Quarterly report pursuant to Section 13 or 15(d)

ACQUISITION OF THE HYBRID CREATIVE, LLC

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ACQUISITION OF THE HYBRID CREATIVE, LLC
9 Months Ended
May 31, 2019
ACQUISITION OF HYBRID CREATIVE, LLC  
Business Acquisition [Line Items]  
ACQUISITION OF THE HYBRID CREATIVE, LLC

NOTE 4 - ACQUISITION OF THE HYBRID CREATIVE, LLC

 

On July 11, 2018, the Company completed its acquisition of Zack Darling Creative Associates (“ZDCA”), and its wholly-owned subsidiary The Hybrid Creative, LLC (“Hybrid”), which together operated as a specialist design agency. Pursuant to the terms of the purchase agreement with the members of ZDCA, the Company purchased the entire issued member interest of ZDCA. Following the acquisition, ZDCA operates as a wholly-owned subsidiary of the Company, with Hybrid continuing to operate as wholly-owned subsidiary of ZDCA.

 

The acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations.  Total fixed consideration paid to the members of Hybrid at the closing included cash consideration consisting of an aggregate of $847 in cash, net of cash received, $82 in cash held back and share consideration consisting of an aggregate of 360 shares of the Company’s common stock. The former members of ZDCA may become entitled to receive cash contingent consideration of up to $485 and up to 213 common shares of equity consideration, based on the net revenue performance of Hybrid during the period September 1, 2018 through August 31, 2019. As of May 31, 2019, the Company determined that it did not appear likely that ZDCA would meet the minimum earnout target threshold. Accordingly, the Company estimated the fair value of the related contingent consideration to be zero.