2. BUSINESS COMBINATIONS

Prior to the Acquisitions, AIAI had no substantive business operations other than activities related to the direct public listing process negotiation of the AI License Agreement, and the acquisition of the Portfolio Companies.

Among the Portfolio Companies acquired, CCCI was determined to be the Predecessor entity of AIAI based on its relative size, fair value, and strategic importance to the Company’s operations. Accordingly, periods prior to the acquisitions are presented as the historical financial statements of CCCI. AIAI’s standalone pre-acquisition operations are not separately presented because AIAI had no material assets or operations before the Acquisitions. The Successor period unaudited condensed consolidated financial statements reflect the consolidated operations of AIAI, and all acquired Portfolio Companies at their acquisition-date fair values in accordance with business combination accounting, except for Bond Street which has been recognized at historical carrying values as a transaction under common control.

Acquisitions of Portfolio Companies

On the Closing Date, AIAI completed the acquisition of 100% of the issued and outstanding equity interests of each of the following six Portfolio Companies in exchange for consideration in the form of Class A common stock of the Company, with fair value measured based on AIAI’s initial closing share price of $15.09 per share of Class A common stock as of the date of our Direct Listing as follows:

 SCHEDULE OF PORTFOLIO COMPANY ACQUISITION

Pursuant to the terms of the acquisition agreements, each Portfolio Company continues to be operated by its existing management team. In the case of CCCI, Constellation, and Vanguard, AIAI has agreed to make certain post-closing capital contributions for working capital and capital expenditure purposes pursuant to annual budgets agreed to by the management teams of AIAI and each of the acquired companies. Such capital contributions, when made, shall be accounted for as equity transactions within the AIAI consolidated group.

Accounting Treatment

The acquisitions of the Portfolio Companies, with the exception of Bond Street, have been accounted for as business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with AIAI as the acquirer. Under the acquisition method, the assets acquired and liabilities assumed are recognized at their estimated fair values as of the Closing Date. Goodwill represents the excess of the purchase consideration over the estimated fair value of the net identifiable assets acquired and liabilities assumed.

The acquisition of Bond Street has been accounted for under the pooling-of-interests method as a transaction between entities under common control of the Company’s Founder, John P. Rochon. Under this method, Bond Street’s net assets have been recognized at their historical carrying values as of the Closing Date, and the excess of the fair value of AIAI equity issued over the historical cost basis of Bond Street, net assets has been recognized as an equity transaction with the Founder, rather than giving rise to goodwill.

Purchase Consideration

The estimated aggregate fair value of purchase consideration for the Portfolio Companies (excluding Bond Street) was approximately $460.7 million, of which $439.9 million was paid at closing consisting of $395.3 million in Class A common stock of the Company, and $44.6 million in pre-combination service associated with fully vested options on Class A common stock of the Company. Included in total purchase consideration paid at closing is 0.015 million shares of Class A common stock of the Company issued as reimbursement of MediGuide seller transaction expenses of $0.2 million. Remaining purchase consideration consists of contingent consideration for Vanguard, payable in Class A common stock of the Company with estimated fair value of $20.6 million, over a period of up to five years after Closing Date. Estimated fair value of shares of AIAI Class A common stock and vested options on AIAI Class A common stock exchanged as purchase consideration is based upon the initial closing price of $15.09 per share of our Class A common stock as of the date of our Direct Listing.

The calculation of estimated fair value of purchase consideration for each Business Combination is as follows (in thousands):

 SCHEDULE OF ESTIMATED FAIR VALUE OF PURCHASE CONSIDERATION

Additionally, Bond Street, was acquired for approximately $7.5 million in AIAI Class A common stock, paid at the Closing Date. The acquisition of Bond Street is accounted for as a transaction between entities under common control in accordance with ASC 805-50 as Bond Street was controlled by the Founder, both before and after the transaction. Accordingly, the assets acquired and liabilities assumed were recognized at their historical carrying amounts using the pooling-of-interests method. No fair value adjustments or goodwill was recorded or recognized in connection with the acquisition of Bond Street. The difference between the fair value of the consideration transferred and the historical carrying value of the net assets received was recorded as an equity transaction within additional paid-in capital. Deferred income taxes recognized in connection with the acquisition of Bond Street, which was historically a pass-through entity for federal income tax purposes, have also been recorded through additional paid-in capital.

Preliminary Purchase Price Allocation

The following table sets forth the preliminary allocation of the estimated fair value of purchase consideration for each Business Combination to the identifiable tangible and intangible assets acquired and liabilities assumed, based on their estimated values as of the Closing Date, measured in accordance with ASC 805, Business Combinations (in thousands):

 SCHEDULE OF PRELIMINARY ALLOCATION OF ESTIMATED PURCHASE CONSIDERATION TO IDENTIFIABLE TANGIBLE AND INTANGIBLE ASSETS ACQUIRED AND LIABILITIES ASSUMED

The preliminary purchase price allocation includes the tax effects of fair value adjustments to acquired assets and assumed liabilities, including identifiable intangible assets. Accordingly, deferred tax assets and liabilities were recognized for differences between the assigned fair values and the corresponding tax bases of such assets and liabilities. These amounts remain subject to refinement during the measurement period. The purchase price allocation remains preliminary and is subject to change during the measurement period, not to exceed one year from the Closing Date.

The Company incurred acquisition related expenses, which primarily consisted of transaction fees and legal, accounting and other professional services that are included in the accompanying unaudited condensed consolidated statement of operations within Acquisition and related costs. Approximately $15.1 million were contingent upon closing of the transaction have been expensed as incurred and included in the period from May 7, 2026 to June 30, 2026 (Successor).

Common Control Acquisition of Bond Street

As discussed above, Bond Street was acquired through a transaction with an affiliated entity under common control and accordingly, assets and liabilities transferred by the affiliated entity have been recognized at their historical cost basis, consistent with the pooling-of-interests method under ASC 805-50. Below is a summary of the initial carrying values of Bond Street net assets recognized as of the Closing Date (in thousands):

 SCHEDULE OF INITIAL CARRYING VALUES OF NET ASSETS RECOGNIZED

The unaudited condensed consolidated statements of operations include revenue of $39.1 million and a net pre-tax loss of $6.1 million attributable to the operations of the Acquisitions for period from May 7, 2026 through June 30, 2026 (Successor). All revenue and net loss reported within the Predecessor periods is associated with historical operations of CCCI.

The following tables present pro forma revenues and net income as though the Acquisitions had occurred on January 1, 2025 (in thousands):

 SCHEDULE OF PRO FORMA REVENUES AND NET INCOME

Pro forma financial information is presented as if the operations of the Acquisitions had been included in the consolidated results of the Company since January 1, 2025 and gives effect to transactions that are directly attributable to the Acquisitions, including adjustments to:

Identifiable Intangible Assets

The following table summarizes the preliminary fair values and estimated useful lives of identifiable intangible assets acquired (in thousands):

 SCHEDULE OF PRELIMINARY FAIR VALUES AND ESTIMATED USEFUL LIVES OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED

In connection with the Business Combinations, the Company recognized trademarks and domain names, acquired technology, customer relationships, partner relationships, customer backlog, and software with an aggregate fair value of approximately $180.8 million. The fair values of identifiable intangible assets were determined using valuation methodologies under the income approach and cost approach, as appropriate for the underlying asset, including the relief-from-royalty method, the multi-period excess earnings method (MPEEM), and the replacement cost method. The identifiable intangible assets have finite useful lives and are being amortized on a straight-line basis over their estimated useful lives, which range from 1 to 25 years, determined on an asset-by-asset basis considering the period over which each asset is expected to contribute to future cash flows.

Goodwill

Goodwill represents the excess of the preliminary estimated purchase consideration for Portfolio Companies other than Bond Street over the estimated fair value of the underlying net assets acquired with respect to those Portfolio Companies. The excess of the fair value of AIAI equity issued in exchange for Bond Street and the historical cost basis of Bond Street net assets does not give rise to goodwill as this transaction is deemed to be an equity contribution from an owner rather than a business combination. As such, Bond Street net assets have been recognized based upon their historical carrying values, inclusive of goodwill recognized upon historical acquisition of Bond Street by the common control group.

Goodwill of approximately $303.8 million arising from the Business Combinations is primarily attributable to expected synergies from the integration of the Company’s licensed AI technology into the operations of the Portfolio Companies, the assembled workforce of the Portfolio Companies, and other factors. Goodwill recognized in the acquisitions is not expected to be deductible for income tax purposes.

Predecessor / Successor Presentation

As CCCI is the designated Predecessor, the historical financial statements presented for the pre-acquisition periods reflect CCCI’s operations on a historical cost basis. The Successor period unaudited condensed consolidated financial statements reflect the consolidated operations of AIAI, inclusive of all Portfolio Companies, from the Closing Date forward. Successor period results reflect impacts of purchase accounting adjustments recorded in accordance with ASC 805, Business Combinations, for CCCI and the other Portfolio Companies other than Bond Street.