XML 18 R10.htm IDEA: XBRL DOCUMENT v3.22.1
Acquisition of subsidiaries
12 Months Ended
Dec. 31, 2021
Acquisition Of Subsidiaries  
Acquisition of subsidiaries

 

4. Acquisition of subsidiaries

 

On June 30, 2020, the Company entered into a stock purchase agreement to acquire 51% of American Treatment Holdings, Inc. (“ATHI”) from The Q Global Trust (“Seller”) and Lawrence B Hawkins (“Hawkins”), which in turn owns 100% of Evernia Health Services LLC. (“Evernia”), which operates drug rehabilitation facilities. The consideration for the acquisition is a loan to be provided by the purchaser to Evernia in the amount of $500,000. As of the date of acquisition, July 1, 2021, the Company had advanced Evernia $1,140,985.

 

The Company originally had a 180 day option, from the advancement of the first tranche to Evernia, to purchase an additional 9% of ATHI for a purchase consideration of $50,000.

 

On April 28, 2021, the Stock Purchase Agreement was amended whereby the option to purchase an additional 9% of ATHI for $50,000 was amended to purchase an additional 24%, an increase of 15% over the prior option, for 100,000,000 shares of common stock. The remaining condition to closing, the receipt of approval for the change of ownership of the license from the Department of Children and Family Services of Florida, was satisfied by the probationary approval, which was received on June 30, 2021. The Company exercised the option and issued the 100,000,000 shares of common stock and $50,000. As of December 31, 2021, the Company had issued the 100,000,000 shares of common stock and had paid $42,750 due to the Seller, in terms of the amended agreement. In addition to the consideration paid for the additional equity the Company agreed to execute a promissory note for the payment of any unpaid management fees at the time of Closing such that the unpaid fees shall be paid pari-passu with the repayment of the Loan Agreement and Seller agrees that any funds advanced to the Company by Behavioral Health Holdings, LLC shall be forgiven and considered contributed capital to ATHI. The Company agrees to advance up to $1,100,000 under the Loan Agreement for the funding of the operations of ATHI as required without any contribution required by the Seller. 

 

Pursuant to the terms of the Amended Purchase Agreement, the consideration paid for 75% of the equity of ATHI was $50,000 in cash plus the issuance of 100,000,000 shares of the Company’s common stock with a market value of $410,000 on the date of acquisition.

 

In terms of the agreement, the preliminary purchase price was allocated to the fair market value of tangible and intangible assets acquired and liabilities assumed as follows:

 

 Schedule of intangible assets acquired and liabilities assumed    
    Amount
Consideration        
Cash   50,000  
100,000,000 shares of common stock at fair market value     410,000  
Total purchase consideration   $ 460,000  
Recognized amounts of identifiable assets acquired and liabilities assumed        
Cash   60,324  
Other Current assets     198,133  
Property, plant and equipment     130,234  
Right of use asset     1,772,560  
Intangibles     1,789,903  
 Total assets     3,951,154  
Less: liabilities assumed        
Current liabilities assumed     (50,040 )
Advances     (1,140,985 )
Operating lease liabilities assumed     (1,836,151 )
Imputed Deferred taxation on identifiable intangible acquired     (310,645 )
 Total liabilities     (3,337,821 )
Net identifiable assets acquired and liabilities assumed     613,333  
Fair value of non-controlling interest     (153,333 )
Total   $ 460,000  

 

 

The amount of revenue and earnings include in the Company’s consolidated statement of operations and comprehensive (loss) income for the year ended December 31, 2021 and the revenue and earnings of the combined entity had the acquisition date been January 1, 2020. Evernia only began operations in June 2020, therefore earning were included from June 2020.

 

 Schedule of revenue and earnings        
    Revenue   Earnings
         
Actual from July 1, 2021 to December 31, 2021   $ 1,568,071     $ (115,142 )
                 
2021 Supplemental pro forma from January 1, 2021 to December 31, 2021   $ 3,024,297     $ (1,965,484 )
                 
2020 Supplemental pro forma from inception to December 31, 2020   $ 420,996     $ 2,142,531  

 

The 2021 and 2020 Supplemental pro forma earnings information was adjusted to account for amortization of intangibles on acquisition of $178,990 and $357,981, respectively.