3. Contingent Consideration

12 Months Ended

Dec. 31, 2014

Business Combination, Contingent Consideration Arrangements [Abstract]

Business Combination, Contingent Consideration Arrangements, Description

In connection with a business acquisition on August 19, 2011, whereby we purchased substantially all of the assets of Printrex, Inc (“Printrex”), we entered into a contingent consideration arrangement with Printrex as part of the acquisition for 30% of the gross profit for a three-year period related to new products under development, less certain other adjustments, beginning on the earlier of 1) January 1, 2012 or 2) the date of first commercial introduction of the new products under development.  As of December 31, 2014, the undiscounted fair value related to the contingent liability was estimated to be zero and we do not expect to make a contingent consideration payment.  The fair value of the contingent consideration arrangement was $0 and $60,000 at December 31, 2014 and 2013, respectively, which were estimated by applying the income approach.  That measure is based on significant inputs that are not observable in the market, which fair value measurement guidance refers to as Level 3 inputs.  During 2014 and 2013, the fair value of the contingent consideration was decreased by $60,000 and $900,000, respectively, and this credit is included in general and administrative expenses on the Consolidated Statements of Operations. No payments were made under the arrangement during 2014 as the underlying conditions of the contingent consideration arrangement were not satisfied.