Note 3 - Acquisition

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Business Combination Disclosure [Text Block]

3. ACQUISITION
 
On January 3, 2024 (the “Acquisition Date”), the Company acquired 100% of the outstanding capital stock of Axign, a Dutch company that designs and develops class-D audio ICs, targeting applications ranging from portable consumer speakers to automotive and professional-grade multi-speaker systems. Commencing on the Acquisition Date, Axign became a wholly-owned subsidiary of the Company and its results of operations have been included in the Company’s consolidated financial statements.
 
Purchase Consideration
 
The purchase consideration was $33.4 million in cash. 
 
In connection with the acquisition, the Company incurred $0.4 million in transaction costs that were expensed as incurred and included in selling, general and administrative expenses in the Consolidated Statements of Operations.
 
Purchase Price Allocation
 
The purchase price allocation for Axign was as follows (in thousands):

Inventory	$	720
Other tangible assets acquired, net of liabilities assumed		1,623
Intangible assets:
Developed technology		9,184
IPR&D		2,147
Total identifiable net assets acquired		13,674
Goodwill		19,724
Total net assets acquired	$	33,398

The intangible asset acquired with a finite life includes the core developed technology with an estimated remaining useful life of eight years. The acquired intangible asset with an indefinite life includes an incomplete R&D project that had not reached technological feasibility as of the Acquisition Date. The fair values of the developed technology and the IPR&D were determined using the income approach.
 
The goodwill arising from the acquisition was primarily attributed to the assembled workforce and synergies that are anticipated to enable the Company to develop solutions with lower power consumption in the consumer and automotive end markets using Axign’s digital feedback technology. The goodwill is not expected to be deductible for tax purposes.