General form of registration statement for all companies including face-amount certificate companies

Acquisition of Verb Direct (Tables)

v3.20.2
Acquisition of Verb Direct (Tables)
3 Months Ended 12 Months Ended
Mar. 31, 2020
Dec. 31, 2019
Business Combinations [Abstract]    
Schedule of Fair Value of Assets Assumed and Liabilities Acquired

The following table summarizes the assets acquired, liabilities assumed and purchase price allocation:

 

 

Assets Acquired:                
Other current assets   $ 2,004,000          
Property and equipment     58,000          
Other assets     1,302,000     $ 3,364,000  
Liabilities Assumed:                
Current liabilities     (2,153,000 )        
Long-term liabilities     (1,068,000 )     (3,221,000 )
Intangible assets             6,340,000  
Goodwill             16,337,000  
Purchase Price           $ 22,820,000  

The allocation of the purchase price was completed on December 31, 2019 through the assistance of a valuation specialist. The following table summarizes the assets acquired, liabilities assumed and purchase price allocation:

 

Assets Acquired:                
Other current assets   $ 2,004,000          
Property and equipment     58,000          
Other assets     1,302,000     $ 3,364,000  
Liabilities Assumed:                
Current liabilities     (2,153,000 )        
Long-term liabilities     (1,068,000 )     (3,221,000 )
Intangible assets             6,340,000  
Goodwill             16,337,000  
Purchase Price           $ 22,820,000  
Schedule of Amortization Expense for Future Periods for Intangible Assets  

The following table summarizes the amortization expense to be recorded in future periods for intangible assets that are subject to amortization:

 

Year ending   Amortization  
2020   $ 1,255,000  
2021     1,195,000  
2022     1,135,000  
2023     1,075,000  
2024 and thereafter     265,000  
Total amortization   $ 4,925,000  
Schedule of Pro Forma Statements of Operations

The unaudited pro forma statements of operations for the periods ended March 31, 2020 and 2019 give effect to the transaction to the merger as if it had occurred on January 1, 2019.

 

   

Three Months Ended

March 31, 2020

   

Three Months Ended

March 31, 2019

 
    (unaudited)     (Proforma,
unaudited)
 
Digital   $ 1,457,000     $ 1,059,000  
Welcome kits and fulfilment     728,000       2,265,000  
Shipping     169,000       677,000  
Total Revenue     2,354,000       4,001,000  
                 
Cost of revenue     1,063,000       2,248,000  
                 
Gross margin     1,291,000       1,753,000  
                 
Operating expenses     5,151,000       4,782,000  
                 
Other income (expense), net     1,914,000       (251,000 )
                 
Net loss     (1,946,000 )     (3,280,000 )
                 
Deemed dividends to Series A stockholders     (3,951,000 )     -  
                 
Net loss attributed to common stockholders   $ (5,897,000 )   $ (3,280,000 )
                 
Loss per share   $ (0.23 )   $ (0.21 )
Weighted average number of common shares outstanding - basic and diluted     25,992,426       15,566,835  

The unaudited pro forma statements of operations for the year ended December 31, 2019 and 2018 give effect to the transaction to the merger as if it had occurred on January 1, 2018.

 

   

Year Ended

December 31,
2019

    Year Ended
December 31,
2018
 
   

(Proforma,

unaudited)

   

(Proforma,

unaudited)

 
Digital   $ 5,290,000     $ 3,734,000  
Welcome kits and fulfilment     6,178,000       7,258,000  
Shipping     1,624,000       1,774,000  
Total Revenue     13,092,000       12,766,000  
                 
Cost of revenue     7,088,000       7,173,000  
                 
Gross margin     6,004,000       5,593,000  
                 
Operating expenses     22,048,000       14,295,000  
                 
Other expense, net     (99,000 )     (4,326,000 )
                 
Loss before income tax provision     (16,143,000 )     (13,028,000 )
                 
Income tax provision     2,000       1,000  
                 
Net loss   $ (16,145,000 )   $ (13,029,000 )
                 
Loss per share   $ (0.76 )   $ (0.99 )
Weighted average number of common shares outstanding - basic and diluted     21,116,207       13,198,681  
Schedule of Results of Operation of Subsidiary  

Results of operation of Verb Direct subsequent to the acquisition are as follows:

 

   

Period April 1,

2019 through

December 31,

2019

 
       
Revenue   $ 9,041,000  
Cost of revenue     4,766,000  
Operating expenses     6,308,000  
Other income expense     (11,000 )
Net loss   $ (2,044,000 )