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Asset Purchase Agreement
 6 Months Ended
Jun. 30, 2012
Asset Purchase Agreement  
Asset Purchase Agreement

Note 3:         Asset Purchase Agreement

 

In March 2012, the Company entered into an asset purchase agreement for an exclusive license of a portion of its intellectual property pertaining to its high-speed serial I/O technology for approximately $4.3 million.  As part of the agreement, the Company provided certain technology transfer support services, and 15 employees of the Company’s India subsidiary accepted employment with the purchaser.  The Company received approximately $2.2 million, net of transaction costs, in cash upon execution of the agreement.  The agreement provides for an additional $1.9 million (the “Holdback”) to be paid upon providing technology transfer support services and achievement of certain contractually agreed-upon development milestones.  In July 2012, $1.3 million of the Holdback payment was received.  A portion of the Holdback is reserved for any costs related to indemnification claims that may arise during the 12 month period following the agreement date.

 

 During the quarter ended March 31, 2012, the Company recognized a $1.9 million gain on this asset sale, net of transaction costs, which has been recorded as a reduction of operating expenses in the condensed consolidated statements of operations and comprehensive loss, and approximately $0.3 million in current liabilities for the technology transfer support service obligation.  As of June 30, 2012, $0.2 million remained of this liability.  Gains related to the Holdback will be recorded when the milestones are completed and the indemnity period lapses, which is expected to be within 12 months of the agreement date.  No gains were recorded in the quarter ended June 30, 2012.