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SEC Filings

10-Q
INCONTACT, INC. filed this Form 10-Q on 11/09/2016
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development which has an initial indefinite life and is expected to be amortized once technical feasibility is established. The fair values of the intangible assets were determined primarily using the income approach and the discount rates range from 20% to 25%. The following sets forth the intangible assets purchased as part of the AC2 acquisition and their respective preliminary estimated economic useful life at the date of the acquisition (in thousands, except useful life):

 

 

 

Amount

 

 

Economic Useful Life (in years)

 

Customer relationships

 

$

710

 

 

 

8

 

Technology

 

 

321

 

 

 

5

 

In-process research and development

 

 

3,014

 

 

Indefinite

 

Patents

 

 

2,641

 

 

 

12

 

Non-competition agreement

 

 

24

 

 

 

2

 

Total intangible assets

 

$

6,710

 

 

 

 

 

 

The Company recorded a deferred tax benefit of $2.7 million at the time of the acquisition.  The tax benefit related to recording a deferred tax liability upon acquisition of AC2 related to acquisition of intangibles for which no tax benefit will be derived.  The reduction of carrying value resulted in a partial reversal of the deferred tax asset valuation allowance upon consolidation.

Attensity Acquisition

On February 8, 2016, we acquired certain intangible assets from Attensity Group, Inc., a Delaware corporation, Biz360, Inc., a California corporation, and Attensity Americas, Inc., a Delaware corporation (collectively “Attensity”).  The purchase consideration was approximately $6.6 million in cash.  The patents purchased from Attensity provide advanced analytics technology to corporate customers.  The acquisition of Attensity technology 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 tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values, as determined by management. The following is the total purchase price allocation as of September 30, 2016  (in thousands):

 

 

 

Amount

 

Assets acquired:

 

 

 

 

Property, plant and equipment and other assets

 

$

290

 

Intangible assets

 

 

4,917

 

Goodwill

 

 

1,525

 

Total assets acquired

 

 

6,732

 

 

 

 

 

 

Liabilities assumed:

 

 

 

 

Current portion of deferred revenue

 

 

157

 

Long-term portion of deferred revenue

 

 

25

 

Total liabilities assumed

 

 

182

 

Net assets acquired

 

$

6,550

 

 

In connection with the acquisition, we incurred professional fees of $27,000, 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 synergies from enhancing our product offerings through the addition of text analysis technology.  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 and patents, which are amortized on a straight-line basis and in-process research and development which has an initial indefinite life and is expected to be amortized once technical feasibility is established. The fair values of the intangible assets were determined primarily using the income approach and the discount rates range from 25% - 30%. The following sets forth the intangible

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