On December 31, 2021, the Company entered into an Asset Purchase Agreement with AuraGen Aesthetics LLC (“AuraGen”) pursuant to which the Company purchased substantially all of the assets of AuraGen relating to its fat grafting technology, including the AuraGen 1-2-3 with AuraClens system. The total consideration paid by the Company to AuraGen (the “Closing Consideration”) consists of (i) $1,000,000 in cash at the closing, (ii) deferred consideration of $3,000,000 due in cash on the first annual anniversary of the Asset Purchase Agreement, and (iii) an aggregate total of 3,930,655 shares of the Company's common stock issued at closing. As of December 31, 2021, the Company recognized a liability of $2.4 million for the deferred consideration, which represents the fair value of the cash to be paid on the first anniversary of the acquisition date based on time to settlement of one year discounted at 20%.

In addition to the Closing Consideration, the Company shall pay additional contingent consideration of up to $8.5 million (the “Milestone Payments” and “Earnout Shares” and, together with the Closing Consideration, the “Asset Purchase Consideration”) to AuraGen based on the achievement of certain clinical endpoints following the completion of the Study (as defined in the Asset Purchase Agreement). The Milestone Payments may be payable in cash, stock or a combination of both at the election of the Company, with the Earnout Shares payable in stock or cash at the election of AuraGen. As of December 31, 2021, the Company recognized a liability of $2.6 million, which represents the fair value of the obligation as of the acquisition date. Refer to Note 4 for additional information on the measurement of the contingent consideration.

The acquisition did not meet the definition of a business combination and was accounted for as an asset acquisition. The acquisition date fair value of the consideration transferred consisted of the following (in thousands):


	Fair Value as of December 31, 2021
Cash payment made on closing date	$	1,000
Direct transaction costs		213
Equity issued on closing date		14,426
Fair value of deferred cash consideration		2,400
Fair value of contingent consideration		2,615
Total purchase consideration	$	20,654

The allocation of the total purchase price is as follows (in thousands):


	December 31,
	2021
Inventories	$	54
Developed technology		20,600
Net assets acquired	$	20,654

The intangible asset acquired, estimated useful life and amortization method is as follows (in thousands):


			Estimated useful	Amortization
	Amount		life	method
Developed technology	$	20,600	8 years	Straight line