BUSINESS COMBINATIONS | NOTE 1 6 Push Holdings Inc. On January 8, 2020, the Company acquired substantially all the assets of Push Holdings Inc in exchange for 35,714,285 shares of the Company’s common stock. The fair value of the shares of common stock at the close of the transaction was $14,285,714. The acquisition of substantially all the assets of Pushing Holding was accounted for as a business combination in accordance with Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”), with the results of Logiq, Inc. (Nevada)’s operations included in the Company’s consolidated financial statements from January 9, 2020. Goodwill has been measured as the excess of the total consideration over the amounts assigned to identifiable assets acquired and liabilities assumed. During the period ended December 31, 2020, the Company, through its wholly-owned subsidiary, Logiq, Inc. (Nevada) acquired substantially all of the assets of Push Holdings, Inc. The fair values of assets acquired and liabilities assumed were as follows: Cash and cash equivalents $ 574,572 Restricted cash 1,025,000 Accounts receivable, net 709,053 Prepaid expenses and other current assets 11,940 Property, plant and equipment 225,126 Intangible assets 8,250,000 Accounts payable (367,091 ) Accrued expenses and other current liabilities (424,094 ) Due to parent company (500,000 ) Goodwill 4,781,208 Net assets acquired $ 14,285,714 Fair valuation methods used for the identifiable net assets acquired in the acquisition make use of quoted prices in active markets, discounted cash flows and risk adjusted weighted cost of capital. The methods used in determining fair value of the intangible assets included consideration of the three traditional approaches to value: market, income, and cost. Accordingly, after due consideration of other appropriate and generally accepted valuation methodologies, the value of intangible assets acquired from Push has been developed primarily on the basis of the income approach. Under the income approach, the Company evaluated revenue projections derived from the software technology and the appropriate royalty rate that Push Holdings would have paid if Push Holdings did not own the software technology. On the acquisition date, goodwill of $4,781,208 and other intangible assets of $8,250,000 were recorded. The other intangible asset identified during the acquisition is software technology, which has a weighted average useful life of five years, which is management’s best estimate at the time of the acquisition. The Company incurred some accounting and legal fees related to the acquisition of the assets of Push Holdings. The amount attributable to the Company has been included in general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2021. In the consolidated statements of operations, revenues and expenses include the operations of Logiq, Inc. (Nevada) since January 9, 2020, which is the day after the acquisition date. Fixel AI Inc. On November 2, 2020, the Company acquired substantially all the assets of Fixel AI Inc., a Delaware corporation (“Fixel”) in exchange for 564,467 shares of the Company’s common stock. The fair value of the shares of common stock at the close of the transaction was $8.86. On the Closing Date, the Company issued 564,467 restricted shares of its common stock to Fixel Stockholders, of which the shares allocated to the Fixel stockholders that are residents of Israel (“Israel Stockholders”) will be delivered to an independent third-party escrow (the “Escrow Shares”), where (i) such shares will be released to Israel Stockholders upon each Israel Stockholder’s compliance with the 104H tax ruling issued by certain tax authorities of Israel in connection with the Merger and (ii) shares held by Founders making up approximately 20% of the shares issued will be held subject to offset for indemnification purposes. The Shares were issued at a trailing twenty (20) day VWAP of $8.86 per share. The fair values of assets acquired and liabilities assumed were as follows: Cash and cash equivalents $ 67,167 Restricted cash 10,229 Accounts receivable, net 29,036 Prepaid expenses and other current assets 20,963 Property, plant and equipment - Intangible assets 4,678,422 Accounts payable 280 Accrued expenses and other current liabilities (47,021 ) Deferred revenue (55,958 ) Goodwill 296,882 Net assets acquired $ 5,000,000 Fair valuation methods used for the identifiable net assets acquired in the acquisition make use of quoted prices in active markets, discounted cash flows and risk adjusted weighted cost of capital. The methods used in determining fair value of the intangible assets included consideration of the three traditional approaches to value: market, income, and cost. Accordingly, after due consideration of other appropriate and generally accepted valuation methodologies, the value of intangible assets acquired from Fixel has been developed primarily on the basis of the income approach. Under the income approach, the Company evaluated revenue projections derived from the software technology and the appropriate royalty rate that Fixel would have paid if Fixel did not own the software technology. On the acquisition date, goodwill of $296,882 and other intangible assets of $4,678,422 were recorded. The other intangible asset identified during the acquisition is software technology, which has a weighted average useful life of five years, which is management’s best estimate at the time of the acquisition. The Company incurred some accounting and legal fees related to the acquisition of the assets of Fixel. The amount attributable to the Company has been included in general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2021. In the consolidated statements of operations, revenues and expenses include the operations of Fixel AI, Inc. since November 3, 2020, which is the day after the acquisition date. Rebel AI Inc. On March 29, 2021, the Company acquired Rebel for a total cash consideration of $1,126,000 and in exchange for 1,032,056 shares of the Company’s common stock. The fair value of the shares of common stock at the close of the transaction was $6.00. On the Closing Date, the Company issued 1,032,056 restricted shares of its common stock to Rebel Stockholders, and at a trailing twenty (20) day VWAP of $6.00 per share. Cash and cash equivalents $ 7,736 Accounts receivable, net 10,052 Prepaid expenses and other current assets 14,617 Property, plant and equipment 28,236 Intangible assets 6,789,969 Accrued expenses and other current liabilities (32,110 ) Goodwill 499,836 Net assets acquired $ 7,318,336 Fair valuation methods used for the identifiable net assets acquired in the acquisition make use of quoted prices in active markets, discounted cash flows and risk adjusted weighted cost of capital. The methods used in determining fair value of the intangible assets included consideration of the three traditional approaches to value: market, income, and cost. Accordingly, after due consideration of other appropriate and generally accepted valuation methodologies, the value of intangible assets acquired from Rebel has been developed primarily on the basis of the income approach. Under the income approach, the Company evaluated revenue projections derived from the software technology and the appropriate royalty rate that Rebel would have paid if Rebel did not own the software technology. On the acquisition date, goodwill of $499,836 and other intangible assets of $6,789,969 were recorded. The other intangible asset identified during the acquisition is software technology, which has a weighted average useful life of five years, which is management’s best estimate at the time of the acquisition. The Company incurred some accounting and legal fees related to the acquisition of the assets of Rebel. The amount attributable to the Company has been included in general and administrative expenses in the accompanying consolidated statement of operations for the period ended December 31, 2021. In the consolidated statements of operations, revenues and expenses include the operations of Rebel AI, Inc. since March 29, 2021, which is the day after the acquisition date. Battle Bridge Labs LLC On March 31, 2022, DLQ completed the acquisition of certain customer contractual agreements of Battle Bridge Labs, LLC, including those of Section 2383 LLC, a Tulsa, Oklahoma-based digital brand marketing agency. The purchase price was $3,250,000 and consisted of the issuance of 2,912,621 shares of restricted common stock of Logiq, Inc. with a fair value of $3,000,000 and cash consideration of $250,000. DLQ considers the Intangible asset acquired, comprising certain customer contractual agreements, to be at fair value and there is no goodwill arising. The fair values of assets acquired assumed were as follows: Intangible assets $ 3,250,000 Goodwill - Net assets acquired $ 3,250,000 AppLogiq Spin-Off On July 27, 2022, the Company completed the Distribution and Spin Off. As a result, the Company no longer has a direct equity ownership of GoLogiq. The Company recognized an impairment loss of $19,700,000 following a revaluation on February 28, 2023 to $11,800,000 as compared to $31,500,000 at December 31, 2021 as shown below. Intangible assets Goodwill Total Brought forward at January 1, 2022 24,000,000 7,500,000 31,500,000 Impairment loss in the year (15,032,000 ) (4,668,000 ) (19,700,000 ) Carried forward at December 31, 2022 8,968,000 2,832,000 11,800,000 The Company has revised its accounting treatment for a reverse acquisition that was previously reported in its Original Form 10-K. Upon further evaluation, the Company determined that prior year adjustments were necessary. GoLogiq Inc (fka Lovarra Inc) acquired substantially all the CreateApp assets from Logiq in exchange for 26,350,756 of the Company’s common shares at a price per share of $1.195411 (par value $0.001). The fair value of the common shares at the close of the transaction was $31,500,000, as determined by a valuation of the business, on the acquisition date, comprising goodwill of $7,500,000 and intangible assets of $24,000,000 were recorded. The value of CreateApp platform was revalued to $11,800,000 on February 28, 2023. This Amendment presents the Company’s consolidated financial statements with reversed goodwill and intangible assets, and corresponding reversal of impairment loss on December 31, 2022 DataLogiq Spin-off On September 9, 2022, the Company and the Company’s wholly-owned subsidiary, DLQ, Inc., a Nevada corporation (“DLQ”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Abri SPAC I, Inc., a Delaware corporation, (“Abri”), and Abri Merger Sub (“Merger Sub”) wherein Merger Sub will merge with and into DLQ with DLQ being the surviving company (“Surviving Company”), and a wholly owned subsidiary of Abri. The Merger is expected to close after obtaining the required approval by the stockholders of Abri and the Company, and upon the satisfaction of certain other customary closing conditions (“Closing”). At Closing Abri will deliver to the Company $114 million worth of shares Abri common stock, par value $0.0001, at $10.00 per share (the “Merger Consideration Shares”). Also at Closing, the Company will issue a dividend to its shareholders on a pro-rata basis equal to 25% of the aggregate Merger Consideration Shares (the “Dividend Shares”), payable to the Company shareholders of record as of a record date to be set shortly before Closing. More information relating to the Merger Agreement, the dividend and the various agreements associated with the Merger Agreement can be found in the Form 8-K filed by the Company on September 12, 2022. On May 1, 2023, the Company and DLQ into an amendment to the Merger Agreement (the “First Amendment”) with the other parties thereto, to remove the requirement that Abri have at least $5,000,001 of net tangible assets either immediately prior to or upon consummation of the Merger. On June 8, 2023, the Company and DLQ entered into a second amendment to the Merger Agreement (the “Second Amendment”) with the other parties thereto, to (i) amend the exchange on which its securities can be listed in connection with the Business Combination to include being listed on Nasdaq Global Market, and (ii) waive any default of Section 9.1(i) of the Merger Agreement for having received a notice from Nasdaq for non-compliance. On July 20, 2023, the Company, DLQ, Abri and Merger Sub entered into the Third Amendment to the Merger Agreement (the “Third Amendment”) to (i) remove provisions related to the transfer of certain intellectual property assets of Fixel AI, Inc. (“Fixel”) and Rebel AI, Inc. (“Rebel”), (ii) change the name of the Surviving Corporation to “Collective Audience, Inc.”, and (iii) increase the size of the senior financing facility from $25 Million to $30 Million. On August 28, 2023, the Company, DLQ, Abri and Merger Sub entered into the Fourth Amendment to the Merger Agreement (the “Fourth Amendment”) to (i) increase the number of shares being distributed to public stockholders of the Company from approximately 25% to approximately 33% of the aggregate Merger Consideration, (ii) require DLQ to distribute 14% of the Merger Consideration Shares to certain investors in DLQ, and (iii) reduce the number of Merger Consideration Shares subject to Lock-Up Agreements, effective as of Closing, from 75% to 53%. One November 2, 2023, the Merger was completed and the Merger Agreement was successfully Closed. In connection to with the completion of the Merger, the Combined Company issued 3,762,000 of the Combined Company shares to the Company. On the year ended December 31, 2023, the Company completed the Distribution and Spin Off. As a result, the Company no longer has a direct equity ownership of DLQ, Inc. All expense incurred by Logiq, Inc. up to September 30, 2023 have been disclosed as discontinued operations, An analysis of the financial results of the discontinued operations are as follows. For the year ended December 31, 2023 2022 (Audited) (Audited) Service Revenue $ 11,663,762 $ 25,711,991 Cost of Service 10,790,605 19,776,533 Gross Profit 873,157 5,935,458 Operating Expenses Depreciation and amortization 1,165,532 10,871,495 General and administrative 3,806,844 10,245,047 Sales and marketing 60,000 1,210,233 Research and development - 3,116,723 Total Operating Expenses 5,032,376 25,443,498 Other (Expenses)/Income, net 132,063 3,592 Net (Loss) from discontinued Operations (4,291,282 ) (19,511,632 ) Upon consolidation, the Company recorded the following gain Assets 13,322,699 Liabilities 5,246,231 Net Assets 8,076,468 Capital reverse (7,471,494 ) Gain on deconsolidation 604,974 Park Place Payments Inc. Share Exchange Agreement On April 25, 2023, the Company, Park Place, and the Stakeholders consummated the transactions contemplated by the Share Exchange Agreement. Pursuant to the Share Exchange Agreement, at the Closing (as defined therein), the Company shall acquire all of the issued and outstanding shares of common stock of Park Place, and in exchange has committed to issue and sell an aggregate of fourteen million six hundred fifty-two thousand seven hundred ninety-eight (14,652,798) shares of common stock of the Company to Park Place, which are to be held in escrow and distributed to the Stakeholders pursuant to the terms of the Share Exchange Agreement (the “Exchange Shares”)(such transactions, collectively the “Share Exchange”). A certain number of the Exchange Shares, being nine million seven hundred sixty-eight thousand five hundred thirty-two (9,768,532) shares, are subject to the achievement by Park Place of earnout provisions pursuant to the terms of the Share Exchange Agreement. The Exchange Shares issued pursuant to the Share Exchange have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any state, and therefore, cannot be resold, pledged, assigned or otherwise disposed of by the holders thereof, absent such registration or an applicable exemption from such registration requirements, and will be subject to further contractual restrictions on transfer as described in the Share Exchange Agreement. All descriptions of the Share Exchange Agreement herein are qualified in their entirety by reference to the text thereof filed as Exhibit 2.10 hereto, which is incorporated herein by reference. The Share Exchange Agreement governs the contractual rights between the parties in relation to the transactions contemplated thereby and contains customary representations and warranties and pre- and post-closing covenants of each party. The Share Exchange Agreement is not intended to be, and should not be relied upon as, making disclosures regarding any facts and circumstances relating to the Company or Park Place. The Share Exchange Agreement is described in this Current Report and attached as Exhibit 2.10 hereto only to provide investors with information regarding the terms and conditions of the Share Exchange Agreement, and, except for its status as a contractual document that establishes and governs the legal relationship among the parties thereto with respect to the transactions contemplated thereby, is not intended to provide any other factual information regarding the Company or Park Place or the actual conduct of their respective businesses during the pendency of the Share Exchange Agreement, or to modify or supplement any factual disclosures about the Company contained in any of the Company’s public reports filed with the Securities Exchange Commission (the “SEC”). On April 21, 2023, the Company received a cease trade order from the Ontario Securities Commission (“OSC”) and, on May 12, 2023, a corresponding notice of delisting related to its listing and trading in Canada on the NEO Exchange (now known as CBOE Canada). As a result of the OSC order and NEO notice, the Company no longer trades in Canada. The Company still is quoted on the OTC market in the United States as its primary market. |