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ACQUISITIONS | 3 Months Ended
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Mar. 31, 2022
ACQUISITIONS |
Acquisitions | NOTE 5 — ACQUISITION On October 29, 2021, ECHG entered into the Avail Transaction to purchase all of the assets, liabilities and rights and interests for $4,500,000 of Avail Recovery Solutions, an Arizona company. The purchase was facilitated by an initial payment of $2,500,000 at closing, and the remaining $2,000,000 to be paid out by 12 quarterly payments starting April 1, 2022, of $166,667 each. See Note 14 to our consolidated financial statements for more information on this loan. The installment note payable for the Avail Transaction imputed at 3.1% interest. As part of the Avail Transaction, goodwill was preliminarily recorded as $3,491,284, which is the purchase price less the approximate fair value of the net assets and liabilities purchased, as shown in the purchase price allocation in the following table. The Company’s goodwill is related to the ECHG segment. ECHG has its own separate financial information to perform goodwill impairment testing. The Company will evaluate goodwill based on cash flows for the ECHG segment. For tax purposes, goodwill is amortized and deductible over 15 years. The purchase price allocation listed below is considered to be a preliminary allocation and is subject to change. The preliminary purchase price for the Avail Transaction is allocated as follows:
Description |  | Amount |
Assets |  |  |
Cash |  | $ | 988,870 |
Account receivables |  |  | 395,144 |
Inventories |  |  | 486,736 |
Prepaid expenses |  |  | 93,727 |
Fixed assets - net |  |  | 247,038 |
Right-of-use assets |  |  | 609,511 |
Other assets |  |  | 13,268 |
Liabilities |  |  |  |
Account payables |  |  | (562,778 | )
Accrued liabilities |  |  | (653,289 | )
Operating lease liabilities |  |  | (609,511 | )
Net assets |  |  | 1,008,716 |
Goodwill |  |  | 3,491,284 |
Total Purchase Price |  | $ | 4,500,000 |
The following table compares the results of Avail as part of the Company’s financial results for the three months ended March 31, 2022, and the Company’s results of operations as if they were combined for the three months ended March 31, 2021:
|  | Consolidated Statement of Income |  |  | Proforma Combined |
|  | For the Three Months Ended |  |  | For the Three Months Ended |
|  | March 31, 2022 |  |  | March 31, 2021 |
|  | (unaudited) |  |  | (unaudited) |
Revenue |  | $ | 47,415,098 |  |  | $ | 27,110,216 |
Income from continuing operations |  | $ | 2,647,225 |  |  | $ | 2,354,895 |
Net income |  | $ | 2,647,225 |  |  | $ | 2,354,895 |
Basic net income per common share |  | $ | 0.10 |  |  | $ | 0.09 |
Diluted net income per common share |  | $ | 0.10 |  |  | $ | 0.09 |

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