Registration of securities issued in business combination transactions

Note 2 - Sale and Deconsolidation of GMI and Discontinued Operations (Tables)

v3.23.4
Note 2 - Sale and Deconsolidation of GMI and Discontinued Operations (Tables)
9 Months Ended
Sep. 30, 2023
Notes Tables  
Disposal Groups, Including Discontinued Operations, Consideration Received [Table Text Block]

Consideration

 

Amount

 

Description and Valuation Methodology

Cash at closing

  $ 935,974  

Cash received at closing less estimated value of transition services to be provided.

Cash after closing

    133,148  

Actual cash operating expenses of GMI from March 1 through March 17, 2023 (prior to the transfer of GMI to GMDC).

GMDC common stock

    581,000  

Based on Series A preferred stock issuance to other GMDC investors for $3,000,000 in cash and application of an option pricing model backsolve method and a minority interest discount to estimate the fair value of the common shares of GMDC.

Contingent payments

    682,000  

Estimated by applying a discount rate of 40.8% to the projected cash receipts expected over the 7-year horizon. (See Note 5).

Total consideration

  $ 2,332,122    
Disposal Groups, Including Discontinued Operations [Table Text Block]
   

Three Months Ended September 30,

   

Nine Months Ended September 30,

 
   

2023

   

2022

   

2023

   

2022

 

Revenue

  $ -     $ -     $ -     $ 566,862  

Cost of revenue

    -       256,974       74,223       1,118,301  

Excess of contract costs over revenue

    -       (256,974 )     (74,223 )     (551,439 )

Operating expenses -

                               

Salaries and benefits

    -       463,502       484,249       1,076,781  

Intangibles amortization

    -       303,791       85,338       917,496  

Stock based compensation, before forfeitures

    -       215,775       65,487       268,283  

Forfeiture of stock options

    -       -       (407,322 )     -  

Other operating expenses

    -       113,078       134,633       702,534  

Change in fair value of contingent consideration

    -       -       -       (930,000 )

Goodwill impairment

    -       2,254,624             2,254,624  

Gain on disposal of business

    -       -       (100,615 )     -  

Loss before income tax benefit

    -       (3,607,744 )     (335,993 )     (4,841,157 )

Income tax benefit

    -       77,592       -       1,788,509  

Net loss on discontinued operations

  $ -     $ (3,530,152 )   $ (335,993 )   $ (3,052,648 )
   

December 31,

 
   

2022

 

Customer relationship intangible asset, net of amortization

  $ 1,057,722  

Technology intangible asset, net of amortization

    760,698  

Capitalized software development costs

    498,425  

Total assets of discontinued operations

  $ 2,316,845