Intangible Software Technology, Net

6 Months Ended

Jun. 30, 2011

Intangible Software Technology, Net

NOTE 4 – INTANGIBLE SOFTWARE TECHNOLOGY, NET

On April 29, 2011, Data I/O purchased software technology for $2 million in cash and 163,934 shares of Data I/O common stock, valued at $1 million on the date of purchase. Acquisition costs of $89,000 were capitalized as part of the transaction. The transaction was accounted for as an asset purchase as it was determined the assets acquired did not constitute an operational business.

For a period of five years Data I/O will pay the seller royalties of 4% of directly associated revenues relating to this acquired software technology. The Company will expense the royalty payments when they are incurred as the Company cannot reasonably estimate the future royalty payment amount at the time of acquisition.

The following is a summary of the Company’s intangible assets:

	June 30, 2011		December 31, 2010
(in thousands)
Intangible software technology	$	3,089	$	—
Less accumulated amortization	$	75	$	—
Intangible software technology - net	$	3,014	$	—