Joint Ventures and Investments

3 Months Ended

Mar. 31, 2018

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

Joint Ventures and Investments

5. Joint Ventures and Investments

Joint Ventures

As of March 31, 2018, the following joint ventures are consolidated with the Company:

Entity Name	Date of Original Formation/ Investment	Iconix's Ownership % as of March 31, 2018		Joint Venture Partner	Put / Call Options, as applicable(2)
Danskin China Limited	October 2016		100%	Li-Ning (China) Sports Goods Co. Ltd.		—
Umbro China Limited	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		55%	Global Brands Group Asia Limited	Put / Call Options
Iconix Israel, LLC(1)	November 2013		50%	MGS		—
Iconix Europe LLC(1)	December 2009		51%	Global Brands Group Asia Limited	Put / Call Options
Hydraulic IP Holdings    LLC(1)	December 2014	51%(3)		Top On International		—
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		—
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, 2017 for material terms of the put and call options associated with certain of the Company’s joint ventures.

⁽³⁾ In April 2018, pursuant to a letter agreement entered into simultaneously with the Company’s acquisition of a 51% equity interest in Hydraulic, the Company acquired the remaining 49% ownership interest from its joint venture partner for no consideration effectively increasing the Company’s ownership interest in Hydraulic to 100% until such time as an affiliate of such joint venture partner satisfies its outstanding payment obligations to the Company under a terminated license agreement (through distributions on such 49% interest or otherwise).

As part of the formation of certain joint ventures, the Company entered into arrangements whereby the joint venture partner paid for its investment in the joint venture entity through payment of a portion of the purchase price in cash at closing and the remainder due over a pre-determined period of time.

As of March 31, 2018, 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
Iconix India joint venture	Reliance Brands Ltd.	$	1,000	Other Assets - Current

Investments

Equity Method Investments

Entity Name	Date of Original Formation / Investment	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.		—
Iconix SE Asia, Ltd.(1)	October 2013	Global Brands Group Asia Limited	Put / Call Options
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 September 2017, the Company entered into a stock repurchase agreement with Galore Media, Inc. (“Galore”) whereby the Company sold, and Galore agreed to repurchase, the Company’s 50,050 outstanding shares of Series A Preferred Stock of Galore for $0.5 million.  Pursuant to the stock repurchase agreement, the Company received $0.3 million upon execution of the agreement and the remaining $0.2 million was received in December 2017.  Additionally, pursuant to the stock repurchase agreement, the Company forfeited and surrendered the 46,067 shares of Series A Preferred Stock of Galore that were received in April 2016 upon the Company’s exercise of the initial warrant.  All remaining warrants to purchase additional shares of Series A Preferred Stock of Galore were also forfeited as part of the stock repurchase arrangement.  This transaction resulted in the Company’s ownership interest in Galore being reduced to zero.

⁽³⁾ Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for material terms of the put and call options associated with the Company’s joint venture.

Additionally, through its ownership of Iconix China Holdings Limited, the Company has 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 March 31, 2018
Candie’s	Candies Shanghai Fashion Co. Ltd.	20%	$	10,343
Marc Ecko	Shanghai MuXiang Apparel & Accessory Co. Limited	15%		2,270
Material Girl	Ningo Material Girl Fashion Co. Ltd.	20%		2,129
Ecko Unltd	Ai Xi Enterprise (Shanghai) Co. Limited	20%		10,568
			$	25,310

Other Equity Investments

Entity Name	Date of Original Formation / Investment
China Outfitters Holdings Ltd.(3)	September 2008
Marcy Media Holdings, LLC(1)	July 2013
Complex Media(1)(2)	September 2013
iBrands International, LLC(1)	April 2014

⁽¹⁾ Historically, given that the Company does not have significant influence over the entity, its investment has been recorded under the cost method of accounting.  During the Current Quarter, the Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. As a result of the adoption of the standard, given that these investments do not have readily determinable fair values and the Company does not have significant influence over the entity, the Company assesses these investments for potential impairment on a quarterly basis.  As of March 31, 2018, there were no indicators of impairment for these investments.

⁽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 was held in escrow to satisfy specified indemnification claims, with a portion of such escrow released twelve months following the closing of the transaction and the remainder released eighteen months following the closing of the transaction, subject to any such claims, at which time, the Company recorded the gain within its consolidated statement of operations.  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 during the third quarter of the year ended December 31, 2016.  In July 2017, the Company received $2.7 million in cash of the total $3.7 million being held in escrow.  As a result, the Company has recognized a gain of $2.7 million recorded within Other Income on the Company’s condensed consolidated statement of operations in FY 2017.   In January 2018, the Company received the remaining $1.0 million in cash being held in escrow.  As a result, the Company has recognized a gain of $1.0 million recorded within Other Income on the Company’s condensed consolidated statement of operations in the Current Quarter.

⁽³⁾ As part of the 2015 purchase of our joint venture partners’ interest in Iconix China, the Company acquired available-for-sale securities in China Outfitters Holdings Ltd.  The Company historically recorded the change in fair value through accumulated other comprehensive income on the Company’s condensed consolidated balance sheet.  In the Current Quarter, the Company adopted ASU 2016-01 and accordingly, adjustments to the fair value of this entity will be recorded through other income on the Company’s condensed consolidated statement of operations prospectively.  As of January 1, 2018, the Company reclassified the $3.2 million cumulative loss in fair value of these available-for-sale securities which were historically recorded in accumulated other comprehensive loss to accumulated losses in accordance with ASU 2016-01.  As of March 31, 2018, the fair value of this investment was approximately $1.0 million.