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ACQUISITIONS | 6 Months Ended
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Jun. 30, 2022
ACQUISITIONS |
NOTE 5 - ACQUISITION | NOTE 5 — ACQUISITION On October 29, 2021, ECHG entered into the Avail Transaction to purchase all of the assets, liabilities and rights and interests of Avail for $4,500,000. 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. On May 31, 2022, an additional cash payment of $216,988 was made in connection with the Avail Transacton adjusting the goodwill and purchase price amount as shown in the preliminary purchase price allocation in the following table. The additional payment is not part of the installment note payable of $2,000,000 from the initial Avail Transaction. 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 following table compares the results of Avail as part of the Company's financial results for the three months ended June 30, 2022, and the Company's results of operations as if they were combined for the three months ended June 30, 2021:
|  | Consolidated Statement of Income For the Three Months Ended |  |  | Proforma Combined For the Three Months Ended |
|  | June 30, 2022 |  |  | June 30, 2021 |
|  | (unaudited) |  |  | (unaudited) |
Revenue |  | $ | 42,639,718 |  |  | $ | 35,525,133 |
Income from continuing operations |  | $ | 3,847,858 |  |  | $ | 2,482,863 |
Net income |  | $ | 3,847,858 |  |  | $ | 2,482,863 |
Basic net income per common share |  | $ | 0.14 |  |  | $ | 0.09 |
Diluted net income per common share |  | $ | 0.14 |  |  | $ | 0.09 |
The following table compares the results of Avail as part of the Company's financial results for the six months ended June 30, 2022, and the Company's results of operations as if they were combined for the six months ended June 30, 2021:
|  | Consolidated Statement of Income For the Six Months Ended |  |  | Proforma Combined For the Six Months Ended |
|  | June 30, 2022 |  |  | June 30, 2021 |
|  | (unaudited) |  |  | (unaudited) |
Revenue |  | $ | 90,054,816 |  |  | $ | 62,635,207 |
Income from continuing operations |  | $ | 6,495,083 |  |  | $ | 4,837,758 |
Net income |  | $ | 6,495,083 |  |  | $ | 4,837,758 |
Basic net income per common share |  | $ | 0.24 |  |  | $ | 0.18 |
Diluted net income per common share |  | $ | 0.24 |  |  | $ | 0.18 |
The purchase price allocation of the Avail transaction is listed below and is considered to be a preliminary allocation and is subject to change. The preliminary purchase price 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 |  |  | 3,708,272 |
Total Purchase Price |  | $ | 4,716,988 |

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