v3.26.1
Acquisitions
 6 Months Ended
Jun. 30, 2026
Acquisitions [Abstract]  
ACQUISITIONS

NOTE 3 - ACQUISITIONS

 

On March 19, 2026, the Company completed its acquisition of Corvex OpCo, an AI cloud computing company specializing in GPU-accelerated infrastructure for AI workloads. The acquisition was undertaken to expand the Company’s AI infrastructure capabilities and strengthen its position in the high-performance compute market. The transaction provides access to Corvex OpCo’s infrastructure platform, engineering resources, and customer relationships, and is expected to enhance the Company’s ability to deliver scalable compute solutions to customers with AI and data-intensive workloads.

 

Pursuant to the terms of the Merger Agreement, total consideration consisted of the following:

 

●240.5620 shares of Series B Preferred Stock which were converted into 240,544 shares of Common Stock on March 31, 2026.

 

●23,551.5195 shares of Series C Preferred Stock, which were convertible into approximately 23,551,502 shares of Common Stock, following stockholder approval at the Company’s 2026 Annual Meeting of Stockholders.

 

●30,227.052 shares of Series D Preferred Stock which were convertible into approximately 30,227,050 shares of Common Stock, following stockholder approval at the Company’s 2026 Annual Meeting of Stockholders.

 

Collectively, the Series B, Series C and Series D Preferred Stock are referred to collectively as “Payment Shares” on that basis that each share will be convertible to Common Stock and each Payment Share, on an as converted basis, represents one thousand shares of the combined company, which is the basis for the determination of the estimated purchase price.

 

In connection with the acquisition, the Company issued replacement awards for Corvex OpCo’s pre-existing stock options and restricted stock units.

 

Total consideration transferred in the acquisition was $581.9 million, consisting of the following (in thousands, except per share data):

 

Fair value of Payment Shares at $10.71 per common share equivalent  $577,045 
Fair value of assumed Corvex OpCo equity awards attributable to pre-combination services   4,910 
Total consideration  $581,955 

The acquisition-related costs were $1.8 million, of which $719 thousand were recorded in general and administrative expense in the condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2026.

 

We allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on their preliminary estimated fair values, which were determined using generally accepted valuation techniques based on estimates and assumptions made by management at the time of acquisition. These estimates and assumptions are believed to be reasonable, but they are inherently uncertain and may be subject to material change as additional information becomes available during the respective measurement period, which will not exceed 12 months from applicable acquisition date. The acquired business contributed revenue of $4.3 million and a net loss of $15.5 million for the period from March 19th to June 30, 2026.

 

Subsequent to the issuance of the March 31, 2026 interim financial statements, immaterial errors to the preliminary purchase price allocation were identified which increased goodwill by approximately $1,054 thousand, increased deferred revenue by $191 thousand and increased accrued expenses by $819 thousand. The Company evaluated these errors quantitatively and qualitatively and determined the related impact was not material to the previously reported consolidated interim financial statements.

 

The preliminary fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands):

 

   Opening
Balance Sheet		 
Cash and cash equivalents  $36,678 
Accounts receivable, net   1,342 
Prepaid expenses and other current assets   596 
Property and equipment, net   26,412 
Operating lease right-of-use assets   3,477 
Intangible assets   15,400 
Goodwill   519,318 
Total assets acquired  $603,223 
      
Accounts payable   1,552 
Accrued liabilities   1,454 
Deferred revenue   4,340 
Operating lease liabilities, current   1,605 
Finance lease liabilities, current   3,798 
Operating lease liabilities, non-current   1,921 
Finance lease liabilities, non-current   6,598 
Total liabilities assumed  $21,268 
      
Total purchase price  $581,955 

The acquired assets and assumed liabilities were recorded at their preliminary estimated fair values. The following table presents the amounts allocated to the intangible assets identified as of the date of acquisition and the estimated useful lives (in thousands):

 

   Fair value  

Useful life

(in years)

 
Customer Relationships  $5,190    7 
Tradename   10,210    20 
   $15,400      

 

Customer relationships represent the preliminary fair value of future projected revenue that will be derived from revenue with existing Corvex OpCo customers. The fair value was determined using the multi-period excess earnings method. The economic useful life was determined based on historical customer turnover rates, including revenue retention and churn rates, as well as the contractual terms and renewal characteristics of customer arrangements. The Company also evaluated qualitative factors specific to its compute capacity services, including the level of integration of its infrastructure within customer operations, switching costs, and the pace of technological change in the underlying compute and AI ecosystem.

 

Tradename refers to Corvex OpCo brand assets. The preliminary fair value was determined by applying the relief-from-royalty method This method is based on the application of a royalty rate to forecasted revenue attributable to the Company’s acquired brand assets. The economic useful life was determined based on the expected usage period of the brand assets and the anticipated cash flows over the forecast period.

 

The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is expected to be deductible for tax purposes. Goodwill is primarily attributable to the assembled workforce as well as the anticipated operational synergies from the integration of Corvex’s technology and resources to deploy AI infrastructure demand at scale with a differentiated product offering, growing sales pipeline and leadership experienced in large-scale distributed computing and software development. All Goodwill is assigned to the AI Platform and services segment.

 

The table below presents supplemental unaudited pro forma information as if Corvex OpCo acquisition had occurred at the beginning of the earliest period presented, which was January 1, 2025. Pro forma results include adjustments for amortization of intangible assets and right of use assets, depreciation of property and equipment, and stock based compensation and do not include any projected cost savings or other anticipated benefits of the Merger. Therefore, the pro forma financial information is not indicative of the results of operations that would have occurred had the transactions been effected on the assumed date.

 

   Six Months Ended June 30, 
   2026   2025 
Revenue:        
Revenue - AI Platform and services  $7,420   $3,561 
Revenue - Connected devices and services   35    309 
Total revenue   7,455    3,870 
Net loss  $(31,401)  $(29,049)