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Commitments and Contingencies
 3 Months Ended
Jun. 30, 2013
Commitments and Contingencies  
Commitments and Contingencies

Note 7- Commitments and 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 recorded a contingent consideration liability of $2,140,000 on the accompanying condensed balance sheets.  Any changes to the contingent consideration ultimately paid would result in additional income or expense on the condensed statements of income.  There has been no material change to the contingent consideration liability as of June 30, 2013.  The contingent consideration is payable in the first quarter of our year ending March 31, 2016.

 

During the year ended March 31, 2013, we determined that we have an obligation for state sales taxes.  The ultimate amount due will depend upon a number of factors, including the amount of sales that were made to customers who already paid the tax or who are exempt, the number of years of exposure, and any penalties and interest.  We recorded an estimate of $100,000 associated with one state, which is included in other accrued expenses on the accompanying balance sheets.  This estimate may change as further analysis is completed and sales tax returns are filed.  We continue to evaluate our exposure in additional states, but at this time the amount of the liability is not estimable.