Looks like the last of the escrowed shares from the Survial link acquistion were released yesterday(I'm nibbling and adding to my position today)
from the 10K
Survivalink Corporation
On September 26, 2001, the Company acquired Survivalink Corporation
("Survivalink"), a privately held Minneapolis-based company that is a leading
provider of Automated External Defibrillators ("AEDs"). As consideration, the
Company paid $10.5 million in cash, issued $25.8 million in senior notes
payable (see Note 10) and tendered 18,150,000 shares of common stock to
Survivalink shareholders. Of this total consideration, approximately $1.8
million of the notes and 907,500 shares of the Company"s common stock are being
held in escrow pursuant to an escrow agreement. The escrow amount is to protect
the Company for claims regarding breach of representation or warranty by
Survivalink. These funds will be released from escrow on September 26, 2002,
providing that all claims, if any, have been resolved.
The acquisition was accounted for as a purchase under SFAS No. 141, Business
Combinations. In accordance with SFAS No. 141, the Company allocated the
purchase price based on the fair value of the assets acquired and liabilities
assumed. Portions of the purchase price, including intangible assets, were
identified by an independent appraiser. These intangible assets include
approximately $73.8 million for goodwill, $7.6 million for patents, $676,000
for customer base, and $378,000 for the Survivalink tradename. The patents are
being amortized over seven years, the customer base over two years, and the
Survivalink tradename over one year.
48
CARDIAC SCIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The components of the purchase price and allocation are as follows:
Purchase Price:
Stock consideration (18,150,000 shares @ $2.31/share)... $41,926,500
Cash.................................................... 10,500,000
Senior notes payable.................................... 25,800,000
Acquisition costs....................................... 2,184,024
-----------
Total...................................................... $80,410,524
===========
Allocation of Purchase Price:
Current assets.......................................... $ 5,369,138
Property, plant and equipment, net...................... 389,748
Other assets............................................ 20,521
Current liabilities..................................... (6,298,615)
Bridge notes............................................ (1,500,000)
Long term liabilities................................... (10,862)
Patents................................................. 7,583,610
Customer base........................................... 675,937
Tradename............................................... 378,152
Goodwill................................................ 73,802,895
-----------
Total...................................................... $80,410,524
===========he
The Company has entered into an agreement with Survivalink shareholders to
establish a tax escrow fund to make loans to employees of Survivalink who owned
options to purchase Survivalink common stock to help them meet their tax
obligations arising from the exercise of their employee stock options. The
Company has deposited $2,108,493 of cash into this fund as of December 31,
2001. This amount is included in other long-term assets in the Company"s
Consolidated Balance Sheets. Each loan from the fund is documented by an
individual tax note. The tax notes are collateralized by any amounts payable to
the Survivalink employee under the senior notes payable issued to the employee
as consideration in the acquisition of Survivalink (see Note 10). The tax
escrow will terminate upon the earlier of (i) full repayment by the Company of
the senior notes payable, or (ii) December 31, 2003. |
