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Business Combinations | 12 Months Ended
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Dec. 31, 2023
Business Combinations [Abstract] |
Business Combinations | 8. Business Combinations On August 27, 2021, the Company completed the acquisition of SilverCloud through a merger in which SilverCloud became a wholly-owned subsidiary of the Company. The cash consideration paid was $105,195 net of cash acquired of $12,239. The stock consideration was comprised of 8.1 million shares of the Company’s Class A common stock valued at $85,571, and escrow share consideration of $6,376. SilverCloud is a leading digital mental health platform. The Company is obligated to pay an earn-out of up to $40,000 contingent upon SilverCloud achieving certain revenue thresholds for the year ending December 31, 2022. The Company estimated the fair value of the contingent consideration as of the acquisition date to be $29,360. The contingent consideration is subject to remeasurement at each reporting date until December 31, 2022, with the remeasurement adjustment reported in the consolidated statement of operations and comprehensive loss. The Company signed an amendment to the agreement accelerating the determination of the SilverCloud revenue earn-out as of May 11, 2022, which resulted in the issuance of 4,959,856 shares of Class A Common Stock. The acquisition was considered a stock acquisition for tax purposes and accordingly, the goodwill resulting from this acquisition is not tax deductible. The total acquisition related costs were $4,854 which included transaction costs from financial and legal advisors and other transaction related fees and were recognized as incurred in the Company’s consolidated statement of operations and comprehensive loss in general and administrative expenses. On August 9, 2021, the Company completed the acquisition of Conversa through a merger in which Conversa became a wholly-owned subsidiary of the Company. The cash consideration paid was $51,331 net of cash acquired of $9,735. The stock consideration was comprised of 4.7 million shares of the Company’s Class A common stock valued at $52,160. Conversa is a leader in automated virtual healthcare. The Company is obligated to pay an earn-out of up to $30,000 contingent upon Conversa achieving certain integration thresholds in the first quarter of 2022, and certain revenue thresholds for the year ending December 31, 2022. The Company estimated the fair value of the contingent consideration as of the acquisition date to be $15,230. The contingent consideration is subject to remeasurement at each reporting date until December 31, 2022, with the remeasurement adjustment reported in the consolidated statement of operations and comprehensive loss. The integration milestone was achieved in December 2021 and $15,000 was paid in January 2022. T he Company signed an amendment to the agreement accelerating the determination of the Conversa revenue earn-out as of March 31, 2022, which resulted in the issuance of 1,020,964 shares of Class A Common Stock. The acquisition was considered a stock acquisition for tax purposes and accordingly, the goodwill resulting from this acquisition is not tax deductible. The total acquisition related costs were $2,435 which included transaction costs from financial and legal advisors and other transaction related fees and were recognized as incurred in the Company’s consolidated statement of operations and comprehensive loss in general and administrative expenses. The Acquisitions were accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and the liabilities assumed be recognized at their fair values as of the acquisition date. The results of the Acquisitions were integrated within the consolidated financial statements commencing on the aforementioned acquisition dates. Actual revenue and losses of the Acquisitions since the acquisition date as well as pro forma combined results of operations for the Acquisition have not been presented because the effect of the Acquisitions were not material to the Company’s consolidated financial results for the periods presented. The following table summarizes the fair value estimates of the assets acquired and liabilities assumed for the SilverCloud and Conversa acquisitions at the respective acquisition dates. The Company, with the assistance of a third-party valuation expert, estimated the fair value of the acquired tangible and intangible assets with significant estimates such as revenue projections. In the year ended December 31, 2021, the Company recorded a $2,825 increase and a $1,268 decrease to goodwill related to the assessment of the tax attributes of the business combinations for SilverCloud and Conversa, respectively. In addition, the Company recorded a $9 and $66 decrease to goodwill with the finalization of the net working capital adjustment for SilverCloud and Conversa, respectively. In the third quarter of 2022, the Company recorded a $522 decrease in goodwill related to the assessment of the tax attributes of the business combination for SilverCloud. The allocation of the consideration transferred to the assets acquired and liabilities assumed for the Acquisitions is final. Identifiable assets acquired and liabilities assumed:
|  | SilverCloud |  |  | Conversa Health |
Purchase consideration: |  |  |  |  |  |
Cash consideration, net of cash acquired |  | $ | 105,195 |  |  | $ | 51,331 |
Stock consideration |  |  | 85,571 |  |  |  | 52,160 |
Contingent consideration |  |  | 29,360 |  |  |  | 15,230 |
Escrow share consideration |  |  | 6,376 |  |  |  |
Working capital adjustment |  |  | (300 | ) |  |  | (127 | )
Total consideration transferred |  | $ | 226,202 |  |  | $ | 118,594 |
Allocation of Consideration transferred: |  |  |  |  |  |
Accounts receivable |  | $ | 2,630 |  |  | $ | 3,651 |
Identifiable intangible assets |  |  | 78,146 |  |  |  | 34,700 |
Other assets |  |  | 491 |  |  |  | 4,604 |
Total assets acquired |  |  | 81,267 |  |  |  | 42,955 |
Current liabilities |  |  | 2,155 |  |  |  | 8,463 |
Deferred revenue |  |  | 5,813 |  |  |  | 4,655 |
Other long-term liabilities |  |  | 11,035 |  |  |  | 115 |
Total liabilities assumed |  |  | 19,003 |  |  |  | 13,233 |
Goodwill |  | $ | 163,938 |  |  | $ | 88,872 |
|  | $ | 226,202 |  |  | $ | 118,594 |
The amount allocated to goodwill reflects the benefits the Company expects to realize from post-acquisition cross selling opportunities from integrating customer relationships and from the growth of the respective acquisitions’ operations. The following are the identifiable intangible assets acquired in the Acquisitions and their respective weighted average useful lives, as determined based on initial valuations. The estimated fair value of the Technology and Tradename was determined using a relief from royalty method and the estimated fair value of the Customer relationships was determined using the excess earnings method:
|  | SilverCloud |  |  | Weighted Average Life (Years) |  |  | Conversa Health |  |  | Weighted Average Life (Years) |
Technology |  | $ | 34,996 |  |  |  | 5.0 |  |  | $ | 20,400 |  |  |  | 5.0 |
Tradename |  |  | 10,800 |  |  |  | 7.0 |  |  |  | 4,200 |  |  |  | 5.0 |
Customer relationships |  |  | 32,350 |  |  |  | 10.0 |  |  |  | 10,100 |  |  |  | 10.0 |
Total |  | $ | 78,146 |  |  |  |  |  | $ | 34,700 |  |  |  |

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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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