v3.19.3

Acquisition of Simply Mac | 9 Months Ended
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Sep. 30, 2019
Simply Mac, Inc. [Member] |
Acquisition | NOTE 21. Acquisition of Simply Mac The Company has long had a stated goal of growing its chain of Apple reseller stores both through organic opening of new stores and through acquisition. This would enable the Company to leverage its leadership structure and support services with a goal of achieving positive cash flow and earnings. To this end, on May 9, 2019, the Company, Simply Mac and GameStop (the “Seller”) entered into a stock purchase agreement, as amended on September 20, 2019 (the “Stock Purchase Agreement”), pursuant to which the Company would purchase from the Seller all of the issued and outstanding shares of capital stock of Simply Mac (the “Stock Purchase”). On September 25, 2019, the Stock Purchase closed and Simply Mac became a wholly-owned subsidiary of the Company. Aggregate consideration for the Stock Purchase amounted to $12,552,000 which consisted of cash consideration of $4,694,000 and a 12% secured promissory note of $7,858,000. The Company accounted for the Stock Purchase in accordance with the guidance of ASC 805 on business combinations using the acquisition method. The Company made a preliminary allocation of the purchase price based on its assessment of the acquisition-date fair value of the net assets acquired in the transaction as set forth in the table below (in thousands). The estimated fair value of assets acquired and liabilities assumed are considered preliminary and are based on the most recent information available. The provisional measurements of fair value are subject to change pending completion of the valuation and related analysis, which will be as soon as practicable, but no later than one year from the acquisition date. In assessing the fair value, the Company did not assume any synergies from combining with Simply Mac, and used the relief-from-royalty method to determine the fair value of the Simply Mac trademark and tradename. Because the purchase of Simply Mac was a stock purchase, none of the implied goodwill of $984,000 is deductible for tax purposes.
Cash |  | $ | 1 |
Accounts receivable |  |  | 1,604 |
Inventory |  |  | 8,211 |
Other current assets |  |  | 362 |
Fixed assets |  |  | 739 |
Right-of-use leased assets |  |  | 3,414 |
Goodwill |  |  | 984 |
Intangibles |  |  | 2,092 |
Other assets |  |  | 44 |
Accounts payable |  |  | (561 | )
Lease liability |  |  | (3,430 | )
Accrued liabilities |  |  | (908 | )
Total |  | $ | 12,552 |
For the period from September 25, 2019, the date of acquisition, through September 30, 2019, net sales and operating loss from Simply Mac included in the Company’s consolidated statement of operations for both the three and nine months ended September 30, 2019 amounted to $1,924,000 and $247,000, respectively. On an unaudited pro forma basis, if the acquisition had occurred on January 1, 2018, the Company’s combined net sales and net loss from continuing operations for the year ended December 31, 2018 would have been $114,400,000 and $25,371,000, respectively, and for the nine months ended September 30, 2019 would have been $69,704,000 and $16,069,000, respectively.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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