NOTE

ACQUISITIONS

July 2019,

the Company acquired the Hillcrest Labs business from InterDigital, Inc. (“InterDigital”). Hillcrest Labs is a leading global supplier of software and components for sensor processing in consumer and IoT devices. Under the terms of the agreement, the Company agreed to pay an aggregate of

$11,204

to purchase the Hillcrest Labs business, as well as non-exclusive rights to certain Hillcrest Labs’ patents retained by InterDigital, with

$10,000

paid at closing,

$204

of which is a contingent consideration that is expected to be paid during the

fourth

quarter of

2019,

and the remainder of

$1,000

held in escrow to satisfy indemnification claims, if any.

The milestone-based contingent payment is calculated based on payments to be received by the Company for certain products to be sold by the Company prior to

October 15, 2019.

These milestone-based contingent payments were measured at fair value on the closing date and recorded as a liability on the balance sheet in the amount of

$204.

In addition, the Company incurred acquisition-related deal expenses and write-off of an acquired lease associated with the Hillcrest Labs transaction in a total amount of

846

which were included in general and administrative expenses for the

three

and

nine

months ended

September 30, 2019.

Acquisition-related costs included legal, accounting and consulting fees, and other external costs directly related to the acquisition.

Goodwill generated from this business combination is attributed to synergies between the Company's and Hillcrest Lab's respective products and services.

The results of Hillcrest Lab's operations have been included in the consolidated financial statements since

July 19, 2019.

Pro forma results of operations related to this acquisition have

not

been prepared because they are

not

material to the Company's consolidated statement of income.

The preliminary purchase price allocation for the acquisition has been determined as follows:

Tangible assets (including inventory, property and equipment and other)	$	681
Intangible assets:
Developed technologies		2,475
Customer relationships		3,518
Customer backlog		72
Goodwill		4,458
Total assets	$	11,204

The acquisition of the Hillcrest Labs business has been accounted in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)

No.

805,

“Business Combinations” (“ASC

805”

). Under the acquisition method of accounting, the total purchase price is allocated to the net tangible and intangible assets based on their fair values on the closing date.

The purchase price allocations have been prepared on a preliminary basis based on information that was available to the Company at the time the condensed consolidated financial statements were prepared, and revisions to the preliminary purchase price allocations

may

result as additional information becomes available.

August 2019,

the Company entered into a strategic agreement with a private company, Immervision, Inc. (“Immervision”), whereby the Company made a strategic technology investment for a total consideration of

$10,000

to secure exclusive licensing rights to Immervision’s advanced portfolio of patented wide-angle image processing technology and software. The Company considered the guidance in ASC

805

and determined that the transaction was an asset acquisition. As a result, the estimated fair value of the assets acquired have been included in the accompanying balance sheet from the date of acquisition.

The preliminary consideration for the investment has been determined as follows:

Intangible assets:
Core technologies		$	10,000

The intangible assets will be amortized based on the pattern upon which the economic benefits of the intangible assets are to be utilized.