Quarterly report pursuant to Section 13 or 15(d)

Acquisitions

v3.19.1
Acquisitions
3 Months Ended
Mar. 31, 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 table below represents the allocation of the preliminary purchase price to the acquired net assets during the three months ended March 31, 2019.

 

    Chlorophyll     Reno Hydroponics     Palm Springs Hydroponics     Total  
Inventory   $ 1,441,000     $ 238,000     $ 465,500     $ 2,144,500  
Prepaids and other current assets     22,000       -               22,000  
Furniture and equipment     100,000       25,000       25,000       150,000  
Goodwill     2,596,100       516,300       554,000       3,666,400  
Total   $ 4,159,100     $ 779,300     $ 1,044,500     $ 5,982,900  

 

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

 

    Chlorophyll     Reno Hydroponics     Palm Springs Hydroponics     Total  
Cash   $ 3,659,100     $ 525,000     $ 800,000     $ 4,984,100  
Common stock     500,000       254,300       244,500       998,800  
Total   $ 4,159,100     $ 779,300     $ 1,044,500     $ 5,982,900  

  

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 March 31, 2019.

 

    Chlorophyll     Reno Hydroponics     Palm Springs Hydroponics     Total  
Acquisition date     1/21,2019    

2/11/2019

     

2/7/2019

         
Revenue   $ 3,450,600     $ 1,594,900     $ 121,500     $ 5,167,000  
Earnings   $ 613,000     $ 165,300     $ 5,800     $

784,100

 

 

The following represents the proforma consolidated income statement as if the acquisitions had been included in the consolidated results of the Company for the entire period for the three months ended March 31, 2018.

 

Pro forma consolidated income statement

 

    March 31, 2018  
Revenue   $ 2,088,200  
Earnings   $ 389,100