Note 6 - Intangible Assets
|9 Months Ended|
May 31, 2017
|Note 6 - Intangible Assets||
NOTE 6 INTANGIBLE ASSETS
On May 3, 2017, the Company acquired a web domain and $26,716 of inventory from RUB Acquisition, LLC (Seller) in exchange for cash consideration of $150,000 and 200,000 restricted shares of the Companys common stock. During the one-year period following the closing, the Seller may become entitled to receive up to an additional $100,000 in cash and 400,000 shares of common stock of the Company if certain contingent milestones are achieved. The Company accounted for the contingent consideration based upon a probability-weighted assessment of the occurrence of triggering events outlined in the asset purchase agreement. The Company recorded a contingent liability for the contingent cash consideration of $50,000 and recorded contingent equity consideration of $466,000. The fair value of the contingent equity consideration is recorded in additional paid in capital. The fair value of the equity consideration issued at closing and the fair value of the contingent equity consideration was based on the closing price of the Companys stock on May 3, 2017, which was $2.33.
The total preliminary asset acquisition consideration used in preparing the unaudited condensed consolidated financial statements is as follows:
The following table summarizes the allocation of the fair values of the assets acquired:
The Company determined that the web domain has an estimated useful life of five (5) years. Accordingly, amortization expense of $18,421 was recorded for the three-month period ended May 31, 2017 and is included in depreciation and amortization expense on the unaudited condensed consolidated statements of operations.
The entire disclosure for all or part of the information related to intangible assets.
Reference 1: http://www.xbrl.org/2003/role/presentationRef