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NOTE 4 - ACQUISITIONS | 9 Months Ended
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Sep. 30, 2013
Disclosure Text Block Supplement [Abstract] |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | NOTE 4 – ACQUISITIONS 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 at the date of purchase based on our incremental borrowing rate. We recorded the note at fair value using a discount rate of 10%, which resulted in an original issue discount of $622, which will accrete up the note to its aggregate principal amount over the course of the life of the loan using the effective interest method. Details regarding the financing of the acquisition are described in the below Notes Payable table. Transactions costs for this acquisition were $905 and we expensed them as incurred. As discussed above, in December 2012, we demanded a purchase price adjustment from PeopleCube Holding B.V. and Meeting Maker Holding B.V., the sellers of the capital stock of Meeting Maker – United States, Inc. (dba PeopleCube) that we purchased in July 2012, based on matters we discovered after closing. In the third quarter of 2013, we reached an agreement to settle our post-closing working capital adjustment dispute. The parties agreed to a post-closing working capital adjustment due to us of $496, with accrued interest of $44, totaling $540. The parties agreed to reduce the original $3,000 deferred purchase payment by the post-closing adjustment amount of $540. This also had the effect of reducing our long-term debt by a like amount and $496 was deducted from our goodwill balance. The remaining deferred purchase price balance under the Subordinated Notes Payable: Peoplecube Acquisition Note is now $2,460. The following is the purchase price allocation for the acquisition of PeopleCube. We expect to continue 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 allocated to Customer Relationships, $1.8 million in Developed Technology, $338 for Trade Names and $23 for a Covenant not-to-compete. We estimated the fair value of the Customer Relationships using the excess earnings method, a form of the income approach. We discounted cash flow projections using a rate of 16.6%, which reflects the risk associated with the intangible asset related to the other assets and the overall business operations to us. We estimated the fair value of the Developed Technology and Trade Names using the relief from royalty method based upon a 5% royalty rate. We estimated the value of the Covenant not-to-compete using a damages calculation, which is a 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 |
Unaudited Pro Forma Financial Information The following unaudited summary of pro forma combined results of operation for 2012 gives effect to the acquisition of PeopleCube as if we had completed it on January 1, 2012. This pro forma summary does not reflect any operating efficiencies, cost savings or revenue enhancements that we may achieve by combining companies. In addition, we have not reflected certain non-recurring expenses, such as legal expenses and other transactions expenses for the first 12 months after the acquisition, in the pro forma summary. We present this pro forma summary for informational purposes only and it is not necessarily indicative of what our actual results of operations would have been had the acquisition taken place as January 1, 2012, nor is it indicative of future consolidated results of operations.
|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2012 (actual) |  |  | 2012 (pro forma) |
Revenues |  | $ | 5,659 |  |  | $ | 18,907 |
Net (loss) |  | $ | (1,228 | ) |  | $ | (4,355 | )
Net (loss) per common share: |  |  |  |  |  |  |  |
Basic and diluted |  | $ | (0.23 | ) |  | $ | (0.85 | )
Weighted average shares outstanding: |  |  |  |  |  |  |  |
Basic and diluted |  | $ | 5,245 |  |  | $ | 5,145 |

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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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