Acquisitions And Business Combinations

12 Months Ended

Dec. 31, 2021

Note 9: ACQUISITIONS AND BUSINESS COMBINATIONS

PHX Interactive, LLC

On February 22, 2019, the Company completed an acquisition of 100% of PHX Interactive, LLC (“PHX”), an entity that operated Greens Goddess Products, Inc., a cannabis license holder and dispensary operator in Phoenix, Arizona. The purpose of the acquisition was to expand the Company’s operations to Arizona.

The acquisition was accounted for in accordance with ASC 805, and related operating results are included in the accompanying consolidated statements of operations, changes in equity and statement of cash flows for periods subsequent to the date of acquisition. Due to a management agreement between PHX and Greens Goddess, PHX controlled Greens Goddess and the Company consolidated both PHX and Greens Goddess from the date of acquisition. The assets acquired and the liabilities assumed have been recorded at fair value as determined by the Company.

Goodwill arose because the consideration paid for the business acquisition reflected the benefit of expected revenue growth and future market development. These benefits were not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. Goodwill is not expected to be deductible for tax purposes.

On March 30, 2020, the Company completed the sale of PHX and Green Goddess to a third party for $6,000 in cash.

The following table summarizes the purchase price allocation:


Consideration transferred:
Cash	$	3,360
Payables issued (1)		304
Equity paid (2)		2,676

Total	$	6,340

Fair value of net assets acquired:
Cash	$	102
Inventory		91
Property and equipment		72
Deposits		2
Goodwill		6,225
Accounts payable and accrued liabilities		(152	)

	$	6,340

(1)	Consists of $304 held back by the Company to pay certain vendor payables.

(2)	As part of the business combination, 5,496 Class F shares were issued which were valued at $2,676.