Note 4. Acquisition

On April 4, 2022, the Company acquired Teton Simulation Software (“Teton”) through a statutory merger in exchange for total consideration of $6.6 million, payable in a combination of cash and equity shares. Teton is a software company whose SmartSlice™ technology automates validation and optimizes part performance for additive manufacturing application. The Company will integrate Teton's technology with its printing software solution, Eiger™, as a subscription add-on that will offer manufacturing customers a streamlined workflow spanning part design, testing, optimization, validation and printing at the point of need, all on a single, cloud-based platform.

A portion of the acquisition consideration is contingent on achievement by Teton of certain business and development milestones, with a fair value of $1.6 million as of the date of acquisition that was determined to be unchanged as of June 30, 2022. The Company will pay up to $1.5 million of business related contingent consideration based on stated sales metrics, which had a fair value of $1.0 million as of the date of acquisition. If Teton reaches certain product technical milestones, the Company will pay out a maximum of $1.5 million in development contingent consideration, which had a fair value of $0.6 million as of the date of acquisition. Of the amount of cash and equity consideration indicated below, $0.25 million of the cash consideration and $0.25 million of the equity consideration has been “held-back.” This amount will be released 12 months following the Closing Date, unless there is a claim for indemnification. The holdback cash and shares are held on Markforged's balance sheet within accrued expenses and equity, respectively.

The total purchase price was allocated to the identifiable assets acquired and liabilities assumed based on the Company’s preliminary estimates of their fair values on the acquisition date. The fair values assigned to Teton’s tangible and intangible assets and

liabilities assumed, are considered preliminary and are based on the information available at the date of the acquisition. Goodwill will not be deductible for tax purposes.

The estimated useful life of the identifiable intangible asset acquired, developed technology, is 7 years.