Business Combinations

12 Months Ended

Dec. 31, 2024

Business Combinations

Business Combinations

20. Business Combinations

Acquisition of Cultivate Agricultural Intelligence, LLC

On September 25, 2024 (the “Cultivate Acquisition Date”), the Company acquired all of the issued and outstanding membership interests of Cultivate Agricultural Intelligence, LLC (“Cultivate”) pursuant to the terms of the Membership Interest Purchase Agreement between the Company and Cultivate, as well as Cultivate’s individual members (the “Cultivate Acquisition”).

The Cultivate Acquisition met the requirements to be considered a business combination under ASC 805: Business Combinations (“ASC 805”). The assets and liabilities acquired from Cultivate, affected for preliminary adjustments to reflect the fair market values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s consolidated financial statements from the Cultivate Acquisition Date. The Company has allocated the purchase price to the tangible and identifiable intangible assets and liabilities assumed based on their estimated fair market values at the Cultivate Acquisition Date as required under ASC 805. The Company has not presented pro forma results because the Cultivate Acquisition was not deemed significant at the date of closing. Amounts related to the Cultivate Acquisition included in Condensed Consolidated Statements of Operations are insignificant.

The Cultivate Acquisition was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred was $6.9 million. Included in the total consideration is cash consideration of $6.2 million and estimated contingent consideration totaling $0.7 million (the “Cultivate Earn-out liability”), for which the Company may be required to pay additional cash consideration contingent on future net profit-based performance targets between the closing date and the fourth anniversary of the closing date, up to a maximum of $2.0 million. As of the Cultivate Acquisition Date, the fair value of the Cultivate Earn-out liability was determined using a Monte Carlo simulation approach and is considered a Level 3 fair value measurement. As of December 31, 2024, the Cultivate Earn-out liability’s fair value of $0.7 million is reported within the Other long-term liabilities line item in the Condensed Consolidated Balance Sheets. The fair value will be remeasured at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in the fair value of the Cultivate Earn-out Liability recognized in the Condensed Consolidated Statements of Operations. The change in the fair value of the Cultivate Earn-out Liability has not changed significantly from the date of acquisition.

The following table displays the total purchase consideration transferred in the Cultivate Acquisition (in thousands):

	Amount
Cash consideration	$	6,167
Earn-out consideration		730
Total purchase consideration transferred	$	6,897

The Company incurred approximately $0.1 million of direct acquisition-related expenditures, which are recognized in General and administrative expense in the Condensed Consolidated Statements of Operations.

The following table sets forth the fair values of the assets acquired and liabilities assumed in connection with the Cultivate Acquisition (in thousands):

Cultivate

Acquisition Date

Fair Value

Current assets	$	302
Property, plant and equipment		21
Intangible assets		2,900
Goodwill		3,742
Other assets		18
Total assets acquired		6,983
Current liabilities		86
Total liabilities assumed		86
Total assets acquired and liabilities assumed	$	6,897

The purchase price allocation is preliminary and subject to change during the measurement period, which is not to exceed one year from the Cultivate Acquisition Date. When the valuation is final, changes to the valuation of acquired assets and liabilities could result in adjustments to identified intangibles and goodwill.

Fair Value of Net Assets Acquired and Intangibles

The assets and liabilities were recorded at their respective fair values as of September 25, 2024. The Company developed the fair value of intangible assets, which includes developed technology, a customer-related intangible, and trade names, using various techniques including the relief from royalty method and multi-period excess earnings method. For all other major assets and liabilities acquired, the Company determined that book value approximated fair value. Goodwill represents the future economic benefits that the Company expects to achieve as a result of the acquisition of the human capital and assets acquired. The goodwill resulting from this acquisition is expected to be deductible for tax purposes. The fair value of net assets acquired, intangibles, and goodwill, was assigned to the Company’s Gevo segment.

The following table sets forth the intangible assets acquired in the Cultivate Acquisition (in thousands):

	Cultivate		Estimated
	Acquisition Date		Life
	Fair Value		(Years)
Developed technology	$	1,300	5.0
Customer-related intangible		1,500	16.0
Trade names		100	4.0
Total intangible assets	$	2,900