5. Acquisitions Marketnet, Inc. On May 31, 2012, the Company completed the acquisition of Marketnet, Inc. ( Marketnet ), an interactive technology company based in Dallas, Texas. Bridgeline acquired all of the outstanding capital stock of Marketnet for consideration consisting of (i) $20 thousand in cash and (ii) assumption of debt of $244 thousand and (ii) contingent consideration of up to $650 thousand in cash and 204,331 shares of Bridgeline Digital common stock. The cash consideration was further reduced by $142 thousand due to the Seller s inability to meet an agreed upon target for working capital. This contingent consideration is payable quarterly over the 12 consecutive calendar quarters following the acquisition, contingent upon the acquired business achieving certain quarterly revenue and quarterly operating income targets during the period. To the extent that either the quarterly revenue target or the quarterly operating income target is not met in a particular quarter, the earn-out period will be extended for up to four additional quarters. Marketnet is also eligible to earn additional bonus equity consideration of 200,000 shares, if annual net revenues of the acquired business exceed a certain threshold in any fiscal year through September 30, 2015. The Company is required to assess the probability of the acquired business achieving the contingent cash and stock payments which requires management to make estimates and judgments based on forecasts of future performance. As a result, the Company estimated and accrued $607 thousand of the contingent cash consideration to be achieved and $262 thousand of the contingent stock consideration (valued at $1.38 per share) to be achieved. The contingent common stock has been issued and is being held in escrow pending satisfaction of the applicable targets. Marketnet s operating results are reflected in the Company s condensed consolidated financial statements as of the acquisition date. Magnetic Corporation On October 3, 2011, the Company completed the acquisit