Acquisition

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisition

Acquisition

In September 2021, Heliogen acquired 100% of the equity interests of HelioHeat GmbH (“HelioHeat”), a private limited liability company in Germany engaged in the development, planning and construction of renewable energy systems and components, including a novel solar receiver (the “HelioHeat Acquisition”).

The components of the fair value of consideration transferred are as follows ($ in thousands):

Cash paid at closing(1)	$	1,714
Contingent consideration(2)	2,009
Settlement of pre-existing relationship	45
Total fair value of consideration transferred	$	3,768

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(1)Includes $0.5 million of cash paid to an escrow that becomes payable to the selling shareholders of HelioHeat to the extent the funds are not used to offset certain costs incurred for the assumed customer projects. The amount is being treated as consideration transferred as the release of the funds is likely to occur.

(2)No change in the fair value of the contingent consideration was identified or recorded during the three months ended March 31, 2022.

The following table summarizes the purchase price allocation as of the acquisition date and measurement period adjustments recognized during the three months ended March 31, 2022:

	As of				As of
	December 31, 2021		Measurement Period Adjustments		March 31, 2022
$ in thousands	Preliminary Valuation				Revised Valuation
Cash and cash equivalents	$	30	$	—	$	30
Prepaid and other current assets	33		—		33
Property, plant and equipment, net	6		—		6
Intangible asset	—		4,204		4,204
Goodwill	4,204		(3,093)		1,111
Total assets acquired	4,273		1,111		5,384
Accrued expenses and other current liabilities	74		—		74
Contract liabilities	390		—		390
Debt	41		—		41
Deferred tax liabilities	—		1,111		1,111
Total liabilities assumed	505		1,111		1,616
Net assets acquired	$	3,768	$	—	$	3,768

The Company recorded measurement period adjustments based on the valuation of the intangible asset related to developed technology associated with HelioHeat’s solar receiver technology and the related deferred tax impact. The purchase price allocation resulted in the recognition of $1.1 million in goodwill, which includes measurement period adjustments, of which none is expected to be tax deductible. Goodwill represents the value expected to be received from the synergies of integrating HelioHeat’s operations with Heliogen’s operations to expand commercial opportunities and the assembled workforce in place. The purchase price allocation for the HelioHeat Acquisition was finalized as of March 31, 2022. As a result of the net impact of measurement period adjustments during the three months ended March 31, 2022, the Company recognized a deferred tax benefit of $0.6 million.

The fair value of the intangible asset was estimated using the replacement cost approach, which was based on Level 3 inputs. Significant valuation assumptions include management’s estimated costs to reproduce HelioHeat solar receiver technology if the Company had developed the technology using its own resources, developer’s profit margin based on estimated market participants’ required margin, and an estimated discount for economic obsolescence. The intangible asset will be amortized over its estimated useful life of ten years.