Note 17 - Business Acquisition

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Business Combination [Text Block]

Note 17. Business Acquisitions

Dura Medical, LLC

Transaction Overview

On September 8, 2025, HOPE, a wholly owned subsidiary the Company, completed the acquisition of Dura, a Florida-based behavioral health and interventional psychiatry practice with locations in Naples and Fort Myers, Florida. Dura was founded in 2018 and provides outpatient mental health treatment specializing in evidence-based therapies for treatment-resistant conditions, including depression, anxiety, PTSD, OCD, and chronic pain. Services include ketamine infusion therapy, Spravato® administration, Transcranial Magnetic Stimulation (TMS), Stellate Ganglion Blocks, psychotherapy, and medication management.

The acquisition aligns with the Company’s strategy to expand its clinical care delivery platform through HOPE and establish a multi-site network offering advanced interventional psychiatry services. Management expects the acquisition to accelerate revenue generation and provide a foundation for integrating proprietary therapeutics, including NRX-100 and NRX-101, upon FDA approval. 

Consideration Transferred

The preliminary fair value of the consideration transferred was $3.3 million, consisting of cash consideration (subject to customary closing adjustments). The preliminary estimated working capital and other customary closing adjustments resulted in a decrease of approximately $0.1 million to the purchase price, which is included in the total consideration transferred.

The following items were determined to represent post-employment compensation under ASC 805 and ASC 718 and are excluded from the purchase price consideration:

● Issuance of 6,188 Class A units of HTX as rollover equity subject to conditional vesting; and

● Contingent consideration of up to $3,000,000 payable over three years based on achievement of specified EBITDA performance targets.

These amounts will be accounted for as compensation expense in future periods as services are rendered.

In connection with the acquisition of Dura, the Company incurred total acquisition-related costs of approximately $0.1 million during the nine months ended September 30, 2025. These costs primarily consist of legal, accounting, consulting fees and a finder fee directly attributable to the transaction. These costs were expensed as incurred and are reflected in general and administrative expenses in the unaudited condensed consolidated statements of operations.

Purchase Price Allocation

The Company has applied the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”) and recognized assets acquired, and liabilities assumed at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill. As the Company finalizes the estimation of the fair value of the purchase price and the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date).

The Company recorded all tangible and identifiable intangible assets acquired and liabilities assumed at their preliminary estimated fair values as of the acquisition date. The preliminary allocation is as follows:

Preliminary Amount Recognized as of the Acquisition Date (In Thousands)
Assets assumed
Cash and cash equivalents	$	536
Accounts receivable		251
Prepaid expenses		23
Furniture and equipment		64
Right-of-use asset		114
Right-of-use asset - related party		252
Customer relationship		605
Trade name		669
Non-compete agreements		527
Goodwill		610
Total assets acquired	$	3,651
Liabilities assumed
Accounts payable and accrued expenses	$	(26	)
Accrued salaries and benefits		(117	)
Operating lease liability		(109	)
Operating lease liability - related party		(244	)
Total liabilities assumed	$	(496	)
Net assets acquired	$	3,155

Certain adjustments of approximately $0.1 million to the purchase price were recorded, decreasing the purchase price during the measurement period ended September 30, 2025. Changes to the provisional amounts recognized at the acquisition date—if based on new information about facts and circumstances that existed as of the acquisition—must be accounted for retrospectively during the measurement period.

Intangible Assets

The Company identified the following finite-lived intangible assets, which will be amortized on a straight-line basis over their estimated useful lives once finalized:

● Trade Name – includes the “Dura Medical” name and associated trademarks.

● Customer relationship – representing the value of established patient relationships and referral sources.

● Non-Compete Agreements – arising from restrictive covenants in the purchase agreement.

The acquired intangible assets are being amortized over their estimated useful lives as follows (in thousands):

				Weighted Average
				Useful Life
	Fair Values			(Years)
Trade name and trademarks	$	669			8.0
Customer relationships		605			3.0
Non-compete agreement		527			5.0
Total intangible assets		1,801
Less accumulated amortization		(24	)
Net carry value	$	1,777

The Company incurred amortization expense of $24 thousand during the three and nine months ended September 30, 2025.

As of September 30, 2025, the maturities of the Company’s intangible assets were as follows (in thousands):

2025	$	98
2026		390
2027		390
2028		329
2029		189
Thereafter		381
Total	$	1,777

Goodwill

Goodwill of approximately $0.6 million represents the excess of the purchase consideration over the fair value of net assets acquired and was recognized in connection with the acquisition. None of the goodwill is expected to be deductible for tax purposes. The goodwill is assigned to the Dura subsidiary. The goodwill primarily represents expected synergies, assembled workforce, and future growth potential. No goodwill arose from step acquisitions or non-controlling interests.

Measurement Period

The Acquisition was recorded as a business combination on a preliminary valuation of assets acquired and liabilities assumed at their acquisition date fair values using unobservable inputs that are supported by little or no market activity and are significant to their fair value of the assets and liabilities (“Level 3” inputs). We expect to complete our purchase price allocation, as well as our fair value estimate of the purchase price consideration as soon as reasonably possible, not to exceed one year from the acquisition date. Adjustments to the preliminary purchase price and allocation could be material. Goodwill and intangible assets represent the excess of the purchase price consideration over the preliminary valuation of the other net assets acquired.

As of September 30, 2025, the purchase price allocation remains preliminary, and the purchase price may be subject to final adjustments. The Company is continuing to assess the fair values of certain identifiable intangible assets and contingent liabilities, including the potential adjustment to exchangeable shares.

Pro-Forma Financial Information (Unaudited)

The following unaudited pro forma information presents the consolidated results of Dura included in the Company’s unaudited condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2025, as if the acquisition was made on January 1, 2025, and operations for the three and nine months ended September 30, 2024, as if the Acquisition had occurred on January 1, 2024. The unaudited pro forma information is presented for illustrative purposes only. It is not necessarily indicative of the results of operations of future periods, or the results of operations that actually would have been realized had the entities been a single company during the periods presented or the results that the combined company will experience after the acquisition. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies, operating efficiencies or cost savings that may be associated with the acquisition. The unaudited pro forma information also does not include any integration costs or remaining future transaction costs that the companies may incur related to the acquisition as part of combining the operations of the companies.

The unaudited pro forma consolidated results of revenue and net loss, assuming the acquisition had occurred on January 1, 2025, is as follows (in thousands):

	For the Three Months Ended September 30,			For the Nine Months Ended September 30,
	2025			2025
Revenue	$	1,128		$	3,147
Net loss		(5,657	)		(28,914	)

The unaudited pro forma consolidated results of revenue and net loss, assuming the acquisitions had occurred on January 1, 2024, is as follows (in thousands):

	For the Three Months Ended September 30,			For the Nine Months Ended September 30,
	2024			2024
Revenue	$	501		$	2,469
Net loss		(2,026	)		(16,417	)

The unaudited pro forma results for the three and nine months ended September 30, 2025, include material nonrecurring adjustments of $0.1 million and $0.5 million, respectively, related to the amortization of intangible assets acquired in connection with the Dura acquisition.

The unaudited pro forma results for the three and nine months ended September 30, 2024, include material nonrecurring adjustments of $0.3 million and $0.9 million, respectively, related to the amortization of intangible assets acquired in connection with the Dura acquisition and approximately $0.1 million related to the finders’ fees incurred and earned upon closing of the transaction.

For the three and nine months ended September 30, 2025, the operating expenses of Dura included in the Company’s consolidated statement of operations and comprehensive loss were insignificant to the Company’s financial results. Net patient service revenue and net income attributable to Dura for the nine months ended September 30, 2025, and included in the Company’s consolidated statement of operations, were $242 thousand and $16 thousand, respectively.