Print Page | Close Window

SEC Filings

10-Q
INCONTACT, INC. filed this Form 10-Q on 11/09/2016
Entire Document
 

 

As of September 30, 2016 all our investments had contractual maturities of less than one year.

At September 30, 2016 and December 31, 2015, we had $5,000 and $81,000 of gross unrealized losses on certain investments, respectively. We regularly review our investment portfolio to identify and evaluate investments that have indications of possible impairment that is other-than-temporary. Factors considered in determining whether a loss is temporary include:

 

the length of time and extent to which fair value has been lower than the cost basis;

 

the financial condition, credit quality and near-term prospects of the investee; and

 

whether it is more likely than not that the Company will be required to sell the security prior to recovery.

We believe that there were no investments held at September 30, 2016 that were other-than-temporarily impaired.  For the nine months ended September 30, 2016, proceeds from maturities of investments were $65.3 million for an immaterial realized gain, $1.0  million of these maturities were securities included in cash equivalents.  We sold $2.8 million of investments for the nine months ended September 30, 2016.

 

 

NOTE 5. ACQUISITIONS

AC2 Acquisition

On January 13, 2016, we acquired 100% of the outstanding shares of AC2 Solutions, Inc. (“AC2”), a Delaware corporation.  AC2 provides Workforce Optimization products and services to call centers.  inContact acquired AC2 for an aggregate purchase price of approximately $12.3 million, which was paid with cash in the amount of $12.0 million and 40,456 restricted shares of the Company’s common stock valued at $344,000.  An additional 505,700 restricted shares of our common stock were issued, but not included in the purchase considerations as the shares will vest as services are provided over a two year period.  The acquisition of AC2 was accounted for under the purchase method of accounting in accordance with ASC 805, Business Combinations. Under the purchase method of accounting, the total purchase price is allocated to the preliminary tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values, as determined by management. The total purchase price was allocated using information currently available. The purchase price allocation for the AC2 acquisition will be finalized during calendar year 2016. As a result, we may continue to adjust the preliminary estimated purchase price allocation after obtaining more information regarding asset valuations, liabilities assumed, and revision of preliminary estimates. The following is the total preliminary purchase price allocation on estimated purchase consideration based on information available as of September 30, 2016 (in thousands):

 

 

 

Amount

 

Assets acquired:

 

 

 

 

Cash and cash equivalents

 

$

78

 

Accounts receivable

 

 

100

 

Other current assets

 

 

63

 

Intangible assets

 

 

6,710

 

Goodwill

 

 

8,243

 

Total assets acquired

 

 

15,194

 

 

 

 

 

 

Liabilities assumed:

 

 

 

 

Accrued liabilities

 

 

136

 

Current portion of deferred revenue

 

 

74

 

Deferred tax liability

 

 

2,666

 

Total liabilities assumed

 

 

2,876

 

Net assets acquired

 

$

12,318

 

 

In connection with the acquisition, we incurred professional fees of $188,000, including transaction costs such as legal and valuation services, which were expensed as incurred. These costs are included within general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss.  The premium paid over the fair value of the net assets acquired in the purchase, or goodwill, represents future economic benefits expected to arise from deploying cutting edge technology to enhance our competitive differentiation.  All of the goodwill was assigned to the Software segment. The entire amount allocated to goodwill is not expected to be deductible for tax purposes.

Intangible assets acquired from the acquisition include customer relationships, which are amortized on a double-declining basis, technologies, patents and a non-competition agreement, which are amortized on a straight-line basis and in-process research and

13