Annual report pursuant to Section 13 and 15(d)

ACQUISITION OF CUREDM

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ACQUISITION OF CUREDM
12 Months Ended
Dec. 31, 2018
Acquisition Of Curedm  
ACQUISITION OF CUREDM
3. ACQUISITION OF CUREDM

 

On February 12, 2018, the Company entered into a Contribution Agreement with the members of CureDM Group Holdings, LLC, a limited liability company (“CureDM Group”), all of which except five are accredited investors (“CureDM Group Members”) pursuant to which the CureDM Group Members agreed to contribute 100% of the outstanding securities of CureDM Group in exchange for an aggregate of 47,741,140 shares of common stock of the Company (the “BTHE Contribution Shares”) of which 25,000,000 BTHE Contribution Shares were delivered at closing and 22,741,140 BTHE Contribution Shares (the “Milestone BTHE Shares”) shall be delivered in four equal tranches of 5,685,285 BTHE Contribution Shares each upon the achievement of specific milestone s (the “CureDM Group Contribution”). The closing of the CureDM Group Contribution occurred on February 12, 2018.

 

A summary of consideration is as follows:

 

25,000,000 shares of the Company’s common stock $ 1,250,000
22,741,140 contingency shares of the Company’s common stock  
     
Total consideration $ 1,250,000

 

The following summarizes the current estimates of fair value of assets acquired and liabilities assumed:

 

Assets acquired:    
Cash $ 3,592
Property and equipment   273
Goodwill   1,176,220
Intangibles   234,122
Liabilities assumed:    
Accounts payable and accrued expenses   (164,207)
Net assets acquired $ 1,250,000

 

As of December 31, 2018, the Company expects the probability of the milestones for issuance of the contingent shares to be remote and therefore has placed no value on the shares as of December 31, 2018. See Note 15.

 

The purchase price allocation for the above acquisition is subject to further refinement as management completes its assessment of the valuation of certain assets and liabilities.

 

The Company accounts for acquisitions in accordance with the provisions of ASC 805-10. The Company assigns to all identifiable assets acquired a portion of the cost of the acquired net assets equal to the estimated fair value of such assets at the date of acquisition. The Company records the excess of the cost of the acquired net assets over the sum of the amounts assigned to identifiable assets acquired as goodwill.

 

The Company accounts for and reports acquired goodwill under Accounting Standards Codification subtopic 350-10, Intangibles-Goodwill and Other (“ASC 350-10”). In accordance with ASC 350-10, at least annually, the Company tests its intangible assets for impairment or more often if events and circumstances warrant. Any write-downs will be included in results from operations.

 

Pro forma results

 

The following table sets forth the unaudited pro forma results of the Company as if the acquisition of CureDM had taken place on the first day of the period presented. These combined results are not necessarily indicative of the results that may have been achieved had the companies been combined as of the first day of the period presented.

 

This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments, and is not indicative of the results that may have been achieved had the companies been combined as of the first day of the period presented.

 

      For the year ended December 31,  
      2018       2017  
Total revenues   $ 31,273     $ 31,263  
Net loss     (3,601,217 )     (2,086,490 )
Basic and diluted net earnings per common share   $ (0.04 )   $ (0.03 )