Quarterly report pursuant to Section 13 or 15(d)

Ten Degrees Acquisition

Ten Degrees Acquisition
9 Months Ended
Sep. 30, 2020
Business Combinations [Abstract]  
Ten Degrees Acquisition

Note 8 - Ten Degrees Acquisition


On August 19, 2020, in accordance with the terms and conditions of that certain Asset Purchase Agreement, by and among the Company, Ten Degrees Inc. ("TDI"), Ten Degrees International Limited ("TDIL"), mCube International Limited ("MCI"), and the holder of a majority of the outstanding capital of TDIL and mCube, Inc., and the sole shareholder of 100% of the outstanding capital stock of MCI ("mCube," together with TDI, TDIL, and MCI collectively, the "Transferors"), we acquired a suite of on-device "blue-dot" indoor location and motion technologies, including patents, trademarks, software and related intellectual property from the Transferors (collectively, the "Assets"). The Assets were acquired for consideration consisting of (i) $1,500,000 in cash and (ii) 480,000 shares of our common stock. In accordance with the terms of the APA, commencing as of the date of the APA, the Transferors, and their affiliates, have agreed to not compete with our business associated with the Assets for a period of five years from the closing date. In addition, each party agreed to not solicit any employees from the other party for a period of one year from the closing date, subject to certain exceptions.


The total recorded purchase price for the transaction was $2,100,000, which consisted of the cash paid of $1,500,000 and $600,000 representing the value of the stock issued upon closing. 


The preliminary purchase price is allocated as follows (in thousands):


Developed technology   $ 1,701  
Non-compete agreements     399  
Total Purchase Price   $ 2,100  


The value of the intangibles were calculated by a third party valuation firm based on projections and financial data provided by management of the Company. A final valuation of the assets and purchase price allocation has not been completed as of the end of this reporting period as the third party valuation has not been finalized. Consequently, the purchase price was preliminarily allocated based upon the Company's best estimates at the time of this filing. These amounts are subject to revision upon the completion of formal studies and valuations, as needed, which the Company expects to occur during the fourth quarter of 2020.