ACQUISITION OF FOXX TROT TANGO, LLC

9 Months Ended

Mar. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

ACQUISITION OF FOXX TROT TANGO, LLC

NOTE D – ACQUISITION OF FOXX TROT TANGO, LLC

On July 25, 2023, the Company acquired 100% ownership of Foxx Trot Tango, LLC (“Foxx Trot”). The combination has been accounted for in the accompanying consolidated financial statements as an “acquisition” transaction. Accordingly, the financial position and results of operation of the Company prior to July 25, 2023 has been excluded from the accompanying consolidated financial statements. The Company acquired a 100% interest in exchange for Convertible Promissory Notes in the amount of $3,100,000 and the potential issuance of 680 shares of Series L Preferred Stock of the Company.

The following table summarizes the aggregate preliminary purchase price consideration paid to acquire Foxx Trot.

	As of July 25, 2023
Convertible promissory notes	$	3,100,000
Contingent consideration (i)		3,400,000
Total purchase price	$	6,500,000

(i) Contingent consideration is based on the following:

Earn-Out Lease Milestones. Seller shall receive up to six hundred and eighty (680) shares of Series L Preferred Stock (“Series L Preferred”) valued at up to $3,400,000, based on the following earn-out lease milestones:

(i)	Lease of 25% of the square footage of the Property, Seller shall receive 25% of the Series L Preferred;
(ii)	Lease of 50% of the square footage of the Property, Seller shall receive 50% of the Series L Preferred;
(iii)	Lease of 75% of the square footage of the Property, Seller shall receive 75% of the Series L Preferred; and
(iv)	Lease of 100% of the Property, Seller shall receive 100% of the Series L Preferred.

Due to the sale of the commercial building on March 26, 2024, there shall be no further potential earn-out lease milestones issuable.

Details regarding the book values and fair values of the net assets acquired are as follows:

	Book Value			Fair Value			Difference
		(Unaudited)			(Unaudited)			(Unaudited)
Cash	$	10,000		$	10,000		$	-
Warehouse building		2,956,583			3,600,000			643,417
Note payable-TK Management Services, LLC		(1.500,000	)		(1,500,000	)		-
Note payable-TXC Services, LLC		(1,600,000	)		(1,600,000	)		-
Net Total	$	(133,417	)	$	510,000		$	643,417

GLOBAL TECHNOLOGIES, LTD

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended March 31, 2024 and 2023

(Unaudited)

NOTE D – ACQUISITION OF FOXX TROT TANGO, LLC (cont’d)

Acquisitions

Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate. The valuation inputs in these models and analyses are based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability.

Fair value estimates are based on a series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. Management values property, plant and equipment using the cost approach supported where available by observable market data, which includes consideration of obsolescence. Management values acquired intangible assets using the relief from royalty method or excess earnings method, forms of the income approach supported by observable market data for peer companies. The significant assumptions used to estimate the value of the acquired intangible assets include discount rates and certain assumptions that form the basis of future cash flows (such as revenue growth rates, customer attrition rates, and royalty rates). Real properties are marked to fair value for valuation of the total purchase price. For certain items, the carrying value is determined to be a reasonable approximation of fair value based on information available to the Company.

The following table summarizes the purchase price allocation of fair values of the assets and liabilities assumed at the date of acquisition:

	As of July 25, 2023
Cash	$	10,000
Warehouse building (ii)		3,600,000
		3,610,000
Goodwill (iii)		2,890,000
Total purchase price	$	6,500,000

(ii)	Warehouse Building valued at fair value based on appraisal.
(iii)	Goodwill is recorded when the cost of acquired business exceeds the fair value of the identifiable net assets acquired.

The changes in the carrying amount of goodwill for the period from July 25, 2023 through March 31, 2024 were as follows:

Balance as of July 25, 2023	$	2,890,000
Additions and adjustments		(2,890,000	)
Balance as of March 31, 2024	$	-

Sale of Commercial Building

On March 26, 2024, the Company closed on the sale of its commercial building located in Sylvester, Georgia for an aggregate cash purchase price of $3,717,778, subject to certain adjustments within the Purchase Agreement.

GLOBAL TECHNOLOGIES, LTD

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended March 31, 2024 and 2023

(Unaudited)