Note 3 - ACQUISITION

9 Months Ended

Jun. 30, 2013

Note 3 – ACQUISITION

In January 2012, VR Holdings entered into an agreement with Litigation Dynamics, Inc. to have Litigation Dynamics, Inc. merge into VR Holdings, Inc. Subsequent to the completion of this acquisition, a formal valuation was obtained from an independent valuation firm to assist VR Holdings in establishing the values of the assets and liabilities of Litigation Dynamics, Inc. at the date of the acquisition.

The acquisition has been accounted for as a business combination, and VR Holdings valued all assets and liabilities acquired at their fair values on the date of acquisition. Accordingly, the assets and liabilities of the acquired entity were recorded at their estimated fair values at the date of the acquisition.

This evaluation determined that the price paid by VR Holdings for Litigation Dynamics, Inc. created intangible assets relating to Tradenames of $4,000 and Goodwill of $1,262,892. Based upon a subsequent review performed by VR Holdings of the continuing value of these assets, it was determined that these assets had no continuing value and were expensed by a charge to the Statement of Operations for the year ended September 30, 2012.

Actual results of operations of Litigation Dynamics, Inc. are included in VR Holdings’ consolidated financial statements from the date of acquisition. The allocation of the purchase price to assets and liabilities based upon the fair market determination at the date of acquisition was as follows:


Cash	$	270
Account receivable, net of allowance of $26,000		4,380
Accounts payable		(41,374	)
Notes payable – related party		(87,668	)
Note payable – long term debt		(300,000	)

Net tangible Assets/liabilities	$	(424,392	)

Trade-names		4,000
Cash paid by Litigation Dynamics to VR Holdings		20,000
Goodwill		1,262,892

Total Net Assets Acquired	$	862,500

Total consideration paid - Common stock (paid to Litigation Dynamics, Inc.)	$	862,500

- Definition

Disclosure of accounting policy for completed business combinations (purchase method, acquisition method or combination of entities under common control). This accounting policy may include a general discussion of the purchase method or acquisition method of accounting (including for example, the treatment accorded contingent consideration, the identification of assets and liabilities, the purchase price allocation process, how the fair values of acquired assets and liabilities are determined) and the entity's specific application thereof. An entity that acquires another entity in a leveraged buyout transaction generally discloses the accounting policy followed by the acquiring entity in determining the basis used to value its interest in the acquired entity, and the rationale for that accounting policy.

+ References+ Details

VR Holdings, Inc. 10-Q/A