Annual report pursuant to Section 13 and 15(d)

Nanotron Acquisition

v3.21.1
Nanotron Acquisition
12 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Nanotron Acquisition Nanotron Acquisition
On October 6, 2020, the Company, through its wholly-owned subsidiary, Inpixon GmbH, a limited liability company incorporated under the laws of Germany, completed the acquisition of all the outstanding capital stock of Nanotron, a limited liability company incorporated under the laws of Germany, pursuant to the terms and conditions of that certain Share Sale and Purchase Agreement, dated as of October 5,2020, among the Company, Nanotron and Sensera Limited (the "Seller", and the owner of all outstanding shares of Nanotron), a stock corporation incorporated under the laws of Australia and the sole shareholder of Nanotron. As a result of the acquisition, the Company now owns 100% of Nanotron. Nanotron’s business consists of developing and manufacturing location-aware IoT systems and solutions.
The total paid to Nanotron was an aggregate purchase price of $8.7 million in cash (less the Holdback Funds (as defined below) and certain other closing adjustments) for the outstanding shares of Nanotron. The price was subject to certain post-Closing adjustments based on actual working capital as of the closing as described in the Purchase Agreement. Inpixon retained $750,000 (the “Holdback Funds”) from the purchase price to secure Nanotron’s obligations under the purchase agreement, with any unused portion of the Holdback Funds to be released to the Seller on the date that is 18 months after the Closing Date. As discussed above, the certain adjustments to the Purchase Price are adjustments for severance payments and calculations of Net Working Capital versus the Working Capital Target (calculation defined as “Net Working Capital Adjustment”). The adjustment for severance payments includes a $214,000 reduction in purchase price for severance payments due after the closing date offset by a return credit of $50,000 for severance payments owed by Sensera Limited. As for Net Working Capital Adjustment, Net Working Capital was determined to be less than the Working Capital Target by an amount of $30,000, resulting in a reduction in the purchase price of $30,000. Inpixon Germany paid the purchase price from funds received in connection with a capital contribution from Inpixon, and a portion of the purchase price was used by the Seller to satisfy outstanding loans payable by Sensera Limited to obtain the release of certain existing security interests on Nanotron’s assets.
The preliminary purchase price is allocated as follows (in thousands):
Fair Value Allocation
Assets acquired:
Cash and cash equivalents 301 
Trade and other receivables 576 
Inventory 827 
Prepaid expenses and other current assets 103 
Operating lease right-of-use asset 557 
Property, plant, and equipment 433 
Tradename 51 
Proprietary Technology 1,213 
Customer Relationships 1,055 
Non-compete Agreements 610 
In-Process R&D 505 
IP Agreement 178 
Goodwill 3,755 
Total assets acquired $ 10,164 
Liabilities assumed:
Accounts payable 526 
Lease liabilities 557 
Restructuring Costs 214 
Accrued Liabilities 361 
Total liabilities assumed 1,658 
Estimated fair value of net assets acquired: $ 8,506 
The value of the intangibles and goodwill were calculated by a third party valuation firm based on projections and financial data provided by management of the Company. The goodwill represents the excess fair value after the allocation to the intangibles.