XML 35 R26.htm IDEA: XBRL DOCUMENT
v3.22.1

Business Combination | 3 Months Ended
--- | ---
Mar. 31, 2022
Business Combination and Asset Acquisition [Abstract] |
Business Combination | Business Combination On February 17, 2022, we acquired substantially all of the net assets of Qterics, a U.S.-based provider of multimedia connectivity solutions and services for internet-enabled consumer products. Under the terms of the Asset Purchase Agreement ("APA"), we paid a cash purchase price of approximately $0.9 million. The acquisition of these assets will allow us to expand our customer base in the OEM market. Our consolidated income statement for the three months ended March 31, 2022 includes net sales of $0.3 million and net income of $0.1 million attributable to Qterics for the period commencing on February 17, 2022. In accordance with the terms of the APA, the initial purchase price was subject to adjustment for differences between the initial estimated working capital balances and the final adjusted balances. This calculation was completed at March 31, 2022. Preliminary Purchase Price Allocation Using the acquisition method of accounting, the acquisition date fair value of the consideration transferred was allocated to the net tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. The calculation of the fair value of deferred revenue has not been finalized, pending the determination of the appropriate service period over which to recognize revenue. The excess of the purchase price over the estimated fair value of net assets acquired is recorded as goodwill. The goodwill is expected to be deductible for income tax purposes. Management's preliminary purchase price allocation as of March 31, 2022 was the following:
(In thousands) | Estimated Lives |  | Preliminary Fair Value
Accounts receivable |  |  | $ | 787 |
Property, plant and equipment | 5 years |  | 3 |
Customer relationships | 6 years |  | 1,340 |
Developed technology | 6 years |  | 440 |
Trade names | 6 years |  | 50 |
Goodwill |  |  | 713 |
Operating lease ROU assets | 3 years |  | 149 |
Other assets |  |  | 2 |
Other accrued liabilities |  |  | (6) |
Short-term operating lease obligation |  |  | (48) |
Deferred revenue |  |  | (1,539) |
Long-term operating lease obligation |  |  | (101) |
Long-term deferred revenue |  |  | (851) |
Cash paid |  |  | $ | 939 |
Management's determination of the fair value of intangible assets acquired are based primarily on significant inputs not observable in an active market and thus represent Level 3 fair value measurements as defined under U.S. GAAP. The fair value assigned to the Qterics developed technology and trade names intangible assets were determined utilizing a relief from royalty method. Under the relief from royalty method, the fair value of the intangible asset is estimated to be the present value of the royalties saved because the company owns the intangible asset. Revenue projections and estimated useful life were significant inputs into estimating the value of the Qterics developed technology and trade names. The fair value assigned to Qterics customer relationships intangible assets were determined utilizing a multi-period excess earnings approach. Under the multi-period excess earnings approach, the fair value of the intangible asset is estimated to be the present value of future earnings attributable to the asset and utilizes revenue and cost projections, including an assumed contributory asset charge. The developed technology, trade names and customer relationships intangible assets are expected to be deductible for income tax purposes. Pro Forma Results (unaudited) The unaudited pro forma financial information of combined results of our operations and the operations of Qterics as if the transaction had occurred on January 1, 2021, is immaterially different from the net sales, net income (loss) and income (loss) per share amounts reported in the Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021.

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationAndAssetAcquisitionAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration