Quarterly report pursuant to Section 13 or 15(d)

Business Combinations

v3.19.2
Business Combinations
 6 Months Ended
Jun. 30, 2019
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]
Note 4. Business Combinations
 
Preliminary purchase accounting
 
On February 1, 2019, the Company’s shareholders exchanged all of its outstanding shares in exchange for 5,263,158 shares of Alliance common stock. Due to the
Company’s
shareholders acquiring a controlling interest in Alliance after acquisition, the transaction was treated as a reverse merger for accounting purposes, with SCWorx being the reporting company. In accordance with purchase accounting rules under ASC 805, the purchase consideration was $11,865,306.
 
 
The acquisition was accounted for under the acquisition method of accounting. The assets acquired, liabilities assumed and preliminary purchase allocation, which is based on estimates and valuations of management, is as follows:
 
   
Estimated Useful 
Life (years)
    
 
Estimated 
Fair Value
  
             
Cash          
$
 5,441,437  
Goodwill             8,466,282  
Identifiable intangible assets:                
Ticketing software     5       64,000  
Promoter relationships     7       176,000  
Total identifiable intangible assets             240,000  
Accounts payable             (1,901,624 )
Current liabilities - discontinued operations             (380,789 )
Aggregate purchase price           $ 11,865,306  
 
 
 
 
 
 
 
 
 
 
 
 
 
The allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition date fair values are considered preliminary and may change within the permissible measurement period, not to exceed one year.
 
Identified intangible assets consist of the following:
 
 
 
  
 
June 30, 2019
 
Intangible assets
 
Useful Life
 
Gross
Assets
 
 
Accumulated
Amortization
 
 
Net
 
Ticketing software
 
5 years
 
$
64,000
 
 
$
(5,334
)
 
 $ 58,666
 
Promoter relationships
 
7 years
 
 
176,000
 
 
 
(10,476
)
 
 
165,524
 
Total intangible assets, gross
 
 
  
 
 $ 240,000
 
 
$
(15,810
)
 
 $ 224,190
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization expense for the quarter ended June 30, 2019 and 2018, was $9,486 and $0, respectively.
 
Amortization expense for the six months ended June 30, 2019 and 2018, was $15,810 and $0, respectively.
 
As of June 30, 2019, the estimated future amortization expense of amortizable intangible assets is as follows:
 
2019 (remaining 6 months)  
$
 18,971  
2020     37,943  
2021     37,943  
2022     37,943  
2023     37,943  
Thereafter     53,447  
   
$
 224,190  
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
The changes to the carrying value of goodwill from January 1, 2019 through June 30, 2019 are reflected below:
 
 
December 31, 2018
      
Goodwill related to the acquisition of Alliance MMA   $  8,466,282  
June 30, 2019
   $ 8,466,282