On April 26, 2022, the Company completed the acquisition of 100% of the outstanding equity of Symphony Buyer, Inc., or Inform Diagnostics, a leading national independent pathology laboratory based in Irving, Texas. Under the terms of the Agreement and Plan of Merger, dated April 16, 2022, or the Merger Agreement, the total purchase price payable to the securityholders of Symphony Buyer, Inc. was approximately $170 million, as adjusted for closing cash, closing indebtedness, closing working capital, closing transaction expenses and other transaction matters. With the addition of Inform Diagnostics, the Company will further expand the Company’s genomic testing footprint and extend its test menu into breast pathology, gastrointestinal pathology, dermatopathology, urologic pathology, neuropathology, and hematopathology.

The financial results of Inform Diagnostics are included in the condensed consolidated financial statements from the date of acquisition. The Company allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on estimated fair values. As additional information becomes available, the Company may further update the preliminary purchase price allocation during the remainder of the measurement period (up to one year from the acquisition date). The following tables summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:


	Amounts
	(in thousands)
Considerations
Cash, net of cash received	$	137,755


Recognized amounts of identifiable assets acquired and liabilities assumed
Net working capital	$	(15,024	)
Fixed assets		20,967
ROU assets - operating		12,653
ROU assets - finance		1,183
Deferred tax assets		3,446
Other long-term assets		4,711
Identifiable intangible assets		56,560
Operating lease liabilities		(12,653	)
Finance lease liabilities		(1,183	)
Income tax payable		(40	)
Other long-term liabilities		(4,449	)
Recognized amounts of identifiable assets acquired and liabilities assumed, net		66,171
Goodwill		71,584
Total	$	137,755

The goodwill of $71.6 million arising from the acquisition is attributed to the expected synergies, assembled workforce, other benefits that will be potentially generated from the combination and deferred tax. The goodwill recognized is not deductible for tax purposes.

The identified intangible assets acquired consisted of $53.5 million customer relationships with an estimated amortization life of 14 years, $2.7 million trade name with an estimated amortization life of 7 years, and $360,000 in-place lease intangible asset to be amortized over the remaining lease term of 5 years.

The fair value of the customer relationship was estimated using the Multiperiod Excess Earnings Method, or MPEEM, of the income approach. Under the MPEEM, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows attributable only to the subject intangible asset after deducting contributory asset charges. The incremental after-tax cash flows attributable to the customer relationships are then discounted to their present value at a risk-adjusted rate of return. The fair value of the trade name was estimated using the relief from royalty, or RFR, method. The RFR method estimates the portion of the Company's earnings attributable to an intangible asset based on the royalty rate the Company would have paid for the use of the asset if it did not own it. The fair value of in-place lease intangible asset was estimated using the discounted cash flow under the income approach. The useful lives of the intangible assets for amortization purposes were determined by considering the period of expected cash flows used to measure the fair values of the intangible assets adjusted as appropriate for entity-specific factors including legal, regulatory, contractual, competitive, economic and other factors that may limit the useful life. The customer relationships and trade name are amortized on a straight-line basis over their estimated useful lives.

Revenue and operating loss from the Inform Diagnostics acquisition since the acquisition date are $23.7 million and $7.1 million, respectively, which are included in the accompanying Condensed Consolidated Statements of Income.

The transaction costs associated with the acquisition of Inform Diagnostics consisted primarily of legal, regulatory and financial advisory fees of approximately $5.2 million and $6.4 million for the three and six months ended June 30, 2022, respectively. These transaction costs were expensed as incurred as selling, general and administrative expense in the respective periods.

Acquisition-related costs - Acquisition-related costs incurred by both Fulgent and Inform Diagnostics were excluded from the net income attributable to Fulgent, and total costs were $8.2 million and $9.5 million for the three and six months ended June 30, 2022, respectively.

Other adjustments to the net income attributable to Fulgent were $172,000 and $690,000 for three and six months ended June 30, 2022, respectively, and $517,000 and $1.0 million for the three and six months ended June 30, 2021, respectively. Other adjustments to revenue were $196,000 and $962,000 for the three and six months ended June 30, 2022, respectively, and $1.0 million and $1.7 million were added back to revenue for the three and six months ended June 30, 2021, respectively.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Revenue	$	133,720	$	193,156	$	486,027	$	589,851
Net income attributable to Fulgent	$	10,461	$	83,271	$	162,317	$	282,703
Basic earnings per common share attributable to Fulgent	$	0.34	$	2.86	$	5.36	$	9.75
Diluted earnings per common share attributable to Fulgent	$	0.34	$	2.70	$	5.20	$	9.18