RETALIX LTD.

NOTE 2 – ACQUISITIONS (continued):
RETALIX LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
g. In January 2004, the Company, through its subsidiary Retalix Holdings Inc., acquired 100% of the shares of OMI International,
Inc. (“OMI”), a company that provides supply chain management solutions and services from an unrelated party in consideration
of $19,100,000, comprised of $13,700,000 in cash, including estimated direct costs and 226,040 of the Company’s Ordinary
shares valued at approximately $5,410,000. The value of the Ordinary shares issued was determined based on the average
market price of the Company’s shares over several days before and after the acquisition was agreed and announced. During
October 2004, the Company paid the sellers of OMI additional $449,000 as part of an election made with the U.S. Internal
Revenue Service the result of which for tax purposes, is the step-up of OMI’s assets value to fair value as of the acquisition date.
The identified intangible assets acquired amounted to approximately $1,700,000 and included mainly acquired technology of
approximately $1,200,000 and customer base of approximately $400,000 to be amortized over their estimated useful lives (3 to 7
years) - see also note 4b. Goodwill arising on the acquisition amounted to approximately $16,800,000. The goodwill can be
amortized for tax purposes over a period of fifteen years.
h. In January 2004, the Company’s subsidiary, StoreAlliance, acquired 100% of the shares of DemandX Ltd. (“DemandX”) in
consideration of $239,000. DemandX is an Israeli corporation that provides supply chain management data analysis services to
suppliers and institutions. The identified intangible assets acquired included mainly customer base of approximately $66,000 to
be amortized over its estimated useful life (3 years) - see also note 4b. Goodwill arising on the acquisition amounted to
approximately $84,000.
i. In March 2003 the Company, through its subsidiary StoreAlliance together with Lipman Electronic Engineering Ltd. and Dai
Telecom Ltd. (“Dai”) established Cell-Time Ltd. (“Cell-Time”). Cell-Time is a provider of on-line services that enable retailers
and cellular communication providers in Israel, to sell on-line pre-paid cellular air-time at retail points of sale. Each of the three
parties holds an equal share in Cell-Time.
According to the agreement between the parties, Dai has committed to invest $1,250,000 in consideration for its share in Cell-
Time and the other parties have committed to grant Cell-Time rights to use certain of their technologies.
As of December 31, 2005, Dai has fulfilled in full its commitment to invest $1,250,000 in Cell-Time. In 2003 ,Cell-Time was
considered to be a newly formed entity and thus the gain arising from Dai’s investment in Cell-Time in 2003 in the amount of
$79,000, was carried to additional paid in capital. In 2005 and 2004, in which Cell-Time was an operating entity, the gain arising
from Dai’s investment which amounted $83,000 and $200,000, respectively, was carried to income on a current basis.
The balance of the investment in Cell-Time as of December 31, 2005 (after taking into account the Group’s share in its losses) is
approximately $70,000.
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