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BUSINESS ACQUISITION | 12 Months Ended
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Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
BUSINESS ACQUISITION | BUSINESS ACQUISITION On September 7, 2021, the Company closed its acquisition of Spyce, a Boston-based restaurant company powered by automation technology. The Company acquired 100% of the stock of Spyce via a merger. The purpose of the acquisition is to allow the Company to serve its food with even better quality, consistency and efficiency in its restaurants via automation. Pursuant to the merger agreement, upon closing of the acquisition, the Company issued 1,843,493 shares of Class S stock (the “Class S Shares”) worth approximately $37.5 million, of which $6.8 million is considered post-business combination compensation expense, see Note 12 for details, and subject to certain vesting requirements of certain Spyce employees. In connection with the Company’s IPO, the Class S Shares converted into 1,316,763 shares of common stock pursuant to a formula based on the Reference Price, which such shares were then reclassified into shares of Class A common stock. Additionally, the Company paid off approximately $3.5 million of certain indebtedness and transaction expenses of Spyce. Furthermore, the former equity holders of Spyce may receive up to an aggregate of 714,285 additional shares of Class A common stock contingent on the achievement of certain performance milestones between the closing date and June 30, 2026. See Note 3. The acquisition of Spyce was not significant pursuant to Rule 3-05 of Regulation S-X. The allocation of the purchase price and the transaction costs is as follows (in thousands):
Fair value of assets acquired | As of September 7, 2021
Restricted cash | 203 |
Property and equipment, net | 707 |
Other assets | 660 |
Developed technology | 20,050 |
Goodwill | 29,695 |
Total assets acquired | $ | 51,315 |
Fair value of liabilities assumed |
Other liabilities | 628
Total liabilities assumed | $ | 628 |
Total identifiable net assets | $ | 50,687 |
Fair value of consideration |
Cash consideration, net of cash acquired | 2,762 |
Closing third party expenses | 781 |
Equity consideration | 30,704 |
Contingent equity consideration | 16,440 |
Total consideration | $ | 50,687 |
Determining the fair value of the intangible assets acquired requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates. The fair value of the intangibles assets was determined using a cost approach, which were based on the Company’s best estimate of recreating the developed technology acquired as part of the transaction. This includes estimates related to opportunity costs, developers profit, weighted average weight of return, and projected overhead. Use of different estimates and judgments could yield materially different results. The Company’s consolidated financial statements for the fiscal years ended December 31, 2023 and December 25, 2022 reflect results of operations of the acquired business. The Company accounted for this acquisition under the acquisition method in accordance with ASC Topic 805, Business Combinations. The goodwill is attributable to the synergies the Company expects to achieve through leveraging the acquired technology to its existing restaurants and the workforce of Spyce. For tax purposes the acquisition was treated as a stock purchase, and as such any goodwill or other intangible assets recorded as a result of this transaction are not deductible for tax purposes. Supplemental Pro Forma Information (unaudited) The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition occurred on December 28, 2020.
(dollar amounts in thousands) |  | Fiscal Year Ended December 26, 2021 |  |
Revenue |  | $ | 340,807 |  |  |
Net loss attributable to Sweetgreen, Inc. |  | $ | (156,050) |  |  |
The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business acquisition included in the reported pro forma revenue and earnings. These pro forma amounts have been calculated by applying the Company’s accounting policies. The unaudited pro forma supplemental information is based on estimates and assumptions, which the Company believes are reasonable and are not necessarily indicative of the results that have been realized had the acquisition been consolidated in the tables above as of December 31, 2019, nor are they indicative of results of operations that may occur in the future.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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