Equity Method Investment

9 Months Ended

Dec. 31, 2019

6.Equity Method Investment

In connection with the transfer of its TeamConnect business and support for its pdvConnect business, the Company entered into a memorandum of understanding (“MOU”) with the principals of Goosetown on December 31, 2018. Under the MOU, the Company agreed to assign the intellectual property rights to its pdvConnect application to the LLC, a new entity formed by the principals of Goosetown, in exchange for a 19.5% ownership interest in the LLC, effective April 30, 2019. The Goosetown principals have agreed to fund the future operations of the LLC, subject to certain limitations. The LLC has assumed the Company’s software support and maintenance obligations under the Goosetown and A BEEP Agreements. The LLC has also assumed customer care services related to the Company’s pdvConnect application. The Company provided transition services to the LLC through April 1, 2019 to facilitate an orderly transition of the customer care services.

As of September 30, 2019, the Company transferred network, computer and other equipment with a net book value of $72,000, and recorded an investment in the LLC amounting to $14,000 and loss on disposal of assets amounting to $58,000 relating to the transfer of the assets as of such date. As of December 31, 2019, the Company also completed the transfer of the intellectual property rights with a net book value of $174,000 to the LLC and recorded an investment in the LLC amounting to $34,000 and loss on disposal of capitalized patent costs amounting to $140,000 relating to the transfer of the intellectual property.

During the nine months ended December 31, 2019, the change in the carrying value of the investment in the LLC is summarized as follows (in thousands):


	Equity Method Investment
Equity method investment carrying value at March 31, 2019	$	—
Contribution		48
Share of net loss from LLC		(8)
Equity method investment carrying value at December 31, 2019	$	40