Pro-Tech Acquisition

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Pro-Tech Acquisition

3. Pro-Tech Acquisition

On July 31, 2018, the Company entered into a stock purchase agreement (the "Purchase Agreement") to purchase 100% of the issued and outstanding common stock of Pro-Tech, a hardbanding service provider servicing Oklahoma Texas, Kansas, Arkansas, Louisiana, and New Mexico. The Company believes that the acquisition of Pro-Tech will create opportunities to leverage its existing portfolio of intellectual property to fulfill its mission of operating as a technology-focused oilfield services company.

In exchange for the outstanding common stock of Pro-Tech, Victory agreed to pay consideration of approximately $1,386,000, comprised of the following:

(i) a total of $500,000 in cash at closing, including $150,000 previously deposited into escrow;

(ii) 11,000 shares of the Company's common stock valued at $0.75 per share;

(iii) $264,078 in cash on the 60th day following the closing date, and

(iv) a zero-coupon note payable with discounted value of $614,223 at the date of acquisition (for further information, see Note 8, Notes Payable)

The fair value of customer relationships and trademarks is provisional pending determination of final valuation of those assets. The Company believes the methodology and estimates utilized to determine the net tangible assets and intangible assets are reasonable.

Net tangible assets acquired, at fair value	$	1,068,905
Intangible assets acquired:		-
Customer relationships		129,680
Trademark		42,840
Goodwill		145,148
Total purchase price	$	1,386,573

The following table summarizes the components of the net tangible assets acquired, at fair value:

Cash and cash equivalents	$	203,883
Accounts receivable		264,078
Inventories		54,364
Property and equipment		678,361
Deferred tax liability		(87,470	)
Other assets and liabilities, net		(44,311	)
Net tangible assets acquired	$	1,068,905

Pro-Tech's results of operations subsequent to the July 31, 2018 acquisition date are included in the Company's condensed consolidated financial statements. The below unaudited combined pro-forma financial data of Victory and Pro-Tech reflects results of operations as though the companies had been combined as of the beginning of each of the periods presented. 

	Three Months Ended			Nine Months Ended
	September 30,			September 30,
	2018			2018
Pro forma net revenue	$	494,926		$	1,588,713
Pro forma net loss	$	(617,891	)	$	(12,735,569	)
Pro forma net loss per share (basic)	$	(0.02	)	$	(0.45	)
Pro forma net loss per share (diluted)	$	(0.02	)	$	(0.45	)

This unaudited pro-forma combined financial data is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the merger had taken place at the beginning of each of the periods presented.