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BUSINESS COMBINATIONS | 12 Months Ended
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Dec. 31, 2023
Business Combinations [Abstract] |
Business Combination Disclosure [Text Block] | NOTE 11 – BUSINESS COMBINATIONS On January 1, 2022, the Company entered into an asset purchase agreement with to acquire certain assets of DTS. The purchase price for the Acquired Assets was $1,335,000, $500,000 of which was paid in cash and $835,000 of which was paid through the issuance of a four-year $835,000 promissory note dated January 1, 2022, paying interest at the rate of 3.25% per annum. The principal amount of the Note was subject to a downward adjustment in the event the Company lost any subscription renewal revenue during the one-year period immediately following the Effective Date from any persons that were customers of DTS immediately prior to the Effective Date (the “DTS Customers”). Any such downward adjustment would be determined by calculating the percentage of loss of Acumatica subscription renewals during the one-year period immediately following the Effective Date from DTS Customers. In the event that subscription renewal revenue received from DTS Customers during the one-year period immediately following the Effective Date was less than 95% of the subscription renewal revenue received by DTS from DTS Customers during the one-year period immediately preceding the Effective Date, the principal amount of the Note would be reduced. The measuring period for any downward adjustment will be as of the one-year anniversary of the Effective Date. Notwithstanding the foregoing, under no circumstances would the principal amount of the Note be reduced by reason of such downward adjustment by more than $150,000 (i.e., to a principal amount below $685,000). There was no downward adjustment necessary as measured on the one-year anniversary of the note, January 1, 2023. The Note was amortized as follows: The first payment of principal and interest due under the Note, which will be an annual payment, was due and paid on January 1, 2023, and thereafter, payments will be made quarterly in twelve equal installments. Upon completion of an independent valuation, the allocation of the purchase price was $1,207,000 to customer lists with the excess purchase consideration of $128,000 being allocated to goodwill. On November 13, 2023, SWK acquired certain assets of JCS pursuant to an Asset Purchase Agreement for cash of $278,489, prepaid time from clients in the amount of $21,511 and the issuance of a promissory note in the amount of $1,025,000 (the JCS Note”) for a total of $1,325,000. The Asset Purchase Agreement was recorded as a business combination under ASC 805, Business Combinations, as the assets purchased are capable of being conducted and managed for the purpose of providing a return. The JCS Note bears interest at a rate of four and one-quarter percent (4.25%) per annum. The principal amount of the Note is subject to a downward adjustment in the event the Company loses any subscription renewal revenue during the one-year period immediately following the Effective Date from any persons that were customers of JCS immediately prior to the Effective Date (the “JCS Customers”). Any such downward adjustment will be determined by calculating the percentage of loss of Acumatica subscription renewals during the one-year period immediately following the Effective Date from JCS Customers. In the event that subscription renewal revenue received from JCS Customers during the one-year period immediately following the Effective Date is less than 95% of the subscription renewal revenue received by JCS from JCS Customers during the one-year period immediately preceding the Effective Date, the principal amount of the Note will be reduced. The measuring period for any downward adjustment will be as of the one-year anniversary of the Effective Date. Notwithstanding the foregoing, under no circumstances will the principal amount of the Note be reduced by reason of such downward adjustment by more than $150,000 (i.e., to a principal amount below $685,000). The Note will be amortized as follows: The first payment of principal and interest due under the Note, which will be an annual payment, is due and payable on November 13, 2024, after the revised principal amount of the Buyer Note is determined and thereafter, payments will be made quarterly in eight equal installments. At December 31, 2023 the outstanding balance on the JCS Note was $1,025,000. 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 following summarizes the purchase price allocation for all prior year and current year acquisitions:
|  | 2023 Purchase JCS |  |  | 2022 Purchase DTS |
Cash consideration |  | $ | 278,489 |  |  | $ | 500,000 |
Note payable |  |  | 1,025,000 |  |  |  | 835,000 |
Total purchase price |  | $ | 1,303,489 |  |  | $ | 1,335,000 |
Customer list |  | $ | 1,325,000 |  |  | $ | 1,207,000 |
Goodwill |  |  | - |  |  |  | 128,000 |
Total assets acquired |  |  | 1,325,000 |  |  |  | 1,335,000 |
Deferred revenue |  |  | (21,511 | ) |  |  | - |
Net assets acquired |  | $ | 1,303,489 |  |  | $ | 1,335,000 |
The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisitions of JCS Computer Resource Corporation (“JCS”) acquired November 13, 2023 occurred on January 1, 2022, 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 year ended December 31, 2022 as if the acquisitions occurred on January 1, 2022. For the year ended December 31 2022, operating expenses have been increased for the amortization expense of expected definite lived intangible assets and interest on the notes payable.
Pro Forma |  | Year Ended December 31, 2023 |  |  | Year Ended December 31, 2022 |
Net revenues |  | $ | 55,655,173 |  |  | $ | 46,561,694 |
Cost of revenues |  |  | 33,137,972 |  |  |  | 27,538,591 |
Operating expenses |  |  | 20,112,520 |  |  |  | 18,509,387 |
(Loss) income before taxes |  |  | (840,719 | ) |  |  | 191,977 |
Net (loss) income |  | $ | (685,535 | ) |  | $ | 204,262 |
Basic and diluted (loss) income per common share |  | $ | (0.13 | ) |  | $ | 0.04 |
For the year ended December 31, 2022, there is $189,276 of estimated amortization expense and $43,440 of estimated interest expense included in the pro-forma results for JCS. For the year ended December 31, 2023, there is $165,617 of estimated amortization expense and $38,010 of estimated interest expense included in the pro-forma results for JCS.

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- 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://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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