ACQUISITIONS

6 Months Ended

Jun. 30, 2022

ACQUISITIONS

NOTE 5 - ACQUISITION

 NOTE 5 — ACQUISITION

On October 29, 2021, ECHG entered into the Avail Transaction to purchase all of the assets, liabilities and rights and interests of Avail for $4,500,000. The purchase was facilitated by an initial payment of $2,500,000 at closing, and the remaining $2,000,000 to be paid out by 12 quarterly payments starting April 1, 2022, of $166,667 each. See Note 14 to our consolidated financial statements for more information on this loan. The installment note payable for the Avail Transaction imputed at 3.1% interest.

As part of the Avail Transaction, goodwill was preliminarily recorded as $3,491,284, which is the purchase price less the approximate fair value of the net assets and liabilities purchased. On May 31, 2022, an additional cash payment of $216,988 was made in connection with the Avail Transacton adjusting the goodwill and purchase price amount as shown in the preliminary purchase price allocation in the following table. The additional payment is not part of the installment note payable of $2,000,000 from the initial Avail Transaction. The Company’s goodwill is related to the ECHG segment. ECHG has its own separate financial information to perform goodwill impairment testing. The Company will evaluate goodwill based on cash flows for the ECHG segment. For tax purposes, goodwill is amortized and deductible over 15 years.

The following table compares the results of Avail as part of the Company's financial results for the three months ended June 30, 2022, and the Company's results of operations as if they were combined for the three months ended June 30, 2021:

	Consolidated Statement  of Income For the Three Months Ended		Proforma Combined For the Three Months Ended
	June 30, 2022		June 30, 2021
	(unaudited)		(unaudited)
Revenue	$	42,639,718	$	35,525,133
Income from continuing operations	$	3,847,858	$	2,482,863
Net income	$	3,847,858	$	2,482,863
Basic net income per common share	$	0.14	$	0.09
Diluted net income per common share	$	0.14	$	0.09

The following table compares the results of Avail as part of the Company's financial results for the six months ended June 30, 2022, and the Company's results of operations as if they were combined for the six months ended June 30, 2021:

	Consolidated Statement of Income For the Six Months Ended		Proforma Combined For the Six Months Ended
	June 30, 2022		June 30, 2021
	(unaudited)		(unaudited)
Revenue	$	90,054,816	$	62,635,207
Income from continuing operations	$	6,495,083	$	4,837,758
Net income	$	6,495,083	$	4,837,758
Basic net income per common share	$	0.24	$	0.18
Diluted net income per common share	$	0.24	$	0.18

The purchase price allocation of the Avail transaction is listed below and is considered to be a preliminary allocation and is subject to change.

The preliminary purchase price is allocated as follows:

Description	Amount
Assets
Cash	$	988,870
Account receivables		395,144
Inventories		486,736
Prepaid expenses		93,727
Fixed assets - net		247,038
Right-of-use assets		609,511
Other assets		13,268
Liabilities
Account payables		(562,778	)
Accrued liabilities		(653,289	)
Operating lease liabilities		(609,511	)
Net assets		1,008,716
Goodwill		3,708,272
Total Purchase Price	$	4,716,988