Note 15 - Business Combination

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Business Combination Disclosure [Text Block]

15.          BUSINESS COMBINATION

The Company entered into the Purchase Agreement with Intrensic and the Sellers with an effective date of August 9, 2023 (the (“Closing”).  The Closing was consummated on August 16, 2023.  Under the terms of the Purchase Agreement, the Company agreed to purchase, and Sellers agreed to sell the  Membership Interests for the following consideration at Closing: (i) $554 in cash, subject to adjustment based upon the outstanding indebtedness of Intrensic and Intrensic’s working capital as of the Closing; and (ii) 1,250,000 shares of Common Stock of the Company valued at approximately $1,938.

The Company assessed the historical financial information of Intrensic to determine if it would materially impact Wrap's historical financial statements for the purposes of disclosing proforma financial information. The Company determined that in the current or prior reporting periods the acquired business contributed immaterially to the Company’s financial statements . Therefore, a pro forma disclosure of the Company as if the business combination had occurred is not warranted under ASC 805.

The preliminary purchase price is not finalized. The Company is still evaluating the impact of the income tax provision related to the acquisition and assessing the assumed contracts related to deferred revenue.

The table below sets forth the preliminary allocation of the fair value of Intrensic’s net assets acquired and the corresponding line item in the Company’s consolidated balance sheet at the date of acquisition.

Cash and cash equivalents	$	3
Accounts receivable		90
Inventory		61
Net property, plant and equipment		-
Technology		490
Customer relationships (included in Intangibles)		160
Trademarks and trade names (included in Intangibles)		80
Goodwill		1,611
Total assets	$	2,495
Liabilities		3
Equity		2,492
Total liabilities and equity	$	2,495
Purchase Price:
Cash		554
Equity		1,938
Liabilities assumed		3
Total	$	2,495

Legal fees incurred in connection with the transaction totaled approximately $38 and have been expensed as incurred.