8x8 2013 Annual Report Download - page 69

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67
7. SEGMENT REPORTING
ASC 280 “Segment Reporting” establishes annual and interim reporting standards for an enterprise’s business segments and
related disclosures about its products, services, geographic areas and major customers. Under ASC 280, the method for
determining what information to report is based upon the way management organizes the operating segments within the
Company for making operating decisions and assessing financial performance. The Company has one reportable segment.
The following table presents net revenues by groupings of similar products (in thousands):
2013 2012 2011
8x8 service, equipment and other $ 107,614 $ 85,800 $ 70,056
Technology licensing and related software - 3 107
Total revenues $ 107,614 $ 85,803 $ 70,163
Years Ended March 31,
Revenue from customers outside the United States was not material for the fiscal years ended March 31, 2013, 2012 and 2011.
All of the Company's property and equipment was located in the United States.
8. ACQUISITIONS
Zerigo, Inc.
On June 16, 2011, the Company entered into an agreement with Zerigo, Inc. ("Zerigo"), a provider of cloud services pursuant
to which the Company acquired 100% of the outstanding stock of Zerigo from its sole shareholder. Under the terms of the
agreement, the Company paid the selling shareholder $750,000 in cash and issued 207,756 shares of its common stock. In
addition, the Company agreed to pay the selling shareholder an earn-out of up to $500,000 cash upon the achievement of
specified software development milestones by December 31, 2011. As of December 31, 2011, the shareholder had achieved the
specified software development milestones and the earn-out of $500,000 had been paid to the shareholder.
The fair value of the consideration transferred consisted of the following (in thousands):
Cash $ 750
Contingent payments 441
Fair value of shares of stock issued 750
Total purchase price
$
1,941
The Company recorded the acquired tangible and identifiable intangible assets and liabilities assumed based on their estimated
fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities
assumed is recorded as goodwill. The amount of goodwill recognized is primarily attributable to the operating synergies
expected to be realized through the acquisition of Zerigo and the workforce of the acquired business. The fair value assigned to
identifiable intangible assets acquired was based on estimates and assumptions made by management. Intangible assets will be
amortized on a straight-line basis.