NOTE 3:- ACQUISITION On July1, 2016 (the "Closing Date"), the Company, through its wholly owned subsidiary Kornit Digital North America Inc., acquired the digital direct to garment printingassets of SPSI Inc., a North American distributor and service provider for graphic arts, printing and garment decoration solutions. Under the related acquisition agreement, the total consideration of $11,443 which compromised of the following: - $9,206 in cash paid on the Closing Date, of which $741 is held in escrow for one year following the Closing Date. - Milestone-based contingent payments in a total of up to $2,700 payable in 2016, 2017 and 2018. The milestone-based contingent payments are subject to the acquired business territory meeting revenues targets between the Closing Date and December 31, 2016 during 2017 and 2018. These milestone-based contingent payments were measured at fair value at the Closing Date and recorded as a liability on the balance sheet in the amount of $2,237 ($2,327 as of September 30, 2016). In addition, the Company incurred acquisition-related costs in a total amount of $493, which are included in general and administrative expenses. Acquisition-related costs include legal, accounting, consulting fees and other external costs directly related to the acquisition. The main reasons for this acquisition is to improve connectivity with customers by expanding its leadership position in the digital textile market as well as providing direct access to a large number of traditional screen printing customers. Purchase price allocation: Under business combination accounting principles, the total purchase price was allocated to SPSI's net tangible and intangible assets based on their estimated fair values as set forth below. The excess of the purchase price over the net tangible and identifiable intangible assets was recorded as goodwill. The purchase price allocation for the acquisition has been determined at the follows: Fair Value Amortization period (years) Tangible Assets Inventory $ 3,472 Intangib