Quarterly report pursuant to Section 13 or 15(d)

Business Combinations

v3.24.1.u1
Business Combinations
 3 Months Ended
Mar. 31, 2024
Business Combination and Asset Acquisition [Abstract]  
Business Combinations Business Combinations
Routejade Acquisition
On October 31, 2023, we acquired 95.8% of the outstanding shares of Routejade, Inc. (“Routejade”). The following table summarizes the considerations for the acquisition.
Cash paid, net of acquisition-related seller expense $ 15,448 
Issuance of Enovix common stock (5,923,521 shares)
 52,779 
Total purchase consideration 68,227 
Less: net assets acquired
Net assets acquired, excluding liability assumed for acquisition-related seller expense 56,367 
Liability assumed for acquisition-related seller expense (357)
Net assets acquired 56,010 
Goodwill $ 12,217 
This acquisition (the “Routejade Acquisition”) constituted a business acquisition in accordance with FASB Accounting Standards Codification (“ASC”) (Topic 805), Business Combinations (“ASC 805”) for business combinations and, therefore, was accounted for as a business combination using the acquisition method of accounting. The tangible and intangible assets acquired and liabilities assumed were recorded based on their estimated fair values at the acquisition date.
The following table summarizes the final purchase price allocation based on the fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands).
Cash, cash equivalents and restricted cash acquired $ 5,481 
Accounts and notes receivable, net (1)
1,796 
Inventory 12,613 
Prepaid expenses and other current assets 1,715 
Property and equipment, net 28,579 
Intangible assets 41,948 
Goodwill 12,217 
Other non-current assets 365 
Debt assumed (7,426)
Deferred revenue (10,568)
Liabilities assumed (3,182)
Deferred income tax liabilities (12,294)
Fair value of net assets acquired 71,244 
Less: non-controlling interest (2)
(3,017)
Total purchase consideration 68,227 
Less: Cash, cash equivalents, restricted cash acquired (5,481)
Total purchase price, net of cash acquired $ 62,746 
(1)
The gross amount of the acquired accounts and notes receivable was $1.9 million, of which an immaterial amount is expected to be uncollectible.
(2)
 The fair value of non-controlling interest is measured based on the fair values of net assets acquired at the acquisition date and the price for the equity shares and the portion of ownership not held by the acquirer.
Goodwill
The excess of the purchase price over the fair value of net assets acquired was recorded to goodwill. Goodwill is primarily attributable to the expected synergies from future expected economic benefits, including integrating electrode coating and battery pack manufacturing. Goodwill from this acquisition is not expected to be deductible for tax purposes.
The following table summarizes the change in goodwill (in thousands) during the first quarter of 2024.
Goodwill
Balances as of December 31, 2023 $ 12,098 
Routejade Acquisition - measurement period adjustments(1)
119 
Balances as of March 31, 2024 $ 12,217 
(1) Our purchase price allocation was finalized in the first quarter of 2024, which included a net adjustment of $0.1 million to goodwill and immaterial adjustments to other assets.
Intangible Assets
Intangible assets consist of customer relationships, developed technology and trade names and trademarks. Customer relationships relate to Routejade’s existing customer relationships for current and future business. Developed
technology relates to Routejade’s technology for manufacturing standard lithium-ion batteries with varying chemistries, which allows for design flexibility and the production of customized battery cells.
The following table summarizes the intangible assets subject to amortization, net (in thousands) as of March 31, 2024.
Gross Accumulated amortization Net Carrying Amount Weighted-average Useful Lives
Customer relationships $ 29,933  $ (1,245) $ 28,688  10 years
Developed technology 11,680  (694) 10,986  7 years
Trade Names and Trademarks 335  (46) 289  3 years
Total intangible assets $ 41,948  $ (1,985) $ 39,963 
We acquired these intangible assets through the Routejade Acquisition in October 2023. For the quarter ended March 31, 2024, amortization of the intangible assets was $1.2 million. As of March 31, 2024, the weighted average remaining useful lives for intangible assets was approximately 8.8 years.
The following is a schedule of expected amortization for the intangible assets as of March 31, 2024 (in thousands).
As of March 31, 2024
2024 (remaining 9 months) $ 3,568 
2025 4,757 
2026 4,829 
2027 4,645 
2028 4,645 
Thereafter 17,519 
Total estimated amortization expense $ 39,963 
Revenue and net loss from operations
For the first quarter ended March 31, 2024, our results of operations included $5.3 million of Routejade’s revenue and an immaterial amount of Routejade’s net operating loss from operations.
Proforma information
The condensed consolidated unaudited proforma revenue for the first quarter of 2024 and 2023, which included Routejade assuming the acquisition occurred on January 1, 2023, were approximately $5.3 million and $5.0 million, respectively. The condensed consolidated unaudited proforma net income related to this acquisition was not included because the impact on our consolidated results of operations was not material.