Business Acquisitions | 5. Business acquisitions Advanced Veterinary Care of Pasco On January 14, 2022, the Company acquired the veterinary practice and related assets of Advanced Veterinary Care of Pasco in Hudson, FL by entering into an Asset Purchase Agreement (“Advanced Veterinary APA”) with Advanced Veterinary Care of Pasco, LLC (“AVP”) and DJA Asset Management, LLC, (“DJA”) (the “Pasco Practice” or collectively “Pasco”) in exchange for the payment of $1,014,000 through the Company’s wholly owned subsidiary, IVP FL Holding Company, LLC. This acquisition was financed by a loan provided by Farmers National Bank of Danville Kentucky for a total of $817,135 (See Note 6 – Debt – Master Lending and Credit Facility) and convertible note payable due to the sellers on or before September 9, 2027 in the amount of $164,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the combined acquisitions from the Pasco Practice in the amount of $1,014,000 was accounted for the acquisition as single business combinations, in accordance with ASC Topic 805. The Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 850,000 Note Payable 164,000 Acquisition costs included in general and administrative 25,315 Recognized amounts of identifiable assets acquired Inventory 35,000 Furniture, fixtures & equipment 144,904 Trademark (5-year life) 97,600 Non-compete agreement (2-year life) 25,500 Client list (5-year life) 157,000 Total identifiable net assets assumed 460,004 Goodwill 553,996 Total $ 1,014,000 Since we first reported the preliminary purchase price allocation for the Pasco transaction as of June 30, 2022, the Company made measurement periodic adjustment, which composed of a $74,904 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Lytle Veterinary Clinic On March 15, 2022, the Company acquired the veterinary practice and related assets of Lytle Veterinary Clinic in Texas by entering into an Asset Purchase Agreement (“Lytle APA”) with Lytle Veterinary Clinic, Inc. (“Lytle”) in exchange for the payment of $662,469 through the Company’s wholly owned subsidiary IVP Texas Holding Company, LLC and its wholly owned subsidiary, IVP Texas Managing Co., LLC. Simultaneously, the Company the real estate operations (land and buildings) utilized by the Lytle Practice was purchased through a Bill of Sale in exchange for $ 780,000 from the Lytle Practice through the Company’s wholly owned subsidiary, IVP Texas Properties, LLC. This acquisition was financed by two loans provided by Farmers National Bank of Danville Kentucky for a total of $1,141,098 (See Note 6 – “Debt – Master Lending and Credit Facility) and convertible note payable due to the sellers on or before September 9, 2027 in the amount of $100,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the combined acquisitions from the Lytle Practice in the amount of $1,442,469 was accounted for the acquisition as single business combinations, in accordance with ASC Topic 805. The Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 1,342,469 Note Payable 100,000 Acquisition costs included in general and administrative 43,605 Recognized amounts of identifiable assets acquired Inventory 28,894 Buildings 660,000 Land 120,000 Furniture, fixtures & equipment 22,991 Tradename – trademarks (5-year life) 40,300 Non-compete agreement (2-year life) 23,200 Client list (5-year life) 116,000 Total identifiable net assets assumed 1,011,385 Goodwill 431,084 Total $ 1,442,469 Since we first reported the preliminary purchase price allocation for the Lytle transaction as of June 30, 2022, the Company made measurement period adjustment, which composed of a $46,563 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Southern Kern Veterinary Clinic On March 22, 2022, the Company acquired the veterinary practice and related assets of Southern Kern Veterinary Clinic in California by entering into an Asset Purchase Agreement (“Kern APA”) with Southern Kern Veterinary Clinic, Inc. (“Kern”) in exchange for the payment of $1,500,000 through the Company’s wholly owned subsidiary IVP CA Holding Co., LLC and its wholly owned subsidiary, IVP Texas Managing Co., LLC. Simultaneously, the real estate operations (land and buildings) utilized by the Kern Practice was purchased through a Bill of Sale in exchange for $500,000 from the Kern Practice through the Company’s wholly owned subsidiary, IVP CA Properties, LLC. This acquisition was financed by two loans provided by Farmers National Bank of Danville Kentucky for a total of $1,700,000 (See Note 6 – “Debt – Master Lending and Credit Facility). The total cash consideration paid for the combined acquisitions from the Kern Practice in the amount of $2,000,000 was accounted for the acquisition as single business combinations, in accordance with ASC Topic 805. The Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 2,000,000 Acquisition costs included in general and administrative 34,812 Recognized amounts of identifiable assets acquired Inventory 25,000 Buildings 425,156 Land 74,844 Furniture, fixtures & equipment 176,862 Tradename – Trademarks (5-year life) 57,800 Non-compete agreement (2-year life) 38,600 Client list (5-year life) 249,000 Total identifiable net assets assumed 1,047,262 Goodwill 952,738 Total $ 2,000,000 Since we first reported the preliminary purchase price allocation for the Kern transaction as of June 30, 2022, the Company made measurement period adjustment, which composed of a $76,862 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Bartow Animal Clinic On May 18, 2022, the Company acquired the veterinary practice and related assets of Bartow Animal Clinic in Bartow, FL by entering into an Asset Purchase Agreement (“Bartow APA”) with Winter Park Veterinary Clinic, Inc. (“Bartow”) in exchange for the payment of $1,055,000 through the Company’s wholly owned subsidiary IVP FL Holding Company LLC. Simultaneously, the real estate operations (land and buildings) utilized by the Bartow Practice was purchased through a Bill of Sale in exchange for $350,000 from the Bartow Practice through the Company’s wholly owned subsidiary, IVP CA Properties, LLC. This acquisition was financed by two loans provided by Farmers National Bank of Danville Kentucky for a total of $969,000 (See Note 6 – “Debt – Master Lending and Credit Facility) and convertible note payable due to the sellers on or before September 9, 2027 in the amount of $100,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the combined acquisitions from the Bartow Practice in the amount of $1,405,000 was accounted for the acquisition as single business combinations, in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 1,305,000 Notes Payable 100,000 Acquisition costs included in general and administrative 14,960 Recognized amounts of identifiable assets acquired Inventory 15,000 Buildings 230,000 Land 60,000 Furniture, fixtures & equipment 171,984 Tradename – Trademarks (5-year life) 49,800 Non-compete agreement (2-year life) 13,900 Client list (5-year life) 90,000 Total identifiable net assets assumed 630,684 Goodwill 774,316 Total $ 1,405,000 Since we first reported the preliminary purchase price allocation for the Bartow transaction as of June 30, 2022, the Company made measurement period adjustment, which composed of a $96,984 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Dietz Family Pet Hospital On June 15, 2022, the Company acquired the veterinary practice and related assets of Dietz Family Pet Hospital in Richmond, TX by entering into an Asset Purchase Agreement (“Dietz APA”) with Dietz Family Pet Hospital, P.A. (“Dietz”) in exchange for the payment of $500,000 through the Company’s wholly owned subsidiary IVP Texas Holding Company LLC and its wholly owned subsidiary, IVP Texas Managing Co. LLC. This acquisition was financed by a loan provided by Farmers National Bank of Danville Kentucky for a total of $382,500 (See Note 6 – “Debt – Master Lending and Credit Facility) and note payable due to the sellers on or before September 9, 2027 in the amount of $50,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition of the Dietz Practice in the amount of $500,000 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 450,000 Notes Payable 50,000 Acquisition costs included in general and administrative 20,193 Recognized amounts of identifiable assets acquired Inventory 21,000 Furniture, fixtures & equipment 59,151 Tradename – trademarks (5-year life) 37,800 Non-compete agreement (2-year life) 12,200 Customer Lists (5-year life) 32,000 Total identifiable net assets assumed 162,151 Goodwill 337,849 Total $ 500,000 Since we first reported the preliminary purchase price allocation for the Dietz transaction as of June 30, 2022, the Company made measurement period adjustment, which composed of a $15,849 decrease to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Aberdeen Veterinary Clinic On July 29, 2022, the Company acquired the veterinary practice and related assets of Aberdeen Veterinary Clinic in Aberdeen, MD (“Aberdeen Practice”) by entering into an Asset Purchase Agreement (“Aberdeen APA”) with Fritz Enterprises, Inc. in exchange for the payment of $574,683 through the Company’s wholly owned subsidiary, IVP MD Holding Company, LLC. This acquisition was financed by a loan provided by Farmers National Bank of Danville Kentucky for a total of $445,981 (See Note 6 – Debt – Master Lending and Credit Facility) and a convertible note payable due to the sellers on or before September 9, 2027 in the amount of $50,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition from the Aberdeen Practice in the amount of $574,683 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 524,683 Convertible Notes Payable 50,000 Acquisition costs included in general and administrative 17,762 Recognized amounts of identifiable assets acquired Inventory 20,000 Furniture, fixtures & equipment 145,982 Trademark (5-year life) 18,600 Non-compete agreement (2-year life) 9,700 Client list (5-year life) 25,000 Total identifiable net assets assumed 219,282 Goodwill 355,401 Total $ 574,683 Since we first reported the preliminary purchase price allocation for the Aberdeen transaction as of June 30, 2022, the Company made measurement period adjustment, which composed of a $30,882 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. All Breed Pet Care On August 12, 2022, the Company acquired the veterinary practice and related assets of All Breed Pet Care veterinary clinic in Newburgh, IN by entering into an Asset Purchase Agreement (“All Breed APA”) with Tejal Rege (the “All Breed Practice” or collectively “All Breed”) in exchange for the payment of $952,000 through the Company’s wholly owned subsidiary IVP IN Holding Company, LLC. Simultaneously, the real estate operations (land and building) utilized by the All Breed practice was purchased through a Bill of Sale in exchange for $1,200,000 from All Breed Pet Care, LLC through the Company’s wholly owned subsidiary, IVP IN Properties, LLC. These acquisitions were financed by three loans provided by Farmers National Bank of Danville Kentucky for a total $1,765,450 (See Note 6 – Debt – Master Lending and Credit Facility) and convertible note payable due to the sellers on or before September 9, 2027 in the amount of $75,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition of the All Breed Practice in the amount of $2,122,000 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 2,077,000 Convertible Notes Payable 75,000 Acquisition costs included in general and administrative 15,000 Recognized amounts of identifiable assets acquired Inventory 45,000 Building 1,045,000 Land 155,000 Furniture, fixtures & equipment 170,013 Trademark (5-year life) 63,600 Non-compete agreement (2-year life) 31,800 Client list (5-year life) 196,000 Total identifiable net assets assumed 1,706,413 Goodwill 445,587 Total $ 2,152,000 Since we first reported the preliminary purchase price allocation for the All Breed transaction as of June 30, 2022, the Company made measurement period adjustments, which composed of a $20,000 increase to Inventory and a $70,013 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Pony Express On October 31, 2022, the Company acquired the veterinary practice and related assets of Pony Express Veterinary Clinic in Xenia, OH (“Pony Express Practice” or collectively “Pony Express”) by entering into an Asset Purchase Agreement (“Pony Express APA”) with Pony Express Veterinary Hospital, Inc. in exchange for the payment of $2,608,652 through the Company’s wholly owned subsidiary, IVP OH Holding Company, LLC. Simultaneously, the real estate operations (land and building) utilized by the Pony Express practice was purchased through a Bill of Sale in exchange for $500,000 from Pony Expressions Enterprises, Ltd through the Company’s wholly owned subsidiary, IVP OH Properties, LLC. This acquisition was financed by three loans provided by First Southern National Bank for a total of $2,853,314 (See Note 6 – Debt – Master Lending and Credit Facility) and a convertible note payable due to the sellers on or before September 9, 2027 in the amount of $200,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition from the Pony Express Practice in the amount of $3,108,652 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 2,908,652 Convertible Note Payable 200,000 Acquisition costs included in general and administrative 6,077 Recognized amounts of identifiable assets acquired Inventory 44,000 Building 234,221 Land 265,779 Furniture, fixtures & equipment 253,072 Trademark (5-year life) 276,900 Non-compete agreement (2-year life) 120,400 Client list (5-year life) 556,000 Total identifiable net assets assumed 1,760,372 Goodwill 1,348,280 Total $ 3,108,652 Williamsburg On December 9, 2022, the Company acquired the veterinary practice and related assets of Williamsburg Veterinary Clinic in Williamsburg, MA (“Williamsburg Practice”) by entering into an Asset Purchase Agreement (“Williamsburg APA”) with Williamsburg Animal Clinic, LLC in exchange for the payment of $850,000 through the Company’s wholly owned subsidiary, IVP MA Holding Company, LLC. This acquisition was financed by a loan provided by Farmers National Bank of Danville Kentucky for a total of $637,500 (See Note 6 – Debt – Master Lending and Credit Facility) and a convertible note payable due to the sellers on or before September 9, 2027 in the amount of $100,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition from the Williamsburg Practice in the amount of $850,000 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 750,000 Convertible Note Payable 100,000 Acquisition costs included in general and administrative 19,196 Recognized amounts of identifiable assets acquired Inventory 61,196 Building - Land - Furniture, fixtures & equipment 28,202 Trademark (5-year life) 79,500 Non-compete agreement (2-year life) 56,300 Client list (5-year life) 190,000 Total identifiable net assets assumed 415,198 Goodwill 434,802 Total $ 850,000 Old 41 On December 16, 2022, the Company acquired the veterinary practice and related assets of The Old 41 Veterinary Clinic in Bonita Springs, FL (“Old 41 Practice” or collectively “Old 41”) by entering into an Asset Purchase Agreement (“Old 41 APA”) with The Old 41 Animal Hospital, LLC in exchange for the payment of $665,000 through the Company’s wholly owned subsidiary, IVP FL Holding Company, LLC. Simultaneously, the real estate operations (land and building) utilized by the Old 41 practice was purchased through a Bill of Sale in exchange for $800,000 from Scott A. Gregory DVM, LLC through the Company’s wholly owned subsidiary, IVP FL Properties, LLC. This acquisition was financed by two loans provided by First Southern National Bank for a total of $1,208,000 (See Note 6 – Debt – Master Lending and Credit Facility) and a convertible note payable due to the sellers on or before September 9, 2027 in the amount of $50,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition from the Old 41 Practice in the amount of $1,465,000 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 1,415,000 Convertible Note Payable 50,000 Acquisition costs included in general and administrative 12,820 Recognized amounts of identifiable assets acquired Inventory 15,804 Building 570,000 Land 300,000 Furniture, fixtures & equipment 103,239 Trademark (5-year life) 44,900 Non-compete agreement (2-year life) 17,400 Client list (5-year life) 44,000 Total identifiable net assets assumed 1,095,343 Goodwill 369,657 Total $ 1,465,000 Pro-Forma Financial Information (Unaudited) The following unaudited pro forma information presents the consolidated results of Pasco Practice, Kern Practice, Lytle Practice, Bartow Practice, Dietz Practice, Aberdeen Practice, All Breed Practice, Pony Express Practice, Williamsburg Practice, and Old 41 Practice included in the Company’s consolidated statement of operations for the three and nine months ended September 30, 2022, as if the acquisitions were made on January 1, 2022. The unaudited pro forma information is presented for illustrative purposes only. It is not necessarily indicative of the results of operations of future periods, or the results of operations that actually would have been realized had the entities been a single company during the periods presented or the results that the combined company will experience after the acquisition. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies, operating efficiencies or cost savings that may be associated with the acquisition. The unaudited pro forma information also does not include any integration costs or remaining future transaction costs that the companies may incur related to the acquisition as part of combining the operations of the companies. As a result of the adjustment, $111,045 and $49,595 of amortization expense for the acquired intangible assets was applied in calculating the Net Loss, for the nine and three months ended September 30, 2022, respectively. The unaudited pro forma consolidated results of operations, assuming the acquisitions had occurred on January 1, 2022, are as follows: Nine Months Three Months September 30, September 30, Revenue $ 8,754,610 $ 5,710,738 Costs and expenses 10,312,255 7,147,711 Loss from operations (1,557,645 ) (1,436,973 ) Other income (expense) (842,027 ) (643,183 ) Loss before income taxes (2,399,672 ) (2,080,156 ) Provision of income taxes 30,094 30,094 Net income (loss) (2,369,578 ) (2,050,062 ) | 5. Business acquisitions Kauai Veterinary Clinic On January 25, 2021, the Company acquired Kauai Veterinary Clinic, Inc., located in Lihue, Hawaii on the island of Kauai providing regional and local veterinary services (“Kauai Veterinary Clinic” or “KVC”), by entering into a Stock Purchase and Sale Agreement (“KVC SPA”) with the shareholders of KVC to acquire 100% of its issued and outstanding stock in exchange for $1,505,000 dollars (the “KVC Purchase Price) paid to the shareholders of KVC through the Company’s wholly owned subsidiary, IVP Practice Holding Company, LLC. Simultaneously to the closing of KVC, the Company acquired the underlying real estate from a third party in exchange for $1,300,000 through the Company’s wholly owned subsidiary, IVP Real Estate Holding Co., LLC. These two acquisitions were financed by the three loans provided by First Southern National Bank for a total of $2,383,400 (See Note 6 – “Debt – FSNB Commercial Loans). The total cash consideration paid for the acquisition from the KVC Practice in the amount of $1,505,000 was accounted for the acquisition as single business combinations, in accordance with ASC Topic 805. The Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The final purchase price allocation amounts are as follows: Consideration: Cash $ 1,505,000 Acquisition costs included in general and administrative 37,495 Recognized amounts of identifiable assets acquired Furniture, fixtures & equipment 81,654 Tradename (5-year life) 41,300 Client list (5-year life) 126,000 Total identifiable net assets assumed 248,954 Goodwill 1,256,046 Total $ 1,505,000 Chiefland Animal Hospital On August 20, 2021, the Company acquired the veterinary practice and related assets of Chiefland Animal Hospital by entering into an Asset Purchase Agreement (“Chiefland APA”) with Polycontec, Inc. (the “Chiefland Practice”) in exchange for the payment of $285,000 through the Company’s wholly owned subsidiary, IVP Practice Holding Company, LLC. Simultaneously, the Company the real estate operations (land and buildings) utilized by the Chiefland Practice was purchased through a Bill of Sale in exchange for $279,500 from the Chiefland Practice through the Company’s wholly owned subsidiary, IVP Real Estate Holding Co., LLC. These acquisitions were financed with two loans provided by WealthSouth, a division of Farmers National Bank for a total of $469,259. (See Note 6 – “Debt – Master Lending and Credit Facility). The total cash consideration paid for the combined acquisitions from the Chiefland Practice in the amount of $564,500 was accounted for the acquisition as single business combinations, in accordance with ASC Topic 805. The Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The final purchase price allocation amounts are as follows: Consideration: Cash $ 564,500 Acquisition costs included in general and administrative 34,979 Recognized amounts of identifiable assets acquired Buildings 159,350 Land 131,831 Furniture, fixtures & equipment 11,995 Tradename (5-year life) 17,200 Client list (5-year life) 60,000 Total identifiable net assets assumed 380,376 Goodwill 184,124 Total $ 564,500 Pets& Friends Animal Hospital On October 7, 2021, the Company acquired the veterinary practice and related assets of the Pets & Friends Animal Hospital by entering into an Asset Purchase Agreement (“P&F APA”) with Pets & Friends Animal Hospital, LLC (“P&F”) in exchange for the payment of $ 375,000 through the Company’s wholly owned subsidiary, IVP Practice Holding Company, LLC. Simultaneously, the Company the real estate operations (land and buildings) utilized by the P&F Practice was purchased through a Bill of Sale in exchange for $264,141 from the P&F Practice through the Company’s wholly owned subsidiary, IVP Real Estate Holding Co., LLC. These acquisitions were financed with two loans provided by WealthSouth, a division of Farmers National Bank for a total of $535,500. (See Note 6 – “Debt – Master Lending and Credit Facility). The total cash consideration paid for the combined acquisitions from the P&F Practice in the amount of $630,000 was accounted for the acquisition as single business combinations, in accordance with ASC Topic 805. The Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The final purchase price allocation amounts are as follows: Consideration: Cash $ 630,000 Acquisition costs included in general and administrative 55,831 Recognized amounts of identifiable assets acquired Inventory 41,000 Buildings 181,999 Land 82,142 Furniture, fixtures & equipment 121,486 Non-compete agreement (2-year life) 5,300 Tradename (5-year life) 27,400 Total identifiable net assets assumed 459,327 Goodwill 170,673 Total $ 630,000 Advanced Veterinary Care of Pasco On January 14, 2022, the Company acquired the veterinary practice and related assets of Advanced Veterinary Care of Pasco in Hudson, FL by entering into an Asset Purchase Agreement (“Advanced Veterinary APA”) with Advanced Veterinary Care of Pasco, LLC (“AVP”) and DJA Asset Management, LLC, (“DJA”) (the “Pasco Practice” or collectively “Pasco”) in exchange for the payment of $1,014,000 through the Company’s wholly owned subsidiary, IVP FL Holding Company, LLC. This acquisition was financed by a loan provided by Farmers National Bank of Danville Kentucky for a total of $817,135 (See Note 6 – Debt – Master Lending and Credit Facility) and convertible note payable due to the sellers on or before September 9, 2027 in the amount of $164,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the combined acquisitions from the Pasco Practice in the amount of $1,014,000 was accounted for the acquisition as single business combinations, in accordance with ASC Topic 805. The Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 850,000 Note Payable 164,000 Acquisition costs included in general and administrative 25,315 Recognized amounts of identifiable assets acquired Inventory 35,000 Furniture, fixtures & equipment 144,904 Trademark (5-year life) 97,600 Non-compete agreement (2-year life) 25,500 Client list (5-year life) 157,000 Total identifiable net assets assumed 460,004 Goodwill 553,996 Total $ 1,014,000 Since we first reported the preliminary purchase price allocation for the Pasco transaction as of June 30, 2022, the Company made measurement period adjustment, which composed of a $74,904 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Lytle Veterinary Clinic On March 15, 2022, the Company acquired the veterinary practice and related assets of Lytle Veterinary Clinic in Texas by entering into an Asset Purchase Agreement (“Lytle APA”) with Lytle Veterinary Clinic, Inc. (“Lytle”) in exchange for the payment of $662,469 through the Company’s wholly owned subsidiary IVP Texas Holding Company, LLC and its wholly owned subsidiary, IVP Texas Managing Co., LLC. Simultaneously, the Company the real estate operations (land and buildings) utilized by the Lytle Practice was purchased through a Bill of Sale in exchange for $ 780,000 from the Lytle Practice through the Company’s wholly owned subsidiary, IVP Texas Properties, LLC. This acquisition was financed by two loans provided by Farmers National Bank of Danville Kentucky for a total of $1,141,098 (See Note 6 – “Debt – Master Lending and Credit Facility) and convertible note payable due to the sellers on or before September 9, 2027 in the amount of $100,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the combined acquisitions from the Lytle Practice in the amount of $1,442,469 was accounted for the acquisition as single business combinations, in accordance with ASC Topic 805. The Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 1,342,469 Note Payable 100,000 Acquisition costs included in general and administrative 43,605 Recognized amounts of identifiable assets acquired Inventory 28,894 Buildings 660,000 Land 120,000 Furniture, fixtures & equipment 22,991 Tradename – trademarks (5-year life) 40,300 Non-compete agreement (2-year life) 23,200 Client list (5-year life) 116,000 Total identifiable net assets assumed 1,011,385 Goodwill 431,084 Total $ 1,442,469 Since we first reported the preliminary purchase price allocation for the Lytle transaction as of June 30, 2022, the Company made measurement period adjustment, which composed of a $46,563 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Southern Kern Veterinary Clinic On March 22, 2022, the Company acquired the veterinary practice and related assets of Southern Kern Veterinary Clinic in California by entering into an Asset Purchase Agreement (“Kern APA”) with Southern Kern Veterinary Clinic, Inc. (“Kern”) in exchange for the payment of $1,500,000 through the Company’s wholly owned subsidiary IVP CA Holding Co., LLC and its wholly owned subsidiary, IVP Texas Managing Co., LLC. Simultaneously, the real estate operations (land and buildings) utilized by the Kern Practice was purchased through a Bill of Sale in exchange for $500,000 from the Kern Practice through the Company’s wholly owned subsidiary, IVP CA Properties, LLC. This acquisition was financed by two loans provided by Farmers National Bank of Danville Kentucky for a total of $1,700,000 (See Note 6 – “Debt – Master Lending and Credit Facility). The total cash consideration paid for the combined acquisitions from the Kern Practice in the amount of $2,000,000 was accounted for the acquisition as single business combinations, in accordance with ASC Topic 805. The Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 2,000,000 Acquisition costs included in general and administrative 34,812 Recognized amounts of identifiable assets acquired Inventory 25,000 Buildings 425,156 Land 74,844 Furniture, fixtures & equipment 176,862 Tradename – Trademarks (5-year life) 57,800 Non-compete agreement (2-year life) 38,600 Client list (5-year life) 249,000 Total identifiable net assets assumed 1,047,262 Goodwill 952,738 Total $ 2,000,000 Since we first reported the preliminary purchase price allocation for the Kern transaction as of June 30, 2022, the Company made measurement period adjustment, which composed of a $76,862 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Bartow Animal Clinic On May 18, 2022, the Company acquired the veterinary practice and related assets of Bartow Animal Clinic in Bartow, FL by entering into an Asset Purchase Agreement (“Bartow APA”) with Winter Park Veterinary Clinic, Inc. (“Bartow”) in exchange for the payment of $1,055,000 through the Company’s wholly owned subsidiary IVP FL Holding Company LLC. Simultaneously, the real estate operations (land and buildings) utilized by the Bartow Practice was purchased through a Bill of Sale in exchange for $350,000 from the Bartow Practice through the Company’s wholly owned subsidiary, IVP CA Properties, LLC. This acquisition was financed by two loans provided by Farmers National Bank of Danville Kentucky for a total of $969,000 (See Note 6 – “Debt – Master Lending and Credit Facility) and convertible note payable due to the sellers on or before September 9, 2027 in the amount of $100,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the combined acquisitions from the Bartow Practice in the amount of $1,405,000 was accounted for the acquisition as single business combinations, in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 1,305,000 Notes Payable 100,000 Acquisition costs included in general and administrative 14,960 Recognized amounts of identifiable assets acquired Inventory 15,000 Buildings 230,000 Land 60,000 Furniture, fixtures & equipment 171,984 Tradename – Trademarks (5-year life) 49,800 Non-compete agreement (2-year life) 13,900 Client list (5-year life) 90,000 Total identifiable net assets assumed 630,684 Goodwill 774,316 Total $ 1,405,000 Since we first reported the preliminary purchase price allocation for the Bartow transaction as of June 30, 2022, the Company made measurement period adjustment, which composed of a $96,984 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Dietz Family Pet Hospital On June 15, 2022, the Company acquired the veterinary practice and related assets of Dietz Family Pet Hospital in Richmond, TX by entering into an Asset Purchase Agreement (“Dietz APA”) with Dietz Family Pet Hospital, P.A. (“Dietz”) in exchange for the payment of $500,000 through the Company’s wholly owned subsidiary IVP Texas Holding Company LLC and its wholly owned subsidiary, IVP Texas Managing Co. LLC. This acquisition was financed by a loan provided by Farmers National Bank of Danville Kentucky for a total of $382,500 (See Note 6 – “Debt – Master Lending and Credit Facility) and note payable due to the sellers on or before September 9, 2027 in the amount of $50,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition of the Dietz Practice in the amount of $500,000 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 450,000 Notes Payable 50,000 Acquisition costs included in general and administrative 20,193 Recognized amounts of identifiable assets acquired Inventory 21,000 Furniture, fixtures & equipment 59,151 Tradename – trademarks (5-year life) 37,800 Non-compete agreement (2-year life) 12,200 Customer Lists (5-year life) 32,000 Total identifiable net assets assumed 162,151 Goodwill 337,849 Total $ 500,000 Since we first reported the preliminary purchase price allocation for the Dietz transaction as of June 30, 2022, the Company made measurement period adjustment, which composed of a $15,849 decrease to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Aberdeen Veterinary Clinic On July 29, 2022, the Company acquired the veterinary practice and related assets of Aberdeen Veterinary Clinic in Aberdeen, MD (“Aberdeen Practice”) by entering into an Asset Purchase Agreement (“Aberdeen APA”) with Fritz Enterprises, Inc. in exchange for the payment of $574,683 through the Company’s wholly owned subsidiary, IVP MD Holding Company, LLC. This acquisition was financed by a loan provided by Farmers National Bank of Danville Kentucky for a total of $445,981 (See Note 6 – Debt – Master Lending and Credit Facility) and a convertible note payable due to the sellers on or before September 9, 2027 in the amount of $50,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition from the Aberdeen Practice in the amount of $574,683 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 524,683 Convertible Notes Payable 50,000 Acquisition costs included in general and administrative 17,762 Recognized amounts of identifiable assets acquired Inventory 20,000 Furniture, fixtures & equipment 145,982 Trademark (5-year life) 18,600 Non-compete agreement (2-year life) 9,700 Client list (5-year life) 25,000 Total identifiable net assets assumed 219,282 Goodwill 355,401 Total $ 574,683 Since we first reported the preliminary purchase price allocation for the Aberdeen transaction as of June 30, 2022, the Company made measurement period adjustment, which composed of a $30,882 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. All Breed Pet Care On August 12, 2022, the Company acquired the veterinary practice and related assets of All Breed Pet Care veterinary clinic in Newburgh, IN by entering into an Asset Purchase Agreement (“All Breed APA”) with Tejal Rege (the “All Breed Practice” or collectively “All Breed”) in exchange for the payment of $952,000 through the Company’s wholly owned subsidiary IVP IN Holding Company, LLC. Simultaneously, the real estate operations (land and building) utilized by the All Breed practice was purchased through a Bill of Sale in exchange for $1,200,000 from All Breed Pet Care, LLC through the Company’s wholly owned subsidiary, IVP IN Properties, LLC. These acquisitions were financed by three loans provided by Farmers National Bank of Danville Kentucky for a total $1,765,450 (See Note 6 – Debt – Master Lending and Credit Facility) and convertible note payable due to the sellers on or before September 9, 2027 in the amount of $75,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition of the All Breed Practice in the amount of $2,122,000 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 2,077,000 Convertible Notes Payable 75,000 Acquisition costs included in general and administrative 15,000 Recognized amounts of identifiable assets acquired Inventory 45,000 Building 1,045,000 Land 155,000 Furniture, fixtures & equipment 170,013 Trademark (5-year life) 63,600 Non-compete agreement (2-year life) 31,800 Client list (5-year life) 196,000 Total identifiable net assets assumed 1,706,413 Goodwill 445,587 Total $ 2,152,000 Since we first reported the preliminary purchase price allocation for the All Breed transaction as of June 30, 2022, the Company made measurement period adjustments, which composed of a $20,000 increase to Inventory and a $70,013 increase to Furniture, fixtures & equipment. This adjustment did not have a significant impact on our consolidated statements of operations in the period previously presented. The adjustment was recognized in the reporting period in which the adjustment amounts is determined, which was the fourth quarter of 2022. Pony Express On October 31, 2022, the Company acquired the veterinary practice and related assets of Pony Express Veterinary Clinic in Xenia, OH (“Pony Express Practice” or collectively “Pony Express”) by entering into an Asset Purchase Agreement (“Pony Express APA”) with Pony Express Veterinary Hospital, Inc. in exchange for the payment of $2,608,652 through the Company’s wholly owned subsidiary, IVP OH Holding Company, LLC. Simultaneously, the real estate operations (land and building) utilized by the Pony Express practice was purchased through a Bill of Sale in exchange for $500,000 from Pony Expressions Enterprises, Ltd through the Company’s wholly owned subsidiary, IVP OH Properties, LLC. This acquisition was financed by three loans provided by First Southern National Bank for a total of $2,853,314 (See Note 6 – Debt – Master Lending and Credit Facility) and a convertible note payable due to the sellers on or before September 9, 2027 in the amount of $200,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition from the Pony Express Practice in the amount of $3,108,652 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 2,908,652 Convertible Note Payable 200,000 Acquisition costs included in general and administrative 6,077 Recognized amounts of identifiable assets acquired Inventory 44,000 Building 234,221 Land 265,779 Furniture, fixtures & equipment 253,072 Trademark (5-year life) 276,900 Non-compete agreement (2-year life) 120,400 Client list (5-year life) 556,000 Total identifiable net assets assumed 1,760,372 Goodwill 1,348,280 Total $ 3,108,652 Williamsburg On December 9, 2022, the Company acquired the veterinary practice and related assets of Williamsburg Veterinary Clinic in Williamsburg, MA (“Williamsburg Practice”) by entering into an Asset Purchase Agreement (“Williamsburg APA”) with Williamsburg Animal Clinic, LLC in exchange for the payment of $850,000 through the Company’s wholly owned subsidiary, IVP MA Holding Company, LLC. This acquisition was financed by a loan provided by Farmers National Bank of Danville Kentucky for a total of $637,500 (See Note 6 – Debt – Master Lending and Credit Facility) and a convertible note payable due to the sellers on or before September 9, 2027 in the amount of $100,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition from the Williamsburg Practice in the amount of $850,000 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 750,000 Convertible Note Payable 100,000 Acquisition costs included in general and administrative 19,196 Recognized amounts of identifiable assets acquired Inventory 61,196 Building - Land - Furniture, fixtures & equipment 28,202 Trademark (5-year life) 79,500 Non-compete agreement (2-year life) 56,300 Client list (5-year life) 190,000 Total identifiable net assets assumed 415,198 Goodwill 434,802 Total $ 850,000 Old 41 On December 16, 2022, the Company acquired the veterinary practice and related assets of The Old 41 Veterinary Clinic in Bonita Springs, FL (“Old 41 Practice” or collectively “Old 41”) by entering into an Asset Purchase Agreement (“Old 41 APA”) with The Old 41 Animal Hospital, LLC in exchange for the payment of $665,000 through the Company’s wholly owned subsidiary, IVP FL Holding Company, LLC. Simultaneously, the real estate operations (land and building) utilized by the Old 41 practice was purchased through a Bill of Sale in exchange for $800,000 from Scott A. Gregory DVM, LLC through the Company’s wholly owned subsidiary, IVP FL Properties, LLC. This acquisition was financed by two loans provided by First Southern National Bank for a total of $1,208,000 (See Note 6 – Debt – Master Lending and Credit Facility) and a convertible note payable due to the sellers on or before September 9, 2027 in the amount of $50,000 with an interest rate per annum of 6% payable on the first business day of January annually beginning in 2023, convertible into the Company’s Series B Common Stock at a 25% discount upon of the opening price of the Company’s public offering, or upon a liquidation event. The total cash consideration paid for the acquisition from the Old 41 Practice in the amount of $1,465,000 was accounted for in accordance with ASC Topic 805. The final purchase price allocation amounts are as follows: Consideration: Cash paid prior to the time of closing $ 1,415,000 Convertible Note Payable 50,000 Acquisition costs included in general and administrative 12,820 Recognized amounts of identifiable assets acquired Inventory 15,804 Building 570,000 Land 300,000 Furniture, fixtures & equipment 103,239 Trademark (5-year life) 44,900 Non-compete agreement (2-year life) 17,400 Client list (5-year life) 44,000 Total identifiable net assets assumed 1,095,343 Goodwill 369,657 Total $ 1,465,000 Pro-Forma Financial Information (Unaudited) The following pro forma information presents the consolidated results of Inspire, Pasco Practice, Kern Practice, Lytle Practice, Bartow Practice, Dietz Practice, Aberdeen Practice, All Breed Practice, Pony Express Practice, Williamsburg Practice, and Old 41 Practice for the year ended December 31, 2022 as if the acquisitions were made on January 1, 2022. The following pro forma information presents the consolidated results of Inspire, Kauai Veterinary Clinic, Chiefland Practice, P&F Practice, Pasco Practice, Kern Practice, Lytle Practice, Bartow Practice, Dietz Practice, Aberdeen Practice, All Breed Practice, Pony Express Practice, Williamsburg Practice, and Old 41 Practice for the year ended December 31, 2021 as if the acquisitions were made on January 1, 2021. The unaudited pro forma information is presented for illustrative purposes only. It is not necessarily indicative of the results of operations of future periods, or the results of operations that actually would have been realized had the entities been a single company during the periods presented or the results that the combined company will experience after the acquisition. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies, operating efficiencies or cost savings that may be associated with the acquisition. The unaudited pro forma information also does not include any integration costs or remaining future transaction costs that the companies may incur related to the acquisition as part of combining the operations of the companies. As a result of the adjustment, $318,744 and $18,343 of amortization expense for the acquired intangible assets was applied in calculating the Net Loss, for the year ended December 31, 2022 and 2021, respectively. The unaudited pro forma consolidated results of operations, assuming the acquisitions had occurred on January 1, 2022 and 2021, are as follows: For the year ended December 31, December 31, Revenue $ 16,953,261 $ 17,471,036 Costs and expenses 18,666,172 16,235,014 (Loss) income from operations (1,712,9111 ) 1,236,022 Other expense (1,423,882 ) (211,091 ) (Loss) income before income taxes (3,136,793 ) 1,024,931 Income tax benefit (expense) 30,094 (74,330 ) Net (loss) income $ (3,106,699 ) $ 950,601 |