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ACQUISITION OF TRANSFORMATION CONSULTING, INC.
9 Months Ended
Sep. 30, 2011
Acquisition Of Transformation Consulting Inc. 
Note 5.ACQUISITION OF TRANSFORMATION CONSULTING, INC.

On March 9, 2011, DEDC purchased 100,000 shares, representing all of the outstanding shares, of Transformation Consulting, Inc. (“TC”) pursuant to a Stock Purchase Agreement dated February 25, 2011. The purchase price for the Shares was $2,000,000, payable from the gross revenues (pre-tax) of TC, as received, subject to the following contingent reduction or increase of the purchase price.  If TC’s gross revenues during the two years following the closing are less than $2,000,000, then the purchase price for the shares shall be reduced to the actual revenue received by TC during the two year period.  If TC’s revenues during the same two year period exceed $2,000,000, then the purchase price for the shares shall be increased by one-half of the excess revenues over $2,000,000 (“contingent consideration”). At the time of the acquisition, TC had minimal tangible assets and the entire $2,000,000 purchase price was allocated to a customers list intangible asset.

 

Management estimated, for presentation purposes, that the present value of the contingent consideration payable is $2,000,000, but the actual amount to be paid could be higher, depending on future events. The total, and current portion expected to be paid within the next 12 months, is $568,232.