In August 2021, Heliogen entered into an agreement to acquire 100% of the equity interests of HelioHeat, a private limited liability company in Germany (the “HelioHeat Agreement”). The HelioHeat Acquisition closed on September 1, 2021. HelioHeat is engaged in the development, planning and construction of renewable energy systems and components, including a novel solar receiver. Heliogen acquired HelioHeat in order to own and use HelioHeat’s particle receiver technology in future commercial-scale facilities for our customers. Pursuant to the HelioHeat Agreement, at closing, cash consideration of approximately $1.0 million was paid to HelioHeat’s shareholders, $0.5 million was deposited in an escrow account that becomes payable to HelioHeat’s shareholders to the extent the funds are not used by Heliogen to offset certain future costs on HelioHeat’s active customer projects, and $0.2 million was used to repay certain of HelioHeat’s outstanding indebtedness. Additionally, pursuant to the HelioHeat Agreement, $3.0 million is payable to HelioHeat’s shareholders in future periods, of which $0.5 million is payable upon service conditions being met over a three-year period for retained employees and $2.5 million subject to earn-out provisions is payable if Heliogen uses and sells HelioHeat’s solar receiver technology in a commercial product, fully operational and tested, within five years of closing.

The components of the preliminary fair value of consideration transferred are as follows ($ in thousands):

We accounted for the HelioHeat Acquisition using the acquisition method of accounting, which requires, among other things, that assets acquired at their fair values and liabilities assumed be recognized on the balance sheet as of the acquisition date. The purchase price allocation for the HelioHeat Acquisition is preliminary as of December 31, 2021 pending the completion of a valuation of the expected intangible asset to be recognized related to developed technology associated with HelioHeat’s particle receiver technology and the completion of a valuation of this intangible asset. All other amounts recognized were finalized as of December 31, 2021.

The following table summarizes the preliminary purchase price allocation as of the acquisition date ($ in thousands):

The preliminary purchase consideration allocation resulted in the recognition of $4.2 million in goodwill, of which none is expected to be tax deductible. Goodwill represents the value expected to be received from the synergies of integrating HelioHeat’s operations with Heliogen operations to expand commercial opportunities and the assembled workforce in place.

The fair value of contingent consideration is approximately $2.0 million. We believe the payment of this consideration to be probable and have estimated its fair value as of the acquisition date using a probability-weighted discounted cash flow model utilizing estimated timing for the commissioning and required operational period of a commercial facility using the acquired particle receiver technology.

During the year ended December 31, 2021, we incurred approximately $0.1 million of acquisition costs that were expensed as incurred.

During the year ended December 31, 2021, we recognized revenues of $0.4 million and a net loss of $0.7 million related to HelioHeat’s operations. Pro forma financial information for HelioHeat has not been provided as it has been deemed immaterial.