NOTE 10 – BUSINESS COMBINATIONS

On December 1, 2020, SWK acquired certain assets of Business Software Solutions (“BSS”) pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $230,000 (the “BSS Note”). The BSS Note is due in 60 months from the closing date and bears interest at a rate of two percent (2.0%) per annum. Monthly payments including interest are $4,031. The purchase price has been allocated to customer list with an estimated life of fifteen years. Upon completion of an independent valuation, the allocation of the purchase price to customer lists will be modified with the excess purchase consideration being allocated to goodwill.

The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisitions of Prairie Technology Solutions Group, LLS (“PT”), acquired July 31, 2020, Computer Management Services, LLC (CMS”), acquired October 1, 2020 and Business Software Solutions (“BSS”), acquired December 1, 2020, occurred on January 1, 2020, nor is the financial information indicative of the results of future operations. The following table represents the unaudited condensed consolidated pro forma results of operations for the three months ended March 31, 2020 as if the acquisitions occurred on January 1, 2020. For the three months ended March 31, 2020, operating expenses have been increased for the amortization expense of expected definite lived intangible assets and interest on the notes payable.

Pro Forma	Three Months Ended March 31, 2020
Net revenues	$	10,653,419
Cost of revenues		6,485,427
Operating expenses		4,564,559
Loss before taxes		(396,567	)
Net loss	$	(309,474	)
Basic and diluted loss per common share	$	(0.07	)

The Company’s unaudited condensed consolidated financial statements for the three ended March 31, 2021 include the actual results of PT, CMS and BSS.

For the three months ending March 31, 2020, there is $10,149 of estimated amortization expense and $3,110 of estimated interest expense included in the PT pro-forma results, $6,864 of estimated amortization expense and $827,of estimated interest expense included in the CMS pro-forma results, and $8,214 of estimated amortization expense and $1,132,of estimated interest expense included in the BSS pro-forma results

For the three months ended March 31, 2021, the Prairie Tech, CMS & BSS operations had a net income before taxes of $107,796 which represented three months of operations for Prairie, CMS and BSS that were included in the Company’s Unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2021. This consisted of approximately $524,640 in revenues, $285,329 in cost of revenues and $131,515 in operating expenses