Note 15 - Acquisition

6 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Business Combination Disclosure [Text Block]

15.

  

Acquisition

On

March 1, 2021,

the Company, pursuant to a Share Purchase Agreement (the “Purchase Agreement”), acquired all of the issued and outstanding shares of Woorank, an entity located in Belgium. The Company accounted for the Woorank, transaction as a business combination in accordance with ASC Topic

805,

Business Combinations

. The purchase price consisted of (

1

) cash paid at closing, (

2

) deferred cash payable in installments post-closing, (

3

) a seller note issued to

one

of the selling shareholders, and (

4

) amounts payable to

one

selling shareholder as consideration for assistance with certain matters related to the acquisition for a period of

one

-year from the closing date of the acquisition. The Purchase Agreement also provides for additional consideration, in the event of achievement of certain revenue targets and operational goals, to the selling shareholders pursuant to

three

separate earn-out provisions. Under certain conditions, up to €

600

thousand (approximately

$723

thousand) of the purchase price is payable, at the Company's discretion, in shares of the Company's common stock, par value

$0.001

per share (“Common Stock”), at a price per share equal to the greater of (i) the closing price of the Company's common stock on the date of issuance or (ii)

$3.38.

On the closing date, the Company issued

29,433

shares of its common stock for a portion of the purchase price. At

March 31, 2021, €

550

thousand of the remaining purchase price and related earn-out

may

be settled, at the Company's option, in shares of the Company's common stock.

The Company accounted for the Woorank transaction as a business combination. The Company determined that the fair value of the gross assets acquired was

not

concentrated in a single identifiable asset of a group of similar assets. Assets acquired and liabilities assumed have be recognized at their estimated fair values as of the acquisition date. The fair value of intangible assets was based on valuations using a discounted cash flow model (level

3

inputs) which requires significant estimates and assumptions, including estimating future revenues and costs. The fair value of contingent consideration was determined based on the probability of achievement of the revenue targets and operational goals, which includes estimating future revenues. The fair value of debt obligations assumed was based on the interest rates underlying these instruments in relation to the market rates available for similar instruments. The excess of the purchase price over the assets acquired and liabilities assumed was recognized as goodwill. The goodwill is attributable to expected synergies and customer cross selling opportunities between the Company and Woorank.

The acquisition date fair value of consideration transferred was as follows:

Cash, including deferred cash payable	$	711
Common stock (29,433 shares at $3.38 per share)		99
Seller's note		352
Contingent consideration (earn-outs)		1,617
Total consideration paid	$	2,779

The preliminary acquisition date fair value of assets acquired and liabilities assumed was as follows:

Assets acquired:
Cash	$	627
Non-cash current assets		351
Property and equipment		5
Intangible assets:
Acquired software		282
Customer relationships		1,280
Domain and trade names		116
Goodwill		2,461
Total assets acquired		5,122
Liabilities assumed:
Current liabilities		198
Assumed debt obligations		2,145
Total liabilities assumed		2,343
Total consideration paid	$	2,779

The average useful lives of the identifiable intangible assets acquired was

five

years for acquired software,

eight

years for customer relationships and

twelve

years for domain and trade names.

Total revenue from the Woorank acquisition totaled

$153

for the

three

months ended

March 31, 2021.

Total earnings from the acquisition is impracticable to disclose as the operations were merged with existing operations and certain costs were

not

accounted for separately.

Pro Forma Information (Unaudited)

The following is the unaudited pro forma information assuming the Woorank acquisition occurred on

October 1, 2019:

	Three Months Ended March 31,					Six Months Ended March 31,
	2021			2020		2021			2020
(in thousands, except per share data)
Revenue	$	3,179		$	3,294	$	6,376		$	6,643
Net income (loss) applicable to common shareholders - basic		(390	)		668		(1,486	)		(1,832	)
Net income (loss) applicable to common shareholders - diluted		(390	)		635		(1,486	)		(1,892	)
Net income (loss) per share attributable to common shareholders:
Basic	$	(0.08	)	$	0.21	$	(0.32	)	$	(0.62	)
Diluted	$	(0.08	)	$	0.14	$	(0.32	)	$	(0.63	)
Weighted average common shares outstanding - basic		4,999,938			3,124,174		4,706,869			2,960,435
Weighted average common shares outstanding - diluted		4,999,938			4,412,935		4,706,869			3,027,147