ACQUISITION

9 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

ACQUISITION

2. ACQUISITION

VENDSCREEN, INC.

On January 15, 2016, the Company executed an Asset Purchase Agreement with Vendscreen, Inc. (“VendScreen”), a Portland, Oregon based developer of vending industry cashless payment technology, by which it acquired substantially all of VendScreen’s assets and assumed specified liabilities, for a cash payment of $5.625 million. The purchase price was funded using $2.625 million in cash, and the balance of $3.0 million from a term loan which was converted from a line of credit.

This acquisition expands the Company’s capability with interactive media (touchscreen) and content delivery through VendScreen’s cloud-based content delivery platform, device platform and products, customer base, vendor management system (VMS) integration, and consumer product information including nutritional data. In addition to new technology and services, the acquisition adds a West Coast operational footprint, with former VendScreen employees able to offer expanded customer services, sales and technical support.

The following table summarizes the preliminary purchase price allocation to reflect the fair values of the assets acquired and liabilities assumed at the date of acquisition.

($ in thousands)
Consideration:
Fair value of total consideration paid in cash	$	5,625
Acquisition / integration expenses:	$	584
Recognized amounts of identifiable assets acquired and liabilities assumed:
Financial Assets:
Accounts receivable	$	3
Finance receivables		628
Other current assets		20
Deferred income taxes		18
		669
Property, and & equipment		81
Identifiable intangible assets:
Developed technology		639
Customer relationships		149
Brand		95
Noncompete agreements		2
Fair value of intangible assets		885
Financial liabilities
Accrued liabilities		(50	)
Total identifiable net assets	$	1,585
Goodwill		4,040
Total Fair Value	$	5,625

Of the $885 thousand of acquired intangible assets, $639 thousand was assigned to developed technology that is subject to amortization over 5 years, $149 thousand was assigned to customer relationships which are subject to amortization over 10 years; $2 thousand was assigned to a non-compete agreement that is subject to amortization over 2 years, and $95 thousand was assigned to the brand that is subject to amortization over 3 years. All of the intangible assets are amortizable for income tax purposes.

Substantially all of the goodwill is amortizable for income tax purposes.

VendScreen has been included in the accompanying consolidated financial statements of the Company since the date of acquisition. The $584 thousand of acquisition / integration expenses consists of non-recurring expenses incurred in connection with the acquisition and integration of the VendScreen business and were included in SG&A expenses during the nine months ended March 31, 2016.