Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v2.4.0.8
Subsequent Events
6 Months Ended
Jun. 30, 2014
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events
On July 1, 2014, the Company and Equus Holdings, Inc. (“Buyer”) completed the transactions contemplated by the asset purchase agreement (see Note 2), resulting in the sale by the Company of all of the assets primarily used in or primarily held for use in connection with its disc publishing business and the assumption by Buyer of certain agreements and liabilities of the disc publishing business. As contemplated by the asset purchase agreement, on July 1, 2014, the Company also entered into a mutual transition services agreement with Buyer and entered into a lease agreement with Buyer for the lease from Buyer of a portion of the property located at 7725 Washington Avenue South, Minneapolis, MN 55439.
The purchase price paid to the Company on the closing date was approximately $20.0 million with an additional $2.3 million placed in an escrow account to support the Company’s indemnification obligations under the asset purchase agreement for a fifteen-month escrow period. As described in the asset purchase agreement, the purchase price is subject to adjustment for the actual cash held by certain subsidiaries at the closing date, the actual difference between net book value at the closing date and the target net book value amount, and the actual EBITDA of the disc publishing business from June 1, 2014 through the closing date. Any adjustments required by the asset purchase agreement will be paid in cash following the closing. An anticipated gain on the sale of the disc publishing business ranging from $14 million to $19 million will be recorded during the third quarter of 2014, and reported as part of discontinued operations. This amount excludes the impact of transaction related expenses recorded through June 30, 2014. The Company expects to utilize existing U.S. net operating losses to offset the taxable impact of the gain on sale.