Note 14 - Purchases of Assets

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note

1

4

– Purchases of assets

On

October 31, 2017,

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,

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

consecutive

twelve

month measurement periods following the Closing Date. The additional consideration is classified as Acquisition related contingent payments, of which

$200,000

is the current portion. For the initial

twelve

-month measurement period, the Company did

not

meet the threshold required and the

$100,000

contingent payment was recorded into earnings.

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