3. BUSINESS COMBINATION

On August 16, 2024, the Company completed the acquisition of assets of Radical Clean Solutions, Inc. (“RCS”), effectively increasing its interest from 14% to 100%, and providing the Company control over RCS. The RCS technology is a product line consisting of patent-pending “smart hydroxyl generation systems” focused on numerous industry verticals that is proven to eliminate 99.99+% of all major pathogens, virus, mold, volatile organic compounds (“VOCs”) and allergy triggers. As the Company’s investment in RCS does not have a readily determinable fair value, the Company previously elected to account for its 14% interest in RCS at cost, less impairment. The Company recognized a loss on the investment of $97,488 during the three- and nine-month periods ended September 30, 2024.

The acquired business did not contribute revenues or earnings to the Company for the period from August 16, 2024 to September 30, 2024. The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2023.

 SCHEDULE OF UNAUDITED PRO FORMA INFORMATION

The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and net loss position.

These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of RCS to reflect the additional amortization that would have been charged assuming the fair value adjustments to the intangible assets had been applied from August 1, 2024, with the consequential tax effects.

The following table summarizes the consideration transferred to acquire RCS and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

 SCHEDULE OF IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED

The acquisition of RCS includes a contingent consideration arrangement that requires additional consideration to be paid by AgriFORCE to a previous owner of RCS who now serves as a Consultant to AgriFORCE (the “Consultant”). The Consultant is entitled to receive commissions on sales and production of RCS Units, which are payable in cash upon receipt of revenue or completed inventory by the Company. The consultant is also entitled to other manufacturing, sales and product development milestones, which are outlined below.

(a) Completion of wall mount design

(b) Completion of patent prosecution for any of the patent applications heretofore provided to Company or any new U.S. patent applications

(c) Execute distribution agreements for other countries or verticals

(d) Production of 250 RCS units

(e) Production of 500 RCS units

(f) Production of 1,000 RCS units

The Consultant is entitled to be awarded 25,000 restricted common shares of the Company for meeting each milestone.

The Consultant is also entitled to restricted stock units (“RSUs”) provided certain conditions are met.

As of September 30, 2024, there were no changes in the recognized amounts or range of outcomes for the contingent consideration recognized as a result of the acquisition of RCS.

The goodwill is attributable to the acquisition of the RCS technologies, synergies, access to their key vendors, and other non-quantifiable assets which are expected to create growth and diversification opportunities for the Company.

Prior to the acquisition, the Company had a preexisting relationship with RCS. The Company was a 14% investor of RCS and held a receivable of $200,000 for a secured loan note issued to RCS. As part of the acquisition terms, the receivable amount of $200,000 funded the purchase price consideration and was deemed settled.