During the year ended December 31, 2022, the Company completed the CalSouthern and Coding Dojo acquisitions on July 1, 2022 and December 1, 2022, respectively. During the year ended December 31, 2021, the Company completed the DigitalCrafts and Hippo Education acquisitions on August 2, 2021 and September 10, 2021, respectively.

Founded in 2013, Coding Dojo offers computer programming and general technology upskilling and reskilling development opportunities to technology-driven students with a quality technology platform and market demand course offering content which include software development, data science and cybersecurity. Coding Dojo is reported within the CTU segment. The preliminary purchase price of $64.9 million includes an initial $52.8 million cash payment funded with cash from operations as well as an estimate of the fair value of contingent consideration of $12.7 million and estimated post-closing working capital adjustments. Pursuant to the purchase agreement, a portion of the post-closing contingent consideration payment will be made in early 2024, with the remainder to be paid in early 2025 up to total maximum payments of $15.0 million, with the final payment amounts to be based upon achievement of certain financial metrics. Additionally, pursuant to the terms of the acquisition agreement, $7.5 million of the initial cash payment was set aside in escrow accounts to secure indemnification obligations of the seller after closing and fund any post-closing working capital adjustments and is reflected as restricted cash on our consolidated balance sheets.

The preliminary purchase price of $64.9 million was allocated to estimated fair values of acquired tangible and identifiable intangible assets of $78.5 million and assumed liabilities of $13.6 million as of December 1, 2022. Intangible assets acquired include customer relationships with an estimated fair value of approximately $1.3 million and an estimated useful life of 1 year, a trade name with an estimated fair value of approximately $5.1 million and an estimated useful life of 10 years and developed technology with an estimated fair value of $6.0 million and an estimated useful life of 5 years. Based on our preliminary purchase price allocation, we have recorded goodwill of $59.4 million. Goodwill reflects the revenue growth opportunities following the acquisition. Substantially all of this goodwill balance will not be deductible for income tax reporting purposes. Subsequent adjustments may be made to the purchase price allocation once the fair values of acquired assets and liabilities, as well as the fair value of contingent consideration, are finalized.

Founded in 1978, CalSouthern has been educating learners through online educational opportunities, primarily in the areas of behavioral sciences and business management. CalSouthern is reported within the AIUS segment. The final purchase price of $40.0 million was funded with cash from operations. Pursuant to the terms of the acquisition agreement, $1.0 million of this payment was set

aside in an escrow account to secure indemnification obligations of the seller after closing and is reflected as restricted cash on our consolidated balance sheets.

The final purchase price of $40.0 million was allocated to the fair values of acquired tangible and identifiable intangible assets of $42.5 million and assumed liabilities of $2.4 million as of July 1, 2022. Intangible assets acquired include customer relationships with a fair value of approximately $14.5 million and an estimated useful life of 15 years, a trade name with a fair value of approximately $1.5 million and an estimated useful life of 10 years and course curriculum with a fair value of $1.4 million and an estimated useful life of 5 years. Based on our final purchase price allocation, we have recorded goodwill of $21.6 million. Goodwill reflects the revenue growth opportunities following the acquisition. We expect substantially all of this goodwill balance to be deductible for income tax reporting purposes.

Hippo, founded in 2011, is a provider of continuing medical education and exam preparation for medical professionals with a quality technology platform and strong course content. Hippo is reported within the CTU segment. During 2021, the Company made a cash payment of $42.0 million for the acquisition of Hippo Education. Pursuant to the terms of the acquisition agreement, $1.2 million of this payment was set aside in an escrow account to secure indemnification obligations of the seller, of which $0.2 million was released during the current year, leaving $1.0 million in escrow which is reflected as restricted cash on our consolidated balance sheets as of December 31, 2022. The payment was fully funded with the Company’s available cash balances.

The purchase price of $43.3 million was allocated to the fair values of acquired tangible and identifiable intangible assets of $47.5 million and assumed liabilities of $4.3 million as of September 10, 2021. Intangible assets acquired include a trade name with a fair value of approximately $3.3 million with an estimated useful life of 10 years, customer relationships with a fair value of approximately $14.1 million with an estimated useful life of 7 years and developed technology with a fair value of $2.0 million with an estimated useful life of 4 years. Based on the final purchase price allocation, we recorded goodwill of $27.8 million. We expect substantially all of this goodwill balance to be deductible for income tax reporting purposes.

DigitalCrafts, launched in 2015, helps provide individuals an opportunity in the technology area through reskilling and upskilling courses within the areas of web development, web design and cybersecurity. DigitalCrafts' is reported within the AIUS segment. During 2021, the Company made total cash payments of $16.5 million for the acquisition of DigitalCrafts. The payments were fully funded with the Company’s available cash balances.

The purchase price of $18.4 was allocated to the fair values of acquired tangible and identifiable intangible assets of $20.0 million and assumed liabilities of $1.7 million as of August 2, 2021. Intangible assets acquired include a trade name with a fair value of approximately $0.7 million with an estimated useful life of 5 years and customer relationships and developed technology with an aggregate fair value of $1.0 million with estimated useful lives of 3 years each. Based on the final purchase price allocation, we recorded goodwill of $16.5 million. We expect substantially all of this goodwill balance to be deductible for income tax reporting purposes.

The following table summarizes the fair values of assets acquired and liabilities assumed as of respective acquisition dates (dollars in thousands):


	Coding Dojo		CalSouthern		Hippo		DigitalCrafts
	December 1, 2022		July 1, 2022		September 10, 2021		August 2, 2021
Assets:	(preliminary)
Cash	$	-	$	-	$	93	$	-
Student receivables, net		5,745		3,214		202		1,777
Prepaid and other assets		408		290		25		4
Property, equipment and ROU assets		552		-		27		-
Intangible assets subject to amortization
Trade name		5,100		1,480		3,340		740
Customer relationships		1,260		14,530		14,100		200
Course curriculum		-		1,390		-		-
Developed technology		6,030		-		1,960		830
Goodwill		59,405		21,556		27,790		16,477
Total assets acquired	$	78,500	$	42,460	$	47,537	$	20,028
Liabilities:
Accounts payable and other accrued liabilities	$	2,069	$	4	$	315	$	268
Deferred revenue		10,324		2,419		3,952		1,404
Deferred tax liability, net		1,221		-		-		-
Total liabilities assumed	$	13,614	$	2,423	$	4,267	$	1,672

Net assets acquired	$	64,886	$	40,037	$	43,270	$	18,356

The purchase price of Coding Dojo is preliminary due to finalization of the working capital adjustment and the evaluations necessary to assess the fair values of the net assets acquired are still in process. Pro forma financial information relating to the DigitalCrafts, Hippo, CalSouthern and Coding Dojo acquisitions is not presented because the acquisitions are not material to the Company.