v3.26.1
Acquisition
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisition

 

3. Acquisition

 

On June 29, 2026, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) to acquire 100% of the membership interests of OW Cyber, LLC, d/b/a VigilAigent, LLC (the “VigilAigent”) over two distinct closings. At the first closing, effective June 29, 2026, the Company acquired 60% of VigilAigent’s membership interests for a purchase price of $2.0 million, paid through $0.4 million of cash and the issuance of $1.6 million of unregistered shares of the Company’s common stock, par value $0.01 per share, at a contractually defined share price of $0.67 per share. At the second closing, subject to specified closing conditions, including obtaining required Company stockholder and Nasdaq Stock Market or other regulatory approvals, the Company agreed to acquire the remaining 40% of VigilAigent’s membership interests for a cash payment of $1.3 million. The obligations of the parties to consummate the second closing are subject to satisfaction, or waiver, on or before August 30, 2026 or such later date as may be agreed upon by the Seller and Company, of the identified closing conditions.

 

Following the second closing, the seller may be eligible to receive up to an additional $6.9 million in contingent consideration, payable via the issuance of unregistered shares of the Company’s common stock upon the achievement of the following specific financial milestones:

 

·Milestone 1: If, as of March 31, 2027, VigilAigent’s annual recurring revenue (“ARR”) run rate is equal to $6.0 million or more and VigilAigent’s adjusted operating cash flow is greater than or equal to $0, the applicable portion of the earn-out consideration payable with respect thereto will be $2.7 million.
·Milestone 2: If, as of September 30, 2027, VigilAigent’s ARR run rate is equal to $7.5 million or more and VigilAigent’s adjusted operating cash flow is greater than or equal to $0.8 million, the applicable portion of the earn-out consideration payable with respect thereto will be $2.7 million.
·Milestone 3: If, as of March 31, 2028, the ARR run rate is equal to $8.6 million or more, the applicable portion of the earnout consideration payable with respect thereto will be $1.5 million.

 

This earn-out consideration only takes effect upon the second closing, so no liability has been recorded as of the six months ended June 30, 2026.

 

Acquisition-related transaction costs for the acquisition of VigilAigent totaled $24 thousand for the six months ended June 30, 2026. These costs are expensed as incurred and recorded within general and administrative expenses in the consolidated statements of operations.

 

VigilAigent is a managed security services provider that delivers subscription-based cybersecurity monitoring, threat detection, incident response, and managed detection and response services to approximately 1,000 customers through a network of more than 80 reseller partners. Its operations combine human cybersecurity specialists with proprietary agentic-AI technology, including its Oracle platform, which continuously analyzes and correlates large volumes of security-event data to identify, investigate, and respond to potential threats. Through this technology-enabled service model, VigilAigent helps managed service providers and enterprise customers protect networks and endpoints, improve threat visibility, accelerate response times, and strengthen their overall cybersecurity posture under primarily recurring, multiyear customer contracts. The acquisition allows the Company to expand its client base and product offerings and the assets acquired were considered to be a business.

 

The acquisition was accounted for as a business combination under ASC 805, Business Combinations. The purchase accounting for this acquisition has not been completed as the Company is in the process of finalizing the working capital adjustments with the seller, as well as the valuation of the acquired intangible assets and other long-lived assets. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition (in thousands):

 

Consideration Paid  Amount 
Cash  $360 
Common stock issued at fair value   1,590 
Total consideration paid  $1,950 

 

Recognized amounts of identifiable assets acquired and liabilities assumed   Amount  
Cash   $ 4  
Accounts receivable     410  
Prepaid expenses and other assets     81  
Equipment     12  
Current liabilities     (1,556 )
Identifiable net liabilities assumed     (1,049 )
Goodwill     4,299  
Noncontrolling interest     (1,300 )
Total   $ 1,950  

 

For the three and six months ended June 30, 2026, VigilAigent contributed revenue of $17 thousand and a net loss of $14 thousand to the consolidated operating results of the Company.