v3.25.1
ACQUISITION
 3 Months Ended
Mar. 31, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
ACQUISITION

2.     ACQUISITION

 

On March 19, 2025, we entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Gamma Innovation LLC, a Pennsylvania limited liability company (“Gamma”), Beta Software and Technologies LLC, a Delaware limited liability company, and Michael Ngo, an individual, pursuant to which we acquired substantially all the assets of Gamma Innovation LLC. (“Gamma”). Gamma is a software and services company focusing on the blood and plasma collection industry that developed innovative solutions targeting donor engagement, retention and management. The Gamma acquisition aligns with our technology and market presence by offering additional engagement, compensation and resource management solutions across our core markets. The new technologies acquired consist of the following solutions: (i) a donor engagement application designed to reduce plasma labor costs and donor fees while improving donor retention; (ii) a customer resource management platform designed to reduce unnecessary expenses and improve donor engagement, marketing effectiveness and retention; and (iii) a donor management solution designed to improve plasma donation center efficiency by reducing operational costs and optimizing donor compensation. Due to the recent acquisition date, the valuations of both the earn-out contingent consideration and identifiable intangible assets acquired were not complete at the time of this filing, and provisional amounts for consideration transferred and the fair values of assets acquired have been presented. Management continues to refine the preliminary valuation of certain assets acquired and liabilities incurred, and may adjust the allocation in subsequent periods. Additionally, tax considerations have not yet been finalized. The final valuation will be completed within the one-year measurement period following the acquisition date.

 

Total preliminary purchase consideration was $17,758,637, which consisted of the following:

     
Cash paid upfront (1)  $2,000,000 
Present value of future cash paid (1)   6,618,637 
Equity consideration (2)   5,950,000 
Earn-out contingent consideration (3)   3,190,000 
Total consideration  $17,758,637 

 

(1) Pursuant to the Asset Purchase Agreement the cash purchase price paid was $10,000,000 to be paid in five equal tranches with the initial payment made on March 19, 2025 and four subsequent payments to be made on each subsequent annual anniversary of the initial payment. The fair value of this consideration was estimated based on the present value of the future payments. The average discount rate of 8% was based on the Company’s estimated cost of debt. The present value of future payments is recorded in other liabilities on the consolidated balance sheets.
(2) Pursuant to the Asset Purchase Agreement the stock consideration paid was 2,500,000 shares of restricted common stock that will vest in five equal amounts beginning on March 31, 2025 and annually thereafter for the next four years. Fair value was estimated using the Company’s stock price of $2.38 on the valuation date. The stock consideration is recorded in the consolidated statements of stockholders’ equity.
(3) Pursuant to the Asset Purchase Agreement an additional earn-out stock consideration of 500,000 shares of our common stock, up to a total consideration of 2,500,000 shares of our common stock, may be paid upon the achievement of certain gross revenue performance targets for each trailing 12-month period beginning on March 20, 2025 and ending on March 19, 2030. The value of earn-out contingent consideration was computed using the Monte Carlo simulation. The contingent payable is recorded in other liabilities on the consolidated balance sheets.

 

We have accounted for the Gamma acquisition as a business combination, which generally requires that we recognize the assets acquired and liabilities assumed at fair value as of the acquisition date. The provisional estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed, including a reconciliation to the total provisional purchase consideration, were as follows:

     
Identifiable intangible assets  $12,246,000 
Total identifiable net assets   12,246,000 
Goodwill   5,512,637 
Total assets acquired  $17,758,637 


During the three months ended March 31, 2025 there were no measurement-period adjustments.

 

Goodwill arising from the acquisition was attributable to expected growth opportunities of the acquired technology, potential synergies from combining the acquired business into our existing business, and an assembled workforce. We expect that approximately $5,512,637 of the goodwill from this acquisition will be deductible for income tax purposes.

 

The following table reflects the estimated acquisition date fair values of the identified intangible assets of Gamma and their respective weighted-average preliminary estimated amortization periods:

       
   Estimated Fair Value   Weighted Avg. Estimated Amortization (years)
Contract related intangible assets  $567,000   9
Acquired technologies   11,679,000   15
Total identifiable intangible assets  $12,246,000    

 

The historical revenue and earnings of Gamma were not material for the purpose of presenting pro forma information. In addition, transaction costs in the amount of $108 thousand associated with this business combination were not material, have been expensed as incurred and are recorded in selling, general & administration expense on the consolidated statements of operation.