On January 2, 2019, the Company completed the purchase of substantially all the assets of the Freedom, Liberty, and Enterphone™ MESH products and services of Viscount Systems, Inc. (“Viscount”) and the assumption of certain liabilities (the “Asset Purchase”). Under the terms of the purchase agreement, the Company was obligated to pay at closing aggregate consideration of $2.9 million consisting of:

An aggregate of approximately 31,447 shares of the Company’s common stock issuable at the closing of the transaction were held back for 12 months following the closing for the satisfaction of certain indemnification claims. In the first quarter of 2020, the Company released the 31,447 holdback shares as the indemnification claims were satisfied.

Additionally, in the event that revenue from the assets purchased under the agreement in 2019 was greater than certain specified revenue targets, the Company would have been obligated to issue earnout consideration of up to a maximum of $3.5 million payable in shares of the Company’s common stock, subject to certain conditions. In the event that such revenue targets were not met in 2019, but 2020 revenue from the assets purchased exceeded certain higher targets for 2020, then the Company would have been obligated to issue up to a maximum of $2.25 million in earnout consideration in the form of common stock. The maximum total earnout consideration liability for all periods was $3.5 million in the aggregate, payable in the Company’s common stock. As of December 31, 2019, management had assessed the probability of the issuance of shares related to the earnout consideration and determined its fair value to be $750,000. In the first quarter of 2020, the Company and the sellers of the assets acquired from Viscount reached agreement that certain of the 2019 revenue targets were achieved. In the second quarter of 2020, the Company issued to the sellers earnout consideration consisting of 157,233 shares of its common stock with a fair value of approximately $489,000. The Company recognized a reduction in earnout consideration expense of $261,000 in the statements of comprehensive loss during the year ended December 31, 2020, representing the settlement date fair value of the shares issued and the recorded earnout liability. Such earnout targets were not achieved in 2020. Accordingly, no value was ascribed to the earnout as of December 31, 2020.

Assets acquired and liabilities assumed were recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. The following table summarizes the fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands):

Accounts receivable	$	636
Inventory		249
Prepaid expenses and other current assets		29
Property and equipment		190
Operating lease ROU assets		550
Trademarks		160
Customer relationships		710
Developed technology		800
Total identifiable assets acquired		3,324
Accounts payable		(372	)
Operating lease liabilities		(61	)
Accrued expenses and liabilities		(120	)
Deferred revenue		(34	)
Earnout consideration liability		(200	)
Other current liabilities		(326	)
Long-term operating lease liabilities		(489	)
Total liabilities assumed		(1,602	)
Net identifiable assets acquired		1,722
Goodwill		1,200
Net purchase price	$	2,922

Acquisition related intangibles included in the above table are finite-lived and are being amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized, as follows (in thousands):

	Gross Purchased Intangible Assets		Estimated Useful Life (in Years)
Trademarks	$	160		5
Customer relationships		710		10
Developed technology		800		10
	$	1,670

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition resulted in $1.2 million of goodwill. With the addition of Viscount’s products and services, the Company believes this goodwill largely reflects the expansion of its Premises offerings with advanced, complementary solutions for the commercial and small- and medium-sized business markets, leveraging Freedom’s IT-centric software, defined architecture, and hardware-light platform. In accordance with ASC 350, goodwill is not amortized but is tested for impairment at least annually in the fourth quarter. See Note 6, Goodwill and Intangible Assets.