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BUSINESS COMBINATIONS
 6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
BUSINESS COMBINATIONS BUSINESS COMBINATIONS
Trailerhawk.AI, LLC
The Company accounts for acquisitions in accordance with guidance found in ASC 805, Business Combinations (“ASC 805”). The guidance requires consideration given, including contingent consideration, assets acquired, and liabilities assumed to be valued at their fair values at the acquisition date. The guidance further provides that: (1) acquisition costs will generally be expensed as incurred, (2) restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and (3) changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. ASC 805 requires that any excess of purchase price over fair value of assets acquired, including identifiable intangibles and liabilities assumed, be recognized as goodwill.
On February 3, 2025, the Company acquired substantially all of the assets and certain of the liabilities of TrailerHawk.ai, LLC, a Delaware limited liability company (“Trailerhawk”), from Loadsmith Holding Corporation for an initial purchase price of $2.5 million less an allowance of $0.8 million for 2025 development activities, plus the release of $3.0 million and accrued interest of $0.1 million on convertible promissory notes, and contingent consideration related to the earnout liability as described below. Trailerhawk is an innovation leader leveraging artificial intelligence and telematics to create digital solutions that allow customers to protect trailer and cargo through the logistics chain. This investment is synergistic with our recurring revenue initiatives, particularly for our Linq Venture Holdings, LLC and Trailers as a Service (TaaS)SM offerings. Trailerhawk is included within the Parts and Services reportable segment. The acquisition agreement includes a purchase price adjustment clause that provides for the possibility of additional earnout payments of up to $15.0 million over a period of seven years after the closing date of the transaction based on certain profitability metrics as a percentage of revenue for each of the subsequent seven years from the acquisition.
The initial accounting for the business combination is incomplete due to the pending finalization of the valuation of certain tangible assets, intangible assets and the earnout liability. Consequently, provisional amounts for these assets and liabilities have been recorded based on the information currently available. The provisional amounts are as follows: Identifiable intangible assets $9.1 million, other assets $0.3 million, and earnout liability $4.7 million. The provisional amounts are subject to change as additional information becomes available and as the valuation studies are finalized. The primary areas of uncertainty include the fair values of identifiable intangible assets and earnout liabilities. During the measurement period, the Company will adjust the provisional amounts retrospectively to reflect any new information obtained about facts and circumstances that existed as of the acquisition date. Any such adjustments will be recognized in the reporting period in which the adjustment amounts are determined. Any significant measurement period adjustments will be disclosed in subsequent financial statements, including the impact on the statement of operations and balance sheet. As of June 30, 2025, the Company recognized $8.2 million of Goodwill due to the acquisition of Trailerhawk. The Goodwill from this transaction is deductible for tax purposes.