SCWorx, Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Business Combinations

Business Combinations

3 Months Ended

Mar. 31, 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

of the Company

for

5,263,158 shares of Alliance common stock. Due to the Company 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 on a prospective basis. 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:

		March 31, 2019
Intangible assets	Useful Life	Gross Assets		Accumulated Amortization			Net
Ticketing software	5 years	$	64,000	$	(2,133	)	$	61,867
Promoter relationships	7 years		176,000		(4,191	)		171,809
Total intangible assets, gross		$	240,000	$	(6,324	)	$	233,676

Amortization expense for the quarter ended March 31, 2019 and 2018, was $6,324 and $0, respectively.

As of March 31, 2019, the estimated future amortization expense of amortizable intangible assets is as follows:

2019 (remaining 9 months)	$	28,457
2020		37,943
2021		37,943
2022		37,943
2023		37,943
Thereafter		53,447
	$	233,676

Goodwill

The changes to the carrying value of goodwill from January 1, 2019 through March 31, 2019 are reflected below:

December 31, 2018	$	—
Goodwill related to the acquisition of Alliance MMA		8,446,282
March 31, 2019	$	8,446,282