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10-K
ICONIX BRAND GROUP, INC. filed this Form 10-K on 03/28/2019
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(4)

In July 2017, the Company sold its 51% ownership interest in NGX, LLC.  Refer to Note 5 in Notes to Consolidated Financial Statements for further details.

(5)

In April 2018, pursuant to a letter agreement entered into simultaneously with the Company’s acquisition of a 51% equity interest in Hydraulic, the Company acquired the remaining 49% ownership interest from its joint venture partner for no cash consideration as a result of an affiliate of the joint venture partner not making its minimum guaranteed royalty payment obligations to the Company in accordance with the respective license agreement. This transaction resulted in the Company effectively increasing its ownership interest in Hydraulic to 100%. The Company will retain 100% ownership interest in Hydraulic unless the affiliate of such joint venture partner satisfies its outstanding payment obligations by making all payments of the minimum guaranteed royalties to the Company under the terminated license agreement.

As of December 31, 2018, the Company was party to the following joint ventures to develop and market its brands in specific international markets, herein collectively referred to as the Company’s “International Joint Ventures”:

 

Date Created

 

Investment /Joint Venture

 

Iconix’s Interest

 

December 2009

 

Iconix Europe

 

 

51

%

May 2012

 

Iconix India

 

 

50

%

March 2013

 

Diamond Icon

 

 

51

%

September 2013

 

Iconix Australia(1)

 

 

55

%

October 2013

 

Iconix Southeast Asia(2)

 

 

50

%

December 2013

 

Iconix Israel

 

 

50

%

December 2014

 

Iconix Middle East(3)

 

 

55

%

July 2016

 

Umbro China Limited(4)

 

 

95

%

October 2016

 

Danskin China Limited(5)

 

 

100

%

March 2018

 

Starter China Limited(6)

 

 

100

%

June 2018

 

Lee Cooper China Limited(7)

 

 

100

%

 

(1)

In July 2018, the Company purchased an additional 5% interest in Iconix Australia, LLC (“Iconix Australia”), increasing the Company’s ownership of Iconix Australia from 50% to 55%. Refer to Note 5 in Notes to Consolidated Financial Statements for further details.

(2)

In June 2017, the Company deconsolidated Iconix SE Asia, Ltd.  Refer to Note 5 in Notes to Consolidated Financial Statements for further details.

(3)

In December 2016, the Company irrevocably exercised its call option to acquire an additional 5% of the equity interests in Iconix Middle East from its partner, in order to increase the Company’s ownership from 50% to 55%.  Such acquisition closed in February 2017.  Refer to Note 5 in Notes to Consolidated Financial Statements for further details.

(4)

In July 2016, the Company sold a 5% interest in a newly formed entity, Umbro China Limited, to MH Umbro International Co. Limited.  Refer to Note 5 in Notes to Consolidated Financial Statements for further details.

(5)

In October 2016, the Company entered into an agreement with Li-Ning (China) Sports Goods Co., Ltd. (“LiNing”) to sell up to a 50% interest (and no less than 30% interest) in its wholly-owned indirect subsidiary, Danskin China Limited (“Danskin China”), a new Hong Kong registered company which holds the intellectual property and related assets in respect of the Danskin brand in mainland China and Macau.  Refer to Note 5 in Notes to Consolidated Financial Statements for further details.  

(6)

In March 2018, the Company entered into an agreement with Photosynthesis Holdings, Co. Ltd. (“PHL”) to sell up to no less than a 50% interest and up to a total of 60% interest in its wholly-owned indirect subsidiary, Starter China Limited, a newly registered Hong Kong subsidiary of Iconix China (“Starter China”), and which will hold the Starter trademarks and related assets in respect of the Greater China territory. PHL’s purchase of the initial 50% equity interest in Starter China is expected to occur over a three-year period commencing on January 15, 2020 for cash consideration of $20.0 million. The additional 10% equity interest (for a total equity interest of 60% interest) purchase right of PHL is expected to occur over a three-year period commencing January 16, 2022 for cash consideration equal to the greater of $2.7 million or 2.5 times the royalty received under the respective license agreement in the previous twelve months based on other terms and conditions specified in the share purchase agreement.

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