XML 30 R11.htm IDEA: XBRL DOCUMENT v2.4.0.8
Note 5 - Acquisition of New Dawn Technologies, Inc
9 Months Ended
Jun. 30, 2013
Disclosure Text Block Supplement [Abstract]  
Mergers, Acquisitions and Dispositions Disclosures [Text Block]

Note 5 – Acquisition of New Dawn Technologies, Inc.


On December 4, 2012 the Company purchased all of the outstanding stock of New Dawn for $14 million in cash.  The New Dawn acquisition was accounted for using the purchase method of accounting in accordance with the Statement of FASB’s ASC 805 Business Combinations. The Company incurred legal and tax fees of about $93,000 associated with this acquisition. These costs were included in “Other general and administrative expenses” on the Company’s Consolidated Statements of Comprehensive Income. New Dawn’s results of operations from December 5, 2012 through June 30, 2013 have been included in the Company’s Consolidated Financial Statements: revenues were $6,430,000, expenses were $7,148,000 (including intangible amortization expenses of $1,111,000), and the pretax loss was $718,000.


   The Company preliminarily allocated the purchase price to the tangible assets ($3.1 million including cash of $2.2 million; accounts receivable, net, of $.66 million, and net fixed assets of $.14 million) and identifiable intangible assets (purchased software and customer relationships of $9.5 million) and liabilities ($12.6 million including accounts payable and accrued expenses of $2.8 million, deferred maintenance agreements of $2.2 million and deferred installation contracts of $7.5 million) based on their fair values with the remaining balance in excess of the net assets allocated to goodwill ($14 million).  Deferred revenues on installation contracts primarily represent advances from customers for software licenses and installation services in various stages of completion; after customer’s acceptance of the completed project, the advances would become no longer at risk of refund and earned.