Table of Contents ENPHASE ENERGY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Acquisition of 365 Pronto, Inc. (“365 Pronto”) On December 13, 2021, the Company completed the acquisition of 365 Pronto, a privately-held company. 365 Pronto provides an online platform for clean technology installation and service landscape by matching asset owners with an on-demand qualified workforce in the United States. As part of the purchase price, the Company paid approximately $69.9 million in cash on December 13, 2021. The acquisition has been accounted for as a business combination under the acquisition method, and accordingly, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. The results of operations of 365 Pronto have been included in the Company’s consolidated statement of operations from the acquisition date. In addition to the purchase price above, the Company was obligated to pay up to approximately $7.0 million and $4.0 million in shares of common stock of the Company in the three months ended March 31, 2023 and June 30, 2023, respectively, subject to achievement of certain revenue, operational and employment targets, of which $6.3 million and $4.0 million was paid in the three months ended March 31, 2023 and June 30, 2023 respectively. As the nature of the additional payments represented an in-substance service period of certain key employees of 365 Pronto and was subject to other conditions, these payments were accounted for as a post-combination expense and were recognized ratably over the term of the measurement period presuming the conditions were met. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): Net tangible assets acquired $ 38 Intangible assets 19,500 Deferred tax liabilities (2,906) Goodwill 53,280 Net assets acquired $ 69,912 The excess of the consideration paid over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill is primarily attributable to expected synergies in the Company’s solar offerings and cross-selling opportunities. None of the goodwill is expected to be deductible for U.S. federal income tax purposes. Intangible assets consist primarily of developed technology and customer relationship intangibles. Intangible assets attributable to developed technology include a combination of unpatented technology, trade secrets, computer software and research processes that represent the foundation for the existing and planned new products to facilitate the generation of new content. Customer relationship intangibles relate to 365 Pronto’s software ability to sell current and future offerings, as well as products built around the current offering, to its existing customers. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized: Fair Value Useful Life (In thousands) (Years) Developed technology $ 18,400 5 Customer relationship 1,100 5 Total identifiable intangible assets $ 19,500 Pro forma financial information has not been presented for the 365 Pronto acquisition as the impact to the Company’s consolidated financial statements was not material. The Company incurred and accrued costs related to this acquisition of $0.1 million and $0.5 million that were recorded in general and administrative expenses in the consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. Enphase Energy, Inc. | 2023 Form 10-K | 89