ACQUISITION OF U.S. COMPOUNDING

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

ACQUISITION OF U.S. COMPOUNDING

NOTE 5: ACQUISITION of U.S. COMPOUNDING

On April 12, 2016, the Company filed a report on Form 8-K announcing the completion of its acquisition of U.S. Compounding, Inc., an Arkansas corporation ("USC"), pursuant to the terms of the Agreement and Plan of Merger, dated March 28, 2016 (the "Merger Agreement"), with USC and Ursula MergerSub Corp., an Arkansas corporation and a wholly owned subsidiary of the Company ("Merger Sub"). Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into USC (the "Merger"), with USC surviving as a wholly owned subsidiary of the Company. Pursuant to the Merger and the Merger Agreement, all of the outstanding shares of common stock of USC were converted into the right to receive a total of 1,618,539 shares of Adamis common stock; and as described further below, in connection with the Merger and the transactions contemplated by the Merger Agreement, the Company assumed approximately $5,722,000 principal amount of debt obligations and related loan agreements of USC and certain related entities.

The merger is accounted for as an acquisition of USC under the purchase method of accounting in accordance with FASB Accounting Standard Codification Subtopic 805—Business Combinations. The assets and liabilities of USC will be reflected at fair value on the balance sheet of the Company. The fair value of the assets and liabilities reflected in the financial statements and notes appearing in this Report on Form 10-K was based on the estimated value of USC as of April 11, 2016 (the date on which the Company acquired USC). 

Total purchase price plus assumed debt is summarized as follows: 

Stock to Seller at Close	$	3,598,884
Stock to Escrow		1,899,000
Incentive Stock to Seller		4,747,500
Plus: Assumed Liabilities		5,722,558
Total Purchase Price	$	15,967,942

The fair value of net assets acquired and liabilities assumed:

Assets Acquired:
Cash	$	381,883
Accounts Receivable and Prepaid Expenses		527,034
Inventory		943,958
Fixed Assets		5,202,356
Intangible Assets		12,419,000
Goodwill		7,640,622
Total assets		27,114,853
Liabilities Assumed:
Accounts Payable and Accrued Expenses		5,731,390
Deferred Tax Liability, gross		5,415,521
Total Liabilities		11,146,911
Total Purchase Price Plus Debts Assumed	$	15,967,942