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Note 16 - Business Combinations
 6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Business Combination [Text Block]

NOTE 16. BUSINESS COMBINATION

 

On April 1, 2026, the Company acquired 80% of the outstanding equity interests of TJIM See Note 1. TJIM provides discretionary and non-discretionary investment advisory services to institutional investors, high-net-worth individuals, retirement plans, sub advisory platforms, and foundations. The acquisition expands the Company’s operations into fee-based investment management and wealth advisory services and is expected to enhance recurring revenues and long-term growth opportunities.

 

Purchase Consideration

 

The aggregate purchase consideration was approximately $12.3 million, consisting of the following:

 

(in thousands)

    

Cash consideration, including transaction costs

 $12,000 

Fair value of deferred consideration

  316 

Total consideration

 $12,316 

 

The purchase agreement provides for a deferred payment of approximately $0.3 million payable on the first anniversary of closing together with interest at 5% per annum. The obligation is fixed and not contingent upon future performance or continued employment.

 

Preliminary Purchase Price Allocation

 

The following table summarizes the preliminary allocation of purchase consideration to the assets acquired and liabilities assumed as of April 1 2026. The preliminary purchase price allocation is based on management's current estimates and assumptions and remains subject to change during the measurement period as additional information becomes available regarding the final working capital adjustment. Any measurement period adjustments could be material to the Company's consolidated financial statements.

 

(in thousands)

    

Total consideration

 $12,316 

Allocated to:

    

Cash and cash equivalents

  590 

Accounts receivable

  1,630 

Property and equipment, net

  19 

Other assets

  289 

Identifiable intangibles, net

  9,700 

Other liabilities

  (1,671)

Redeemable noncontrolling interest

  (3,080)

Goodwill

 $4,839 

 

Intangible Assets

 

Identifiable intangible assets consist of tradenames and client relationships. These intangible assets are being amortized over estimated useful lives ranging from 10 to 15 years. See Note 7.

 

Goodwill

 

Goodwill recognized in connection with the acquisition primarily represents expected synergies, the assembled workforce, and other future economic benefits that do not qualify for separate recognition. Goodwill will not be amortized. Instead, goodwill will be tested for impairment at least annually, or more frequently in the case of a triggering event. Goodwill was allocated to the asset management segment of TJIM. Goodwill is expected to be deductible for tax purposes. See Note 7.

 

Redeemable Noncontrolling Interest

 

At the acquisition date, the redeemable noncontrolling interest was initially measured at its acquisition-date fair value in accordance with ASC 805. The fair value was determined using a market participant perspective and incorporated significant unobservable inputs, including projected future cash flows, expected growth rates, profitability assumptions, market multiples of comparable companies, and an appropriate discount rate.

 

Acquisition-Related Costs

 

The Company incurred acquisition-related costs of approximately $1.5 million and $0.9 million during the six and three months ended June 30, 2026, respectively, which were recorded within audit, legal and other professional fees in the statement of operations.

 

Pro Forma Financial Information

 

The TJIM Acquisition contributed $1.7 million in revenue and $0.6 million in earnings during both the three and six months ended June 30, 2026. The TJIM Acquisition was not completed until the second fiscal quarter of 2026; as such it did not contribute any revenue or earnings during the three months ended March 31, 2026 or during the three and six months ended June 30, 2025.

 

The following unaudited pro forma financial information presents the combined results of operations of the Company and TJIM as if the acquisition had occurred on January 1, 2025:

 

(in thousands, except per share data)

                
  

Six Months Ended June 30,

  

Three Months Ended June 30,

 
  

2026

  

2025

  

2026

  

2025

 

Revenue

 $15,305  $14,144  $7,228  $7,122 

Net income

 $1,699  $1,649  $498  $376 

Net income attributable to Bimini Capital Management, Inc. stockholders

 $1,619  $1,438  $498  $309 

Basic and diluted net income per share of:

 $0.16  $0.14  $0.05  $0.03 

 

The unaudited pro forma information is presented for informational purposes only and does not necessarily reflect the results of operations that would have occurred had the acquisition been completed on the date indicated, nor is it indicative of future operating results.