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Investments
3 Months Ended
Mar. 31, 2019
Investments, All Other Investments [Abstract]  
Investments

Note 5 – Investments

 

In March 2019, the Company entered into an agreement to finance and co-produce Broadway Asia’s theatrical production of DreamWorks’ Kung Fu Panda Spectacular Live at the Venetian Theatre in Macau, Hong Kong, currently scheduled to open in January 2020 (“Macau Show”). The agreement requires the Company to invest at least $2 million in Panda Productions (HK) Limited (“Panda), in exchange for which the Company has received an equity interest in the production, billing credit as associate producer, and certain rights to participate in possible future productions of DreamWorks’ Kung Fu Panda property in similar theatrical productions.

 

During the three months ended March 31, 2019, the Company acquired an approximate 2% interest in Panda for $2.0 million. The Company has evaluated the guidance in ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, and elected to account for the investment using the measurement alternative as the equity securities are without a readily determinable fair value and do not give the Company significant influence over Panda. The measurement alternative at cost, less any impairment, plus or minus changes resulting from observable price changes. As of March 31, 2019, the Company considered the cost of the investment to not exceed the fair value of the investment and did not observe price changes.

  

As of March 31, 2019, the Company paid $1.0 million to Panda. As of March 31, 2019 and the date of this report, $1.0 million remains unfunded.

 

During the quarter ended March 31, 2019, the Company sold profits interests to accredited investors and received cash of $0.2 million. As part of this transaction the Company also issued 37,300 common shares in connection with this transaction. As a result of this sale of the profits interest, the Company will potentially distribute approximately 10% of its proceeds received in the Macau Show. The Company allocated 100% the amount of proceeds received from investors to the fair value of the profits interests based upon expected cash outflows on the Macau Shaw. The issuance of a profits interest meets the definition of a derivative in accordance with ASC 815, therefore, the Company will update the fair value of this profits interests on a quarterly basis and record any change in fair value as a component of other income (expense). The Company determined that the fair value of this profits interest to be approximately $0.2 million as of the date of this transaction and as of March 31, 2019.