Business combination |
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| Business combination | Note 20 – Business combination
On March 31, 2026, the Company completed its 100% equity acquisition of Blessing Logistics Ltd (“Blessing Logistics”). This transaction was executed to secure a critical operating authorization that supports the Company’s planned expansion into cross-border heavy crude oil logistics services. The operating results of Blessing Logistics have been included in the Company’s consolidated financial statements prospectively from the March 31, 2026 effective acquisition date.
The Company finalized the full acquisition-date fair value valuation in accordance with ASC 805 Business Combinations as of the March 31, 2026 closing date. Blessing Logistics operates exclusively as a specialized licensed service entity, with no material owned tangible long-lived assets, operating capital, financial assets or contingent liabilities assumed by the Company at closing. As a result, the only separate identifiable asset acquired is the transferable export heavy crude oil license, with a finalized acquisition-date fair value of $2,000,000.
Total consideration transferred for the acquisition consisted entirely of newly issued ordinary shares of the Company, measured at the closing market price of the Company’s common stock on the acquisition date for a total fair value of $2,000,000. The fair value of total consideration exactly equaled the fair value of net identifiable assets acquired, resulting in no residual goodwill balance, and no recognition of a bargain purchase gain in connection with this transaction.
The final purchase price allocation as of the March 31, 2026 acquisition date is summarized in the table below:
Intangible Asset Amortization Disclosure
The acquired export heavy crude oil license intangible asset has been assigned a finite estimated useful life of 2 years, aligned with the remaining valid term of the operating authorization. The license will be amortized on a straight-line basis over this 2-year period, with annual amortization expense of approximately $1,000,000 for each of the next two full fiscal years. No amortization expense has been recognized in the six months ended March 31, 2026, as the license was acquired at the very end of the reporting period and placed into service on April 1, 2026. No residual value has been assigned to this intangible asset.
Unaudited Pro Forma Supplemental Information
The following unaudited pro forma supplemental financial information presents the combined revenues and net (loss) income of the Company and Blessing Logistics Ltd. for the six months ended March 31, 2026 and 2025 as if the acquisition had occurred on October 1, 2024, the beginning of the fiscal year preceding the fiscal year in which the acquisition occurred.
(Unaudited, in U.S. dollars)
The unaudited pro forma supplemental financial information combines the historical results of the Company and Blessing Logistics Ltd. and reflects adjustments directly attributable to the acquisition. The pro forma adjustments consist of the recognition of the amortization expense for the acquired export heavy crude oil license intangible asset as if the acquisition had occurred on October 1, 2024, together with the elimination of all intercompany transactions between the two entities for the periods presented. All adjustments are non-recurring in nature and directly tied to the consummation of the Blessing Logistics acquisition, with no recurring operating impacts unrelated to the transaction.
No material nonrecurring pro forma adjustments directly attributable to the acquisition have been included in the pro forma amounts presented above. No transaction-related costs, bargain purchase adjustments or fair value remeasurement charges impacted the pro forma results for the periods disclosed.
The unaudited pro forma supplemental financial information is presented for informational purposes only and is not necessarily indicative of the results that would have been achieved had the acquisition occurred on the assumed date or of results that may be achieved in future periods. The information does not reflect anticipated synergies or cost savings from the acquisition. |
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