Business Combinations |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Business Combinations xtraCHEF On June 8, 2021, we acquired 100% of the outstanding capital stock of xtraCHEF, Inc., or xtraCHEF, a provider of restaurant-specific invoice management software that automates the accounts payable and inventory workflow and improves efficiencies related to expense tracking and recording. The acquisition is expected to expand our product portfolio and enable our customers to improve operational efficiencies and financial decision making. The aggregate purchase price, net of cash acquired of $1, was subject to normal and customary purchase price adjustments and was as follows on the acquisition date:
(1)The amount includes the indemnity funds related to the seller's satisfaction of potential indemnity claims that may be released to the sellers no later than 15 months following the acquisition date, as well as a cash payment related to working capital, subject to further working capital adjustments, that will be released to the sellers or remitted back to us no later than 12 months following the acquisition date. In consideration for the acquisition of xtraCHEF, we issued 569,400 shares of common stock to the seller shareholders with a fair value of $26.10 per share on the acquisition date supported by a contemporaneous valuation. Additionally, we settled an immaterial amount of option awards that were subject to accelerated vesting on the acquisition date. Total consideration transferred for the settled option awards consisted of cash consideration of $3 and deferred consideration of $1, which included the indemnity fund, the working capital fund and the fair value of contingent consideration. The consideration transferred for the settled option awards of $3 approximated the estimated fair value of the settled option awards on the acquisition date, of which $1 was attributable to pre-acquisition services and included in the purchase price. The remaining amount of $2 was recorded as a stock-based compensation expense on the acquisition date within "General and administrative" expenses in our Consolidated Statements of Operations. The fair value of contingent consideration of $2 on the acquisition date was estimated based on a Monte Carlo simulation and recorded as a liability in the Consolidated Balance Sheets. Contingent consideration liability was $5 at December 31, 2021. Contingent consideration is based on a cumulative achievement of certain recurring revenue targets, as defined in the acquisition agreement, and represents a potential obligation by us to pay cash and issue shares of our common stock to the former xtraCHEF shareholders up to a certain amount based on the achievement of the required revenue targets during the years ended December 31, 2021 and 2022. The contingent consideration obligation is limited to a maximum payment amount of $7. The liability of $6 related to the indemnity fund will be released to the sellers, to the extent there were no claims for indemnification by us against the fund, no later than 15 months following the acquisition date. As of December 31, 2021, contingent consideration liability consists of a current portion of $4 and a long-term portion of $1 which were included within “Accrued expenses and other current liabilities“ and “Other long-term liabilities” in the Consolidated Balance Sheets. We accounted for the acquisition as a business combination in accordance with provisions of ASC 805, Business Combinations, or ASC 805. The operating results of xtraCHEF have been reflected in our results of operations from the date of the acquisition. We used a market participant approach to record the assets acquired and liabilities assumed in the xtraCHEF acquisition. Due to the timing of the acquisition, the accounting for this acquisition was not complete as of December 31, 2021. The fair values of the assets acquired and the liabilities assumed have been determined provisionally and are subject to adjustment as we obtain additional information. In particular, additional time is needed to review and finalize the results of the valuation of assets acquired and liabilities assumed. Any adjustments to the purchase price allocation will be made as soon as practicable, but no later than one year from the acquisition date. Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired. Goodwill was primarily the result of expected synergies from combining the operations of xtraCHEF with our operations and was not deductible for tax purposes. The following table summarizes the allocation of the preliminary purchase price and the amounts of assets acquired and liabilities assumed for the acquisition based upon their estimated fair values at the date of acquisition. Such balances are reflected in the Consolidated Balance Sheets as of December 31, 2021:
The developed technology and the customer relationships intangible assets of $13 and $1, respectively, have a weighted average amortization period of 10 years and 6 years, respectively, on the acquisition date. We used the income approach in accordance with the relief-from-royalty method to estimate the fair value of the developed technology which is equal to the present value of the after-tax royalty savings attributable to owning the intangible asset. Fair value of the customer relationships was estimated based on the income approach in accordance with the excess-earnings method which is equal to the present value of the after-tax cash flows attributable to the intangible asset only. During the year ended December 31, 2021, we incurred acquisition-related expenses of $1 in connection with the acquisition of xtraCHEF which were recorded in "General and administrative" expenses in our Consolidated Statements of Operations. We did not present proforma financial information for our consolidated results of operations for the year ended December 31, 2021 and 2020 as if the acquisition of xtraCHEF occurred on January 1, 2020 because such results were not material. Revenue and result of operations from xtraCHEF were not material to our consolidated revenue and consolidated net loss during the year ended December 31, 2021. StratEx On July 17, 2019, we acquired 100% of the outstanding shares of StratEx HoldCo, LLC, or StratEx, a technology company that offers payroll services. The acquisition of StratEx enabled us to integrate payroll services to our existing point of sale product offering creating a cohesive solution for restaurant labor and payroll management. The purchase consideration directly paid to shareholders consisted of $36 in cash and 543,300 shares of our common stock with a fair value of $3. Third-party acquisition-related costs were $1. The results of StratEx’s operations have been included in the consolidated financial statements since the closing date. The following table summarizes the consideration paid for StratEx and the fair value of the assets acquired, and liabilities assumed at the closing date:
Goodwill from the StratEx acquisition was primarily attributable to the value of the expected synergies created by incorporating StratEx solutions into our point-of-sale platform and the value of the assembled workforce. Goodwill was not deductible for tax purposes. The acquisition of StratEx did not have a material impact on our reported revenue or net loss amounts. Accordingly, pro forma financial information has not been presented. In connection with the acquisition of StratEx, certain individual stockholders continuing employment at the Company were eligible to receive earn-out bonuses of up to $7 in aggregate based on the achievement of defined financial metrics for specified periods of time in the three-year period following the acquisition. The rights to such payments were tied to continuing employment at the Company and, as such, were considered compensatory and expected payments were accrued over the requisite service period. As of December 31, 2021, 2020, and 2019, we have concluded that we do not expect to pay the earn-out bonuses and hence no accrual was recorded.
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