8. Goodwill and Acquisition Accounting

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Acquisition Accounting

8. Goodwill and Acquisition Accounting

On September 17, 2018, of the Company acquired Two JS LLC, d/b/a The Big Tomato, a Colorado limited liability company (“Big T” or “The Big Tomato”). The Company issued an aggregate of 1,933,329 shares of its common stock in exchange for a 100% ownership of Big T. The Company utilized purchase price accounting stating that net book value approximates the 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 was no requirement for The 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.

The 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

As of December 31, 2019, the Company’s Goodwill has a balance of $12,304,306. This amount consisted of $3,003,226 from the DCG (Denver Consulting Group) acquisition, $6,301,080 from the Success Nutrients and Pono Productions acquisitions and $3,000,000 from the acquisition of The Big Tomato. As of December 31, 2019, the Company had an independent third-party valuation group perform an impairment analysis on our consolidated goodwill balance. It was noted that as of December 31, 2019, no impairment was needed.