BUSINESS COMBINATION

6 Months Ended

Jun. 30, 2016

BUSINESS COMBINATION [Abstract]

BUSINESS COMBINATION

NOTE L – BUSINESS COMBINATION

On May 29, 2015, the Company entered into an agreement for, and completed its purchase of, all of the assets of NetWolves, LLC and its affiliates, including the membership interests in NetWolves Network Services LLC  (collectively, “NetWolves”) for $18,000,000 (the “Purchase Price”). The purchase of NetWolves was accomplished pursuant to an Asset Purchase Agreement (the "Purchase Agreement").  As a result, the Company effectively purchased all rights, titles and ownership of all assets held by NetWolves.   The Purchase Price was paid using $14,200,000 in cash on hand and $3,800,000 raised through the issuance of a secured subordinated promissory note (“Note”) to MedTechnology Investments, LLC (“MedTech” - see Note M).  The Company believes there are significant operational synergies between NetWolves’ capabilities and VasoHealthcare IT’s requirements under its VAR contract with GEHC, as well as the opportunity to expand NetWolves’ existing services to the healthcare IT market.

In accordance with Accounting Standards Codification 805, Business Combinations, the total purchase consideration is allocated to the net tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at May 29, 2015 (the acquisition date).  The following table summarizes the allocation of the assets acquired and liabilities assumed based on their estimated fair values as follows:

	(in thousands)
	May 29, 2015
Cash and cash equivalents	$	733
Accounts receivable and other current assets		1,535
Other assets		50
Property and equipment		2,359
Accounts payable and other current liabilities		(4,382	)
Long term debt		(1,701	)
Goodwill and other intangibles		14,375
Customer-related intangibles		5,031
Total	$	18,000

The goodwill is expected to be deductible for tax purposes.

The following unaudited supplemental pro forma information presents the financial results as if the acquisition of NetWolves had occurred January 1, 2014.

	(in thousands)
	Three months ended			Six months ended
	June 30, 2015			June 30, 2015
	(unaudited)			(unaudited)
Revenue		$	16,088		$	31,449
Net income			580			517
Earnings per share - basic and diluted		$	0.00		$	0.00