Support.com 2011 Annual Report Download - page 55

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
We paid a total of $8.5 million in cash including $1.0 million held in escrow against payment of a milestone-based earn-out. The earn-out
consists of four criteria-based milestones that must be met by specific dates over the next 18 months. The probability-weighted fair value of the $1.0
million payment is $919,000. As a result, we recorded the $81,000 difference between $1.0 million escrow cash payment and $919,000 fair value as
other current assets on our consolidated balance sheets. The probability of milestone achievement will be re-measured quarterly and any changes in
the estimated fair value will be recorded in statement of operations. Following our periodic re-evaluation of the probability of milestone achievements,
the remaining value of the other current asset on our consolidated balance sheets has been reduced from the $81,000 originally recorded to $75,000 at
December 31, 2011. We expect the value of this asset to decline as we near the completion dates of future milestones and re-evaluate the probability
of these milestone achievements..
The tangible and identifiable intangible assets acquired and liabilities assumed, and resulting goodwill are summarized below. The financial
information presented includes purchase accounting adjustments to the tangible and intangible assets:

 


Accounts receivable $ 5
Prepaid expenses 6
Accrued liabilities (1)
Deferred revenue (491)
Net liabilities assumed (481)
Identifiable intangible assets:
Technology 4,910 66 months
Trade/product name 310 66 months
Non-compete 160 72 months
Customer base 80 30 months
Goodwill 3,440
Total purchase consideration 8,419
Other current asset 81
Total cash consideration $ 8,500
The operating results of SAS have been included in our accompanying consolidated statements of operations from June 16, 2011, the day
following acquisition. Pro-forma results of operations have not been presented because the acquisition was not material to our results of
operations. In addition to the $8.5 million cash consideration, we incurred acquisition-related expenditures of approximately $363,000 as of
December 31, 2011, which were expensed in the period in which they were incurred in accordance with ASC 805, . These
expenses were recorded in general and administrative expense in our consolidated statements of operations.

Property and equipment are stated at cost, less accumulated depreciation, and consist of the following (in thousands):
 
   
Computer equipment and software $ 4,043 $ 3,797
Furniture and office equipment 340 337
Leasehold improvements 399 399
Construction in progress 70 69
4,852 4,602
Accumulated depreciation (4,391) (3,979)
$ 461 $ 623
53
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