Business Combination - Merger Between Uroplasty, Inc. and Vision-Sciences, Inc.

9 Months Ended

Sep. 30, 2016

Business Combination - Merger Between Uroplasty, Inc. and Vision-Sciences, Inc. [Abstract]

Business Combination - Merger Between Uroplasty, Inc. and Vision-Sciences, Inc.

Note 2. Business Combination - Merger Between Uroplasty, Inc. and Vision-Sciences, Inc.

The Merger has been accounted for as an acquisition of VSCI by UPI, in accordance with Accounting Standards Codification (ASC) Topic 805, "Business Combinations," using the acquisition method of accounting with UPI as the accounting acquirer. Since the Company (formerly known as Vision-Sciences), as the parent company of UPI after the Merger, is the legal acquirer, the Merger has been accounted for as a reverse acquisition.  Under these accounting standards, UPI’s total purchase price of $16.5 million is calculated as if UPI had issued its shares to VSCI stockholders and converted options and warrants to purchase VSCI shares to options and warrants to purchase UPI’s common stock.

Under the acquisition method of accounting, the total purchase price was allocated to the net tangible and intangible assets of VSCI acquired in the Merger, based on their fair values at the effective date of the Merger. The allocation was finalized without any change to the preliminary allocation and is as follows:

Cash and cash equivalents	$	2,020,000
Accounts receivable		4,249,000
Inventories		4,462,000
Other current assets		369,000
Property, plant and equipment		817,000
Goodwill		18,750,000
Other intangibles		13,660,000
Other non-current assets		97,000
Total assets acquired	$	44,424,000
Accounts payable and other liabilities	$	5,209,000
Deferred revenue		176,000
Convertible debt – related party		22,530,000
Other non-current liabilities		40,000
Total liabilities assumed		27,955,000
Total purchase price	$	16,469,000

The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of the following intangible assets:

	Amount		Weighted Average Life-Years
Developed technology	$	6,200,000		7
Customer relationships		7,270,000		5
Trade names		190,000		10
	$	13,660,000

The supplemental unaudited pro forma net sales and net loss of the combined entity had the acquisition been completed on January 1, 2015:

	Nine months ended September 30, 2015 (unaudited)
Supplemental pro forma combined results of operations:
Net sales	$	35,669,538
Net loss	$	(12,164,228	)
Net loss per share – basic and diluted	$	(0.47	)

Adjustments to the supplemental pro forma combined results of operations are as follows:

	Nine months ended September 30, 2015 (unaudited)
Increase in amortization of intangibles	$	594,000
Interest amortization on related party debt		282,000
Increase in net loss	$	876,000

These unaudited pro forma condensed consolidated financial results have been prepared for illustrative purposes only and do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on January 1, 2015, or of future results of the consolidated entities.  The unaudited pro forma condensed consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition.