Acquisition of Stability Inc. (Tables)

9 Months Ended

Sep. 30, 2016

The actual purchase price has been preliminarily allocated as of September 30, 2016 (in

thousands) and is subject to change:



Cash paid at closing	$	6,000
Working capital adjustment	(480		)
Common stock issued (441,009 shares valued at $9.07 per share)	3,346
Assumed debt	1,771
Fair value of earn-out	25,620
Total fair value of purchase price	$	36,257

Net assets acquired:
Debt-free working capital	$	2,179
Other assets, net	199
Property, plant and equipment	1,375
Deferred tax liability	(8,268		)
Subtotal	(4,515		)
Intangible assets:
Customer relationships	6,090
Patents and know-how	9,170
Trade names and trademarks	830
Non compete agreements	1,080
Licenses and permits	690
Subtotal	17,860
Goodwill	22,912
Total Assets Purchased	$	36,257

Working capital and other assets were composed of the following (in thousands):
Working capital
Cash	$	140
Prepaid Expenses and other current assets	100
Accounts receivable	2,001
Federal and state taxes receivable	28
Inventory	8,725
Accounts payable and accrued expenses	(8,815		)
Debt-free working capital	$	2,179

Current portion of long term debt	$	(194	)
Long-term debt	(560		)
Line of Credit	(932		)
Shareholder loan	(85		)
Net working capital	$	408

Other assets:
Other long term assets	$	199

The intangible assets were assigned the following lives for amortization purposes:



		Estimated useful life (in years)
Intangible asset:
Customer relationships		12
Patents and know-how		20
Trade name and Trademarks		Indefinite
Non compete agreements		4
Licenses and permits		2

Unaudited pro forma information for the three and nine months ended September 30, 2016 and 2015 (in thousands) is as follows:



	Three months ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Revenue	$	64,429	$	52,108	$	175,687	$	148,521

Net income	$	3,406	$	4,253	$	7,074	$	12,227

Income per share, fully diluted	$	0.03	$	0.04	$	0.06	$	0.11