Bivio Acquisition

3 Months Ended

Dec. 30, 2012

Business Combinations [Abstract]

Bivio Acquisition

The Bivio Transaction has been accounted for under the acquisition method of accounting.  Accordingly, the Company has estimated the purchase price allocation based on the fair values of the assets acquired.

The preparation of the valuation required the use of significant assumptions and estimates. Critical estimates included, but were not limited to, future expected cash flows, including projected revenues and expenses, and applicable discount rates. These estimates were based on assumptions that the Company believes to be reasonable. However, actual results may significantly differ from these estimates.

The following table presents the calculation of the purchase price:

Cash	$	600,000
Fair value of warrants issued	85,000
Total purchase price	$	685,000

The following outlines the significant assumptions the Company used to estimate the fair value of the warrants using the Binomial Lattice pricing model as of the acquisition date on October 12, 2012:

Risk free interest rate		1.69	%
Expected volatility		92.20	%
Expected dividends	None

Under the acquisition method of accounting, the total estimated purchase price is allocated the tangible and intangible assets and assumed liabilities based on their estimated fair values at October 12, 2012. Based on the Company’s valuation of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on estimates and assumptions that are subject to change, the purchase price is allocated as follows:

Tangible Current Assets	$	142,000
Tangible Non-Current Assets		48,000
Liabilities assumed		(798,000	)
Amortizable intangible assets		900,000
Goodwill		393,000
Total fair value of net assets acquired	$	685,000

The following table presents amortizable intangible assets acquired and their amortization periods:

	Estimated
	fair value		Amortization period
Customer relationships	$	100,000	5.0 years
Trade name		300,000	10.0 years
Software		500,000	7.0 years
Total	$	900,000