Quarterly report pursuant to Section 13 or 15(d)

8. Goodwill and Acquisition Accounting

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8. Goodwill and Acquisition Accounting
9 Months Ended
Sep. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Acquisition Accounting

8. Goodwill and Acquisition Accounting

 

On September 17, 2018, we closed the acquisition of Two JS LLC, dba The Big Tomato, a Colorado limited liability company. (“Big T” or “Big Tomato”). The Company issued an aggregate of 1,933,329 shares of its common stock for 100% ownership of Big Tomato. The Company accounted for the transaction utilizing purchase price accounting stating that net book value approximates fair market value of the assets acquired. The purchase price accounting resulted in the Company valuing the investment as $3,000,000 of Goodwill. At September 17, 2018, the Company’s per share value of common stock was $1.55. There is no requirement for Big Tomato to have independent audited financial statement for the prior two fiscal years and any interim periods because the aggregate value of the acquisition is less than 20% of the Company’s current assets.

 

Big Tomato Balance Sheet

 

    Book/Fair Value         Book/Fair Value  
                 
Assets           Liabilities        
Inventory   $ 291,000     Accounts payable   $ 272,266  
Other assets     4,950     Customer Deposits     23,684  
    $ 295,950         $ 295,950  

 

Purchase Price (1,933,329*1.5517)      
    $ 3,000,000  
Less: BV of Assets     (295,950 )
Add: BV of Liabilities     295,950  
Goodwill   $ 3,000,000  

  

The following table sets forth the changes in the carrying amount of the Company’s goodwill at September 30, 2019, and December 31, 2018:

 

Balance, December 31, 2017   $ 9,304,306  
Acquisition of Big Tomato     3,000,000  
Balance, December 31, 2018   $ 12,304,306  
Activity for the period ended September 30, 2019      
Balance September 30, 2019   $ 12,304,306