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Acquisition of Inside Out Solutions, LLC | 12 Months Ended
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Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisition of Inside Out Solutions, LLC | Acquisition of InsideOut Solutions, LLC On December 1, 2022 (the “Closing Date”), we purchased substantially all of the assets (the “Transaction”) of InsideOut Solutions, LLC, a Florida limited liability company (“InsideOut”), for an aggregate purchase price of approximately $7.5 million (the “Purchase Price”) pursuant to an asset purchase agreement, dated as of December 1, 2022, by and between Harte Hanks and InsideOut (the “Asset Purchase Agreement”). The acquisition of InsideOut further expands our capabilities into premium sales enablement within the customer care segment and strengthens our ability to drive profitable revenue growth within our sales enablement offerings, including: (i) demand generation which creates qualified marketing leads for our clients, and (ii) inside sales offerings to further promote a client’s internal growth objectives. Pursuant to the Asset Purchase Agreement, $5.75 million of the Purchase Price was paid in cash at closing, $1.0 million in cash was placed in escrow to satisfy indemnification obligations, and earn-outs related to future revenue performance. Separately, $0.75 million of the Purchase Price was paid at closing in 70,956 shares of Harte Hanks common stock. The share amount was based on the volume weighted closing price over the 15 trading days ending on November 28, 2022. In the year ended December 31, 2023, InsideOut didn't meet the performance requirement to earn the 1st installment of $0.5 million of the $1.0 million in escrow. As a result, $0.50 million was refunded from the escrow account and our goodwill amount was decreased by $0.5 million. The remaining $0.5 million cash in escrow account is included in other assets in our balance sheet as of December 31, 2023. The acquisition was accounted for under the acquisition method of accounting with the Company treated as the acquiring entity. Accordingly, the consideration paid by the Company to complete the acquisition has been recorded to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition. The carrying values for current assets and liabilities were deemed to approximate their fair values due to the short-term nature of these assets and liabilities. The following table shows the amounts recorded as of their acquisition date.
in thousands |  | Amount
Accounts receivable |  | $1,445 |
Prepaid expenses |  | 148 |
Property, plant and equipment |  | 177 |
Total assets acquired |  | 1,770 |
Less: Current liabilities assumed |  | (761) |
Net assets acquired |  | $1,009 |
The Purchase Price was subject to a post-closing net working capital true-up. The true up made was immaterial. We recognized $3.6 million of intangible assets and $2.4 million of goodwill associated with this acquisition. The amount of goodwill recorded reflects expected earning potential and synergies with our Customer Care segment. We are amortizing the intangible assets on a straight-line basis over its useful life of five years. A summary of the Company’s intangible asset as of December 31, 2023, is as follows:
In thousands |  | Weighted Average Amortization Period |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Customer Relationships |  | 5 years |  | $ | 3,600 |  |  | $ | 780 |  |  | $ | 2,820 |
Estimated future amortization expense related to intangible assets as of December 31, 2023, is as follows:
In thousands |  |
Year Ending December 31, |  | Amount
2024 |  | $ | 720 |
2025 |  | 720 |
2026 |  | 720 |
2027 |  | 660 |
Total |  | $ | 2,820 |
The Company's results of operations for the year ended December 31, 2023 includes revenue of $9.7 million from the InsideOut operation.

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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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