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NOTE 4 - ACQUISITIONS | 12 Months Ended
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Dec. 31, 2012
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | NOTE 4 - ACQUISITIONS Fiscal 2012 Acquisition In July 2012, Asure acquired the capital stock of Meeting Maker – United States, Inc., doing business as PeopleCube, for a combination of cash and Asure common stock. The 2012 acquisition of PeopleCube gave Asure a product line that includes software to assist customers in driving integrated facility management of offices, conference rooms, video conferencing, events and training, alternative workspaces and lobby use. The purchase price was composed of $9,800 in cash, subject to a post-closing working capital adjustment, (ii) 255 shares of our common stock, par value $0.01 per share, representing just under five percent of Asure’s outstanding shares and valued at $2.94 per share and (iii) an additional $3,000 note from us that is due on October 31, 2014, subject to offset of any amounts owed by the seller under the indemnification provisions of the stock purchase agreement. The note was adjusted to a fair value of $2,404 based on the Company’s incremental borrowing rate. Details regarding the financing of the acquisition are described in the below Notes Payable table. Transactions costs for this acquisition were $905 and were expensed as incurred. Following is the purchase price allocations for the acquisition of PeopleCube in 2012. The preliminary fair value estimate for the assets acquired and liabilities assumed for this acquisition was based upon preliminary calculations and valuations and our estimates and assumptions for each of these acquisitions are subject to change as we obtain additional information for our estimates during the respective measurement periods (up to one year from the respective acquisition dates). The primary areas of those preliminary estimates that are not yet finalized related to certain tangible assets and liabilities acquired, certain legal matters and income and non-income based taxes. We expect to deduct goodwill arising from this acquisition for tax purposes over 15 years. We recorded the transaction using the acquisition method of accounting and recognized assets and liabilities assumed at their fair value as of the date of acquisition. The $7.4 million of intangible assets subject to amortization consist of $5.2 million in Customer Relationships, $1.8 million in Developed Technology, $338 in Trade Names and $23 in Covenant not-to-compete. The fair value of the Customer Relationships has been estimated using the excess earnings method, a form of the income approach and cash flow projections were discounted using a rate of 16.6 percent, which reflects the risk associated with the intangible asset related to the other assets and the overall business operations to us. The fair value of the Developed Technology and Trade names has been estimated using the relief from royalty method based upon a 5% royalty rate. Covenant not-to-compete has been estimated using a damages calculation, which is the form of the income approach.
Consideration paid: |  |  |
Cash per stock purchase agreement |  | $ | 10,000 |
Working capital adjustments |  |  | (200 | )
Total cash paid |  |  | 9,800 |
Fair value of note payable |  |  | 2,404 |
Fair value of stock issued |  |  | 747 |
Total consideration paid |  |  | 12,951 |
We based the allocations on fair values at the date of acquisition:
|  | PeopleCube |
Assets Acquired |  |  |
Accounts receivable |  | $ | 2,608 |
Fixed assets |  |  | 117 |
Other assets |  |  | 124 |
Goodwill |  |  | 9,276 |
Intangibles |  |  | 7,445 |
Total assets acquired |  |  | 19,570 |
Liabilities assumed |  |  |  |
Accounts payable |  |  | (671 | )
Accrued other liabilities |  |  | (245 | )
Subordinated notes payable |  |  | (1,614 | )
Deferred revenue |  |  | (4,089 | )
Total liabilities assumed |  |  | (6,619 | )
Net assets acquired |  | $ | 12,951 |
Fiscal 2011 Acquisitions During 2011, we made two acquisitions for approximately $10,400 in aggregate purchase consideration. We funded the 2011 acquisitions from available cash on hand, long-term debt and promissory notes issued to the sellers. In October 2011, we purchased (through a wholly-owned subsidiary) substantially all of the assets and assumed certain liabilities of ADI Time, LLC relating to its time and attendance software and management services business. The purchase price for the assets consisted of $6,000 in cash and a $1,095 promissory note from our subsidiary, guaranteed by us. The note bears interest at an annual rate of 0.16% and will mature on October 1, 2014. We may offset any indemnification payments owed by ADI to us under the asset purchase agreement against up to $1,000 under the note. We funded the cash portion of the purchase price with our cash on hand and proceeds from our bank financing. Details regarding the financing of the acquisition is described in the below Notes Payable table. In December 2011, we purchased (through a wholly-owned subsidiary) substantially all of the assets and assumed certain liabilities of WG Ross Corp., d/b/a Legiant, relating to its cloud computing time and attendance software and management services. The purchase price for the assets was $4,000, consisting of approximately $1,511 in cash and three subordinated promissory notes in the aggregate principal amount of approximately $2,489, as adjusted pursuant to the terms of the asset purchase agreement. One of the promissory notes is for an aggregate principal amount of $250, bears interest at an annual rate of 0.20%, matured on February 1, 2012 and was paid in full. The second promissory note is for an aggregate principal amount of approximately $479, bears interest at an annual rate of 5.00%, and will mature on October 1, 2014. The third promissory note is for an aggregate principal amount of approximately $1,761, bears interest at an annual rate of 0.20%, and will mature on October 1, 2014. We may offset any indemnification payments owed by Legiant to us under the asset purchase agreement against up to $1,000 of the amount due on third promissory note. We have guaranteed all three promissory notes issued by our subsidiary, which are subordinated to our bank financing. We funded the cash portion of the purchase price with our cash on hand and proceeds from our bank financing. Details regarding the financing of the acquisition is described in the below Notes Payable table. Transaction costs for these acquisitions were $130 and were expensed as incurred. Following are the aggregate purchase price allocations for the acquisitions of ADI and Legiant in 2011. As of December 31, 2012, we have finalized the measurement period for these acquisitions . We expect to deduct goodwill arising from these acquisitions for tax purposes over 15 years. We based the allocations on fair values at the dates of acquisition:
|  | ADI |  |  | Legiant |  |  | Total |
Consideration paid net of Cash received |  |  | 6,697 |  |  |  | 3,704 |  |  |  | 10,401 |
Less: Original issue discount |  |  | (244 | ) |  |  | (382 | ) |  |  | (626 | )
Total |  |  | 6,453 |  |  |  | 3,322 |  |  |  | 9,775 |
Assets Acquired: |  |  |  |  |  |  |  |  |  |  |  |
Receivables |  |  | 437 |  |  |  | 5 |  |  |  | 442 |
Inventories |  |  | 31 |  |  |  | 56 |  |  |  | 87 |
Prepaid expenses and other current assets |  |  | 5 |  |  |  | 11 |  |  |  | 16 |
Property and equipment, net |  |  | 157 |  |  |  | 30 |  |  |  | 187 |
Total Assets |  |  | 630 |  |  |  | 102 |  |  |  | 732 |
Liabilities Assumed: |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  |  | (134 | ) |  |  | (17 | ) |  |  | (151 | )
Other accrued liabilities |  |  | (6 | ) |  |  | (23 | ) |  |  | (29 | )
Deferred revenue |  |  | (695 | ) |  |  | (692 | ) |  |  | (1,387 | )
Total Liabilities |  |  | (835 | ) |  |  | (732 | ) |  |  | (1,567 | )
Intangibles Acquired: |  |  |  |  |  |  |  |  |  |  |  |
Developed technology |  |  | 671 |  |  |  | - |  |  |  | 671 |
Reseller relationships` |  |  | 853 |  |  |  | - |  |  |  | 853 |
Trade names |  |  | 37 |  |  |  | - |  |  |  | 37 |
Customer relationships |  |  | 967 |  |  |  | 1,786 |  |  |  | 2,753 |
Non-compete agreements |  |  | 32 |  |  |  | - |  |  |  | 32 |
Goodwill |  |  | 4,098 |  |  |  | 2,166 |  |  |  | 6,264 |
Total Intangibles |  |  | 6,658 |  |  |  | 3,952 |  |  |  | 10,610 |
Total |  |  | 6,453 |  |  |  | 3,322 |  |  |  | 9,775 |
Unaudited Pro Forma Financial Information The following unaudited summaries of pro forma combined results of operation for 2012 and 2011, give effect to the acquisitions of ADI, Legiant and PeopleCube as if they had been completed on January 1, 2011. These pro forma summaries do not reflect any operating efficiencies, cost savings or revenue enhancements that we achieve by the combined companies. In addition, certain non-recurring expenses, such as legal expenses and other transactions expenses for the first 12 months after the acquisition, are not reflected in the pro forma summaries. We present these pro forma summaries for informational purposes only and they are not necessarily indicative of what our actual results of operations would have been had the acquisitions taken place as January 1, 2011, nor are they indicative of future consolidated results of operations.
|  | FOR THE YEARS ENDED |
|  | DECEMBER 31 |  |  | DECEMBER 31, |
|  | 2012 |  |  | 2011 |
Revenues |  |  | 24,422 |  |  |  | 23,014 |
Net (loss) |  |  | (3,900 | ) |  |  | (5,404 | )
Net (loss) per common share: |  |  |  |  |  |  |  |
Basic and diluted |  |  | (0.74 | ) |  |  | (1.11 | )
Weighted average shares outstanding: |  |  |  |  |  |  |  |
Basic and diluted |  |  | 5,260 |  |  |  | 4,882 |

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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