On September 1, 2021, the Company acquired 100% of the outstanding equity interests of Invoice2go. The results of Invoice2go's operations have been included in the accompanying consolidated financial statements since the acquisition date. Invoice2go provides mobile-first accounts receivable software that empowers SMBs and freelancers to grow their client base, manage invoicing and payments, and build their brand. Invoice2go has operations in the U.S. and in Australia, and serves a large global customer base of SMBs. The acquisition of Invoice2go will enhance the Company’s ability to provide an expanded product solution to enable SMBs to manage accounts payable, corporate card spend, and accounts receivable all in one place. Additionally, the acquisition will expand the market opportunity for the Company by offering Invoice2go's product to its existing customers and network members and vice versa.

(1) This includes 1,788,372 shares of the Company’s common stock issued with a fair value based upon the opening market price on the acquisition date. This also includes the stock options assumed to replace stock options that were outstanding on the acquisition date under Invoice2go's 2014 Equity Incentive Plan (Invoice2go 2014 Plan). The fair value of these stock options was $21.7 million, which was the amount attributable to the pre-combination requisite service period.

Customer relationships were measured at fair value using the multiple-period excess earnings method under the income approach. Significant inputs used to measure the fair value include an estimate of projected revenue and costs associated with existing customers, and a discount rate of 12.3%.

Developed technology was measured at fair value using the relief-from-royalty method of the income approach. Significant inputs used to measure the fair value include an estimate of projected revenue from existing technology, a pre-tax royalty rate of 15.0% and a discount rate of 12.3%.

Trade name was measured at fair value using the relief-from-royalty method under the income approach. Significant inputs used to measure the fair value include an estimate of projected revenue from the trade name, a pre-tax royalty rate of 2.5% and a discount rate of 12.3%.

The $585.4 million goodwill is attributable primarily to the expected synergies and economies of scale expected from combining the operations of both entities, and intangible assets that do not qualify for separate recognition, including assembled workforce acquired through the acquisition. None of the goodwill is expected to be deductible for income tax purposes. As a result of ASU 2021-08 adoption on October 1, 2021, retrospectively to September 1, 2021, the Company recorded adjustments of $8.0 million to increase goodwill and deferred revenue, and an immaterial amount to deferred income tax liability. The amounts recorded as measurement period adjustments from the acquisition date through June 30, 2022 were not material.

The Company recognized $3.7 million of acquisition-related costs that were expensed during the year ended June 30, 2022. These costs are shown as part of general and administrative expenses in the accompanying consolidated statements of operations.

The amount of Invoice2go’s revenue and net loss, which includes amortization of intangible assets, from the acquisition date of Invoice2go that were included in the Company’s consolidated statements of operations during the year ended June 30, 2022 were approximately $32.9 million and $32.0 million, respectively.

The unaudited pro forma information below summarizes the combined results (in thousands) of the Company and Invoice2go as if the Company’s acquisition of Invoice2go closed on July 1, 2020, but does not necessarily reflect the combined actual results of operations of the Company and Invoice2go that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma information reflects certain adjustments that were directly attributable to the acquisition of Invoice2go, including additional depreciation and amortization adjustments for the fair value of the assets acquired and liabilities assumed. The pro forma net loss for the year ended June 30, 2022 was adjusted to exclude nonrecurring acquisition-related costs of $19.0 million. The pro forma net loss for the year ended June 30, 2021 was adjusted to exclude nonrecurring acquisition-related costs of $20.6 million.

On Jun 1, 2021, the Company acquired 100% of the outstanding equity interests of DivvyPay, Inc. (Divvy). The results of Divvy’s operations have been included in the consolidated financial statements since the acquisition date. Divvy offers a cloud-based spend management application and smart corporate cards to SMBs in the U.S. The acquisition of Divvy will enhance the Company’s ability to provide an expanded solution to enable SMBs to manage accounts payable, corporate card spend, and accounts receivable all in one place. Additionally, the acquisition will expand the market opportunity for the Company by offering a spend management application combined with smart corporate cards to its existing customers and network members.

(1) This includes 10,767,140 shares of the Company’s common stock issued with a fair value based upon the opening market price on the acquisition date. This also includes the stock options assumed to replace stock options that were granted after May 1, 2019 under Divvy’s 2016 Equity Incentive Plan (Divvy 2016 Plan) and were outstanding on the acquisition date. The fair value of these stock options was $55.3 million, which was the amount attributable to the pre-combination requisite service period.


Cash	$	108,689
Acquired card receivables	159,784
Accounts receivable	7,435
Card receivables held for sale	12,730
Property and equipment	15,805
Intangible assets	423,000
Prepaid expenses and other assets	57,669
Total identifiable assets acquired	785,112
Accounts payable and other liabilities	(153,855)
Outstanding borrowings from credit facilities	(79,703)
Total liabilities assumed	(233,558)
Net identifiable assets acquired	551,554
Goodwill	1,772,043
Net assets acquired	$	2,323,597

Following the acquisition of Divvy, the Company had a period of not more than 12 months to finalize the fair values of assets acquired and liabilities assumed, including valuations of identifiable intangible assets and indemnification asset related to certain assumed liabilities at the acquisition date. During the 12-month measurement period, the Company remeasured the fair value of the leases acquired and the replacement stock based awards included in the purchase consideration. The effect of these measurement period adjustments resulted in a decrease of goodwill by $2.7 million. There were no other material adjustments made during the 12-month measurement period related to the acquisition of Divvy.

The $1.8 billion goodwill is attributable primarily to the expected synergies and economies of scale expected from combining the operations of both entities, and intangible assets that do not qualify for separate recognition, including assembled workforce acquired through the acquisition. Goodwill is not expected to be deductible for income tax purposes.

As of the acquisition date, the fair value of card receivables held for sale, which approximates the gross contractual amount, was $12.7 million. These receivables were substantially settled as of June 30, 2021.

Pursuant to the terms of the merger agreement, the Company recognized an indemnification asset of $13.4 million and $20.4 million related to certain assumed liabilities at the acquisition date as of June 30, 2022 and 2021, respectively. The indemnification asset was measured and recognized on the same basis and at the same time as the indemnified liabilities.

The Company recognized $15.5 million of acquisition-related costs that were expensed during the year ended June 30, 2021. These costs are shown as part of general and administrative expenses in the accompanying consolidated statements of operations.

The amounts of Divvy’s total revenues and net loss that were included in the Company’s consolidated statement of operations from the acquisition date through June 30, 2021 were $10.3 million and $11.4 million, respectively.

The unaudited pro forma information does not necessarily reflect the actual results of operations of the combined entities that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma information reflects certain adjustments that were directly attributable to the acquisition of Divvy, including additional depreciation and amortization adjustments for the fair value of the assets acquired and liabilities assumed. The pro forma net loss for the year ended June 30, 2021 was adjusted to exclude nonrecurring acquisition related costs of $2.3 million. The pro forma net loss for the year ended

Jun 30, 2020 was adjusted to include nonrecurring acquisition-related costs of $75.3 million. Below is the unaudited pro forma financial information of the combined results of operations of the Company and Divvy as if the acquisition occurred on July 1, 2019 (in thousands).