Business Acquisitions

3 Months Ended

Sep. 30, 2017

Business Combinations [Abstract]

Business Acquisitions

4.     BUSINESS ACQUISITIONS

Parscale Digital, Inc.

On August 1, 2017, the Company completed the acquisition of Parscale Creative, Inc., a Nevada corporation (“Parscale Creative”). As of that date, the Company’s operating subsidiary, Parscale Digital, Inc., a Nevada corporation (“Parscale Digital”), merged with Parscale Creative, and the name of the combined subsidiary was changed to Parscale Digital.The total purchase price of $10,209,830, was paid in the form of the issuance of ninety thousand (90,000) shares of the Company's Series D Convertible Preferred Stock, at a liquidation preference of one hundred dollars ($100) per share, plus $928,745 in dividend payments, based on 5% of adjusted revenue of Parscale Digital. Adjusted revenue is defined as total revenue, minus digital marketing media buys.As of the date of closing, Brad Parscale, the 100% owner of Parscale Creative, was appointed to the Company’sBoard of Directors.

Under the purchase method of accounting, the transactions were valued for accounting purposes at $10,209,830, which was the fair value of Parscale Creative at the time of acquisition. The assets and liabilities of Parscale Creative were recorded at their respective fair values as of the date of acquisition. The acquisition date estimated fair value of the consideration transferred consisted of the following:

Cash	$	200,000
Deferred Revenue		(481,085	)
Net tangible liabilities		(281,085	)
Non-compete agreements		476,661
Brand name		2,245,000
Customer list		3,105,837
Goodwill		6,082,417
Deferred tax liability		(1,419,000	)
Total purchase price	$	10,209,830

Issuance of Series D Convertible Preferred Stock	$	9,000,000
Purchase price contingency		928,745
Net tangible liabilities		281,085
Total purchase price	$	10,209,830

The above estimated fair value of the intangible assets is based on a preliminary purchase price allocation prepared by management. As a result, during the preliminary purchase price allocation period, which may be up to one year from the business combination date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.  After the preliminary purchase price allocation period, we record adjustments to assets acquired or liabilities assumed subsequent to the purchase price allocation period in our operating results in the period in which the adjustments were determined.

Pro forma results

The following tables set forth the unaudited pro forma results of the Company as if the acquisition of Parscale Creative had taken place on the first day of the period presented. These combined results are not necessarily indicative of the results that may have been achieved had the companies been combined as of the first day of the period presented.

	Three months ended, September 30, 2017			Three months ended, September 30, 2016
Total revenues	$	3,015,311			2,600,589
Net loss		(377,438	)		(288,260	)
Basic and diluted net earnings per common share	$	(0.00	)		(0.00	)

Parscale Media, LLC

On August 1, 2017, the Company entered into a purchase agreement with Brad Parscale, to purchase Parscale Media, LLC, a website hosting business, formed under the laws of Texas. Under the terms of the agreement, the Company agreed to pay Mr. Parscale $1,000,000 in cash, upon closing the transaction, but in no event later than January 1, 2018. As of September 30, 2017, the Company has not consummated the transaction.