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Subsequent Event
3 Months Ended
Mar. 31, 2018
Subsequent Events [Abstract]  
Subsequent Event
Subsequent Event
On May 3, 2018 (the “Closing Date”), the Company acquired all of the outstanding ownership interests of VIEVU, LLC (“VIEVU”), a public safety camera and cloud-based evidence management system provider for law enforcement agencies.
The purchase price consisted of $4.6 million in cash and 58,843 shares of the Company's common stock (the “Closing Stock”) issued to VIEVU’s parent company, Safariland, LLC (“Safariland”), at closing. The number of shares of Closing Stock was determined by dividing $2.5 million in aggregate value by the volume-weighted average price of the Company’s common stock, as reported on the NASDAQ Global Select Market, for the 20-trading day period up to and including the trading day that was three trading days immediately preceding (but not including) the Closing Date (the “Closing Stock Price”). The Closing Stock Price was $42.49 per share.
Pursuant to the terms of the transaction, the Company has agreed to issue up to $6.0 million in aggregate value of its common stock (the “Earn-Out Stock Payments”), at a price per share equal to the Closing Stock Price, if certain conditions relating to retention of VIEVU’s customers are met as of the first and second anniversaries of the Closing Date. Subject to the satisfaction of those conditions, the Company may issue up to 141,226 additional shares of common stock in respect of the Earn-Out Stock Payments.
Concurrently with the closing of the VIEVU acquisition, the Company entered into a long-term Product Development and Supplier Agreement (the “Supply Agreement”) with Safariland, pursuant to which Safariland will be the Company’s preferred provider of holsters for its CEW products. The Company will include the fair value of the Supply Agreement as a component of the purchase price to be allocated to the acquired net assets of VIEVU. The acquisition will be accounted for in the second quarter of fiscal year 2018 using the acquisition method in accordance with ASC 805, Business Combinations. Accordingly, the identified assets and liabilities assumed will be measured at their acquisition-date fair value. VIEVU’s operating results will be included in the Company’s consolidated financial statements from the effective date of the acquisition (i.e., May 3, 2018).
The Closing Stock and the shares of common stock that may be issued in respect of the Earn-Out Stock Payments (if any), was and will be, as applicable, issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption from registration set forth in Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated by the SEC thereunder. Safariland represented and warranted to the Company that it is an “accredited investor” as that term is defined in Rule 501 of Regulation D, and the Company did not engage in any general solicitation in connection with the issuances of Company common stock contemplated by the terms of the transaction. All such shares of Company common stock are and will be, as applicable, “restricted securities” as that term is defined in Rule 144 promulgated by the SEC under the Securities Act.