Note 2 - Acquisition
|6 Months Ended|
Jun. 30, 2018
|Notes to Financial Statements|
|Business Combination Disclosure [Text Block]||
April 6, 2018,the Company entered into an Asset and Franchise Purchase Agreement under which (i) the Company repurchased from the seller
oneoperating franchise in San Diego, California and (ii) the parties agreed to mutually terminate a
secondfranchise agreement for an operating franchise. The Company intends to operate the remaining franchise as a company-managed clinic. The total purchase price for the transaction was
$12,998of deferred revenue resulting in total purchase consideration of
$87,002related to the transaction.
The Company incurred approximately
$3,250of transaction costs related to this acquisition, which is included in general and administrative expenses in the accompanying statements of operations.
Purchase Price Allocation
The following summarizes the aggregate estimated fair values of the assets acquired and liabilities assumed during
2018as of the acquisition date:
Intangible assets in the table above consist of reacquired franchise rights of
$85,000amortized over an estimated useful life of
fouryears and customer relationships of
$44,000amortized over an estimated useful life of
Pro Forma Results of Operations (Unaudited)
The following table summarizes selected unaudited pro forma condensed consolidated statements of operations data for the
June 30, 2018and
2017as if the acquisitions in
2018had been completed on
January 1, 2017.
This selected unaudited pro forma consolidated financial data is included only for the purpose of illustration and does
notnecessarily indicate what the operating results would have been if the acquisitions had been completed on that date. Moreover, this information is
notindicative of what the Company’s future operating results will be. The information for
2018prior to the acquisitions is included based on prior accounting records maintained by the acquired companies. In some cases, accounting policies differed materially from accounting policies adopted by the Company following the acquisitions. For
2018,this information includes actual data recorded in the Company’s financial statements for the period subsequent to the date of the acquisitions. The Company’s consolidated statement of operations for the
2018includes net revenue and net income of approximately
$17,000,respectively, attributable to the acquisitions.
The pro forma amounts included in the table above reflect the application of accounting policies and adjustment of the results of the clinics to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied from
January 1, 2017.
The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef