Business Combination

12 Months Ended

Jan. 31, 2023

Business Combination and Asset Acquisition [Abstract]

7. Business Combination

On December 3, 2021, the Company completed the acquisition of Opstrace, Inc., a technology company based in San Francisco, California.

The transaction was accounted for as a business combination. The acquisition date fair value of the consideration transferred consisted of the following (in thousands):


Cash consideration	$	2,970
Fair value of common stock issued on closing	959
Contingent common stock consideration (classified under additional paid-in capital)	1,754
Contingent cash consideration	3,007
Contingent cash consideration (classified under other long-term liabilities)	4,893
Total consideration	$	13,583

Cash consideration includes $2.5 million held back as partial security for post-closing indemnification claims made within 18 months of the closing date recorded in accrued expenses and other current

liabilities on the consolidated balance sheet as of January 31, 2023 and in other long-term liabilities as of January 31, 2022.

As a result of acquisition, the fair value of the consideration transferred included contingent cash considerations of $7.9 million in aggregate. These contingent cash considerations are determined based upon the satisfaction of certain defined operational milestones and are remeasured at fair value at each reporting period through earnings. As the fair value is based on unobservable inputs, the liabilities are included in Level 3 of the fair value measurement hierarchy.

In September 2022, one of the operational milestones was achieved and the Company paid $4.2 million of contingent cash consideration, part of which was previously recorded in accrued expenses and other current liabilities. The difference of $1.1 million between the amount accrued and the amount paid was attributable to the change in fair value of the original measurement and was recorded as a loss in general and administrative expenses during the year ended January 31, 2023.

We reassessed the fair value of outstanding operational milestones and recorded the fair value gain of $1.7 million in general and administrative expenses for the year ended January 31, 2023.

Accretion expense was $0.3 million for the year ended January 31, 2023. There was no accretion expense for the years ended January 31, 2022 and 2021.

Results of operations of the business acquired have been included in our consolidated financial statements subsequent to the date of acquisition. The revenue and net loss earned by the business acquired following the acquisition are not material to our consolidated results of operations.