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Thanks for clarifying but what I mean is usually when purchase...

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dcmmm

84 Posts.

31

01/03/18

18:04

Post #: 31460074
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Originally posted by whitelist1 ↑

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.

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Thanks for clarifying but what I mean is usually when purchase price is above net assets, it creates goodwill. So I thought in this case the net asset is approx the debt ($600k), so creating the $3M goodwill into the balance sheet instead of just writing it all off on the income statement. Am I thinking wrong here?

DEM Price at posting: 21.0¢ Sentiment: None Disclosure: Not Held
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(20min delay)
Last 11.5¢		Change -0.005(4.17%)		Mkt cap ! $30.31M

Open	High	Low	Value	Volume
12.0¢	12.0¢	11.5¢	$478	4.095K

Buyers (Bids)

No.	Vol.	Price($)
3	98335	11.5¢

Sellers (Offers)

Price($)	Vol.	No.
12.0¢	48317	3

View Market Depth

No.	Vol.	Price($)
3	98335	0.115
1	125000	0.110
1	50000	0.100
1	10427	0.096
2	30000	0.088

Price($)	Vol.	No.
0.120	48317	3
0.130	90730	1
0.135	55748	1
0.140	5874	1
0.145	50000	1

Last trade - 12.08pm 25/04/2024 (20 minute delay)

DEM (ASX) Chart