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Note 4 - Business Combination | 3 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
4. | BUSINESS COMBINATION
On October 2, 2020, the Company completed the purchase of the assets of Amika Mobile Corporations (“Amika Mobile”) pursuant to an Asset Purchase Agreement. Amika Mobile is a leading provider of integrated emergency critical communications based in Ottawa, Canada. The Company believes the Amika Mobile asset purchase will expand the Company's enterprise software solutions and enhance the Company's unified multi-channel critical communications platform. The Amika Mobile asset purchase was accounted for as a business combination using the acquisition method pursuant to ASC Topic 805. As the acquirer for accounting purposes, the Company has estimated the purchase consideration, assets acquired and liabilities assumed as of the acquisition date, with the excess of the purchase consideration over the fair value of net assets acquired recognized as goodwill. The estimated fair value of assets purchased and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value. The consideration consisted of the following:
Cash paid |  | $ | 4,367 |
Asset purchase holdback liability |  |  | 613 |
Common stock to be issued |  |  | 3,431 |
|  | $ | 8,411 |
Under the terms of the Asset Purchase Agreement, the Company is required to deposit a holdback liability in the amount of CAD$1,000 into an interest-bearing account as security for potential indemnification claims against the seller. The holdback amount will be released three years from the closing date subject to amounts withheld for actual, pending or potential claims. The Company also agreed to issue 191,267 shares of the Company's common stock to the former owners of Amika Mobile on each of the first, second and third anniversaries of the closing date. The total number of shares of common stock the Company is obligated to issue is 573,801. The fair value of the Company's common stock on the closing date was $5.98, resulting in an addition of $3,431 to additional paid-in-capital. The cash portion of the purchase price was funded from cash on hand. The Company incurred $242 in expenses related to this transaction, through December 31, 2020. These expenses were recorded in selling, general and administrative expenses in the condensed consolidated statement of operations as follows: $10 in the first quarter of fiscal 2021, $132 in the fourth quarter of fiscal 2020 and $100 in the third quarter of fiscal 2020. Purchase Price Allocation
Assets Acquired |  |  |  |
Prepaid expenses |  | $ | 2 |
Fixed assets |  |  | 22 |
Operating lease right of use asset |  |  | 248 |
Intangible Assets |  |  | 2,820 |
Goodwill |  |  | 5,663 |
Total assets acquired |  | $ | 8,755 |
Liabilities assumed |  |  |  |
Accrued liabilities |  | $ | 96 |
Operating lease liability |  |  | 248 |
Total liabilities assumed |  |  | 344 |
Net Assets acquired |  | $ | 8,411 |
The estimated fair value of the identifiable intangible assets acquired and their estimated useful lives are as follows:
|  | Fair Value |  |  | Useful Lives (in years) |
Developed technology |  | $ | 2,500 |  |  |  | 7 |
Customer relationships |  |  | 320 |  |  |  | 7 |
|  | $ | 2,820 |  |  |  |  |
Identifiable intangible assets consist of certain technology and customer relationships purchased from Amika Mobile. Identifiable intangible assets are amortized over their useful lives based upon a number of assumptions including the estimated period of economic benefit and utilization. The weighted average amortization period for identifiable intangible assets acquired is 7 years. These intangible assets are classified as Level 3 in the ASC Topic 820 three -tier fair value hierarchy. The goodwill for Amika Mobile is attributable to combining the Company's existing emergency communications solutions with the software and software development capabilities of Amika Mobile to enhance product offerings. Goodwill is also attributable to the skill level of the acquired workforce. The Company will continue to analyze the transaction and refine its calculations, as appropriate during the measurement period, which could affect the value of goodwill. Goodwill from the Amika Mobile asset purchase will not be deductible for tax purposes.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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