Business Combinations (Tables)

9 Months Ended

Sep. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Schedule of Allocation of Purchase Price

The following table sets forth the preliminary allocation of the purchase price to Thrasys’ identifiable tangible and intangible assets acquired and liabilities assumed, including measurement period adjustments. The allocation of value in this table is subject to reevaluation during the measurement period.

(In thousands)	As of September 30, 2021		Measurement Period Adjustments		As of November 20, 2020
Accounts receivable	$	3,491	$	—	$	3,491
Prepaid expenses and other	3,001		—		3,001
Identifiable intangible assets	27,875		—		27,875
Property and equipment	101		—		101
Other assets	19		—		19
Goodwill	145,036		(3,052)		148,088
Total assets acquired	179,523		(3,052)		182,575
Accounts payable	1,779		—		1,779
Accrued expenses and other current liabilities	5,322		—		5,322
Debt	430		(531)		961
Deferred tax liabilities	6,378		—		6,378
Deferred revenue	700		—		700
Total liabilities assumed	14,609		(531)		15,140
Net assets acquired	$	164,914	$	(2,521)	$	167,435

The following table sets forth the preliminary allocation of the purchase price to BHS’ identifiable tangible and intangible assets acquired and liabilities assumed, including measurement period adjustments. The allocation of value in this table is subject to reevaluation during the measurement period.

(In thousands)	As of September 30, 2021		Measurement Period Adjustments		As of November 20, 2020
Accounts receivable	$	1,257	$	—	$	1,257
Inventories	100		—		100
Prepaid expenses and other	40		—		40
Identifiable intangible assets	225		—		225
Property and equipment	53		—		53
Other assets	4		—		4
Deferred tax assets	19		—		19
Goodwill	15,339		(767)		16,106
Total assets acquired	17,037		(767)		17,804
Accounts payable	374		—		374
Accrued expenses and other current liabilities	847		421		426
Debt	229		(1,005)		1,234
Total liabilities assumed	1,450		(584)		2,034
Net assets acquired	$	15,587	$	(183)	$	15,770

The following table sets forth the preliminary allocation of the purchase price to TTC’s identifiable tangible and intangible assets acquired and liabilities assumed, including measurement period adjustments. The allocation of value in this table is subject to reevaluation during the measurement period.

(In thousands)	As of September 30, 2021		Measurement Period Adjustments		As of January 25, 2021
Accounts receivable	$	1,773	$	—	$	1,773
Prepaid expenses and other	187		—		187
Identifiable intangible assets	1,125		—		1,125
Property and equipment	531		—		531
Other assets	281		—		281
Goodwill	57,921		347		57,574
Total assets acquired	61,818		347		61,471
Accounts payable	625		—		625
Accrued expenses and other current liabilities	602		—		602
Due to related parties	4,200		2,807		1,393
Debt	11,217		(1,283)		12,500
Deferred tax liabilities	474		—		474
Total liabilities assumed	17,118		1,524		15,594
Net assets acquired	$	44,700	$	(1,177)	$	45,877

The following table sets forth the preliminary allocation of the purchase price to Glocal's identifiable tangible and intangible assets acquired and liabilities assumed, including measurement period adjustments. The allocation of value in this table is subject to reevaluation during the measurement period.

(In thousands)	As of September 30, 2021		Measurement Period Adjustments		As of March 26, 2021
Accounts receivable, net	$	4,461	$	(2,000)	$	6,461
Inventories	326		—		326
Identifiable intangible assets	38,039		—		38,039
Property, equipment, and work in progress	40,726		—		40,726
Other current assets, including short term advances	1,980		—		1,980
Other noncurrent assets, including long term advances	509		—		509
Goodwill	109,872		18,001		91,871
Total assets acquired	195,913		16,001		179,912
Accounts payable	579		—		579
Accrued expenses and other current liabilities	8,271		—		8,271
Deferred tax liability	9,890		9,890		—
Debt	34,171		11,959		22,212
Noncontrolling interest	17,389		—		17,389
Total liabilities assumed and noncontrolling interest	70,300		21,849		48,451
Net assets acquired	$	125,613	$	(5,848)	$	131,461

The following table sets forth the preliminary allocation of the purchase price to Innovation’s identifiable tangible and intangible assets acquired and liabilities assumed. The allocation of value in this table is subject to reevaluation during the measurement period.

(In thousands)	As of September 30, 2021		Measurement Period Adjustments		As of April 27, 2021
Accounts receivable	$	47	$	—	$	47
Inventories	2,693		—		2,693
Prepaid expenses and other	530		—		530
Identifiable intangible assets	28,325		—		28,325
Property and equipment	7,937		—		7,937
Other assets	22		—		22
Goodwill	144,264		534		143,730
Total assets acquired	183,818		534		183,284
Accounts payable	472		—		472
Accrued expenses and other current liabilities	780		—		780
Deferred revenue	302		—		302
Deferred tax liability	7,837		—		7,837
Debt	4,069		—		4,069
Noncontrolling interests	534		534		—
Total liabilities assumed and noncontrolling interest	13,994		534		13,460
Net assets acquired	$	169,824	$	—	$	169,824

The following table sets forth the preliminary allocation of the purchase price to Cloudbreak's identifiable tangible and intangible assets acquired and liabilities assumed. The allocation of value in this table is subject to reevaluation during the measurement period.

(In thousands)	As of September 30, 2021		Measurement Period Adjustments		As of June 9, 2021
Accounts receivable	$	4,810	$	—	$	4,810
Prepaid expenses and other	921		—		921
Identifiable intangible assets	32,475		—		32,475
Property and equipment	6,882		—		6,882
Other assets	1,042		—		1,042
Goodwill	111,363		395		110,968
Total assets acquired	157,493		395		157,098
Accounts payable	2,518		—		2,518
Accrued expenses and other current liabilities	987		82		905
Deferred revenue	15		—		15
Deferred tax liability	7,906		—		7,906
Other long-term liabilities	300		300		—
Debt	3,752		—		3,752
Total liabilities assumed	15,478		382		15,096
Net assets acquired	$	142,015	$	13	$	142,002

Schedule of Acquired Intangible Assets

The acquired intangible assets from Thrasys and their related estimated useful lives consisted of the following:

	Value		Useful Life
(In thousands)			(in years)
Definite-lived intangible assets—Trade names	$	6,925	10
Definite-lived intangible assets—Technology and intellectual property	10,825		10
Definite-lived intangible assets—Customer relationships	10,125		10
Total fair value of identifiable intangible assets	$	27,875

The acquired intangible assets from BHS and their related estimated useful lives consisted of the following:

	Value		Useful Life
(In thousands)			(in years)
Definite-lived intangible assets—Trade names	$	225	3
Total fair value of identifiable intangible assets	$	225

The acquired intangible assets from TTC and their related estimated useful lives consisted of the following:

	Approximate Fair Value		Estimated Useful Life
(In thousands)			(in years)
Definite-life intangible assets – Trade names	$	1,125	3
Total fair value of identifiable intangible assets	$	1,125

The acquired intangible assets from Glocal and their related estimated useful lives consisted of the following:

	Approximate Fair Value		Estimated Useful Life
(In thousands)			(in years)
Definite-lived intangible assets—Technology and intellectual property	$	38,039	8.5
Total fair value of identifiable intangible assets	$	38,039

The acquired intangible assets from Innovations and their related estimated useful lives consisted of the following:

	Approximate Fair Value		Estimated Useful Life
(In thousands)			(in years)
Definite-lived intangible assets—Trade names	$	10,925	10
Definite-lived intangible assets—Technology and intellectual property	8,075		5 - 7
Definite-lived intangible assets—Customer relationships	9,325		17
Total fair value of identifiable intangible assets	$	28,325

The acquired intangible assets from Cloudbreak and their related estimated useful lives consisted of the following:

	Approximate Fair Value		Estimated Useful Life
(In thousands)			(in years)
Definite-lived intangible assets—Trade names	$	12,975	15
Definite-lived intangible assets—Technology and intellectual property	5,825		5
Definite-lived intangible assets—Customer relationships	13,675		10
Total fair value of identifiable intangible assets	$	32,475

Schedule of Pro Forma Results

The following unaudited pro forma consolidated financial information reflects the results of operations as if the acquisition of UpHealth Holdings (including all subsidiaries) and Cloudbreak had occurred on January 1, 2020, after giving effect to certain purchase accounting adjustments. These purchase accounting adjustments mainly include incremental depreciation expense related to the fair value adjustment of property and equipment, amortization expense related to identifiable intangible assets, and tax expense related to the combined tax provisions. This information does not purport to be indicative of the actual results that would have occurred if the acquisition had actually been completed on the date indicated, nor is it necessarily indicative of the future operating results or the financial position of the combined company:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Pro Forma
Revenues	$	49,070	$	26,582	$	118,848	$	86,050
Net income (loss)	$	32,592	$	(3,215)	$	(7,459)	$	(12,269)
Basic earnings per share	$	0.28	$	(0.06)	$	(0.08)	$	(0.25)
Diluted earnings per share	$	0.28	$	(0.06)	$	(0.08)	$	(0.25)