v3.26.3
Business Combination
 6 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Business Combination
3.Business Combination

 

On May 12, 2026, the Company closed its previously announced merger with Ryvyl Inc. The transaction was accounted for as a reverse acquisition using the acquisition method in accordance with ASC 805, Business Combinations (“ASC 805”). ASC 805 requires that one of the combining entities be designated as the accounting acquiror for accounting purposes. For this transaction, the Company has been determined to be the accounting acquiror. In making this determination, management considered the structure of the merger, including the relative voting rights and the corporate governance structure of the combined company post-merger, the composition of post-merger board of directors, and the designation of key senior management positions. The purchase consideration has been preliminarily allocated to the fair value of the historical Ryvyl Inc.’s identifiable assets and liabilities as of the closing date of the merger, with the excess purchase consideration recorded as goodwill.

 

Consideration Transferred

 

The fair value of the consideration transferred on the closing date of the merger was $14.573 million, which consisted of 1,291,088 shares common stock valued at $10.083 million plus the cancellation of the Company’s pre-existing preferred stock investment in Ryvyl with a fair valueof $6.50 million, less the settlement of a pre-existing note payable plus accrued interest that the Company owed to Ryvyl valued at $2.01 million.

 

Preliminary Allocation of Purchase Price

 

The purchase price is allocated to the legacy Ryvyl assets acquired and liabilities assumed based on their estimated fair values on the merger closing date, with any excess purchase price recorded as goodwill. The purchase price allocation shown in the following table reflects the preliminary fair value estimates based on management’s analysis, including preliminary work performed by third-party valuation specialists (in thousands):

 

Fair value of consideration transferred  $14,573 
      
Estimated fair values of assets acquired and liabilities assumed:     
Cash and restricted cash   4,244 
Accounts receivable, net   1,255 
Prepayments and other current assets   1,221 
Intangible assets   9,815 
Operating lease right-of-use assets   128 
Other assets   268 
Accounts payable   (2,827)
Accrued expenses   (7,963)
Current portion of operating lease liabilities   (737)
Other current liabilities   (51)
Operating lease liabilities, noncurrent   (1,285)
Other long-term liabilities   (611)
Total estimated fair value of net assets acquired   3,457 
      
Estimated goodwill  $11,116 

The fair values of the identifiable intangible assets acquired were determined using the income and cost approaches. The fair value measurements were primarily based on inputs that are not observable in the market and thus represent Level 3 measurements as defined in ASC 820, Fair Value Measurements and Disclosures. The multi-period excess earnings method was used to value customer relationships. This method is an application of the income approach that estimates the present value of cash flows attributable to the asset after deducting contributory asset charges for the other assets that contribute to those cash flows. To value the BIN sponsorship agreement, the cost to recreate (replacement cost) method was used, which estimates the fair value of an intangible asset based on the current cost to reconstruct or replace it with a comparable asset, adjusted for any obsolescence.

 

Supplemental Pro Forma Financial Information

 

The following unaudited pro forma financial information presents the Company’s financial results as if the merger with Ryvyl had occurred as of January 1, 2025. The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have been had the acquisitions been completed on this date. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the Company’s future financial results. The pro forma information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from the acquisition.

 

   Three Months Ended
June 30,		   Six Months Ended
June 30,		 
   2026   2025   2026   2025 
Pro forma revenue  $3,711   $3,298   $6,798   $6,543 
Pro forma net loss   (10,192)   (3,917)   (18,255)   (10,401)