Acquisition

On June 7, 2019, we completed the acquisition of Systron Donner Inertial, Inc. (“SDI”), a private-equity backed navigation systems provider with a scalable, chip-based platform for higher volume gyro applications utilizing Quartz MEMS technology. The total purchase price was approximately $25.0 million, consisting of (i) approximately $22.0 million in cash after working capital adjustments and (ii) the issuance of approximately 811 thousand shares of common stock with an aggregate value of approximately $3.0 million as of the closing date.

Following the closing, we began integrating SDI into our current navigation product line and have included the financial results of SDI in our consolidated financial statements beginning on the acquisition date. Net revenue and net loss of SDI from the acquisition date of $9.8 million and $0.6 million, respectively, is included in our consolidated statements of operations and comprehensive (loss) income for the fiscal year ended September 30, 2019.

Preliminary Purchase Price Allocation

The total purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date.

As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period (a period not to exceed 12 months from the date of acquisition). As of September 30, 2019, the Company had not finalized the determination of fair values allocated to equipment, deferred taxes and goodwill. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in a material adjustment to goodwill.

The table below represents the purchase price allocation to the assets acquired and liabilities assumed of SDI based on their estimated fair values as of the acquisition date. The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions at the acquisition date.



(in thousands)	Amount			Weighted Average Useful Life (years)
Purchase Price	$	24,978
Developed technology	250			7
Cash acquired	541
Inventories	8,522
Accounts receivable	4,291
Other assets	355
Land and building	12,890
Equipment	2,913
Net liabilities assumed	(4,853		)

Goodwill	$	69

Identifiable intangible assets - The estimated fair value of the developed technology was determined based on the expected future cost savings resulting from ownership of the asset. The present value of the expected future cash flows for the developed technology intangible asset was determined based on discount rates which incorporate a risk premium to take into account the risks inherent in those expected cash flows. The expected cash flows were estimated using available historical data adjusted based on the expectations of market participants.

Tangible assets acquired:

Inventories

Finished goods were valued at estimated selling price less costs of disposal and a reasonable profit allowance for the selling effort. Raw materials were valued at estimated replacement cost.

Property, plant and equipment

The property, plant and equipment acquired were valued using either the replacement cost or market approach, as appropriate, as of the acquisition date.

Goodwill

Goodwill represents the excess of the preliminary purchase price over the fair value of the assets acquired and liabilities assumed. The goodwill recognized is primarily attributable to the benefits the Company expects to derive from deepening the Company's expertise in navigation systems products.

For the fiscal year ended September 30, 2019, the Company incurred transaction costs of approximately $0.8 million, in connection with the SDI acquisition, which were expensed as incurred and included in selling, general and administrative expenses within the consolidated statements of operations.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presented for the fiscal years ended September 30, 2019 and 2018 does not purport to be indicative of the results of operations that would have been achieved had the acquisition been consummated on October 1, 2017, nor of the results which may occur in the future. The pro forma amounts are based upon available information and certain assumptions that the Company believes are reasonable.



(in thousands, except per share data)	For the Fiscal Years ended September 30,
	2019			2018
Revenue	$	107,199		$	113,398
Net loss	$	(42,013	)	$	(18,136	)
Net loss per basic and diluted share	$	(1.50	)	$	(0.67	)
Weighted-average number of basic and diluted shares outstanding	27,983			27,266