SEC Company Response from Outdoor Holding (POWW) — Aug 8, 2017
Outdoor Holding Co
Date: Aug. 8, 2017 · CIK: 0001015383 · Accession: 0001079973-17-000459
AI Filing Summary & Sentiment
File numbers found in text: 001-13101
Letter
Office of Beverages, Apparel, and Mining Division of Corporate Finance Securities and Exchange Commission August 1, 2017 Comment Letter Form 10-Q for the quarter ended March 31, 2017 File No. 001-13101
Dear Mr. Arakawa:
We have read your letter and our answer to the inquiry is as follows:
Form 10-Q for the quarter ended March 31, 2017
Note 3–Vendor Notes Receivable, page 12
1.
We note you have recorded $1.77 million of goodwill as a result of your successful credit bid for the collateral related to the note receivable you held with ATAC. Please tell us your basis for recording goodwill related to this transaction, citing the authoritative literature that supports your accounting.
Answer:
On February 20, 2017, AMMO as a result of a successful credit bid foreclosed on the assets of ATAC. At February 20, 2017 the fair value of the assets acquired was:
Assets
$
117,517
Collectible receivables
509,447
Inventory
187,815
Equipment
814,779
Notes payable owned by AMMO
2,585,000
Recognized goodwill
$
1,770,221
The fair value of each asset was assessed by management and a valuation expert was employed to ascertain the fair value of the manufacturing equipment. The ATAC inventory was originally valued at $1,129,000 in ATAC’s general ledger; however, the ATAC packaging and certain manufactured ATAC products bearing the ATAC brand could not be used by AMMO. Basically, the only inventory that could be used was the raw materials, which were priced at replacement cost which management felt was its fair value. There were no intangible assets, such as customer lists, trade secrets, or brand names due to the bad reputation of the ATAC brand.
In FASB ASC 805-30-30-1, goodwill should be recognized at the acquisition date (in this case the foreclosure date), measured as the excess of (a) over (b) as follows:
a.
The aggregate of the (1) consideration transferred, (2) fair value of any noncontrolling interest in the acquiree, and (3) acquisition-date fair value of any previously held equity interest in the acquiree, if the business combination was achieved in stages.
b.
Net amount of identifiable assets acquired and liabilities assumed as of the acquisition date.
It is AMMO’s management’s opinion that the goodwill recognized was determined in accordance with FASB ASC 805-30-30-1.
Very truly yours,
/s/ Fred Wagenhals
Show Raw Text
CORRESP 1 filename1.htm Correspondence August 3, 2017 Mr. Craig Arakawa Accounting Branch Chief Office of Beverages, Apparel, and Mining Division of Corporate Finance Securities and Exchange Commission Washington, DC 20549 Mail Stop 3561 RE: August 1, 2017 Comment Letter Form 10-Q for the quarter ended March 31, 2017 File No. 001-13101 Dear Mr. Arakawa: We have read your letter and our answer to the inquiry is as follows: Form 10-Q for the quarter ended March 31, 2017 Note 3–Vendor Notes Receivable, page 12 1. We note you have recorded $1.77 million of goodwill as a result of your successful credit bid for the collateral related to the note receivable you held with ATAC. Please tell us your basis for recording goodwill related to this transaction, citing the authoritative literature that supports your accounting. Answer: On February 20, 2017, AMMO as a result of a successful credit bid foreclosed on the assets of ATAC. At February 20, 2017 the fair value of the assets acquired was: Assets $ 117,517 Collectible receivables 509,447 Inventory 187,815 Equipment 814,779 Notes payable owned by AMMO 2,585,000 Recognized goodwill $ 1,770,221 The fair value of each asset was assessed by management and a valuation expert was employed to ascertain the fair value of the manufacturing equipment. The ATAC inventory was originally valued at $1,129,000 in ATAC’s general ledger; however, the ATAC packaging and certain manufactured ATAC products bearing the ATAC brand could not be used by AMMO. Basically, the only inventory that could be used was the raw materials, which were priced at replacement cost which management felt was its fair value. There were no intangible assets, such as customer lists, trade secrets, or brand names due to the bad reputation of the ATAC brand. In FASB ASC 805-30-30-1, goodwill should be recognized at the acquisition date (in this case the foreclosure date), measured as the excess of (a) over (b) as follows: a. The aggregate of the (1) consideration transferred, (2) fair value of any noncontrolling interest in the acquiree, and (3) acquisition-date fair value of any previously held equity interest in the acquiree, if the business combination was achieved in stages. b. Net amount of identifiable assets acquired and liabilities assumed as of the acquisition date. It is AMMO’s management’s opinion that the goodwill recognized was determined in accordance with FASB ASC 805-30-30-1. Very truly yours, /s/ Fred Wagenhals Fred Wagenhals