ACQUISITIONS | NOTE 5 ACQUISITIONS AOS Acquisition On September 12, 2022, STCB, through its wholly-owned subsidiary Merger Sub, completed the AOS Acquisition. The AOS Acquisition consisted of Merger Sub merging with and into AOS, with AOS being the surviving corporation. AOS is a maker of premium body and skincare products engineered to power and protect athletes. Starco acquired AOS as STCB is always looking for technologies and brands that have ability to scale and change behavior. In the world of sport, there are currently no brands that have successfully penetrated multiple categories of consumer products. AOS has historically been a personal care brand – offering products such as body wash, shampoo, deodorant and face wash. Starco Brands, through its relationship with TSG, has access to intellectual property that will allow AOS vertically integrate manufacturing and expand into multiple consumer product categories – OTC, sun care, air care, beverage, etc. The AOS Acquisition was completed through an all-stock deal, where the Company’s shares were issued at $ 0.19 61,400,000 5,000,000 5,000,000 5,000,000 Securities Act 0.0982 The 5,000,000 5,000,000 5,000,000 5,000,000 As of September 30, 2023, the Company has paid $ 1,821 6,137 62,499 The AOS Acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The preliminary fair values of the acquired assets and liabilities as of the acquisition date were: SCHEDULE OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES Consideration 1 $ 12,608,560 Assets acquired: Cash and cash equivalents 200,661 Accounts receivable 153,764 Prepaid and other assets 167,565 Inventory 656,448 PP&E, net 16,622 Intangibles 17,309 Right of use asset 85,502 Customer relationships - Trade names and trademarks - Total assets acquired 1,297,871 Liabilities assumed: Accrued liabilities 562,919 Accounts payable 128,724 Right of use liability 87,539 Note payable - Line of credit - Total liabilities assumed 779,182 Net assets acquired 518,689 Goodwill $ 12,089,871 1 Consideration consists of the following: $ 1,821 11,654,452 4,147 1,990 946,149 The purchase price allocation is based on estimates of the fair values of the tangible and intangible assets acquired and liabilities assumed from a final third-party valuation of the AOS Acquisition. The above purchase price allocation is final and not subject to further change. The Company incurred approximately $ 845,000 Skylar Acquisition On December 29, 2022, STCB, through its wholly-owned subsidiaries First Merger Sub and Second Merger Sub, completed the Skylar Acquisition. In a two-step process, during the First Merger, First Merger Sub merged with and into Skylar Inc. and as part of the same overall transaction, during the Second Merger, Skylar Inc. merged with and into Second Merger Sub to result in Skylar as the surviving entity. Skylar is a wholly owned subsidiary of STCB. Skylar is a maker of fragrances that are hypoallergenic and safe for sensitive skin. Starco Brands acquired Skylar as STCB is always looking for technologies and brands that have the ability to scale and change behavior. In the world of fragrances, there are no other brands that have successfully built clean, beautiful, premium incredibly well-scented and recyclable fragrance brands for consumers. Starco Brands, through its relationship with TSG and other strong partners, the Company has access to intellectual property that will allow Skylar to vertically integrate manufacturing and expand, positioning Skylar to be the future of fragrance. The Skylar Acquisition was completed through a cash and stock deal, where the Company paid $ 2,000,000 0.20 68,622,219 19,268,162 11,573,660 19,268,162 0.17 The 19,268,162 11,573,660 earnout shares of Class A common stock to be issued if certain future sales metrics are met, are deemed to be part of the consideration paid for the acquisition. As of September 30, 2023, the Company has paid $ 27,273 The Skylar Acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The preliminary fair values of the acquired assets and liabilities as of the acquisition date were: SCHEDULE OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES Consideration 1 $ 21,417,681 Assets acquired: Cash and cash equivalents 339,679 Accounts receivable 381,762 Prepaid and other assets 701,566 Inventory 2,508,287 PP&E, net 25,942 Intangibles 161,693 Customer relationships 2 2,091,000 Trade names and trademarks 3 6,557,000 Total assets acquired 12,766,929 Liabilities assumed: Accrued liabilities 540,036 Accounts payable 2,425,524 Total liabilities assumed 2,965,560 Net assets acquired 9,801,369 Goodwill $ 11,616,312 1 Consideration consists of the following: $ 2,039,345 13,120,924 571,428 2,314,732 3,371,252 2 Based on the valuation of the Skylar Acquisition, customer relationships, a new intangible asset was identified, and given a fair value of $ 2,091,000 10 years 3 Based on the valuation of the Skylar Acquisition, trade names and trademarks, a new intangible asset was identified, and given a fair value of $ 6,557,000 16 years The purchase price allocation is based on estimates of the fair values of the tangible and intangible assets acquired and liabilities assumed from a final valuation of the Skylar Acquisition. The above purchase price allocation is preliminary and subject to change as the Company may further refine the determination of certain assets during the measurement period of one year. The final amounts allocated to assets acquired and liabilities assumed could differ significantly from the amounts presented. The Company incurred approximately $ 1,770,000 Soylent Acquisition On February 15, 2023, the Company, through its wholly-owned subsidiary Starco Merger Sub I completed the Soylent Acquisition. The Soylent Acquisition consisted of Starco Merger Sub I merging with and into Soylent, with Soylent being the surviving corporation. Soylent is the maker of a wide range of plant-based “complete nutrition” and “functional food” products with a lineup of plant-based convenience shakes, powders and bars that contain proteins, healthy fats, functional amino acids and essential nutrients. Through its relationship with TSG and other strong partners, the Company has access to intellectual property that will allow Soylent to vertically integrate manufacturing and expand, positioning Soylent to be the future of nutritional products. The Soylent Acquisition was completed through a cash and stock deal, where the Company paid $ 200,000 0.15 165,336,430 12,617,857 18,571,429 0.35 0.35 0.35 0.189 37,143,360 0.203 39,894,720 The Soylent Acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The preliminary fair values of the acquired assets and liabilities as of the acquisition date were: SCHEDULE OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES Consideration 1 $ 68,339,812 Assets acquired: Cash and cash equivalents 189,071 Accounts receivable 5,617,270 Prepaid and other assets 1,045,431 Inventory 14,564,431 PP&E, net 2 8,568 Intangibles 3 24,600,000 Total assets acquired 46,024,770 Liabilities assumed: Accounts payable 6,561,069 Accrued liabilities 699,364 Line of credit 4,800,000 Total liabilities assumed 12,060,434 Net assets acquired 33,964,336 Goodwill $ 34,375,476 1 Consideration consists of the following: $ 200,000 26,693,143 2,785,714 1,517,595 37,143,360 0.35 2 Based on the valuation of the Soylent Acquisition, inventory was marked up to fair value in the amount $ 2,250,103 3 Based on the valuation of the Soylent Acquisition, new intangible assets classified as tradenames and trademarks were identified as of Soylent Acquisition date, with a fair value of $ 19,700,000 4,600,000 16 years 10 years The purchase price allocation is based on estimates of the fair values of the tangible and intangible assets acquired and liabilities assumed from the Soylent Acquisition. The above purchase price allocation is preliminary and subject to change as the Company may further refine the determination of certain assets during the measurement period of one year. The amounts allocated to assets acquired and liabilities assumed could differ significantly from the amounts presented. Soylent incurred approximately $ 5.7 |