8x8 2014 Annual Report Download - page 80

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The preliminary fair values of the assets acquired and liabilities assumed are as follows (in thousands):
None of the goodwill recognized is expected to be deductible for income tax purposes.
Voicenet contributed revenue of approximately $3.3 million and a net loss of approximately $0.8 million for the period from the date of
acquisition to March 31, 2014. The Company determined that it is impractical to include such pro forma information given the difficulty in
obtaining the historical financial information of Voicenet. Inclusion of such information would require the Company to make estimates and
assumptions regarding Voicenet's historical financial results that we believe may ultimately prove inaccurate.
9. GAIN ON SETTLEMENT OF ESCROW CLAIM
In December 2013, the Company settled an escrow claim for indemnification with the sellers of Contactual, Inc. Under the terms of the
settlement, the Company recorded a gain of $0.6 million in other income. Under the terms of the Contactual merger agreement and the escrow
agreement, each indemnifying seller paid his, her or its pro rata share of the obligations owed to the Company on January 29, 2014. Upon receipt
of the cash on January 29, 2014, the Company released the remaining escrow account balance to the sellers of Contactual Inc.
10. PATENT SALE
In June 2012, the Company entered into a patent purchase agreement and sold a family of patents to a third party for approximately $12.0
million plus a future payment of up to a maximum of $3.0 million based on future license agreements entered into by the third party purchaser.
In February 2013, the third party entered into a separate license agreement with its customer; therefore, the Company earned an additional $1.0
million under the patent purchase agreement. Under the terms and conditions of the patent purchase agreement, the Company has retained
certain limited rights to continue to use the patents. The patent purchase agreement contains representations and warranties customary for
transactions of this type.
11. DISCONTINUED OPERATIONS
On September 30, 2013, the Company completed the sale of its dedicated server hosting business to IRC Company, Inc. ("IRC") and, as a result,
no longer provides dedicated server hosting services. In the transaction, IRC purchased 100% of the stock of Central Host, Inc., which had been
wholly owned by the Company and all of the assets specific to the dedicated server hosting business.
The Company sold its dedicated server hosting business for total consideration of $3.0 million in cash, which was received on October 1, 2013.
75
Estimated
Fair Value
Assets acquired:
Cash
$
854
Current assets
1,114
Property and equipment
956
Intangible asset - customer relationship
6,381
Total assets acquired
9,305
Liabilities assumed:
Current and non-current liabilities
(4,132)
Total liabilities assumed
(4,132)
Net identifiable assets acquired
5,173
Goodwill
14,155
Total consideration transferred
$
19,328