Acquisition

9 Months Ended

Sep. 30, 2011

Acquisition [Abstract]

Acquisition

(3) Acquisition, dollar amounts in thousands

On June 3, 2010, the Company completed the acquisition of certain of the assets of Press-Sense Ltd. ("Press-Sense") pursuant to terms of a Purchase and Sale Agreement dated May 31, 2010 by and among the Company, Bitstream Israel Ltd., a wholly-owned subsidiary of the Company organized under the Laws of the State of Israel and the court appointed Special Manager of Press-Sense Ltd., an Israeli company in temporary liquidation under the supervision of the District Court of Haifa. The purchase price of $6,528, including $28 of VAT, was paid in cash. Assets purchased include all Press-Sense software and know-how and related intellectual property rights (both source code and object code), some fixed and tangible assets, and all trademarks, transferable licenses and customer data. No liabilities were acquired in the transaction. The results of operations of the Press-Sense assets have been included in the condensed consolidated financial statements since June 3, 2010. The acquisition was accounted for using the purchase method of accounting in accordance with appropriate standards.

Goodwill was recognized for the excess purchase price over the fair value of the assets acquired. Goodwill is primarily attributable to the expected growth from synergies related to the integration of Press-Sense assets acquired with the Company's Pageflex automated marketing communication and print production software. Goodwill from the acquisition of Press-Sense Ltd. assets will be included within the Company's one reporting unit and will be included in the Company's enterprise-level annual review for impairment. Goodwill is deductible for tax purposes.

The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives:

	Fair Value		Weighted Average Useful  life (Years)
Developed product technology	$	1,410		7.5
Customer relationships		2,200		11.5
Total	$	3,610

The following table presents the pro forma results of the historical condensed consolidated statements of operations of the Company and Press-Sense Ltd. for the nine month periods ended September 30, 2011 and 2010, giving effect to the merger as if it occurred on January 1, 2010:

	Nine Months Ended September 30,
	2011			2010
Pro forma revenue	$	20,940		$	18,752
Pro forma net loss	$	(4,235	)	$	(3,770	)
Pro forma loss per share:
Basic and Diluted	$	(0.41	)	$	(0.38	)
Pro forma shares outstanding:
Basic and Diluted		10,242			9,878

The pro forma net loss and loss per share for each period presented primarily includes adjustments for amortization of intangibles, depreciation, interest income, and income taxes. This pro forma information does not purport to indicate the results that would have actually been obtained had the acquisition been completed on the assumed date, or which may be realized in the future.