Exodus Movement, Inc.

3. Acquisition

During the second quarter of 2026, the Company completed a series of transactions related to its previously announced acquisition efforts involving W3C Corp. (“W3C”), including the settlement of financing arrangements previously entered into with W3C and the acquisition of certain businesses and assets associated with W3C.

On May 1, 2026, the Company acquired 100% of the issued and outstanding equity interests of Monavate Holdings Limited, Monavate Ltd, and Baanx.com Ltd. The consideration was satisfied through the settlement of principal, accrued interest and other amounts outstanding under the Company’s financing arrangements ("W3C Loans") with W3C. For the three and six months ended June 30, 2026, the Company recognized interest income of $0.3 million and $4.7 million, respectively, related to such financing arrangements prior to their settlement.

Also on May 1, 2026, the Company acquired 100% of the issued and outstanding equity interests of Baanx US Corp. and other specified assets pursuant to a Stock and Asset Purchase Agreement, dated May 1, 2026, among the Company, Baanx US Corp., W3C, and Garth Howat, for aggregate consideration of $30.0 million. The purchase price is payable in installments over afour-year period, consisting of $5.0 million payable upon the delivery date as defined in the purchase agreement, $5.0 million payable on the first anniversary of closing, $10.0 million payable on the third anniversary of closing, and $10.0 million payable on the fourth anniversary of closing. None of the installment payments are contingent on post-closing performance metrics such as revenue or profitability.

Subject to the prior written approval of W3C, the Company may satisfy all or a portion of the third and fourth installment payments through the issuance of shares of the Company’s Class A Common Stock. In addition, the Company agreed to forgive, cancel and discharge a $10.0 million secured promissory note previously made available to Mr. Howat (the "Howat Loan"), together with all accrued interest and related obligations, which was treated as a component of the purchase consideration associated with the transaction. For the three and six months ended June 30, 2026, the Company recognized interest income of $0.1 million and $0.2 million, respectively, related to the secured promissory note prior to its forgiveness and cancellation.

The Company expects the acquisition to expand its capabilities in on-chain payments, including wallet and payment card functionality, and to enhance its ability to support enterprise clients and geographic expansion. During the three and six months ended June 30, 2026, the Company incurred acquisition-related transaction costs of approximately $26.7 million and $29.5 million, respectively, primarily consisting of transaction related incentive expense, which are included within general and administrative expenses in the condensed consolidated statements of operations.

Purchase Consideration

In accordance with ASC 805, the acquisition was accounted for as a business combination under the acquisition method. Under the acquisition method of accounting, the preliminary fair value of the consideration transferred is estimated to be $131.7 million. For purchase accounting purposes under ASC 805, consideration transferred is measured at its fair value as of the acquisition date.

The total consideration transferred is comprised of the following:

Because the W3C Loans and Howat Loan were effectively settled as part of the acquisition consideration transferred to the Seller, ASC 805, requires such consideration to be measured at fair value as of the acquisition date. Accordingly, the W3C Loans and Howat Loan were measured at a combined preliminary fair value of $106.9 million, representing a pre-tax gain of $20.3 million from their aggregate carrying value of $86.6 million immediately prior to the acquisition. The gain is recognized within other expenses (income)in the condensed consolidated statements of operations.

The deferred payment obligation was initially measured at its preliminary fair value of $24.8 million, representing the present value of the $30.0 million contractual installment payments. Following the initial $5.0 million payment, the carrying amount of the remaining liability was $20.1 million as of June 30, 2026 of which the current and noncurrent portions were included in accrued liabilities and other long-term liabilities, respectively, in the condensed consolidated balance sheets. The remaining liability will be accreted to its contractual settlement amount using the effective interest method, with the related accretion expense recognized as interest expense over the remaining payment period. Subject to the prior written approval of W3C and the Seller, the Company may satisfy all or a portion of the remaining installment payments through the issuance of shares of the Company’s Class A Common Stock.

Preliminary Purchase Price Allocation

The consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded as goodwill, as follows:

1. The Company recognized a deferred tax asset related to the assets acquired pursuant to the Stock and Asset Purchase Agreement with Baanx US Corp. ("Baanx US"), W3C and Howat. Under ASC 740, the deferred tax asset arose from the excess tax basis over the financial reporting basis associated with the Transaction. Recognition of that deferred tax asset reduced the residual amount otherwise allocable to goodwill for this component of the Transaction. Because the deferred tax asset exceeded that residual amount, the excess was recognized immediately in earnings within Other income, net.

The goodwill is primarily attributable to the expected synergies and operational efficiencies anticipated from integrating the Acquired Entities with the Company's existing operations, as well as the assembled workforce and other intangible benefits that do not qualify for separate recognition. The goodwill attributable to the acquisitions of Monavate and Baanx.com is not expected to be deductible for tax purposes. A portion of the goodwill arising from the acquisition of Baanx US and the purchased assets acquired pursuant to the Stock and Asset Purchase Agreement is expected to be deductible for U.S. tax purposes. The goodwill related to Acquired Entities is not expected to be deductible but the goodwill associated with the other assets acquired is expected to be deductible for U.S. tax purposes.

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:

The tradename was valued using the relief from royalty method. The customer relationships represent the fair value of projected cash flows derived from existing customers of the Acquired Entities and were valued using the multi-period excess earnings method. The developed technology was valued using the relief from royalty and cost approach methods. The licenses were valued using the cost approach method. The present value of projected cash flows included assumptions and significant judgment regarding future revenues, discount rate and attrition rate.