date of Original Formation/ Investment	Iconix's Ownership % as of September 30, 2016		Joint Venture Partner	Put / Call Options, as applicable(2)
Umbro China Limited(4)	July 2016		95%	Hong Kong MH Umbro International Co. Ltd.	Call Options
US Pony Holdings, LLC	February 2015		75%	Anthony L&S Athletics, LLC		—
Iconix MENA Ltd.(1)	December 2014		50%	Global Brands Group	Put / Call Options
LC Partners US, LLC(1)	March 2014		50%	Rise Partners, LLC	Put Option
Iconix Israel, LLC(1)(3)	November 2013		50%	MGS	Call Option(3)
Iconix SE Asia, Ltd.(1)	October 2013		50%	Global Brands Group	Put / Call Options
Iconix Canada joint    venture(1)	June 2013		50%	Buffalo International	Call Options
Iconix Europe LLC(1)	December 2009		51%	Global Brands Group	Put / Call Options
Hydraulic IP Holdings    LLC(1)	December 2014		51%	Top On International		—
NGX, LLC(1)	October 2014		51%	NGO, LLC		—
Diamond Icon(1)	March 2013		51%	Albion Agencies Ltd.
Buffalo brand joint    venture(1)	February 2013		51%	Buffalo International		—
Icon Modern Amusement,    LLC(1)	December 2012		51%	Dirty Bird Productions		—
Peanuts Holdings, LLC	June 2010		80%	Beagle Scouts LLC		—
Hardy Way, LLC	May 2009		85%	Donald Edward Hardy		—

⁽¹⁾ The Company determined, in accordance with ASC 810, based on the corporate structure, voting rights and contributions of the Company and its respective joint venture partner, the entity is a variable interest entity (VIE) and, as the Company has been determined to be the primary beneficiary, is subject to consolidation.  The Company has consolidated this joint venture within its consolidated financial statements since inception.  The liabilities of the VIE are not material and none of the VIE assets are encumbered by any obligation of the VIE or other entity.

⁽²⁾ Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as amended, for material terms of the put and call options associated with certain of the Company’s joint ventures.  
Regarding Iconix Europe LLC (Iconix Europe), pursuant to the Iconix Europe Operating Agreement, each of Global Brands Group (“GBG”) and the Company holds specified put and call rights, respectively, relating to GBG’s ownership interest in the joint venture as described below.
Five-Year and Eight-Year Put/Call Options:  At any time during the six month period commencing January 13, 2019, and again at any time during the six month period commencing January 13, 2022, GBG may deliver a put notice to the Company, and the Company may deliver a call notice to GBG, in each case, for the Company’s purchase of all equity in the joint venture held by GBG.  In the event of the exercise of such put or call rights, the purchase price for GBG’s equity in Iconix Europe is an amount equal to (x) the Agreed Value (in the event of GBG’s put) or (y) 120% of Agreed Value (in the event of an Iconix call).  The purchase price is payable in cash.

Agreed Value-Five-Year Put/Call: (i) (x) percentage of Iconix Europe owned by GBG, multiplied by (y) 5.5, multiplied by (z) the greater of aggregate royalty generated by Iconix Europe for the year ended December 31, 2013 and the year ended December 31, 2018; plus (ii) percentage of Iconix Europe owned by GBG multiplied by the aggregate amount of cash in Iconix Europe which is available for distribution to the members.
Agreed Value-Eight-Year Put/Call: (i) (x) percentage of Iconix Europe owned by GBG, multiplied by (y) 5.5, multiplied by (z) the greater of aggregate royalty generated by Iconix Europe for the year ended December 31, 2013 and the year ended December 31, 2021; plus (ii) percentage of Iconix Europe owned by GBG multiplied by the aggregate amount of cash in Iconix Europe which is available for distribution to the members.    

Regarding Umbro China Limited (Umbro China), pursuant to the Umbro China Shareholder Agreement, each of Hong Kong MH Umbro International Co. Limited (MHMC) and the Company holds specified call rights to purchase its partners’ interest in the joint venture as described below.
If at any time after June 2036, both Iconix and MHMC hold shares in Umbro China, either shareholder (Initiating Shareholder) may provide written notice (Call Option Notice) to the other shareholder of its election to purchase all shares held by such shareholder at the date of the Call Option Notice and at a price per share as stated in the Call Option Notice.  

Within ten (10) business days after receipt of a Call Option Notice, the other shareholder may provide written notice (Purchase Option Notice) to the Initiating Shareholder of its election to purchase all shares held by the Initiating Shareholder at the price per share set forth in the Call Option Notice, at which point the Call Option Notice shall become null and ineffective as if it was not issued or served.

⁽³⁾ The call option associated with Iconix Israel expired on May 14, 2016.

⁽⁴⁾ In July 2016, the Company consummated an agreement with MHMC to sell up to an aggregate 50% interest in a newly registered company in Hong Kong which holds the Umbro intellectual property in respect of the Greater China territory for total cash consideration of $25.0 million.  The acquisition of such equity is expected to occur over a four-year period.  As stipulated in the agreement, on each anniversary subsequent to the close of the transaction, MHMC will pay a portion of the total cash consideration to the Company in return for a percentage of the total potential 50% equity interest.  In July 2016, the Company received $2.5 million in cash from MHMC for a 5% interest in Umbro China.  In accordance with ASC 810, the Company has recorded noncontrolling interest of $1.8 million for the sale of 5% interest in Umbro China to MHMC and the corresponding gain associated with the sale of this interest is recorded in additional paid in capital on the Company’s consolidated balance sheet as of September 30, 2016.  Pursuant to the Shareholder Agreement entered into in connection with the formation of Umbro China, each of MHMC and the Company holds specified call rights to purchase its partners’ ownership interest in the joint venture as outlined above.

Amounts Due from Such Joint Venture Partners Remain Recorded on Consolidated Balance Sheet

As of September 30, 2016, the following amounts due from such joint venture partners remain recorded on the Company’s consolidated balance sheet:

Entity	Joint Venture Partner	Amount		Recorded in(1)
Iconix MENA Ltd.	Global Brands Group	$	6,216	Redeemable Non-controlling interest
LC Partners US, LLC	Rise Partners	$	2,000	Redeemable Non-controlling interest
Iconix Israel, LLC	MGS	$	195	Non-controlling interest
Iconix SE Asia, Ltd.	Global Brands Group	$	3,915	Redeemable Non-controlling interest
Iconix Canada joint venture	Buffalo International	$	5,778	Non-controlling interest
Iconix India joint venture	Reliance Brands Ltd.	$	971	Other Assets - Current
Buffalo brand joint venture	Buffalo International	$	5,412	Other Assets - Current

⁽¹⁾ In accordance with ASC 480-10-S99 for consolidated joint ventures, installment payments are netted against redeemable non-controlling interest for specified joint ventures, as the joint venture agreement has put options which are exercisable by the joint venture partner at a future date.  The Company recorded the put option at fair value at the date of inception within Redeemable Non-controlling Interest on the Company’s consolidated balance sheet.  The amount recorded at inception is accreted, over the period when the put option becomes exercisable, to what the Company would be obligated to pay to the non-controlling interest holder if the put option was exercised. In the absence of put options, the installment payments are recorded against non-controlling interest of the respective joint venture partner.  In respect of the Iconix India joint venture, the installment payment is recorded within Other Assets – Current given the Company records its investment in Iconix India as an equity method investment as noted below.  In respect of the Buffalo Brand joint venture, the note receivable due from Buffalo International is included in Other Assets – Current as the receivable has no relation to its ownership interest in the joint venture.

Equity Method Investments

Investments

Equity Method Investments

Entity Name	Date of Original Formation / Investment	JV Partner	Put / Call Options, as applicable(3)
Iconix Australia, LLC(1)	September 2013	Pac Brands USA, Inc.	Put / Call Options
Iconix India joint venture(1)	June 2012	Reliance Brands Ltd.		—
MG Icon(1)	March 2010	Purim LLC		—
Galore Media, Inc.(1)(2)	April 2016	Various minority interest holders		—

⁽¹⁾ The Company determined, in accordance with ASC 810, based on the corporate structure, voting rights and contributions of the Company and its respective joint venture partner, that the joint venture is not a VIE and not subject to consolidation.  The Company has recorded its investment under the equity method of accounting since inception.

⁽²⁾ In April 2016, the Company entered into agreements with Galore Media, Inc. (Galore), a marketing company formed in FY 2015 and still in a development stage.  Under the agreements, the Company purchased 50,050 shares of Series A Preferred Stock of Galore for $0.5 million and entered into arrangements pursuant to which the Company agreed to purchase up to an aggregate $0.5 million of marketing services from Galore in FY 2016.  In connection with the marketing services arrangement, the Company received warrants that, as the Company purchases specified levels of marketing services, may be exercised for additional shares of Galore’s Series A Preferred Stock at a nominal exercise price.  The Series A Preferred Stock carries voting rights, and the holders of the Series A Preferred Stock have the collective right to appoint one of five members of the Board of Directors as long as there are at least 48,000 Series A Preferred Shares outstanding.  Given these arrangements, the Company has an investment of approximately 11% of the equity of Galore.

⁽³⁾ Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as amended, for material terms of the put and call options associated with the Company’s joint venture.

Additionally, through our ownership of Iconix China Holdings Limited, we have equity interests in the following private companies which are accounted for as equity method investments:

Brands Placed	Partner	Ownership by Iconix China		Value of Investment As of September 30,2016
Candie’s	Candies Shanghai Fashion Co. Ltd.		20%	$	10,641
Marc Ecko	Shanghai MuXiang Apparel & Accessory Co. Limited		15%		2,284
Royal Velvet	Bai Shi Kou International (Qingdao) Home Products Co. Ltd.		20%		383
Material Girl	Ningo Material Girl Fashion Co. Ltd.		20%		3,193
Ecko Unltd	Ai Xi Enterprise (Shanghai) Co. Limited		20%		10,918
				$	27,419

Cost Method Investments

Cost Method Investments

Entity Name	Date of Original Formation / Investment
Marcy Media Holdings, LLC(1)	July 2013
Complex Media(1)(2)	September 2013
iBrands International, LLC(1)	April 2014

⁽¹⁾ As the Company does not have significant influence over the entity, its investment has been recorded under the cost method of accounting.

⁽²⁾ In July 2016, the Company received $35.3 million in connection with the sale of its interest in Complex Media.  An additional $3.7 million is being held in escrow to satisfy specified indemnification claims, with a portion of such escrow expected to be released twelve months following the closing of the transaction and the remainder expected to be released eighteen months following the closing of the transaction, subject to any such claims, at which time, the Company will record the gain within its consolidated statement of operations.  For the Current Quarter, the Company recognized a gain of $10.2 million as a result of this transaction which has been recorded in Other Income on the Company’s consolidated statement of operations.