The Company continually evaluates potential acquisitions that either strategically fit within the Company’s existing portfolio or expand the Company’s portfolio into new product lines or adjacent markets. The Company has completed a number of acquisitions that have been accounted for as business combinations and have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill includes the know-how of the assembled workforce, the ability of the workforce to further improve technology and product offerings, customer relationships and the expected cash flows resulting from these efforts. Goodwill may also include expected synergies resulting from the complementary strategic fit these businesses bring to existing operations. The business acquisition discussed below is included in the Company’s results of operations from their respective dates of acquisition.

On April 1, 2019, the Company entered into a Stock Purchase Agreement with Mission Mode Solutions, Inc. (“Mission Mode”) pursuant to which the Company purchased all of the issued and outstanding shares of stock of Mission Mode for base consideration of $6.8 million. There is also a contingent payment of up to $1.0 million that can be earned in addition to the base consideration by the sellers based on successfully converting Mission Mode’s customers to the Company’s products. At the date of the acquisition, the Company preliminarily assessed the probabilities of Mission Mode meeting the future sales and billing thresholds and determined them to be probable. Therefore, contingent consideration was recorded as part of the purchase price allocation and the preliminary fair value of the contingent consideration was determined to be $0.6 million. The Company’s acquisition of Mission Mode was made primarily to expand the Company’s customer base and to a lesser extent to complement some of the existing facets of Mission Mode’s business with the Company’s existing products.

The Company accounted for the acquisition of Mission Mode using the acquisition method of accounting for business combinations under FASB Accounting Standards Codification (“ASC”) 805, Business Combinations. The total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date.

Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives and the expected future cash flows and related discount rates, can materially impact the Company’s results of operations. Significant inputs used for the model included the amount of cash flows, the expected period of the cash flows and the discount rates.

The following table summarizes the allocation of the purchase consideration and the estimated fair value of the assets acquired and the liabilities assumed as well as the aggregate consideration during the three months ended June 30, 2019 for the acquisition of Mission Mode made by the Company (in thousands):

	Mission Mode
Assets acquired
Accounts receivable	$	295
Other assets		7
Property and equipment		6
Trade names		220
Acquired technology		310
Customer relationships		4,600
Goodwill		2,918
Total assets acquired		8,356
Liabilities assumed
Accounts payable and accrued expenses		152
Deferred revenue		880
Other liabilities		10
Net assets acquired	$	7,314
Consideration paid
Cash paid, net of cash acquired	$	6,764
Contingent consideration		550
Total	$	7,314

The weighted average useful life of all identified acquired intangible assets is 6.90 years. The weighted average useful lives for acquired technologies, customer relationships and trade names are 3.0 years, 7.0 years and 1.0 year, respectively. Identifiable intangible assets with definite lives are amortized over the period of estimated benefit using the straight-line method and the estimated useful lives of one to seven years. The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible assets.

As a result of the acquisition, the Company recorded $2.9 million of goodwill. The goodwill balance is primarily attributed to the anticipated synergies from the acquisition and expanded market opportunities with respect to the integration of Mission Mode’s products with the Company's other solutions. The Company believes that the factors listed above in relation to the purchase of Mission Mode support the amount of goodwill recorded as a result of the purchase price paid for the acquisition, in relation to other acquired tangible and intangible assets. The resulting goodwill from the Mission Mode acquisition is not deductible for income tax purposes.

For the nine months ended September 30, 2019, the Company incurred transaction costs of $0.1 million in connection with the Mission Mode acquisition, which were expensed as incurred and included in general and administrative expenses within the accompanying consolidated statements of operations.

Neither the investment in the assets nor the results of operations of the acquisition of Mission Mode was significant to the Company’s consolidated financial position or results of operations, and thus pro forma information is not presented.

On July 29, 2019, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with NC4 Inc., NC4 Public Sector LLC, and Celerium Group Inc., pursuant to which the Company purchased all of the outstanding membership interests of NC4 Inc. and NC4 Public Sector LLC (collectively, “NC4”) for total consideration of approximately $84.5 million. The Company paid approximately $51.7 million in cash at closing from the Company’s cash and cash equivalents, which is subject to certain post-closing net working capital adjustments provided for in the Purchase Agreement. The remaining purchase price was paid with 320,998 newly issued shares of the Company’s common stock. On the date of this acquisition the price of the Company’s common stock on the Nasdaq Global Market was $102.18 price per share. On August 1, 2019, the Acquisition was consummated pursuant to the Purchase Agreement, except the transfer of the NC4 Public Sector business which was consummated on September 30, 2019. The Company determined that the two transactions should be accounted for as a single transaction in accordance with ASC 810-10-40-6, Consolidation, as the transactions were entered in contemplation of one another and were essentially a single transaction designed to achieve an overall commercial effect. The Company’s acquisition of NC4 was made primarily to expand the Company’s customer base and to a lesser extent to complement some of the existing facets of NC4’s business with the Company’s existing products.

The Company accounted for the acquisition of NC4 using the acquisition method of accounting for business combinations under ASC 805. Acquired assets and liabilities were recorded at their estimated fair values as of the acquisition date.

As the Company finalizes their estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months). Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives and the expected future cash flows and related discount rates, can materially impact the Company’s results of operations. Significant inputs used for the model included the amount of cash flows, the expected period of the cash flows and the discount rates. The finalization of the acquisition accounting valuation assessment may result in a change in the valuation of accounts receivable, deferred tax assets and liabilities, deferred revenue, and intangible assets, which could have a material impact on the Company’s results of operations and financial position. The initial accounting is incomplete as of September 30, 2019 for the acquired assets and liabilities noted above as the Company is currently in process of completing the assessment of valuation inputs and assumptions as well as completing the assessment of the tax attributes of the business combination.

The following table summarizes the preliminary estimated fair value of the assets acquired and the liabilities assumed as well as the aggregate consideration during the three months ended September 30, 2019 for the acquisition of NC4 made by the Company (in thousands):

	NC4
Assets acquired
Accounts receivable	$	2,611
Other current assets		530
Property and equipment		75
Acquired technology		5,210
Trade names		8,610
Customer relationships		35,490
Goodwill		40,424
Total assets acquired		92,950
Liabilities assumed
Deferred revenue		7,540
Other current liabilities		917
Net assets acquired	$	84,493
Consideration paid
Cash paid	$	51,655
Fair value of common stock issued		32,838
Total	$	84,493

The weighted average useful life of all identified acquired intangible assets is 5.88 years. The average useful lives for acquired technologies, customer relationships and trade names are 3.0 years, 7.0 years and 3.0 years, respectively. Identifiable intangible assets with definite lives are amortized over the period of estimated benefit using the straight-line method and the estimated useful lives of three to seven years. The straight-line method of amortization represents the Company’s best estimate of the period of expected cash flows of the identifiable intangible assets.

As a result of the acquisition, the Company recorded $40.4 million of goodwill. The goodwill balance is primarily attributed to the anticipated synergies from the acquisition and expanded market opportunities with respect to the integration of NC4’s products with the Company's other solutions. The Company believes that the factors listed above in relation to the purchase of NC4 support the amount of goodwill recorded as a result of the purchase price paid for the acquisition, in relation to other acquired tangible and intangible assets. The resulting goodwill from the NC4 acquisition is deductible for income tax purposes.

For both the three and nine months ended September 30, 2019, the Company incurred transaction costs of $0.2 million in connection with the NC4 acquisition, which were expensed as incurred and included in general and administrative expenses within the accompanying consolidated statements of operations.

The following tables reflect the results of acquired business included in our unaudited financial information for the three months ended September 30, 2019 as well as the unaudited pro forma combined results of operations for the three and nine months ended September 30, 2019 and the three and nine months ended September 30, 2018 as if the acquisition of NC4 had taken place on January 1, 2018. The unaudited pro forma financial information includes the effects of certain adjustments, including the amortization of acquired intangible assets and the associated tax effect and the elimination of the Company’s and the acquiree’s non-recurring acquisition related expenses (in thousands, except per share amounts):

	Revenue		Net loss
From the acquisition date to September 30, 2019	$	2,040	$	(1,465	)
For the three months ended September 30, 2019 pro forma		54,352		(13,387	)
For the nine months ended September 30, 2019 pro forma		154,719		(45,875	)
For the three months ended September 30, 2018 pro forma		43,037		(11,543	)
For the nine months ended September 30, 2018 pro forma		116,838		(48,652	)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2019

2018

2019

2018

Basic and diluted loss per share pro forma

(0.40

)

(0.39

)

(1.38

)

(1.66

)

The unaudited pro forma information presented does not purport to be indicative of the results that would have been achieved had the acquisition been consummated at January 1, 2018 nor of the results which may occur in the future. The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable.

For the year ended December 31, 2018, the Company acquired Unified Messaging Systems ASA, PlanetRisk, Inc. and Respond B.V. and accounted for the acquisitions using the acquisition method of accounting for business combinations under ASC 805. The acquisitions were not material individually or on a consolidated basis.

On April 3, 2018, the Company acquired Unified Messaging Systems ASA (“UMS”) in exchange for cash consideration of $31.9 million, net of cash acquired. UMS is an industry leader in the area of critical communication and population alerting systems and is headquartered in Oslo, Norway. The Company acquired UMS for its customer base and to complement some of the existing facets of UMS’ business with the Company’s existing products.

On May 1, 2018, the Company acquired certain assets from PlanetRisk, Inc. (“PlanetRisk”) in exchange for cash consideration of $2.0 million. PlanetRisk is a provider of data analytics and visualization solutions. The Company acquired these assets from PlanetRisk for its customer base and to complement some of the existing facets of PlanetRisk’s business with the Company’s existing products.

On May 18, 2018, the Company acquired Respond B.V. (“Respond”) in exchange for current cash consideration of $2.0 million, net of cash acquired and issued a note to be paid one year after the transaction date in the amount of $0.4 million, for a total purchase price of $2.3 million. Respond is a provider of critical communication solutions and is headquartered in the Netherlands. The Company acquired Respond for its customer base and to complement some of the existing facets of Respond’s business with the Company’s existing products.

For the three and nine months ended September 30, 2018, the Company incurred transaction costs of $0.3 million and $0.6 million, respectively, in connection with the UMS, PlanetRisk and Respond acquisitions, which were expensed as incurred and included in general and administrative expenses within the accompanying consolidated statements of operations.

Neither the investment in the assets nor the results of operations of the acquisition of UMS, PlanetRisk and Respond was significant to the Company’s consolidated financial position or results of operations, and thus pro forma information is not presented.