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Acquisitions | 12 Months Ended
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Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions Avast Family Safety Mobile Business On April 16, 2021, the Company acquired the Family Safety Mobile Business from Avast pursuant to a Membership Interest and Asset Purchase Agreement (the “Purchase Agreement”). The following table summarizes the consideration paid for the Family Safety Mobile Business in 2021 (in thousands):
Fair value of assets acquired | $ | 74,818 |
Fair value of liabilities assumed | 2,085 |
Total purchase price | $ | 72,733 |
Components of purchase price: |
Cash | $ | 63,216 |
Common stock | 8,381 |
Contingent consideration | 1,136 |
Total purchase price | $ | 72,733 |
The Company’s allocation of the purchase price is summarized as follows (in thousands):
Assets: |
Cash | $ | 6,351 |
Accounts receivable | 6,225 |
Prepaid expenses | 513 |
Fixed assets | 921 |
Intangible assets | 38,033 |
Goodwill | 22,775 |
Total assets | $ | 74,818 |
Liabilities: |
Accounts payable | $ | 392 |
Accrued payroll and benefits | 1,662 |
Accrued expenses | 31 |
Total liabilities | $ | 2,085 |
Total purchase price | $ | 72,733 |
The Purchase Agreement included an earn-out provision that provided for additional future payments to Avast aggregating up to $14.0 million. Approximately $1.1 million of the earn-out consideration was included in the original purchase price allocation and valued based upon a percentage of the projected revenue stream from a specified contract utilizing a discounted cash flow method. During the third quarter of 2021, the Company recorded the remaining $12.9 million as a charge to operating expenses due to a contract extension becoming probable with a given customer designated in the earn-out provision, resulting in an increase in the contingent consideration due to Avast. In November 2021, the remainder of the earn-out was paid in full and no further earn-out payments will be due in the future. The goodwill recognized was attributable primarily to expected synergies and the assembled workforce of the Family Safety Mobile Business. The goodwill is deductible for income tax purposes. The purpose of the Family Safety Mobile Business acquisition was to acquire a portfolio of mobile family safety services including location features, content filtering and screen time management, cementing Smith Micro as a leader in delivering mobile family safety software solutions to wireless carriers and to further expand Smith Micro’s white-label digital safety solutions, positioning the Company as a leading family safety software-as-a-service provider globally while adding critical headcount in the U.S. and Europe.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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