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Acquisition of Foresight Energy, Ltd. | 9 Months Ended
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Sep. 30, 2024
fSight |
Business Acquisition [Line Items] |
Acquisition of Foresight Energy, Ltd. | 4. Acquisition of Foresight Energy, Ltd. On January 25, 2023 (“Acquisition Closing Date”), Legacy Tigo acquired 100% of the equity interests of fSight. The results of fSight’s operations have been included in the condensed consolidated financial statements since the Acquisition Closing Date. fSight primarily focuses on developing and marketing a software as a service platform, based on artificial intelligence for the smart management of electrical energy. The acquisition expands the Company’s ability to leverage energy consumption and production data for solar energy producers, adding a prediction platform that provides actionable system performance data, from the grid down to the module level. The Company changed the name of fSight to Tigo Energy AI Ltd. in September 2024. Under the terms of the purchase agreement, total consideration amounted to $13.2 million which consisted of 5,598,751 shares of Legacy Tigo’s common stock (which represents 1,306,385 shares of Common Stock on an as-converted basis as a result of the Business Combination) issued at closing with a fair value of approximately $11.0 million, 737,233 shares of Legacy Tigo’s common stock (which represents 172,022 shares of Common Stock on an as-converted basis as a result of the Business Combination) with a fair value of approximately $1.4 million to be issued 12 months from closing and 368,617 shares of Legacy Tigo’s common stock (which represents 86,011 shares of Common Stock on an as-converted basis as a result of the Business Combination) with a fair value of approximately $0.7 million to be issued 18 months from closing (collectively with the shares to be issued at 12 months “Contingent Shares”). In addition to the consideration in the purchase agreement, there is an additional $0.5 million in consideration related to a loan that the Company issued to fSight prior to the Acquisition Closing Date, for a total consideration transferred of $13.7 million. The loan payable was deemed settled immediately following the Acquisition Closing Date. Pursuant to the terms of the purchase agreement, the Contingent Shares are subject to adjustment based on certain indemnification obligations, liabilities or settlements that may arise during the contingency period, which ends 18 months following the Acquisition Closing Date. During the year ended December 31, 2023, there was an adjustment recorded against the Contingent Shares related to an unrecorded liability that was not present as of the opening balance sheet date of January 25, 2023, and the number of Contingent Shares was adjusted downward by 5,745 shares to reflect this change. As of December 31, 2023, there was a total of up to 252,288 Contingent Shares that may be issued pursuant to the terms of the purchase agreement. The Contingent Shares were recorded as a liability at a fair value of approximately $2.1 million on the Acquisition Closing Date based on the fair value of Legacy Tigo’s common stock at the Acquisition Closing Date. The contingent shares liability is recorded in accrued expenses and other current liabilities within the condensed consolidated balance sheet. On January 25, 2024, consistent with the terms of the purchase agreement, the Company issued the 12-month tranche of Contingent Shares, 166,271 shares of its Common Stock, to certain former equity holders of fSight. At January 25, 2024, the liability was revalued to $0.4 million based upon the Company’s Common Stock fair value per share at that date. A mark-to-market gain of $0.2 million was recorded upon the remeasurement at January 25, 2024. Additionally, on July 25, 2024, consistent with the terms of the purchase agreement, the Company issued the 18-month tranche of Contingent Shares, 86,017 shares of its Common Stock, to certain former equity holders of fSight. At July 25, 2024, the liability was revalued to $0.1 million, and the Company recognized a mark-to-market expense of $3,000 related to the remeasurement upon issuance of the final tranche of Contingent Shares. As of September 30, 2024, there are no Contingent Shares outstanding. For the three months ended September 30, 2024, and 2023, the Company recognized a $3,000 mark-to-market expense and $3.0 million mark-to-market gain, respectively. For the nine months ended September 30, 2024, and 2023, the Company recognized a $0.2 million and $0.4 million mark-to-market expense, respectively. Mark-to-market expense and gains are recorded in the change in fair value of preferred stock warrant and contingent share liability financial statement line item within the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2024, and 2023. The transaction was accounted for as a business combination pursuant to ASC Topic 805, Business Combinations, using the acquisition method of accounting and in conjunction with the acquisition, Legacy Tigo recognized $47,000 and $0.2 million of acquisition-related costs during the three and nine months ended September 30, 2023. The Company did not incur any expense associated with acquisition-related costs during the three and nine months ended September 30, 2024. The acquisition-related costs, which were expensed as incurred, are recorded in general and administrative expenses on the condensed consolidated statement of operations and comprehensive loss. The assets acquired and liabilities assumed were recorded at fair value as follows (in thousands):
Consideration transferred: |  |  |
Fair value of common stock issued |  | $ | 10,974 |
Fair value of contingent shares |  |  | 2,167 |
Deemed settlement of loan payable |  |  | 527 |
Total consideration |  | $ | 13,668 |
Assets acquired: |  |  |
Cash and cash equivalents |  | $ | 55 |
Accounts receivable |  |  | 117 |
Property and equipment |  |  | 9 |
Developed technology |  |  | 1,820 |
Customer relationships |  |  | 170 |
Goodwill |  |  | 12,209 |
Total assets acquired |  | $ | 14,380 |
Liabilities assumed: |  |  |
Accounts payable |  | $ | 418 |
Accrued expenses |  |  | 294 |
Net assets acquired |  | $ | 13,668 |
Supplemental Pro Forma Information (Unaudited) The following table presents supplemental pro-forma information for the three and nine months ended September 30, 2023, as if the merger with fSight had occurred on January 1, 2022. These amounts have been calculated after applying the Company’s accounting policies and are based upon currently available information.
(in thousands) |  | Three Months Ended September 30, 2023 |  |  | Nine Months Ended September 30, 2023 |
Net revenue |  | $ | 17,104 |  |  | $ | 136,056 |
Net loss |  | $ | 29,056 |  |  | $ | 13,644 |
Supplemental Information of Operating Results The following table presents supplemental pro-forma information on the net revenue and net loss attributable to fSight included within the Company’s condensed consolidated statement of operations and comprehensive loss.
(in thousands) |  | Three Months Ended September 30, 2023 |  |  | Nine Months Ended September 30, 2023 |
Net revenue |  | $ | 156 |  |  | $ | 398 |
Net loss |  | $ | (374 | ) |  | $ | (931 | )

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