NOTE 14. PROFORMA ACQUISITION FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

NOTE 14. PROFORMA ACQUISITION FINANCIAL INFORMATION

NOTE 14. PROFORMA ACQUISITION FINANCIAL INFORMATION

Description of the Transactions

Service 800, Inc.

On March 4, 2019 Jean Mork Bredeson, Founder and President of Service 800, Inc., received $1,890,000 in cash, a short term cash hold back of $210,000 and $2,100,000 in a three year 5.5% promissory note. The $2,100,000 promissory note is personally guaranteed by Geordan Pursglove Beyond Commerce’s President, CEO. On July 18, 2018 Jean Mork Bredeson received 2,000,000 shares of Beyond Commerce’s restricted common stock, and directed the issuance of 3,000,000 additional shares to three other individuals as part of the business combination as follows: On July 18, 2018 Allen Bredeson, Vice President of Marketing and Client Relations, received 1,000,000 shares of Beyond Commerce’s restricted common stock. Derick White, Vice President of Sales received 1,000,000 shares of Beyond Commerce’s restricted common stock, and Jeff Schwendinger, Vice President of Operations received 1,000,000 shares of Beyond Commerce’s restricted common stock. The effective date of this business combination between Beyond Commerce and Service 800, is February 28, 2019, when Beyond Commerce received 100% of Service 800 stock, assets consisting of the company’s website, customer lists, current customer base, and customer’s in the company’s pipeline and proprietary software. 

 This acquisition  combined resources and customer base to support more productivity and help in the development of new product lines. Beyond Commerce started consolidating Service 800 Inc for financial reporting purposes as of March 1, 2019. From the date of acquisition to December 31, 2019, Service 800 reported revenue of $ 4,099,925.

The fair value of the purchase consideration issued to Service 800 Inc. was allocated to the net tangible assets acquired. The Company accounted for the Acquisition as the purchase of a business under GAAP under the acquisition method of accounting, and the assets and liabilities acquired were recorded as the acquisition date, at their respective fair values and consolidated with those of the Company. The fair value of the net assets acquired was approximately $3,881,241. The excess of the aggregate fair value of the net tangible assets has been allocated to goodwill of $1,299,144. The company wrote down the asset value of Service 800, Inc. by approximately $635,000 mainly attributable to the value of the shares of stock issued to certain employees of Service 800, Inc. as the belief this was not considered an essential component of the transaction and not valued accordingly.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on external evaluations at the date of acquisition:

Value of considered paid:
Cash at Closing	$	2,100,000
Promissory Note - discounted		1,781,241
Assets acquired		3,881,241

Assets Acquired:
Prepaid expenses	$	28,316
Property, plant and equipment		47,484
Intangible assets		2,921,400
Goodwill		1,299,144
Assets acquired	$	4,296,344
Liabilities Assumed:
Accounts payable	$	121,958
Other current liabilities		293,145
Liabilities assumed	$	415,103
Net assets acquired	$	3,881,241
Fair value of consideration given	$	3,881,241

PathUX, LLC

On May 31, 2019, Robert Bisson, Christian Schine, and Ryan Rich, the three members of PathUX, LLC, received an aggregate of 70,000,000 shares of Beyond Commerce’s restricted common stock, valued at $427,000. The $427,000 is reflected as deposit on the acquisition of PathUX to be held in escrow pending the following alternatives, which would encompass the return of these shares:

i. Ninety (90) days after closing, Beyond Commerce, Inc. at the discretion of the former PathUX LLC members shall owe $1,000,000 to the three former members. The payment due date may be extended at the discretion of the Company for an additional ninety (90) days, for a total of one hundred eighty (180) days, through incremental cash payment aggregating $300,000 of additional monetary compensation. 

ii. Company will also during this time period, and once again at the discretion of the former members, issue a $2,000,000 convertible promissory note, which carries a two year quarterly amortizing payment requirement of $317,068.40 starting on December 30, 2019, and an 8.0% interest rate. This note is fully amortized on June 30, 2021. 

 These acquisition liabilities are presented on the Company’s financials as follow:

Short-term contingent acquisition liability	$ 1,951,205
Long-term contingent acquisition liability	1,048,795
Total contingent acquisition liability	$ 3,000,000

On June 4, 2019, Robert Bisson, received 31,500,000 shares of Beyond Commerce’s restricted common stock, Christian Schine received 31,500,000 shares of Beyond Commerce’s restricted common stock, and Ryan Rich, received 7,000,000 shares of Beyond Commerce’s restricted common stock. The business combination between Beyond Commerce and PathUX LLC, became effective May 31, 2019, when Beyond Commerce received 100% of PathUX’s membership interests. PathUX’s assets consist of the company’s website, customer lists, current customer base, and customer’s in the company’s pipeline and proprietary software. Beyond Commerce has not paid any additional funds to the previous owners of PathUX as the extension period has expired, therefore the Company has forfeited the 70,000,000 shares valued at $427,000.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on internal company evaluations at the date of acquisition:

Assets Acquired:
Cash	$	9,066
Accounts receivable		16,326
Proprietary Software		1,063,441
Intangible asset – customer list		2,070,110
Assets acquired	$	3,158,943
Accounts payable	$	5,705
Other current liabilities		153,238
Liabilities assumed	$	158,943
Net assets acquired	$	3,000,000
Fair value of consideration given	$	3,000,000

Customer Centered Strategies, LLC. (CCS)

On December 31, 2019 TCA Beyond Commerce, a joint venture which is 80% owned by Beyond Commerce entered into a Membership Interest Purchase, whereby TCA Beyond Commerce acquired 100% of the authorized and issued membership interests of CCS from its sole member. TCA Beyond Commerce acquired the membership interests for a purchase price $525,000 (the “CCS Purchase Price”), with $175,000 to be paid in cash and the remaining $350,000 to be paid through TCA Beyond Commerce’s issuance of a convertible promissory note with an original principal of $350,000 and a conversion feature that provides the CCS with the right to convert outstanding principal and accrued interest into shares of the Company’s common stock at a price based on the 10-day trailing average price of the Company’s stock.

In addition to the CCS purchase price, the CCS and Service 800, Inc., entered into an employment agreement whereby the CCS will be employed by Service 800 as Vice President of Operations and Technologies for a period of six months.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on internal company evaluations at the date of acquisition:

Assets Acquired:
Cash	$	37,597
Accounts receivable		155,626
Prepaid expense		2,500
Intangible asset – customer list		535,877
Assets acquired	$	731,600
Accounts payable	$	37,817
Other current liabilities		37,533
Liabilities assumed	$	75,350
Net assets acquired	$	656,250
Fair value of consideration given:
Cash	$	175,000
Convertible note – 5%		350,000
Minority interest		131,250
Total	$	626,250

The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of Service 800 Inc, and PathUX, and Customer Centered Strategies occurred on January 1, 2018:

	Twelve Months Ended
	December 31,
	2019		2018
Net Revenues	$	7,312,278	$	6,632,611
Net (loss) income from operations		(5,859,912)		(3,699,574)
Net (loss) income per share from operations		(0.01)		(0.00)
Weighted average number of shares – basic and diluted		1,176,847,590		1,004,144,021