10 Acquisition of Aquila Biolabs GmbH

9 Months Ended

Mar. 31, 2022

10 Acquisition of Aquila Biolabs GmbH

Acquisition of Aquila Biolabs GmbH

10. Acquisition of Aquila Biolabs GmbH

Effective April 29, 2021, the Company acquired all the outstanding capital stock of Aquila, a German start-up company engaged from its facility in Baesweiler, Germany in the design, production, and sale of bioprocessing systems and products which focus on the control and analysis of bioprocesses in bioreactors and incubation shakers for an aggregate purchase price of $7,880,100 in cash upon closing. Aquila’s principal customers are universities, pharmaceutical companies, and industrial companies. Aquila’s products are sold primarily on a direct basis and to a lesser extent, through distributors.

The acquisition was accounted for in accordance with ASC 805, Business Combinations (“ASC 805”) in which the Company is treated as the accounting acquirer. Accordingly, the assets acquired and liabilities assumed were measured at estimated fair value.

For purposes of measuring the estimated fair value, where applicable, of the assets acquired and liabilities assumed, as reflected in the unaudited pro forma condensed consolidated financial information, the guidance in ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) has been applied, which establishes a framework for measuring fair value. In accordance with ASC 820, fair value is an exit price and is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Under ASC 805, acquisition-related transaction costs and acquisition-related restructuring charges are not included as components of consideration transferred but are accounted for as expenses in the period in which the costs are incurred.

Management of the Company allocated the purchase price based on its estimated valuation of the assets acquired and liabilities assumed as follows:

	Amount			Useful life
Fair value of assets acquired:
Current assets:
Cash and cash equivalents	$	201,100
Accounts receivable		159,200
Inventory		187,500
Prepaid expenses and other current assets		25,400
Property, plant and equipment		40,200
Deferred tax asset		800,300
Tradename		452,300		6 years
Non-compete agreements		784,500		4 years
In-process research and development		742,100		5 years
Customer relationships		252,200		9 years
Patents and other intangibles		286,200		7 years
Total assets acquired	$	3,931,000
Fair value of liabilities assumed:
Accounts payable	$	(39,300	)
Accrued expenses		(90,300	)
Other current liabilities		(59,400	)
Total liabilities assumed	$	(189,000	)
Total identifiable net assets	$	3,742,000
Fair value of consideration transferred		7,880,100
Goodwill	$	4,138,100