v3.26.1
ACQUISITION (Details - Consideration paid) - Gamma Innovation L L C [Member]
Mar. 19, 2025
USD ($)
shares
Business Combination [Line Items]  
Cash paid upfront $ 2,000,000 [1]
Present value of future cash paid 6,618,637 [1]
Equity consideration 5,950,000 [2]
Earn-out contingent consideration 990,000 [3]
Total consideration transferred 15,558,637
Total cash purchase price to be paid $ 10,000,000
Stock issued for acquisition, shares | shares 2,500,000
Earn-out contingent consideration, shares | shares 500,000
[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 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 contingent payable is recorded in other liabilities on the consolidated balance sheets.