NOTE 2 – ACQUISITIONS

Crashboxx acquisition

On April 17, 2015, the Company acquired certain intangible assets from a company doing business as Crashboxx to advance its insurance telematics strategy for a cash payment of $1.5 million and future earn-out payments. The aggregate estimated fair value of the earn-out payments is $455,000 based on projected revenues over a period of 5 years of products and services incorporating the acquired technology. The Company acquired developed technology from Crashboxx with a fair value of $930,000 and paid a premium (i.e. goodwill) over the fair value of the identified assets acquired. The goodwill of $1,025,000 is primarily attributable to the benefit of the acquired proprietary automobile accident claims process automation technology. The goodwill arising from this acquisition is deductible for income tax purposes.

Radio Satellite Integrators acquisition

On December 18, 2013, the Company completed the acquisition of all outstanding capital stock of Radio Satellite Integrators, Inc. (“RSI”) for a cash payment at closing of $6.5 million and future earn-out payments based on post-acquisition sales and gross profit performance in the aggregate estimated fair value amount of $2.1 million that was paid quarterly over two years. RSI was a privately-held provider of fleet management solutions primarily to city and county government agencies for applications involving public works, waste management, transit and public safety.

Following is the purchase price allocation for RSI (in thousands):

Purchase price				$	8,563
Less cash acquired					(382	)
Net purchase price					8,181
Fair value of net assets acquired:
Current assets other than cash	$	941
Customer lists		3,150
Developed technology		1,970
Other non-current assets		10
Current liabilities		(1,675	)
Deferred tax liabilities, net		(1,768	)
Total fair value of net assets acquired					2,628
Goodwill				$	5,553

This goodwill is primarily attributable to the benefit of having an assembled workforce to address the Company's governmental markets and the value that the Company expected to derive from RSI's customer relationships beyond the current contractual terms of these service agreements. The goodwill arising from this acquisition is not deductible for income tax purposes.

Wireless Matrix acquisition

On March 4, 2013, the Company completed the acquisition of all outstanding capital stock of Wireless Matrix USA, Inc. (“Wireless Matrix”). Under the terms of the agreement, the Company acquired Wireless Matrix for a cash payment of $52.9 million. The assets acquired by the Company included cash of approximately $6.1 million. The Company funded the purchase price from the net proceeds of an equity offering in February 2013 of $44.8 million, the $3.2 million net proceeds from a bank term loan and cash on hand.

Following is the purchase price allocation for Wireless Matrix (in thousands):

Purchase price				$	52,986
Less cash acquired					(6,149	)
Net cash paid					46,837
Fair value of net assets acquired:
Current assets other than cash	$	6,353
Deferred tax assets, net		9,437
Property and equipment		1,683
Customer lists		14,440
Developed technology		11,180
Other non-current assets		144
Current liabilities		(5,218	)
Total fair value of net assets acquired					38,019
Goodwill				$	8,818

The Company paid a premium (i.e., goodwill) over the fair value of the net tangible and identified intangible assets acquired. A principal rationale for this acquisition is that the Company could leverage Wireless Matrix's mobile workforce management and asset tracking applications to build upon its current product offerings for its customers in the energy, government and transportation markets and expand its turnkey offerings to global enterprise customers in new vertical markets such as heavy equipment and insurance telematics, among others. The Company believes that this acquisition accelerated its development roadmap, thereby enabling it to offer higher margin turnkey solutions for new and existing customers, and further enhanced its relevance with mobile network operators and key channel partners in the global M2M marketplace. The goodwill arising from the Wireless Matrix acquisition is not deductible for income tax purposes.