The reason is in page 13, where they gave a breakdown of the acquisition.
Going by the numbers, it is unlikely that Awka Worx could have continued as a going concern without being bought out. They had 30k cash in the bank, and a net liability of 600k. Hence the company paid 1.5m in cash, about 900k in stock and took on 600k in debt. This adds up to 3m.
The most worrying thing is that Awka Worx was supposed to be the cash engine for the company as it was an established company. But it posted a net loss of 100k+. does this mean the asset continues to be distressed?
I can't say this was a very positive report.
Ann: Preliminary Final Report, page-3
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