Business Combinations

Komand, Inc.

On July 12, 2017, we acquired 100% of the outstanding equity of Komand, Inc. (Komand) for total cash consideration of $14.8 million. We expensed the related acquisition costs of $0.2 million in general and administrative expense.

The following table summarizes the cash consideration paid for Komand and the preliminary allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date (in thousands):



Cash consideration	$	14,781

Recognized amount of identifiable assets acquired and liabilities assumed:
Net working capital	(21		)
Deferred tax liability	(2,632		)
Intangible assets	9,380
Total identifiable net assets assumed	6,727
Goodwill	8,054
Total purchase price allocation	$	14,781

The fair value of the identifiable intangible asset was based on a valuation using a combination of the income and cost approaches. The estimated fair value and useful life of the identifiable intangible asset was as follows:



	Amount		Weighted Average Amortization Life (years)
	(in thousands)
Developed technology	$	9,380	5
Identifiable intangible assets	$	9,380

The excess of the purchase price over the tangible assets acquired, identifiable intangible asset acquired and assumed liabilities was recorded as goodwill. We believe that the amount of goodwill reflects the expected synergistic benefits of being able to leverage the integration of our existing product offerings and services with the products and technology acquired in connection with our acquisition of Komand and to successfully market and sell these new products to our customer base. The goodwill was allocated to our one reporting unit. The acquired goodwill and intangible asset will not be deductible for tax purposes. Accordingly, a $2.6 million deferred tax benefit was recorded resulting from a partial release of our valuation allowance to account for the creation of a deferred tax liability for the developed technology intangible asset acquired which is not deductible for tax purposes.

These preliminary amounts are subject to subsequent adjustment as we obtain additional information to finalize certain components of working capital.

Following the acquisition, certain retained employees of Komand (i) received an aggregate of 295,600 RSUs which will vest over four years and (ii) shall be eligible for an aggregate of up to $5.0 million of incentive payments contingent on achievement of certain milestones within four years of the acquisition date. The vesting of the RSUs and eligibility to receive the incentive payments are each subject to the employee's continued service with us. Accordingly, compensation expense associated with the RSUs and incentive payments will be expensed as incurred in our post-acquisition financial statements.

Proforma results of operations have not been included, as the acquisition of Komand was not material to our results of operations for any periods presented.

RevelOps, Inc.

On October 13, 2015, we acquired 100% of the outstanding equity of RevelOps, Inc. (d/b/a Logentries) for total consideration of $68.1 million. We made an initial payment of $36.2 million in cash, issued 1,252,627 shares of our common stock with an aggregate fair value of $27.4 million, inclusive of a discount from the quoted market price due to certain trading restrictions associated with the shares, and issued vested replacement options with respect to 221,759 shares of our common stock to certain continuing employees with an aggregate fair value of $4.5 million upon the closing of the acquisition. The fair value of the vested replacement options included in the purchase price was based on the fair value of the vested Logentries options on the acquisition date. The excess fair value when comparing the fair value of the new vested replacement options and the vested Logentries options of $0.3 million was expensed immediately in the post-combination financial statements of the combined entity.

The assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The excess of the purchase price over the assets acquired and liabilities assumed was recorded as goodwill. The fair value of goodwill, intangible assets and net tangible assets were $59.2 million, $9.4 million and $(0.5) million, respectively.

NT OBJECTives, Inc.

On April 30, 2015, we acquired 100% of the outstanding equity of NT OBJECTives, Inc. (NTO) for total consideration of $6.1 million. We made an initial cash payment of $3.4 million and issued 9,091 shares of our common stock with an aggregate fair value of $0.1 million upon the closing of the acquisition. We were also obligated to pay $0.1 million in cash for the settlement of a working capital adjustment and make two additional payments of $1.5 million each, less the amount of any indemnity claims. The net present value of these two additional payments, or $2.5 million, was included in the total purchase consideration paid. In December 2016, we paid the first of the two additional payments of $1.5 million, as well as the $0.1 million working capital adjustment. In April 2017, we made the second payment of $1.0 million which was a negotiated settlement of the original $1.5 million amount due as a result of certain indemnity claims made.

The assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The excess of the purchase price over the assets acquired and liabilities assumed was recorded as goodwill. The fair value of goodwill, intangible assets and net tangible assets were $4.6 million, $2.1 million and $(0.6) million, respectively.

In May 2015, we entered into loan agreements with certain retained employees of NTO in the aggregate amount of $0.5 million. The terms of these agreements required the employees to pay us the total amount borrowed, with accrued interest at 1.7% per annum, within 18 months of the agreement date. The loan agreements were secured by restricted stock awards granted to the employees. The loans were repaid in full.