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2. Acquisitions | 12 Months Ended
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Dec. 31, 2020
Business Combinations [Abstract] |
Acquisitions | On July 15, 2019, Command Center completed its acquisition of Legacy HQ . Upon the closing of the Merger, all of the membership interests in Hire Quest Holdings, LLC were converted into the right to receive 68% of the Company’s common stock outstanding immediately after the closing, or 9,939,668 shares. We accounted for the Merger as a reverse acquisition. As such, Legacy HQ is considered the accounting acquirer and Legacy HQ's historical financial statements replace Command Center’s historical financial statements following the completion of the Merger. The results of operations of the combined company are included in our financial statements for all periods beginning July 15, 2019. The fair value of the purchase consideration is calculated based on the Company's stock price on the NASDAQ exchange as it is considered to be more reliable than the fair value of the membership interests a private company, Legacy HQ. Consideration is calculated based on the Company's closing share price of $5.76 on July 15, 2019. The following table summarizes the estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date:
Closing share price on July 15, 2019 |  | $ | 5.76 |
Common stock |  |  | 4,677,487 |
Stock consideration |  | $ | 26,942,325 |
Accounts receivable |  | $ | 10,480,907 |
Cash and cash equivalents |  |  | 5,376,543 |
Identifiable intangible assets |  |  | 17,015,857 |
Other current assets |  |  | 725,453 |
Property, plant and equipment, net |  |  | 281,186 |
Right-of-use asset |  |  | 1,642,695 |
Current liabilities |  |  | (3,124,081 | )
Lease liabilities |  |  | (1,624,461 | )
Deferred tax liability |  |  | (2,930,947 | )
Other liabilities |  |  | (900,827 | )
Purchase price allocation |  | $ | 26,942,325 |
The following table presents the unaudited pro forma information assuming the Merger occurred on January 1, 2018. The unaudited pro forma information is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place on that date.
|  | Year ended
|  | December 31, 2020 |  | December 31, 2019
Royalty revenue |  | $ | 12,792,793 |  |  | $ | 16,176,219 |
Net income |  |  | 5,359,414 |  |  |  | 5,090,045 |
Basic earnings per share |  | $ | 0.40 |  |  | $ | 0.38 |
Basic weighted average shares outstanding |  |  | 13,542,403 |  |  |  | 13,294,201 |
Diluted earnings per share |  | $ | 0.39 |  |  | $ | 0.38 |
Diluted weighted average shares outstanding |  |  | 13,654,128 |  |  |  | 13,294,736 |

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: 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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