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NOTE 4 - ACQUISITION

9 Months Ended

Sep. 30, 2020

NOTE 4 - ACQUISITION

On April 15, 2020, we entered into a Company Acquisition Agreement (the “Agreement”) with Francisco Bunt regarding the acquisition of 51% of the shares in loT Labs. The Company’s principal business activity is the sale of Short Messages (SMS) between USA and Mexico.

We have agreed to pay a total of $180,000 for the 51% interest in the Company. The consideration shall occur with an installment of $60,000 on the date of the execution of the Agreement, followed by a second payment of $60,000 at closing and a final payment of $60,000 that is set to occur 60 days following the closing date. Under the Agreement, Mr. Bunt has the right to request that any of the aforementioned payments be made in shares of our common stock, which the parties have agreed to value at $2.00 per share. The shares are subject to adjustment after 180 days and up to 360 days after issuance if our stock trades at less than $2.00 per share. The Agreement provides for a right of return to Mr. Bunt of the shares in the Company if we fail to make timely payments.

The following table summarizes the fair value of the consideration paid by the Company and the fair value amounts assigned to the assets acquired on the acquisition date:

		April 15,
		2020
Fair Value of Consideration:
Cash	$	180,000
Total Purchase Price	$	180,000

loT Labs has been included in our consolidated results of operations since the acquisition date.

The following table summarizes the identifiable assets acquired and liabilities assumed upon acquisition of IoT Labs and the calculation of goodwill:

Total purchase price	$	180,000
Cash		135,781
Other current assets		953
Property and equipment		34,075
Intangible asset		21,875
Total identifiable assets		192,684
Accounts payable		(100)
Total liabilities assumed		(100)
Net assets		192,584
Non-controlling interest		94,366
Total net assets		98,218
Goodwill	$	81,782

Unaudited combined proforma results of operations for the nine months ended September 30, 2020 and 2019 as though the Company acquired loT Labs on January 1, 2019, are set forth below:

	Nine Months Ended
	September 30,
	2020		2019
Revenues	$	40,313,358	$	32,007,532
Cost of revenues		39,418,379		31,354,143
Gross profit		894,979		653,389

Operating expenses		3,211,867		40,313,358
Operating loss		(2,316,888)		39,418,379

Other expense		(1,044,813)		(4,590,259)
Net Loss	$	(3,361,701)	$	(5,004,853)