Quarterly report pursuant to Section 13 or 15(d)

MERGER AGREEMENT AND DIVESTITURE (Tables)

v3.19.3.a.u2
MERGER AGREEMENT AND DIVESTITURE (Tables)
9 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
Schedule of consideration paid for the acquisition

The consideration paid for the acquisition was as follows:

 

Series E Preferred Shares   $ 18,701,000  
Series F Preferred Shares     1,417,000  
   Total consideration   $ 20,118,000  
Schedule of current values of the assets and liabilities of Lineal as of the Merger

The allocation of the preliminary purchase price to the assets and liabilities acquired in connection with the Lineal Merger was based on the current values of the assets and liabilities of Lineal as of the Lineal Merger date on July 8, 2019 and are as follows:

 

Cash   $ 449,763  
Accounts receivable     2,776,477  
Deferred tax assets     34,000  
Cost in excess of billings     944,250  
Property and equipment     1,436,920  
Right of use asset – operating leases     913,396  
Other current assets and deposits     60,132  
Goodwill     17,992,118  
Accounts payable – trade     (400,889 )
Accrued and other liabilities     (893,013 )
Operating lease liabilities     (913,396 )
Finance lease liabilities     (313,472 )
Loan Payable – shareholder     (492,337 )
Notes payable     (1,475,949 )
   Net assets acquired   $ 20,118,000  
Schedule of net consideration received for the divestiture

The net consideration received for the divestiture was as follows:

 

Return of Series E Preferred Shares

 

$

14,666,000

 

Return of Series F Preferred Shares

 

 

2,434,000

 

   Total net consideration

 

$

17,100,000

 

 

Schedule of assets and liabilities transferred in Redemption agreement

The following table summarizes the assets and liabilities of Lineal which were transferred from the Company to the Preferred Holders, together with Lineal, as part of the Redemption agreement:

 

Cash   $ 2,101,879  
Accounts receivable     1,673,538  
Deferred tax assets     34,000  
Cost in excess of billings     497,340  
Property and equipment     1,996,229  
Right of use asset – operating leases     710,898  
Other current assets and deposits     49,275  
Goodwill     18,314,222  
Accounts payable – trade     (260,882 )
Accrued and other liabilities     (369,448 )
Billings in excess of costs                                                                                                               (445,759)  
Operating lease liabilities     (710,898 )
Finance lease liabilities     (237,925 )
Notes payable     (3,545,841 )
   Net assets divested   $ 19,806,628  

Schedule of consolidated statements of operations related to discontinued operations

Components of amounts reflected in the Company’s consolidated statements of operations related to discontinued operations are presented in the following table for the three and nine months ended December 31, 2019.

 

    Three Months Ended     Nine Months Ended  
    December 31, 2019     December 31, 2019  
Contract revenue   $ 2,821,229     $ 9,106,764  
Contract costs     (2,875,530 )     (7,772,726 )
Depreciation and amortization     (90,415 )     (155,282 )
Selling, general and administrative     (885,164 )     (1,649,643 )
Operating loss     (1,029,880 )     (470,887 )
Other income     9,925       273,037  
Interest expense     (1,529 )     (113,522)  
Net (loss) from discontinued operations     (1,021,484)       (311,372 )
Loss on disposal of business     (2,706,628 )     (2,706,628 )
Change in value of preferred stock     3,018,000       3,018,000  
Total loss on discontinued operations   $ (710,112 )   $