NOTE 24. Acquisition of Unitron Assets

On August 17, 2018, the Company exercised an option to acquire the assets of a chain of seven retail electronics stores in the Dominican Republic referred to as the “Unitron Assets.” The Option Agreement, as amended, was issued on January 5, 2018 as part of the Company’s Merger with Cooltech. The Option Agreement provided that upon exercise of the Option by the Company, the Cooltech shareholders at the date of the merger would receive 625,000 shares of the Company’s common stock that was originally carved out of the Merger consideration when the Unitron acquisition had to be unwound as a result of the inability to produce pre-acquisition audited financial statements. In the Unitron acquisition, the total consideration amounted to $6,359,000 which consisted of the cancellation of $3,700,000 of previously advanced funds, including $1,450,000 of funds advanced during the nine months ended September 30, 2018, the assumption of $868,000 of debt and $1,791,000 attributed to the value of the 625,000 restricted shares issued. A 25% discount to the $3.82 per share market value of the stock was applied to value the shares, which was based on the six-month trading restriction on the shares imposed by Rule 144. A preliminary purchase price allocation of the net assets acquired in the transaction is as follows (in thousands):

Cash	$	18
Accounts receivable		27
Inventory		1,243
Other current assets		601
Fixed assets		332
Convenant not to compete		46
Tradename		30
Goodwill		6,190
Other assets		41
Accounts payable		(2,169	)
Notes payable		(868	)
Total	$	5,491

For the period from August 17, 2018, the date of acquisition, through September 30, 2018, net sales and operating loss from the Dominican Republic entity included in the Company’s consolidated statement of operations amount to $503,000 and $98,000, respectively. On a pro forma basis, if the acquisition had occurred on January 1, 2017, the Company’s combined net sales and net loss for the nine months ended September 30, 2018 would have been $24,172,000 and $9,706,000, respectively.