v3.25.1
ACQUISITION (Tables)
 3 Months Ended
Mar. 31, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Schedule of purchase consideration
     
Cash paid upfront (1)  $2,000,000 
Present value of future cash paid (1)   6,618,637 
Equity consideration (2)   5,950,000 
Earn-out contingent consideration (3)   3,190,000 
Total consideration  $17,758,637 

 

(1) Pursuant to the Asset Purchase Agreement the cash purchase price paid was $10,000,000 to be paid in five equal tranches with the initial payment made on March 19, 2025 and four subsequent payments to be made on each subsequent annual anniversary of the initial payment. The fair value of this consideration was estimated based on the present value of the future payments. The average discount rate of 8% was based on the Company’s estimated cost of debt. The present value of future payments is recorded in other liabilities on the consolidated balance sheets.
(2) Pursuant to the Asset Purchase Agreement the stock consideration paid was 2,500,000 shares of restricted common stock that will vest in five equal amounts beginning on March 31, 2025 and annually thereafter for the next four years. Fair value was estimated using the Company’s stock price of $2.38 on the valuation date. The stock consideration is recorded in the consolidated statements of stockholders’ equity.
(3) Pursuant to the Asset Purchase Agreement an additional earn-out stock consideration of 500,000 shares of our common stock, up to a total consideration of 2,500,000 shares of our common stock, may be paid upon the achievement of certain gross revenue performance targets for each trailing 12-month period beginning on March 20, 2025 and ending on March 19, 2030. The value of earn-out contingent consideration was computed using the Monte Carlo simulation. The contingent payable is recorded in other liabilities on the consolidated balance sheets.
Schedule of assets acquired and liabilities assumed
     
Identifiable intangible assets  $12,246,000 
Total identifiable net assets   12,246,000 
Goodwill   5,512,637 
Total assets acquired  $17,758,637 
Schedule of fair values intangible assets and estimated amortization
       
   Estimated Fair Value   Weighted Avg. Estimated Amortization (years)
Contract related intangible assets  $567,000   9
Acquired technologies   11,679,000   15
Total identifiable intangible assets  $12,246,000