Note 3: Mergers and Acquisitions

Block Street

On April 20, 2026, the Company entered into, a Stock Exchange Agreement (the “SEA”) with the four stockholders of Block Street Corp., a Nevada corporation (“Block Street”), pursuant to which the Company acquired 100% of the issued and outstanding equity interests of Block Street in a share-for-share exchange, and Block Street became a wholly-owned subsidiary of the Company. Block Street operates a platform designed to support token issuances aligned with applicable regulatory frameworks and the tokenization of real-world assets. Block Street’s capabilities have not yet been deployed commercially and Block Street has not generated revenues to date.

The Company evaluated the acquired set under ASC 805 and concluded that it did not meet the definition of a business. Accordingly, the transaction was accounted for as an asset acquisition under ASC 805-50 rather than as a business combination.

The purchase price for this transaction consisted of 12,670,257 shares of the Company’s common stock issued at closing, valued at approximately $12.0 million. We also granted the sellers the right to two earn-out payments in the amount of the first earnout of $15.0 million (payable in 5five (5)-year pre-funded warrants exercisable for up to 15,837,821 shares of common stock with an initial aggregate exercise price of $15.0 million) at the point in time if, or when, Block Street generates US GAAP-compliant net revenues, applied consistently with the Company’s historical accounting policies, of not less than $20.0 million on a trailing four-quarter reporting basis. The second earnout of approximately $16.0 million payable in 5five (5)-year pre-funded warrants exercisable for up to 16,893,675 shares of common stock with an initial aggregate exercise price of $16.0 million) at the point in time if, or when, Block Street generates US GAAP-compliant Modified Operating Income, defined in the SEA as Net Operating Income plus realized gains minus realized losses from token sale operations, of not less than $8.0 million on a trailing four-quarter reporting basis.

The fair value of the purchase price components outlined above was $11.7 million due to fair value adjustments for the contingent consideration, cash acquired, and working capital adjustments, as detailed below (in $000’s):

 Schedule of Business Acquisition

The table below outlines the purchase price allocation of the purchase for Block Street to the acquired identifiable intangible assets (in $000’s):

Schedule of Business Acquisition

Mswipe

Effective on May 9, 2025, the Company and our indirect, wholly-owned second-tier Canadian subsidiary entered into an agreement to purchase all of the outstanding capital stock of Fortress II Holdings Ltd. d/b/a Mswipe, an entity that, through its subsidiaries, offers multi-currency, fiat- and crypto-enabled payment card services of Mswipe. The company conducts business under the name Mswipe. Through a suite of physical and virtual cards that are available on both the Visa^® and Mastercard^® networks, the acquired operations enable users to seamlessly spend traditional and digital currencies across the globe. The platform is built with robust compliance frameworks, advanced security protocols, and real-time exchange capabilities, which allow for fast, secure, and borderless transactions. This is a B2B solution, which, when combined with our other product offerings, bridges the gap between the crypto economy and traditional financial systems—while ensuring regulatory alignment, interoperability with existing payment networks, and a seamless user experience for institutional partners and their end-users.

The purchase price for this transaction consisted of our (i) issuing one million restricted shares of our common stock to the three sellers, valued at the Historical NOCP on May 9, 2025 of $6.10, (ii) granting five hundred thousand (500,000) four 4(4)-year common stock warrants to the three sellers, with a per-share exercise price of $5.50 (which was the approximate market price at the time that we reached an agreement in principal for this transaction), (iii) issuing shares to two of the sellers in Alyea, which shares we valued at $4.8 million, and (iv) issuing two 14-month straight promissory notes in the aggregate initial principal balance of approximately one million dollars with an interest rate at the AFR for quarterly compounded notes of 3.99% per annum and all principal and interest due at the maturity date. We also are acknowledging an equivalent 14-month term straight promissory note at the acquired company level that pre-dated our acquisition. The principal balance of this note, as of May 9, 2025, was approximately $5.1 million and the interest was reset to match that of the two notes that we issued. We also granted the sellers the right to one earn-out payment in the amount of $20 million (payable in cash or unregistered shares of our common stock) at the point in time if, or when, Mswipe generates a minimum of $15 million in annualized or actual total revenue from Mswipe’s operations.

The fair value of the purchase price components outlined above was $14.2 million due to fair value adjustments for the contingent consideration, cash acquired, and working capital adjustments, as detailed below (in $000’s):

 Schedule of Business Acquisition

Under the preliminary purchase price allocation, the Company recognized goodwill of approximately $6.4 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed as compared to the fair value of the identifiable assets acquired. The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of May 9, 2025, as calculated by an independent third-party firm. Because the transaction was considered a stock purchase for tax purposes, none of the goodwill arising from the acquisition will deductible for tax purposes. The table below outlines the purchase price allocation of the purchase for Mswipe to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):

Schedule of Assets Liabilities Assumed Goodwill 

Proforma Information

The table below presents selected proforma information for the Company for the 13 and 26 weeks ended June 28, 2025, assuming that the acquisition had occurred on December 31, 2023 (the beginning of the Company’s 2024 fiscal year), pursuant to ASC 805-10-50. This proforma information does not purport to represent what the actual results of operations of the Company would have been had the acquisition occurred on that date, nor does it purport to predict the results of operations for future periods (in $000’s).

Schedule of Proforma Information  

● Amortization expense of definite-lived intangible assets has been adjusted based on the preliminary fair value at the acquisition date.