Acquisitions

12 Months Ended

Dec. 31, 2020

American Electric. On July 26, 2019, we completed a Share Exchange with American Electric and its subsidiaries and began operating under the name Stabilis Energy, Inc., since changed to Stabilis Solutions, Inc. Because the former owners of Stabilis LLC owned 88.4% of the voting stock of the combined company immediately following the Effective Date and certain other factors, including that directors designated by LNG Investment, parent of Stabilis LLC, constituted a majority of the board of directors, Stabilis is treated as the acquiror of American Electric in the Share Exchange for accounting purposes. As a result, the Share Exchange is treated by American Electric as a reverse acquisition under the purchase method of accounting in accordance with US GAAP.

The aggregate consideration paid in connection with the Share Exchange was allocated to American Electric’s tangible and intangible assets and liabilities based on their fair values at the time of the completion of the Share Exchange. The assets and liabilities and results of operations of American Electric are consolidated into the results of operations of Stabilis as of the completion of the Share Exchange.

The total purchase price of the Share Exchange is as follows:


Number of shares of the combined company to be owned by American Electric stockholders	1,466,092
Multiplied by the fair value per share of American Electric Common Stock	$	7.12
Cash	$	650,000
Purchase price	$	11,088,573

The number of shares of American Electric common stock includes the 1,173,914 outstanding as of July 26, 2019, 276,549 shares issued prior to the completion of the Share Exchange for conversion of 1,000,000 shares of outstanding Series A Convertible Preferred Stock and 15,629 shares related to restricted stock units and deferred shares. The fair value of American Electric common stock used in determining the purchase price was $7.12 per share based on the closing price of American Electric’s common stock on July 26, 2019.

Consistent with the purchase method of accounting, the total purchase price is allocated to the acquired tangible and intangible assets and assumed liabilities of American Electric based on their estimated fair values as of the Share Exchange closing date. The excess of the purchase price over the fair value of the acquired assets and liabilities assumed is reflected as goodwill and is attributable to strategic advantages gained from the acquisition of a public entity with access to LNG markets in Brazil and China. All of the goodwill is assigned to the Power Delivery segment and is not expected to be deductible for income tax purposes.

The allocation of the purchase price for the acquired assets and liabilities of American Electric is as follows (in thousands):


Total purchase price	$	11,089
Current Assets	3,611
Property, plant and equipment, net	532
Investment in foreign joint venture	9,333
Other noncurrent assets	410
Total identifiable assets	13,886
Accounts payable and other accrued expenses	(2,714)
Accrued liabilities and other current liabilities	(138)
Other Liabilities	(84)
Total liabilities assumed	(2,936)
Goodwill	$	139

The following table presents summarized results of operations of American Electric for the period from July 26, 2019 to December 31, 2019 and are included in the accompanying Consolidated Statement of Operations for the year ended December 31, 2019.


	July 27 - December 31,
	2019
Revenue	$	3,421
Income before income tax expense	769
Net income from continuing operations	691

The following table presents unaudited pro forma results of operations reflecting the acquisition of American Electric as if the acquisition had occurred as of January 1, 2019. This information has been compiled from current and historical financial statements and is not necessarily indicative of the results that actually would have been achieved had the transaction occurred at the beginning of the periods presented or that may be achieved in the future.


	Years Ended December 31,
	2019
Revenue	$	50,898

Net loss	(7,389)

Diversenergy, LLC (“Diversenergy"). On August 20, 2019 (the "acquisition date"), we completed our acquisition of privately held Diversenergy and its subsidiaries. We purchased all of the issued and outstanding membership interests of Diversenergy for total consideration of 684,963 shares of Company common stock valued at $3.0 million as of the closing date and $2.0 million in cash, subject to adjustments for Diversenergy’s net working capital as of the closing date. Diversenergy specializes in virtual LNG distribution systems, providing LNG to customers who use it as a fuel in mobile high horsepower applications and to customers who do not have natural gas pipeline access. The completion of the acquisition will expand the Company's presence in the distributed LNG and compressed natural gas (“CNG”) markets in Mexico.

Consistent with the purchase method of accounting, the total purchase price is allocated to the acquired tangible and intangible assets and assumed liabilities of Diversenergy based on their estimated fair values as of the closing date. The excess of the purchase price over the fair value of the acquired assets and liabilities assumed is reflected as goodwill and is attributable to the strategic opportunities to grow the Company's LNG and CNG business in Mexico. All of the goodwill is assigned to the LNG segment and is not expected to be deductible for income tax purposes.

The aggregate consideration paid in connection with the acquisition has been allocated to Diversenergy's tangible and intangible assets and liabilities based on their fair market values at the time of the completion of the acquisition. The assets and liabilities and results of operations of Diversenergy are consolidated into the results of operations of Stabilis as of the acquisition date.

The total purchase price of the Diversenergy acquisition is as follows:


Number of shares issued to Diversenergy stockholders	684,963
Multiplied by the fair value per share of Stabilis Common Stock	$	4.38
Cash	$	2,000,000
Purchase price	$	5,000,000

The following table summarizes the allocation of the purchase price to the fair value of the respective assets and liabilities acquired (in thousands). The purchase price allocations are subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed. Any measurement period adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition.


Total purchase price	$	5,000
Current Assets	164
Property, plant and equipment, net	507

Other noncurrent assets	114
Total identifiable assets	785

Current liabilities	(99)

Total liabilities assumed	(99)
Goodwill	$	4,314

Pro forma results of operations reflecting the Diversenergy acquisition as if it occurred as of the beginning of the periods presented in this report do not materially differ from actual reported results.