Acquisitions (Tables)

6 Months Ended

Jun. 30, 2015

Summary of Unaudited Pro Forma Consolidated Results of Operations

The following table presents our unaudited pro forma results of operations of the Company and Uptivity as if the companies had been combined as of January 1, 2013, and includes pro forma adjustments related to the fair value of deferred revenue, amortization of acquired intangible assets and share-based compensation expense. Direct and incremental transaction costs are excluded from the three and six months ended June 30, 2015 and 2014 pro forma condensed combined financial information presented below, and was included in the three and six months ended June 30, 2013 pro forma condensed combined financial information. The tax benefit of $9.4 million that resulted from the acquisition was recorded in the three and six months ended June 30, 2013 pro-forma period.

	Three Months Ended						Six Months Ended
	June 30, 2015						June 30, 2015
	As Reported			Pro forma			As Reported			Pro forma
Net revenue	$	53,071		$	53,071		$	104,409		$	104,409
Net loss		(7,290	)		(5,865	)		(13,278	)		(11,468	)
Basic and diluted net loss per common share		(0.12	)		(0.10	)		(0.22	)		(0.19	)
	Three Months Ended						Six Months Ended
	June 30, 2014						June 30, 2014
	As Reported			Pro forma			As Reported			Pro forma
Net revenue	$	41,111		$	42,982		$	78,165		$	85,298
Net income (loss)		3,428			(5,458	)		1,704			(8,485	)
Basic net income (loss) per common share		0.06			(0.09	)		0.03			(0.15	)
Diluted net income (loss) per common share		0.06			(0.09	)		0.03			(0.15	)

Summary of Fair Value of the Intangible and Other Assets Acquired

The purchase price allocations for our acquisition of Transcend Products were prepared by the Company’s management utilizing a valuation report, which was prepared in accordance with the provisions of ASC 805 Business Combination, and other tools available to the Company, including conversations with Transcend’s management and projections of revenues and expenses. The fair values of the intangible assets were determined primarily using the income approach and the discount rates range from 13.4% to 16.4%. The total purchase price, which includes the contingent consideration liability above, was preliminarily allocated as follows (in thousands):

	July 2, 2013
Property and equipment, net	$	29
Intangible assets, net		3,249
Goodwill		2,477
Total assets acquired	$	5,755

Summary of Intangible Assets

Intangible assets acquired in the acquisition include customer relationships, patents and technology, which are amortized on a straight-line basis. The following sets forth the intangible assets purchased as part of the Transcend acquisition and their economic useful life at the date of acquisition (in thousands, except useful life):

	Gross Assets		Economic Useful Life (in years)
Customer relationships	$	168		3.5
Patents		2,168		10.0
Technology		913		5.0
Total intangibles	$	3,249

Uptivity

Summary of Total Preliminary Purchase Price Allocation of Acquired Assets And Liabilities

The total purchase price was allocated as follows (in thousands):

		Amount
Assets acquired:
Cash	$	3,894
Accounts receivable		742
Other current assets		1,363
Property, plant and equipment and other assets		584
Intangible assets		24,448
Goodwill		32,684
Total assets acquired		63,715
Liabilities assumed:
Trade accounts payable		1,124
Accrued liabilities		1,934
Current portion of deferred revenue		1,516
Long-term portion of deferred revenue		353
Deferred tax liability		9,884
Total liabilities assumed		14,811
Net assets acquired	$	48,904

Summary of Intangible Assets Purchased and Economic Useful Life

Intangible assets acquired from the acquisition include customer relationships, which are amortized on a double-declining basis, technologies and trade name and trademarks, which are amortized on a straight-line basis. The fair values of the intangible assets were determined primarily using the income approach and the discount rates range from 17.0% to 20.6%. The following sets forth the intangible assets purchased as part of the Uptivity acquisition and their respective preliminary estimated economic useful life at the date of the acquisition (in thousands, except useful life):

	Amount		Economic Useful Life (in years)
Customer relationships	$	11,460		8
Trade name and trademarks		1,942		5
Technology		7,686		7
In-process research and development		3,360		Indefinite
Total intangible assets	$	24,448