LICENSE AND MEDIA RIGHTS

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

MLB Promotion Rights Agreement

On October 11, 2022, the Company entered into a Promotional Rights Agreement (the "MLB Promotional Rights Agreement") with MLB Advanced Media L.P., on its own behalf and on behalf of Major League Baseball Properties, Inc., the Office of the Commissioner of Baseball, The MLB Network, LLC and the Major League Baseball Clubs (collectively, the "MLB"), pursuant to which the Company entered into a strategic partnership with MLB to promote the Company’s new NSF-Certified for Sport® product line. On January 29, 2024, the Company and MLB entered into the First Amendment to the Promotional Rights Agreement ("First Amendment"). The First Amendment extended the agreement through December 31, 2027, with an aggregate rights fee of $23 million for the remainder of the term.

As consideration under the MLB promotional rights agreement, the Company has paid and is committed to pay a combination of cash over the license period, along with upfront non-cash consideration in the form of equity, as well as contingent consideration in the form of contingent payments based on revenue. The consideration was as follows: 4% of the Company’s fully diluted outstanding common shares; $30.5 million in cash consideration from 2022 through 2025, paid in accordance with the payment schedule below; 10% royalty on the Company’s gross revenue from the sale of MLB branded products, after cumulative gross sales of all such branded products exceed $18.0 million.

As of December 31, 2023 and December 31, 2022, the carrying value of licensed properties was $14,589 and $21,883, respectively, recorded as a license and media rights asset within the consolidated balance sheets. As of December 31, 2023 and December 31, 2022, the carrying value of the media rights was $4,982 and $7,482 recorded as a prepaid asset and a license and media rights asset within the consolidated balance sheets. For the year ended December 31, 2023 and December 31, 2022, the Company paid MLB $8,000 and $500 as part of the committed cash payments, and recognized $9,794 and $2,034, respectively, in amortization expense related to the license and media rights assets. Licensed properties are amortized straight line and media rights are expensed as incurred.

Maturities of the MLB license and media rights payable as of December 31, 2023 are as follows:


Year Ending December 31:
2024	10,000
2025	12,000
Total payments	$	22,000
Less: Imputed interest	(810)
Total license and media rights payable	$	21,190
Less: Current license liabilities	(9,852)
Total non-current license and media rights payable	$	11,338

The MLB First Amendment agreement extended the maturities of the future payment by an additional 2 years. For the years ending 2024-2027, the respective future payments will be an average of $5.7 million per year.

As of December 31, 2023, expected amortization of licensed properties is as follows:


Year Ending December 31:
2024	$	7,294
2025	7,294
Total future amortization	$	14,588