Annual report pursuant to Section 13 and 15(d)

Business Combinations

v3.22.1
Business Combinations
12 Months Ended
Dec. 31, 2021
Business Combinations [Abstract]  
Business Combinations

Note 5. Business Combinations

 

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 $11,765,491.

 

The acquisition was accounted for under the acquisition method of accounting. The assets acquired, liabilities assumed and purchase allocation, which is based on valuations of management, are as follows:

 

    Fair Value  
Cash   $ 5,441,437  
Goodwill     8,366,467  
Identifiable intangible assets:        
Ticketing software     64,000  
Promoter relationships     176,000  
Total identifiable intangible assets     240,000  
Account payable     (1,901,624 )
Current liabilities - discontinued operations     (380,789 )
Aggregate purchase price   $ 11,765,491  

 

Identified intangible assets consist of the following:

 

        December 31, 2020  
Intangible assets   Useful
life
  Gross
assets
    Accumulated
amortization
    Net  
Ticketing software   2 years   $ 64,000     $ (64,000 )   $
-
 
Promoter relationships   2 years     176,000       (176,000 )    
-
 
Total intangible assets       $ 240,000     $ (240,000 )   $
-
 

 

During the year ended December 31, 2020, the Company determined that while its ticketing platform was still active, the negative impact that COVID 19 had on the overall MMA industry where it is currently being utilized had potentially lessened its useful life as currently deployed. Because of this potential impact, management has chosen to shorten the projected useful life of these assets and accelerate their amortization accordingly.

 

Amortization expense for the year ended December 31, 2020 was $205,219.

 

Goodwill

 

There were no changes to the carrying value of goodwill for the years ended December 31, 2021 and 2020.