XML 20 R9.htm IDEA: XBRL DOCUMENT v3.24.1.1.u2
Acquisition
3 Months Ended
Mar. 31, 2024
Business Combination and Asset Acquisition [Abstract]  
Acquisition Acquisition
Since January 1, 2023, the Company has completed the following acquisition to achieve its business purposes as discussed in Note 1.
GTMR
On March 22, 2023, the Company entered into an agreement and plan of merger with GTMR. This acquisition was accounted for as a business combination whereby GTMR became a 100% owned subsidiary of the Company. The Company acquired GTMR to expand its capabilities, increase market share, gain access to new contracts, and achieve cost efficiencies through synergies and economies of scale.
The following represents the assets and liabilities acquired in this acquisition:
March 31, 2023AdjustmentsMarch 31, 2024
Cash$475,000 $— $475,000 
Accounts receivable other receivables1,380,203 (9,384)1,370,819 
Income tax receivable155,449 (127,992)27,457 
Prepaid expenses116,892 (30,856)86,036 
Other asset17,182 — 17,182 
Furniture and equipment163,301 103,760 267,061 
Right of use asset – operating lease— 641,392 641,392 
Customer relationships2,426,000 — 2,426,000 
Right of use asset - finance lease— 17,456 17,456 
Tradename517,000 — 517,000 
Backlog1,774,000 — 1,774,000 
Goodwill1,822,466 279,571 2,102,037 
Deferred tax liability(1,244,368)(242,093)(1,486,461)
Lease liability – operating lease(17,608)(603,799)(621,407)
Lease liability – finance lease— (12,549)(12,549)
Accounts payable and accrued expenses$(1,030,957)$141,341 $(889,616)
Net assets acquired$6,554,560 $156,847 $6,711,407 
The consideration paid for GTMR was as follows:
Cash$470,233 
Due to Seller350,000 
Other consideration17,791 
Cash from factoring411,975 
Common stock5,304,561 
Accounts receivable note156,847 
Total consideration paid$6,711,407 
The GTMR Acquisition has been accounted for under the acquisition method of accounting. Under the acquisition method of accounting, the total acquisition consideration price was allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values. The fair value measurements utilize estimates based on key assumptions of the GTMR Acquisition, and historical and current market data. The
excess of the purchase price over the total of the estimated fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed is recognized as goodwill. To determine the fair values of tangible and intangible assets acquired and liabilities assumed for GTMR, we engaged a third-party independent valuation specialist. Intangible assets, which are primarily comprised of customer relationships and backlog, were valued using the excess earnings discounted cash flow method. On the date of the acquisition, the Company simultaneously factored $411,975 of the accounts receivable from GTMR to finance the acquisition.
The Company paid $185,896 in transaction costs of GTMR, which was excluded from the purchase price and issued an accounts receivable note (“Accounts Receivable Note”), and held back $350,000, the details for which have been discussed in amounts Due to Seller in Note 10,
During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date. The measurement period for the GTMR acquisition is closed as of March 22, 2024.

During the measurement period, the Company recorded several adjustments to goodwill as a result of GTMR's adoption of ASC 842, tax adjustments, and an update to the fair value of acquired furniture and equipment. These measurement period adjustments were subsequently identified as a result of the completion of third party accounting assistance.

The Company also recorded a measurement period adjustment to goodwill as a result of finalizing the transaction price. The Company entered into an Accounts Receivable Note due to the sellers four months after the closing date of the transaction, subject to the adjustment of any net working capital deficiencies. This amount was determined to be $156,847.
The following table shows unaudited pro-forma results for the three months ended March 31, 2024 and 2023, as if the acquisitions of GTMR had occurred on January 1, 2023. These unaudited pro forma results of operations are based on the historical financial statements of each of the companies.
For the three months ended March 31, 2024
Revenues$11,335,053 
Net loss$(4,141,541)
Net loss per share - basic$(0.08)
For the three months ended March 31, 2023
Revenues$12,583,985 
Net loss$(6,532,634)
Net loss per share - basic$(0.16)