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Acquisition | 6 Months Ended
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Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisition | Acquisition On February 28, 2023, the Company completed the FCI Acquisition for an aggregate cash consideration of $44.9 million. The FCI Acquisition expanded the Company's product portfolio to include high-resolution cell images with the speed, sensitivity and phenotyping abilities of flow cytometry and added cost-effective, entry-level and personal instrument options to broaden the market and research areas the Company services. The acquisition was accounted for as a business combination in accordance with ASC 805. The purchase price has been allocated to tangible assets and identifiable intangible assets acquired and liabilities assumed based upon their estimated fair values, with the exception of contract liabilities assumed which are recognized and measured in accordance with ASC 606, Revenue from Contracts with Customers. The Company finalized its accounting for the FCI Acquisition during the fourth quarter of 2023. During the year ended December 31, 2023, the Company recorded the following changes as a result of measurement period adjustments to the fair value of the initial assets as follows: •Property and equipment increased by $1.4 million •Deferred tax assets increased by $0.6 million •Customer relationships increased by $0.1 million •Developed technologies increased by a total $0.7 million •Trade names increased by $0.2 million The measurement period adjustments noted above decreased goodwill by $3.0 million. The fol lowing table summarizes the estimated fair value of assets acquired and liabilities assumed at the date of the FCI Acquisition:
| (in thousands)
Fair value of assets acquired and liabilities assumed: |
Inventories | $ | 18,695 |
Property and equipment | 3,040 |
Prepaid expenses | 70 |
Deferred tax assets | 570 |
Intangible assets |
Customer Relationships | 8,600 |
Amnis ImageStream developed technology | 10,000 |
Guava easyCyte and Muse developed technology | 140 |
Amnis FlowSight and CellStream developed technology | 20 |
Amnis tradename | 2,900 |
Guava tradename | 90 |
Goodwill | 6,038 |
Deferred revenue | (4,952) |
Other current liabilities | (316) |
Fair value of net assets acquired | $ | 44,895 |
The $6.0 million of goodwill arising from the FCI Acquisition is primarily attributed to significant time-to-market advantages, as the Company gained immediate access to the FCI Products, existing relationships and business infrastructure and knowledgeable and experienced workforce. The goodwill is deductible for tax purposes. The Company has integrated the FCI Business into its existing business structure, which is comprised of a single reportable segment and a single reporting unit. Intangible assets identified for recognition separate from goodwill were those that satisfied either the contractual or legal criterion or the separability criterion in the accounting guidance. The identifiable intangible assets acquired and their estimated useful lives for amortization are as follows:
| Fair Value |  | Useful life (years)
| (In thousands, except for years)
Customer relationships | $ | 8,600 |  |  | 9
Amnis ImageStream Developed Technology | 10,000 |  |  | 6
Guava easyCyte and Muse Developed Technology | 140 |  |  | 2
Amnis FlowSight and CellStream Developed Technology | 20 |  |  | 1
Amnis Tradename | 2,900 |  |  | 15
Guava Tradename | 90 |  |  | 3
Total | $ | 21,750 |  |  |
The customer relationships intangible asset represents the fair value of the underlying relationships with existing customers of the FCI Business. The trade name intangible asset represents the fair value of brand and name recognition associated with the marketing of the FCI Products. The FCI developed technology intangible asset represents the fair value of access to certain imaging and microcapillary technologies. The fair value of the intangible assets acquired were estimated using variations of the income approach. The fair value of the customer relationships intangible asset was determined based on the multi-period excess earnings method and the relief-from-royalty method was utilized to estimate the fair values of the trade name and FCI developed technology intangible assets. The key assumptions used in estimating the fair values of intangible assets included forecasted financial information; customer retention rates; factors for technological obsolescence; royalty rates and discount rates. The cash flow projections were discounted using rates ranging from 29.0% to 39.0% The cash flows were based on estimates used to price the transaction, including market participant considerations, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital. All acquired intangibles are being amortized over their estimated useful lives using the straight-line method of amortization. The fair value assigned to the assets acquired are based on reasonable assumptions and estimates that market participants would use. Actual results may differ from these estimates and assumptions. The results of operations for the FCI Business are included in the consolidated financial statements of the Company from the date of the acquisition.

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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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