Note 4. Merger of FGF and FGH

On February 29, 2024, FGF and FGH completed a merger transaction pursuant to which FGH common stockholders received one share of FGF common stock for each share of common stock of FGH held by such stockholder.

The merger involved a change of control between two businesses and was accounted for as a reverse acquisition in accordance with ASC 805 Business Combinations (“ASC 805”). A reverse acquisition occurs when the entity that issues securities (the legal acquirer) is identified as the acquiree for accounting purposes and the entity whose equity interests are acquired (the legal acquiree) is identified as the acquirer for accounting purposes. FGH was determined to be the accounting acquirer.

Per ASC 805, the acquirer measures the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values. Management completed its preliminary assessment of the fair value of identifiable tangible and intangible assets acquired, as well as the liabilities assumed during the quarter ended March 31, 2024 and determined the fair value of the FGF assets and liabilities as of February 29, 2024 was approximately $17.4 million.

In a reverse acquisition, generally the legal acquirer (accounting acquiree) issues consideration in the transaction. As such, the fair value of the consideration transferred is determined based on the number of equity interests the accounting acquirer (legal acquiree) would have had to issue to the owners of the legal acquirer (accounting acquiree) in order to provide the same ratio of ownership of equity interests in the combined entity as a result of the reverse acquisition. Management determined total consideration was $15.6 million, which resulted in a bargain purchase gain of $1.8 million, which was recorded during the quarter ended March 31, 2024 and is included within bargain purchase on acquisition and other (expense) income, net on the condensed consolidated statement of operations.

During the fourth quarter of 2024, management finalized the fair value of the FGF assets and liabilities as of February 29, 2024 and determined the fair value was approximately $17.9 million, which resulted in the recognition of an additional $0.5 million of bargain purchase gain that was recorded in the quarter ended December 31, 2024.

The table below represents the pro forma consolidated income statement as if FGF had been included in the condensed consolidated results of the Company for the nine months ended September 30, 2024. The revenue amount below excludes revenue generated by our discontinued operations.

Schedule of Pro Forma Consolidated Income Statement