In fiscal year 2022, we acquired substantially all of the assets of the Grilla Grills business of Fahrenheit Technologies, Inc., or FTI, for $27 million, financed using a combination of existing cash balances and cash from a $25 million draw on our revolving line of credit. Based in Michigan, Grilla Grills is a provider of high-quality, barbecue grills; Wi-Fi-enabled wood pellet grills; smokers; accessories; and modular outdoor kitchens.

We accounted for the acquisition as a business combination using the acquisition method of accounting. The purchase price allocation below was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. We expect to finalize the purchase price allocation as soon as practicable during the respective measurement periods, which will not exceed 12 months from the date of acquisition. The acquisition of Grilla Grills will necessitate the use of this measurement period to adequately analyze and assess a number of factors used in establishing the asset and liability fair values as of the acquisition date, including the significant contractual and operational factors underlying the tradename, intangible assets, and the related tax impacts of any changes made. The excess of the consideration transferred over the estimated fair value of the net assets received has been recorded as goodwill. The factors that contributed to the recognition of goodwill primarily relate to acquisition-driven anticipated cost savings and synergies. Assembled workforce is not recognized separate and apart from goodwill as it is neither separable nor contractual in nature. During the year ended April 30, 2022, we increased goodwill by $3.5 million as a result of valuations related to the Grilla Grills acquisition, which was subsequently written off as we recorded a full impairment of our goodwill on April 30, 2022. The goodwill related to the Grilla Grills acquisition is deductible for tax purposes.

The following table summarizes the preliminary allocation of the purchase price for the Grilla Grills acquisition (in thousands):


	Grilla Grills Acquisition (as reported)

Inventories	$	5,956
Property, plant, and equipment		105
Intangibles		18,495
Goodwill		3,534
Total assets acquired		28,090
Accounts payable		894
Accrued expenses		46
Accrued warranty		150
Total liabilities assumed		1,090
	$	27,000

We recorded $646,000 of acquisition-related costs, including $47,000 of acquisition-related costs incurred in the three months ended July 31, 2022, which are recorded in general and administrative expenses. The Grilla Grills acquisition generated $5.2 million of net sales during the three months ended July 31, 2022.

We determined the fair market value of the intangible assets acquired in accordance with ASC 805 - Business Combinations and ASC 820 - Fair Value Measurement and assigned a fair market value of $18.5 million to tradenames at the acquisition date. We amortize assets in proportion to expected yearly revenue generated from the intangibles that we acquire. The weighted average life of tradenames acquired is 6.5 years.

Additionally, the following table reflects the unaudited pro forma results of operations assuming that the Grilla Grills acquisition had occurred on May 1, 2021 (in thousands, except per share data):



	For the Three Months ended July 31, 2021
Net sales	$	65,193
Income from operations		4,240
Net income per share - diluted		0.24

The unaudited pro forma income from operations for the three months ended July 31, 2021 has been adjusted to reflect increased cost of goods sold from the fair value step-up in inventory, which is expensed over the first inventory cycle, and the amortization of intangibles as if the Grilla Grills acquisition had occurred on May 1, 2021. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the actual results that would have been achieved had the Grilla Grills acquisition occurred as of May 1, 2021 or the results that may be achieved in future periods.