Business Acquisition and Goodwill

12 Months Ended

Jun. 30, 2025

Business Acquisition and Goodwill [Abstract]

BUSINESS ACQUISITION AND GOODWILL

4 -  BUSINESS ACQUISITION AND GOODWILL 

Reverse Acquisition of Fuwei

On July 18, 2022, Fuwei and BJY entered into the Merger Agreement, pursuant to which a wholly-owned subsidiary of Fuwei will be merged with and into BJY, with BJY being the surviving entity and a wholly-owned subsidiary of Fuwei.

On December 23, 2022, the Merger was consumed with completion of the following transactions and consequently, Fuwei changed its name to “Baijiayun Group Ltd” and the shareholders of BJY and shareholders of Fuwei owned 96.79% and 3.21% interest of Baijiayun Group Ltd, respectively, upon consummation of the Merger:

- Each BJY ordinary share that is issued and outstanding immediately prior to the Merger was cancelled in exchange for the right to receive the number of Fuwei newly issued ordinary shares as is equal to one (1) multiplied by the conversion ratio of 0.7807324;

- Each BJY preferred share that is issued and outstanding immediately prior to the Merger was cancelled in exchange for the right to receive the number of Fuwei newly issued ordinary shares as is equal to one (1) multiplied by the conversion ratio of 0.7807324;

- 805,200 ordinary shares, consisting of 259,361 Class A ordinary shares, and 545,840 Class B ordinary shares, were issued to BJY’s ordinary and preferred shareholders based on the conversion ratio;

- Warrants to subscribe for 179,649 Class A ordinary shares were issued to certain preferred shareholders of BJY in lieu of shares issuable in connection with the share allotment and the automatic conversion of the convertible redeemable preferred shares upon the completion of the Merger as the required overseas direct investment (“ODI”) filings had not been completed. See Note 15.

The Merger was accounted for as a reverse acquisition in accordance with ASC 805, “Business Combinations”, for reporting purpose. Fuwei and BJY are deemed to be accounting acquiree and accounting acquirer, respectively, due to BJY comprising the ongoing operations of the combined company, BJY’s senior management comprising the senior management of the combined company and BJY shareholders having a majority of the voting power of the combined company. Accordingly, the consolidated assets, liabilities, equity, and results of operations of BJY became the historical financial statements of the combined company, and Fuwei’s assets, liabilities and results of operations were consolidated with BJY beginning on the acquisition date. The equity structure of the combined company reflects the equity structure of Fuwei, and the equity structure of BJY was retrospectively restated using the conversion ratio to reflect the number of shares of Fuwei issued in the reverse acquisition.

The Company selected a convenience date of December 31, 2022 to account for the allocation of the purchase price, which was based on the fair value of assets and liabilities as of December 31, 2022. The Company evaluated the events between December 23, 2022 and December 31, 2022 and concluded the use of an accounting convenience date of December 31, 2022 did not have material impact on the results of operations or financial position.

As a result of the Fuwei Disposition, substantially all assets acquired and liabilities assumed are classified as held for sale. The assets and liabilities held for sale are measured at fair value less costs to sell based on the $30.0 million purchase price agreed between the Company and Aoji Holdings Co., Ltd and the costs to sell of $520,000. See Note 5.

The following table presents the purchase price allocation of the assets acquired and liabilities assumed on December 31, 2022. The dollar amount presented in the table was based on the exchange rate of RMB1.00 to US$0.145 on December 31, 2022.

	Amount
Assets acquired and liabilities assumed:
Assets held for sale
Inventories		5,856,077
Other current assets		44,572,781
Fixed assets		16,644,971
Land use rights		2,051,673
Other non-current assets		186,452
Fair value adjustment on assets held for sale in connection with the Fuwei Disposition (giving effect of $520,000 costs to sell)		(21,227,128	)
Total assets held for sale, net		48,084,826
Liabilities held for sale
Short-term borrowing		9,424,114
Other current liabilities		8,930,900
Other non-current liabilities		249,812
Total liabilities held for sale		18,604,826
Net assets acquired classified as held for sale		29,480,000
Consideration:
Number of outstanding ordinary shares held by Fuwei’s shareholders as of December 23,2022		32,659
Closing price of Fuwei’s ordinary shares as of December 23, 2022		830
Fair value of Fuwei shareholders’ 3.21% interest of Baijiayun Group Ltd as of December 23, 2022		27,106,447
Total consideration		27,106,447
Bargain purchase gain		(2,373,553	)

Acquisition of Beijing Hydrogen

In March 2023, the Company entered into an equity acquisition agreement with shareholders of Beijing Hydrogen to acquire 100% equity interest of Beijing Hydrogen. The total consideration includes a cash payment of RMB3,245,750 (approximately $473,000) and the issuance to such shareholders a total of 18,047 Class A ordinary shares, as calculated pursuant to the terms specified in the underlying equity acquisition agreement. The fair value of consideration associated with these shares issued is measured by the quoted price of the Company’s Class A ordinary shares on the acquisition date.

The Company substantially took over the operation of Beijing Hydrogen on April 1, 2023 and can determine the direction of management and policies of Beijing Hydrogen since that date. Therefore, the Company concluded that it has obtained control of Beijing Hydrogen on April 1, 2023 and the acquisition date is April 1, 2023.

The following table presents the purchase price allocation of the assets acquired and liabilities assumed on April 1, 2023. The dollar amount presented in the table was based on the exchange rate of RMB1.00 to US$0.141 on April 1, 2023.

	Amount		Amortization
	US$		Years
Current assets		807,891
Property and equipment, net		2,076
Other long-term assets		589
Customer relationship		2,038,558		8.75
Apipost data		1,033,840		Indefinite life
Technology		829,984		5
Total identifiable assets acquired		4,712,938
Current liabilities		197,236
Deferred tax liabilities		585,357
Total liabilities assumed		782,593
Net identifiable assets acquired		3,930,345
Number of Class A ordinary shares issued as consideration*		18,047
Quoted price of Class A ordinary shares on acquisition date*		769
Fair value of Class A ordinary shares issued as consideration		13,877,605
Cash consideration		472,618
Total purchase consideration		14,350,223
Goodwill		10,419,878

As of June 30, 2025, $15,136 of the cash acquisition proceeds remained unpaid to the former shareholders.

The fair value of the customer relationship was determined using the Multi-period Excess Earnings Method, and the fair value of technology was determined using Relief from Royalty Method, all of which were under the income approach. The fair value of the apipost data was determined using the Market Approach.

The determination of fair values involves the use of significant judgments and estimates. The judgments used to estimate the fair value assigned to assets acquired and liabilities assumed, the intangible asset life, as well as the significant assumptions, can materially impact the Company’s consolidated financial statements. Significant assumptions used for the models included but not limited to the weighted average cost of capital, forecasted operating cash flows, discount rates, attrition rate, royalty saving rate, and quoted price in the market. The Company utilized the assistance of third-party valuation appraisers to determine the fair values as of the date of acquisition.

After the acquisition date, Beijing Hydrogen contributed revenues and net income of $4,524,672 and $2,078,315 to the Company for the year ended June 30, 2024

Acquisition of Wuhan BaiJiaYun

In July 2023 the Company acquired 100% equity interest in Wuhan BaiJiaYun (currently known as Wuhan Xinwanlian Technology Co., Ltd.) with consideration of US$247,688. The acquisition was closed on July 31, 2023 and the consideration was fully paid in August 2023.

The following table presents the purchase price allocation of the assets acquired and liabilities assumed and the related deferred income taxes on July 31, 2023. The dollar amount presented in the table was based on the exchange rate of RMB1.00 to US$0.140 on July 31, 2023.

	Amount
	US$
Cash and cash equivalents		173,350
Other current assets		1,304,251
Property and equipment, net		36,143
Other long-term assets		143,005
Total identifiable assets acquired		1,656,749
Current liabilities		709,933
Lont-term borrowings		1,400,050
Total liabilities assumed		2,109,983
Net identifiable assets acquired		(453,234	)
Total purchase consideration		247,688
Goodwill		700,922
Effect on cash flows of the Company
Cash paid (as above)		247,688
Less: cash and cash equivalents in entity acquired		(173,350	)
Cash outflow (inflow) on acquisition		74,338

The determination of fair values involves the use of significant judgments and estimates. The judgments used to estimate the fair value assigned to assets acquired and liabilities assumed, the intangible asset life and non-controlling interests, as well as the significant assumptions, can materially impact the Company’s consolidated financial statements. Significant assumptions used for the models included but not limited to the weighted average cost of capital, forecasted operating cash flows, discount rates, and attrition rate. The Company utilized the assistance of third-party valuation appraisers to determine the fair values as of the date of acquisition.

After the acquisition date, Wuhan BaiJiaYun contributed revenues and net loss of $1,926,137 and $535,534 to the Company for the year ended June 30, 2024. Pro forma results reflecting this transaction were not presented because Wuhan BaiJiaYun is not significant to the Company’s consolidated financial results.

Acquisition of BaiJiaYi

In January 2024, the Company acquired 51% equity interest in Baijiayi Digital Technology (Henan) Co., Ltd.(“BaiJiaYi”) with consideration of nil. The acquisition was closed on January 19, 2024, and the consideration was fully paid in nil.

The following table presents the purchase price allocation of the assets acquired and liabilities assumed and the related deferred income taxes on July 31, 2023. The dollar amount presented in the table was based on the exchange rate of RMB1.00 to US$0.140 on January 31, 2024.

	Amount
	US$
Cash and cash equivalents		4,327
Other current assets		49,689
Total identifiable assets acquired		54,016
Current liabilities		94,667
Total liabilities assumed		94,667
Net identifiable assets acquired		(40,651	)
Total purchase consideration		—
Fair value of non-controlling interests		(19,916	)
Goodwill		20,735
Effect on cash flows of the Company
Cash paid (as above)		—
Less: cash and cash equivalents in entity acquired		(4,327	)
Cash outflow (inflow) on acquisition		(4,327	)

The determination of fair values involves the use of significant judgments and estimates. The judgments used to estimate the fair value assigned to assets acquired and liabilities assumed, the intangible asset life and non-controlling interests, as well as the significant assumptions, can materially impact the Company’s consolidated financial statements. Significant assumptions used for the models included but not limited to the weighted average cost of capital, forecasted operating cash flows, discount rates, and attrition rate. The Company utilized the assistance of third-party valuation appraisers to determine the fair values as of the date of acquisition.

After the acquisition date, Baijiayi contributed revenues and net loss of nill and $2,360 to the Company, respectively. Pro forma results reflecting this transaction were not presented because Baijiayi is not significant to the Company’s consolidated financial results.