Sale of intellectual property and workforce

9 Months Ended

Mar. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Sale of intellectual property and workforce

Sale of intellectual property and workforce

In August 2019, we entered into certain agreements with affiliates of Grab, including: (i) a services agreement pursuant to which we agreed to provide certain services to Grab through certain of our employees designated to work on our OpenTerra Platform; (ii) a license agreement pursuant to which we granted to Grab a perpetual license to certain intellectual property associated with the OpenTerra Platform; and (iii) an asset purchase agreement pursuant to which we sold certain intellectual property associated with the OpenTerra Platform to Grab and facilitated offers for employment or consulting arrangements by Grab of certain of our OpenTerra employees.

In January 2020, Grab completed the acquisition of assets pursuant to which we sold certain intellectual property associated with the OpenTerra Platform to Grab and facilitated the making of offers for employment or consulting arrangements by Grab to certain of our OpenTerra employees in exchange for a non-marketable equity interest in Grab Holdings, Inc. ordinary shares. We also received a perpetual, royalty-free license under the OpenTerra intellectual property rights assigned to Grab. Grab’s acquired workforce consisted of 59 of our employees.

Total consideration including cash, as well as equity compensation received upon sale of the assets, was allocated between the license and services (subject to ASC 606), and the assets (not within the scope of ASC 606) based on standalone selling prices. The standalone selling price for the rights acquired under the asset purchase agreement was estimated based on comparing the rights transferred under the perpetual license as compared to the incremental rights transferred under the asset purchase agreement if such incremental rights were transferred separately in similar circumstances and to similar customers. The value of the equity compensation was based on the most recently available valuation information and is subject to variability. To determine the fair market value of these ordinary shares, we used all information reasonably available from Grab Holdings, Inc. regarding the assessment of its board of directors of the fair market value of the ordinary shares, including the limited number of arms’ length sales of Grab Holdings, Inc.’s ordinary shares and a review of financial statements provided by Grab Holdings, Inc.  Because there is no public trading market for Grab Holdings, Inc.’s ordinary shares and because Grab does not prepare its financial statements in accordance with GAAP or file its financial statements with the SEC or another securities regulatory body, we relied on the most current information available to assess the fair market value of Grab Holdings, Inc.’s ordinary shares. We determined the value of the perpetual license received under the OpenTerra intellectual property rights assigned to Grab based upon the discounted estimated future cash flows to be received associated with the license.

We recorded a $6.2 million non-marketable equity investment in Grab Holdings, Inc. (see Note 4) and an $800,000 capitalized software asset representing the perpetual license received, and we recognized a gain on the sale of $45,000. The non-marketable equity investment and capitalized software are recorded in Other assets and Property and equipment net, respectively, on our condensed consolidated balance sheet, and the gain on sale is recorded as other income in our condensed consolidated statement of operations.