BUSINESS COMBINATIONS

9 Months Ended

Sep. 30, 2021

Business Combination and Asset Acquisition [Abstract]

NOTE 3: BUSINESS COMBINATIONS

On August 13, 2021, we acquired all outstanding stock of A Say Inc. and its subsidiaries ("Say Technologies"). Subsequently, we caused A Say Inc. to merge with each of its three subsidiaries and converted it into a limited liability company under the name Say Technologies LLC, which remains a wholly-owned subsidiary of RHM. New York-based Say Technologies, founded in 2017, is an investor communications and shareholder engagement platform. The acquisition of Say Technologies will allow us to empower retail investors to access their full ownership rights by facilitating proxy and issuer materials delivery and making shareholder voting on corporate matters easier.

The acquisition date fair value of the consideration transferred for Say Technologies was $132.8 million, which consisted of the following:


(in thousands)	Fair Value
Cash	$	132,168
Share-based compensation awards attributable to pre-combination services	639
Total consideration	$	132,807

We entered into holdback agreements with certain employees of Say Technologies for $11.1 million in cash payments, which are contingent upon the continuous service of the employees and treated as post-combination compensation expense over the required service period of three years. For employees of Say Technologies with unvested Say Technologies equity awards, we issued replacement awards under our 2021 Plan (as defined below in Note 13) with an estimated fair value of $6.3 million. Of this

amount, $0.6 million was allocated to the consideration transferred and $5.7 million was allocated to post-combination services and will be expensed as compensation expense over the remaining service periods on a straight-line basis. In addition, we paid $1.9 million to cash-settle certain unvested Say Technologies equity awards, which was treated as post-combination compensation expense and recognized immediately as share-based compensation in our unaudited condensed consolidated statement of operations.

Transaction costs associated with the acquisition, which included legal, due diligence, and other professional fees, were not material.

The purchase price allocation is based on a preliminary valuation and subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available, including certain tax matters, during the measurement period (up to one year from the acquisition date). The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:


(in thousands)	Fair Value
Cash and cash equivalents	$	15,412
Accounts receivable	1,704
Goodwill	93,094
Intangible assets	34,600
Other current assets	192
Accounts payable, accrued expenses and other current liabilities	(9,354)
Deferred tax liability	(2,841)
Net assets acquired	$	132,807

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is not deductible for tax purposes. Goodwill is primarily attributed to the assembled workforce of Say Technologies and anticipated operational synergies. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions at the time of acquisition. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:


(in thousands, except years)	Fair Value		Useful Life
Developed technology	$	22,000	3
Customer relationships	12,000		10
Trade names	600		3
Total	$	34,600

The overall weighted average useful life of the identified amortizable intangible assets acquired is five years. The estimated fair value of the intangible assets acquired approximate the amounts a market participant would pay for these intangible assets as of August 13, 2021. We used the replacement cost method to estimate the fair value of developed technology and the relief from royalty method to estimate the fair value of trade names. A multi-period excess earnings method was used to estimate the fair value of customer relationships.

Tangible net assets were valued at their respective carrying amounts as of the acquisition date, as these amounts approximated fair value.

Results of operations of Say Technologies were included in our results since the date of acquisition and were not material for the period ended September 30, 2021. Pro forma results of operations for Say Technologies have not been presented as the effect of this acquisition was not material.