The FCI Acquisition expanded the Company’s product portfolio to include high-resolution cell images with the speed, sensitivity and phenotyping abilities of flow cytometry and added cost-effective, entry-level and personal instrument options to broaden the market and research areas the Company services.

The acquisition was accounted for as a business combination in accordance with ASC 805. The purchase price has been allocated to tangible assets and identifiable intangible assets acquired and liabilities assumed based upon their estimated fair values, with the exception of contract liabilities assumed which are recognized and measured in accordance with ASC 606, Revenue from Contracts with Customers. The Company finalized its accounting for the FCI Acquisition during the fourth quarter of 2023.


	(in thousands)
Fair value of assets acquired and liabilities assumed:
Inventories	$	18,695
Property and equipment	3,040
Prepaid expenses	70
Deferred tax assets	570
Intangible assets
Customer relationships	8,600
Amnis ImageStream® developed technology	10,000
Guava easyCyte™ and Muse® developed technology	140
Amnis FlowSight® and CellStream® developed technology	20
Amnis trade name	2,900
Guava trade name	90
Goodwill	6,039
Deferred revenue	(4,952)
Accrued warranty costs	(316)
Fair value of net assets acquired	$	44,896

The $6.0 million of goodwill arising from the FCI Acquisition is primarily attributed to significant time-to-market advantages, as the Company gained immediate access to the FCI Products, existing relationships and business infrastructure and knowledgeable and experienced workforce. The goodwill is deductible for tax purposes. The Company has integrated the FCI Business into its existing business structure, which is comprised of a single reportable segment and a single reporting unit.

Intangible assets identified for recognition separate from goodwill were those that satisfied either the contractual or legal criterion or the separability criterion in the accounting guidance. The identifiable intangible assets acquired and their estimated useful lives for amortization are as follows:


	Fair Value		Useful life (years)
	(In thousands, except for years)
Customer relationships	$	8,600	9
Amnis ImageStream® developed technology	10,000		6
Guava easyCyte™ and Muse® developed technology	140		2
Amnis FlowSight® and CellStream® developed technology	20		1
Amnis trade name	2,900		15
Guava trade name	90		3
Total	$	21,750

The customer relationships intangible asset represents the fair value of the underlying relationships with existing customers of the FCI Business. The trade name intangible asset represents the fair value of brand and name recognition associated with the marketing of the FCI Products. The FCI developed technology intangible asset represents the fair value of access to certain imaging and microcapillary technologies.

The fair value of the intangible assets acquired were estimated using variations of the income approach. The fair value of the customer relationships intangible asset was determined based on the multi-period excess earnings method and the relief-from-royalty method was utilized to estimate the fair values of the trade name and FCI developed technology intangible assets. The key assumptions used in estimating the fair values of intangible assets included forecasted financial information; customer retention rates; factors for technological obsolescence; royalty rates and discount rates. The cash flow projections were discounted using rates ranging from 29.0% to 39.0%. The cash flows were based on estimates used to price the transaction, including market participant considerations, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital.

The fair value assigned to the assets acquired are based on reasonable assumptions and estimates that market participants would use. Actual results may differ from these estimates and assumptions.