Business Combination

9 Months Ended

Sep. 30, 2012

Business Combinations [Abstract]

Business Combination

Business Combination

On February 16, 2012, the Company completed the acquisition of the video conferencing business of Israel-based VCON Video Conferencing, Ltd. (“VCON”) through an asset purchase agreement. VCON is a pioneer in software based video conferencing solutions with product offerings that include group video conferencing endpoints, desktop video conferencing endpoints, video conferencing infrastructure solutions and software development kits. This acquisition and the combination of streaming and digital signage technologies will provide us with complementary technology opportunities allowing us to enter new growth markets.

Pursuant to the asset purchase agreement, the Company paid initial consideration of $4,632 in cash. This initial consideration is subject to a final working capital adjustment.

The estimated fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed. The Company believes that such information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the Company is waiting for additional information necessary to finalize those fair values. The measurement period for purchase price allocation ends as soon as information on the facts and circumstances becomes available, but will not exceed twelve months from the date of acquisition. Adjustments in the purchase price allocation may require a recasting of the amounts allocated to intangible assets and possible allocation to goodwill, retroactive to the period in which the acquisition occurred. Therefore, the preliminary measurements of fair value reflected are subject to change and any such changes could be significant.

The preliminary fair value of identified assets and liabilities acquired and goodwill is as follows:

Inventory	$	320
Property and equipment	34
Product warranty liability	(8		)
Tradename	500
Patents and technology	2,300
Proprietary software	500
In-process research and development	200
Goodwill	786
	$	4,632

The Company incurred $44 and $270 towards acquisition related expenses, all of which are categorized under general and administrative expenses in the condensed consolidated statements of operations for the three and nine months ended September 30, 2012, respectively.

Supplemental Pro Forma information

1) Revenue and net loss from the VCON business from February 16, 2012 to September 30, 2012 was $720 and ($773), respectively.

2) Revenue and earnings of the combined entity as though the business combination occurred as of January 1, 2011 is as follows:

	Three months ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
Revenue	$	11,573	$	11,886	$	33,595	$	35,249
Net income	929		3,152		1,913		5,115

3) There were no material, nonrecurring pro forma adjustments directly attributable to the acquisition included in this supplemental Pro Forma information.