NOTE 5 – 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 the Share Purchase Agreement dated May 23, 2025, as amended on May 27, 2025, by and among the Company, its wholly-owned subsidiaries ExchangeCo and Callco, the Streamex Exchange Shareholders, and 1540873 B.C. Ltd., as trustee under the Exchange Rights Agreement.

Under the terms of the Share Purchase Agreement, ExchangeCo acquired all of the issued and outstanding shares of Streamex Exchange (the “Purchased Shares”) in exchange for 109,070,079 Exchangeable Shares of ExchangeCo, based on an acquisition consideration ratio of 2.046862 Exchangeable Shares per Purchased Share. Each Exchangeable Share is separately exchangeable for one share of the Company’s common stock, subject to the adjustments and conditions described below.

The purpose of the Acquisition was to enter the digital commodity trading and blockchain-based financial infrastructure market by acquiring an established operating platform, rather than developing comparable technology internally, and to obtain the assembled workforce, intellectual property, and regulatory capabilities of Streamex Exchange. Prior to the Acquisition, the Company did not operate a digital asset tokenization or commodity trading platform, and Streamex Exchange’s business represented a new line of business for the Company.

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 VIE and concluded Streamex Exchange 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 Exchange’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 Exchange has been consolidated in the Company’s financial statements from the acquisition date.

Stockholder 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 sought stockholder approval for certain matters related to the transaction, including the issuance of shares of common stock exchangeable for Exchangeable Shares, the issuance of shares underlying the Convertible Debentures, increases to the authorized share count and the 2023 Long-Term Incentive Plan, and amendments to the Company’s Amended and Restated Certificate of Incorporation. At the special meeting of stockholders held on September 5, 2025, all proposals except the issuance of shares exchangeable for Exchangeable Shares (Proposal A) were approved. Proposal A was subsequently approved on November 4, 2025.

Following stockholder approval of Proposal A on November 4, 2025, and subject to the terms of the Exchange Rights Agreement, the holders of Exchangeable Shares are entitled to exchange such shares for an aggregate of 109,070,079 shares of the Company’s common stock representing up to 75% of the Company’s fully diluted common stock as of the Share Purchase Agreement date.

Consideration Transferred

The fair value of the consideration transferred was $105,498, 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 ratio at which each Exchangeable Share is exchangeable for shares of the Company’s common stock (the “Common Share Exchange Ratio”) from 1.00 to 1.25 if stockholder approval was not obtained within six months following the closing date. The Common Share Exchange Ratio is distinct from the acquisition consideration ratio of 2.046862 Exchangeable Shares issued per Purchased Share described above. The potential adjustment was not included in the purchase consideration as of May 28, 2025. Because stockholder approval was obtained on November 4, 2025, within six months following the closing date, the adjustment was not triggered, the Common Share Exchange Ratio remained 1.00, and no additional consideration was required.

On November 4, 2025, the Company received stockholder approval for the issuance of shares of common stock exchangeable for Exchangeable Shares and one share of Special Voting Preferred Stock in connection with the Share Purchase Agreement. As a result, the conversion cap was removed, and Streamex Exchange shareholders became able to convert their Exchangeable Shares into the Company’s common stock. Concurrently, the derivative liability associated with the Exchangeable Shares was reclassified to permanent equity. No derivative liability related to the Exchangeable Shares remained outstanding as of June 30, 2026 or 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 $5,900 during the year ended December 31, 2025, primarily consisting of legal, accounting, and consulting fees directly attributable to the transaction. These costs were expensed as incurred and are reflected in general and administrative expenses in the unaudited condensed consolidated statements of operations. No further acquisition-related costs were incurred during the six months ended June 30, 2026.

Purchase Price Allocation

The Company applied the acquisition method of accounting in accordance with ASC 805 and recognized assets acquired and liabilities assumed at their estimated fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill. The Company completed its assessment of the fair values of the assets acquired and liabilities assumed during the three months ended March 31, 2026, and the measurement period has since closed. No measurement period adjustments were recorded during the six months ended June 30, 2026.

The Acquisition was recorded as a business combination based on a 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). Goodwill represents the excess of the purchase price consideration over the valuation of the net assets acquired.

The final allocation of the purchase consideration 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 $12,588, 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 $70,435 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.