NOTE 7: ACQUISITIONS

Minus — 10 Software, LLC (“Minus 10”)

On April 1, 2014, we completed the acquisition of Minus 10, a company that develops and maintains software products and provides related services to its customers with respect to web-enabled bankruptcy preparation and case management and expanded our Chapter 11 restructuring service offerings. Minus 10 is included in our Bankruptcy and Settlement Administration segment.

The preliminary purchase price of Minus 10 was comprised of the following:

	(in thousands)
Cash paid at closing	$	302
Net working capital liability	17
Deferred cash consideration	43
Fair value of contingent consideration	933
Total purchase price	$	1,295

The cash consideration paid at closing was funded from our cash balances.

As a result of an earn-out opportunity the sellers of Minus 10 have the opportunity to receive contingent consideration based on a percentage of future qualifying profit and other measures, as defined in the purchase agreement. This contingent consideration opportunity for the sellers would be payable, if earned, over seven discrete measurement periods beginning with April 1, 2014 through December 31, 2014 and each annual period ending December 31, 2015 through December 31, 2020.

The fair value of the contingent consideration was determined by a present value calculation of the potential payouts based on financial projections over the earn-out period. Subsequent changes in fair value, which will be measured quarterly, will be recognized in earnings. We recognized fair value of approximately $1.1 million of the contingent consideration in “Long-term obligations” on the Condensed Consolidated Balance Sheet at September 30, 2014.

Transaction related costs, which were expensed during the period in which they were incurred, were not material related to this acquisition.

Total purchase consideration has been allocated to the identifiable intangible assets based on their respective fair values on the acquisition date. The preliminary purchase price allocations are summarized in the following table:

	(in thousands)
Intangible assets:
Acquired technology	$	1,142
Goodwill	153
Net assets acquired	$	1,295

We allocated approximately $1.1 million of the purchase price to acquired technology which is included in “Intangible assets” on the Condensed Consolidated Balance Sheets as of September 30, 2014. This intangible asset will be amortized on a straight-line basis over an amortization period of 10 years. The entire balances of goodwill and acquired technology related to this acquisition are amortizable for tax purposes.

For the nine months ended September 30, 2014, our consolidated results of operations, since our acquisition of Minus 10 on April 1, 2014, included immaterial results of operations and operating revenue related to the Minus 10 legal entity. These amounts are not necessarily reflective of the actual impact of the Minus 10 acquisition due to post-acquisition integration with our legal entities.