ACQUISITIONS

3 Months Ended

Mar. 31, 2023

Credit Loss [Abstract]

ACQUISITIONS

3. ACQUISITIONS

Effective October 1, 2022, the Company acquired 100% of the issued and outstanding membership interests of Forever 8.

Pursuant to the Purchase Agreement, the Sellers received consideration consisting of (i) an aggregate of 215,000 non-voting preferred membership units of Forever 8 (the “Initial Base Preferred Units”), subject to adjustments discussed below, (ii) convertible promissory notes in an aggregate principal amount of $27.5 million (the “Promissory Notes”), and (iii) the right to receive potential earnout amounts as discussed below. The following table summarizes the aggregate preliminary purchase price consideration paid to acquire Forever 8 Fund, LLC:

	October 1,
	2022
215,000 non-voting preferred membership units of Forever 8	$	7,300,000
Convertible promissory notes in an aggregate principal amount of $27.5 million		24,500,000
Contingent consideration		6,100,000
Total purchase price	$	37,900,000

The Company believes that this combination will further strengthen its future growth opportunities. The Company accounted for this acquisition as a business combination under the acquisition method of accounting. The following table summarizes the preliminary purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition:

	October 1,
	2022
Cash and cash equivalents	$	732,716
Accounts receivable, net		561,569
Inventories		7,464,823
Prepaid expenses and other assets		116,857
Property and equipment		2,146
Intangible assets		19,000,000
Goodwill		22,324,588
Total assets acquired		50,202,699
Accounts payable and accrued expenses		10,452,699
Debt		1,850,000
Earnout		-
Total liabilities assumed		12,302,699
Total	$	37,900,000

The Company anticipates the goodwill will be tax deductible.