XML 30 R17.htm IDEA: XBRL DOCUMENT
v3.21.1

BUSINESS COMBINATION | 12 Months Ended
--- | ---
Dec. 31, 2020
Business Combinations [Abstract] |
Business Combination Disclosure [Text Block] | NOTE 10 – BUSINESS COMBINATIONS On January 1, 2019, SWK acquired certain assets of Partners in Technology, Inc. (“PIT”) pursuant to an Asset Purchase Agreement in exchange for cash of $60,000 and a promissory note in the aggregate principal amount of $174,000 (“PIT Note”). The PIT Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%). Monthly payments including interest are $4,984. The allocation of the purchase price to customer list with an estimated life of fifteen years and goodwill, which is deductible for tax purposes, has been based on an independent valuation. On July 31, 2020, the Company acquired certain assets of Prairie Technology Solutions Group, LLC, (“PT”) pursuant to an Asset Agreement for cash of $185,000 and the issuance of three promissory notes each in the amount of $103,333. Note 1 is due on the one- year anniversary of the closing date. Note 2 is due on the two-year anniversary of the closing date and Note 3 is due on the three-year anniversary of the closing date. Each note bears an interest rate of four percent (4%) per annum. Payments are due annually including interest. The allocation of the purchase price to customer list with an estimated life of ten years and goodwill, which is deductible for tax purposes, has been based on an independent valuation. On October 1, 2020, the Company acquired certain assets of Computer Management Services, LLC (“CMS”) pursuant to an Asset Purchase Agreement. In consideration for the acquired assets, the Company paid $410 in cash and issued a promissory note to CMS in the principal aggregate amount of $170,000. The CMS Note is due in 36 months from the closing date and bears interest at a rate of two (2%) percent per annum. Monthly payments including interest are $4,869. The allocation of the purchase price to customer list with an estimated life of ten years and goodwill, which is deductible for tax purposes, has been based on an independent valuation. On December 1, 2020, SWK acquired certain assets of Business Software Solutions (“BSS”) pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $230,000 (the “BSS Note”). The BSS Note is due in 60 months from the closing date and bears interest at a rate of two percent (2.0%) per annum. Monthly payments including interest are $4,031. The purchase price has been allocated to customer list with an estimated life of fifteen years. Upon completion of an independent valuation, the allocation of the purchase price to customer lists will be modified with the excess purchase consideration being allocated to goodwill. The Company expects these acquisitions to create synergies by combining operations and expanding geographic market share and product offerings. The Company expects these acquisitions to create synergies by combining operations and expanding geographic market share and product offerings. The following summarizes the purchase price allocation for all prior year and current year’s acquisitions:
|  | PIT |  |  | PT |  |  | CMS |  |  | BSS (Preliminary) |
Cash consideration |  | $ | 60,000 |  |  | $ | 185,000 |  |  | $ | 410 |  |  | $ | - |
Note payable |  |  | 174,000 |  |  |  | 310,000 |  |  |  | 170,000 |  |  |  | 230,000 |
Total purchase price |  | $ | 234,000 |  |  | $ | 495,000 |  |  | $ | 170,410 |  |  | $ | 230,000 |
Deposits and other assets |  | $ | - |  |  | $ | 32,896 |  |  | $ | - |  |  | $ | - |
Accounts Receivable |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Customer List |  |  | 228,000 |  |  |  | 406,000 |  |  |  | 274,115 |  |  |  | 230,000 |
Operating Lease Right-of-Use Assets |  |  | - |  |  |  | 64,863 |  |  |  | - |  |  |  | - |
Goodwill |  |  | 6,000 |  |  |  | 107,852 |  |  |  | 13,000 |  |  |  | - |
Total assets acquired |  |  | 234,000 |  |  |  | 611,611 |  |  |  | 287,115 |  |  |  | 230,000 |
Deferred revenue |  |  | (- | ) |  |  | (51,748 | ) |  |  | (111,705 | ) |  |  | (- | )
Contingent liability |  |  | (- | ) |  |  | (- | ) |  |  | (5,000 | ) |  |  | (- | )
Operating lease liability |  |  | (- | ) |  |  | (64,863 | ) |  |  | - |  |  |  | (- | )
Net assets acquired |  | $ | 234,000 |  |  | $ | 495,000 |  |  | $ | 170,410 |  |  | $ | 230,000 |
The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisitions occurred on January 1, 2019, nor is the financial information indicative of the results of future operations. The following table represents the unaudited consolidated pro forma results of operations for the years ended December 31, 2020 and 2019 as if the acquisitions occurred on January 1, 2019. Operating expenses have been increased for the amortization expense associated with the estimated fair value adjustment as of December 31, 2019 of expected definite lived intangible assets and interest on the notes payable.
Pro Forma |  | Year Ended December 31, 2020 |  |  | Year Ended December 31, 2019 |
Net revenues |  | $ | 42,774,741 |  |  | $ | 41,592,100 |
Cost of revenues |  |  | 25,241,176 |  |  |  | 25,073,722 |
Operating expenses |  |  | 17,237,828 |  |  |  | 18,013,296 |
Income (loss) before taxes |  |  | 295,737 |  |  |  | (1,494,918 | )
Net income (loss) from continuing operations |  | $ | 278,519 |  |  | $ | (1,059,912 | )
Basic and diluted income (loss) per common share |  | $ | 0.06 |  |  | $ | (0.24 | )
The Company’s consolidated financial statements for the years ending December 31, 2020 and 2019 include the actual results of PIT since the date of acquisition, January 1, 2019. The year ended December 31, 2020 pro-forma results above include seven months of results of PT, nine months of CMS and eleven months of BSS. For the year ending December 31, 2020, there is $23,683 of estimated amortization expense and $7,231 of estimated interest expense included in the PT pro-forma results, $20,598 of estimated amortization expense and $2,274 of estimated interest expense included in the CMS pro-forma results, and $30,118 of estimated amortization expense and $3,881 of estimated interest expense included in the BSS pro-forma results. For the year ended December 31, 2020, PT had a net loss of $5,739, CMS had net income of $116, 074 and BSS had a net loss $7,463. For the year ended December 31, 2020, the PT, CMS & BSS operations had a net income before taxes of $157,515 which represented 6 months of operations of PT, three months of operations of CMS and one months of operations of BSS that were included in the Company’s Consolidated Statement of Operations. This consisted of approximately $867,991 in revenues, $467,654 in cost of revenues and $242,822 in operating expenses. The year ended December 31, 2019 pro-forma results above include total year results for PT, CMS and BSS. For the year ending December 31, 2019, there is $40,596 of estimated amortization expense and $12,630 of estimated interest expense included in the PT pro-forma results, $27,456 of estimated amortization expense and $2,893 of estimated interest expense included in the CMS pro-forma results, and $32,856 of estimated amortization expense and $4,196 of estimated interest expense included in the BSS pro-forma results. For the years ended December 31, 2019, there was no income included in the Company’s Statement of Operations for PT, CMS and BSS.

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration