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Contingencies
 6 Months Ended
Sep. 30, 2012
Contingencies  
Contingencies

Note 8 - Contingencies

 

As part of the 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 Bios if the cumulative revenues from the acquisition for the three years subsequent to the acquisition exceed $22,127,000.  The potential undiscounted future payment that we could be required to make ranges from $0 to $6,710,000.  The fair value of the contingent consideration arrangement included in the purchase price was estimated based on the historic revenue growth of Bios.  We have recorded a contingent consideration liability of $2,140,000 on the accompanying condensed balance sheet as of September 30, 2012.  Any changes to the contingent consideration ultimately paid would result in additional income or expense on the condensed statements of income.  The contingent consideration is payable in the first quarter of our year ending March 31, 2016.

 

During the third quarter of our year ended March 31, 2012, we determined that we had a potential liability related to the payment of state sales taxes.  We continue to evaluate this potential liability, and no adjustment was deemed necessary for the three or six month period ended September 30, 2012.