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Acquisition | 9 Months Ended
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Sep. 30, 2022
Business Combinations [Abstract] |
Acquisitions | Acquisition Hardent, Inc. On May 20, 2022, (the “Closing Date”), the Company completed its acquisition of Hardent, a leading electronic design company, by acquiring all of its outstanding shares. The Company acquired Hardent for a total consideration of approximately $16.1 million, which consisted of $14.7 million in initial cash consideration paid at the Closing Date, $1.2 million was deposited into an escrow account to fund indemnification obligations to be released within 18 months after the Closing Date, and $0.2 million was deposited into an escrow account to fund other contractual provisions related to certain working capital adjustments. The addition of the technology and expertise from Hardent augments the Company’s CXL memory interconnect initiative. As part of the acquisition, the Company agreed to pay certain Hardent employees approximately $1.2 million in cash over three years following the Closing Date (the “Retention Bonus”), to be paid in three equal installments on each of the dates that are 12 months, 24 months and 36 months following the Closing Date. The Retention Bonus payouts are subject to the condition of continued employment. Therefore, the Retention Bonus payouts will be treated as compensation and will be expensed ratably over the retention period. As of September 30, 2022, the Company had incurred approximately $1.2 million in external acquisition costs in connection with the transaction, which were expensed as incurred. The purchase price allocation and related accounting for this acquisition is preliminary. The preliminary fair value estimates for the assets acquired and liabilities assumed were based upon preliminary calculations and valuations and the Company’s estimates and assumptions for the acquisition are subject to change if the Company obtains additional information during the measurement period. The fair value of the intangible assets acquired was determined by management primarily by using the multi-period excess earnings method under the income approach. This method reflects the present value of the projected cash flows that are expected to be generated by the existing technologies less charges representing the contribution of other assets to those cash flows. The fair values of the remaining assets acquired and liabilities assumed approximated their carrying values at the Closing Date. The Company performed a valuation of the net assets acquired as of the Closing Date. The total consideration from the acquisition was preliminarily allocated as follows:
(In thousands) |  | Total
Cash and cash equivalents |  | $ | 209 |
Accounts receivable |  | 1,088 |
Unbilled receivables |  | 239 |
Prepaid expenses and other current assets |  | 16 |
Identified intangible assets |  | 5,000 |
Goodwill |  | 12,069 |
Accounts payable |  | (55) |
Deferred revenue |  | (578) |
Income taxes payable |  | (466) |
Deferred tax liability |  | (1,325) |
Other current liabilities |  | (56) |
Total |  | $ | 16,141 |
The goodwill arising from the acquisition is primarily attributed to synergies related to the combination of new and complementary technologies of the Company and the assembled workforce of the acquired business. This goodwill is not expected to be deductible for tax purposes. The identified intangible assets assumed in the acquisition of Hardent were recognized as follows based upon their estimated fair values as of the acquisition date:
| Total |  | Estimated Weighted-Average Useful Life
| (in thousands) |  | (in years)
Existing technology | $ | 4,800 |  |  | 5 years
Customer contracts and contractual relationships | 200 |  |  | 2 years
Total | $ | 5,000 |  |  |
Unaudited Pro Forma Combined Consolidated Financial Information The following pro forma financial information presents the combined results of operations for the Company and Hardent as if the acquisition had occurred on January 1, 2021. The pro forma financial information has been prepared for comparative purposes only and does not purport to be indicative of the actual operating results that would have been recorded had the acquisition actually taken place on January 1, 2021, and should not be taken as indicative of future consolidated operating results. Additionally, the pro forma financial results do not include any anticipated synergies or other expected benefits from the acquisition:
|  | Three Months Ended |  | Nine Months Ended |  |
|  | September 30, |  | September 30, |  |  |  |
(In thousands) |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  |  |  |
Total revenue |  | $ | 112,244 |  |  | $ | 83,057 |  |  | $ | 335,485 |  |  | $ | 242,354 |  |  |  |  |
Net income (loss) |  | $ | 1,170 |  |  | $ | 4,355 |  |  | $ | (29,228) |  |  | $ | 12,633 |  |  |  |  |
The pro forma net income for 2022 was adjusted to exclude $0.2 million and $1.2 million of acquisition-related costs incurred during the three and nine months ended September 30, 2022, respectively. Consequently, the pro forma net income for the corresponding periods in 2021 were adjusted to include these costs.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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- References No definition available. + Details
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