Annual report pursuant to Section 13 and 15(d)

Acquisitions

v3.20.1
Acquisitions
12 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
ACQUISITIONS
14. 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 year ended December 31, 2019.

 

    Grow
World
LLC
    Grand
Rapids
Hydro
    Green
Life
Garden
    Chlorophyll     Reno
Hydroponics
    Palm
Springs
Hydroponics
    Total  
Inventory   $ 553,900     $ 1,453,100     $ 1,038,600     $ 1,441,000     $ 238,000     $ 465,500     $ 5,190,100  
Prepaids and other current assets     -               14,100       22,000       -               36,100  
Furniture and equipment     35,000       50,000       100,000       100,000       25,000       25,000       335,000  
Goodwill     696,900       2,376,900       2,305,900       2,596,100       516,300       554,000       9,046,100  
Total   $ 1,285,800     $ 3,880,000     $ 3,458,600     $ 4,159,100     $ 779,300     $ 1,044,500     $ 14,607,300  

 

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

 

    Grow
World
LLC
    Grand
Rapids
Hydro
    Green
Life
Garden
    Chlorophyll     Reno
Hydroponics
    Palm
Springs
Hydroponics
    Total  
Cash   $ 1,000,000     $ 2,350,000     $ 2,647,700     $ 3,659,100     $ 525,000     $ 800,000     $ 10,981,800  
Common stock     285,800       1,530,000       810,900       500,000       254,300       244,500       3,625,500  
Total   $ 1,285,800     $ 3,880,000     $ 3,458,600     $ 4,159,100     $ 779,300     $ 1,044,500     $ 14,607,300  

 

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 December 31, 2019.

 

    Grow
World
LLC
    Grand
Rapids
Hydro
    Green
Life
Garden
    Chlorophyll     Reno
Hydroponics
    Palm
Springs
Hydroponics
    Total  
Acquisition date   12/16/19     9/3/2019     5/14/2019     1/21/2019     2/11/2019     2/7/2019        
Revenue   $ 153,900     $ 2,412,700     $ 4,829,800     $ 6,030,500     $ 2,106,900     $ 3,075,300     $ 18,609,100  
Earnings   $ 6,400     $ 444,500     $ 998,700     $ 936,600     $ 366,742     $ 651,400     $ 3,404,342  

 

The following represents the unaudited pro forma consolidated income statement as if the acquisitions had been included in the consolidated results of the Company for the year ended December 31, 2018. These unaudited pro forma results are presented for information purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the earliest period presented, nor are they indicative of future results of operations.

  

    December 31,
2018
 
Revenue   $ 59,650,900  
Earnings   $ (2,087,900 )