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Acquisitions and Divestiture | 12 Months Ended
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Dec. 31, 2023
Business Combinations [Abstract] |
Acquisitions and Divestiture | NOTE 7 – ACQUISITIONS AND DIVESTITURE Vewd Software Holdings Limited On July 1, 2022, the Company acquired all common stock of Vewd Software Holdings Limited (“Vewd,” and the “Vewd Acquisition”). Vewd is a leading global provider of OTT and hybrid TV solutions. The Vewd Acquisition establishes the Company as a leading independent streaming media platform through its TiVo brand and one of the largest independent providers of Smart TV middleware globally. The total consideration was approximately $102.9 million, consisting of approximately $52.9 million of cash and $50.0 million of debt. See Note 9—Debt for additional information on this debt. Purchase Price Allocation The Vewd Acquisition was accounted for as a business combination, using the acquisition method. The following table presents the allocation of the purchase price to the identifiable assets acquired and liabilities assumed based on the fair values at the acquisition date (fair value amounts in thousands):
|  | Estimated Useful Life (years) |  |  |  |  |  | Estimated Fair Value |
Cash and cash equivalents |  |  |  |  |  |  |  | $ | 2,684 |
Accounts receivable |  |  |  |  |  |  |  |  | 3,341 |
Unbilled contracts receivable |  |  |  |  |  |  |  |  | 2,335 |
Other current assets |  |  |  |  |  |  |  |  | 1,208 |
Property and equipment |  |  |  |  |  |  |  |  | 443 |
Operating lease right-of-use assets |  |  |  |  |  |  |  |  | 2,020 |
Identifiable intangible assets: |  |  |  |  |  |  |  |  |
Technology |  | 7 |  |  |  | 28,050 |  |  |  |
Customer relationships - large |  | 7 |  |  |  | 4,900 |  |  |  |
Customer relationships - small |  | 4 |  |  |  | 3,500 |  |  |  |
Non-compete agreements |  | 2 |  |  |  | 870 |  |  |  |
Trade name |  |  | 5 |  |  |  | 830 |  |  |  |
Total identifiable intangible assets |  |  |  |  |  |  |  |  | 38,150 |
Goodwill |  |  |  |  |  |  |  |  | 68,115 |
Other long-term assets |  |  |  |  |  |  |  |  | 977 |
Accounts payable |  |  |  |  |  |  |  |  | (869 | )
Accrued liabilities |  |  |  |  |  |  |  |  | (4,777 | )
Deferred revenue |  |  |  |  |  |  |  |  | (920 | )
Long-term deferred tax liabilities |  |  |  |  |  |  |  |  | (8,393 | )
Noncurrent operating lease liabilities |  |  |  |  |  |  |  |  | (1,094 | )
Other long-term liabilities |  |  |  |  |  |  |  |  | (307 | )
Total purchase price |  |  |  |  |  |  |  | $ | 102,913 |
Identifiable Intangible Assets Identifiable intangible assets primarily consist of technology, customer relationships, non-compete agreements and trade name. In determining the fair value, the Company utilized various forms of the income and cost approaches depending on the asset being valued. The estimation of fair value required significant judgment related to cash flow forecasts, discount rates reflecting the risk inherent in each cash flow stream, competitive trends, market comparables and other factors. Inputs were generally determined using historical data supplemented by current and anticipated market conditions, and growth rates. The technology was valued using the excess earnings method. Significant assumptions used under this method include forecasted revenue and growth, estimated technology obsolescence, contributory asset charges, and the discount rate. The customer relationships were valued using the cost approach, based on estimated customer acquisition costs. Goodwill The excess of the consideration transferred over the fair value of assets acquired and liabilities assumed was recognized as goodwill. The goodwill is generated from operational synergies and cost savings the Company expects to achieve from the consolidated operations, as well as the expected benefits from future technologies that do not meet the definition of an identifiable intangible asset and Vewd’s knowledgeable and experienced workforce. Transaction and Other Costs In connection with the Vewd Acquisition, the Company incurred significant one-time expenses such as transaction-related costs, including transaction bonuses, legal expenses and consultant fees, and severance and retention costs. For the year ended December 31, 2022, transaction-related costs and severance and retention costs were $7.4 million and $4.0 million, respectively. Supplemental Pro Forma Information The following unaudited pro forma financial information assumes the Vewd Acquisition was completed as of January 1, 2021. The unaudited pro forma financial information as presented below is for informational purposes only and is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information. This is not necessarily indicative of the results of operations that would have been achieved if the Vewd Acquisition had taken place on January 1, 2021, nor is it necessarily indicative of future results. Consequently, actual results could differ materially from the unaudited pro forma financial information presented below. The following table presents the pro forma operating results as if the acquired operations of Vewd had been included in the Company’s Consolidated Statements of Operations as of January 1, 2021 (unaudited, in thousands):
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Revenue |  | $ | 508,636 |  |  | $ | 498,992 |
Net loss attributable to the Company |  | $ | (769,483 | ) |  | $ | (209,690 | )
The unaudited supplemental pro forma information above includes the following pro forma adjustments: adjustments for transaction-related costs and severance and retention costs, adjustments for amortization of intangible assets, adjustments for interest and related expenses associated with Vewd’s historical debt, elimination of inter-company transactions between Vewd and the Company, and adjustments for the related income tax impact. The unaudited supplemental pro forma information above does not include any cost saving synergies from operating efficiencies. Divestiture and Assets Held for Sale In December 2023, the Company entered into a definitive agreement with Tobii AB (the “Purchaser”), an eye tracking and attention computing company, pursuant to which it agreed to sell to the Purchaser its AutoSense in-cabin safety business and related imaging solutions subject to certain customary closing conditions (the “Divestiture”). The Divestiture represents a 100% equity sale transaction, in which the Purchaser is obligated to issue a senior secured promissory note in the principal amount of approximately $27.7 million carrying a fixed interest rate of 8%, and will make an aggregate of $15.0 million in future cash payments. In addition, there is potential incremental cash consideration which is contingent upon the future success of the divested AutoSense in-cabin safety business. Within 15 days of closing the Divestiture, the Purchaser is required to pay to the Company the acquired closing cash balance, less certain adjustments. The Divestiture is expected to further streamline the Company’s business and focus its investments on entertainment markets. The divestiture did not represent a strategic shift that would have a major effect on the Company’s consolidated results of operations, and therefore its results of operations were not reported as discontinued operations. The following table summarizes the carrying amounts of assets and liabilities classified as held for sale in connection with the Divestiture on the Company’s consolidated balance sheet as of December 31, 2023 (in thousands):
|  | December 31, 2023 |
|  | Current |  |  | Noncurrent |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 12,349 |  |  | $ | — |  |  | $ | 12,349 |
Accounts receivable, net |  |  | 1,323 |  |  |  | — |  |  |  | 1,323 |
Unbilled contracts receivable, net |  |  | 1,209 |  |  |  | 5,320 |  |  |  | 6,529 |
Prepaid expenses and other current assets |  |  | 979 |  |  |  | — |  |  |  | 979 |
Property and equipment, net |  |  | — |  |  |  | 2,391 |  |  |  | 2,391 |
Operating lease right-of-use assets |  |  | — |  |  |  | 3,346 |  |  |  | 3,346 |
Other noncurrent assets |  |  | — |  |  |  | 1,192 |  |  |  | 1,192 |
Total assets held for sale (1) |  | $ | 15,860 |  |  | $ | 12,249 |  |  | $ | 28,109 |
Liabilities: |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 244 |  |  | $ | — |  |  | $ | 244 |
Accrued liabilities |  |  | 4,821 |  |  |  | — |  |  |  | 4,821 |
Deferred revenue |  |  | 1,126 |  |  |  | — |  |  |  | 1,126 |
Operating lease liabilities, noncurrent |  |  | — |  |  |  | 2,741 |  |  |  | 2,741 |
Other noncurrent liabilities |  |  | — |  |  |  | 7,064 |  |  |  | 7,064 |
Total liabilities held for sale |  | $ | 6,191 |  |  | $ | 9,805 |  |  | $ | 15,996 |
Net assets held for sale |  | $ | 9,669 |  |  | $ | 2,444 |  |  | $ | 12,113 |
(1) Total assets held for sale also included certain fully amortized finite-lived intangible assets with an original cost of $35.2 million. Due to the estimated fair value less cost to sell exceeding the carrying amount of the assets and liabilities presented above, the Company did not recognize an impairment loss related to the assets held for sale in the year ended December 31, 2023.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent + Details
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