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Acquisitions

3 Months Ended

Mar. 31, 2018

On February 8, 2017, the Company acquired substantially all of the assets of NextGen in exchange for $750,000 in cash, plus 1,523,809 unregistered shares of Class B Common Stock of the Company, which were issued at a negotiated fair value of $1.75 per share and a subordinated secured promissory note issued by the Company in favor of NextGen in the amount of $1,333,334 (the “NextGen Note”). The NextGen Note matures on the third anniversary of the closing date (the “Maturity Date”). During the fourth quarter of 2017, the Company finalized the preliminary purchase price allocation recorded at the acquisition date and made a measurement period adjustment to the preliminary purchase price allocation which included:(i) an increase to technology development of $1,500,000; (ii) a decrease in goodwill of $1,390,000; (iii) a decrease to customer contracts of $10,000; and (iv) a decrease to non-compete agreements of $100,000. The measurement period adjustment would have resulted in a $38,750 net increase in accumulated amortization and amortization expense previously recorded for the three-months ended March 31, 2017. This measurement period adjustment is reflected in the table below. The Company made these measurement period adjustments to reflect facts and circumstances that existed as of the acquisition date and did not result from intervening events subsequent to such date.

The following table presents the purchase price consideration:

	Preliminary Purchase Price Allocation			Cumulative Measurement Period Adjustment			Final Purchase Price Allocation
Net tangible assets acquired:

Technology development	$	1,400,000		$	1,500,000		$	2,900,000

Customer contracts		10,000			(10,000	)		-

Non-compete agreements		100,000			(100,000	)		-

Tangible assets acquired		1,510,000			1,390,000			2,900,000

Goodwill		3,240,000			(1,390,000	)		1,850,000

Total purchase price		4,750,000			-			4,750,000

Less: Issuance of shares		(2,666,666	)		-			(2,666,666	)

Less: Debt issued		(1,333,334	)		-			(1,333,334	)

Cash paid	$	750,000			-		$	750,000