Contingent Liabilities

9 Months Ended

Apr. 30, 2016

Contingent Liabilities [Abstract]

Contingent Liabilities

5. Contingent Liabilities 

Consideration for the April 2015 TASCO acquisition included a $138,000 (as adjusted) holdback payable, which has been paid in full as of April 30, 2016. 

Consideration for the September 2014 TCS acquisition includes a contingent earn-out purchase price, originally payable in three potential payments and contingent upon the attainment of specific revenue goals. The fair value of the earn-out was originally estimated at $711,000. On March 7, 2016 the TCS Asset Purchase Agreement was amended in relation to the contingent earnout, whereas four quarterly payments of $120,905 commenced on December 31, 2015, followed by four quarterly payments of $70,000, commencing December 31, 2016.  The Company recorded a gain of $13,000 as a result of the Amendment during the nine months ended April 30, 2016.

Consideration for the 2012 Ready2Ride acquisition included a contingent hold-back purchase price of up to $250,000 and contingent earn-out payments as follows: (i) the first earn-out payment, composed of $125,000 was paid in October 2013 and 10,000 shares of common stock issued in November 2013; (ii) the second earn-out payment, composed of $125,000 and 15,000 shares of common stock, was paid in September 2014; and (iii) the third earn-out payment, composed of $125,000 and 15,000 shares of common stock, was paid in August 2015. The Company recorded a loss of $8,000 as a result of a change in estimate related to an increase in the market price of the Company’s common stock during the nine months ended April 30, 2016.

The following table shows changes in the holdback and earn-out payable related to the TCS and TASCO acquisition (in thousands):

	Nine months ended April 30
	2016		2015
Beginning balance	$	1,116	$	448
Additions		-		911
Adjustments		(62)		-
Payments		(565)		(292)
Imputed interest recognized		22		37
Gain on change in fair value of earn-out		(5)		-
Ending balance	$	506	$	1,104
Less current portion	$	(382)	$	(627)
Ending balance, long-term	$	124	$	477

The following table shows the remaining estimated payments of contingent liabilities related to the TCS acquisition at April 30, 2016, (in thousands):

2016	$	121
2017		331
2018		70
Total estimated payments		522
Less imputed interest		(16)
Present value of contingent liabilities	$	506