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Business Combination, Goodwill and Intangibles | 12 Months Ended
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Dec. 31, 2013
Business Combinations [Abstract] |
Business Combinations, Goodwill and Intangibles Disclosure | Business Combinations, Goodwill and Intangibles Acquisition of video conferencing business On February 16, 2012, the Company completed the acquisition of the video conferencing business of Israel-based VCON Video Conferencing, Ltd. (“VCON”) through an asset purchase agreement. VCON was a pioneer in software-based video conferencing solutions with product offerings that include group video conferencing endpoints, desktop video conferencing endpoints, video conferencing infrastructure solutions and software development kits. This acquisition and the combination of streaming and digital signage technologies have provided us with complementary technology opportunities allowing us to enter new growth markets. Pursuant to the asset purchase agreement, the Company paid consideration of $4,632 in cash. The fair values of assets acquired and liabilities assumed are based on the information that was available during the measurement period of twelve months from the date of acquisition. The fair value of identified assets and liabilities acquired and goodwill is as follows:
| Fair Value
Inventory | $ | 40 |
Property and equipment | 34 |
Product warranty liability | (8 | )
Proprietary software | 2,247 |
Goodwill | 2,319 |
| $ | 4,632 |
The goodwill of $2,319 is composed of expected synergies in utilizing VCON technology in ClearOne product offerings, reduction in future combined research and development expenses, and intangible assets including acquired workforce that do not qualify for separate recognition. This goodwill balance is no t deductible for tax purposes. Unaudited Supplemental Pro Forma information for the acquisition is as follows:
1) | Revenue and net loss from the video conferencing business from February 16, 2012 to December 31, 2012 were $1,319 and ($1,170), respectively.
2) | Revenue and earnings of the combined entity for the years ended December 31, 2013 and 2012 calculated as though the business combination occurred prior to the year ended December 31, 2012, were as follows:
| Year ended December 31,
| 2013 |  | 2012
Revenue | $ | 49,592 |  |  | $ | 46,630 |
Net income | 5,179 |  |  | 26,603 |
3) | There were no material, nonrecurring pro forma adjustments directly attributable to the acquisition included in this supplemental Pro Forma information.
Goodwill Changes in the carrying amount of the company's goodwill for the years ended December 31, 2013 and 2012 were as follows:
| 2013 |  | 2012
Balance as of January 1, |  |  |
Goodwill | $ | 3,472 |  |  | $ | 1,153 |
Accumulated impairment losses | — |  |  | — |
| 3,472 |  |  | 1,153 |
Goodwill acquired during the year | — |  |  | 2,319 |
Balance as of December 31, |  |  |
Goodwill | 3,472 |  |  | 3,472 |
Accumulated impairment losses | — |  |  | — |
| $ | 3,472 |  |  | $ | 3,472 |
Intangible Assets Intangible assets as of December 31, 2013 and 2012 consisted of the following:
| Estimated |  | As of December 31,
| useful lives |  | 2013 |  | 2012
Tradename | 7 years |  | $ | 435 |  |  | $ | 435 |
Patents and technological know-how | 10 years |  | 2,070 |  |  | 2,070 |
Proprietary software | 3 to 15 years |  | 2,961 |  |  | 2,961 |
In-process research and development | Indefinite |  | — |  |  | 159 |
Other | 5 years |  | 208 |  |  | 49 |
|  |  | 5,674 |  |  | 5,674 |
Accumulated amortization |  |  | (1,964 | ) |  | (1,416 | )
|  |  | $ | 3,710 |  |  | $ | 4,258 |
During the years ended December 31, 2013 and 2012, amortization of these intangible assets were $548 and $679, respectively. The estimated future amortization expense of intangible assets is as follows:
Years ending December 31, |
2014 | $ | 559 |
2015 | 515 |
2016 | 477 |
2017 | 389 |
2018 | 374 |
Thereafter | 1,396 |
| $ | 3,710 |

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