Common use of Preliminary Allocation of Purchase Price Clause in Contracts

Preliminary Allocation of Purchase Price. The Acquisition will be treated as a purchase in accordance with Accounting Standards Codification (ASC) 805, Business Combinations, which requires allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed in the transaction. The allocation of purchase price is based on management’s judgment after evaluating several factors, including a preliminary valuation assessment. The allocation of purchase price is preliminary and subject to changes, which could be significant, as the valuation of tangible and intangible assets are finalized, working capital adjustments are finalized, and additional information becomes available. The Company purchased substantially all of the operations and assets of AHI. Assets and operations not included in the Acquisition relate to the diabetes program product line, which is a start-up operation with nominal revenue. The assets excluded consist primarily of cash and restricted cash and diabetes inventory as well as leasehold improvements utilized in connection with a leased facility that was not assumed by the Company. The preliminary allocation of purchase price (reflected in the Unaudited Pro Forma Balance Sheet) is as follows: Accounts receivable $ 876 Inventory and other current assets 132 Fixed assets 274 Customer portal (existing technologies) 4,151 Customer relationships 1,930 Goodwill 657 Accounts payable (764 ) Accrued expenses (256 ) Preliminary Purchase Price $ 7,000 Intangible assets acquired include existing technology in the form of a customer-facing wellness portal and customer relationships. The estimated useful life for the wellness portal and customer relationships is expected to be 4 years and 8 years, respectively. Amortization is expected to be recorded on a straight-line basis over the estimated useful life of the asset.

Preliminary Allocation of Purchase Price. The Acquisition will be treated as a purchase in accordance with Accounting Standards Codification (ASC) 805, Business Combinations, which requires allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed in the transaction. The allocation of purchase price is based on management’s judgment after evaluating several factors, including a preliminary valuation assessment. The allocation of purchase price is preliminary and subject to changes, which could be significant, as the valuation of tangible and intangible assets are finalized, working capital adjustments are finalized, and additional information becomes available. The Company purchased substantially all of the operations and assets of AHI. Assets and operations not included in the Acquisition relate to the diabetes program product line, which is a start-up operation with nominal revenue. The assets excluded consist primarily of cash and restricted cash and diabetes inventory as well as leasehold improvements utilized in connection with a leased facility that was not assumed by the Company. The preliminary allocation of purchase price (reflected in the Unaudited Pro Forma Balance Sheet) is as follows: Accounts receivable $ 876 1,341 Inventory and other current assets 132 144 Fixed assets 274 297 Customer portal (existing technologies) 4,151 3,007 Customer relationships 1,930 2,200 Goodwill 657 1,595 Accounts payable (764 634 ) Accrued expenses (256 950 ) Preliminary Purchase Price $ 7,000 Intangible assets acquired include existing technology in the form of a customer-facing wellness portal and customer relationships. The estimated useful life for the wellness portal and customer relationships is expected to be 4 5 years and 8 years, respectively. Amortization is expected to be recorded on a straight-line basis over the estimated useful life of the asset.