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Acquisitions
 12 Months Ended
Dec. 31, 2012
Acquisitions  
Acquisitions

Note 4: Acquisitions

MagnaLynx

        In March 2010, the Company acquired all of the outstanding stock of MagnaLynx, Inc. (MagnaLynx), a provider of semiconductor interface technology. Under the terms of the merger agreement, the Company paid approximately $2.2 million to settle debt and certain other liabilities of MagnaLynx and approximately $1.2 million to MagnaLynx shareholders. An additional $0.5 million, referred to as the indemnification holdback, was payable 18 months after the closing, net of any costs related to indemnification claims that may have arisen during such 18 month period. An additional $1.0 million was payable six months after the closing as earn-out consideration based on MagnaLynx meeting certain contractually agreed-upon development milestones. Both the indemnification holdback and earn-out were paid in 2011. The earn-out consideration was included in the acquisition price because the Company expected that it was more likely than not that the objectives related to this earn-out would be met.

        The Company recorded a total acquisition price as follows (in thousands):

Cash

   $ 3,355  

Acquisition-related earn-out

     1,000  

Indemnification holdback

     500  

Liabilities assumed by MoSys

     32  
       

Total acquisition price

   $ 4,887  
       

        The allocation of the acquisition price for net tangible and intangible assets was as follows (in thousands):

Net tangible assets

   $ 100  

Intangible asset—developed technology

     4,440  

Goodwill

     347  
       

Total acquisition price

   $ 4,887  
       

        Goodwill represents the excess of the acquisition price of an acquired business over the fair value of the underlying net tangible and intangible assets. Included in the goodwill amount is the value of the acquired workforce, which has significant expertise in low-power interface IP. The goodwill recognized is expected to be deductible for income tax purposes.

        The value of the identifiable intangible asset was determined by using future cash flow assumptions. The intangible asset, which is considered developed technology, is being amortized on a straight-line basis over its estimated life of five years.