Quarterly report pursuant to Section 13 or 15(d)

Business Combinations

Business Combinations
6 Months Ended
Jun. 30, 2022
Business Combination and Asset Acquisition [Abstract]  
Business Combinations

4. Business Combinations


On September 20, 2021, the Company acquired a 45.62% interest in RemoteMore USA, Inc., a software developer recruiting company, for an estimated total purchase price of $1,363,333, paying $863,333 in cash and $500,000 to be paid within one year. The acquisition is expected to significantly grow the Company’s revenues and recruiting platform and also included bringing onboard Boris Krastev and Boris Borisov, the co-founders of RemoteMore.



The purchase price allocation as of the date of the acquisition was based on a detailed analysis about the fair value of assets acquired. No liabilities were assumed. The major classes of assets to which we have allocated the purchase price were as follows:


Goodwill   $ 935,334  
Intangible assets     427,999  
Business combination total   $ 1,363,333  


The goodwill recognized in connection with the acquisition is primarily attributable to anticipated synergies from future growth and is expected to be deductible for tax purposes.


Intangible assets purchased in connection with the acquisition primarily represent contracts acquired, and to a lesser extent trademarks, and are reflected in the Company’s consolidated balance sheets at gross amounts, net of accumulated amortization. The Company expects to fully realize its interest in the revenues associated with the contracts acquired (see Note 7 – Intangible Assets).


Operations for RemoteMore are included in the Company’s consolidated financial statements at gross amounts as the Company has significant influence in the way RemoteMore operates. The 54.38% interest retained by the seller are included in the Company’s consolidated financial statements as noncontrolling interest. For the six months ended June 30, 2022, RemoteMore generated approximately $1,125,000 of revenues and incurred approximately $1,779,000 of operating costs, inclusive of amortization expense associated with the aforementioned intangible assets of approximately $461,000, for a loss before income taxes of approximately $668,000.


RemoteMore was incorporated in December 2020 and did not begin operations until on or about July 1, 2021. From January 1, 2021, through the acquisition date of September 20, 2021, revenues and expenses would have been deemed immaterial to the Company’s consolidated financial statements.


In February 2022, in connection with the September 2021 acquisition of the 45.62% interest in RemoteMore USA, Inc., and as a component of the $500,000 to be paid within one year, the Company issued 279,720 shares of its common stock, with a value of $400,000, to the co-founders of RemoteMore. The Company has the option to purchase up to an additional 20% interest in RemoteMore for approximately $100,000.