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Business Combinations
 6 Months Ended
Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Business Combinations Business Combinations
The Company acquired Silicon Radar in February 2023, GEO Semiconductor, Inc. (“GEO”) in March 2023, Exalos in September 2023, and Kinetic in January 2024. These acquisitions were recorded by allocating the purchase consideration to the net assets acquired based on their estimated fair values at the acquisition date. The excess of the purchase consideration for the acquisition over the fair value of the net assets acquired is recorded as goodwill. The following presents the preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed for Exalos and Kinetic, and the final allocation of the purchase consideration to the assets acquired and liabilities assumed for Silicon Radar and GEO as of June 30, 2024:

KineticExalosSilicon RadarGEO
Purchase price - cash consideration paid$3,200 $— $8,653 $91,076 
Purchase price - cash consideration accrued1,300 — 800 3,464 
Less: cash acquired— (3,439)(208)(1,092)
Net cash consideration$4,500 $(3,439)$9,245 $93,448 
Purchase price - equity consideration issued (common stock)$— $42,791 $9,834 $75,556 
Purchase price - equity consideration issuable (common stock)— 2,500 — 20,979 
Total equity consideration$— $45,291 $9,834 $96,535 
Contingent consideration4,599 13,225 9,240 59,280 
Net consideration$9,099 $55,077 $28,319 $249,263 
Estimated fair value of net assets and liabilities assumed:
Current assets other than cash$6,040 $4,408 $2,979 $24,043 
Property and equipment962 1,001 781 178 
Developed technology455 7,968 4,950 69,330 
In-process research & development750 7,968 8,870 27,040 
Customer relationships250 5,312 4,340 14,220 
Backlog19 664 150 390 
Trade name97 3,984 2,130 10,320 
Operating lease right-of-use assets step-up— 664 — — 
Other non-current assets729 — 17 10 
Current liabilities(752)(3,541)(1,585)(6,084)
Deferred revenue— — (512)— 
Deferred tax liabilities, non-current— (5,318)(2,772)(1,982)
Other non-current liabilities(217)— — (711)
Total fair value of net assets acquired$8,333 $23,110 $19,348 $136,754 
Goodwill$766 $31,967 $8,971 $112,509 
For all acquisitions, trade receivables and payables, as well as other current and non-current assets and liabilities and deferred revenue, were valued at the existing carrying value as they represented the fair value of those items at the acquisition date, based on management’s judgments and estimates.
Because the acquisitions related to Exalos and Kinetic occurred relatively recently, and in light of the magnitude of the transactions, the significant information to be obtained and analyzed and the fact that Exalos resides in a foreign jurisdiction, the Company’s fair value estimates for the purchase price allocation are preliminary and may change during the allowable measurement period, which is up to the point the Company obtains and analyzes the information that existed as of the date of the acquisition necessary to determine the fair values of the assets acquired and liabilities assumed, but in no case to exceed more than one year from the date of the acquisition. Changes in the estimated fair values of the net assets recorded for the business combinations of Exalos and Kinetic upon the finalization of more detailed analyses of the facts and circumstances that
existed at the date of the transactions will change the allocation of the purchase price. Subsequent changes to the purchase allocation during the measurement period that are material will be recorded in the reporting period in which the adjustment amounts are determined. As of August 9, 2024, the Company had not finalized the determination of fair values allocated to various assets and liabilities, including, but not limited to, inventory, property, plant and equipment, identifiable intangible assets, deferred taxes, goodwill, tax uncertainties, income taxes payable and other liabilities. Specifically for the valuation of intangibles assets acquired, the Company used publicly available benchmarking information, as well as a variety of other assumptions, including market participant assumptions to determine the preliminary values. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in material adjustments to goodwill and/or deferred taxes.
Refer to Note 2 Business Combination within Part II, Item 8 of our 2023 Annual Report on Form 10-K for the fiscal year ended December 31, 2023 under the heading “Financial Statements and Supplementary Data” for a detailed discussion of acquisitions of Silicon Radar and GEO.
Acquisition of Exalos AG
On September 18, 2023, Ay Dee Kay Ltd. completed its acquisition of Exalos AG, a Swiss corporation (“Exalos”), pursuant to that Share Sale and Purchase Agreement by and among Ay Dee Kay Ltd., the Company and all of the stockholders of Exalos, whereby Ay Dee Kay Ltd. acquired all of the outstanding common shares of Exalos. The closing consideration consisted of (i) approximately 6,613,786 shares of Class A common stock of the Company, with a fair value of $42,791, and (ii) a contingent consideration with fair value of $13,225 at closing, payable in cash or Class A common stock, subject to Exalos’ achievement of certain revenue-based milestones through September 30, 2025; and (iii) a holdback of $2,500 subject to final release 12 months from the acquisition date payable in shares of Class A common stock. The purchase price is subject to working capital and other adjustments as provided in the Share Sale and Purchase Agreement.
The Company paid a premium (i.e., goodwill) over the fair value of the net tangible and identified intangible assets acquired as this acquisition immediately expands the Company’s ADAS and User Experience product and technology offering to its global tier one and automotive OEM customer base. Specifically, indie can now leverage Exalos’ technology portfolio to extend its FMCW LiDAR portfolio. The goodwill is not expected to be deductible for tax purposes.
The Company incurred various acquisition-related costs, which were primarily legal expenses and recorded as part of the Selling, General and Administrative expenses. Total costs incurred were $621 during the year ended December 31, 2023. Total costs incurred are $243 for the six months ended June 30, 2024
The Company maintains an adjustment holdback for the purpose of providing security against any adjustment to the amounts at closing. The holdback period extends for twelve months from the closing date and will be paid in shares of Class A common stock.
Total purchase consideration transferred at closing also included contingent consideration that had a fair value of $13,225 as of the acquisition date. The acquisition date fair value of the contingent consideration was determined based on the Company’s assessment of the probability of achieving the performance targets that ultimately obligate the Company to transfer additional consideration to the seller. The contingent consideration is comprised of two tranches, both subject to Exalos achieving certain revenue targets. Both tranches are payable in cash or Class A common stock, at indie’s election, up to a maximum of $20,000, upon the achievement of a revenue threshold of $19,000 for the twelve-month period ending on September 30, 2024 and the achievement of a revenue threshold of $21,000 for the twelve-month period ending on September 30, 2025, respectively. The fair value of any outstanding contingent consideration liabilities will be remeasured as of the end of each reporting period with any resulting remeasurement gains or losses recognized in the condensed consolidated statement of operations. The first tranche of this earn-out liability is reflected in Contingent considerations and the second tranche is reflected in Other long-term liabilities in the condensed consolidated balance sheet as of June 30, 2024.
Pro forma financial information for Exalos is not disclosed as the results are not material to the Company’s condensed consolidated financial statements.
Acquisition of Kinetic
On January 25, 2024 (“Deal Closing Date”), indie and ADK LLC completed its acquisition of Kinetic. The acquisition was consummated pursuant to an executed APA to acquire certain research and development personnel, intellectual property and business properties from Kinetic, in support of a custom product development for a North American electric vehicle OEM. The closing consideration consisted of (i) $3,200 in cash as the Initial Cash Consideration, net of an adjustment holdback amount of $500 and an indemnity holdback amount of $800, (ii) the Production Earnout with fair value of $2,348, payable in cash or Class A common stock, subject to achievement of certain production based milestones 24 months after the Deal Closing Date, and (iii) the Revenue Earnout with fair value of $2,251, payable in cash or Class A common stock, subject to achievement of certain revenue based milestones 12 months after the Deal Closing Date. The purchase price is subject to working capital and other adjustments as provided in the APA. The indemnity holdback amount is payable within five business days after the 18-month anniversary of the Deal Closing Date and is payable in shares of Class A common stock.
The Company paid a premium (i.e., goodwill) over the fair value of the net tangible and identified intangible assets acquired as this acquisition brings the Company a new family of smart connectivity solutions that enable high-speed networking of displays and controllers throughout the vehicle, which already generated interest from OEMs. The goodwill is expected to be deductible for tax purposes.
indie incurred various acquisition-related costs, which were primarily legal expense, and recorded these as part of the Selling, General and Administrative expenses. Total costs incurred are $350 for the six months ended June 30, 2024.
The Company maintains an adjustment holdback for the purpose of providing security against any adjustment to the amounts at closing. The holdback period extends for 18 months from the Deal Closing Date and will be paid in cash.
Total purchase consideration transferred at the Deal Closing Date also included contingent consideration that had a total fair value of $4,599 as of the acquisition date. The acquisition date fair value of the contingent considerations was determined based on the Company’s assessment of the probability of achieving the performance targets that ultimately obligate the Company to transfer additional consideration to the seller. The contingent consideration is comprised of two tranches and both are payable in cash or Class A common stock, at indie’s election. The Production Earnout pays up to a maximum of $3,000, upon fulfillment of certain production volume of a predetermined product within 24-month period ending on January 24, 2026. The Revenue Earnout pays up to a maximum of $2,500 upon the achievement of a minimum revenue threshold of $12,000 for the twelve-month period ending on January 24, 2025. The fair value of any outstanding contingent consideration liabilities will be remeasured as of the end of each reporting period with any resulting remeasurement gains or losses recognized in the condensed consolidated statement of operations. The Revenue Earnout is reflected in Contingent considerations and the Production Earnout is reflected in Other long-term liabilities in the condensed consolidated balance sheet as of June 30, 2024.
Pro forma financial information for Kinetic is not disclosed as the results are not material to the Company’s condensed consolidated financial statements.