Acquisitions

12 Months Ended

Dec. 31, 2020

Drive-Thru Acquisition

Effective September 30, 2019, the Company, through its wholly-owned subsidiary ParTech, Inc. (“ParTech”), acquired assets of 3M Company's Drive-Thru Communications Systems business, including the XT-1 and G5 headset systems, contracts and intellectual property associated with the business, for a purchase price of $8.4 million (total fair value of assets were $8.4 million including approximately $1.2 million of developed technology, $3.6 million of customer relationships, and $2.4 million of goodwill, net of warranty liability of $1.4 million, resulting in cash paid of $7.0 million).

Restaurant Magic Acquisition

Effective December 18, 2019, the Company, through ParTech, acquired 100% of the limited liability company interests of AccSys LLC (f/k/a AccSys, Inc., and otherwise known as Restaurant Magic) in base consideration of approximately $42.8 million, of which approximately $12.8 million was paid in cash, which reflects a $0.2 million favorable working capital adjustment recognized in the second quarter of 2020, $27.5 million was paid in restricted shares of Company common stock and $2.0 million was paid by delivery of a subordinated promissory note. The sellers of Restaurant Magic have the opportunity through 2022 to earn additional purchase price consideration subject to the achievement of certain post-closing revenue focused milestones. The Earn-Out, if any, will be payable 50% in cash or subordinated promissory notes, or a combination of both, at the Company's election, and 50% in restricted shares of Company common stock; the equity component of the Earn-Out is classified as a liability on the Company's balance sheet as the quantity of restricted shares is variable subject to the final value of the Earn-out. The Earn-Out has no maximum payment. As of December 31, 2019, the value of the Earn-Out based on the Monte Carlo simulation was $3.3 million. During the year ended December 31, 2020, $3.3 million of fair-value adjustments were recorded to earnings to reflect a reduction in the fair value of the Earn-Out to zero; see “Note 16 - Fair Value of Financial Instruments” for additional information. The adjustment was recorded as a component of Operating expense for the year ended December 31, 2020.

The Company issued $2.0 million of restricted stock units (“RSUs”) in connection with its assumption of awards granted by Restaurant Magic to its employees and contractors prior to the closing of the acquisition. The cost of these RSUs are amortized over their vesting period and have been reflected in selling, general and administrative, (“SG&A”) expenses as part of stock-based compensation in the consolidated statements of operations.

The fair values assigned to the assets acquired and liabilities assumed in the Drive-Thru Acquisition and the Restaurant Magic Acquisition and presented in the table below were based on management's best estimates and assumptions at the conclusion of the measurement period for each respective transaction:


(in thousands)	Purchase Price Allocation
	Drive-Thru		Restaurant Magic		Total
Developed technology	$	1,200	$	16,400	$	17,600
Customer relationships	3,600		1,100		4,700
Trade name	—		900		900
Trademark	510		—		510
Tangible assets	—		1,344		1,344
Goodwill	2,390		27,773		30,163
Property, plant, and equipment - net	712		—		712
Total assets	8,412		47,517		55,929
Accounts payable and accrued expenses	—		629		629
Warranty liability	1,412		—		1,412
Deferred revenue	—		715		715
Earn-Out liability	—		3,340		3,340
Consideration paid	$	7,000	$	42,833	$	49,833

The estimated fair values of the developed technology, customer relationships, and trade names were all based on the income approach, which estimates fair value based upon the present value of cash flows that the assets are expected to generate. Amortization of identifiable finite-lived intangible assets is computed using the straight-line method over the remaining estimated economic life of the asset. The acquired customer relationships, trade names, and developed technology assets are amortized over their estimated useful lives ranging from two to seven years, respectively.

Pro Forma Financial Information

For the year ended December 31, 2020, the Drive-Thru Acquisition and the Restaurant Magic Acquisition resulted in additional revenues of $18.5 million and $8.4 million, respectively. For the year ended December 31, 2019, the Drive-Thru Acquisition and the Restaurant Magic Acquisition resulted in additional revenues of $3.2 million and $0.3 million, respectively. The Company determined it is impractical to report net loss for the Drive-Thru Acquisition for years ended December 31, 2020 and

2019, and the Restaurant Magic Acquisition for the year ended December 31, 2020; presentation of pro forma net loss has correspondingly been removed from the below table of pro forma results of operations and pro forma net income (loss) previously reported for the three, six and nine month periods ended March 31, 2019, June 30, 2019 and September 30, 2019, respectively, were incorrect as such amounts are not determinable. Presented pro forma results of operations are not necessarily indicative of the results that would have occurred had the businesses acquired in 2019 been consummated at the beginning of the period presented, nor are they necessarily indicative of any future consolidated operating results. The following table summarizes the Company's unaudited pro forma operating results:


(in thousands)	Year Ended December 31, 2019
Total revenue	$	208,802

This pro forma financial information does not give effect to any anticipated synergies, operating efficiencies or cost savings or any integration costs related to the Restaurant Magic Acquisition.