On January 25, 2023 (“Acquisition Closing Date”), Legacy Tigo acquired 100% of the equity interests of fSight. The results of fSight’s operations have been included in the consolidated financial statements since the Acquisition Closing Date. fSight primarily focuses on developing and marketing a software as a service platform, based on artificial intelligence for the smart management of electrical energy. The acquisition expands the Company’s ability to leverage energy consumption and production data for solar energy producers, adding a prediction platform that provides actionable system performance data, from the grid down to the module level.

Under the terms of the purchase agreement, total consideration amounted to $13.2 million which consisted of 5,598,751 shares of Legacy Tigo’s common stock (which represents 1,306,385 shares of Common Stock on an as-converted basis as a result of the Business Combination) issued at closing with a fair value of approximately $11.0 million, 737,233 shares of Legacy Tigo’s common stock (which represents 172,022 shares of Common Stock on an as-converted basis as a result of the Business Combination) with a fair value of approximately $1.4 million to be issued 12 months from closing and 368,617 shares of Legacy Tigo’s common stock (which represents 86,011 shares of Common Stock on an as-converted basis as a result of the Business Combination) with a fair value of approximately $0.7 million to be issued 18 months from closing (collectively with the shares to be issued at 12 months “Contingent Shares”). In addition to the consideration in the purchase agreement, there is an additional $0.5 million in consideration related to a loan that the Company issued to fSight prior to the Acquisition Closing Date, for a total consideration transferred of $13.7 million. The loan payable was deemed settled immediately following the Acquisition Closing Date.

Pursuant to the terms of the purchase agreement, the Contingent Shares are subject to adjustment based on certain indemnification obligations, liabilities or settlements that may arise during the contingency period, which ends 18 months following the Acquisition Closing Date. During the year ended December 31, 2023, there was an adjustment recorded against the Contingent Shares related to an unrecorded liability that was not present as of the opening balance sheet date of January 25, 2023, and the number of Contingent Shares was adjusted downward by 5,745 shares to reflect this change. As of December 31, 2023, there was a total of up to 252,288 Contingent Shares that may be issued pursuant to the terms of the purchase agreement.

The contingent shares were recorded as a liability at a fair value of approximately $2.1 million on the Acquisition Closing Date based on the fair value of Legacy Tigo’s common stock at the Acquisition Closing Date. The contingent shares liability is recorded in accrued expenses and other current liabilities financial statement line items within the consolidated balance sheet. At December 31, 2023, the liability was revalued to $0.5 million based upon Legacy Tigo’s common stock fair value per share on December 31, 2023. The $1.6 million gain on mark to market was recorded in the change in fair value of preferred stock warrant and contingent share liability financial statement line item within the consolidated statement of operations and comprehensive loss for the year ended December 31, 2023.

The transaction was accounted for as a business combination pursuant to ASC Topic 805, “Business Combinations”, using the acquisition method of accounting and in conjunction with the acquisition, Legacy Tigo recognized $0.2 million of acquisition-related costs during the year ended December 31, 2023, which were expensed as incurred and are recorded in general and administrative expenses on the consolidated statement of operations and comprehensive loss.

The following table summarizes the provisional fair values of the identifiable assets acquired and liabilities assumed at the date of the acquisition:


(in thousands)	As previously reported - September 30, 2023		PPA Adjustments			Final - December 31, 2023
Consideration transferred (1):
Fair value of common stock issued	$	10,974	$	—		$	10,974
Fair value of contingent shares		2,167		—			2,167
Deemed settlement of loan payable		527		—			527
Total consideration	$	13,668	$	—		$	13,668

Assets Acquired
Cash and cash equivalents	$	55	$	—		$	55
Accounts receivable		117		—			117
Property and equipment		9		—			9
Developed technology		1,820		—			1,820
Customer relationships		170		—			170
Goodwill		13,079		(870	)		12,209
Total assets acquired	$	15,250	$	(870	)	$	14,380
Liabilities Assumed
Accounts payable	$	418	$	—		$	418
Accrued expenses		294		—			294
Other current liabilities		89		(89	)		—
Other long-term liabilities		781		(781	)		—
Net assets acquired	$	13,668	$	(870	)	$	13,668

(1)

The reported provisional amounts presented above have been updated from the Company’s S-1 filed with the SEC on June 22, 2023. The Company recorded an out of period adjustment related to the adjustment of the provisional fair market value of the Legacy Tigo common stock that was used to develop the calculation of the purchase price consideration. The Company does not believe that the adjustment had a material impact on its consolidated statements of operations and comprehensive loss, consolidated balance sheets, or consolidated statements of cash flows in any periods previously reported.

During the fourth quarter of 2023, upon the recognition that the liabilities associated with other current liabilities and other long-term liabilities, initially assumed and incorporated within the opening balance sheet as of January 25, 2023, were not obligatory, the Company made an adjustment to the financial statement line items associated with these liabilities and correspondingly adjusted goodwill. Additionally, in the fourth quarter of 2023, the Company finalized its fair value determination on the acquired assets and assumed liabilities, and completed its assessment of the purchase price allocation. The purchase price was allocated to the tangible assets and identifiable intangible assets acquired and liabilities assumed based on their acquisition date estimated fair values. Accounts receivable and property and equipment acquired were not material in size or scope, and the carrying amounts of these assets represented their fair value. The identifiable intangible assets consist of developed technology and customer relationships which were assigned fair values of approximately $1.8 million and $0.2 million, respectively. The developed technology and customer relationships are all being amortized on a straight-line basis over 10 years.

Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired in addition to liabilities assumed arising from the business combination. The Company believes the goodwill related to the acquisition was attributable to the expected synergies, value of the assembled workforce, and the collective experience of the management team with regards to its operations, customers, and industry. As a non-taxable stock acquisition, the value attributable to the acquired intangibles and goodwill are not tax deductible.

For the year ended December 31, 2023, the Company’s consolidated statement of operations included net revenues of $0.6 million and a net loss of $1.4 million attributable to fSight.