Quarterly report pursuant to Section 13 or 15(d)

Pro-Tech Acquisition

v3.10.0.1
Pro-Tech Acquisition
9 Months Ended
Sep. 30, 2018
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 $1,386,573, 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 9, Notes Payable)

 

The estimates and assumptions used to determine the allocation of the purchase price are subject to change during the allowable allocation period, which is up to one year from the acquisition date. 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   $ 1,100,575  
Intangible assets acquired:        
Customer relationships     129,680  
Trademark     42,840  
Goodwill     113,478  
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   $ 203,716  
Accounts receivable     264,078  
Inventories     54,364  
Property and equipment     819,361  
Deferred tax liability     (200,856 )
Other assets and liabilities, net     (40,088 )
Net tangible assets acquired   $ 1,100,575  

 

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   2017   2018   2017
Pro forma combined net revenue   $ 494,927     $ 456,801     $ 1,588,714     $ 1,205,170  
Pro forma combined net loss   $ (694,618 )   $ (515,345 )   $ (12,662,166 )   $ (1,672,562 )
Pro forma combined net loss per share (basic)   $ (0.02 )   $ (0.02 )   $ (0.67 )   $ (0.05 )
Pro forma combined net loss per share (diluted)   $ (0.02 )   $ (0.02 )   $ (0.67 )   $ (0.05 )

 

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.