Quarterly report pursuant to Section 13 or 15(d)

ACQUISITIONS

v3.22.1
ACQUISITIONS
 3 Months Ended
Mar. 31, 2022
Business Combinations [Abstract]  
ACQUISITIONS
 
NOTE
J
– ACQUISITIONS
 
Agribody Technologies, Inc. - In April 2021, the Company acquired Agribody Technologies, Inc., (“ATI”) a private agricultural biotechnology company. The transaction was accomplished by acquiring a 100% controlling interest in ATI in an all-stock transaction for a total fair value of approximately $5 million. In consideration for the shares of ATI, the Company issued 830,526 shares of common stock at an approximate fair value of $6.02 per share. The primary reason for the combination was to leverage the expertise of ATI to speed the development of novel Camelina varieties for SusOils. The Company hired the CEO/Co-founder of ATI and will continue to monetize the pre-acquisition ATI revenue contracts.
 
Entira, Incorporated - In November 2021, we acquired Entira, Incorporated, an agriculture business and marketing consulting firm (“Entira”), to bolster SusOils’ Camelina production strategy and the roll-out of its Camelina development program. As consideration for the purchase of Entira, we issued a total of 407,150 unregistered shares of our common stock, which were valued at $6.05 per share and assumed liabilities for a total purchase price of approximately $2.5 million. In addition, we issued 71,850 unregistered shares to certain employees as post acquisition compensation. Entira had been engaged as a consulting firm to GCEH for over 10 years and had extensive knowledge of our Camelina development program. We hired five people from Entira to join our team. Entira has been integrated into SusOils.
 
Camelina Company Espana, S.L. - In December 2021 we acquired Camelina Company Espana, S.L., a private limited company (“CCE”). Based in Madrid, Spain, CCE is Europe’s largest Camelina crop innovator and seed producer. We acquired CCE for a total purchase price of €7.3 million (approximately $8.3 million USD at that time), which price was paid by the delivery of (i) €0.7 million ($0.8 million USD) in cash, (ii) €0.7 million ($0.8 million USD) in one-year, unsecured interest-free promissory notes, and (iii) 1,353,951 unregistered shares of our Common Stock, valued at $4.957 per share, or an aggregate of €5.9 million ($6.7 million USD). In addition, we issued 67,314 unregistered shares to certain employees as post acquisition compensation. Established in 2010, CCE will lead our initiatives to expand our Camelina operations into Europe and South America. CCE will continue as a subsidiary with approximately seventeen people located in Spain.
 
GCEH acquired goodwill in each of the acquisitions it completed in 2021 for a total of $10.3 million. This goodwill represents the acquired assembled workforce and synergies and none of this goodwill is deductible for tax purposes
.
 
The Company had no acquisitions in the three months ended March 31, 2022.
 
Below is a table that shows the fair value of assets acquired and liabilities assumed by the Company as a result of the 2021 transactions.
The purchase price allocation below for CCE is preliminary, as management is currently evaluating certain assumptions including working capital changes and tax impacts and may adjust the allocation in the subsequent period.

 
Assets
 
Agribody
Technologies, Inc.
as of April 15, 2021
 
 
Entira, Inc. as of
November 17, 2021
 
 
Camelina Company
Espana, S.L. as of
December 2
9
, 2021
 
 
Total of
Acquisitions
 
Cash and cash equivalents
 
$
263,755
 
 
$
2,100
 
 
$
151,188
 
 
$
417,043
 
Accounts receivable
 
 
-
 
 
 
-
 
 
 
414,554
 
 
 
414,554
 
Prepaid expense and other current assets
 
 
-
 
 
 
-
 
 
 
1,094,894
 
 
 
1,094,894
 
Property, plant, and equipment
 
 
185,445
 
 
 
33,000
 
 
 
598,619
 
 
 
817,064
 
Patents
 
 
3,450,000
 
 
 
-
 
 
 
-
 
 
 
3,450,000
 
Developed seed variant technology
 
 
-
 
 
 
-
 
 
 
5,679,500
 
 
 
5,679,500
 
Trade name
 
 
90,000
 
 
 
-
 
 
 
-
 
 
 
90,000
 
Goodwill
 
 
2,345,569
 
 
 
2,858,930
 
 
 
5,120,400
 
 
 
10,324,899
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
 
(344,277
)
 
 
(300,000
)
 
 
(2,555,066
)
 
 
(3,199,343
)
Long term liabilities
 
 
-
 
 
 
-
 
 
 
(619,293
)
 
 
(619,293
)
Deferred tax liabilities
 
 
(990,492
)
 
 
(130,723
)
 
 
(1,623,599
)
 
 
(2,744,814
)
Total fair value of net assets acquired
 
 
5,000,000
 
 
 
2,463,307
 
 
 
8,261,197
 
 
 
15,724,504
 
Less: Cash acquired
 
 
(263,755
)
 
 
(2,100
)
 
 
(151,188
)
 
 
(417,043
)
Total fair value of consideration transferred, net of cash acquired
 
$
4,736,245
 
 
$
2,461,207
 
 
$
8,110,009
 
 
$
15,307,461
 
During the three months ended March 31, 2022, we recorded adjustments to the preliminary fair value estimates of assets acquired and liabilities assumed
for CCE as o
f the acquisition date as noted in the table below:
 
Assets
 
Preliminary
 
 
Adjustments
 
 
As adjusted
 
Cash and cash equivalents
 
$
151,188
 
 
$
-
 
 
$
151,188
 
Accounts receivable
 
 
1,094,894
 
 

(680,340
)
 
 
414,554
 
Prepaid expense and other current assets
 
 
1,094,894
 
 
 
-
 
 
 
1,094,894
 
Property, plant, and equipment
 
 
598,619
 
 
 
-
 
 
 
598,619
 
Patents
 
 
-
 
 
 
-
 
 
 
-
 
Developed seed variant technology
 
 
5,679,500
 
 
 
-
 
 
 
5,679,500
 
Trade name
 
 
-
 
 
 
-
 
 
 
-
 
Goodwill
 
 
3,572,941
 
 
 
1,547,458
 
 
 
5,120,399
 
Liabilities
 
 
 
 
 
 
 
 
 
 

 
Accounts payable and accrued liabilities
 
 
(1,687,947
)
 
 
(867,118
)
 
 
(2,555,065
)
Long term liabilities
 
 
(619,293
)
 
 
-
 
 
 
(619,293
)
Deferred tax liabilities
 
 
(1,623,599
)
 
 
-
 
 
 
(1,623,599
)
Total fair value of net assets acquired
 
 
8,261,197
 
 
 
-
 
 
 
8,261,197
 
Less: Cash acquired
 
 
(151,188
)
 
 
-
 
 
 
(151,188
)
Total fair value of consideration transferred, net of cash acquired
 
$
8,110,009
 
 
$
-
 
 
$
8,110,009