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Business Combinations | 12 Months Ended
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Dec. 31, 2023
Business Combinations [Abstract] |
BUSINESS COMBINATIONS |
3. | BUSINESS COMBINATIONS
Fiscal year 2022 acquisitions: During the year ended December 31, 2022, the Company acquired four subsidiaries from Mr. Tu Jingyi, a related party. These acquisitions have been accounted for in accordance with IFRS 3 guidelines under acquisition accounting, whereby the Company recognized the assets and liabilities transferred at their carrying amounts with carry-over basis. A Purchase Price Allocation exercise has been undertaken to establish the constituent parts of the acquired companies’ balance sheet at fair value on acquisition. As is customary in these circumstances, this will remain under review and subject to change during the twelve-month hindsight period.
| (i) | On March 22, 2022, the Company closed an acquisition of Shenzhen GFAI and Guangzhou GFAI. A total of $1,000,000 cash was paid and 2,142,852 shares were issued and valued at the $1.22 per share in consideration of 100% of the equity interest in both companies. As a result of the 2023 share consolidation, the share consideration became a total of 53,571 shares issued, valued at $48.8 per share.
The following represents the purchase price allocation at the date of the acquisition:
|  | March 22, 2022 |
Cash and cash equivalents |  | $ | 2,187 |
Trade and other receivables |  |  | 896,327 |
Inventories |  |  | 1,411,893 |
Other current assets |  |  | 85,338 |
Other non-current assets |  |  | 23,566 |
Property, plant and equipment |  |  | 2,055,610 |
Intangible assets |  |  | 1,592,783 |
Trade and other payables |  |  | (4,156,649 | )
Other current liabilities |  |  | (163,785 | )
Goodwill |  |  | 1,867,009 |
Total purchase price |  | $ | 3,614,279 |
The total revenue included in the Consolidated Statement of Profit or Loss for the year ended December 31, 2022 since the acquisition date contributed by Shenzhen GFAI and Guangzhou GFAI was $661,839. Total net loss for the year ended December 31, 2022 incurred by Shenzhen GFAI and Guangzhou GFAI since the acquisition date was $3,306,084. Had Shenzhen GFAI and Guangzhou GFAI been consolidated from January 1, 2022, the Consolidated Statement of Profit or Loss for the year ended December 31, 2022 would show total revenue from Shenzhen GFAI and Guangzhou GFAI of $952,358 and total net loss from Shenzhen GFAI and Guangzhou GFAI of $3,746,740. During the year ended December 31, 2023, the Company recorded a goodwill impairment loss on Shenzhen GFAI and Guangzhou GFAI of $1,867,009. No impairment loss on goodwill was recorded on Shenzhen GFAI and Guangzhou GFAI for the years ended December 31, 2023, 2022.
| (ii) | On June 22, 2022, the Company closed the acquisition of Beijing Wanjia. A total of $840,000 cash was paid and 3,780,000 shares were issued and valued at $0.52 per share in consideration of 100% of the equity interest in Beijing Wanjia. As a result of the 2023 share consolidation, the share consideration became a total of 94,500 shares issued, valued at $20.8 per share.
The following represents the purchase price allocation at the date of the acquisition:
|  | June 22, 2022 |
Cash and cash equivalents |  | $ | 38,342 |
Trade and other receivables |  |  | 1,656,550 |
Inventories |  |  | 562,768 |
Property, plant and equipment |  |  | 20,488 |
Intangible assets |  |  | 1,593,398 |
Other non-current assets |  |  | 203,765 |
Trade and other payables |  |  | (1,536,547 | )
Other current liabilities |  |  | (145,026 | )
Goodwill |  |  | 411,862 |
Total purchase price |  | $ | 2,805,600 |
The total revenue included in the Consolidated Statement of Profit or Loss for the year ended December 31, 2022 since the acquisition date contributed by Beijing Wanjia was $1,785,789. Total net loss for the year ended December 31, 2022 incurred by Beijing Wanjia since the acquisition date was $204,127. Had Beijing Wanjia been consolidated from January 1, 2022, the Consolidated Statement of Profit or Loss for the year ended December 31, 2022 would show revenue from Beijing Wanjia of $3,255,081 and net loss from Beijing Wanjia of $544,673. No impairment loss on goodwill was recorded on Beijing Wanjia for the years ended December 31, 2023 and 2022.
| (iii) | On January 20, 2022, the Company closed an acquisition to obtain 100% equity interest in AI Malaysia. The consideration is approximately $1 (RM1).
The following represents the purchase price allocation at the date of the acquisition:
|  | January 20, 2022 |
Cash and cash equivalents |  | $ | 12,500 |
Current liabilities |  |  | (13,184 | )
Goodwill |  |  | 685 |
Total purchase price |  | $ | 1 |
The revenue included in the Consolidated Statement of Profit or Loss for the year ended December 31, 2022 since the acquisition date contributed by AI Malaysia was $nil. Net loss incurred by AI Malaysia was $242,075 over the same period. Had AI Malaysia been consolidated from January 1, 2022, the Consolidated Statement of Profit or Loss for the year ended December 31, 2022 would show revenue from AI Malaysia of $nil and net loss from AI Malaysia of $242,075. During the year ended December 31, 2023, the Company recorded impairment loss on AI Malaysia of $685. No impairment loss on goodwill was recorded on AI Malaysia for the years ended December 31, 2022 and 2021.
| (iv) | On February 9, 2022, the Company closed an acquisition to obtain 100% equity interest in AI Macau. The consideration is approximately $3,205 (MOP25,000).
The following represents the purchase price allocation at the date of the acquisition:
|  | February 9, 2022 |
Cash and cash equivalents |  | $ | 21,038 |
Other current assets |  |  | 4,162 |
Current liabilities |  |  | (92,350 | )
Goodwill |  |  | 70,355 |
Total purchase price |  | $ | 3,205 |
AI Macau acts as an agent-only subsidiary company, operating solely and for all purposes as the agent of AI Hong Kong for the deployment of robots and thus, AI Macau has no independent revenue of its own. During the year ended December 31, 2023, the Company recorded a goodwill impairment loss on AI Macau of $70,355. No impairment loss on goodwill was recorded on AI Macau for the years ended December 31, 2022 and 2021. Fiscal year 2021 acquisitions: During the year ended December 31, 2021, the Company acquired two subsidiaries, these acquisitions have been accounted for in accordance with IFRS 3 guidelines under acquisition accounting, whereby the Company recognized the assets and liabilities transferred at their carrying amounts with carry-over basis. A Purchase Price Allocation exercise has been undertaken to establish the constituent parts of the acquired companies’ balance sheet at fair value on acquisition. As is customary in these circumstances, this will remain under review and subject to change during the twelve-month hindsight period.
| (i) | On February 4, 2021, the Company announced the acquisition of a majority stake in information security consultants Handshake Networking Ltd. (“Handshake”), a Hong Kong-based company specializing in penetration testing. A total of 43,700 shares were issued and valued at $7.50 per share in consideration of 51% of Handshake. As a result of the 2021 and 2023 share consolidation, consideration became a total of 1,091 shares issued, valued at $300 per share. The acquisition was closed on March 25, 2021.
Accordingly, the acquisition has been accounted for in accordance with IFRS 3 guidelines under acquisition accounting, whereby the Company recognized the assets and liabilities of Handshake transferred at their carrying amounts with carry-over basis. The following represents the purchase price allocation at the date of the acquisition:
|  | March 25, 2021 |
Cash and cash equivalents |  | $ | 24,276 |
Other current assets |  |  | 32,250 |
Current liabilities |  |  | (58,297 | )
Goodwill |  |  | 329,534 |
Total purchase price |  | $ | 327,763 |
The revenue included in the Consolidated Statement of Profit or Loss for the year ended December 31, 2021 since the acquisition date contributed by Handshake Networking Ltd was $484,318. Handshake Networking Limited also contributed net profit of $39,787 over the same period. Had Handshake been consolidated from January 1, 2021, the Consolidated Statement of Profit or Loss for the year ended December 31, 2021 would show revenue from Handshake of $559,934 and net loss from Handshake of $72,325. During the year ended December 31, 2023, the Company recorded a goodwill impairment loss on Handshake of $329,534. No impairment loss on goodwill was recorded on Handshake for the years ended December 31, 2022 and 2021.
| (ii) | On November 1, 2021, the Company entered into a Transfer Agreement (the “Agreement”) to acquire 100% of the equity interests in Guardforce AI Singapore Pte. Ltd., a company incorporated in Singapore (“AI Singapore”). AI Singapore was controlled by Mr. Tu Jingyi and Mr. Tu Jingyi was the majority shareholder of Guardforce before the acquisition was completed.
The Company recorded assets and liabilities recognized as a result of transactions between entities under common control at the carrying value on the transferor’s financial statements to reflect the results for the full year 2021, irrespective of transaction date. The following represents their assets and liabilities:
|  | December 31, 2021 |
Cash and cash equivalents |  | $ | 28,148 |
Other current assets |  |  | 11,973 |
Current liabilities |  |  | (68,882 | )
Loss for the year |  |  | 16,041 |
Additional paid in capital |  | $ | (12,720 | )

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