v3.26.1
BUSINESS COMBINATION
 6 Months Ended
Jun. 30, 2026
BUSINESS COMBINATION  
BUSINESS COMBINATION

NOTE 4 — BUSINESS COMBINATION

 

On April 1, 2026, the Company completed the acquisition of 100% of the issued and outstanding equity interests of Crestview BPO Pte. Ltd. (now TaskAlpha Pte. Ltd.), which owns 100% of Flipside AI, pursuant to a Stock Purchase Agreement dated January 13, 2026, as amended March 30, 2026, among the Company, Arcadia Data Pte. Ltd. (“Arcadia”), Crestview, Flipside AI and the selling shareholders named therein. The transaction was accounted for as a business combination under ASC 805 with Nexscient as the accounting acquirer.

 

The consideration transferred consisted of the following:

 

Cash

 

$600,000

 

Seller convertible note, at present value

 

 

379,694

 

Common stock

 

 

1,630,000

 

Total consideration transferred

 

$2,609,694

 

 

The cash consideration was paid on April 1, 2026, of which $400,000 was remitted through TaskAlpha acting as paying agent and disbursed to the eight selling shareholders and Arcadia, and $200,000 was paid directly to Arcadia. The seller convertible note is non-interest-bearing and was recorded at present value using an imputed interest rate of 9% (Note 8). 

 

The Company issued an aggregate 6,846,000 shares of common stock in connection with the acquisition, of which 6,520,000 shares were issued as consideration under the Stock Purchase Agreement and 326,000 shares were issued to the business broker. The aggregate contractual value of the consideration payable to the selling shareholders under the Stock Purchase Agreement was $2,680,000. The 326,000 broker shares, valued at $81,500, were not consideration and were separately recorded as a transaction cost. Purchase price consideration transferred pursuant to the acquisition was $2,609,694; the difference of $70,306 represents the discount on the seller convertible note, which is recorded at its present value using an imputed rate of 9%.

 

Shares issued in the acquisition were measured at $0.25 per share, the price at which the Company sold shares for cash in contemporaneous private placements, because the Company’s common stock does not trade in an active market.

 

The following table summarizes the provisional fair values of the assets acquired and liabilities assumed at the acquisition date:

 

 

 

Amount

 

Identifiable assets acquired:

 

 

 

Cash

 

$25,146

 

Accounts receivable, net

 

 

354,252

 

Due from related parties

 

 

354,996

 

Prepaid expenses and other current assets

 

 

25,788

 

Property and equipment, net

 

 

204,685

 

Right of use asset

 

 

213,125

 

Other non-current assets

 

 

63,101

 

Identifiable intangible assets

 

 

200,000

 

Total identifiable assets acquired

 

 

1,441,093

 

 

 

 

 

 

Liabilities assumed:

 

 

 

 

Accounts payable and accrued expenses

 

 

(122,257)

Loans payable

 

 

(741,054)

Right of use liability

 

 

(200,075)

Retirement benefit obligation

 

 

(301,266)

Deferred tax liability on intangibles (25%)

 

 

(50,000)

Total liabilities assumed

 

 

(1,414,652)

 

 

 

 

 

Net identifiable assets acquired

 

 

26,441

 

Goodwill

 

 

2,583,253

 

Total consideration transferred

 

$2,609,694

 

 

The allocation is provisional pending completion of the Company’s valuation procedures and may be revised during the measurement period, which ends April 1, 2027. Goodwill represents the excess of consideration transferred over the net identifiable assets acquired and is attributable principally to the assembled workforce and expected synergies. Goodwill is not expected to be deductible for income tax purposes.

 

Supplemental pro forma information

 

The following unaudited pro forma information presents the combined results as though the acquisition had occurred on January 1, 2025:

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2026

 

 

2025

 

Revenues as reported

 

$1,110,112

 

 

$-

 

Flipside AI pre-acquisition revenue

 

 

685,386

 

 

 

1,160,617

 

Pro forma revenues

 

 

1,795,498

 

 

 

1,160,617

 

 

 

 

 

 

 

 

 

 

Net loss as reported

 

 

(557,687)

 

 

(242,317)

Flipside AI pre-acquisition net income

 

 

34,021

 

 

 

(78,026)

Amortization of acquired intangible assets

 

 

(8,714)

 

 

(17,428)

Accretion of seller note discount

 

 

(8,543)

 

 

(17,086)

Pro forma net loss

 

$(540,923)

 

$(354,857)

 

The pro forma amounts are presented for informational purposes only and do not purport to represent the results that would have been achieved had the acquisition occurred on the date indicated, nor are they indicative of future results. Pre-acquisition amounts for Flipside AI are derived from the subsidiary’s statutory records and do not reflect the U.S. GAAP conversion adjustments applied to post-acquisition periods.