Quarterly report pursuant to Section 13 or 15(d)

Acquisition of Innoergy Limited

Acquisition of Innoergy Limited
9 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Acquisition of Innoergy Limited
8. Acquisition of Innoergy Limited

On October 19, 2020, the Company entered into a Share Purchase Agreement for the acquisition of a 100% interest in Innoergy Limited and immediately changed its name to Pacific Green Innoergy Technologies Limited (“Innoergy”). Innoergy is a designer of battery energy storage systems registered in the United Kingdom. The acquisition marks the Company’s entry into the battery energy storage system market in conjunction with its joint venture partner, PowerChina SPEM.

In consideration of all the issued and outstanding securities of Innoergy, the Company has issued to the selling shareholders of Innoergy an aggregate of 525,000 common shares of the Company. The Company paid £25,000 ($32,500) to a selling shareholder on completion of the transaction, and will pay an equal amount when Innoergy achieves battery storage sales equivalent to 50 megawatts. The common shares of the Company issued to the sellers are subject to a sales volume restriction of 65,625 shares per calendar quarter. As a further condition of the acquisition, Pacific Green will make available to Innoergy a working capital credit facility of £350,000 (approximately $455,000) at an interest rate of eight percent (8%) per annum, which will be due on demand and secured by a floating charge and debenture against the assets of Innoergy.

Total purchase consideration is estimated at $633,911, inclusive of the fair value of the conditional payments, which were considered 75% probable at the acquisition date. Total purchase consideration also includes 525,000 shares with fair value of $577,500 or $1.10 per share. This share price is determined on the basis of the closing market price of the Company’s common shares at the date of acquisition. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition. The purchase consideration has been applied to cash of $146,503, other net working capital of $ 2,758, property and equipment of $540, and loan payable of $64,981. The residual value of $549,091 has been allocated to goodwill, which is expected to be partially or completely tax deductible. The resulting goodwill is based on preliminary valuations and is subject to change based on information that may be made available in the measurement period. The measurement period during which changes may be made to the provisional purchase price allocation will not exceed one year from the acquisition date.