| Schedule of purchase price allocation |
Assets Acquired: |
|
|
|
Cash |
|
$ |
1,112,485 |
|
Receivables |
|
|
4,870,471 |
|
Inventory |
|
|
55,410 |
|
Other current assets (Note A) |
|
|
852,759 |
|
Prepaid Licenses/Contracts (Note B) |
|
|
9,146,954 |
|
Property and equipment |
|
|
254,638 |
|
Trade name/trademarks (Note C) |
|
|
3,250,000 |
|
Customer relationships (Note C) |
|
|
2,130,000 |
|
Goodwill |
|
|
4,544,053 |
|
| |
|
|
26,216,770 |
|
Liabilities Assumed: |
|
|
|
|
Accounts payable |
|
|
5,094,390 |
|
Accrued expenses (Note D) |
|
|
970,139 |
|
Deferred Revenue |
|
|
11,152,241 |
|
| |
|
|
17,216,770 |
|
Purchase Price |
|
$ |
9,000,000 |
|
(A) |
Other current assets consist primarily of $356,000 of rebates receivable, $107,000 of prepaid expenses, $195,000 of unbilled revenues and $153,000 for a working capital settlement adjustment. The asset purchase agreement included a provision for an adjustment to working capital as of the closing date of the transaction. |
(B) |
Prepaid licenses/contracts are payments made by the Company directly to the manufacturer for the maintenance services and are being amortized over the life of the contract |
(C) |
The trade name/trademarks and customer relationships are identifiable intangible assets that are being amortized over their useful life of seven years. |
(D) |
Accrued expenses consist primarily of $654,000 of accrued compensation, $50,000 of accrued other operational expenses and $35,000 of sales taxes payable. |
|