Table:
|  |  | February 28, |
| --- | --- | --- |
|  | 2019 | 2018 |
| Deferred compensation plan assets | $6,413 | $5,641 |
| Investment in international licensees | 2,263 | 2,349 |
| Equity investment in and loan to ThinxNet GmbH | 2,650 | 2,674 |
| Equity investment in and loan to Smart Driver Club | - | 3,814 |
| Deferred product cost | 10,094 | 3,523 |
| Other | 1,090 | 828 |
|  | $22,510 | $18,829 |
Paragraphs:
NOTE 9 – OTHER ASSETS
Other assets consist of the following (in thousands):
We have a non-qualified deferred compensation plan in which certain members of management and all nonemployee
directors are eligible to participate. Participants may defer a portion of their compensation until retirement
or another date specified by them in accordance with the plan. We are funding the plan obligations through cash
deposits to a Rabbi Trust that are invested in various equity, bond and money market mutual funds in generally the
same proportion as investment elections made by the participants. The deferred compensation plan liability is included
in Other Non-Current Liabilities in the accompanying consolidated balance sheets.
Our investment in international licensees at February 28, 2019 consists principally of a 12.5% equity interest in
a Mexican licensee of $1.7 million, which became a wholly-owned subsidiary as of March 19, 2019 (see Note 2), as
well as other smaller interests in Benelux and French licensees. Generally, the investments in international licensees
are accounted for using the cost method of accounting and carried at cost as we do not exercise significant influence
over these investees. We have received dividends from our investment in the Mexican licensee in the amount of $0.3
million, $0.3 million and $0.2 million for fiscal years ended February 28, 2019, 2018 and 2017, respectively.
In September 2015, we invested £1,400,000 or approximately $2.2 million for a 49% minority ownership
interest in Smart Driver Club Limited (“Smart Driver Club”), a technology and insurance startup company located in
the United Kingdom. This investment has been accounted for under the equity method since we have significant
influence over the investee. As of February 28, 2019, we had made loans aggregating £5,700,000 or approximately
$7.6 million to Smart Driver Club bearing interest at an annual interest rate of 8%, with all principal and all unpaid
interest due in 2021. Our equity in the net loss of Smart Driver Club amounted to $1.8 million, $1.4 million and $1.3
million in fiscal years ended February 28, 2019, 2018 and 2017, respectively. As of February 28, 2019, we determined
that this equity method investment was subject to other than temporary impairment. This decision was dictated by the
continuing operating losses and deteriorating liquidity position of Smart Driver Club. Accordingly, we recorded an
impairment charge of $5.0 million in the impairment loss and equity in net loss within our consolidated statement of
comprehensive income (loss). Smart Driver Club drew an additional £400,000 of debt on March 26, 2019 under a
fourth amendment to the original agreement dated March 14, 2019
Effective August 24, 2017, we acquired an ownership interest valued at $1.4 million in ThinxNet GmbH, a
company headquartered in Munich, Germany (“ThinxNet”). ThinxNet is an early stage company focused on
commercializing cloud-based mobile device and applications in the automotive sector throughout Europe. This
represents a cost basis investment as we cannot exercise significant influence over the investee. Contemporaneously,
we executed an unsecured convertible note receivable for $1.27 million with an interest rate of 6%, which has a fixed
term of 12 months, after which the loan can be converted into equity in ThinxNet or a loan due on demand at our
option. The equity investment and note receivable were consideration we received in exchange for our outstanding
accounts receivable from ThinxNet. No gain or loss was recorded on this exchange. The assets received in this
exchange are included in Other Assets in the consolidated balance sheet as of February 28, 2019 and 2018.
In August 2018, ThinxNet commenced a subsequent financing transaction to raise additional funds for working capital purposes. In connection with this transaction, we converted approximately $300,000 of outstanding accounts receivable due from ThinxNet into additional ownership interest in an in-kind exchange of assets. Based on the fair value of ThinxNet at the time of conversion, we revalued the initial ownership interest and recorded an impairment charge of $326,000, which is netted within Investment Income in our consolidated statement of comprehensive income (loss). Effective March 2019, we notified ThinxNet that we expect the outstanding loan to be repaid in June 2019.
Question:
What did ThinxNet do in August 2018?
Answer: commenced a subsequent financing transaction to raise additional funds for working capital purposes.