XML 24 R12.htm IDEA: XBRL DOCUMENT

ACQUISITIONS AND DISPOSITIONS

3 Months Ended

Mar. 31, 2025

NOTE 3 – ACQUISITIONS AND DISPOSITIONS

Acquisitions

Scienture, Inc.

The Company evaluated the Scienture Merger Agreement pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations. The Company first determined that Scienture met the definition of a business as it includes inputs and a substantive process that together significantly contribute to the ability to create outputs. Scienture’s results of operations are included in the Company’s consolidated financial statements from the date of acquisition. 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. The purchase price allocation is preliminary and could be significantly revised as a result of additional information obtained regarding assets acquired and liabilities assumed and revisions of estimates of fair values of tangible assets and related deferred tax assets and liabilities. The Company will finalize its valuation and the allocation of the purchase price, along with required retrospective adjustments, if any, within a year following the acquisition date.

On July 25, 2024, the Company issued 291,536 shares of common stock and 6,826,753 shares of Series X Preferred Stock pursuant to the Scienture Merger Agreement. The aggregate fair value of the purchase price consideration was $78,646,184. The fair value was determined by the underlying stock price of the common stock on the date of the Scienture Merger, which was $11.63 per share, which was utilized for both the issuance of common and preferred stock after evaluating the terms of the Series X Preferred Stock. The Company also applied a discount for lack of marketability of 5% due to certain lock-up terms on the shares issued.

The following summarizes the purchase price consideration and the preliminary purchase price allocation as of the acquisition date:

SCHEDULE OF PURCHASE PRICE ALLOCATION

	July 25, 2024
Purchase consideration:
Common stock	$	3,221,245
Series X preferred stock		75,424,939
Total purchase consideration	$	78,646,184

Purchase price allocation:
Cash	$	132,976
Operating lease right-of-use assets		61,578
Goodwill		21,372,960
Intangible assets - product technologies		76,400,000
Accounts payable		(987,097	)
Accrued liabilities		(1,198,134	)
Loan payable, related party		(265,000	)
Lease liability		(61,886	)
Development agreement liability		(1,285,000	)
Long-term convertible notes		(2,000,000	)
Deferred tax liability		(13,524,213	)
Net assets acquired	$	78,646,184

Goodwill is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that do not qualify for separate recognition. The goodwill is not deductible for tax purposes.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the Company’s financial results as if the Scienture Merger had occurred as of January 1, 2024. The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have been had the acquisitions been completed on this date. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the Company’s future financial results. The pro forma information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from the acquisition:

	Three Months
	Ended
	March 31,
	2024
Revenue	$	1,863,830
Net loss from continuing operations	$	(9,698,339	)
Net loss from continuing operations per share	$	(9.35	)

Dispositions and Divestitures

MMS APA

On February 16, 2024, the Company, together with Softell and MMS, entered into the MMS APA under which MMS agreed to purchase for cash substantially all of the assets of Softell. On February 16, 2024, the parties consummated the closing of the transactions contemplated by the MMS APA. The purchase price paid at closing was $22,660,182. Subject to the terms and conditions of the MMS APA, because MMS received $1,600,000 or greater in certain collections from third parties resulting from any products or services sold, or provided, by the business assets and operations acquired from Softell during the period ending on the four-month anniversary of the closing date, the Company was due an additional $7,500,000 payment from MMS. The Company received the payment in May 2024.

The MMS APA was accounted for a business disposition in accordance with ASC 810-40-40-3A. As of February 16, 2024, the Company no longer consolidated the assets, liabilities, revenues and expenses of Softell. The components of the disposition are as follows:


Cash received from MMS	$	22,660,182
Other receivable from MMS		7,500,000
Total fair value of consideration received	$	30,160,182

Carrying amount of assets and liabilities
Cash	$	76,821
Accounts receivable, net		719,876
Prepaid expenses		55,397
Property, plant and equipment, net		45,655
Operating lease right-of-use assets		12,277
Accounts payable		(347,000	)
Accrued liabilities		(5,269	)
Other current liabilities		(26,244	)
Lease liability, current		(1,556	)
Notes payable, current portion		(45,000	)
Lease liability, net of current portion		(10,720	)
Total carrying amount of assets and liabilities		474,236

Gain on disposition of business	$	29,685,946

The gain on disposition of business of $29,685,946 was included in income from discontinued operations, net of tax in the consolidated statements of operations of the year ended December 31, 2024.

Superlatus SPA

On March 5, 2024, the Company entered into the Superlatus SPA with the Buyer. Pursuant to the Superlatus SPA, the Company sold all of the issued and outstanding stock of Superlatus to the Buyer. The $1.00 purchase price for the stock was delivered to the Company at the closing, which occurred simultaneously with the execution of the Superlatus SPA. As a result of the transaction, Superlatus ceased to be a subsidiary of the Company, and the rights and assets of Superlatus together with various liabilities and obligations that were specific to Superlatus became rights and obligations of the Buyer.

The transaction was accounted for a business disposition in accordance with ASC 810-40-40-3A. As of March 5, 2024, the Company no longer consolidated the assets, liabilities, revenues and expenses of Superlatus. The components of the disposition are as follows:


Fair value of consideration received	$	1
Total fair value of consideration received	$	1

Carrying amount of assets and liabilities
Cash	$	151,546
Property, plant and equipment, net		223,080
Intangible assets, net		8,962,688
Operating lease right-of-use assets		325,995
Purchase price payable		(350,000	)
Accounts payable		(224,137	)
Accrued liabilities		(173,436	)
Notes payable, current portion		(6,480,000	)
Lease liability - current		(105,567	)
Lease liability - net of current portion		(221,428	)
Notes payable		(25,000	)
Total carrying amount of assets and liabilities		2,083,743

Loss on disposition of business	$	(2,083,742	)

The loss of disposition of business of $2,083,742 was included in income from discontinued operations, net of tax in the consolidated statements of operations of the year ended December 31, 2024.

Discontinued Operations

In accordance with the provisions of ASC 205-20, the Company has excluded the results of discontinued operations from its results of continuing operations in the accompanying consolidated statements of operations for the three months ended March 31, 2025 and 2024. The results of the discontinued operations for the three months ended March 31, 2025 and 2024 consist of the following:

SCHEDULE OF DISCONTINUED OPERATIONS


	TRX				Bonum					Superlatus					Total
	Three Months Ended				Three Months Ended					Three Months Ended					Three Months Ended
	March 31,				March 31,					March 31,					March 31,
	2025		2024		2025		2024			2025		2024			2025		2024
Revenues	$	-	$	970,808	$	-	$	-		$	-	$	-		$	-	$	970,808
Cost of sales		-		-		-		-			-		-			-		-
Gross profit		-		970,808		-		-			-		-			-		970,808

Operating expenses:
Wage and salary expense		-		551,983		-		578			-		-			-		552,561
Professional fees		-		15,385		-		-			-		-			-		15,385
Technology expense		-		86,660		-		2,245			-		-			-		88,905
General and administrative		-		36,029		-		678			-		-			-		36,706
Total operating expenses		-		690,057		-		3,500			-		-			-		693,557
Operating income		-		280,751		-		(3,500	)		-		-			-		277,251

Other income (expense):
Goodwill impairment		-		-		-		-			-		-			-		-
Gain on dispositions		-		29,685,946		-		-			-		(2,083,742	)		-		27,602,205
Other expense		-		-		-		-			-		-			-		0
Other income		-		-		-		-			-		-			-		-
Interest expense		-		-		-		-			-		-			-		-
Total other income(expense)		-		29,685,946		-		-			-		(2,083,742	)		-		27,602,204

Provision for income taxes		-		-		-		-			-		-			-
Net income(loss) on discontinued operations	$	-	$	29,966,697	$	-	$	(3,500	)	$	-	$	(2,083,742	)	$	-	$	27,879,455

In the second quarter of 2024, the Company determined to dissolve Bonum Health, Inc. and Bonum Health, LLC, and have presented the results of operations in net income (loss) from discontinued operations.