ACQUISITIONS (Tables)

6 Months Ended

Jun. 30, 2022

ACQUISITIONS

Schedule of purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date

( in thousands)	Balance at March 9, 2022
Assets purchased:
Cash	$	398
Accounts receivable		437
Other assets		29
Client relationships (1)		3,600
Internally-developed software (1)		700
Trade name (1)		50
Goodwill (2)		3,616
Total assets purchased		8,830
Liabilities assumed:
Accounts payable and accrued liabilities		7
Deferred revenue		1,040
Total liabilities assumed		1,047
Net assets acquired		7,783
Consideration:
Cash paid		5,132
Contingent consideration liability (3)		2,651
Total consideration	$	7,783

(1) Acquired intangible assets will be amortized on a straight-line basis over their estimated useful lives of 2 to 7 years. In the six months ended June 30, 2022, amortization expense associated with these acquired intangible assets totaled $221,000.

(2) Goodwill represents the excess of purchase price over the estimated fair value of net tangible and intangible assets acquired.

(3) The fair value of the contingent consideration liability was determined using the Monte-Carlo simulation. The key assumptions used in the Monte-Carlo simulation were as follows: non-recurring and recurring revenue metrics for the earn-out periods, non-recurring revenue discount rate of 11.75%, recurring revenue discount rate of 10.75%, expected revenue volatility of 28.83%, risk-free rate of 2.84%, buyer specific discount rate of 12.35%, and discount periods of 0.7 year and 1.91 year. The change in the fair value of contingent consideration was $158,000 from the date of BOIA acquisition, March 9, 2022, to the end of the quarter, June 30, 2022, and is included in General and administrative in the accompanying Statement of Operations. The balance of contingent consideration is subject to further change in subsequent periods through settlement based on actual and estimated non-recurring and recurring revenues from the BOIA offering relative to certain thresholds, as well as adjustments for discount periods, discount rates, risk-free rate, volatility, and buyer specific discount rate.

Schedule of unaudited pro forma results of operations

	Pro Forma Combined Financials (unaudited)
	Three months ended June 30,				Six months ended June 30,
( in thousands)	2022		2021		2022		2021
Revenue	$	7,569	$	6,692	$	15,138	$	13,019
Net loss attributed to common shareholders		(2,568)		(1,814)		(5,834)		(4,725)