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ACQUISITION

9 Months Ended

Mar. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

NOTE 12 — ACQUISITION

On September 28, 2023, the Company, entered into a Stock Purchase Agreement (the “Purchase Agreement”) with GEDi Cube Intl Ltd., a private company formed under the laws of England and Wales (“GEDi Cube”) to acquire 100% of the equity interests of GEDi Cube from its equity holders (the “Sellers”). On September 28, 2023, the Board of Directors of the Company, and the board of managers of GEDi Cube unanimously approved the Purchase Agreement and on January 25, 2024, the shareholders of the Company approved the issuance of the shares of Common Stock pursuant to the Purchase Agreement. The acquisition adds complementary product candidates and technologies from GEDi Cube and may accelerate the Company's product development and therapeutic approaches for cancer and other diseases.

On February 13, 2024 (the “Closing Date”), the Company consummated the previously announced acquisition of GEDi Cube and the other transactions contemplated by the Stock Purchase Agreement (collectively, the “Transaction”). As a result of the Transaction, GEDi Cube became a wholly-owned subsidiary of the Company.

Pursuant to the Stock Purchase Agreement, as of the Closing Date, the Company acquired all the issued and outstanding equity interests of GEDi Cube owned by the Sellers as of the Closing Date (each, a “GEDi Cube Share” and, collectively, the “GEDi Cube Shares”) in exchange for which each Seller was entitled to receive (i) as of the Closing Date, such Seller’s pro rata percentage of an aggregate of 70,834,183 shares of common stock, par value $0.0001 per share, of the Company (“Common Stock”), which represents the 67,224,089 shares of Common Stock issued and outstanding as of the Closing Date (minus (a) 1 million shares of Common Stock previously issued to a consultant assisting with the Transaction and (b) 1 million shares of Common Stock previously issued to Avram Miller, a director of the Company, pursuant to his Advisory Agreement, dated October 11, 2023, by and between Mr. Miller and the Company) (the “Closing Consideration”) plus 5,610,100 shares of Common Stock representing the Seller’s Earnout Shares (defined below) resulting from the automatic conversion of the Company’s Series A Convertible Preferred and, (ii) following the Closing Date, such Seller’s pro rata percentage of the shares of Common Stock (the “Earnout Shares” and, together with the Closing Consideration, the “Exchange Consideration”) to be issued to the Sellers upon the exercise or conversion of any of the Company’s derivative securities (subject to certain exceptions) that are outstanding at the Closing Date (the “Closing Derivative Securities”). Each Seller’s pro rata percentage of the Exchange Consideration is equal to the ratio of the aggregate number of GEDi Cube Shares owned by such Seller divided by the aggregate number of GEDi Cube Shares issued and outstanding, in each case, as of the Closing Date.

The transaction was accounted for in accordance with the provisions of ASC 805-10 - Business Combinations. As a result of the issuance of the Closing Consideration on the Closing Date and based on the number of shares of Common Stock outstanding as of the Closing Date, the Sellers held approximately 49% of the issued and outstanding shares of Common Stock immediately following the closing of the Transaction and the conversion of the Series A Convertible Preferred Stock.

The assets acquired and liabilities assumed are recognized provisionally in the accompanying condensed consolidated balance sheets at their estimated fair values as of the acquisition date. The initial accounting for the business combination is not complete as the Company is in the process of obtaining additional information for the valuation of acquired intangible assets and deferred tax liabilities. The provisional amounts are subject to change to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. Under U.S. GAAP, the measurement period shall not exceed one year from the acquisition date and the Company will finalize these amounts no later than February 13, 2025. The estimated fair values as of the acquisition date are based on information that existed as of the acquisition date. During the measurement period the Company may adjust provisional amounts recorded for assets acquired and liabilities assumed to reflect new information that the Company has subsequently obtained regarding facts and circumstances that existed as of the acquisition date.

The acquisition-date fair value of the consideration transferred totaled approximately $156 156,559,131 million, which consisted of the following:


Common stock		$	136,001,631
Contingent consideration			20,557,500
Total consideration transferred		$	156,559,131

The fair value of the Company’s common shares issued as consideration was based on the closing price of the Company’s common stock as of the Acquisition Date. The fair value determination of the contingent consideration is further detailed in Note 4 to these condensed consolidated financial statements.

The following table details the provisional fair values of the assets acquired and liabilities assumed at the acquisition date:

Schedule of fair values of the assets acquired and liabilities assumed
Cash		$	65,851
Prepaid & Other Assets			151,544
Fixed Assets			16,243
Operating lease ROU			624,366
In-process research and development			10,684,091
Total Assets Acquired:			11,542,095

Accounts Payable			583,577
Accrued Expenses			722,509
Operating Lease liability			624,367
Notes Payable			1,832,460
Deferred tax liabilities			2,756,495
Total Liabilities Assumed			6,519,408
Net Assets Acquired			5,022,687

Goodwill			151,536,444
Total Consideration		$	156,559,131

The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Gedi Cube. None of the goodwill is expected to be deductible for income tax purposes.

The fair values of the acquired tangible and intangible assets were determined using variations of the income approach. The income approach valuation methodology used for the intangible assets acquired makes use of Level 3 inputs.

The in-process research and development acquired represents know-how and intellectual property being developed by GEDi Cube pertaining to its diagnostic platform currently being developed. The fair value of this asset was determined based on a cash flow model with forecasted revenues and expenses specifically tied to the diagnostic platform. Those cash flows were then discounted at 19.2% over the life of the projections. The discount rate was determined by the use of a weighted average return on assets analysis.

The Company recognized approximately $1.2 million of acquisition related costs that were expensed during the period ended March 31, 2024. These costs are included in “selling, general and administrative expenses” in the accompanying condensed consolidated statements of operations.

The amounts of revenue and loss of GEDi Cube, included in the Company’s consolidated statements of operations from the Closing Date through March 31, 2024 are as follows:

Schedule of consolidated statements of operations
Revenues		$	—
Net loss		$	(398,597	)

Consolidated unaudited pro forma information:

The following consolidated pro forma information assumes that the acquisition of Renovaro Cube took place on July 1, 2023 for the statement of operations for the nine-month period ended March 31, 2024. These amounts have been estimated after applying the Company’s accounting policies:

Schedule of consolidated proforma information
Revenues		$	—
Net loss		$	(33,622,997	)