Note 3 – 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 B.V.'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. The foregoing events described in this paragraph are referred to as 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 year ended December 31, 2011 was as follows:


	Year ended December 31, 2011
Loss from operations	$	(1,595	)
Loss on disposal		(4,523	)

Loss from discontinued operations	$	(6,118	)

DigiNotar revenues of $1,764 for the year ended December 31, 2011 are included in the loss from operations shown above.

The loss on disposal includes the following:


	Amount			Tax			Net
Impairment of goodwill	$	2,873		$	(251	)	$	2,622
Impairment of intangibles		2,307			(201	)		2,106
Other assets and liabilities		(1,459	)		204			(1,255	)
Provision for doubtful account		952			0			952
Professional fees		1,253			(110	)		1,143
Contingent consideration		(1,085	)		40			(1,045	)

Total loss on disposal	$	4,841		$	(318	)	$	4,523

At December 31, 2011, remaining assets and liabilities related to DigiNotar have been classified as assets of discontinued operations and liabilities of discontinued operations, respectively, in the consolidated balance sheets and consist of the following:


Contingent consideration due from escrow	$	1,813
Due from DigiNotar net of allowance for doubtful account of $952		414
Income taxes receivable		318

Assets of discontinued operations	$	2,545

Due to DigiNotar	$	1,275
Accrued professional fees		317

Liabilities of discontinued operations	$	1,592