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ACQUISITIONS AND DISPOSITIONS | 9 Months Ended
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Sep. 30, 2023
Acquisitions And Dispositions |
ACQUISITIONS AND DISPOSITIONS | NOTE 3 – ACQUISITIONS AND DISPOSITIONS Acquisitions - Provisional Superlatus, Inc. On July 31, 2023, the Company entered into the Merger Agreement (see Note 1) with Superlatus (“Seller”) whereby the Company acquired 100% of the stock of the Seller (the “Acquisition”). Superlatus includes a wholly-owned subsidiary, Sapientia. Consideration for the Acquisition consisted of (i) 136,441 shares of the Company’s common stock at a fair value of $7.30 per share, representing 19.99% of the total issued and outstanding share of the Company’s common stock at Closing, and (ii) 306,855 shares of the Company’s Series B Preferred Stock, a new class of the Company’s non-voting convertible preferred stock with a conversion ratio of 100 to one. The total fair value of the common stock and Series B Preferred Stock on the Closing Date was $225,000,169 (“Purchase Price”). On January 8, 2024, the Company entered into Amendment No. 1 to the Agreement and Plan of Merger (the “Amendment”). Under the terms of the Amendment, the merger consideration to the shareholders of Superlatus was adjusted to an aggregate of 136,441 shares of common stock of the Company, representing 19.99% of the total issued and outstanding common stock of the Company after the consummation of the Merger and 15,759 shares of Company’s Series B Preferred Stock, par value $0.00001 per share, with a conversion ratio of 100 shares of Series B Preferred Stock to one share of common stock. The total fair value of the common stock and Series B Preferred Stock on the Closing Date was adjusted to $12,500,089 (“Amended Purchase Price”). Additionally, the shareholders of Superlatus agreed to surrender back to the Company 289,731 shares of the Company’s Series B Preferred Stock previously received before the amendment. The acquisition of Superlatus was accounted for as a business combination using the acquisition method pursuant to FASB ASC Topic 805. As the acquirer for accounting purposes, the Company had estimated the Purchase Price, assets acquired and liabilities assumed as of the acquisition date, with the excess of the Purchase Price over the fair value of net assets acquired recognized as goodwill. An independent valuation expert assisted the Company in determining these fair values. Accounting guidance provides that an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period, which runs through July 31, 2024, in the measurement period in which the adjustment amounts are determined. The acquirer must record in the financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the changes to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Items that could be subject to adjustment include credit fair value adjustments on loans, core deposit intangible and the deferred income tax assets resulting from the acquisition. The provisional Amended Purchase Price allocation as of the acquisition date is presented as follows: SCHEDULE OF PURCHASE PRICE ALLOCATION
|  | July 31, 2023 |
Purchase consideration: |  |  |  |
Common Stock, at fair value |  | $ | 996,019 |
Series B Preferred Stock, at fair value |  |  | 11,504,070 |
Total purchase consideration |  | $ | 12,500,089 |
Purchase price allocation: |  |  |  |
Cash |  | $ | 5,546 |
Prepaid expenses |  |  | 3,705 |
Inventory |  |  | 122,792 |
Intangible assets, net |  |  | 9,777,478 |
Goodwill |  |  | 5,129,116 |
Assets acquired |  |  | 15,038,637 |
Accounts payable and other current liabilities |  |  | (633,548 | )
Notes payable |  |  | (1,905,000 | )
Liabilities assumed |  |  | (2,538,548 | )
Net assets acquired |  | $ | 12,500,089 |
The Urgent Company, Inc. On September 27, 2023, the Company entered into an Asset Purchase Agreement (“APA”) with The Urgent Company, Inc. (“TUC”) and its wholly owned subsidiaries, pursuant to which, the Company was assigned certain inventory and property and equipment and assumed certain operating leases for consideration of a $3,150,000 promissory note (“Purchase Price”, see Note 11). This acquisition is expected to enhance the Company’s production of sustainable food products and enable the expansion of market share. The transaction was accounted for as an asset acquisition pursuant to FASB ASC Topic 805. As the acquirer for accounting purposes, the Company allocated the cost of the asset acquisition to the assets acquired and liabilities assumed as of the acquisition date based on their respective relative fair value as of the date of the transaction. The following summarizes the provisional relative fair values of the assets acquired as of the acquisition date based on the allocation of the cost of the asset acquisition: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED
|  | September 27, 2023 |
Purchase consideration: |  |  |  |
Promissory note |  | $ | 3,150,000 |
Total purchase consideration |  | $ | 3,150,000 |
Allocation of cost of assets acquired: |  |  |  |
Inventory |  | $ | 2,960,235 |
Property and equipment |  |  | 231,170 |
Operating right-of-use assets |  |  | 383,218 |
Assets acquired |  |  | 3,574,623 |
Liabilities assumed |  |  | (424,623 | )
Net assets acquired |  | $ | 3,150,000 |
Dispositions and Divestitures SOSRx, LLC On and effective on, February 1, 2023, the Company, Exchange Health and SOSRx, entered into a Voluntary Withdrawal and Release Agreement, which was replaced in its entirety, corrected, and became effective on February 4, 2023 (as replaced and corrected, the “Release Agreement”). As part of the Release Agreement, a note payable to Exchange Health was forgiven in the amount of $500,000 and $15,000 in accounts payable was waived. Effective February 4, 2023, the operations of SOSRx were discontinued and operations were shut down. As a result of this, the assets and liabilities of SOSRx have been reflected as assets and liabilities of discontinued operations in the Company’s consolidated balance sheets. As of September 30, 2023 and December 31, 2022 as follows: SCHEDULE OF FINANCIAL STATEMENTS OF DISCONTINUED OPERATIONS
|  | September 30, 2023 |  |  | December 31, 2022 |
Cash |  | $ | - |  |  | $ | 22,474 |
Accounts receivable |  |  | - |  |  |  | 363 |
Total assets of discontinued operations |  | $ | - |  |  | $ | 22,837 |
Accounts payable |  | $ | - |  |  | $ | 46,500 |
Total liabilities of discontinued operations |  | $ | - |  |  | $ | 46,500 |
The terms of the Release Agreement qualifies the transaction as a discontinued operation in accordance with U.S. GAAP. As a result, operating results and cash flows related to the SOSRx operations have been reflected as discontinued operations in the Company’s consolidated statements of operations, consolidated statements of cash flows and consolidated statements of shareholders’ equity. Alliance Pharma Solutions, LLC and Community Specialty Pharmacy, LLC On August 22, 2023, the Company and Wood Sage, LCC (“Wood Sage”) entered into a Membership Interest Purchase Agreement, pursuant to which the Company sold 100% of the membership interest in Alliance Pharma Solutions, LLC (“ASP MIPA”) for consideration of a $125,000 promissory note (“ASP Sale Price”) and a Membership Interest Purchase Agreement, pursuant to which the Company sold 100% of the membership interest in Community Specialty Pharmacy, LLC (“CSP MIPA”) in exchange for a $100,000 promissory note (“CSP Sale Price”). The divestiture of APS and CSP represents an intentional strategic shift in the Company’s operations and will allow the Company to become focused on food technology As a result, the results of APS and CSP were classified as discontinued operations in our condensed statements of operations and excluded from both continuing operations and segment results for the three and nine months ended September 30, 2022. As part of recognizing the business as held for sale in accordance with U.S. GAAP, the Company was required to measure APS and CSP at the lower of its carrying amount or fair value less cost to sell. As a result of this analysis, during the three and nine months ended September 30, 2023, the Company recognized a non-cash, pre-tax loss on disposal of $3,209,776. The loss is included in “Net loss from discontinued operations” in the consolidated statements of operations. The loss was determined by comparing the fair value of the consideration received for the sale of a 100% interest in APS and CSP with the net assets of APS and CSP, respectively, immediately prior to the transaction. As a result of the transactions, the following assets and liabilities of APS and CSP were transferred to Wood Sage as of August 22, 2023: SCHEDULE OF ASSETS AND LIABILITIES
|  | Alliance Pharma Solutions, LLC |  |  | Community Specialty Pharmacy, LLC |
Cash |  | $ | 1,050 |  |  | $ | 61,988 |
Accounts receivable, net |  |  | - |  |  |  | 11,452 |
Inventory |  |  | - |  |  |  | 123,230 |
Prepaid assets |  |  | - |  |  |  | 525 |
Intangible assets and capitalized software, net |  |  | 739,337 |  |  |  | - |
Accounts payable |  |  | (23,982 | ) |  |  | (231,876 | )
Accrued liabilities |  |  | - |  |  |  | (10,182 | )
Net assets sold |  | $ | 716,405 |  |  | $ | (44,863 | )
Discontinued Operations The results of operations from discontinued operations for the three and nine months ended September 30, 2023 and 2022, have been reflected as discontinued operations in the consolidated statements of operations and consist of the following: SCHEDULE OF DISCONTINUED OPERATIONS
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  | SOSRx |  |  | APS |  |  | CSP |  |  | Total |
|  | Three Months Ended September 30, |  |  | Three Months Ended September 30, |  |  | Three Months Ended September 30, |  |  | Three Months Ended September 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Revenue |  | $ | - |  |  | $ | 3,368 |  |  | $ | - |  |  | $ | - |  |  | $ | 124,238 |  |  | $ | 341,140 |  |  | $ | 124,238 |  |  | $ | 344,508 |
Cost of sales |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 127,671 |  |  |  | 314,945 |  |  |  | 127,671 |  |  |  | 314,945 |
Gross profit |  |  | - |  |  |  | 3,368 |  |  |  | - |  |  |  | - |  |  |  | (3,433 | ) |  |  | 26,195 |  |  |  | (3,433 | ) |  |  | 29,563 |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Wage and salary expense |  |  | - |  |  |  | 17,689 |  |  |  | - |  |  |  | - |  |  |  | 108,772 |  |  |  | 70,002 |  |  |  | 108,772 |  |  |  | 87,691 |
Professional fees |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 10,471 |  |  |  | 18,079 |  |  |  | 2,094 |  |  |  | 18,079 |  |  |  | 12,565 |
Accounting and legal expense |  |  | - |  |  |  | - |  |  |  | 1,948 |  |  |  | 104 |  |  |  | 700 |  |  |  | 500 |  |  |  | 2,648 |  |  |  | 604 |
Technology expense |  |  | - |  |  |  | 23,000 |  |  |  | 4,177 |  |  |  | 31,564 |  |  |  | 2,231 |  |  |  | 5,445 |  |  |  | 6,408 |  |  |  | 60,009 |
General and administrative |  |  | - |  |  |  | 29,907 |  |  |  | 134 |  |  |  | 3,527 |  |  |  | 4,257 |  |  |  | 25,428 |  |  |  | 4,391 |  |  |  | 58,862 |
Total operating expense |  |  | - |  |  |  | 70,596 |  |  |  | 6,259 |  |  |  | 45,666 |  |  |  | 134,039 |  |  |  | 103,469 |  |  |  | 140,298 |  |  |  | 219,731 |
Operating loss from discontinued operations |  |  | - |  |  |  | (67,228 | ) |  |  | (6,259 | ) |  |  | (45,666 | ) |  |  | (137,472 | ) |  |  | (77,274 | ) |  |  | (143,731 | ) |  |  | (190,168 | )
Other income (expense) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain (loss) on disposal of assets |  |  | - |  |  |  | - |  |  |  | (1,783,209 | ) |  |  | 1,900 |  |  |  | (1,426,567 | ) |  |  | - |  |  |  | (3,209,776 | ) |  |  | 1,900 |
Total other income (expense) |  |  | - |  |  |  | - |  |  |  | (1,783,209 | ) |  |  | 1,900 |  |  |  | (1,426,567 | ) |  |  | - |  |  |  | (3,209,776 | ) |  |  | 1,900 |
Loss from discontinued operations |  | $ | - |  |  | $ | (67,228 | ) |  | $ | (1,789,468 | ) |  | $ | (43,766 | ) |  | $ | (1,564,039 | ) |  | $ | (77,274 | ) |  | $ | (3,353,507 | ) |  | $ | (188,268 | )
Loss per common share from discontinued operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | - |  |  | $ | (0.12 | ) |  | $ | (2.32 | ) |  | $ | (0.08 | ) |  | $ | (2.03 | ) |  | $ | (0.14 | ) |  | $ | (4.35 | ) |  | $ | (0.34 | )
Diluted |  | $ | - |  |  | $ | (0.12 | ) |  | $ | (0.76 | ) |  | $ | (0.08 | ) |  | $ | (0.66 | ) |  | $ | (0.14 | ) |  | $ | (1.42 | ) |  | $ | (0.34 | )
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  | SOSRx |  |  | ASP |  |  | CSP |  |  | Total |
|  | Nine months ended September 30, |  |  | Nine months ended September 30, |  |  | Nine months ended September 30, |  |  | Nine months ended September 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Revenue |  | $ | - |  |  | $ | 20,424 |  |  | $ | - |  |  | $ | - |  |  | $ | 761,306 |  |  | $ | 905,083 |  |  | $ | 761,306 |  |  | $ | 925,507 |
Cost of sales |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 705,206 |  |  |  | 1,019,470 |  |  |  | 705,206 |  |  |  | 1,019,470 |
Gross profit |  |  | - |  |  |  | 20,424 |  |  |  | - |  |  |  | - |  |  |  | 56,100 |  |  |  | (114,387 | ) |  |  | 56,100 |  |  |  | (93,963 | )
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Wage and salary expense |  |  | - |  |  |  | 54,939 |  |  |  | - |  |  |  | - |  |  |  | 456,297 |  |  |  | 180,819 |  |  |  | 456,297 |  |  |  | 235,758 |
Professional fees |  |  | - |  |  |  | - |  |  |  | 3,125 |  |  |  | 44,962 |  |  |  | 20,246 |  |  |  | 5,572 |  |  |  | 23,371 |  |  |  | 50,534 |
Accounting and legal expense |  |  | - |  |  |  | - |  |  |  | 7,773 |  |  |  | 104 |  |  |  | 63,000 |  |  |  | 500 |  |  |  | 70,773 |  |  |  | 604 |
Technology expense |  |  | - |  |  |  | 53,910 |  |  |  | 20,611 |  |  |  | 83,659 |  |  |  | 9,464 |  |  |  | 13,989 |  |  |  | 30,075 |  |  |  | 151,558 |
General and administrative |  |  | - |  |  |  | 33,873 |  |  |  | 3,762 |  |  |  | 10,761 |  |  |  | 32,830 |  |  |  | 47,945 |  |  |  | 36,592 |  |  |  | 92,579 |
Total operating expense |  |  | - |  |  |  | 142,722 |  |  |  | 35,271 |  |  |  | 139,486 |  |  |  | 581,837 |  |  |  | 248,825 |  |  |  | 617,108 |  |  |  | 531,033 |
Operating loss from discontinued operations |  |  | - |  |  |  | (122,298 | ) |  |  | (35,271 | ) |  |  | (139,486 | ) |  |  | (525,737 | ) |  |  | (363,212 | ) |  |  | (561,008 | ) |  |  | (624,996 | )
Other income (expense) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain (loss) on disposal of assets |  |  | (352,244 | ) |  |  | - |  |  |  | (1,783,209 | ) |  |  | 1,900 |  |  |  | (1,426,567 | ) |  |  | - |  |  |  | (3,562,020 | ) |  |  | 1,900 |
Total other income (expense) |  |  | (352,244 | ) |  |  | - |  |  |  | (1,783,209 | ) |  |  | 1,900 |  |  |  | (1,426,567 | ) |  |  | - |  |  |  | (3,562,020 | ) |  |  | 1,900 |
Loss from discontinued operations |  | $ | (352,244 | ) |  | $ | (122,298 | ) |  | $ | (1,818,480 | ) |  | $ | (137,586 | ) |  | $ | (1,952,304 | ) |  | $ | (363,212 | ) |  | $ | (4,123,028 | ) |  | $ | (623,096 | )
Loss per common share from discontinued operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.50 | ) |  | $ | (0.22 | ) |  | $ | (2.57 | ) |  | $ | (0.25 | ) |  | $ | (2.76 | ) |  | $ | (0.66 | ) |  | $ | (5.82 | ) |  | $ | (1.14 | )
Diluted |  | $ | (0.15 | ) |  | $ | (0.22 | ) |  | $ | (0.79 | ) |  | $ | (0.25 | ) |  | $ | (0.85 | ) |  | $ | (0.66 | ) |  | $ | (1.79 | ) |  | $ | (1.14 | )

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