XML 39 R13.htm IDEA: XBRL DOCUMENT v2.4.0.6
Contingencies
 3 Months Ended
Jun. 30, 2012
Contingencies  
Contingencies

8.  Contingencies

 

As part of our Bios Acquisition, the Bios Agreement includes a provision for contingent consideration based on revenue growth over a three year earn-out period.  The contingent consideration arrangement requires us to pay the former owners of Bios if cumulative revenues from the acquisition for the three years subsequent to the acquisition exceed approximately $22,127,000.  The potential undiscounted future payments that we could be required to make is between $0 and $6,710,000.  The preliminary fair value of the contingent consideration arrangement included in the purchase price was estimated based on Bios’ historic revenue growth.  We have recorded a contingent consideration liability of $2,240,000 on the condensed balance sheet as of June 30, 2012.  This amount may change as we finalize our purchase price allocation, with the difference affecting the allocation to the acquired assets and assumed liabilities.  Any changes to the contingent consideration subsequent to our finalizing purchase accounting, however, would impact the income statement.  An increase would be recorded as expense, while a decrease would be recorded as income.  The contingent consideration is payable in the first quarter of fiscal 2016.

 

During the third quarter of fiscal 2012, we determined that the Company had a potential liability for state sales taxes.  During the first quarter of fiscal 2013, we completed our analysis and determined that no additional liability is required.