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Acquisitions | 9 Months Ended
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Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions Purigen Acquisition In November 2022, the Company completed the acquisition of Purigen Biosystems, Inc. for approximately $32.0 million in cash and up to an aggregate of $32.0 million in cash payable based on the achievement of certain milestones. Cash of $1.2 million will be held in an escrow fund for purposes of satisfying any post-closing purchase price adjustments and indemnification claims under the Purigen Merger Agreement. The acquisition was structured as a stock sale and therefore goodwill is non-tax deductible. The purchase price allocation for the acquisition of Purigen is preliminary and subject to revision as additional information about the fair value of assets and liabilities becomes available. As permitted under ASC 805, the Company is allowed a measurement period, which may not exceed one year, in which to complete its accounting for the acquisition. Per the terms of the Purigen Merger Agreement, the purchase price is still subject to adjustment for the final determination of deferred and current tax assets and liabilities. During the second quarter of 2023, the Company recorded an increase in the estimated return of cash to buyer from escrow in the amount of $5,000, with the offset recorded to goodwill. The following is the purchase price for the acquisition of Purigen:
Cash |  | $ | 32,034,000 |
Estimated fair value of milestone consideration |  | 12,970,000 |
Return of cash to buyer from escrow |  | (95,000) |
Total purchase price |  | $ | 44,909,000 |
The total purchase price was allocated to Purigen’s tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded as goodwill, as follows:
Cash & cash equivalents |  | $ | 290,000 |
Accounts receivable |  | 259,000 |
Inventory |  | 944,000 |
Prepaid expenses and other current assets |  | 184,000 |
Property and equipment, net |  | 805,000 |
Restricted cash |  | 400,000 |
Operating lease right-of-use assets |  | 1,636,000 |
Other long-term assets |  | 533,000 |
Intangible assets |  | 20,000,000 |
Goodwill |  | 22,646,000 |
Accounts payable and other accrued liabilities |  | (1,152,000) |
Operating lease liability (short-term and long-term) |  | (1,636,000) |
Net assets acquired |  | $ | 44,909,000 |
The acquisition date fair values of identifiable intangible assets acquired are as following:
Developed technology |  | $ | 18,800,000 |
Customer relationships |  | 200,000 |
Tradename |  | 1,000,000 |
Fair value of identifiable intangible assets |  | $ | 20,000,000 |
The Company uses the income approach to derive the fair value of the identified intangible assets acquired. This approach calculates fair value by estimating future cash flows attributable to the assets and then discounting these cash flows to a present value using a risk-adjusted discount rate. The customer relationships and trade name intangibles are being amortized on a straight-line basis over their estimated useful lives of 5 years. The developed technology intangible is being amortized on a straight-line basis over its estimated useful live of 15 years. Straight-line amortization was determined to be materially consistent with the pattern of expected use of the intangible assets. As the Company began integrating Purigen’s operations with its existing operations during the fourth quarter of 2022, it is not practical or meaningful to distinguish Purigen’s expenses or net income or loss from that of the combined operations. The Company recognized approximately $1.8 million of acquisition-related transaction costs for the acquisitions of Purigen, including financial advisor fees, legal expenses and accounting fees for the year ended December 31, 2022. These costs were included in the consolidated statement of operations in selling, general and administrative expense. Pro forma Financial Information The unaudited pro forma financial information in the table below summarizes the combined results of operations for the Company and Purigen as if the companies had been combined as of the beginning of the year prior to the acquisition. These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Purigen to reflect the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied at the beginning of the year prior to the acquisition. The following unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved as if the acquisition had taken place as of January 1, 2021.
|  | Three Months Ended September 30 |  | Nine Months Ended September 30,
| 2022 |  | 2022
Revenue |  | $ | 7,667,000 |  |  | $ | 21,119,000 |
Net loss |  | (33,584,000) |  |  | (100,101,000) |
Basic and diluted net loss per share |  | $ | (1.16) |  |  | $ | (3.49) |

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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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