During the year ended December 31, 2021, the Company completed the DigitalCrafts and Hippo acquisitions on August 2, 2021 and September 10, 2021, respectively. During the year ended December 31, 2020, the Company acquired substantially all of the assets of Trident University International (“Trident University”) on March 2, 2020.

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’ programs are now offered by AIUS under the ‘DigitalCrafts’ name. On the date of acquisition, the Company made a cash payment of $16.3 million for the DigitalCrafts assets and a subsequent working capital payment of $0.2 million. The initial and working capital payments were fully funded with the Company’s available cash balances. Pursuant to the acquisition agreement, a post-closing contingent consideration payment of up to $2.5 million is expected to be paid in early 2024 based upon the achievement of certain financial metrics.

The purchase price of $18.4 million for the DigitalCrafts assets consists of the initial purchase price of $16.3 million, the working capital payment of $0.2 million and the fair value calculation of contingent consideration of $1.9 million. The purchase price 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. The fair value of student receivables is equal to the gross contractual amount of student receivables. 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 our purchase price allocation, we recorded goodwill of $16.5 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 programs are now offered by CTU under the ‘Hippo Education’ name. On the date of acquisition, the Company made an initial cash payment of $42.0 million. 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 after closing and is reflected as restricted cash on our consolidated balance sheets. The initial payment was fully funded with the Company’s available cash balances. Additionally, pursuant to the purchase agreement, a post-closing contingent consideration payment of up to $4.0 million is expected to be paid in early 2024 based upon the achievement of certain financial metrics.

The purchase price of $43.3 million for Hippo represents the initial purchase price of $42.0 million as well as the fair value calculation of contingent consideration of $1.3 million. The purchase price 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. The fair value of student receivables is equal to the gross contractual amount of student receivables. 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 our purchase price allocation, we recorded goodwill of $27.8 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.

Trident University, a regionally accredited university, offers online undergraduate, master’s and doctoral programs with a strong focus on graduate programs. Trident University’s operations were brought within the scope of the state licensure, accreditation and Department of Education (“Department”) approval of American InterContinental University, with Trident University relinquishing its accreditor and Department approvals. Trident University’s programs are now offered by AIU under the “Trident” name. The combined institution continues to serve existing and future students with a broader range of program offerings and resources.

During 2020, the Company made a total cash payment of $43.8 million for the acquisition of Trident University assets. Pursuant to the purchase agreement, $4.0 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 purchase price of $43.8 million was allocated to the fair values of acquired tangible and identifiable intangible assets of $53.1 million and assumed liabilities of $9.3 million as of March 2, 2020. Intangible assets acquired include a trade name with a fair value of $1.0 million with an estimated useful life of 5 years and customer relationships and course curriculum with an aggregate fair value of $9.4 million with estimated useful lives of 3 years each. Based on the final purchase price allocation, we recorded goodwill of $31.0 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):

	Trident University		DigitalCrafts		Hippo
	March 2, 2020		August 2, 2021		September 10, 2021
Assets:
Cash	$	-	$	-	$	93
Student receivables		6,212		1,777		202
Other current assets		912		4		25
Property and equipment		3,932		-		27
Intangible assets subject to amortization
Trade name		1,000		740		3,340
Customer relationships		8,000		200		14,100
Course curriculum		1,400		-		-
Developed technology		-		830		1,960
Goodwill		30,956		16,477		27,790
Deferred tax asset		454		-		-
Other non-current assets		270		-		-
Total assets acquired	$	53,136	$	20,028	$	47,537
Liabilities:
Accounts payable and other accrued liabilities	$	2,622	$	268	$	315
Deferred revenue		4,749		1,404		3,952
Loan discharge reserve		1,900		-		-
Other long-term liabilities		46		-		-
Total liabilities assumed	$	9,317	$	1,672	$	4,267

Net assets acquired	$	43,819	$	18,356	$	43,270

Pro forma financial information relating to the Trident, DigitalCrafts and Hippo acquisitions is not presented because the acquisitions are not material to the Company.