Annual report [Section 13 and 15(d), not S-K Item 405]

Business Combination

v3.26.1
Business Combination
 12 Months Ended
Dec. 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combination Business Combination
On March 20, 2025, the Company acquired substantially all of the assets and certain specified liabilities of SeaTrepid, an expert in providing subsea robotic services to customers throughout the world, for a total consideration of $14.2 million. The acquisition aligns with the Company’s long-term growth strategy and expands its presence in the offshore market. The acquisition was accounted for as a business combination using the acquisition method in accordance with ASC 805 Business Combinations, because the acquired assets and liabilities met the definition of a business, which includes inputs, processes, and outputs capable of generating revenue.

$3.95 million of the total consideration was paid in cash at closing and the remaining purchase price (excluding the contingent consideration) was due on or before September 30, 2025 per the asset purchase agreement. The Company and counterparty mutually agreed to defer the payment, with the settlement now scheduled June 2026. The deferred amount is recorded in accrued liabilities in our consolidated balance sheet as of December 31, 2025 and will be settled in cash.
The acquisition of SeaTrepid includes a contingent consideration arrangement in which the Company agreed to issue shares of its common stock to the sellers of SeaTrepid, subject to the achievement of $4 million of business revenue for the year ended December 31, 2025. In accordance with the asset purchase agreement executed on March 5, 2025, the number of earnout shares is equal to $5.5 million divided by the Minimum Price, as defined under Nasdaq Rule 5635(d), determined as of the date of the asset purchase agreement. The Company calculated the number of earnout shares equals 671,544 shares, based on a Minimum Price of $8.19 as of the date of execution of the asset purchase agreement. At the acquisition date, the Company estimated the fair value of the contingent consideration to be approximately $6.9 million, which is included in the total consideration transferred for the business combination. The contingent consideration is classified as equity in accordance with ASC 815-40, as it will be settled in a fixed number of shares and does not meet the definition of a derivative or liability. As such, it will not be remeasured in future periods. As of December 31, 2025, the earnout target was achieved and the earnout shares have been issued to the sellers of SeaTrepid in March 2026.

As part of the acquisition agreement, the purchase price is subject to a post-closing working capital adjustment. Based on the closing balance sheet, a working capital shortfall of approximately $0.5 million was identified and reduced the total purchase consideration.

The following table summarizes the consideration transferred to acquire SeaTrepid and preliminary allocation of the purchase price to the identifiable assets acquired and liabilities assumed, based on their estimated fair values as of the acquisition date. The cash consideration includes the future cash payment of $4 million due on September 30, 2025 discounted to a net present value of $3.9 million as at March 20, 2025.

Cash consideration $ 7,857,118 
Earnout shares (fair value) 6,864,729 
Purchase price adjustment (512,037)
Total purchase price $ 14,209,810 

Purchase Price Allocation March 20, 2025
Cash $ 78,008 
Accounts receivable, net 138,354 
Inventory 75,300 
Other current assets 62,515 
Property and equipment 5,594,303 
Intangible assets 1,429,400 
Goodwill 9,600,745 
Accounts payable (287,766)
Accrued liabilities (97,668)
Notes payable - current (2,383,381)
Total purchase price $ 14,209,810 

For additional details on the fair value measurement of the acquired assets and liabilities, including the valuation techniques used, see Note 22 Fair Value Measurements.

The results of SeaTrepid's operations have been included in the Company’s consolidated financial statements since the acquisition date.

The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2024.
Year ended December 31,
2025 2024
Revenue $ 5,772,140  $ 9,518,395 
Net loss $ (41,516,247) $ (133,634,269)

These pro forma amounts reflect the historical operating results of the Company and SeaTrepid, adjusted for the effects of the acquisition, including the additional depreciation that would have been charged assuming the fair value adjustments to acquired property and equipment had been applied from January 1, 2024.

For the year ended December 31, 2025, the Company incurred $1 million of acquisition-related costs. These expenses are included in general and administration expense on the condensed consolidated statement of operations for the year ended December 31, 2025.

Measurement Period Adjustments

The purchase price allocation for the SeaTrepid acquisition was preliminary as of the Company's previously issued interim financial statements and subject to adjustments during the measurement period, which extends up to one year from the acquisition date.

During the measurement period, the Company obtained a third-party valuation report and finalized its assessment of the fair value of identifiable intangible assets acquired. As a result, the Company recognized $1.4 million of identifiable intangible assets, consisting primarily of customer relationships, intellectual property, trade name and non-compete agreements, with a corresponding decrease to goodwill. This adjustment resulted in incremental amortization expense of approximately $0.2 million for the year ended December 31, 2025.

The Company additionally revised its measurement of deferred cash consideration to reflect the present value of the $4.0 million payment due subsequent to closing, resulting in a reduction of purchase consideration of approximately $0.1 million and a corresponding decrease to goodwill.
The Company also recorded an adjustment to decrease the fair value of certain acquired fixed assets by $575,000 based on an independent third-party valuation. This adjustment resulted in a corresponding increase to goodwill and a reduction in depreciation expense of $44,825 for the period.