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Business Acquisitions
 3 Months Ended
Mar. 31, 2023
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.

 

The following unaudited pro forma information presents a summary of the condensed consolidated results of operations for the Company as if the acquisition of Yellow Folder had occurred on January 1, 2022.

 

   March 31, 2023   March 31, 2022 
   For the three months ended 
   (unaudited)   (unaudited) 
   March 31, 2023   March 31, 2022 
Total revenues  $4,186,833   $3,481,413 
           
Net income  $112,563   $14,440 
           
Basic net income per share  $0.03   $0.00 
Diluted net income per share  $0.03   $0.00 

 

The unaudited pro forma condensed 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, 2022.

 

 

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

 

   For the three months ended 
   March 31, 2023 
Yellow Folder:     
Total revenues  $874,562 
Net income  $185,702