The Company’s money market funds are categorized as Level 1 within the fair value hierarchy. As of June 30, 2025 and 2024, the Company’s cash and cash equivalents were as follows:

As of June 30, 2025 and 2024, the Company’s contingent consideration liabilities related to acquisitions are categorized as Level 3 within the fair value hierarchy. Contingent consideration was valued at June, 2025 and 2024 using unobservable inputs, primarily internal revenue forecasts. Contingent consideration was valued at the time of acquisitions using unobservable inputs and included using the Monte Carlo simulation model. This model incorporated revenue volatility, internal rate of return, and a risk-free rate. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management with the assistance, at times, of a third-party valuation specialist.

As of June 30, 2025, the Company’s contingent consideration liabilities, current and non-current balances were as follows:

Actual BLI revenue through June 30, 2025 resulted in additional gross consideration of $1.5 million over the remainder of the contingent consideration payout period ending on July 31, 2025, payable in cash. Actual BLI revenue through July 31, 2025 did not trigger additional consideration. Accordingly, contingent consideration remaining for the BLI acquisition as of June 30, 2025 is calculated at the present value of the remaining $1.5 million cash discounted at risk-free interest rates from the estimated payment date.

The change in fair value of contingent consideration for BLI for the year ended June 30, 2025 was a non-cash expense of approximately $0.14 million included as change in fair value of acquisition contingent consideration in the statements of operations. This reflects the change in the time value of money related to the present value of anticipated payments.

The change in fair value of contingent consideration for XR Terra, LLC (“XRT”) for the year ended June 30, 2025 was a non-cash gain of approximately $0.03 million included as change in fair value of acquisition contingent consideration in the statements of operations. This reflects the reversal of the estimated final consideration payment related to the acquisition of XRT. The contingent consideration payout period ended September 2024.

As of June 30, 2024, the Company’s contingent consideration liabilities current and non-current balances were as follows:

	Contingent Consideration at Purchase Date		Consideration Paid			Changes in Fair Value			Fair Value		Contingent Consideration
	As of June 30, 2024
	Contingent Consideration at Purchase Date		Consideration Paid			Changes in Fair Value			Fair Value		Contingent Consideration
Level 3:
Contingent consideration, current - BLI	$	1,264,200	$	-		$	167,561		$	1,431,761	$	1,431,761
Contingent consideration, current - S5D		2,060,300		(1,359,001	)		(701,299	)		-		-
Contingent consideration, current - XRT		-		(499,288	)		535,002			35,714		35,714
Total contingent consideration, current portion	$	3,324,500	$	(1,858,289	)	$	1,264		$	1,467,475	$	1,467,475

Level 3:
Contingent consideration, non-current - BLI	$	6,060,700	$	(1,497,894	)	$	(3,149,110	)	$	1,413,696	$	1,413,696
Contingent consideration, non-current - S5D		7,108,900		(2,857,143	)		(4,251,757	)		-		-
Total contingent consideration, net of current portion	$	13,169,600	$	(4,355,037	)	$	(7,400,867	)	$	1,413,696	$	1,413,696

Revenue projections for BLI were expected to trigger potential additional gross consideration of $3.0 million over the remainder of the contingent consideration payout period ending in July 31, 2025, payable in cash (of which $1.5 million was paid in February 2025). The possibility of achieving any remaining revenue targets to trigger additional consideration was remote. Accordingly, contingent consideration remaining for the BLI acquisition as of June 30, 2024 is calculated at the present value of the estimated remaining $3.0 million cash discounted at risk-free interest rates from the estimated payment dates.

Sector 5 Digital, LLC (“S5D”) had significantly underperformed revenue expectations that were employed to determine fair value at acquisition. The possibility of achieving any remaining revenue targets to trigger additional consideration was remote and all earned consideration had been paid. Accordingly, there was no future contingent consideration recorded related to the S5D acquisition as of June 30, 2024. The contingent consideration payout period ended January 2025 with no additional consideration paid.

The contingent consideration related to XRT as of June 30, 2024 represented an accrual for anticipated achievement of an additional revenue threshold though the end of the contingent consideration period September 2024.

The change in fair value of contingent consideration for BLI and S5D for the year ended June 30, 2024 was a non-cash gain of approximately $1.87 million and $2.35 million, respectively, included as change in fair value of acquisition contingent consideration in the statement of operations. This was primarily driven by the decrease in the Company’s common stock price between the measurement dates and reduced revenue projections. In addition, a payment was made to the sellers of S5D for consideration in March 2024 in the form of Company common stock, fair valued at $0.81 million; and a $1.49 million cash payment was made to the sellers of BLI for consideration in May 2024.

The change in fair value of contingent consideration for XRT for the year ended June 30, 2024 was a non-cash gain of approximately $0.05 million, included as change in fair value of acquisition contingent consideration in the statement of operations. This reflects the decrease in the Company’s common stock price between the measurement dates partially offset by an accrual for final consideration payment. In addition, payments were made to the sellers of XRT for consideration in September 2023 and January 2024 in the form of Company common stock, fair valued at $0.17 million.