XML 23 R10.htm IDEA: XBRL DOCUMENT v2.3.0.15

DigiNotar

9 Months Ended

Sep. 30, 2011

DigiNotar [Abstract]

DigiNotar

Note 4 – DigiNotar

On January 10, 2011, we purchased all of the intellectual property of DigiNotar Holding B.V. and its subsidiaries and acquired 100% of the stock of DigiNotar B.V. and DigiNotar Notariaat B.V., each a private company organized and existing in The Netherlands (collectively, "DigiNotar"), for aggregate consideration of € 10,000 ($13,253 at an exchange rate of 1.32 US Dollars per Euro) comprised of assumed debt of € 64 and cash. Both transactions were effective January 1, 2011. We funded the transactions from our existing cash balances.

The consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as of the acquisition date as follows:

Current assets		$	2,039
Property and equipment			589
Goodwill			2,632
Intangible assets			10,139
Deferred income tax liabilities – current			(414	)
Other current liabilities			(1,217	)
Deferred income tax liabilities – non-current			(515	)
		$	13,253

Acquired identifiable intangible assets are amortized over their respective useful lives ranging from two to seven years.

Purchase consideration includes contingent consideration held in escrow payable upon the achievement of certain one year operating targets. The contingent consideration was recorded as a current asset at its estimated fair value of $861. As a result of events described below, the contingent consideration was re-measured as of September 30, 2011 resulting in an increase of $1,085 recorded in our statement of operations as discontinued operations.

In July 2011, DigiNotar B.V. detected an intrusion into its Certificate Authority (CA) infrastructure, which resulted in the fraudulent issuance of public key certificate requests for a number of domains. On September 14, 2011, the Dutch Independent Post and Telecommunications Authority (OPTA) Commission terminated DigiNotar's registration as a certification service provider that issues qualified certificates. As a result of the termination of its registration as a certification service provider, DigiNotar B.V. filed for bankruptcy on September 19, 2011 and the Haarlem District Court, The Netherlands declared DigiNotar B.V. bankrupt on September 20, 2011. The court appointed a bankruptcy trustee to manage all the affairs of DigiNotar B.V. as it proceeds through the bankruptcy process. The trustee took over the management of business activities of DigiNotar B.V. and responsibility for the administration and liquidation of DigiNotar B.V. (collectively, the "DigiNotar Events").

As a result of the DigiNotar Events, the loss on operating activities, the loss on the disposal and the related assets and liabilities related to DigiNotar B.V. are reflected as discontinued operations. The income (loss) from discontinued operations, net of tax, for the quarter and nine months ended September 30, 2011 was as follows:

		Period ended September 30, 2011
		Three Months				Nine Months
		(in thousands, unaudited)
Income (loss) from operations		$	271			$	(1,595	)
Loss on disposal			(3,962	)			(3,962	)
Income (loss) from discontinued operations		$	(3,691	)		$	(5,557	)

DigiNotar revenues of $594 and $1,764 for the three and nine months ended September 30, 2011, respectively, are included in the income (loss) from operations shown above.

The loss on disposal includes the following:

		Amount				Tax				Net
Impairment of goodwill		$	2,873			$	(230	)		$	2,643
Impairment of intangibles			2,307				(185	)			2,122
Other assets and liabilities			(1,459	)			142				(1,317	)
Provision for doubtful account			952				-				952
Professional fees			651				(52	)			599
Contingent consideration			(1,085	)			48				(1,037	)
Total loss on disposal		$	4,239			$	(277	)		$	3,962

At September 30, 2011, remaining assets and liabilities related to DigiNotar have been classified as assets of discontinued operations and liabilities of discontinued operations, respectively, in the balance sheets and consist of the following:

Contingent consideration due from escrow		$	1,904
Due from DigiNotar net of allowance for doubtful account of $952			435
Income taxes receivable			277
Assets of discontinued operations		$	2,616
Due to DigiNotar			1,339
Accrued professional fees			529
Liabilities of discontinued operations		$	1,868

X

- Definition

Business Combinations And Discontinued Operations [Abstract]

+ Details

Name:	vdsi_BusinessCombinationsAndDiscontinuedOperationsAbstract
Namespace Prefix:	vdsi
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

The entire description for costs incurred to effect a business combination that have been expensed during the period. Such costs could include business integration costs, systems integration and conversion costs, and severance and other employee-related costs. Also the entire disclosure for aggregate costs incurred during the period for restructuring, remediation, implementation, integration and asset impairment activities. Description of restructuring activities such as exit and disposal activities, could include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. This would also include disclosure of the charge against earnings resulting from the aggregate write down of all assets from their carrying value to their fair value.

+ Details

Name:	vdsi_BusinessCombinationsAndDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix:	vdsi
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration