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Business Combinations (Tables)

9 Months Ended

Sep. 30, 2021

Business Acquisition [Line Items]

Summary of identifiable intangible assets and related expected lives for finite-lived intangible assets

The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets (in thousands):


Category		Estimated life (in years)		Fair value
Finite-lived intangible assets
Market-related intangibles		5		$	1,700
Customer relationships		5			8,950
Developed technology		12			2,600
Covenants to non-compete		2			115
Indefinite-lived intangible assets
In-process research and development		N/A			700
Total identifiable intangible assets acquired				$	14,065

Business Acquisition [Line Items]

Summary of Fair Value of Purchase Consideration

The following table summarizes the fair value of purchase consideration to acquire NimbeLink (in thousands):


Cash		$	15,991
Deferred payments(1)			728
Contingent consideration(2)			5,986
Replacement options(3)			40
Total purchase consideration		$	22,745

(1) The fair value of the holdback payment was determined by discounting to present value, payments totaling $0.7 million expected to be made to NimbeLink fifteen months after the close of the transaction.

(2) The fair value of contingent consideration is based on applying the Monte Carlo simulation method to forecast achievement under various contingent consideration events which may result in up to $8 million in payments subject to the acquired business’s satisfying certain revenue targets in 2021. Key inputs in the valuation include forecasted revenue, revenue volatility and discount rate. Underlying forecast mathematics were based on Geometric Brownian Motion in a risk-neutral framework and discounted back to the applicable period in which the accumulative thresholds were achieved at discount rates commensurate with the risk and expected payout term of the contingent consideration.

(3) Represents the pre-combination stock compensation expense for replacement options issued to NimbeLink employees.

Summary of Assets Acquired and Liabilities Assumed at Fair Value

The following is an allocation of purchase price as of the closing date based upon a preliminary estimate of the fair value of the assets acquired and liabilities assumed by the Company in the acquisition (in thousands):


Cash		$	1,806
Accounts receivable			1,127
Inventory			1,671
Prepaids and other current assets			141
Property and equipment			151
Right of use assets			402
Other assets			194
Identified intangible assets			14,065
Accounts payable			(654	)
Accrued compensation			(139	)
Accrued expenses and other current liabilities			(432	)
Short-term lease liabilities			(78	)
Long-term lease liabilities			(324	)
Deferred tax liabilities			(2,330	)
Identifiable net assets acquired			15,600
Goodwill			7,145
Total purchase price		$	22,745

Summary of Unaudited Pro forma Revenue and Income (loss)

The following unaudited pro forma financial information presents the combined results of operations for each of the periods presented as if the NimbeLink acquisition had occurred at the beginning of 2020 (in thousands):


		Three months ended September 30,								Nine months ended September 30,
		2021				2020				2021				2020
Net revenue - pro forma combined		$	15,455			$	15,323			$	50,161			$	45,244
Net loss - pro forma combined			(3,069	)			(1,140	)			(5,442	)			(3,988	)

The following adjustments were included in the unaudited pro forma combined net revenues (in thousands):


		Three months ended September 30,								Nine months ended September 30,
		2021				2020				2021				2020
Net revenue		$	15,455			$	13,010			$	50,129			$	35,672
Add: Net revenue - acquired businesses			—				2,313				32				9,572
Net revenues - pro-forma combined		$	15,455			$	15,323			$	50,161			$	45,244

The following adjustments were included in the unaudited pro forma combined net income (loss) (in thousands):


		Three months ended September 30,								Nine months ended September 30,
		2021				2020				2021				2020
Net income (loss)		$	(3,069	)		$	(261	)		$	(5,441	)		$	(2,199	)
Add: Results of operations of acquired business			—				(338	)			(310	)			228
Less: pro forma adjustments
Amortization of historical intangibles			—				26				—				73
Amortization of acquired intangibles			—				(583	)			(38	)			(1,800	)
Inventory fair value adjustments			—				—				353				(353	)
Interest income			—				—				(6	)			—
Interest expense			—				16				—				63
Net loss - pro forma combined		$	(3,069	)		$	(1,140	)		$	(5,442	)		$	(3,988	)