On February 2, 2022, the Company entered into an Agreement and Plan of Merger by and among the Company, Rewrite Therapeutics, Inc. (“Rewrite”), RW Acquisition Corp. and Shareholder Representative Services, LLC as Securityholder representative (the “Rewrite Merger Agreement”). Under the Rewrite Merger Agreement, the Company paid Company Securityholders (as defined in the Rewrite Merger Agreement) (the “Rewrite Holders”) upfront consideration in an aggregate amount of $45.0 million, excluding customary purchase price adjustments and closing costs, payable in cash. Pursuant to the Rewrite Merger Agreement, the Company acquired all of the issued and outstanding shares of Rewrite. The Rewrite transaction resulted in the acquisition of certain know-how and IP assets related to Rewrite’s proprietary DNA writing technology. The Company’s management determined that the acquired assets do not meet the definition of a business pursuant to ASC 805, Business Combinations, as substantially all of the fair value of the acquired assets is concentrated into one identifiable asset, the DNA writing technology. As of the date of closing of the transactions contemplated by the Rewrite Merger Agreement (the “Rewrite Merger Agreement Date”), the asset acquired had no alternative future use and had not reached a stage of technological feasibility. As a result, all payment obligations were recorded as research and development expense in the condensed consolidated statements of operations and other comprehensive loss in the amount of $56.0 million. The total transaction price was allocated to the assets acquired and liabilities assumed on a relative fair value basis.

In addition, the Rewrite Holders are eligible to receive up to an additional $155.0 million, including $55.0 million upon the achievement of pre-specified research milestones and $100.0 million upon the achievement of a regulatory approval milestone, payable through a mixture of $130.0 million in cash and $25.0 million in a combination of cash and the Company’s common stock which would be valued using the volume-weighted average price of the Company’s Common Stock over the ten consecutive trading day period ending on and including the trading day that is two trading days immediately prior to the issuance of the consideration issued in connection with the applicable milestone. In September 2022, Rewrite Therapeutics, Inc. merged into Intellia, with Intellia the surviving entity.

In January 2023, the $25.0 million research milestone noted above was achieved and, in February 2023, the Company paid the Rewrite Holders $0.9 million in cash and issued 567,045 shares of Intellia common stock in order to fulfill its obligation under the Rewrite Merger Agreement. The cash obligation was recorded as research and development expense in the condensed consolidated statement of operations and other comprehensive loss in the first quarter of 2023. The Company had determined that the research milestone settled in the Company’s common stock would be classified as a contingent consideration liability under ASC 480 and, therefore, the Company initially recorded a liability for this milestone payment as of the Rewrite Merger Agreement Date at its original fair value of $10.5 million. The contingent consideration liability was remeasured at fair value each financial reporting period, with the resulting impact reflected in the Company’s condensed consolidated statements of operations and other comprehensive loss, presented within other income (expense). The remaining milestones to be settled in cash would be recorded when the contingency is resolved and the consideration is paid or becomes payable.

The transaction price on the Rewrite Merger Agreement Date was determined and allocated as follows (in thousands):


Transaction Price
Upfront cash consideration	$	43,730
Research contingent consideration liabilities		10,541
Transaction costs		1,838
Total transaction price	$	56,109
Transaction Price Allocated
In-process research and development	$	55,990
Cash acquired		287
Other current assets acquired		153
Other liabilities assumed		(321	)
Total transaction price	$	56,109