Quarterly report pursuant to Section 13 or 15(d)

Business Combinations

v3.22.2.2
Business Combinations
9 Months Ended
Sep. 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, 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, or until certain factors of the agreement are met. 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 (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 three and nine months ended September 30, 2022, RemoteMore generated consolidated amounts of approximately $757,000 and $1,882,000 of revenues and incurred approximately $1,034,000 and $2,802,000 of operating costs, inclusive of amortization expense associated with the aforementioned intangible assets of approximately $205,000 and $667,000, for a loss before income taxes of approximately $277,000 and $945,000, respectively. For the period September 20, 2021 (acquisition date) through September 31, 2021, RemoteMore generated consolidated amounts of approximately $19,000 of revenues and incurred approximately $53,000 of operating costs, for a loss before income taxes of approximately $34,000.

 

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 aforementioned $500,000 still to be paid, the Company issued 279,720 shares of its common stock, with a value of $400,000, to the co-founders of RemoteMore. The Company still retains the option to purchase up to an additional 20% interest in RemoteMore for the remaining approximately $100,000.