Quarterly report pursuant to Section 13 or 15(d)

Business Combination

Business Combination
3 Months Ended
Mar. 31, 2021
Business Combinations [Abstract]  
Business Combination


Business Combination


On September 17, 2020, the Company, through SG Echo, LLC (its wholly owned subsidiary), entered into an Asset Purchase Agreement (“APA") to acquire substantially all of the assets of Echo DCL, LLC (“Echo”) for $1,059,600 in cash (the “Echo Acquisition”), except for ECHO DCL's real estate holdings. The Echo Acquisition closed on September 23, 2020. In addition, the sellers of Echo have the potential of additional consideration based upon the APA.  In accordance with ASC 805, the Echo Acquisition is accounted for as a business combination. The Echo Acquisition was made for the purpose of expanding the Company’s footprint into the modular manufacturing business. 


The purchase consideration amounted to:


Cash $ 1,059,600

Earnout liability

Settlement of accounts receivable and net contract liabilities
(94,980 )

  $ 964,620

The settlement of accounts receivable and net contract liabilities represents amounts effectively settled upon the purchase of Echo, which originated from contacts between the Company and Echo prior to the purchase date. 

The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed for the Echo Acquisition:  

Cash and cash equivalents 



Accounts receivable






Prepaid expenses and other current assets 



Property, plant and equipment



Right-of-use assets




Intangible assets



Accounts payable and accrued expenses 




Assumed liabilities
(285,204 )

Contract liabilities




Lease liability








As part of the Echo Acquisition, the Company recorded a contingent consideration liability for additional payments due to the sellers of Echo. These payments are due in accordance with the APA and are based upon the net income obtained from the Echo business during certain earnout periods. The initial contingent consideration liability of $0 was based on the fair value of the contingent consideration liability at the acquisition date, and is payable in cash and shares of restricted common stock of the Company. As of March 31, 2021, the liability remains to be $0.