v3.26.1
Business Combinations
 6 Months Ended
Jun. 30, 2026
Business Combinations [Abstract]  
Business Combinations

3. Business Combinations

 

On June 17, 2026, the Company acquired approximately 85% of the outstanding common shares of NDAG, a leading provider of AI and high-performance computing infrastructure (“ND Business Combination”). The primary reason for the acquisition is to obtain large-scale AI compute infrastructure, GPU capacity, data center assets and power resources that accelerate the growth of our cloud business. The goodwill that arises in the acquisition, which is not deductible for tax purposes, is primarily attributed to the expected synergies from combining Rumble’s cloud platform and technology ecosystem with NDAG’s AI infrastructure assets, as well as expected future growth opportunities. Acquisition-related transaction costs of $28,314,638 and $33,161,645 incurred in connection with this transaction during the three and six months ended June 30, 2026, respectively, are included in the condensed consolidated interim statements of operations. On June 3, 2026, Company exercised its option to draw $36,242,538 under this arrangement in exchange for 4,599,365 pre-funded warrants. The partial exercise settled on June 17, 2026, concurrent with the closing of the business combination. As of June 30, 2026 the derivative asset associated with the funding arrangement is included within other non-current assets on the Company’s condensed consolidated interim balance sheet.

 

In connection with the acquisition, the Company entered into a funding arrangement with Tether under which the Company can draw up to $200 million under certain situations related to the VAT matter described in Note 19. The funding arrangement can be settled, at the Company’s option, by either issuing shares of Class A Common Stock at $7.88, pre-funded warrants exercisable for $0.0001 at $7.8799 or a convertible loan payable on the same terms as the convertible loan payable described in Note 14. The Company has determined that the funding arrangement is a derivative that is not classified in equity, and as a result it has been recognized in changes in fair value of derivative in the condensed consolidated interim statement of operations. On June 17, 2026, Company utilized $36,242,538 of this arrangement and issued 4,599,365 pre-funded warrants.

 

The identification and measurement of the consideration transferred, identifiable assets acquired, liabilities assumed and non-controlling interest is provisional and subject to changes during the measurement period, not to exceed one year from the acquisition date, as additional information related to the facts and circumstances that existed at the acquisition date becomes available. The table below summarizes the provisional fair value of consideration transferred, net assets acquired, non-controlling interest, and resulting goodwill.

 

Consideration   $ 1,515,556,856  
Non-controlling interest     93,349,709  
Total consideration   $ 1,608,906,565  
         
Cash   $ 51,036,334  
Account receivables and other, net     52,879,228  
Contingent consideration receivable     23,827,868  
Prepaid expenses and other current assets     104,616,682  
Investment     7,059,450  
Other non-current assets     19,265,879  
Digital assets     8,548,488  
Property and equipment     887,260,497  
Right-of-use assets     146,226,827  
Intangible assets, net     172,474,080  
Accounts payable and accrued liabilities     (11,006,831 )
Deferred revenue     (20,508,519 )
Income tax payable     (28,980,271 )
Deferred tax liabilities     (25,305,298 )
Lease liabilities     (144,141,688 )
Other current liabilities     (187,825 )
Other liabilities     (45,661,476 )
Fair value of net identifiable assets acquired   $ 1,197,403,425  
Add: Goodwill     411,503,140  
Total net assets acquired   $ 1,608,906,565  

 

Consideration

 

The consideration transferred in the acquisition of NDAG consisted of shares of the Company’s Class A Common Stock, pre-funded warrants exercisable for shares of the Company’s Class A Common Stock, and a euro-denominated note payable issued to Tether Investments, S.A. De C.V. (“Tether”) in connection with the assignment of an existing shareholder loan owed by NDAG to Tether (“Shareholder Loan”).

 

    Number of
Instruments		    

Fair Value

Per Unit

     Fair Value  
(i) Class A Common Stock     59,346,944     $ 7.29     $ 432,639,220  
(ii) Pre-funded warrants     98,264,309     $ 7.29       716,336,988  
(iii) Note payable                     366,580,647  
Total consideration                   $ 1,515,556,855  

 

(i) Rumble Class A Common Stock

 

The equity consideration to former NDAG shareholders who validly tendered their shares pursuant to the voluntary public exchange offer commenced by the Company as part of the ND Business Combination was based on an exchange ratio of 2.0281 shares of the Company’s Class A Common Stock for each NDAG share validly tendered; and the equity consideration to former NDAG shareholders who sold their NDAG shares to the Company in the concurrent private transaction pursuant to certain transaction support agreements was based on the same ratio, with a portion placed in escrow in accordance with such transaction support agreements.

 

(ii) Pre-funded warrants

 

The Company issued pre-funded warrants to Tether, a former NDAG shareholder pursuant to a transaction support agreement with, in lieu of shares of the Company’s Class A Common Stock to the extent such issuance of the Company’s Class A Common Stock to Tether would result in the voting power of Tether and its affiliates in the Company to exceed 9.90% of the outstanding voting power of the capital stock of the Company.

 

(iii) Issuance of note payable

 

The note payable was measured at fair value as part of the consideration transferred. The note contains an embedded derivatives that was separately recognized as a derivative liability. See Note 14 for further details.

 

Non-Controlling Interest

 

The non-controlling interest is comprised of the following components:

 

    Number of
Instruments		    

Fair Value

Per Unit

     Fair Value  
(i) Northern Data AG common shares     9,519,223     $ 9.29     $ 88,435,357  
(ii) Vested options outstanding at the date of acquisition     1,085,302     $ 0.64 - $4.61       3,762,652  
(iii) Allocation of the fair value of unvested options based on service provided prior to the date of acquisition     1,179,071     $ 1.04 - $4.61       1,151,700  
Total non-controlling interest               $ 93,349,709  

 

(i) Common shares

 

At June 17, 2026, 9,519,223 common shares were not tendered. The fair value was determined using the NDAG closing share price on the exchange date, which was €8.02 ($9.29).

 

(ii) Vested and unvested options

 

Under the NDAG stock option plan, for options that were granted prior to a change in control, the holder may elect to exercise their vested options and receive shares in NDAG or to elect a cash alternative. The cash alternative is based on the difference between the strike price of the option and the unweighted arithmetic mean of NDAG’s stock price for the last ten days prior to the change in control. Based on the strike prices of the options, which range from €14.12 to €58.54, the cash alternative would result in $nil payment to the option holders. As a result, the stock option plan has been determined to be equity classified.

 

The fair value of vested and unvested options was determined using the Black Scholes model with the following inputs:

 

   

As at

June 17,
2026

  
Share price     €49.45  
Exercise price     €14.12 - €58.54  
Risk-free interest rate     2.44% - 2.48 %
Volatility     85% - 92 %
Expected life     1.80 – 4.33 years  
Dividend rate     0.00 %

 

(iii) Unvested options

 

The unvested stock options include both service and performance conditions. The service condition is generally 3 years, and the performance condition requires NDAG to achieve a revenue target of 25% compound annual growth rate (“CAGR”). The CAGR is calculated and assessed over the reference period which varies and is outlined in the grant. The total fair value of unvested options at the acquisition date, net of those that are not probable of vesting, is $4,037,426, of which $1,151,701 relates to past service and is included in non-controlling interest. $2,885,725 will be recognized as compensation expense over 0.40 to 2.15 years. During the three and six months ended June 30, 2026, the Company recognized $322,025 in stock-based compensation related to NDAG’s stock option plan, with a corresponding increase in non-controlling interest.

 

Proforma Results

 

The following unaudited pro-forma condensed consolidated interim statement of operations for the six months ended June 30, 2026, has been prepared as if the acquisition had occurred on January 1. The below does not include any pro-forma adjustments other than adding in the actual results of NDAG from January 1, 2026 to June 17, 2026.

 

From the date of acquisition on June 17, 2026, NDAG contributed $10,092,593 of revenue and $11,968,936 of loss before income taxes. If the acquisition had taken place at the beginning of the fiscal year, NDAG would have contributed approximately $168,244,631 of revenue and $(545,037,732) of loss before income taxes.