v3.26.1
Business Combinations
 12 Months Ended
Mar. 31, 2026
Business Combination [Abstract]  
Business Combinations

10. BUSINESS COMBINATIONS

 

A business combination is an acquisition of business. Business combinations are accounted by allocating the fair value of the purchase price of the assets acquired and liabilities assumed.

 

For the year ended March 31, 2026, the acquired business contributed revenue of and net income of $11.6 million and $3.9 million, respectively which are included in the Consolidated Statements of Operations from the acquisition date through March 31, 2026.

 

IndiCue Acquisition

 

On February 12, 2026, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) to acquire all of the issued and outstanding equity interests of IndiCue, a CTV monetization and engagement platform. The acquisition is intended to expand the Company’s technology capabilities and strengthen its advertising and audience engagement offerings within the streaming and connected television ecosystem.

 

Pursuant to the terms of the Purchase Agreement, the aggregate purchase price, further detailed below was subject to working capital and other customary adjustments, consisting of (i) $12.8 million payable in cash at closing and (ii) deferred consideration, payable over 6 to 12 months, in cash or shares of the Company’s Class A common stock, subject to stockholder approval, and earnout payments, in amounts totaling up to $18.0 million if certain revenue and gross profit earnout targets are achieved during the first three fiscal years following the Acquisition. The Purchase Agreement also includes certain restrictive covenants of the Sellers, including noncompetition provisions.

 

The Company agreed to pay deferred stock consideration one year after Closing (or earlier at the Company's discretion, or after six months upon the seller's request). Subject to certain conditions, settlement shall be in common stock, with a mechanism requiring additional compensation ("Shortfall Amount") if the Company's share price falls below a designated amount at the time of settlement. The Shortfall Amount may also be settled in cash or shares at the Company's discretion, subject to certain conditions. The Company elected the fair value option ("FVO") under ASC 825 to account for the deferred consideration liability. With this election, the Company remeasures the deferred consideration obligation at fair value at the end of each reporting period. All changes in fair value are recognized in earnings each reporting period until settlement. For the year ended March 31, 2026, the Company recognized a $1.0 million increase in the fair value of the deferred consideration liability, which is presented as Change in fair value of acquisition-related deferred consideration in the Consolidated Statements of Operations.

 

The aggregate purchase consideration consisted of the following (in thousands):

 

 

 

IndiCue

 

Purchase price allocation:

 

 

 

Cash paid to seller

 

 

12,800

 

Deferred consideration

 

 

11,250

 

Contingent consideration

 

 

11,250

 

Total purchase price

 

$

35,300

 

Allocated to:

 

 

 

Cash and cash equivalents

 

 

3,183

 

Accounts receivables

 

 

15,424

 

Other current assets

 

 

39

 

Goodwill

 

 

14,419

 

Intangible assets:

 

 

 

Tradenames, Trademarks and Patents

 

 

2,500

 

Software

 

 

9,500

 

Customer Relationships

 

 

7,800

 

Accounts payable and accrued expenses

 

 

(14,729

)

Deferred tax liability

 

 

(2,836

)

 

 

$

35,300

 

 

Giant Worldwide Acquisition

 

On January 7, 2026, the Company acquired Giant Worldwide ("Giant"), a provider of audience development, customer acquisition, direct-to-consumer marketing, and media services for leading entertainment brands and studios. The acquisition brings deep studio relationships, audience development expertise, and performance-driven marketing capabilities to the Matchpoint™ platform, further enhancing the Company's ability to provide end-to-end technology and media solutions to content owners, distributors, and streaming services.

 

Pursuant to the terms of the asset purchase agreement, the Company acquired the assets and liabilities of Giant for an aggregate purchase price of $1.95 million, payable as (a) $ 0.35 million at closing (the "Closing Date Payment") and (b) $1.65 million in four equal installments of $ 0.41 million due at the 3, 6, 9, and 12-month anniversaries of the Closing Date.

 

The Company acquired Giant as a result of a forced sale through an assignment for the benefit of creditors process.

Following the Company's reassessment of the assets and liabilities acquired, the Company recognized identifiable intangibles of $6.2 million for consideration of $2.0 million resulting in a bargain purchase gain of $4.3 million.

 

The aggregate purchase consideration consisted of the following (in thousands):

 

 

 

Giant Worldwide

 

Purchase price allocation:

 

 

 

Cash paid to seller

 

 

350

 

Deferred consideration

 

 

1,600

 

Total purchase price

 

$

1,950

 

Allocated to:

 

 

 

Gain on bargain purchase

 

 

(4,250

)

Intangible assets :

 

 

 

Tradenames, Trademarks and Patents

 

 

600

 

Preferred partner medallions

 

 

4,100

 

Customer Relationships

 

 

1,500

 

 

 

$

1,950

 

 

The following unaudited pro forma financial information presents the combined results of operations of the Company, IndiCue as if the acquisitions had occurred on April 1, 2024 (in thousands):

 

 

March 31,

 

 

2026

 

 

2025

 

Revenue

 

101,479

 

 

 

92,606

 

Net (loss) income

$

(8,097

)

 

$

2,911

 

 

Giant Worldwide is excluded from the table above due to impracticality reasons, as the Company was unable to obtain the requisite financial records for results pre-acquisition.