3.     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. 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.

Total purchase consideration transferred or transferable was $15,558,637, which consisted of the following:

The Company’s contingent consideration liability is measured at fair value on a recurring basis and is classified within Level 3 of the fair value hierarchy. Changes in fair value of contingent consideration are recorded in the consolidated statements of operations. The fair value is estimated using the Monte Carlo simulation model based on projected revenues and expected payout scenarios. Significant unobservable inputs include forecasted revenues, probability of achieving performance targets, and a risk-free discount rate of 4%. There were no significant changes in the valuation techniques or inputs used in the measurement during the year ended December 31, 2025. Accordingly, the Company has not presented a reconciliation of the beginning and ending balances of the Level 3 fair value measurement. Fair value adjustments to the contingent consideration purchase price was $0 for the year ended December 31, 2025.

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 final estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed, including a reconciliation to the total final purchase consideration, were as follows:

During the second quarter of 2025, a measurement period adjustment of $2,200,000 related to the Gamma acquisition decreased the amount of earn-out contingent consideration from $3,190,000 to $990,000, which decreased the amounts attributable to acquired technology and goodwill. The updated amounts are reflected in the above preliminary purchase consideration and value of goodwill and identifiable intangible assets.

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 $4,487,637 of the goodwill from this acquisition will be deductible for income tax purposes.

The estimated fair value includes $10,568,000 million of acquired technologies intangible assets, all of which have finite lives. The fair value of the identifiable intangible assets has been estimated using the income approach by using the multi-period excess earnings method. Under this method, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. The estimated fair value was developed by discounting future net cash flows to their present value at market-based rates of return. Such assumptions included forecasted revenues, cost of sales and operating expenses, technology obsolescence, and weighted average cost of capital. The Company also utilized the cost replacement approach for certain immaterial intangible assets included within the acquired technology stack. The determination of the useful lives for acquired technologies is based upon various industry studies, historical acquisition experience, and economic factors. The following table reflects the final estimated acquisition date fair values of the identified intangible assets of Gamma and their respective weighted-average estimated amortization periods:

During the fourth quarter of 2025, we changed the weighted average useful lives of acquired technology is amortized from 15 years to 10 years. The revised amortization periods are reflected in the identifiable intangible assets acquisition date fair values and their respective periods.

The historical revenue and earnings of Gamma were not material for the purpose of presenting pro forma information. Transaction costs in the amount of $129 thousand associated with this business combination have been expensed as incurred and are recorded in selling, general & administration expense on the consolidated statements of operation.