Village Tea Acquisition

6 Months Ended

Dec. 31, 2014

8. Village Tea Acquisition

The Company recorded goodwill as a result of its business acquisition of Village Tea Distribution Company, Inc. (“Village Acquisition”) . Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible assets acquired. In the Village Acquisition , the objective was to expand the Company’s product offerings and customer base by entering into a new line of business. The Company determined the value of the goodwill by discounted projecting cash flow analysis. Based upon that analysis, the Company determined that the value of the Goodwill was $2,145,489 as follows:

Assets acquired:
Inventory		138,789
Other Capitalized costs		49,130
Total	$	187,919
Liabilities acquired:
Accrued Expenses	$	92,858
Amounts due to Management		334,898
Non-convertible debt		360,500
Other long-term obligations		8,500
Total	$	796,756
Stockholders’ (deficit)	$	(608,837)

Value of Enterprise based on Analysis		$1,536,652
Other long-term obligations		(608,837)
Goodwill	$	2,145,489

The Company tests goodwill for impairment on a quarterly basis. At December 31, 2014, the company determined that there was no impairment.