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

Note 4 – Business Combinations

 

On December 31, 2021, the Company completed its acquisitions of Advanced Conceptions, Inc. (“ACI”) and Idaho Molecular, Inc. (“IdMo”), which were related entities developing, with the Company, an at-home/point-of-care medical diagnostic device. Upon the completion of the acquisition, all outstanding ACI and IdMo common stock was initially exchanged for approximately 3.2 million shares of the Company’s common stock and contingent consideration that includes up to approximately 1.4 million shares and approximately 456,000 warrants to purchase shares of the Company’s common stock. The contingent consideration is based on the achievement of certain milestones, which include regulatory approval for identified products, as well as production and net revenue targets. Upon the completion of the acquisition, both ACI and IdMo became 100% wholly-owned subsidiaries of the Company.

 

The fair value of assets acquired and liabilities assumed was based on a preliminary valuation, with estimates and assumptions subject to change within the measurement period. During 2022, the Company finalized negotiations that were ongoing as of December 31, 2021 with one remaining shareholder of ACI, which resulted in an increase to the purchase consideration of $580,135. Additionally, there was an increase of $101,593 in the estimated tax liabilities that resulted from the acquisition. Due to the change in purchase consideration and estimated tax liabilities, a measurement period adjustment was recorded, resulting in an increase to goodwill of $681,728.

 

Following the resolution with the remaining shareholder, the total number of shares exchanged as purchase consideration was approximately 3.3 million shares. Additionally, the updated purchase consideration includes contingent consideration of up to approximately 1.4 million shares and 465,000 warrants to purchase shares of the Company’s common stock.

 

In addition, the adjustments to the provisional purchase consideration amount resulted in an increase in the gain on remeasurement of acquisition contingencies of $78,617.

 

 

The total purchase consideration, including adjustment during the measurement period, was allocated to the assets acquired and liabilities assumed as set forth below:

 

   Amounts Recognized as of Acquisition Date (as previously reported)   Measurement Period Adjustments   Amounts Recognized as of Acquisition Date (as adjusted) 
Purchase Consideration               
Fair value of common shares issued  $25,160,223   $480,776   $25,640,999 
Payable to shareholder   100,000    (100,000)   - 
Fair value of contingent shares   8,684,669    165,957    8,850,626 
Fair value of contingent warrants   1,747,972    33,402    1,781,374 
Total fair value of consideration transferred  $35,692,864   $580,135   $36,272,999 
                
Identifiable assets acquired and liabilities assumed               
Cash  $1,196,243   $-   $1,196,243 
Accounts receivable   31,170    -    31,170 
Prepaid expenses and other current assets   70,321    -    70,321 
Property and equipment   408,173    -    408,173 
Technology - In-process research and development   26,101,000    -    26,101,000 
Non-competition agreements   1,094,000    -    1,094,000 
Accounts payable and accrued other expenses   (1,069,274)   (101,593)   (1,170,867)
Deferred tax liability   (6,845,587)   -    (6,845,587)
Total identifiable net assets   20,986,046    (101,593)   20,884,453 
Goodwill   14,706,818    681,728    15,388,546 
Total  $35,692,864   $580,135   $36,272,999 

 

The in-process research and development is considered an indefinite-lived intangible until the completion or abandonment of the research and development activities. The non-competition agreements are being amortized over a range of 1.5 to 3 years.