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Business Acquisitions
 12 Months Ended
Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract]  
Business Acquisitions

4. Business Acquisitions

 

On April 1, 2022, we entered into an asset purchase agreement to acquire substantially all of the assets of Yellow Folder. The acquisition was accounted for in accordance with GAAP and was made to expand our market share in the digital transformation industry and due to synergies of product lines and services between the Companies.

 

The purchase price has been preliminarily allocated to assets acquired and liabilities assumed based on the estimated fair value of such assets and liabilities at the date of acquisitions as follows:

 

      
Assets acquired:     
Accounts receivable  $68,380 
Prepaid expenses   38,913 
Property and equipment   30,018 
Intangible assets (see Note 5)   3,888,000 
Assets   4,025,311 
Liabilities assumed:     
Accounts payable   36,446 
Deferred revenue   1,072,530 
Liabilities   1,108,976 
      
Total identifiable net assets   2,916,335 
      
Purchase price   6,383,269 
      
Goodwill - Excess of purchase price over fair value of net assets acquired  $3,466,934 

 

The purchase price of $6,383,269 was paid in cash. Goodwill in the amount of $3,466,934 was recognized in the acquisition of Yellow Folder and is attributable to the cash flows of the business derived from our potential to outperform the market due to its existing relationship and other synergies created within the Company.

 

Acquisition costs which include legal and other professional fees of $355,281 for the twelve months ended December 31, 2022, were expensed as nonrecurring transaction costs and are included in transaction costs in the accompanying consolidated statements of operations.

 

The following unaudited pro forma information presents a summary of the consolidated results of operations for the Company as if the acquisition of Yellow Folder had occurred on January 1, 2021.

 

           
   For the twelve months ended 
   (unaudited)   (unaudited) 
   December 31, 2022   December 31, 2021 
Total revenues  $14,794,780   $14,273,739 
           
Net income  $58,543   $1,316,854 
           
Basic net income per share  $0.01   $0.32 
Diluted net income per share  $0.01   $0.29 

 

The unaudited pro forma consolidated results are based on our historical financial statements and those of Yellow Folder and do not necessarily indicate the results of operations that would have resulted had the acquisition actually been completed at the beginning of the applicable period presented. The pro forma financial information assumes that the companies were combined as of January 1, 2021.

 

 

 

The following tables present the amounts of revenue and earnings of Yellow Folder since the acquisition date included in the consolidated income statement for the reporting period.

 

   For the twelve months ended 
   December 31, 2022 
Yellow Folder:     
Total revenues  $2,460,474 
Net income  $520,186