NOTE 11 – BUSINESS ACQUISITION

Streamex Exchange Corporation

Transaction Overview

On May 28, 2025, the Company completed the acquisition of Streamex Exchange, a software development company based in Vancouver, British Columbia, specializing in digital tools for commodity trading and finance.

The acquisition was effected pursuant to a Share Purchase Agreement dated May 23, 2025, as amended on May 27, 2025 (collectively, the “Agreement”), by and among the Company, its wholly-owned subsidiaries ExchangeCo and Callco, the Stream Exchange Shareholders, and 1540873 B.C. Ltd., as trustee under the Exchange Rights Agreement.

Under the terms of the Agreement, ExchangeCo acquired all of the issued and outstanding shares of Streamex Exchange (the “Purchased Shares”) in exchange for 109,070,039 Exchangeable Shares of ExchangeCo, issued at a ratio of 2.046862 Exchangeable Shares per Purchased Share. The Exchangeable Shares are exchangeable on a one-for-one basis for shares of the Company’s common stock, subject to certain adjustments and conditions described below.

The purpose of the Acquisition is to enhance shareholder value by combining with a privately held operating company and positioning the combined entity for future growth with expansion into digital commodity trading and blockchain-based financial technologies. The acquisition was undertaken to expand the Company’s technology platform into digital commodity trading and blockchain-based financial infrastructure and to obtain the assembled workforce, intellectual property, and regulatory capabilities of Streamex Exchange.

In connection with the transaction, the Company evaluated the accounting under ASC 805, Business Combinations, and ASC 810, Consolidation. The Company concluded the acquired set met the definition of a business. In making this determination, the Company considered the concentration test in ASC 805 and determined that substantially all of the fair value of the gross assets acquired was not concentrated in a single identifiable asset or group of similar identifiable assets. The Company also evaluated whether the acquiree is a variable interest entity (“VIE”) and concluded Streamex is a VIE because, among other factors, it lacked sufficient equity at risk to finance its activities without additional subordinated financial support and the equity holders, as a group, did not have substantive power to direct the activities that most significantly impact economic performance at the acquisition date.

The Company concluded it is the primary beneficiary because it has both (i) the power to direct the activities that most significantly impact Streamex’s economic performance through governance rights in place at closing and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant. Accordingly, the transaction is accounted for as a business combination with the Company as the accounting acquirer, and Streamex has been consolidated in the Company’s financial statements from the acquisition date.

Shareholder Approval and Contingent Features

Initially, the Exchangeable Shares were not exchangeable into more than 19.99% of the Company’s outstanding common stock on a pre-transaction basis, in accordance with Nasdaq listing rules. Following the closing, the Company intended to seek stockholder approval to the following:

At the special meeting of stockholders held on September 5, 2025, Proposals B—F were approved. Proposal A was adjourned to November 4, 2025.

Upon stockholder approval of Proposal A, and subject to the terms of the Exchange Rights Agreement, the holders of Exchangeable Shares would be entitled to exchange such shares for an aggregate of 109,070,039 shares of the Company’s common stock representing up to 75% of the Company’s fully diluted common stock as of the Agreement date.

Consideration Transferred

The preliminary fair value of the consideration transferred was $105.5 million, consisting entirely of Exchangeable Shares issued by ExchangeCo. Due to the lack of an active market for the Exchangeable Shares and the contingent nature of their conversion, a fundamentals-based valuation approach was used to estimate the fair value of the consideration. The contingent consideration related to the potential adjustment of the Exchange Ratio from 1.0 to 1.25—triggered if shareholder approval is not obtained within six months following the closing date—is not included in the preliminary purchase consideration as of May 28, 2025. See Note 7, Stockholder Equity and Note 12, Fair Value Measurements. For an overview of the Company’s derivative financial instruments and related disclosures required by ASC 815, see Note 17, Derivative Financial Instruments and Hedging Activities.

On November 4, 2025 the Company received shareholder approval for the issuance of our shares of common stock exchangeable for Exchangeable Shares and one share of Special Voting Preferred Stock in connection with the Agreement. As a result, the conversion cap was removed, and Streamex Exchange shareholders may now convert all their Exchangeable Shares into the Company’s common stock. Concurrently, the derivative liability associated with the Exchangeable Shares was reclassified to permanent equity. As a result of the reclassification, the Exchangeable Shares are classified as permanent equity as of December 31, 2025 and are presented within stockholders’ equity in the Consolidated Balance Sheet. No derivative liability related to the Exchangeable Shares remained outstanding at December 31, 2025. Although the Exchangeable Shares were reclassified to permanent equity upon stockholder approval on November 4, 2025, the consideration transferred for purposes of the acquisition date purchase price allocation reflects the fair value of the Exchangeable Shares as of May 28, 2025.

In connection with the acquisition of Streamex Exchange, the Company incurred total acquisition-related costs of $5.9 million during the year ended December 31, 2025. These costs primarily consisted of legal, accounting, and consulting fees directly attributable to the transaction. Included in this amount was the issuance of 200,000 shares of the Company’s common stock to a third-party consultant, valued at $1.0 million based on the grant-date fair value and the expected issuance of 824,052 shares of the Company’s common stock to third party consultants in connection with a finders fee, valued at $4.8 million. These costs were expensed as incurred and are reflected in general and administrative expenses in the Consolidated Statements of Operations.

Purchase Price Allocation

The Company has applied the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”) and recognized assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill. As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date). The purchase price allocation is preliminary primarily because the Company has not yet finalized the valuation of certain identifiable intangible assets and the related deferred income tax effects, which could result in changes to the amounts assigned to intangible assets, deferred tax liabilities, and goodwill during the measurement period.

The Company recorded all tangible and identifiable intangible assets acquired and liabilities assumed at their preliminary estimated fair values as of the acquisition date. The preliminary allocation is as follows:

 SCHEDULE OF TANGIBLE AND IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND LIABILITIES ASSUMED

Deferred tax liability

In connection with the acquisition of Streamex Exchange, the transaction was structured as a stock acquisition for both U.S. and Canadian tax purposes. No election was made under IRC §338(g); therefore, no step-up in the tax basis of the acquired assets was obtained in either jurisdiction. The purchase price allocation created taxable temporary differences related to identifiable intangible assets, resulting in a deferred tax liability of approximately $12.6 million, measured using the enacted combined Canadian federal and provincial rate of 26.5%. Because these deferred tax liabilities arise in a separate foreign jurisdiction, they cannot offset deferred tax assets of the U.S. parent. The corresponding increase in goodwill was recognized as part of purchase accounting.

Intangible Assets

The Company identified the following finite-lived intangible assets:

Goodwill

Goodwill of $70.4 million represents the excess of the purchase consideration over the fair value of net assets acquired and was recognized in connection with the acquisition. None of the goodwill is expected to be deductible for tax purposes. The goodwill is assigned to the consolidated reporting unit, as the Company operates as a single segment. The goodwill primarily represents expected synergies, assembled workforce, and future growth potential. No goodwill arose from step acquisitions or noncontrolling interests.

Measurement Period

As of December 31, 2025, the purchase price allocation for the acquisition of Streamex Exchange remains preliminary.

The Acquisition was recorded as a business combination on a preliminary valuation of assets acquired and liabilities assumed at their acquisition date fair values using unobservable inputs that are supported by little or no market activity and are significant to their fair value of the assets and liabilities (“Level 3” inputs). We expect to complete our purchase price allocation, as well as our fair value estimate of the purchase price consideration as soon as reasonably possible, not to exceed one year from the acquisition date. Adjustments to the preliminary purchase price allocation could be material. Goodwill represent the excess of the purchase price consideration over the preliminary valuation of the net assets acquired.

As of December 31, 2025, the purchase price allocation remains preliminary. The Company is continuing to assess the fair values of certain identifiable intangible assets.

Pro-Forma Financial Information

The following unaudited pro forma financial information has been prepared for the years ended December 31, 2025 and 2024, and is based on the historical consolidated financial statements of the Company and Streamex, adjusted to give effect to the acquisition and related pro forma adjustments. Streamex’s results of operations have been included in the Company’s consolidated financial statements from the acquisition date of May 28, 2025.

The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have been realized had the acquisition occurred on January 1, 2024, nor is it indicative of the future results of operations of the combined company.

The unaudited pro forma financial information does not give effect to the potential impact of future economic conditions, regulatory matters, or any anticipated synergies, operating efficiencies, or cost savings that may result from the acquisition. In addition, the unaudited pro forma financial information does not include any integration costs or remaining transaction costs that the Company may incur in connection with the acquisition.

The unaudited pro forma financial information includes adjustments for, among other items:

The purchase price allocation remains preliminary and is subject to change during the measurement period as additional information becomes available. Any such changes could have a material impact on the unaudited pro forma financial information.

All amounts presented are in U.S. dollars. The pro forma consolidated results of revenue and net loss, assuming the acquisition had occurred on January 1, 2025 and assuming the acquisitions had occurred on April 1, 2024, the date of inception of Streamex Exchange, is as follows:

 SCHEDULE OF UNAUDITED PRO FORMA CONSOLIDATED RESULTS OF REVENUE AND NET LOSS

Material Nonrecurring Pro Forma Adjustments

The unaudited pro forma results for the year ended December 31, 2025, include material nonrecurring adjustments of $2.3 million related to the amortization of intangible assets acquired in connection with the Streamex Exchange acquisition, and $608 related to income tax benefit recognized from the deferred tax liability acquired in connection with the Streamex Exchange acquisition.

The unaudited pro forma results for the year ended December 31, 2024, include material nonrecurring adjustments of $4.4 million related to the amortization of intangible assets acquired in connection with the Streamex Exchange acquisition, $1.2 million related to income tax benefit recognized from the deferred tax liability acquired in connection with the Streamex Exchange acquisition, $4.8 million related to the finders fees incurred and earned upon closing of the transaction, $400 of severance expense related to the resignation of the Company’s former CEO following the acquisition, and $1.0 million related to the issuance of 200,000 shares of the Company’s common stock to a consultant in lieu of cash compensation in connection with the acquisition. The finder’s fee amount was revised during the fourth quarter of 2025, as one of the originally identified finders was ultimately determined to be ineligible to receive equity consideration. The revised finder’s fee amount is reflected in the audited consolidated financial statements for 2025.

These nonrecurring adjustments are included only to the extent required for pro forma presentation and are not expected to have a continuing impact on the results of operations of the combined company beyond the periods presented.