v2.4.1.9
Acquisitions
 12 Months Ended
Dec. 31, 2014
Business Combinations [Abstract]  
Acquisitions

NOTE 6 – ACQUISITIONS

 

On July 16, 2014, we entered into a sales purchase agreement to acquire 100% of the outstanding shares of Lexi Luu Designs. Bitzio paid 500,000,000 restricted commons shares for this acquisition. 300,000 shares valued $0.0014, the market price of the Company’s stock on the day of acquisition, or $420,000, was the consideration given. The other 200,000 shares, or $280,000 were recorded as pre-paid compensation per the guidance at ASC 805-10-55-25, as they are considered compensation for continuing employment of Mr. Blanchette. The value of the shares will be amortized over the service period of approximately 20 months. Lexi Luu shareholders are able to earn an additional $300,000 in restricted common shares over the course of three years in an earn out upon hitting certain revenue benchmarks. The Company recorded an earnout contingent liability of $87,000 as part of the acquisition. We accounted for the transaction as a business combination. Of the purchase price paid as of July 16, 2014 ($183,629) was allocated among the assets and liabilities and the difference was assigned to intangible assets.

 

On July 18, 2014, we entered into a sales purchase agreement to acquire 100% of the outstanding shares of E-motion Apparel. Designs. Bitzio paid 350,000,000 restricted commons shares for this acquisition. All 350,000 shares, or $455,000 were recorded as pre-paid compensation per the guidance at ASC 805-10-55-25, as they are considered compensation for continuing employment of Ms. Brassington, Ms. Cunningham and Ms. Brito. The value of the shares will be amortized over the service period of approximately 20 months. E-motion Apparel shareholders are able to earn an additional $300,000 in restricted common shares over the course of years in an earn out upon hitting certain revenue benchmarks. The Company recorded an earnout contingent liability of $48,000 as part of the acquisition. We accounted for the transaction as a business combination. Of the purchase price paid as of July 18, 2014 ($26,235) was allocated among the assets and liabilities and the difference was assigned to intangible assets. This License Agreement between Bitzio and E-motion Apparel was cancelled on July 18, 2014 and was replaced with the sales purchase agreement.

 

The total purchase price for the Lexi Luu acquisition was allocated as follows:

 

Assets        
Cash     170  
Accounts receivable     794  
Inventories     64,883  
Property and equipment     2,724  
Other assets     19,503  
Intangible assets-Customer relationships     690,629  
Liabilities        
Accounts payable and accrued liabilities     (256,030 )
Due to shareholder     (15,673 )
Earn-out contingent liability     (87,000 )
Net assets acquired   $ 420,000  

 

The total purchase price for the E-motion acquisition was allocated as follows:

 

Assets        
Inventories     165,807  
Other assets     5,050  
Intangible assets-Customer relationships     74,235  
Liabilities        
Accounts payable and accrued liabilities     (197,092 )
Earn-out contingent liability     (48,000 )
Net assets acquired   $ -  

 

The Customer relationships will be amortized over their estimated useful lives of 2 years.