On July 2, 2012, the Company sold a group of consumer audio products and certain related intellectual property to Numark for approximately $11.8 million. The Company received $10.9 million of the purchase price in the third quarter of 2012, with the remaining balance to be held in escrow until the final release date in 2013. The divestiture met the criteria for held-for-sale accounting and the assets of this business were included as a single line item in the asset section of the condensed consolidated financial statements as of June 30, 2012. The Company determined that the consumer audio product line constituted a business, as defined by The Financial Accounting Standards Board's Accounting Standards Codification (ASC) Topic 350, Intangibles-Goodwill and Other, and therefore, the assets held-for-sale of this business included an allocation of $6.3 million of goodwill from the Company's single reporting unit. Even though the consumer audio product line constituted a business, the Company determined that this business did not represent a component of the Company that would require the presentation of the divestiture as a discontinued operation. This decision was based on the fact that the consumer audio product line does not have operations or cash flows that are clearly distinguishable and largely independent from the rest of the Company's single reporting unit.

On July 2, 2012, the Company sold a group of consumer video products and certain related intellectual property to Corel for approximately $3.0 million. The Company received $2.4 million of the purchase price in the third quarter of 2012, with the remaining balance to be held in escrow until the final release date in 2014. The divestiture met the criteria for held-for-sale accounting and the assets of this business were included as a single line item in the asset section of the condensed consolidated financial statements as of June 30, 2012. The Company determined that the consumer video product line constituted a business, as defined by (ASC) Topic 350, Intangibles-Goodwill and Other, and therefore, the assets held-for-sale of this business included an allocation of $1.7 million of goodwill from the Company's single reporting unit. Even though the consumer video product line constituted a business, the Company determined that this business did not represent a component of the Company that would require the presentation of the divestiture as a discontinued operation. This decision was based on the fact that the consumer video product line does not have operations or cash flows that are clearly distinguishable and largely independent from the rest of the Company's single reporting unit.

As of June 30, 2012, the Company measured the net assets held-for-sale at estimated fair value less costs to sell. Accordingly, during the quarter ended June 30, 2012, the Company recorded total estimated write-downs and costs to sell on the assets held-for-sale of approximately $10.0 million, within operating expenses, representing the excess of the aggregate carrying amount of such net assets over the aggregate of their fair value plus costs to sell. During the three-month period ended September 30, 2012, the Company recorded a gain on the sales of assets of approximately $0.2 million, primarily driven by a change in the estimated warranty obligation related to the divestitures.

The total net assets that were sold in connection with the consumer audio and consumer video divestitures were approximately $12.9 million. The net book value of the assets and liabilities that were sold and the related write-downs to fair value for each of the consumer audio and consumer video divestitures were as follows (in thousands):




	Consumer Audio			Consumer Video			Total
Inventory	$	7,707		$	3,058		$	10,765
Prepaid expense	—			60			60
Capitalized software	102			270			372
Fixed assets	454			24			478
Goodwill and intangible assets	9,855			1,662			11,517
Accrued warranty	—			(507		)	(507		)
Net book value of divested assets and liabilities	18,118			4,567			22,685
Less write down to fair value	(6,277		)	(1,567		)	(7,844		)
Estimated fair value	$	11,841		$	3,000		$	14,841

Less costs to sell	$	(1,013	)	$	(888	)	$	(1,901	)
Net assets and liabilities sold	$	10,828		$	2,112		$	12,940