Acquisition

3 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Acquisition

Note 14 - Acquisition

On September 4, 2019, Galaxy entered into a stock purchase agreement with Concepts and Solutions. Under the terms of the stock purchase agreement, 100% of the outstanding capital for both Concepts and Solutions was purchased by Galaxy. Concurrent with this acquisition, the Company applied pushdown accounting; therefore, the consolidated financial statements after completion of the acquisition include the assets, liabilities, and results of operations of the combined company from and after the closing date. As part of the stock purchase agreement, Galaxy issued 1,350,000 shares of common stock to the seller with a value of $1,485,000. In addition to the issuance of shares of common stock, the Company entered into three promissory notes with the seller for a total note payable of $3,000,000. Payments under the notes are subject to adjustment based on the achievement of minimum gross revenues and successful resolution of certain pre-acquisition payroll withholding tax issues of Concepts and Solutions. The Company believes future earnings goals will not be met and valued the note payable at $1,484,473. The balance of the note payable is $1,030,079 at September 30, 2020 and June 30, 2020.

Management of the Company determined that a triggering event to assess the impairment of goodwill associated with the acquisition of Concepts and Solutions occurred during the year ended June 30, 2020. While there was no single event, the consideration in totality of several factors that developed during this year led management to conclude that it was more likely than not that the fair values of certain intangible assets and goodwill acquired as part of the acquisition were below their carrying amounts. See Note 4.

The following table summarizes the preliminary allocation of the fair value of the assets and liabilities as of the acquisition date through pushdown accounting. The preliminary allocation to certain assets and/or liabilities may be adjusted by material amounts as the Company finalizes fair value estimates.

Assets
	Cash	$             201,161
	Accounts receivable	1,165,953
	Inventory	94,360
	Property and equipment	20,904
	Other assets	2,800
	Goodwill and other intangibles	3,760,287
	Total Assets	5,245,465
Liabilities
	Accounts payable	1,225,734
	Accrued expenses	783,540
	Short-term debt	96,941
	Deferred revenue	518,900
	Total Liabilities	2,625,115
	Net Assets	$          2,620,350
Consideration
	Fair value of anti-dilution clause in employment agreement	$             235,350
	Note payable to seller	900,000
	Stock	1,485,000
		$          2,620,350