On August 31, 2023, the Company acquired 100% of the outstanding equity of Rookout, Ltd. (“Rookout”). Rookout is a provider of enterprise-ready and privacy-aware solutions that enable developers to troubleshoot and debug actively running code in Kubernetes-hosted cloud-native applications. This acquisition expanded the Company’s unified observability and security platform from the addition of Rookout’s technology and experienced team. The purchase consideration of Rookout was $33.4 million, after considering certain adjustments, and was paid from cash on hand.

The fair value of the purchase price was allocated to the identifiable assets acquired and liabilities assumed as of the acquisition date, with the excess recorded to goodwill as shown below (in thousands).


Assets acquired:
Cash and cash equivalents	$	1,152
Accounts receivable, prepaid and other assets	342
Property and equipment	46
Intangible asset	7,800
Total assets acquired	$	9,340

Liabilities assumed:
Accounts payable, accrued and other liabilities	2,242
Deferred revenue	1,064
Total liabilities assumed	$	3,306

Net assets acquired	6,034
Fair value of consideration transferred	33,407
Goodwill	$	27,373

These preliminary amounts are subject to subsequent adjustment as additional information is obtained to finalize certain components of working capital and deferred income taxes.

Goodwill is primarily attributable to expected synergies and acquired skilled workforce. The goodwill was allocated to the Company’s one reporting unit. The Company identified developed technology as the sole acquired intangible asset. The estimated fair value of the developed technology was $7.8 million, which was based on a valuation using the income approach and was classified as capitalized software on the consolidated balance sheet. The estimated useful life of the developed technology is seven years. The acquired goodwill and intangible asset were not deductible for tax purposes.

The operating results of Rookout from the date of acquisition have been included in the Company’s consolidated statements of operations. The revenue and net loss attributable to Rookout for the year ended March 31, 2024 was not material. The transaction costs related to the Rookout acquisition were $2.9 million for the year ended March 31, 2024 and are included in general and administrative expense on the consolidated statements of operations.

On March 1, 2024, the Company acquired a 100% equity interest in Runecast Solutions Limited (“Runecast”). Runecast is a provider of software solutions that provide insights for security compliance, vulnerability assessment, and configuration management for complex, on-premises, hybrid and multi-cloud IT environments. This acquisition expanded the Company’s unified observability and security platform from the addition of Runecast’s technology and experienced team.

The preliminary purchase consideration consisted of $26.1 million cash paid at closing and $2.3 million in deferred cash payments. The deferred cash payments will be held by the Company to satisfy indemnification obligations and post-closing purchase price adjustments payable within 15 months after the acquisition date.

In connection with the acquisition of Runecast, per the purchase agreement, $9.0 million of RSAs will be issued to the previous owners subject to continuing employment and certain indemnification clauses. The RSAs are considered share-based compensation expense and $0.3 million was recognized in fiscal 2024.

The fair value of the purchase price was allocated to the identifiable assets acquired and assumed acquired as of the acquisition date, with the excess recorded to goodwill as shown below (in thousands).


Assets acquired:
Cash and cash equivalents	$	1,224
Accounts receivable, prepaid and other assets	883
Property and equipment	50
Intangible assets	7,500
Other non-current assets	436
Total assets acquired	$	10,093

Liabilities assumed:
Accounts payable, accrued and other liabilities	582
Deferred revenue	5,132
Other non-current liabilities	1,229
Total liabilities assumed	$	6,943

Net assets acquired	3,150
Fair value of consideration transferred	28,390
Goodwill	$	25,240

The preliminary fair value of assets acquired and liabilities assumed may change as additional information is received during the measurement period.

Goodwill is primarily attributable to expected synergies and acquired skilled workforce. The goodwill was allocated to the Company’s one reporting unit. The Company identified developed technology and customer relationships as the acquired intangible assets. The estimated fair value of the developed technology and customer relationships was $7.3 million and $0.2 million, respectively, which was based on a valuation using the income approach. The estimated useful lives of the developed technology and customer relationships is seven years and four years, respectively. The acquired goodwill and intangible assets were not deductible for tax purposes.

The operating results of Runecast from the date of acquisition have been included in the Company’s consolidated statements of operations. The revenue and net loss attributable to Runecast for the year ended March 31, 2024 was not material. The transaction costs related to the Runecast acquisition were $3.0 million for the year ended March 31, 2024 and are included in the general and administrative expense on the consolidated statement of operations.