Sale of Intellectual Property

6 Months Ended

Jun. 30, 2012

Sale of Intellectual Property [Abstract]

Sale of Intellectual Property

13. SALE OF INTELLECTUAL PROPERTY:

In June 2012, Microsoft Corporation agreed to purchase Edgewater Fullscope’s Process Industries 2 (PI2) software and intellectual property (the “Assets”) for an aggregate of $3.25 million, payable in installments. Also, Microsoft will engage Edgewater Fullscope in additional development and training services during the integration of the software module into Microsoft’s ERP solution for enterprises, Microsoft Dynamics AX. Our future quarterly revenue will be influenced by our recognition of both proceeds related to the IP sale and service revenue generated under the development and training service agreements. We will recognize revenue associated with the Microsoft IP Sale in direct proportion to the actual periodic services performed, as compared to the anticipated development services to be performed over the duration of the agreement. The agreement contains representations, warranties, covenants and indemnities, including an agreement by Edgewater Fullscope not to develop, promote, market or sell any software or technology that has the same or substantially similar, in any material respect, features or functions as the Assets or could replace, be used in lieu of or otherwise compete with such Assets.