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Acquisitions | 12 Months Ended
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Dec. 31, 2018
Business Combinations [Abstract] |
Acquisitions | NOTE 3 – ACQUISITIONS The acquisitions described below were each accounted for as business combinations which requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date on the balance sheet. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. On May 9, 2018, the Company acquired 100% of the share capital of Cohuborate, Ltd. based in Lancashire, England. Cohuborate produces, sells and distributes interactive display panels designed to provide new learning and working experience through high-quality technologies and solutions through in-room and room-to-room multi-device multi-user collaboration. Although a development stage company with minimal revenues to date, we believe that Cohuborate will enhance our software capability and product offerings. We purchased the Cohuborate shares for 257,200 shares of the Company’s Class A common stock and 100 British pound sterling (US$138).
Assets acquired: |  |  |
Cash |  | $ | 1,038,368 |
Accounts receivable |  |  | 12,114 |
Inventory |  |  | 315,438 |
Other current assets |  |  | 22,928 |
Property and equipment |  |  | 4,321 |
Intangible assets |  |  | 190,430 |
Total assets acquired |  |  | 1,583,599 |
Total liabilities assumed |  |  | (148,285 | )
Net assets acquired |  | $ | 1,435,314 |
Consideration paid: |  |  |  |
Issuance of 257,200 shares of Class A common stock |  | $ | 1,435,176 |
Cash |  |  | 138 |
Total |  | $ | 1,435,314 |
On June 22, 2018, the Company acquired 100% of the share capital of Qwizdom, Inc. based in the state of Washington and its subsidiary Qwizdom UK Limited based in Northern Ireland (the “Qwizdom Companies”). The Qwizdom companies develop software and hardware solutions that are quick to implement and designed to increase participation, provide immediate data feedback, and, most importantly, accelerate and improve comprehension and learning. We purchased the Qwizdom shares for (1) $410,000 in cash, (2) issuance of an 8% promissory note of $656,000 (3) issuance of 142,857 shares of the Company’s Class A common stock, and (4) an annual earn-out payment at maximum of $410,000 based on 16.4% of future consolidated revenues as defined in the agreement from 2018 to 2020.
Assets acquired: |  |  |
Cash |  | $ | 239,698 |
Accounts receivable |  |  | 662,636 |
Inventory |  |  | 132,411 |
Other current assets |  |  | 20,857 |
Property and equipment |  |  | 299,525 |
Intangible assets |  |  | 650,188 |
Goodwill |  |  | 477,145 |
Total assets acquired |  |  | 2,482,460 |
Total liabilities assumed |  |  | (177,890 | )
Net assets acquired |  | $ | 2,304,570 |
Consideration paid: |  |  |  |
Cash |  | $ | 410,000 |
Promissory note |  |  | 656,000 |
Issuance of 142,857 shares of Class A common stock |  |  | 828,570 |
Earn-out payable |  |  | 410,000 |
Total |  | $ | 2,304,570 |
On August 31, 2018, the Company acquired 100% of the share capital of EOS based in Arizona. EOS is in the business of providing technology consulting, training, and professional development services to create sustainable programs that integrate technology with curriculum in K-12 schools and districts. The Company purchased the EOS shares for 100,000 shares of the Company’s Class A common stock.
Assets acquired: |  |  |
Cash |  | $ | 32,269 |
Accounts receivable |  |  | 89,871 |
Other current assets |  |  | 4,543 |
Intangible assets |  |  | 156,823 |
Goodwill |  |  | 78,411 |
Total assets acquired |  |  | 361,917 |
Total liabilities assumed |  |  | (7,917 | )
Net assets acquired |  | $ | 354,000 |
Consideration paid: |  |  |  |
Issuance of 100,000 shares of Class A common stock |  | $ | 354,000 |
Total |  | $ | 354,000 |
Unaudited Pro Forma Results of Operations The following table presents the unaudited consolidated condensed pro forma results of operations that reflect the acquisitions of Cohuba, Qwizdom Companies and EOS as if the acquisitions had occurred as of the first day of the period presented, adjusted for items that are directly attributable to the acquisitions. This information has been compiled from historical financial statements and is not necessarily indicative of the results that actual would have been achieved had the transaction already occurred or that may be achieved in the future.
|  | For the year ended December 31, 2018 |
Revenues |  | $ | 39,118,779 |
Cost of revenues |  |  | (29,534,694 | )
Operating expenses |  |  | (16,874,840 | )
Other incomes (expenses) |  |  | (181,172 | )
Net loss |  | $ | (7,471,927 | )
Net loss per common share |  | $ | (0.74 | )
Weighted average outstanding common shares – basic and diluted |  |  | 10,149,786 |
The pro forma combined results of operations were adjusted to include Cohuba’s, Qwizdom Companies’ and EOS’ operating results for the period from January 1, 2018 to the day that the companies were acquired by the Company. In addition, the pro forma results of operations were adjusted for the following expenses:
|  | For the year ended December 31, 2018 |
Record amortization expense of intangible assets acquired |  | $ | 100,000 |
The Company engaged a third-party valuation specialist to assist in the valuation and is in the process of completing its assessment of the fair value of assets acquired and liabilities assumed. Thus, the preliminary measurement of the assets acquired and liabilities assumed are subject to change, which could be significant. The Company will finalize the amounts recognized no later than one year from the acquisition date.

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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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