Oblong Industries Acquisition

9 Months Ended

Sep. 30, 2020

Note 3 - Oblong Industries Acquisition

On October 1, 2019 (the “Closing Date”), the Company closed its Acquisition of Oblong Industries, Inc. The Acquisition was consummated through the merger of Glowpoint Merger Sub II, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (the “Merger Sub”), with and into Oblong Industries on the Closing Date, with Oblong Industries continuing as the surviving corporation and as a wholly-owned subsidiary of the Company.

The Acquisition was accounted for in accordance with FASB Accounting Standards Codification (“ASC”) Topic 805 “Business Combinations” (“ASC 805”) as a business combination, which requires an allocation of the purchase price of an acquired entity to the assets acquired and liabilities assumed based on their estimated fair values at the date of Acquisition. The purchase price and the fair value of the assets acquired and liabilities assumed were based on management estimates and values with assistance from an outside appraisal. Pursuant to ASC 805, the purchase price of $18,862,000 was measured as the fair value of the consideration exchanged in the Acquisition.

The Company acquired net assets of $11,496,000, including $12,780,000 of identifiable intangible assets, in the Acquisition. The purchase price exceeded the fair value of the net assets acquired by $7,366,000, which was recorded as goodwill.

The accompanying condensed consolidated financial statements do not include any revenues or expenses related to the Oblong Industries business on or prior to October 1, 2019 (the Closing Date of the Acquisition).

The condensed consolidated statements of operations for the three and nine months ended September 30, 2020 include $1,942,000 and $6,669,000 of revenue, respectively, and net losses of $334,000 and $3,839,000, respectively, related to Oblong Industries. The Company's unaudited pro forma results for the three and nine months ended September 30, 2019 are summarized in the table below, assuming the Acquisition had occurred on January 1, 2019. These unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have actually resulted had the Acquisition occurred on January 1, 2019, nor to be indicative of future results of operations.


	Pro forma and unaudited (as if the Acquisition of Oblong Industries had occurred on January 1, 2019)
	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	($ in thousands)		($ in thousands)
Revenue
Glowpoint	$	2,370	$	7,403
Oblong Industries	$	4,259	$	12,758
Pro forma total revenue	$	6,629	$	20,161
Net loss
Glowpoint	$	640	$	2,113
Oblong Industries	$	3,756	$	12,782
Pro forma net loss	$	4,396	$	14,895