v3.26.1
Acquisitions
 3 Months Ended
Mar. 31, 2026
Vidello [Member]  
Business Acquisition [Line Items]  
Acquisitions

 

Vidello

 

On January 31, 2025, the Company closed a previously announced merger with Vidello Limited ("Vidello"), a private limited company registered in England and Wales (the "Vidello Merger"), pursuant to an Agreement and Plan of Merger (the "Vidello Merger Agreement"), dated December 19, 2024, by and among the Company, Vidello, and certain shareholders of Vidello (the "Vidello Shareholders"). At the closing, Vidello Shareholders transferred all the outstanding shares of Vidello to the Company, and Vidello became a direct and wholly owned subsidiary of the Company. At the closing, the Company paid to the Vidello Shareholders, $2,745 in cash (the "Vidello Cash Consideration"), whereby $2,500 are withheld for indemnification expenses and other holdback provisions in accordance with the Vidello Merger Agreement, and issued 4,491 shares of Class A Common Stock (the "Share Consideration," together with the Cash Consideration, the "Vidello Closing Consideration"). The Company's primary reason for acquiring Vidello was to enhance revenue growth and strengthen the Company's competitive market position through cross selling opportunities. Vidello is a video hosting and marketing platform designed to help businesses manage, customize, and optimize their video content.

 

With respect to the holdback amount, this consists of three distinct components, being (1) the withholding of $1,000 as security for the obligations of Company Shareholders for a period of twelve months (the “Indemnification Holdback Amount”), (2) the withholding of $500 as security for the obligations of Company Shareholders to cooperate with best efforts and in good faith with to complete the transition, integration and related matters of Vidello's business with Banzai, including, but not limited to (a) the transition of data of Vidello managed and/or held by Vidello to Banzai, (b) certain services relating to the continued operations of Vidello, and (c) the training of certain employees of Banzai regarding the operations of Vidello including any proprietary business processes and trade secrets following the Closing, during the six months following the Closing (the “Transition Holdback Period”), and (3) the withholding

of $1,000 subject to certain revenue related conditions being met during the 180 day period following the Closing (the “Revenue Holdback Amount” and together with the Indemnification Holdback Amount and the Transition Holdback Amount, the “Holdback Amount”).

 

As of December 31, 2025, the Company recognized $486 of expense after foreign currency translation in the consolidated statements of operations related to the Transition Holdback Amount in the line Vidello earnout expense. During the three months ended September 30, 2025, the Company paid the contractual amount of $500 to the Vidello Shareholders for the Transition Holdback Period.

 

During the three months ended September 30, 2025, the 180 day measurement period for the Revenue Holdback lapsed and the revenue conditions as defined in the Vidello Merger Agreement had not been met. As such the Company recognized a gain on the extinguishment of Vidello revenue holdback of $973 during the three months ended September 30, 2025.

 

In connection with and as a condition of closing pursuant to the Vidello Merger Agreement, the Company executed and delivered to each Vidello Shareholder a lock-up agreement (the "Vidello Lock-Up Agreement"), pursuant to which, the shareholders of Class A Common Stock and any other securities convertible or exercisable into the shares of Class A Common Stock beneficially owned by them, during the 180-day period following the closing of the Vidello Merger, cannot complete any Prohibited Transfer (as defined in the Vidello Merger Agreement).

 

Immediately prior to the closing of the Vidello Merger, the directors, and officers of Vidello tendered their resignation, effective at the closing. Pursuant to the Vidello Merger Agreement, the CEO of the Company shall be the sole member of the board of directors of Vidello effective upon the closing of the Vidello Merger.

 

During the three months ended March 31, 2025, the Company incurred transaction costs of approximately $730 which are included in the unaudited condensed consolidated statements of operations.

The Vidello Merger was accounted for as a business combination under the acquisition method pursuant to FASB ASC 805, Business Combinations (“ASC 805”), with the Company as the accounting acquirer. Under the acquisition method, the total purchase price of the acquisition is allocated to the net identifiable tangible and intangible assets acquired and liabilities assumed based on the fair values as of the acquisition date. The fair value of the consideration transferred totaled $6,268 summarized as follows:

 

 

 

Amount

 

Cash paid at closing

 

$

2,745

 

Common stock issued to Vidello Stockholders

 

 

1,662

 

Fair value of Holdback Amount

 

 

1,861

 

Total consideration paid

 

$

6,268

 

 

The Company allocated the purchase price of the Vidello Merger to the assets acquired and liabilities assumed as of the acquisition date, as follows:

 

Assets acquired:

 

 

 

Cash and cash equivalents

 

$

68

 

Property and equipment, net

 

 

9

 

Intangible assets – customer relationships

 

 

551

 

Intangible Assets – trade name

 

 

736

 

Intangible Assets – developed technology

 

 

4,010

 

Total assets

 

$

5,374

 

Liabilities assumed:

 

 

 

Accounts payable

 

 

1

 

Accrued expenses and other current liabilities

 

 

15

 

Unearned revenue, current

 

 

448

 

Deferred tax liability

 

 

1,324

 

Taxes payable

 

 

337

 

Total liabilities

 

$

2,125

 

Total identifiable net assets

 

 

3,249

 

Goodwill recorded:

 

 

 

Goodwill

 

 

3,019

 

Total consideration

 

$

6,268

 

 

Goodwill recognized is not expected to be deductible for tax purposes. We believe that in this acquisition goodwill represents the value of Vidello's existing products, combined with the added business synergies of integrating with the existing Banzai products and customer base.

All intangible assets acquired are subject to amortization and their associated estimated useful lives are as follows:

 

 

 

Estimated

Intangible Assets

 

Useful Life

Customer relationships

 

6 years

Trade name

 

10 years

Developed technology

 

7 - 8 years

 

Net income in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025 includes net loss of approximately $250 and net income of $734, respectively, of Vidello from the date of acquisition to March 31, 2026.

Pro forma disclosure for the Vidello acquisition

The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if the Merger with Vidello had taken place on January 1, 2025. The pro forma results presented are the result of combining the revenues and earnings of the Company with the revenues and earnings of Vidello. The Company did not have any material, non-recurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue.

The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected on the assumed date:

 

 

For the Three Months Ended March 31,

 

 

2026

 

 

2025

 

Revenue

$

2,696

 

 

$

3,609

 

Cost of revenue

 

521

 

 

 

796

 

Operating expenses

 

7,955

 

 

 

7,753

 

Total other expenses (income), net

 

2,689

 

 

 

(1,337

)

Loss before income taxes attributable to common stockholders

 

(8,469

)

 

 

(3,603

)