Commitments and Contingencies
|3 Months Ended|
Jun. 30, 2021
|Commitments and Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||Commitments and Contingencies
Acquisition of AdColony
Under the terms of the AdColony Acquisition, the Company must pay $100,000 in cash on or before October 29, 2021.
Acquisition of Fyber
Pursuant to certain German law on public takeovers, following the closing of the Fyber Acquisition, the Company launched a public tender offer to the Minority Fyber Shareholders to acquire from them the Minority Fyber Shares (please see Note 3, "Acquisitions," for further information). The tender offer is subject to certain minimum price rules under German law. The timing and the conditions of the tender offer, including the consideration of EUR 0.84 per share offered to the Minority Fyber Shareholders in connection with the tender offer, was determined by the Company pursuant to the applicable Dutch and German takeover laws. The Company anticipates completing the tender offer during its fiscal second quarter 2022. Please see Note 14, "Subsequent Events," for further information.
Contingent Earn-Out Considerations
The Company's recent acquisitions of AdColony and Fyber include contingent earn-out considerations as part of the purchase prices under which it will make future payments to the sellers upon the achievement of certain benchmarks. Future payments are driven by the continued performances of the acquisitions through the 12-month earn-out periods ending on December 31, 2021 for AdColony and on March 31, 2022 for Fyber. Under the terms of the AdColony Acquisition, the Company must pay an earn-out estimated between $200,000 to $225,000 in cash following December 31, 2021. As of June 30, 2021, the Company estimates the fair value of this payment to be $213,413. This amount is included in acquisition price liabilities on the condensed consolidated balance sheet as of June 30, 2021. Under the terms of the Fyber Acquisition, the Company may have to make an earn-out payment of up to $50,000 in shares of its common stock or, under certain circumstances, cash following March 31, 2022. As of June 30, 2021, the Company estimates the fair value of this payment to be $0.
The fair value of the contingent earn-out consideration of $213,413 for AdColony was estimated using various estimates and assumptions, including projected financial data through fiscal year 2023, long-term sustainable growth rate, taxable depreciation, statutory tax rate, and working capital levels, among others, and was derived through a Monte Carlo simulation. The earn-out amount is subject to change based on final results and calculations.
The Company will compare the probabilities of possible future payments against the estimated fair values of contingent earn-out considerations on a quarterly basis over the earn-out periods. Actual results are compared to the estimates and probabilities of achievement used in forecasts. Should the actual results of the acquired businesses increase or decrease as compared to the estimates and assumptions used, the estimated fair values of the contingent earn-out consideration liabilities will increase or decrease. Changes in the estimated fair values of the contingent earn-out considerations, as a factor of a change in inputs, would be reflected in the Company's results of operations in the periods in which they are identified.
Acquisition Purchase Price Liability
The Company has recognized acquisition purchase price liability of $313,413 on its condensed consolidated balance sheet as of June 30, 2021, comprised of the following components:
•$100,000 of unpaid cash consideration for the AdColony Acquisition
•$213,413 of estimated contingent earn-out consideration for the AdColony Acquisition
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef