Acquisition of Hia, Inc.

12 Months Ended

Dec. 28, 2024

15. Acquisition of Hia, Inc.

On August 26, 2022 (the “Closing Date”), the Company completed the acquisition of Hia, Inc., a supplier of magnetic bars, to bring the manufacturing of these magnetic bars

in-house

and to protect our technology. Pursuant to the Stock Purchase Agreement, dated August 26, 2022, between the Company, Hia and the other parties thereto, the Company paid an aggregate purchase price of $700,000 to Hia’s stockholders on the Closing Date. Further contingent consideration would consist of amounts payable upon achievement of certain development and commercialization milestones, which consideration was estimated to be up to $500,000. The first milestone was achieved and contingent consideration in the amount of $250,000 was paid on January 17, 2023. The Company was also obligated pay a royalty of $1,500 for each magnetic bar sold through December 31, 2030. If at any time prior to December 31, 2030, the Company effects a change of control or a sale, license, transfer or other disposition to a third party (other than an affiliate of Intevac) of all or substantially all of the assets or rights associated with the magnetic bars, then, upon the closing of such transaction, a payment of $1.7 million (minus any royalty payments previously paid) will immediately become due and payable, which payment shall fulfill the Company’s royalty obligations.

The Company determined this transaction represented an asset acquisition as substantially all of the value was in the technology intangible assets of Hia. Contingent consideration is not recorded in an asset acquisition until the contingency was resolved (when the contingent consideration is paid or becomes payable) or when probable and reasonably estimable. The first milestone was achieved and contingent consideration in the amount of $250,000 was paid on January 17, 2023. The technology intangible assets was being amortized on a straight-line basis over a period of 8.3 years. Total amortization expense during fiscal 2024 and fiscal 2023 was $102,000 and $136,000, respectively.

During the fourth quarter of fiscal year 2024, the Company made the decision to abandon the TRIO product line. This resulted in an impairment charge of $851,000 to fully reserve the Hia product technology intangible. The impairment charge is recorded in asset impairments and restructuring in the consolidated statement of operations. (See Note 13 Restructuring Charges.)

Information regarding the technology intangible assets was as follows (in thousands):


	December 30, 2023
Gross carrying amount	$	1,132
Accumulated Amortization		(178	)

Net carrying amount	$	954

INTEVAC INC 10-K