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Purchase of LAT Pharma
 6 Months Ended 12 Months Ended
Dec. 31, 2016
Jun. 30, 2016
Business Combinations [Abstract]    
Purchase of LAT Pharma

7. Purchase of LAT Pharma

 

On April 11, 2016, the Company entered into and consummated an Agreement and Plan of Merger (the “Merger Agreement”), with LAT Acquisition Corp., a Nevada corporation and wholly-owned subsidiary of the Company (“Acquisition”) and LAT Pharma, LLC an Illinois limited liability company (“LAT”). Pursuant to the terms of the Merger Agreement, Acquisition merged with and into LAT in a statutory triangular merger (the “Merger”) with LAT surviving as a wholly-owned subsidiary of the Company. As consideration for the Merger, the Company issued the interest holders of LAT (the “LAT Holders”) an aggregate of 39,820,000 shares of our Common Stock issued to the LAT Holders in accordance with their pro rata ownership of LAT membership interests prior to the Merger. Following the Merger, the Registrant will continue the development of LAT’s lead clinical therapeutic candidate Continuous low-dose Infusion (CI) Terlipressin.

 

Immediately prior to the Merger, the Company had 87,210,000 shares of Common Stock issued and outstanding. In connection with the Merger, certain shareholders of the Company collectively agreed to retire and cancel an aggregate of 39,869,999 shares of Common Stock. Following the consummation of the Merger, the issuance of the Merger Shares of the 39,820,000 shares of Common Stock, the Company had 87,160,001 shares of Common Stock issued and outstanding and the LAT Holders beneficially own 39,820,000 shares or approximately forty-six percent (46%) of such issued and outstanding Common Stock.

 

Under the purchase method of accounting, the transaction was valued for accounting purposes at $2,389,200, which was the estimated fair value of the consideration paid by the Company. The estimate was based on the consideration paid of 39,820,000 shares of common stock valued based on the closing price on 04/11/2016 of $0.06 per share.

 

The assets and liabilities of LAT Pharma, Inc. were recorded at their respective fair values as of the closing date of the Merger Agreement, and the following table summarizes these values based on the balance sheet at April 11, 2016. 

 

$2,303,682   Assets Purchased
 260,193   Liabilities Assumed
 2,043,489   Net Assets Purchased
 2,389,200   Purchase Price
$345,711   Goodwill from Purchase

 

Intangible asset detail 

 

$2,293,770   Intangible Intellectual Property
 345,711   Goodwill
$2,639,481   Intangible Asset from Purchase

 

Under the 338(h)(10) election, intangibles related to the acquisition of LAT Pharma will be fully deductible for tax purposes.

 

The intangible intellectual property is amortized over 10 years.

 

   December 2016  December 2015
Intangible Assets subject to Amortization  $2,293,770   $—   
Amortization Expense in current year  $57,344   $—   
Accumulated Amortization at year end  $165,724   $—   

 

The previous year amortization expense has been amortized for the period from April 11, 2016 to June 30, 2016. The estimated Amortization expense for each of the five succeeding fiscal years will be approximately $229,300 per year.

7. Purchase of LAT Pharma

 

On April 11, 2016, the Company entered into and consummated an Agreement and Plan of Merger (the “Merger Agreement”), with LAT Acquisition Corp., a Nevada corporation and wholly-owned subsidiary of the Company (“Acquisition”) and LAT Pharma, LLC an Illinois limited liability company (“LAT”). Pursuant to the terms of the Merger Agreement, Acquisition merged with and into LAT in a statutory triangular merger (the “Merger”) with LAT surviving as a wholly-owned subsidiary of the Company. As consideration for the Merger, the Company issued the interest holders of LAT (the “LAT Holders”) an aggregate of 39,820,000 shares of our Common Stock issued to the LAT Holders in accordance with their pro rata ownership of LAT membership interests prior to the Merger. Following the Merger, the Registrant will continue the development of LAT’s lead clinical therapeutic candidate Continuous low-dose Infusion (CI) Terlipressin.

 

Immediately prior to the Merger, the Company had 87,210,000 shares of Common Stock issued and outstanding. In connection with the Merger, certain shareholders of the Company collectively agreed to retire and cancel an aggregate of 39,869,999 shares of Common Stock. Following the consummation of the Merger, the issuance of the Merger Shares of the 39,820,000 shares of Common Stock, the Company had 87,160,001 shares of Common Stock issued and outstanding and the LAT Holders beneficially own 39,820,000 shares or approximately forty-six percent (46%) of such issued and outstanding Common Stock.

 

Under the purchase method of accounting, the transaction was valued for accounting purposes at $2,389,200, which was the estimated fair value of the consideration paid by the Company. The estimate was based on the consideration paid of 39,820,000 shares of common stock valued based on the closing price on 04/11/2016 of $0.06 per share.

 

The assets and liabilities of LAT Pharma, Inc. were recorded at their respective fair values as of the closing date of the Merger Agreement, and the following table summarizes these values based on the balance sheet at April 11, 2016. 

 

$ 2,303,682     Assets Purchased
  260,193     Liabilities Assumed
  2,043,489     Net Assets Purchased
  2,389,200     Purchase Price
$ 345,711     Goodwill from Purchase

 

Intangible asset detail 

 

$ 2,293,770     Intangible Intellectual Property
  345,711     Goodwill
$ 2,639,481     Intangible Asset from Purchase

 

Under the 338(h)(10) election, all goodwill and intangibles related to the acquisition of LAT Pharma will be fully deductible for tax purposes.

 

The intangible intellectual property is amortized over 10 years.

 

    June 2016   June 2015
Intangible Assets subject to Amortization   $ 2,293,770     $ —    
Amortization Expense in current year   $ 51,036     $ —    
Accumulated Amortization at year end   $ 51,036     $ —    

 

 

The current year amortization expense has been amortized for the period from April 11, 2016 to June 30,2016. The estimated Amortization expense for each of the five succeeding fiscal years will be approximately $229,300 per year.