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ACQUISITIONS | 3 Months Ended
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Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
ACQUISITIONS | ACQUISITIONS On September 5, 2024, the Company acquired all of the equity interests of SB Software Limited ("SB Software"), a United Kingdom private limited company. SB Software is in the business of vending and coffee machine management in the United Kingdom. The acquisition enhances Cantaloupe’s operational capabilities and market reach in Europe. On February 1, 2024, the Company acquired all of the equity interests of Cheq Lifestyle Technology, Inc. ("Cheq"). Cheq powers payments for numerous professional sports teams, entertainment venues and festival operators through its enterprise-grade payment devices and mobile ordering platform. The acquisition positions Cantaloupe for expansion into the large and rapidly growing sports, entertainment, and restaurant sectors with a comprehensive suite of self-service solutions. Both acquisitions were accounted for as business combinations using the acquisition method of accounting. The purchase price of each acquired company was allocated between tangible and intangible assets acquired and liabilities assumed from the acquired businesses based on their estimated fair values using primarily Level 3 inputs under ASC Topic 820, "Fair Value Measurement", with the residual of the purchase price recorded as goodwill. SB Software For SB Software, the Company paid a purchase price of approximately $11.4 million which includes cash paid of $10.0 million and the estimated fair value of contingent consideration to be paid out of $1.4 million. The acquisition was funded by the Company's cash on hand. The $1.4 million fair value of the contingent consideration to be paid out represents the present value of up to $3.3 million in contingent consideration based on a Monte Carlo Simulation should SB Software achieve certain revenue growth metrics as defined in the share purchase agreement. Should these metrics be achieved, approximately $1.3 million, $1.0 million and $1.0 million will be payable in September 2025, September 2026 and September 2027, respectively. The current and noncurrent portions of the fair value of the contingent consideration of $0.5 million and $0.8 million are included in Accrued expenses and Other non-current liabilities on the Condensed Consolidated Balance Sheet, respectively. The following table summarizes the estimated fair value assigned to the assets acquired and liabilities assumed:
($ in thousands) | Amount
Cash and cash equivalents | $ | 284 |
Accounts receivable | 94 |
Inventory | 42 |
Prepaid expenses | 14 |
Property and equipment | 67 |
Operating lease right-of-use assets | 244 |
Intangible assets | 3,362 |
Total identifiable assets acquired | 4,107 |
Accounts payable | (71) |
Accrued expenses | (152) |
Operating lease liability | (244) |
Total liabilities assumed | (467) |
Total identifiable net assets | 3,640 |
Goodwill | 7,743 |
Fair value of total considerations transferred | $ | 11,383 |
The Company determined the estimated fair value of the identifiable intangible assets acquired with the assistance of third-party valuation consultants. Amounts allocated to identifiable intangible assets included $3.0 million related to developed technology, $0.2 million related to customer relationships, and $0.2 million related to trade names. The estimated fair value of the acquired developed technology was determined using a multi-period excess earnings method. The estimated fair value of the acquired customer relationships was determined using the distributor method which estimates the value using the cash flow impact in a scenario where the customer relationships are not in place. The estimated fair value of the acquired trade names was determined using the relief from royalty method which estimates the value using the discounted value of the royalty that a company would pay to license the trade name. The recognized intangible assets will be amortized on a straight-line basis over the estimated useful lives of the respective assets. The estimated useful lives for developed technology, customer relationship, trade names were 5, 3 and 3 years, respectively. Goodwill of $7.7 million arising from the acquisition includes the expected synergies between SB Software and the Company. The goodwill, which is not deductible for income tax purposes, was assigned to the Company’s only reporting unit. The Company recognized $0.2 million of integration and acquisition related costs that were expensed during the three months ended September 30, 2024. These costs are recorded within Integration and acquisition expenses in the Condensed Consolidated Statements of Operations. The allocation of the purchase price is currently provisional and is subject to change over the remainder of the measurement period as the Company continues to evaluate and analyze the estimates and assumptions used in the valuation. Pro forma financial information of the acquisition and revenue and net income since acquisition are not presented due to the immaterial impact of the financial results of SB Software in the Company's Condensed Consolidated Financial Statements. Cheq For Cheq, the Company paid an aggregate purchase price consideration of $4.7 million, including $1.1 million in accounts payable paid concurrently with the acquisition and $0.9 million cash held back by the Company for net working capital and other post-closing adjustments. The acquisition was funded by the Company's cash on hand. Cash held back by the Company is expected to be paid after post-closing adjustments on January 1, 2025. The following table summarizes the adjusted fair value assigned to the assets acquired and liabilities assumed:
($ in thousands) | Amount
Cash and cash equivalents | $ | 84 |
Property and equipment | 1,136 |
Intangible assets | 1,750 |
Other assets | 486 |
Total identifiable assets acquired | 3,456 |
Accounts payable | (691) |
Other liabilities | (52) |
Total liabilities assumed | (743) |
Total identifiable net assets | 2,713 |
Goodwill | 2,000 |
Fair value of total considerations transferred | $ | 4,713 |
The Company determined the fair value of the identifiable intangible assets acquired with the assistance of third-party valuation consultants. Amounts allocated to identifiable intangible assets included $1.4 million related to developed technology, $0.2 million related to customer relationships, and $0.2 million related to trade names. The fair value of the acquired developed technology was determined using a multi-period excess earnings method. The fair value of the acquired customer relationships was determined using the distributor method which estimates the value using the cash flow impact in a scenario where the customer relationships are not in place. The fair value of the acquired trade names was determined using the relief from royalty method which estimates the value using the discounted value of the royalty that a company would pay to license the trade name. The recognized intangible assets will be amortized on a straight-line basis over the estimated useful lives of the respective assets. The estimated useful lives for developed technology, customer relationship, trade names were 5, 3 and 3 years, respectively. Goodwill of $2.0 million arising from the acquisition includes the expected synergies between Cheq and the Company. The goodwill, which is not deductible for income tax purposes, was assigned to the Company’s only reporting unit. The Company recognized $1.1 million of integration and acquisition related costs that were expensed during the year ended June 30, 2024. These costs are recorded within Integration and acquisition expenses in the Condensed Consolidated Statements of Operations.

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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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