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Asset acquisition (Notes)
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3 Months Ended |
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Mar. 31, 2013
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| Asset Acquisition [Abstract] | |
| Asset acquisition |
Asset acquisition
On January 9, 2013 the Company purchased certain assets, both tangible and intangible, required to manufacture the generator used in its InVerde product from Danotek Motion Technologies. The aggregate consideration paid by the Company was $497,500, of which $199,230 represents the estimated fair value of machinery and equipment which is depreciated over useful lives ranging from five tofifteen years. The fair value of the machinery and equipment was estimated utilizing a replacement cost method. The balance of $298,270 is included in intangible assets, net in the accompanying condensed consolidated balance sheet. Acquisition related costs were not material to the financial statements and were expensed as incurred to general and administrative expenses.
This transaction was accounted for under the purchase method of accounting in accordance with FASB ASC Topic 805, Business Combinations. Under the purchase method of accounting, the total preliminary purchase price has been allocated to the net tangible and intangible assets acquired based on various preliminary estimates of their values by the Company's management. Management's estimates and assumptions are subject to change upon the finalization of the valuation and may be adjusted. The purchase price allocation is not finalized. Valuations of the and intangible assets, intellectual property and know how, have not been completed. There is one reporting unit within the Company.
Under the purchase method of accounting, an acquisition is recorded as of the closing date, reflecting the purchased assets, at their acquisition date fair values. Intangible assets that are identifiable are recognized separately from goodwill which is measured and recognized as the excess of the fair value, as a whole, over the net amount of the recognized identifiable assets acquired.
The preliminary allocation of the purchase price for accounting purposes was based upon preliminary estimates and assumptions that are subject to change upon the finalization of the valuations.
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