Sale Of The 3ware Storage Adapter Business To LSI Corporation

12 Months Ended

Mar. 31, 2012

Sale Of The 3ware Storage Adapter Business To LSI Corporation [Abstract]

Sale Of The 3ware Storage Adapter Business To LSI Corporation

13. Sale of the 3ware Storage Adapter Business to LSI Corporation

On April 5, 2009, the Company entered into a Purchase Agreement with LSI Corporation ("LSI"). Under the Purchase Agreement, the Company agreed to sell to LSI substantially all of the operating assets (other than patents) primarily used or held for use in its 3ware storage adapter business (the "Storage Business") but retaining certain assets, including patents, cash, accounts receivable and accounts payable, even if related to the Storage Business (the "Transaction"). The assets sold included customer contracts, inventory, fixed assets, certain intellectual property and other assets, as well as rights to the name "3ware."

The Company completed the Transaction on April 21, 2009. After adjustments for the level of inventory of $0.7 million and products in the channel of $0.8 million, the final adjusted price of the Transaction was approximately $21.5 million for a gain of $11.4 million. During the fiscal year ended March 31, 2010, the Company and LSI reached an agreement to end the warranty support portion of the Purchase Agreement. As a result of the Transaction, the Company decreased its number of full-time employees by 56.

The Company has reclassified the financial results of the 3ware storage adapter business as discontinued operations for all periods presented.