XML 26 R13.htm IDEA: XBRL DOCUMENT v3.26.1
ACQUISITIONS
 12 Months Ended
Dec. 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
ACQUISITIONS

NOTE 4: ACQUISITIONS

 

Business Combinations

 

Sundry

 

On December 30, 2022, the Company completed its previously announced acquisition (the “ Sundry Acquisition”) of all of the issued and outstanding membership interests of Sunnyside, LLC, a California limited liability company (“Sundry”), pursuant to that certain Second Amended and Restated Membership Interest Purchase Agreement (the “ Sundry Agreement”), dated October 13, 2022, by and among Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies (“ Sundry Sellers”), George Levy as the Sundry Sellers’ representative, the Company as Buyer, and Sundry.

 

Pursuant to the Agreement, Sellers, as the holders of all of the outstanding membership interests of Sundry, exchanged all of such membership interests for (i) $7.5 million in cash, (ii) $5.5 million in promissory notes of the Company (the “Sundry Notes”), and (iii) a number of shares of common stock of the Company equal to $1.0 million (the “Sundry Shares”), calculated in accordance with the terms of the Agreement, which consideration was paid or delivered to the Sellers, Jenny Murphy and Elodie Crichi. Each Sundry Note bears interest at eight percent (8%) per annum and matured on February 15, 2023. The Sundry Notes have been fully settled. The Company issued 90,909 shares of common stock to the Sundry Sellers on December 30, 2022 at a fair value of $1,000,000.

 

The Company evaluated the acquisition of Sundry pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition. Goodwill recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the acquisition.

 

Bailey 44

 

On February 12, 2020, the Company acquired 100% of the membership interests of Bailey. The purchase price consideration included (i) an aggregate of 20,754,717 shares of Series B Preferred Stock of the Company (the “Parent Stock”) and (ii) a promissory note in the principal amount of $4,500,000. The total purchase price consideration was $15,500,000.

 

Stateside

 

On August 30, 2021, the Company entered into a Membership Interest Purchase Agreement (the “MIPA”) with Moise Emquies pursuant to which the Company acquired all of the issued and outstanding membership interests of MOSBEST, LLC, a California limited liability company (“Stateside” and such transaction, the “Stateside Acquisition”). Pursuant to the MIPA, Moise Emquies, as the holder of all of the outstanding membership interests of Stateside, exchanged all of such membership interests for $5.0 million in cash and 22,031 shares of the Company’s common stock (the “Shares”), which number of Shares was calculated in accordance with the terms of the MIPA. Of such amount, $375,000 in cash and a number of Shares equal to $375,000, or 1,652 shares (calculated in accordance with the terms of the MIPA), is held in escrow to secure any working capital adjustments and indemnification claims. The MIPA contains customary representations, warranties and covenants by Moise Emquies.

 

Asset Acquisition

 

On April 1, 2025, the Company entered into an Asset Purchase Agreement with Open Daily Technologies Inc., pursuant to which the Company acquired intellectual property and related assets for total consideration of $3,000,000. The consideration was settled through issuance of 344,827 shares of restricted Common Stock at $8.70 per share. The transaction closed on April 2, 2025.

 

 

The acquired assets primarily comprise technology infrastructure (including the Outfit platform, iOS applications, Shopify-integrated web application, and related source code), registered intellectual property such as patents and trademarks, proprietary technical knowledge, and strategic business relationships. No liabilities were assumed as part of the transaction.

 

The transaction has been accounted for as an asset acquisition in accordance with ASC 805-10, as substantially all of the fair value of the gross assets acquired is concentrated in a group of similar identifiable intangible assets, thereby satisfying the concentration test. Additionally, no substantive processes or workforce were transferred, further supporting the conclusion that the transaction does not constitute a business combination.

 

The total purchase consideration has been allocated to the acquired assets on a relative fair value basis as follows:

 

  ● Technology Assets – $1,500,000
  ● Strategic Relationships – $750,000
  ● Registered Intellectual Property – $250,000
● Proprietary Know-How – $250,000

 

Accordingly, no goodwill has been recognized. The total consideration has been measured based on the acquisition-date fair value of the equity instruments issued, determined using the quoted market price of the Company’s common stock on the acquisition date. The aggregate cost recognized amounts to $2,948,276, reflecting the fair value of 344,827 shares issued on the closing date.

 

The consideration transferred has been measured based on the fair value of equity instruments issued. While the transaction was initially recorded at $8.70 per share (as agreed in the Asset Purchase Agreement), subsequent evaluation of observable market data indicates that the closing market price of the Company’s common stock on April 30, 2025 was $8.55 per share. Accordingly, a difference of $0.15 per share resulted in a total adjustment of $51,724 (344,827 shares × $0.15), and the aggregate consideration has been revised to $2,948,276 based on the acquisition-date fair value of the equity consideration. The $51,724 adjustment was allocated proportionately in all acquired intangible assets.

 

All acquired intangible assets meet the asset recognition criteria under U.S. GAAP, as they embody probable future economic benefits, are controlled by the Company, and arise from a completed transaction. Further, none of the acquired assets qualify as in-process research and development under ASC 730, as the technology and related assets are fully developed and commercially deployable. The acquired technology assets were placed into service during 2025 and are being amortized on a straight-line basis over their estimated useful lives. Amortization expense is included in operating expenses.