Quarterly report pursuant to Section 13 or 15(d)

12. Acquisition

12. Acquisition
9 Months Ended
Sep. 30, 2019
Business Combinations [Abstract]  

Note 12 – Acquisition


On March 15, 2019, the Company entered into and closed an asset purchase agreement with AVX Design & Integration, Inc. (“AVX”) as stated in Note 1.


A summary of the purchase price and the purchase price allocations at fair value is below. The purchase price allocation is a preliminary and subject to change. The Company has not yet completed its analysis to determine the fair value of the assets acquired on the acquisition date. Once this analysis is complete, the Company will adjust, if necessary, the provisional amounts assigned to the assets purchased in the accounting period in which the analysis is completed.


Purchase price      
Cash   $ 550,000  
29,286 shares of common stock (1)     290,716  
Secured promissory note     50,000  
Total purchase price   $ 890,716  


Allocation of purchase price        
Cash   $ 201,482  
Accounts receivable     436,554  
Inventories     11,282  
Prepaid expenses     2,478  
Property and equipment     10,381  
Operating lease right-of-use assets     186,449  
Deposits     5,968  
Goodwill     307,572  
Accounts payable and accrued liabilities     (73,787 )
Operating lease liability     (197,663 )
Purchase price   $ 890,716  


(1) – the fair value of the common stock was calculated based on the closing market price of the Company’s common stock at the date of acquisition.