Business Combination (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Purchase Price and Allocation of Purchase Price

The purchase price and the allocation of the purchase price were as follows (in thousands):



Purchase price:
Cash paid at closing	$	2,960
Fair value of deferred payments owing to EBGL Sellers	941
Fair value of contingent earn-out liability	943
ATRM common stock (100,000 shares at $1.49 per share)	149
Purchase price adjustment – paid in January 2017	218
Total purchase price	$	5,211



Allocation of purchase price:
Assets acquired:
Inventories	$	898
Costs and estimated profit in excess of billings	93
Prepaid expenses	3
Equipment ⁽¹⁾	289
Goodwill ⁽²⁾	3,020
Customer relationships ⁽²⁾⁽³⁾	677
Tradenames ⁽²⁾	104
Purchased backlog ⁽²⁾⁽³⁾	300
Total assets acquired	5,384

Liabilities assumed:
Billings in excess of costs and estimated profits	(31		)
Accrued compensation	(40		)
Accrued other liabilities	(102		)
Total liabilities assumed	(173		)

Net assets acquired	$	5,211


⁽¹⁾	The fair value of equipment was determined based primarily on an independent appraisal.

⁽²⁾

Goodwill and tradenames are considered indefinite-lived assets and are not subject to future amortization, but will be tested for impairment at least annually. Goodwill is comprised primarily of manufacturing processes and knowhow, assembled workforce and other intangible assets that do not qualify for separate recognition. The full amount of goodwill is expected to be deductible for tax purposes.


⁽³⁾	The amortization period for customer relationships is six years. Purchased backlog will be amortized over the period that the related contracts are completed, which is expected to be less than one year.

Schedule of Business Acquisition, Pro Forma Information

The following unaudited pro forma financial information presents the combined results of ATRM and EBGL for the year ended December 31, 2016 as if the EBGL Acquisition had occurred on January 1, 2016 (in thousands):



	2016
Pro forma net sales	$	40,589
Pro forma net loss	(5,880		)
Pro forma loss per share – basic and diluted	(2.51		)