Acquisition of Vaporsens, Inc

6 Months Ended

Jun. 30, 2020

On April 3, 2020, the Company acquired Vaporsens, Inc (“Vaporsens”) for $10.6 million in a stock purchase deal, which was in addition to the previous $3.0 million equity investment by the Company in Vaporsens. The Company funded the acquisition with $7.1 million in cash payments, with the remaining $3.5 million of consideration paid with restricted common stock of the Company. Vaporsens specializes in nanofiber chemical sensing research and development, which the Company anticipates using to complement and expand its product offerings. Vaporsens is now a 100% owned subsidiary of the Company, and will be classified within the “Other” segment.

The assets acquired and liabilities assumed were recorded at fair value on the acquisition date. The Company accounted for the acquisition under the provisions of FASB ASC Topic 805, Business Combinations. There were no revenues or earnings of the business of Vaporsens which were included in the the Company’s consolidated statement of income and comprehensive income for the quarter or year to date periods ended June 30, 2020.

The following table summarizes the fair values of the assets acquired, and the liabilities assumed, as of the acquisition date of April 3, 2020. The valuation process is not complete and the final determination of the fair values may result in further adjustments to the values presented below:


	Fair Value
Current Assets	$	435,722
Personal Property	562,840
Technology Licenses	245,335
In-Process R&D	11,000,000
Goodwill	1,667,177
Total assets acquired	13,911,074
Current liabilities	255,522
Deferred Tax Liability	36,552
Total Liabilities assumed	292,074
Net Assets Acquired	$	13,619,000

The allocation of the purchase price above is considered preliminary and was based upon valuation information available and estimates and assumptions made as of June 30, 2020. The Company is still in the process of verifying data and finalizing information related to the valuation and recording of identifiable intangible assets, deferred taxes, net working capital, and the resulting effects on the amount of recorded goodwill. The Company expects to finalize these matters within the measurement period, which is currently expected to remain open through the end of calendar year 2020.

Through June 30, 2020, the Company has incurred acquisition-related costs of approximately $550,000, which has been expensed as incurred in the "Selling, general & administrative" section of its Condensed Consolidated Income Statement.