Quarterly report pursuant to Section 13 or 15(d)

Acquisitions

v3.19.2
Acquisitions
6 Months Ended
Jun. 30, 2019
Business Combinations [Abstract]  
ACQUISITIONS
12. ACQUISITIONS

 

The Company accounts for acquisitions in accordance with ASC 805 "Business Combinations." Assets acquired and liabilities assumed are recorded in the accompanying consolidated balance sheets at their estimated fair values, as of the acquisition date. For all acquisitions, the preliminary allocation of the purchase price was based upon a preliminary valuation, and the Company's estimates and assumptions are subject to change within the measurement period as valuations are finalized. The Company has not made any adjustments to the preliminary valuations. The table below represents the allocation of the preliminary purchase price to the acquired net assets during the six months ended June 30, 2019.

 

    Green Life Garden     Chlorophyll     Reno Hydroponics     Palm Springs Hydroponics     Total  
Inventory   $ 1,038,600     $ 1,441,000     $ 238,000     $ 465,500     $ 3,183,100  
Prepaids and other current assets     14,100       22,000       -               36,100  
Furniture and equipment     100,000       100,000       25,000       25,000       250,000  
Goodwill     2,305,900       2,596,100       516,300       554,000       5,972,300  
Total   $ 3,458,600     $ 4,159,100     $ 779,300     $ 1,044,500     $ 9,441,500  

 

The table below represents the consideration paid for the net assets acquired in business combinations.

 

    Green Life Garden     Chlorophyll     Reno Hydroponics     Palm Springs Hydroponics     Total  
Cash   $ 2,647,700     $ 3,659,100     $ 525,000     $ 800,000     $ 7,631,800  
Common stock     810,900       500,000       254,300       244,500       1,809,700  
Total   $ 3,458,600     $ 4,159,100     $ 779,300     $ 1,044,500     $ 9,441,500  

 

The following table discloses the date of the acquisitions noted above and the revenue and earnings included in the consolidated income statement from the date of acquisition to the period ended June 30, 2019.

 

    Green Life Garden     Chlorophyll     Reno Hydroponics     Palm Springs Hydroponics     Total  
Acquisition date   5/14/2019     1/21,2019     2/11/2019     2/7/2019        
Revenue   $ 1,056,200     $ 3,450,600     $ 880,400     $ 1,326,400     $ 6,713,600  
Earnings   $ 234,700     $ 613,000     $ 151,100     $ 271,600     $ 1,270,400  

 

The following represents the pro forma consolidated income statement as if the acquisitions had been included in the consolidated results of the Company for the entire period for the six months ended June 30, 2018.

 

Pro forma consolidated income statement

 

    June 30,
2018
 
Revenue   $ 9,873,500  
Earnings   $ 1,073,800