***D1 Mobile Asset Purchase was a failure according to the It seems that Ackroo did not realize the expected revenue/value from this transaction. (from 2016 filling)
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D1 Mobile Corp. On March 14, 2016, the Company completed the purchase of certain software technologies and customer contracts from D1 Mobile Corp. (“D1 Mobile”). In consideration for the assets, the Company issued 500,000 common shares.
In addition, the Company entered into a consulting agreement with D1 Mobile effective on closing of the acquisition, pursuant to which D1 Mobile agreed to assist with the development and integration of the acquired assets.
In consideration for providing the services under the consulting agreement D1 Mobile will receive payments of $5,000 per month plus an additional royalty bonus as described below. The consulting agreement may be terminated by either party with 30 days’ notice. All equity consideration was paid at closing and the value of the assets was recorded at the fair market value of the equity instruments issued.
The value of the assets was calculated using a discounted cash flow based on the existing operations of the business for a 5-year timeframe in conjunction with consideration for the consulting agreement and an expected royalty bonus provision, resulting in a total net value of $120,000.
This transaction did not meet the criteria of an acquisition of a business under IFRS 3 and the Company allocated the full $120,000 of purchase consideration to customer contracts. Royalty Bonus: In addition to the compensation set forth above,
D1 Mobile is entitled to receive a cash bonus equivalent to forty percent (40%) of the portion of gross revenue derived, and collected, by the Company, which exceeds the aggregate of $50,000 and any amounts paid to D1 Mobile in connection with the additional bonus described below. The amount shall be paid to the Consultant on a quarterly basis, for a period of 2 years following completion of the acquisition, and each installment shall be due and payable within 60 days of completion of each fiscal quarter of the Company. As of the year ended December 31, 2016, no royalty bonus was due to D1 Mobile Corp. as gross revenue did not meet the above criteria.
D1 Mobile shall also be entitled to an additional cash bonus equivalent to 70% of all cash amounts received by the Company for the provision of services to FRESHii Inc. in the 3 month period following completion of the acquisition, and 100% of all cash amounts received by the Company for the provision of services to Yogen Fruz in the 1 month period following completion of the acquisition. As of the year ended December 31, 2016, no royalty bonus was due to D1 Mobile Corp. as gross revenue did not meet the above criteria.