4. Business Acquisitions During the fiscal year 2019, the Company completed the following acquisitions: Craft Canning + Bottling On January 11, 2019, the Company completed the acquisition of Craft Canning + Bottling, LLC (Craft Canning), a Portland, Oregon-based provider of bottling and canning services. The Companys consolidated financial statements for the year ended December 31, 2019 include Craft Cannings results of operations from the acquisition date of January 11, 2019 through December 31, 2019. The Companys consolidated financial statements reflect the final purchase accounting adjustments in accordance with ASC 805 Business Combinations, whereby the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. The following allocation of the purchase price is as follows: Consideration given: 338,212 shares of common stock valued at $6.10 per share $ 2,080,004 Cash 2,003,200 Notes payable 761,678 Total value of acquisition $ 4,844,882 Assets and liabilities acquired: Cash $ 553,283 Trade receivables, net 625,717 Inventories, net 154,824 Prepaid expenses and current assets 250 Property and equipment, net 1,839,486 Right-of-use assets 232,884 Intangible assets - customer list 2,895,318 Other assets 26,600 Accounts payable (231,613 ) Accrued liabilities (74,389 ) Deferred revenue (52,000 ) Lease liabilities (256,375 ) Notes payable (869,103 ) Total $ 4,844,882 Intangible assets are recorded at estimated fair value, as determined by management based on available information. The fair value assigned to the customer list intangible asset was determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earning methods. The major assumptions used in arriving at the estimated identifiable intangible asset value included managements estimates of future cash flows, discounted at an appropriate rate of return which is based on the weighted average cost of capital for both the Company and other market participants, projected customer attrition rates, as well as applicable royalty rates for comparable assets. The useful lives for intangible assets were determined based upon the remaining useful economic lives of the tangible assets that are expected to contribute directly or indirectly to future cash flows. The customer relationships estimated useful life is seven years. The Company incurred Craft Canning-related acquisition costs of $0.1 million during the year ended December 31, 2019 that have been recorded in general and administrative expenses on the consolidated statements of operations. The results of the Craft Canning acquisition are included in our consolidated financial statements from the date of acquisition through December 31, 2019. The sales and net income (including transaction costs) of Craft Canning operations included in our consolidated statements of operations were $7.1 million and $0.4 million, for the period from January 11, 2019 through December 31, 2019. Azunia Tequila On September 12, 2019, the Company completed the acquisition of the Azunia Tequila brand, the direct sales team, existing product inventory, supply chain relationships and contractual agreements from Intersect Beverage, LLC, an importer and distributor of tequila and related products. The Companys consolidated financial statements as of and for the year ended December 31, 2019 include the Azunia Tequila assets and results of operations. For the year ended December 31, 2019, the Azunia Tequila results of operations are included from the acquisition date of September 12, 2019 through December 31, 2019. The acquisition was structured as an all-stock transaction, provided that the Company may, at its election, pay a portion of the consideration in cash or by executing a three-year promissory note if the issuance of stock would require the Company to hold a vote of its stockholders under the applicable Nasdaq rules. Subject to compliance with applicable Nasdaq rules, the initial consideration, will be payable approximately 18 months following the closing and will consist of 850,000 shares of the Companys common stock at a stipulated value of $6.00 per share, 350,000 shares of the Companys common stock based on the Companys stock price twelve months after the close of the transaction, and additional shares based on the Azunia business achieving certain revenue targets and the Companys stock price 18 months after the close of the transaction. The Company has also agreed to issue additional stock consideration (subject to compliance with applicable Nasdaq rules) of up to $1.5 million upon the Azunia business achieving revenue of at least $9.45 million in the period commencing on the 13th month following the closing and ending on the 24th month following the closing. The Companys consolidated financial statements reflect the final purchase accounting adjustments in accordance with ASC 805 Business Combinations, whereby the purchase price was allocated to the assets acquired based upon their estimated fair values on the acquisition date. The Company estimated the purchase price based on weighted probabilities of future results and recorded deferred consideration payable of $12.8 million on the acquisition date that will be remeasured to fair value at each reporting date until the contingencies are resolved, with the changes in fair value recognized in earnings. The Company remeasured the deferred consideration payable for the period ended December 31, 2019 and increased the liability by $2.7 million to a balance of $15.5 million. The following allocation of the purchase price is as follows: Consideration given: Deferred consideration payable $ 12,781,092 Total value of acquisition $ 12,781,092 Assets acquired: Inventories, net $ 836,026 Intangible assets - brand 11,945,066 Total $ 12,781,092 Intangible assets are recorded at estimated fair value, as determined by management based on available information. The fair value assigned to the brand intangible asset was determined through the use of the market approach. The major assumptions used in arriving at the estimated identifiable intangible asset value included category averages for comparable acquisitions, including multiples of annual sales and dollars per case sold. The Company used an estimated brand useful life of seven years for these accounting purposes. The Company incurred Azunia Tequila-related acquisition costs of $0.2 million during the year ended December 31, 2019 that have been recorded in general and administrative expenses on the consolidated statements of operations. The results of the Azunia Tequila asset acquisition are included in our consolidated financial statements from the date of acquisition through December 31, 2019. The sales of Azunia Tequila products included in our consolidated statements of operations were $1.1 million for the period from September 12, 2019 through December 31, 2019. Pro Forma Financial Information The following unaudited pro forma consolidated results of operations for the years ended December 31, 2019 and 2018 assume that both acquisitions of Craft Canning + Bottling and Azunia Tequila were completed on January 1, 2018: 2019 2018 Pro forma sales $ 19,868,484 $ 16,088,104 Pro forma net loss (20,350,193 ) (10,868,474 ) Pro forma basic and diluted net loss per share $ (2.19 ) $ (1.69 ) Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the periods presented and is not intended to be a projection of future results. The share and per share data have been retroactively reflected for the acquisitions.