NOTE 7 – ACQUISITION



On May 14, 2020, in a reverse triangular merger, the Company completed the acquisition of 100% of Ecessa Corporation (“Ecessa”), based in Plymouth, Minnesota. The purchase price was  $4,650,000, with cash acquired totaling $666,000. The purchase price includes initial consideration of $4,666,000 and $ (16,000) in working capital adjustments.



The estimated assets and liabilities of Ecessa are recorded in the condensed consolidated balance sheet within the Services & Support segment at June 30, 2020. The preliminary purchase price allocation was based on estimates of the fair value of assets acquired and liabilities assumed, and included total assets of $5,249,000, including estimated goodwill of $411,000 and estimated intangibles of $3,190,000, and total liabilities of $599,000.  The fair value of acquired identifiable intangible assets of $3,190,000 is provisional depending on the final valuations for those assets. All balances recorded are estimated amounts and the Company expects to finalize the purchase price allocation during the third quarter of 2020 as the valuation of identifiable assets and liabilities is completed. The pro forma impact of Ecessa was not significant to the Company’s results for the three and six months ended June 30, 2020.