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Acquisition | 3 Months Ended
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Mar. 31, 2021
Business Combinations [Abstract] |
Acquisition | 3. Acquisition On October 19, 2020, we acquired substantially all of the assets of Green Remedies (the “Green Remedies Assets”) pursuant to the Asset Purchase Agreement (the “Asset Purchase Agreement”), dated as of October 19, 2020, among the Company, Green Remedies and Alan Allred (the “Acquisition”). Green Remedies is a leading provider of independent environmental services, particularly in the multi-family housing market, and is located in Burlington, NC. The Acquisition strengthens our presence across key markets, particularly in multi-family housing. The total purchase price for the Green Remedies Assets was approximately $16.1 million at close, which includes an earn out estimate tied to future performance over the next three years. We funded the Acquisition primarily with funds pursuant to the Monroe Capital term note, as further discussed in Note 7, which is secured by a first priority lien on substantially all of QRHC’s tangible and intangible assets. The following table sets forth the purchase price allocation amount of assets acquired and liabilities assumed as of the acquisition date:
Purchase price allocation: |  |  |  |
Accounts receivable, net |  |  | 1,331,190 |
Machinery and equipment |  |  | 1,270,705 |
Intangible assets |  |  | 5,890,000 |
Goodwill |  |  | 8,101,895 |
Current liabilities |  |  | (527,907 | )
|  | $ | 16,065,883 |
The purchase price was allocated based on an estimate of the fair value of assets acquired and liabilities assumed as of the acquisition date. Goodwill represents the amount by which the purchase price exceeds the estimated fair value of the net assets acquired and primarily reflects future synergies. The goodwill related to the Green Remedies Assets is deductible for income tax purposes. Deferred consideration payable to the seller includes $2,684,250 payable in either cash or shares of our common stock at our option, and an earn-out not to exceed $2,250,000 over an earn-out period, as defined in the Asset Purchase Agreement. We valued the earn-out liability at $440,000 using a Monte Carlo simulation (a Level 3 measurement under Accounting Standards Codification (“ASC”) 820, Fair Value Measurement). The fair value estimate uses unobservable inputs that reflect our own assumptions as to the performance target benchmarks of the acquired business and discount rates used in the calculation. As the earn-out liability is a contingent consideration arrangement, it is subject to periodic revaluation in accordance with ASC 820. Changes in the estimated fair value of the contingent earn-out consideration would be reflected in our results of operations in the period in which they are identified. We believe the estimated fair value of the earn-out, based on the evaluation of the performance of the acquired business is materially accurate as of March 31, 2021. The following table presents unaudited pro forma information for the three months ended March 31, 2020 as if the Acquisition had occurred at the beginning of our 2020 fiscal year. The unaudited pro forma information includes adjustments for amortization expense on definite lived intangible assets acquired, interest expense on debt incurred related to the Acquisition, and the related income tax effects. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the Acquisition had been effected on the dates previously set forth, nor is it indicative of the future operating results or financial position in combination.
|  | Three months ended |
|  | March 31, 2020 |
|  | (unaudited) |
Revenue |  | $ | 28,211,053 |
Net loss |  | $ | (329,717 | )
Loss per share - basic and diluted |  | $ | (0.02 | )

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: 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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