Note 15 - Business Acquisition

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note

15

– Business acquisition

On

December 16, 2016,

we purchased certain assets formerly owned by Tantaline A/S of Nordborg, Denmark through our wholly owned subsidiary, CVD Materials Corporation. Formed in

2007,

as a spin off from The Danfoss Group, Tantaline A/S established itself as a leader in the commercialization of tantalum treated parts for corrosion resistance. We have now established in

Nordborg a new and wholly owned CVD subsidiary operating under the name Tantaline CVD Aps (“Tantaline”).

Pursuant to the asset Purchase Agreement, the purchase price for the assets acquired in the Acquisition was

$500,000,

which was paid out on Closing Date.

The Company accounted for this acquisition using the acquisition method. The Company allocated the purchase price to the acquired assets based on their estimated fair values at the acquisition date as summarized in the following table.

Inventory	$	10,000
Machinery and equipment		286,900
Intellectual property		203,100
Net tangible assets acquired	$	500,000

On

October 31,

CVD Mesoscribe Technologies Corporation, a New York corporation and newly formed

and wholly-owned indirect subsidiary of CVD Equipment Corporation (the “Company”) and MesoScribe Technologies, Inc., a Delaware corporation (“Seller”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”). Pursuant to the Asset Purchase Agreement, among other things, Buyer acquired (the “Acquisition”) substantially all of the operating assets and business of the Seller (excluding cash, accounts receivable and other specified excluded assets), as more particularly described in the Asset Purchase Agreement.

Pursuant to the Asset Purchase Agreement, the purchase price for the assets acquired in the Acquisition was

$800,000.00,

of which

$500,000

was paid on the Closing Date and

$300,000

may

be paid to Seller as additional

acquisition related contingent consideration based upon the achievement of certain revenue thresholds and other criteria set forth in the Asset Purchase Agreement with respect to each of the

two

(

2

) consecutive

twelve

(

12

) month measurement periods following the Closing Date.

The Company accounted for this acquisition using the acquisition method. The Company allocated the purchase price to the acquired assets based on their estimated fair values at the acquisition date as summarized in the following table.

Inventory	$	25,000
Machinery and equipment		350,000
Intellectual property		425,000
Net tangible assets acquired	$	800,000