BUSINESS COMBINATION |
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BUSINESS COMBINATION |
Correlate Exchange Agreement
On December 28, 2021, Correlate Inc. became a wholly owned subsidiary of the Company. As detailed in Note 1, Correlate was determined to be the accounting acquirer. Additionally, management determined that TCCR did not meet the definition of a business as described in ASC 805, as the only asset of TCCR was cash. The assets and liabilities of TCCR were transferred to the Company on December 28, 2021, as follows:
Loyal Exchange Agreement
On December 28, 2021, Loyal became a wholly owned subsidiary of the Company. The acquisition date fair value of the consideration transferred for Loyal was approximately $1,099,776, which consisted of 2,339,920 common shares.
The fair value of the common stock issued by the Company was determined using the closing stock price of the Company’s common shares on December 28, 2021.
The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition:
The excess of purchase consideration over the fair value of assets acquired and liabilities assumed was recorded as goodwill. The resulting goodwill is primarily attributed to the expanded market opportunities, including integrating the Loyal service offerings with existing Company service offerings. The goodwill has no basis for U.S. income tax purposes.
The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:
The following pro forma financial information summarizes the combined results of operations for the Company and Loyal, as though the companies were combined as of January 1, 2021. The unaudited pro forma financial information was as follows:
The pro forma financial information for all periods presented above has been calculated after adjusting the results of Loyal to reflect the business combination accounting effects resulting from this acquisition, including the amortization expense from acquired intangible assets as though the acquisition occurred as of January 1, 2021. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at January 1, 2021. |