Business Acquisition—Consolidation of AIXC

9 Months Ended

Sep. 30, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Business Acquisition—Consolidation of AIXC

Business Acquisition—Consolidation of AICX

On September 29, 2025 the Company invested $30.0 million in cash into AIXC and in exchange obtained a controlling financial interest. AIXC is a publicly traded life-sciences company that, with this investment, will transition towards cryptocurrency-related business. While the Company holds approximately 7.9% of AIXC’s outstanding voting shares as of September 30, 2025, it obtained governance and operating decision-making rights, including the appointment of a Co-Chief Executive Officer and the Chief Financial Officer of AIXC, each of whom is also an employee or officer of the Company, along with discretion over all digital-asset and cash management decisions. AIXC was determined to be a VIE because substantially all of the activities are controlled by a party with relatively few voting rights. Based on the Company’s governance and operating decision-making rights, the Company determined that it has the power to direct the activities that most significantly impact AIXC’s economic performance and is therefore the primary beneficiary of AIXC. The Company consolidates AIXC pursuant to the VIE provisions of ASC 810. The Series B Convertible Preferred Stock held by the Company as of September 30, 2025 became convertible into voting common shares upon stockholder approval in November 2025, in accordance with applicable Nasdaq listing rules, increasing the Company’s ownership to approximately 57.5% on an as-converted basis.

We accounted for the Business Combination using the acquisition method of accounting, as prescribed by ASC 805, “Business Combinations” (“ASC 805”). In accordance with valuation methodologies described in ASC 820, “Fair Value Measurement” (“ASC 820”), the acquired assets and assumed liabilities were recorded at their estimated fair values as of the date of the acquisition.

As part of this PIPE transaction, the Company received 248,722 shares of AIXC common stock and 13,108,358 shares of Series B Convertible Preferred Stock. Prior to conversion, only the common stock held voting rights, resulting in the Company owning approximately 7.9% of AIXC’s outstanding voting shares as of September 30, 2025. Upon stockholder approval of the Series B conversion terms on November 12, 2025 (see Note 17 - Subsequent Events), the preferred shares became convertible into common stock. On an as-converted basis, the Company held a total of approximately 13.4 million AIXC shares, representing 57.5% of the fully diluted share count of approximately 23.2 million shares at the acquisition date.

The Company contributed $30.0 million in cash to AIXC as part of a larger $40.7 million private placement financing (the “PIPE”) round whereby AIXC issued new shares of Common and Preferred Stock to the Company and other investors. For purchase accounting purposes under ASC 805, the Company concluded that the acquired fair value of AIXC’s net assets is approximately $38.2 million, as shown below. Goodwill, IPR&D and deferred tax liabilities, totaling $29.7 million, were recognized based on the fair value AIXC’s net assets, $38.2 million, which also represents the fair value of the non-controlling interest held by non FF investors in AIXC, less net assets acquired of $8.5 million. The Company’s acquisition-related costs were insignificant.

ASC 805 requires the acquirer to recognize the acquiree’s tangible and intangible assets and liabilities at their acquisition‑date fair values and to recognize identifiable intangible assets separately from goodwill when they are contractual or separable. The Company believes that the historical values of AIXC’s current assets and current liabilities approximate fair value based on the short-term nature. The provisional allocation to AIXC’s net assets is as follows (amounts in thousands):

Description (balance sheet line item)	Fair Value	Methodology
Cash (includes funds from non FF PIPE Investors)	$8,777	Carrying value
Prepaid expenses and other current assets	343	Recorded based on existing contracts and balances
Short term note receivable	4,348	Evaluated based on contractual terms and recoverability
Other receivable	2	Nominal; carried at book value
Intangibles (in-process R&D)	2,500	Valued with third-party specialist using cost build-up approach
Accounts payable and accruals	(1,324)	Carried at book value; represents working capital obligations
Warrant Liability	(362)	Based on acquisition-date Black-Scholes valuation by external expert
Promissory Notes	(3,237)	Fair value as of acquisition date
Other liabilities (deferred tax liability)	(625)	Estimated based on book-to-tax basis differences, prepared with specialist input
Net identifiable assets acquired	10,422	Subtotal of above
Goodwill	27,783	Calculated as residual of purchase price less net assets

Total Net Assets Acquired1	$38,205	Total investment allocated
1. The Net Assets of AIXC acquired by the Company also represent the fair value of the non controlling interest in AIXC within the Company’s Unaudited Condensed Consolidated Financial Statements. The Company recognized NCI as the estimated fair value of the equity interests in AIXC not owned by the Company, measured in accordance with ASC 805 and ASC 820. The NCI will be adjusted in future periods for the Company’s proportionate share of AIXC’s earnings or losses and other changes in equity.

NCI is measured on the acquisition date as the fair value of the equity interests not held by the Company. NCI is computed by summing the other‑holders’ components on a fair-value and as-converted basis for preferred shares. Amounts are in thousands.

Component	Amount
Common Shares	$	15,368
Preferred Shares	22,837
	$	38,205

Provisional impact on consolidated results

The preliminary purchase price allocation is based on current information and is subject to change during the measurement period (up to one year from the closing) as valuations are finalized. Any material adjustments will be recorded as adjustments in the Company’s financial statements.

Goodwill and Measurement Period

The goodwill recorded at closing relates principally to intangible assets that do not qualify for separate recognition under GAAP. The goodwill recognized at the acquisition date primarily reflects the impact of measuring the noncontrolling interest at fair value, which was determined using directly observable quoted prices of AIXC’s shares on the acquisition date. AIXC’s stock price on that date experienced notable volatility associated with the closing of a financing round that significantly enhanced AIXC’s liquidity. Additionally, AIXC provided an established public-company platform, including an existing registration, exchange listing, and shareholder baser. Goodwill was measured as the excess of the purchase price over net tangible and identifiable intangible assets.