On February 26, 2021 the Company acquired 100% of the issued and outstanding shares of HealthMode Inc. (“HealthMode”), a developer of technologies using Artificial Intelligence (AI)-enabled digital measurement to increase the precision and speed of clinical research and patient monitoring. The Company plans to utilize these technologies in its clinical trials to enhance the quality of the data that is collected during the Company’s clinical trials.

The consideration paid for the acquisition of HealthMode was $27.6 million, and consisted of $0.5 million cash, 81,497 Multiple Voting Shares (equivalent to 8,149,700 Subordinate Voting Shares), valued at approximately $27.0 million based upon the closing price of the Company's Subordinate Voting Shares on the acquisition date, and $0.1 million in stock options (33,619 stock options), which are convertible into Subordinate Voting Shares of the Company. The Company incurred acquisition costs of $0.3 million in connection with the acquisition, primarily related to legal, accounting, and other professional services, which were recorded to general and administrative expense in the accompanying consolidated statements of operations and comprehensive loss.

The Company recognized this transaction as a business combination. The Company recognized approximately $9.5 million of identifiable finite-lived intangible assets and $19.9 million of goodwill related to the acquisition of HealthMode. The identifiable finite-lived intangible assets are expected to be amortized over their useful lives which are estimated to be three years.

The following table sets forth the allocation of the purchase price to the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed, with the excess recorded to goodwill (in thousands):


Cash	$	178
Prepaid and other current assets		75
Property and equipment		15
Intangible assets (developed technology)		9,485
Goodwill		19,918
Total assets	$	29,671
Accounts payable and accrued expenses		880
Deferred tax liability		1,157
Total liabilities	$	2,037
Net assets acquired	$	27,634

Actual and pro forma results for this acquisition have not been presented as the financial impact to the Company’s consolidated statement of operations is not material.

The goodwill is attributable to the value of the assembled workforce, and the related expertise and developed business function. Further, the acquisition is expected to allow the Company streamline its product development processes. None of the goodwill is expected to be deductible for tax purposes.

On February 27, 2020, the Company announced the completion of its reverse acquisition (the “Transaction”) which was accounted for as a reverse recapitalization, pursuant to the terms of an arrangement agreement entered into on October 15, 2019 (the “Arrangement”) between Broadway, Madison Metals Inc., Broadway Delaware Subco Inc. (“Delaware Subco”) and MindMed US. The Transaction does not constitute a business combination as Broadway does not meet the definition of a business under ASC 805 – Business Combinations. Immediately after the Transaction, shareholders of MindMed US owned 97% of the voting rights of Broadway. As a result, the Transaction has been accounted for as a capital transaction with MindMed US being identified as the accounting acquirer and the equity consideration being measured at fair value. Any excess value of the consideration transferred as compared to the net assets acquired was recorded as within additional paid-in capital on the Company's consolidated balance sheets.

The consideration consisted entirely of shares of the MindMed US which were measured at the estimated fair value on the date of acquisition. The fair value of the Subordinate Voting Shares issued to the former Broadway shareholders was determined to be $1.5 million based on the acquisition date fair value of the shares issued. The Company incurred share issuance costs of $0.4 million in connection with the acquisition, which were recorded as a reduction to additional paid-in capital.

The following table sets forth the allocation of the purchase price to the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed (in thousands, except per share amounts):


Subordinate Voting Shares of the Company issued		6,232,525
Fair value of shares issued @CAD$0.33 (USD $0.247) per share	$	1,539
Total purchase price		1,539
Identifiable assets and liabilities acquired:
Assets
Prepaid expenses and other current assets		23
Total assets		23
Liabilities
Accounts payable and accrued expenses		261
Total liabilities		(261	)
Net liabilities acquired		238

Excess of consideration transferred over net assets acquired	$	1,777