Acquisition

9 Months Ended

Mar. 31, 2021

Note 14 - Acquisition

Concepts and Solutions

On September 4, 2019, Galaxy entered into a stock purchase agreement with Concepts and Solutions. Under the terms of the stock purchase agreement, 100% of the outstanding capital for both Concepts and Solutions was purchased by Galaxy. Concurrent with this acquisition, the Company applied pushdown accounting; therefore, the consolidated financial statements after completion of the acquisition include the assets, liabilities, and results of operations of the combined company from and after the closing date. As part of the stock purchase agreement, Galaxy issued 1,350,000 shares of common stock to the seller with a value of $1,485,000. In addition to the issuance of shares of common stock, the Company entered into three promissory notes with the seller for a total note payable of $3,000,000. Payments under the notes are subject to adjustment based on the achievement of minimum gross revenues and successful resolution of certain pre-acquisition payroll withholding tax issues of Concepts and Solutions. The Company believes future earnings goals will not be met and valued the note payable at $1,484,473. The balance of the note payable is $1,030,079 at March 31, 2021 and June 30, 2020.

Management of the Company determined that a triggering event to assess the impairment of goodwill associated with the acquisition of Concepts and Solutions occurred during the year ended June 30, 2020. While there was no single event, the consideration in totality of several factors that developed during this year led management to conclude that it was more likely than not that the fair values of certain intangible assets and goodwill acquired as part of the acquisition were below their carrying amounts. See Note 4.

The following table summarizes the preliminary allocation of the fair value of the assets and liabilities as of the acquisition date through pushdown accounting. The preliminary allocation to certain assets and/or liabilities may be adjusted by material amounts as the Company finalizes fair value estimates.



Assets
	Cash	$ 201,161
	Accounts receivable	1,165,953
	Inventory	94,360
	Property and equipment	20,904
	Other assets	2,800
	Goodwill and other intangibles	3,760,287

	Total Assets	5,245,465

Liabilities
	Accounts payable	1,225,734
	Accrued expenses	783,540
	Short-term debt	96,941
	Deferred revenue	518,900

	Total Liabilities	2,625,115

	Net Assets	$ 2,620,350

Consideration
	Fair value of anti-dilution clause in employment agreement	$ 235,350
	Note payable to seller	900,000
	Stock	1,485,000

		$ 2,620,350

Classroom Technologies Solutions, Inc.

On October 15, 2020, the Company entered into an Asset Purchase Agreement, to acquire the assets of Classroom Technologies Solutions, Inc. ("Classroom Tech") for consideration of (a) paying off a secured Classroom Tech loan, not to exceed the greater of 50% of the value of the Classroom Tech assets acquired or $120,000; (b) the issuance of a promissory note in the amount of $44,526 to a Classroom Tech designee; and (c) the issuance of 10 million shares of common stock to the seller of Classroom Tech.

The following table summarizes the allocation of the fair value of the assets as of the acquisition date through pushdown accounting.


	Assets
			Cash		$ 38,836
			Accounts receivable		31,710
			Inventory		209,431
			Property and equipment		17,530
			Other assets		1,150
			Goodwill and other intangibles		46,869

			Total Assets		$ 345,526
Consideration
		Notes payable to seller and related party of seller		$ 164,526
		Bonus program		30,000
		Stock		151,000
				$ 345,526