Rezolve AI (RZLV) posts heavy 2025 loss and warns on going-concern, token risks
Rhea-AI Filing Summary
Rezolve AI plc files its annual Form 20-F, highlighting that it remains an early‑stage, loss‑making AI commerce company with significant risks. The company reported a net loss of $101.4 million for the year ended December 31, 2025, after a $173.5 million loss in 2024. At December 31, 2025, it had a shareholders’ deficit of $246.8 million, an accumulated deficit of $359.6 million, cash of $111.1 million, and a working capital deficit of $87.1 million.
Management discloses a liquidity note stating that these conditions raise substantial doubt about Rezolve’s ability to continue as a going concern, despite raising $520.7 million in 2025 and into 2026. The company outlines plans focused on cost savings, refinancing short‑term debt, and using an at‑the‑market equity program, but acknowledges no assurance of success.
The filing details extensive business, technology, crypto‑asset and AI‑related risks, including limited revenues, dependence on pre‑revenue strategic partners, competition in SaaS and AI markets, regulatory uncertainty around artificial intelligence, exposure to Tether and Venezuelan developments, and a $63.3 million impairment on SQD token holdings. Market and listing risks, potential dilution from future equity raises, and heightened compliance obligations as a foreign private issuer and emerging growth company are also emphasized.
Positive
- None.
Negative
- Substantial going‑concern doubt: Net loss of $101.4 million in 2025, accumulated deficit of $359.6 million, shareholders’ deficit of $246.8 million and a working capital deficit of $87.1 million lead management to disclose substantial doubt about the company’s ability to continue as a going concern.
- Material digital‑asset impairment and ongoing risk: Following the Subsquid acquisition, Rezolve recorded a $63.3 million impairment on SQD token holdings in 2025 and warns that continued volatility, illiquidity or adverse regulation could force further impairments and weaken its financial position.
Insights
Rezolve flags going‑concern risk amid heavy losses and token impairments.
Rezolve reports sizeable net losses of $101.4 million in 2025 and $173.5 million in 2024, with an accumulated deficit of $359.6 million and shareholders’ deficit of $246.8 million. A working capital deficit of $87.1 million despite cash of $111.1 million underpins substantial going‑concern doubt.
Management’s mitigation plan relies on cost cuts, refinancing short‑term debt, ongoing debt and equity financings, and an at‑the‑market equity program. The text explicitly notes there is no assurance these steps will succeed, implying continued financing and dilution risk for existing shareholders.
Risk is compounded by exposure to digital assets and AI regulation. Rezolve recorded a $63.3 million impairment on SQD token holdings after price declines and warns further volatility or adverse regulation could trigger additional write‑downs. New regimes such as the EU AI Act and U.S. state AI laws introduce compliance costs and potential fines, which could pressure margins if revenues do not scale.
Key Figures
Key Terms
going concern financial
working capital deficit financial
emerging growth company regulatory
SQD tokens financial
EU AI Act regulatory
at-the-market equity program financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What were Rezolve AI plc’s 2025 net loss and accumulated deficit (RZLV)?
Why does Rezolve AI plc’s Form 20-F raise going-concern doubts for RZLV?
How strong was Rezolve AI plc’s liquidity position at December 31, 2025 (RZLV)?
What digital-asset risks does Rezolve AI plc disclose, including SQD tokens?
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report
Commission File Number
(formerly Rezolve AI Limited)
(Exact name of Registrant as specified in its charter)
Not applicable
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
(+44 204 625 9700)
(Address of principal executive offices)
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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered, pursuant to Section 12(b) of the Act
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Securities registered or to be registered pursuant to Section 12(g) of the Act.
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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act
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Indicate the number of outstanding shares of each of the issuer’s classes of capital stock or common stock as of the close of the period covered by the annual report.
At December 31, 2025, the issuer had
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
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International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ |
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Other ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
TABLE OF CONTENTS
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Item 1. |
Identity of Directors, Senior Management and Advisers |
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Offer Statistics and Expected Timetable |
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Item 3. |
Key Information |
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Item 4. |
Information on the Company |
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Item 4A. |
Unresolved Staff Comments |
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Item 5. |
Operating and Financial Review and Prospects |
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Item 6. |
Directors, Senior Management and Employees |
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Item 7. |
Major Shareholders and Related Party Transactions |
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Item 8. |
Financial Information |
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Item 9. |
The Offer and Listing |
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Item 10. |
Additional Information |
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Item 11. |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 12. |
Description of Securities Other than Equity Securities |
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PART II |
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Item 13. |
Defaults, Dividend Arrearages and Delinquencies |
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Item 14. |
Material Modifications to the Rights of Security Holders and Use of Proceeds |
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Controls and Procedures |
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[Reserved]. |
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Audit Committee Financial Expert |
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Item 16B. |
Code of Ethics |
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Item 16C. |
Principal Accountant Fees and Services |
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Item 16D. |
Exemptions from the Listing Standards for Audit Committees |
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Item 16E. |
Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
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Item 16F. |
Change in Registrant’s Certifying Accountant |
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Corporate Governance |
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Item 16H. |
Mine Safety Disclosure |
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Item 16I. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
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Item 16J. |
Insider Trading Policies |
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Cybersecurity |
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PART III |
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Item 17. |
Financial Statements |
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Item 18. |
Financial Statements |
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Exhibits |
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PART I
Item 1. Identity of Directors, Senior Management and Advisers
Not applicable.
Item 2. Offer Statistics and Expected Timetable
Not applicable.
Item 3. Key Information
Not applicable.
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Risk factors summary.
Except where the context otherwise requires or where otherwise indicated in this Annual Report on Form 20-F, all references to "Rezolve," the "Company," "we," "our" and similar terms refer to Rezolve AI plc and its subsidiaries. You should consider carefully the risks and uncertainties described in this prospectus before investing in our securities. These risks are discussed more fully in the section titled “Risk Factors” following this summary. If any of these risks actually occur, our business, financial condition or results of operations would likely be materially adversely affected. These risks include, but are not limited to, the following:
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Risk Factors.
An investment in our securities involves a high degree of risk. You should consider carefully the following risks, together with the financial and other information we include or incorporate by reference in this Annual Report on Form 20-F, including "Management's Discussion and Analysis of Financial Condition and Results of Operations," before you decide to purchase our securities. If any of the following risks actually occur, our business, financial condition and operating results could be materially and adversely affected. In that case, the market price of our securities could decline and you may lose all or a part of your investment. The risks discussed below are not the only risks we face. Additional risks or uncertainties not currently known to us, or that we currently deem immaterial, may also have a material adverse effect on our business, financial condition and operating results. See “Cautionary Note Regarding Forward-Looking Statements.”
Risks Related to Our Business and Industry
Rezolve has generated limited revenues from existing channels and there is no guarantee that it will be able to attract and retain new merchants and increase sales to new merchants.
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Rezolve expects to generate revenues principally through subscription fees and one-time transaction fees. Rezolve expects to be dependent on agreements with certain business partners to service merchants and remit subscription fees to Rezolve, including Microsoft, Google and ACI in North America and Europe, and Grupo Carso in Latin America. While we expect to generate revenues from these partners, these partnerships are currently pre-revenue. There is no guarantee that Rezolve will be able to renew existing agreements on similar terms or at all when they expire or that they will not be terminated at an earlier time. As a result, there can be no assurance that Rezolve will be able to retain these partnerships. Rezolve’s costs associated with subscription renewals are substantially lower than costs associated with generating revenues from new merchant relationships associated with new partners or costs associated with generating sales of additional solutions to merchants associated with existing partners. Therefore, if Rezolve is unable to retain partners, even if such losses are offset by an increase in new merchants associated with new partners or an increase in other revenues, Rezolve’s operating results could be adversely impacted.
Rezolve may also fail to attract new partners and retain existing partners as a result of a number of other factors, including:
Rezolve is an early-stage company with a history of financial losses and expects to incur significant expenses and continuing losses for the foreseeable future.
Rezolve incurred a net loss of $101.4 million in the year ended December 31, 2025 and $173.5 million in the year ended December 31, 2024, respectively. At December 31, 2025, Rezolve had a total shareholders’ deficit of $246.8 million. These losses and accumulated deficit are a result of the substantial investments Rezolve made to grow its business, and Rezolve expects to make significant expenditures to expand its business in the future. Rezolve expects to increase its investment in sales and marketing as it continues to spend on marketing activities and expand its partner referral programs. Rezolve also plans to increase its investment in research and development as it continues to introduce new offerings and services to extend the functionality of its platform. Rezolve intends to invest in its merchant service and support operations, which it considers critical for its continued success. To support the continued growth of its business and to comply with continuously changing security and operational requirements, Rezolve plans to continue investing in its technical infrastructure, marketing and payroll systems. Rezolve expects that these increased expenditures will make it harder for Rezolve to achieve profitability, and Rezolve cannot predict if it will achieve profitability in the near-term or at all. Historically, Rezolve’s costs have increased each year due to these factors and Rezolve expects to continue to incur increasing costs to support its anticipated future growth. Rezolve also expects to incur additional general and administrative expenses as a result of both its growth and the increased costs associated with being a public company. Rezolve’s expenses may be greater than it anticipates, and Rezolve’s investments to improve the efficiency of its business, technical infrastructure, marketing and payroll systems may not be successful. Increases in costs may adversely affect Rezolve’s business and results of operations.
The impact of worldwide economic conditions, including the resulting effect on spending by SMBs and spending on technology, may adversely affect Rezolve’s business, operating results and financial condition.
Rezolve’s performance is subject to worldwide economic conditions and overall demand for technology and the impact of these factors on the economic performance of Rezolve’s current and prospective Channels and the levels of spending of their customers. In general, worldwide economic conditions may remain unstable, including inflation, and these conditions would make it difficult for Rezolve’s Channels, prospective Channels, merchants and Rezolve to forecast and plan future business activities accurately, and they could cause Rezolve’s Channels or prospective Channels and merchants to reevaluate their decision to purchase Rezolve’s solutions. Weak global economic conditions, changes in consumer behavior or a reduction in technology spending even if economic conditions
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stabilize, could adversely impact Rezolve’s business and results of operations in a number of ways, including longer sales cycles, lower demand or prices for Rezolve’s platform, fewer subscriptions and lower or no growth. For example, recent increased inflation, the residual effects of the collapse of Silicon Valley Bank and other financial institutions in March and April 2023, and resultant instability in global financial markets, may cause Rezolve’s customers to reduce spending, including on Rezolve’s services. Merchants and Channels may be disproportionately affected by economic downturns. Merchants and Channels frequently have limited budgets and may choose to allocate their spending to items other than Rezolve’s platform, especially in times of economic uncertainty or recessions.
Prolonged economic uncertainties or downturns could adversely affect Rezolve’s business, financial condition, and results of operations. Negative conditions in the global economy, including conditions resulting from financial and credit market fluctuations, heightened interest rates, changes in economic policy, trade uncertainty, including changes in tariffs, sanctions, international treaties and other trade restrictions, the occurrence of a natural disaster or global public health crisis, such as the COVID-19 pandemic, or armed conflicts, such as the conflict in Ukraine, and resulting sanctions imposed by countries, and retaliatory actions taken by Russia in response to such sanctions, could negatively affect the growth of Rezolve’s business.
Economic downturns may also adversely impact retail sales, which could result in merchants who use Rezolve’s platform going out of business or deciding to stop using Rezolve’s services in order to conserve cash. Weakening economic conditions may also adversely affect third parties with whom Rezolve has entered into relationships and upon which Rezolve depends in order to grow its business. Uncertain and adverse economic conditions may also lead to increased refunds and chargebacks or reduced transaction fees, any of which could adversely affect Rezolve’s business.
Uneven economic growth or downturns or international trade and other global disruptions, geopolitical tensions, or disputes could adversely affect our business and operating results.
Trade and other global disputes and interruptions, including those related to tariffs, trade protection measures, import or export licensing requirements, the imposition of trade sanctions or similar restrictions by the U.S. or other governments, international tension and conflicts, as well as economic stagnation, cost inflation, strains on global transportation, manufacturing, and labor markets, and public health outbreaks, epidemics, or pandemics affect our ability to do business. Among other risks, the use of tariffs and other trade restrictions increase costs and may impact or otherwise complicate aspects of our business.
Rezolve’s limited operating history in a new and developing market makes it difficult to evaluate its current business and future prospects and may increase the risk that it will not be successful.
Rezolve is constantly evolving with new offerings and services such as Instant Checkout. This evolving platform makes it difficult to accurately assess Rezolve’s future prospects. Rezolve also operates in developing markets that may not develop as it expects. You should consider Rezolve’s future prospects in light of the challenges and uncertainties that it faces, including the fact that it may not be possible to discern fully the trends that Rezolve is subject to, that Rezolve operates in developing markets, and that elements of its business strategy are new and subject to ongoing development. Rezolve has encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries, including, among other factors, increasing and unforeseen expenses as Rezolve continues to grow its business, undercapitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. If Rezolve does not manage these risks successfully, its business, results of operations and prospects will be harmed.
Rezolve’s growth depends in part on the success of its strategic relationships with third parties.
Rezolve anticipates that the growth of its business will continue to depend on third-party relationships, including relationships with its referral sources, resellers, payment processors and other partners. Identifying, negotiating and documenting relationships with third parties requires significant time and resources as does integrating third-party content and technology. Rezolve’s agreements with providers of cloud hosting, technology, content and consulting services are typically non-exclusive and do not prohibit such service providers from working with competitors or from offering competing services. These third-party providers may choose to terminate their relationship with Rezolve or to make material changes to their businesses, offerings or services. Rezolve’s competitors may be effective in providing incentives to third parties to favor their offerings or services or to prevent or reduce subscriptions to Rezolve’s platform. In addition, these providers may not perform as expected under Rezolve’s agreements or under their agreements with Rezolve’s merchants, and Rezolve or its merchants may in the future have disagreements or disputes with such providers. If Rezolve loses access to products, offerings or services from a particular supplier, or experiences a significant disruption in the supply of products, offerings or services from a current supplier, including any single-source supplier, it could have an adverse effect on Rezolve’s business and operating results.
Furthermore, while Rezolve has developed its own proprietary LLM, brainpowa, Rezolve also uses AI technologies licensed from third parties, including Google Vertex AI Search for Commerce, in its products and services. Rezolve’s ability to continue to use such
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technologies at the scale it needs may be dependent on access to specific third-party technology. Rezolve cannot control the availability or pricing of such third-party AI technologies, especially in a highly competitive environment, and Rezolve may be unable to negotiate favorable economic terms with the applicable providers. If any such third-party AI technologies become incompatible with Rezolve’s solutions or unavailable for use, or if the providers of such technologies unfavorably change the terms on which their AI technologies are offered or terminate their relationship with Rezolve, Rezolve’s solutions may become less appealing to its customers and its business could be harmed.
Any disruption, outage, or loss of information through hosted AI services could disrupt Rezolve’s operations or solutions. In addition, Rezolve’s vendors may incorporate artificial intelligence tools into their own offerings, and the providers of these artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards, including with respect to privacy and data security. Any of the foregoing could adversely affect Rezolve’s business, financial condition and results of operations.
The markets for Rezolve’s offerings are new and evolving and may develop more slowly or differently than we expect. Rezolve’s future success is dependent on the growth and expansion of these markets, its ability to adapt and respond effectively to evolving market conditions and its relationship with its business partners.
The markets for Rezolve’s offerings are relatively new, rapidly evolving and unproven. Accordingly, it is difficult to predict customer adoption and renewals, demand for Rezolve’s platform and Rezolve’s offerings, the entry of competitive offerings, the success of existing competitive offerings, or the future growth rate, expansion, longevity and the size of Rezolve’s target markets. The expansion of, and Rezolve’s ability to penetrate, these new and evolving markets depends on a number of factors, including widespread awareness among key organizational decision makers, the cost, performance and effectiveness of, and the perceived value associated with, digital adoption platforms and technologies. If we or other software and SaaS providers experience security incidents, loss or unauthorized acquisition or other processing of customer data, or disruptions in delivery or service, the market for these applications as a whole, including our platform and offerings, may be negatively affected. If digital adoption technologies and software do not continue to achieve market acceptance, or if there is a reduction in demand caused by decreased customer or user acceptance, technological challenges, weakening economic conditions (including in connection with international conflicts, economic downturns, and global pandemics like the COVID-19 pandemic), privacy, data protection, and cybersecurity concerns, governmental regulation, competing technologies and offerings, decreases in information technology spending or otherwise, or if software providers begin to implement digital adoption solutions natively within their existing products, the markets for our platform and offerings might not continue to develop or might develop more slowly than we expect, which could adversely affect our business, financial condition and results of operations.
Non-performance under, termination, non-renewal or material modification of agreements with Rezolve’s business partners could have a material adverse effect on Rezolve’s business, financial condition and/or results of operations.
Rezolve expects to be dependent on its business partners to service its existing customers and ensure that subscription payments from expected merchant customers are subsequently remitted to Rezolve. Rezolve’s business partners may fail to meet their settlement obligations on a timely basis or at all. Such failures to pay, payment delays or other non-performance may be due to their insolvency or bankruptcy, a downturn in the economic cycle or factors specific to the relevant business partner. The failure of Rezolve’s business partners to meet their settlement obligations and/or Rezolve’s inability to find new business partners in a timely manner could have a material adverse effect on Rezolve’s financial condition and/or results of operations.
No assurance can be given that business partners will renew their agreements upon expiration of those agreements or that they will not request unfavorable amendments to existing agreements. Also, no assurance can be given that Rezolve will be successful in negotiating favorable terms with these business partners. Any failure to obtain renewals of existing agreements or failure to successfully negotiate favorable terms for such renewals of or amendments to existing agreements could result in a reduction in revenues and, accordingly, have a material adverse effect on Rezolve’s business, prospects, financial condition and/or results of operations.
Rezolve’s business could be harmed if it fails to manage its growth effectively.
Rezolve’s plans to grow in Germany, Latin America, the U.S. and India and to expand into new geographies places significant demands on its operational infrastructure. The scalability and flexibility of its platform depends on the functionality of its technology and network infrastructure and its ability to handle increased traffic and demand. As merchant numbers grow and merchants increase their use of Rezolve’s platform, the number of orders processed through Rezolve’s platform and the amount of data and requests that it processes will increase. Any problems with the transmission of increased data and requests could result in harm to Rezolve’s brand or reputation. Moreover, as Rezolve’s business grows, Rezolve will need to devote additional resources to improving its operational infrastructure and continuing to enhance its scalability to maintain the performance of its platform.
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Rezolve’s growth will likely continue to place, a significant strain on its managerial, administrative, operational, financial and other resources. Rezolve has grown from 21 employees at December 31, 2019 to 573 employees at December 31, 2025. Rezolve intends to further expand its overall business, including headcount, with no assurance that its revenues will grow. As Rezolve grows, it will be required to continue to improve its operational and financial controls and reporting procedures and it may not be able to do so effectively. As such, Rezolve may be unable to manage its expenses effectively in the future, which may negatively impact its gross profit or operating expenses.
In addition, Rezolve believes that an important contributor to its success has been its corporate culture, which it believes fosters innovation, teamwork, passion for its merchants and a focus on attractive designs and technologically advanced and well-crafted software. Most of Rezolve’s employees have been with Rezolve or Rezolve Limited for fewer than two years as a result of Rezolve's rapid growth. As Rezolve continues to grow, Rezolve must effectively integrate, develop and motivate a growing number of new employees. As a result, Rezolve may find it difficult to maintain its corporate culture, which could limit its ability to innovate and operate effectively. Any failure to preserve Rezolve’s culture could also negatively affect its ability to retain and recruit personnel, continue to perform at current levels or execute its business strategy.
Rezolve does not have the history with its solutions or pricing models necessary to accurately predict optimal pricing necessary to attract new merchants and retain existing merchants.
Rezolve has limited experience determining the optimal prices for its solutions. Rezolve has changed its pricing model from time to time and expects to do so in the future. Given Rezolve’s limited experience with selling new solutions, Rezolve may not offer new solutions at the optimal price, which may result in Rezolve’s solutions not being profitable or not gaining market share. As competitors introduce new solutions that compete with Rezolve’s, especially in the payments space where Rezolve currently faces significant competition, Rezolve may be unable to attract new merchants at competitive prices. Pricing decisions may also impact the mix of adoption among Rezolve’s plans and negatively impact Rezolve’s overall revenues. Moreover, SMBs, which are generally sensitive to price and are expected to comprise a portion of the merchants using Rezolve’s platform, may be quite sensitive to price increases or prices offered by competitors. As a result, in the future, Rezolve may be forced to reduce its prices, which could adversely affect its financial results.
Our financial statements contain a liquidity note, which could impact our ability to obtain new financing on reasonable terms or at all.
As described in our accompanying combined consolidated financial statements, for the year ended December 31, 2025, we had an accumulated deficit of $359.6 million. For the year ended December 31, 2025, we incurred a net loss of $101.4 million and net cash used in operating activities was $63.1 million. Cash and cash equivalents totaled $111.1 million as of December 31, 2025, an increase of $101.4 million from December 31, 2024. The Company has a working capital deficit of $87.1 million as at December 31, 2025. We continue to incur losses while we develop our artificial intelligence-driven commerce and engagement solutions, target customers and incur costs for business combinations. Our primary sources of cash for these activities have been debt and equity financings. These conditions and events raise substantial doubt about our ability to continue as a going concern for a least one year from the date of our combined consolidated financial statements are issued.
Management's plans to alleviate the substantial doubt about our ability to continue as a going concern, as described above, include the following actions:
We, however, cannot be certain that additional financing will be available to us on acceptable terms, or at all. If funds are not available when needed, we may be required to delay, reduce the scope of, or eliminate product development, commercialization efforts, and other business initiatives; restructure or significantly curtail our operations; or pursue other strategic alternatives. Any financings we do obtain may be dilutive to existing shareholders or may impose restrictive covenants or other obligations that limit our operational and financial flexibility.
We have also raised during 2025 and into 2026 $520.7 million, as more fully described in Note 2.4. Liquidity in our Notes to our combined consolidated financial statements. Although we have historically been able to raise capital to support our operations, there can be no assurance that we will be successful in doing so in the future, that such financing will be available on commercially
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reasonable terms, or that our plans, even if implemented, will alleviate the substantial doubt regarding our ability to continue as a going concern.
As a result of Rezolve’s business model, it may not be able to accurately assess its financial position and results of operations.
Rezolve intends to offer its platform primarily through a mix of monthly and single-year subscription agreements and is expected to recognize revenue ratably over the related subscription period. As a result, a large percentage of the revenues Rezolve expects to report each quarter may be derived from agreements entered into during prior months or years. In addition, Rezolve does not and will not record deferred revenues beyond amounts invoiced as a liability on its balance sheet. Such declines may negatively affect its revenues and deferred revenues balances in future periods, and the effect of significant downturns in sales and market acceptance of its platform, and potential changes in Rezolve’s rate of renewals, may not be fully reflected in Rezolve’s results of operations until future periods. Rezolve’s subscription model also may make it difficult for Rezolve to rapidly increase its total revenues and deferred revenues balance through additional sales in any period, as revenues from new customers must be recognized over the applicable subscription term. These factors may have an adverse effect on Rezolve’s business, results of operations and financial condition.
Rezolve’s business is susceptible to risks associated with international sales and the use of its platform in various countries.
Rezolve’s international sales and the use of its platform in various countries subject Rezolve to risks that include, but are not limited to:
These factors may cause Rezolve’s international costs of doing business to increase and may also require significant management attention and financial resources. Any negative impact from Rezolve’s international business efforts could adversely affect Rezolve’s business, results of operations and financial condition.
As Rezolve and its Channels and merchants adopt its proprietary machine learning systems, it may be exposed to risks related to systems efficiency and disclosure and changes to the political and regulatory framework for AI technology, which can adversely affect Rezolve’s business, financial condition and results of operations.
Rezolve’s future success will depend in large part on establishing and growing a market for its solutions and systems, whose proprietary machine learning algorithm processes vast amounts of data collected from user interactions. Rezolve’s AI capabilities analyze user behavior and preferences, and identify patterns and trends that inform the creation of personalized experiences for each user, which allows merchants to deliver marketing campaigns, content, offers, and promotions that cater specifically to individual users, leading to higher engagement and conversion rates. Rezolve’s machine learning systems may inadvertently reduce the efficiency of Rezolve’s systems, or may cause unintentional or unexpected outputs that are incorrect, do not match Rezolve’s business goals, do not comply with Rezolve’s policies, or otherwise are inconsistent with Rezolve’s brand. Any errors or vulnerabilities
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discovered in our code could also result in damage to Rezolve's reputation, loss of its Channels and merchants, unauthorized disclosure of personal and confidential information, or loss of revenues or liability for damages, any of which could adversely affect Rezolve’s growth prospects and its business.
The political and regulatory framework for AI technology and machine learning is evolving and remains uncertain. It is possible that new laws and regulations will be adopted in the countries in which Rezolve operates, or existing laws and regulations may be interpreted in new ways, that would affect the operation of Rezolve’s network and the way in which Rezolve uses AI technology and machine learning, including with respect to laws related to privacy, data protection, cybersecurity and processing customer information. The cost to comply with such laws or regulations could be significant and would increase Rezolve’s operating expenses, which could adversely affect its business, financial condition and results of operations.
Exchange rate fluctuations may negatively affect Rezolve’s results of operations.
Exchange rate fluctuations may affect Rezolve’s merchant solutions as Rezolve may generate revenues in different currencies. For example, if in the future Rezolve generates revenues through Instant Buy in the local currency of the country in which the applicable merchant is located, Rezolve will be exposed to foreign currency exchange rate fluctuations to the extent revenues in foreign currencies from Instant Buy payments increase. Fluctuations in the exchange rates of these foreign currencies could adversely affect Rezolve’s growth prospects and its business.
Rezolve’s operating results are expected to be subject to seasonal fluctuations.
Rezolve’s merchant transaction-based revenues are expected to be correlated with the number of transactions that Rezolve’s merchants process through its platform. Certain of its merchants are expected to be subject to seasonal fluctuations as a result of holidays in the countries in which they operate resulting in increased or decreased consumer spending. If Rezolve grows its merchant solutions offerings, Rezolve cannot guarantee that its business will not become more seasonal in the future, and historical patterns in its business may not be a reliable indicator of Rezolve’s future sales activity or performance.
Rezolve's business may be negatively affected by price fluctuations of Tether related to federal regulatory investigations and changes to the Venezuelan government.
In November 2024, Rezolve announced a partnership with Tether, the world's most widely used stablecoin platform, to integrate digital currency capabilities into Rezolve's Brain Checkout wallet. Recently, federal authorities announced an investigation into Tether for possible violations of sanctions placed against the company and anti-money laundering rules and whether third parties have use the cryptocurrency to fund illegal activities. Additionally, due to recent events affecting the Venezuelan government, the use of Tether in Venezuela, a leading user of Tether globally, may be negatively impacted, which may affect the price and stability of Tether. If the price of Tether becomes unstable, or investigations lead to the imposition of additional federal regulations on Tether or cryptocurrencies in general, Rezolve's business may be adversely affected.
There is volatility and impairment risk related to Rezolve's holdings of SQD tokens.
The market price and trading volume of the SQD tokens that Rezolve holds have been, and may continue to be, highly volatile and subject to periods of limited liquidity. Following our acquisition of Subsquid in 2025, the market price of SQD declined significantly through December 31, 2025, and we recorded a $63.3 million impairment charge related to our SQD holdings for the year. Future price declines, adverse market events affecting digital‑asset trading venues or custodians, or regulatory developments impacting SQD or similar tokens could require us to recognize additional impairment charges and could materially and adversely affect our results of operations and financial condition. Moreover, digital‑asset trading platforms may be subject to outages, market manipulation, fraud, cybersecurity incidents, or insolvency, and insurance for token losses may be unavailable or cost‑prohibitive. If the SQD market remains illiquid or volatile, or if adverse regulatory actions restrict SQD trading or custody, the fair value and realizable value of our SQD holdings could further decrease.
If Rezolve fails to improve and enhance the functionality, performance, reliability, design, security and scalability of its platform in a manner that responds to merchants’ evolving needs, its business may be adversely affected.
The markets in which Rezolve competes are characterized by constant change and innovation, and Rezolve expects them to continue to evolve rapidly. Rezolve’s ability to attract new merchants and increase sales to new merchants will depend in large part on its ability to continue to improve and enhance the functionality, performance, reliability, design, security and scalability of its platform as well as to introduce new features, capabilities and offerings to its platform.
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Rezolve may experience difficulties with software development that could delay or prevent the development, introduction or implementation of new solutions and enhancements. Software development involves a significant amount of time for Rezolve’s research and development team, as it can take Rezolve’s developers months to update, code and test new and upgraded solutions and integrate them into its platform. Rezolve must also continually update, test and enhance its software platform. For example, Rezolve’s design team spends a significant amount of time and resources incorporating various design enhancements, such as customized colors, fonts, content and other features, into its platform. The continual improvement and enhancement of Rezolve’s platform requires significant investment and Rezolve may not have the resources to make such investment. To the extent Rezolve is not able to improve and enhance the functionality, performance, reliability, design, security and scalability of its platform in a manner that responds to Rezolve’s merchants’ evolving needs, Rezolve’s business, operating results and financial condition will be adversely affected.
Rezolve may not be able to compete successfully against current and future competitors.
Rezolve faces competition in various aspects of its business, and Rezolve expects such competition to grow in the future. Rezolve has competitors with longer operating histories, larger customer bases, greater brand recognition, more experience and more extensive commercial relationships in certain jurisdictions, and greater financial, technical, marketing and other resources than Rezolve. As a result, Rezolve’s current and potential competitors may be able to develop products, offerings and services better received by merchants or respond more quickly and effectively than Rezolve can to new or changing opportunities, technologies, regulations or merchant requirements. In addition, certain of Rezolve’s larger competitors may be able to leverage a larger installed customer base and distribution network to adopt more aggressive pricing policies and offer more attractive sales terms, which could cause Rezolve to lose potential sales or to sell Rezolve’s solutions at lower prices.
Competition may intensify as Rezolve’s competitors enter into business combinations or alliances or raise additional capital, or as established companies in other market segments or geographic markets expand into Rezolve’s market segments or geographic markets. For example, certain competitors could use strong or dominant positions in one or more markets to gain a competitive advantage against Rezolve in areas where Rezolve operates including: by integrating competing platforms or features into products or offerings they control such as search engines, web browsers, mobile device operating systems or social networks; by making acquisitions; or by making access to Rezolve’s platform more difficult. Further, current and future competitors could choose to offer a different pricing model or to undercut prices in an effort to increase their market share. If Rezolve cannot compete successfully against current and future competitors, Rezolve’s business, results of operations and financial condition could be negatively impacted.
Payment transactions on Rezolve’s platform may be subject to regulatory requirements and other risks that could be costly and difficult to comply with or that could harm Rezolve’s business.
Rezolve may become subject to a number of risks related to payments processed through Instant Buy, including:
Rezolve is required by its payment processors to comply with payment card network operating rules. The payment card networks set and interpret the operating rules. Rezolve faces the risk that one or more payment card networks or other processors may, at any time, assess penalties against Rezolve or terminate its ability to accept credit card payments or other forms of online payments from customers, which would have an adverse effect on Rezolve’s business, financial condition and operating results.
If Rezolve fails to comply with the rules and regulations adopted by the payment card networks, including the Payment Card Industry Data Security Standard ("PCI DSS"), Rezolve would be in breach of its contractual obligations to its payment processors, financial institutions, partners and merchants. Such failure to comply may subject Rezolve to fines, penalties, damages, higher transaction fees and civil liability, and could eventually prevent Rezolve from processing or accepting payment cards or could lead to a loss of payment processor partners, even if there is no compromise of customer information.
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Rezolve is currently subject to a variety of laws and regulations in the U.S., Mexico, the UK, Europe, India and elsewhere related to payment processing, including those governing cross-border and domestic money transmission, electronic funds transfers, foreign exchange, anti-money laundering, counter-terrorist financing, banking and import and export restrictions. Depending on how Instant Buy and Rezolve’s other merchant solutions evolve, Rezolve may be subject to additional laws in the U.S., Mexico, China, the UK, Europe, India and elsewhere. In certain jurisdictions, the application or interpretation of these laws and regulations is not clear. Rezolve’s efforts to comply with these laws and regulations could be costly and result in diversion of management time and effort and may still not guarantee compliance. In the event that Rezolve is alleged to be in violation of any such legal or regulatory requirements, it may be subject to claims, demands, and litigation by private parties, and governmental investigations and other proceedings, which may result in Rezolve being subject to cease and desist orders, monetary fines or other penalties or liabilities, or being required to make changes to its platform or other aspects of its operations, any of which could have an adverse effect on its business, financial condition and results of operations.
Rezolve has in the past made and in the future may make acquisitions and investments, which could divert management’s attention, result in operating difficulties and dilution to Rezolve’s shareholders and otherwise disrupt Rezolve’s operations and adversely affect its business, operating results or financial position.
From time to time, Rezolve evaluates potential strategic acquisition or investment opportunities. Any transactions that Rezolve enters into could be material to its financial condition and results of operations. The process of acquiring and integrating another company or technology could create unforeseen operating difficulties and expenditures. Acquisitions and investments involve a number of risks, such as:
In addition, a significant portion of the purchase price of companies that Rezolve acquires may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment on at least an annual basis. In the future, if Rezolve’s acquisitions do not yield expected returns, Rezolve may be required to take charges to its operating results based on this impairment assessment process, which could adversely affect Rezolve’s results of operations.
Acquisitions and investments may also result in dilutive issuances of equity securities, which could adversely affect Rezolve’s share price, or result in issuances of securities with superior rights and preferences to our Ordinary Shares or the incurrence of debt with restrictive covenants that limit Rezolve’s future uses of capital in pursuit of business opportunities.
Rezolve may not be able to identify acquisition or investment opportunities that meet Rezolve’s strategic objectives, or to the extent such opportunities are identified, Rezolve may not be able to negotiate terms with respect to the acquisition or investment that are acceptable to Rezolve.
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Rezolve may need to raise additional funds to pursue its growth strategy or continue its operations, and Rezolve may be unable to raise capital when needed or on acceptable terms.
From time to time, Rezolve may seek additional equity or debt financing to fund its growth, enhance its platform, respond to competitive pressures or make acquisitions or other investments. Rezolve’s business plans may change, general economic, financial or political conditions in its markets may deteriorate or other circumstances may arise, in each case that have a material adverse effect on Rezolve’s cash flows and the anticipated cash needs of Rezolve’s business. Any of these events or circumstances could result in significant additional funding needs, requiring Rezolve to raise additional capital. Rezolve cannot predict the timing or amount of any such capital requirements at this time. If financing is not available on satisfactory terms, or at all, Rezolve may be unable to expand Rezolve’s business at the rate desired and Rezolve’s results of operations may suffer. Financing through issuances of equity securities would be dilutive to holders of Rezolve’s shares.
Failure to effectively develop and expand Rezolve’s marketing, sales, customer service, and content management capabilities could harm its ability to increase Rezolve’s customer base and achieve broader market acceptance of Rezolve’s platform.
Rezolve’s sales cycle, from initial contact to contract execution and implementation can take significant time. Rezolve’s sales efforts involve educating its clients about the use, technical capabilities and benefits of Rezolve’s platform. Certain of Rezolve’s clients undertake an evaluation process that frequently involves not only its platform but also the offerings of Rezolve’s competitors. As a result, it is difficult to predict when Rezolve will obtain new clients and begin generating revenues from new clients. Even if Rezolve’s sales efforts result in obtaining a new client, under Rezolve’s usage-based pricing model, to a large degree the client controls when and to what extent it uses Rezolve’s platform. As a result, Rezolve may not be able to add clients or generate revenues as quickly as Rezolve may expect, which could harm Rezolve’s revenue growth rates.
If the availability of Rezolve’s platform does not meet its service-level commitments to customers, Rezolve’s current and future revenues may be negatively impacted.
Rezolve typically commits to its customers that its platform will maintain a minimum service-level of availability. If Rezolve is unable to meet these commitments, Rezolve may be obligated to provide customers with additional capacity, which could significantly affect its revenues. Further, any failure to meet its service-level commitments could damage its reputation and adoption of its platform, and Rezolve could face loss of revenues from reduced future consumption of its platform. Any service-level failures could adversely affect Rezolve’s business, financial condition, and results of operations.
Rezolve does not intend to pay dividends for the foreseeable future.
Rezolve may retain future earnings, if any, for future operations, expansion and debt repayment and has no current plans to pay any cash dividends for the foreseeable future. As a result of Rezolve’s current dividend policy, you may not receive any return on an investment in Ordinary Shares unless you sell Ordinary Shares for a price greater than that which you paid for them. Any future determination to declare and pay cash dividends will be at the discretion of Rezolve’s board of directors and will depend on, among other things, Rezolve’s financial condition, results of operations, cash requirements, contractual restrictions and such other factors as Rezolve’s board of directors deems relevant.
Expansion into geographies such as the U.S., Latin America, India, and China in the future, is important to the growth of Rezolve’s business, and if Rezolve does not manage the business and economic risks of international expansion effectively, it could materially and adversely affect Rezolve’s business, financial condition and results of operations.
Rezolve’s future success depends, in part, on Rezolve’s ability to expand its penetration of the international markets in which it currently operates and to expand into additional international markets. Rezolve’s ability to expand internationally will depend upon its ability to deliver functionality and other features that reflect the needs and preferences of the international customers that we target and to successfully navigate the risks inherent in operating a business internationally. Any new geographic market could have different characteristics from the markets in which Rezolve currently operates, and Rezolve’s success in such markets will depend on its ability to adapt properly to these differences. These differences may include limited or unfavorable intellectual property protection, international political or economic conditions, restrictions on the repatriation of earnings, longer sales cycles, warranty expectations, differing regulatory requirements, tax laws, trade laws, labor regulations, corporate formation laws and requirements and tariffs. In addition, expanding into new geographic markets will increase Rezolve’s exposure to presently existing risks, such as fluctuations in the value of foreign currencies and difficulties and increased expenses related to complying with U.S. and foreign laws, regulations and trade standards.
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A regional or global health pandemic, including global pandemics, may adversely impact Rezolve’s business, results of operations and financial performance.
A regional or global health pandemic, depending upon its duration and severity, could have a material adverse effect on our business. For example, in March 2020, the World Health Organization characterized COVID-19 as a global pandemic, which has had numerous effects on the global economy. The COVID-19 pandemic and efforts to control its spread significantly curtailed the movement of people, goods and services, including in most or all of the regions in which Rezolve sells its offerings and services and conducts its business operations. While Rezolve has so far been able to mitigate the impacts of the COVID-19 pandemic on its business, Rezolve cannot guarantee that this will continue to be the case or that a pandemic in the future will have the same outcome.
To the extent the COVID-19 pandemic, or any similar future pandemic or related events could have a material adverse effect on Rezolve’s or Rezolve’s customers’ and business partners’ business, financial condition, results of operations and/or liquidity, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.
If Rezolve is unable to hire, retain and motivate qualified personnel, its business will be adversely affected.
Rezolve’s future success depends, in part, on its ability to continue to attract and retain highly skilled personnel. The inability to attract or retain qualified personnel or delays in hiring required personnel may seriously harm Rezolve’s business, financial condition and operating results. Rezolve’s ability to continue to attract and retain highly skilled personnel, specifically employees with technical and engineering skills and employees with high levels of experience in designing and developing software and internet-related services, will be critical to Rezolve’s future success. Competition for highly skilled personnel can be intense due in part to the more limited pool of qualified personnel as compared to other types of employees. In addition, to the extent Rezolve hires personnel from competitors, Rezolve may be subject to allegations that such personnel have been improperly solicited or divulged proprietary or other confidential information. While Rezolve intends to issue stock options or other equity awards as key components of its overall compensation and employee attraction and retention efforts, it is required under U.S. GAAP to recognize compensation expense in its operating results for employee stock-based compensation under its equity grant programs, which may increase the pressure to limit stock-based compensation.
Rezolve is dependent on the continued services and performance of its senior management and other key employees, the loss of any of whom could adversely affect Rezolve’s business, operating results and financial condition.
Rezolve’s future performance depends on the continued services and contributions of Rezolve’s senior management, including Rezolve’s Chief Executive Officer, Daniel Wagner, Chief Operating and Financial Officer, Arthur Yao, Chief Scientist, Salman Ahmad, and President, Global Professional Services and Chief Digital Officer, Sauvik Banerjjee, and other key employees to execute its business plan and to identify and pursue new opportunities and offering innovations. The loss of services of senior management or other key employees could significantly delay or prevent the achievement of Rezolve’s strategic objectives. In addition, certain of the members of Rezolve’s current senior management team have only been working together for a short period of time, which could adversely impact Rezolve’s ability to achieve its goals. From time to time, there may be changes in Rezolve’s senior management team resulting from the hiring or departure of executives, which could disrupt Rezolve’s business. Rezolve does not maintain key person life insurance policies on any of its employees other than a policy providing limited coverage on the life of its Chief Executive Officer. The loss of the services of one or more of Rezolve’s senior management or other key employees for any reason could adversely affect Rezolve’s business, financial condition and operating results and require significant amounts of time, training and resources to find suitable replacements and integrate them within Rezolve’s business, and could affect Rezolve’s corporate culture.
Rezolve expects to be dependent upon consumers’ and merchants’ willingness to use the internet and internet-enabled mobile devices for commerce.
Rezolve’s success depends upon the general public’s continued willingness to use the internet and internet-enabled mobile devices as a means to pay for purchases, communicate, access social media, research and conduct commercial transactions, including through mobile devices. If consumers or merchants become unwilling or less willing to use the internet or internet-enabled mobile devices for commerce for any reason, including lack of access to high-speed communications equipment, congestion of traffic on the internet, internet outages or delays, disruptions or other damage to merchants’ and consumers’ computers, increases in the cost of accessing the internet and cybersecurity, data protection, and privacy risks or the perception of such risks, Rezolve’s business could be adversely affected.
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Risks related to Rezolve’s Software, Platform, and Security
If Rezolve’s software or platform contains serious errors or defects, Rezolve may lose revenues and market acceptance and may incur costs to defend or settle claims with its merchants.
Software or platforms such as Rezolve’s may contain errors, defects, security vulnerabilities or bugs that are difficult to detect and correct, particularly when first introduced or when new versions or enhancements are released. Despite internal testing, Rezolve’s software or platform may contain serious errors or defects, security vulnerabilities or bugs that Rezolve may be unable to successfully detect, correct or otherwise address in a timely manner or at all, which could result in security breaches or incidents, interruptions, lost revenues, significant expenditures of capital, a delay or loss in market acceptance, damage to Rezolve’s reputation and brand, and other harm, any of which could have an adverse effect on its business, financial condition, and operations. Furthermore, Rezolve’s software and platform is a multi-tenant cloud-based system that allows Rezolve to deploy new versions and enhancements to all of its merchants simultaneously. To the extent Rezolve deploys new versions or enhancements that contain errors, defects, security vulnerabilities or bugs to all of its merchants simultaneously, the consequences would be more severe than if such versions or enhancements were only deployed to a smaller number of its merchants.
Since Rezolve expects its merchants will use its software or platform for processes that are critical to their businesses, errors, defects, security vulnerabilities, service interruptions or bugs, or security breaches or incidents of, Rezolve’s software or platform could result in losses to its merchants. Rezolve’s merchants may seek significant compensation from Rezolve for any losses they suffer or believe they may have suffered or cease conducting business with Rezolve altogether. Further, merchants could share negative information about their experiences with Rezolve on social media or in other channels or forums, which could result in damage to Rezolve’s reputation and loss of future sales. There can be no assurance that provisions typically included in Rezolve’s agreements with its merchants that attempt to limit its exposure to claims would be enforceable or adequate or would otherwise protect Rezolve from liabilities or damages with respect to any particular claim. Even if not successful, a claim brought against Rezolve by any of its merchants would likely be time-consuming and costly to defend against and could seriously damage Rezolve’s reputation and brand, making it harder for Rezolve to sell its offerings and services.
A denial-of-service attack or security breach or incident could delay or interrupt service to Rezolve’s merchants and their customers, harm Rezolve’s reputation and subject Rezolve to significant liability.
Rezolve’s platform and systems may be subject to distributed denial-of-service (“DDoS”) attacks and other sources of disruption or interruption, or security breaches or incidents, including catastrophic events, error or malfeasance by employees, contractors, or other third parties, equipment malfunction or constraints, software defects or deficiencies, bugs, vulnerabilities, computer viruses, ransomware, and other malware, phishing attacks, and cyberattacks. Rezolve cannot guarantee that applicable recovery systems, security protocols, network protection mechanisms and other procedures or measures are or will be adequate to identify, detect, prevent or mitigate any such events. Techniques used to obtain unauthorized access to systems and data change frequently and the size of DDoS attacks is increasing while other threats, including ransomware, increasingly are prevalent in Rezolve’s industry. Such threats also may be heightened as a result of many of Rezolve’s employees and contractors working remotely. Rezolve may be unable to identify or implement adequate preventative measures for any cyberattack, disruption, interruption or other security breach or incident, cease or mitigate attacks or other sources of system disruptions or security breaches or incidents, or remediate them in a timely manner or at all. A DDoS attack or security breach or incident could delay or interrupt service to Rezolve’s merchants and their customers and may deter consumers from visiting Rezolve’s merchants’ shops. In addition, any actual or perceived DDoS attack or other source of system interruption or disruption, or security breach or incident, could result in a loss of or unauthorized use, alteration, unavailability, disclosure or other processing or compromise of personal data, intellectual property or confidential data of Rezolve and its customers, damage Rezolve’s reputation and brand, result in a loss of business, expose Rezolve to a risk of claims, demands and litigation by private parties, and investigations or other proceedings by governmental authorities, possible fines, penalties and other liabilities, and require Rezolve to expend significant capital and other resources in efforts to alleviate problems caused by the interruption, disruption or security breach or incident. Rezolve also may be required to incur significant costs in an effort to prevent and mitigate system and network disruptions and cyberattacks and other sources of security breaches and incidents. Rezolve engages third-party service providers to store and otherwise process certain of its data, including confidential information and personal and other data relating to individuals. Its service providers may also be the targets of cyberattacks and other malicious activity and other sources of security breaches and incidents, which create similar risks for Rezolve.
Certain jurisdictions have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data and Rezolve’s agreements with certain customers require Rezolve to notify them in the event of a security incident. Such mandatory disclosures or any other disclosures regarding any such event could lead to negative publicity and may cause Rezolve’s merchants to lose confidence in the effectiveness of its data security measures. Moreover, if a high-profile security breach or incident occurs with respect to another SaaS provider, merchants may lose trust in the security of the SaaS business model generally, which could adversely impact Rezolve’s ability to retain existing merchants or attract new ones. Any of these circumstances could have an adverse effect on Rezolve’s business, financial condition and results of operations.
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Rezolve uses a limited number of data centers to deliver its services. Any disruption of service at these facilities could harm Rezolve’s business.
Rezolve currently manages its services and serves all of its merchants from third-party data center facilities. While Rezolve owns the hardware on which its platform runs and deploys this hardware to the data center facilities, Rezolve does not control the operation of these facilities. Rezolve has experienced, and may in the future experience, failures at the third-party data centers where its hardware is deployed. Data centers are vulnerable to damage or interruption from human error, intentional bad acts, earthquakes, hurricanes, floods, fires, geopolitical conflicts, terrorist attacks, power losses, hardware failures, systems failures, outages, telecommunications failures and other events. Any of these events could result in lengthy interruptions in Rezolve’s services. Changes in laws or regulations applicable to data centers in various jurisdictions, or in their interpretation or enforcement, could also cause a disruption in service. Certain jurisdictions may also impose data localization requirements, which mandate information to be stored in the jurisdiction of origin. These regulations may inhibit Rezolve’s ability to expand into those markets or prohibit Rezolve from offering services in those markets without significant additional costs. Interruptions in Rezolve’s services would reduce its revenues, subject Rezolve to potential liability and adversely affect its ability to retain its merchants or attract new merchants. The performance, reliability and availability of Rezolve’s platform are critical to its reputation and ability to attract merchants. Merchants could share negative information about experiences with Rezolve on social media and in other forums, which could result in damage to Rezolve’s reputation and loss of future sales. Any of the risks above, if realized, could have an adverse effect on Rezolve’s business, financial condition and results of operations.
Rezolve’s business and prospects would be harmed if changes to technologies used in Rezolve’s platform or new versions or upgrades of operating systems and internet browsers adversely impact the process by which merchants and consumers interface with Rezolve’s platform.
Providers of internet browsers may from time to time introduce new features that could make it difficult for merchants to use Rezolve’s platform. In addition, internet browsers for desktop or mobile devices could introduce new features or change existing browser specifications, which could result in them being incompatible with Rezolve’s platform, or preventing consumers from accessing Rezolve’s merchants’ shops. Any changes to technologies used in Rezolve’s platform, to existing features that Rezolve relies on, or to operating systems or internet browsers, that make it difficult for merchants to access Rezolve’s platform or consumers to access Rezolve’s merchants’ shops, could adversely impact Rezolve’s business, financial condition, results of operations, and prospects.
Rezolve relies on computer hardware, purchased or leased, and software licensed from and services rendered by third parties in order to provide its solutions and run its business.
Rezolve relies on computer hardware, purchased or leased, and software licensed from and services rendered by third parties to provide its solutions and run its business. Third-party hardware, software and services may not continue to be available on commercially reasonable terms, or at all. Any loss of the right to use or any failures of third-party hardware, software or services, particularly when such third-party is a sole source supplier to Rezolve, could result in delays in Rezolve’s ability to provide its solutions or run its business until equivalent hardware, software or services are developed by Rezolve or, if available, identified, obtained and integrated, which could be costly and time-consuming and may not result in an equivalent solution, any of which could have an adverse effect on Rezolve’s business, financial condition and operating results. Further, merchants could assert claims against Rezolve in connection with such service disruptions or cease conducting business with Rezolve completely. Even if not successful, a claim brought against Rezolve by any of Rezolve’s merchants would likely be time-consuming and costly to defend and could seriously damage Rezolve’s reputation and brand, making it harder for Rezolve to sell its solutions.
If Rezolve does not or cannot maintain the compatibility of its platform with third-party applications that its customers use in their businesses, Rezolve’s revenues will decline.
Rezolve’s technologies that allow its platform to interoperate with various third-party applications are critically important to its business. Third-party systems are constantly evolving, and it is difficult to predict the challenges that Rezolve may encounter in developing its platform for use with such third-party systems, and Rezolve may not be able to modify its platform to assure its compatibility with the systems of other third parties following any changes to their systems. Without a convenient way for customers that Rezolve expects to have to integrate with Rezolve’s offerings and services, customers may be less likely to renew or upgrade their subscriptions, or prospective customers may be less likely to acquire subscriptions, at current prices or at all.
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Mobile devices are increasingly being used to conduct commerce, and if Rezolve’s solutions do not operate as effectively when accessed through these devices, Rezolve’s merchants and their customers may not be satisfied with Rezolve’s services, which could harm Rezolve’s business.
Rezolve is dependent on the interoperability of its platform with third-party mobile devices and mobile operating systems as well as web browsers that Rezolve does not control. Any changes in such devices, systems or web browsers that degrade the functionality of its platform or give preferential treatment to competitive services could adversely affect usage of its platform. Effective mobile functionality is integral to Rezolve’s current business and long-term development and growth strategy. In the event that Rezolve’s merchants and their customers have difficulty accessing and using Rezolve’s platform on mobile devices, its business, financial condition, and operating results could be adversely affected.
Rezolve may store and process personal data of its merchants and their customers. If the security of this information is compromised or otherwise subjected to unauthorized access, Rezolve’s reputation may be harmed and Rezolve may be exposed to liability.
Rezolve may in the future store and otherwise processes data, including personal data, credit card information, and other confidential information, of its merchants and their customers. Rezolve does not expect to regularly monitor or review the content of data that its merchants upload and store and, therefore, does not control the substance of the content on its servers, which may include personal data. Rezolve may experience successful attempts by third parties to obtain unauthorized access to, or to exfiltrate, alter, or otherwise process without authorization, data of its merchants and their customers. This data could also be lost, used, altered, rendered unavailable, disclosed or otherwise processed or compromised through human error or malfeasance.
Furthermore, any sensitive information, including confidential, competitive, proprietary, or personal data, that Rezolve or its merchants may input into its future planned AI platforms, including brainpowa or third-party generative AI/ML platforms, could be leaked or disclosed to others, including if sensitive information is used to train third parties’ AI/ML models. Additionally, where an AI/ML model ingests personal data and makes connections using such data, those technologies may reveal other personal or sensitive information generated by the model. Sensitive data of Rezolve or its merchants could also be leaked, disclosed, or revealed as a result of or in connection with Rezolve’s employees’, personnel’s, or vendors’ use of generative AI technologies. Use of AI technologies may also increase risks related to cyberattacks or other security incidents or result in a failure to protect confidential information.
Rezolve’s proprietary AI platform is designed to keep both merchant and customer confidential and PII data secure and is regulated by strict GDPR policies. However, if the security of this information is compromised or otherwise subjected to unauthorized access, Rezolve’s reputation may be harmed and Rezolve may be exposed to liability. Any of the foregoing could adversely affect Rezolve’s business, financial condition and results of operations.
Rezolve is also subject to laws and regulations regarding privacy, data protection, and cybersecurity, including the European Union General Data Protection Regulation, the UK General Data Protection Regulation, and the ePrivacy Directive (collectively, “European Data Protection Laws”). European Data Protection Laws regulate the collection, use and other processing of personal data, and impose requirements in connection with such processing that often are more restrictive than in other jurisdictions. For example, European Data Protection Laws may, for example, require companies processing personal data on behalf of customers to cooperate with data protection authorities, implement security measures, enter into data processing agreements, execute standard contractual clauses to effectuate data transfers to third countries, and keep records of data processing activities. Numerous other jurisdictions have also proposed or enacted laws and regulations addressing these matters.
The political and regulatory framework for AI technology and machine learning continues to evolve and remains uncertain. It is possible that new laws and regulations will be adopted in the countries in which Rezolve operates, or existing laws and regulations may be interpreted in new ways, that would affect the operation of Rezolve’s network and the way in which Rezolve uses AI technology and machine learning, including with respect to laws related to privacy, data protection, cybersecurity, and processing customer information.
In Europe, the European Union Artificial Intelligence Act (the “EU AI Act”) entered into force in August 2024 and establishes a comprehensive, risk-based governance framework for AI in the EU market. The EU AI Act will apply to companies that develop, use, and/or provide AI in the EU and includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, general purpose AI, and foundation models, and provides for fines for breach of up to 7% of worldwide annual turnover or €35 million. The EU AI Act’s stringent measures may impact Rezolve’s business and require a proactive approach to regulatory compliance, risk management, and investment in infrastructure to align with the EU’s vision of a safe and ethical AI environment.
In the United States, legislation related to AI technologies has been introduced at the federal level and is advancing at the state level. California has enacted multiple laws regulating use of AI technologies, and other states have passed AI-focused legislation, such as
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Colorado’s Artificial Intelligence Act, which requires developers and deployers of “high-risk” AI systems to implement certain safeguards against algorithmic discrimination, and Utah’s Artificial Intelligence Policy Act, which establishes disclosure requirements and accountability measures for the use of generative AI in certain consumer interactions. Rezolve faces a risk that the use of machine learning in its models, or one or more variables in its model, could be deemed to have resulted in a “disparate impact” on protected groups or otherwise discriminatory outcomes, which could expose Rezolve to regulatory action or litigation.
The cost to comply with such laws or regulations could be significant and would increase Rezolve’s operating expenses, which could adversely affect its business, financial condition and results of operations. If Rezolve enables or offers solutions that draw controversy due to their perceived or actual impact on society, such as AI technology solutions that have unintended consequences, infringe copyright, or are controversial because of their impact on privacy, employment, or other social or economic issues, Rezolve may experience brand or reputational harm, competitive harm, financial harm, and/or legal liability.
European Data Protection Laws and other laws, regulations and other actual and asserted obligations applicable to privacy, data protection and cybersecurity evolve rapidly and are subject to varying interpretations, and Rezolve may not be or have been, and may face allegations that its activities are not or have not been, compliant with such applicable laws, regulations, or obligations. Certain jurisdictions have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data and Rezolve’s agreements with certain merchants require Rezolve to notify them in the event of a security incident. Rezolve posts on its website its privacy policy and terms of service, which describe its practices concerning the use, transmission and disclosure of merchant data and certain other data relating to their customers. In addition, the interpretation of laws, regulations, and obligations in certain jurisdictions, and their application to Rezolve, are unclear and in a state of flux. There is a risk that these laws, regulations, and obligations may be interpreted and applied in conflicting ways, and in manners inconsistent with Rezolve’s practices. Changes to laws, regulations, and other obligations applicable or alleged to be applicable to Rezolve, including certain industry standards and contractual obligations, such as the PCI DSS, may impose more stringent requirements for compliance and impose significant penalties for non-compliance or provide for significant damages in the event of breach or violation. Rezolve expects that there will continue to be new proposed laws, regulations, and obligations relating to privacy, data protection, and cybersecurity, including in the European Economic Area, the UK and other jurisdictions, and Rezolve cannot yet determine the impact such future laws, regulations, and obligations may have on its business. Any such new laws, regulations, or other actual or asserted obligations relating to privacy, data protection or cybersecurity, or changing interpretations of such laws, regulations, or obligations, may cause Rezolve to modify its policies and practices, which may involve expending substantial costs and require substantial time and effort from management and technical personnel, in efforts to comply with them. Because Rezolve’s services are accessible worldwide, certain foreign jurisdictions may claim that Rezolve is required to comply with their laws, regulations, and obligations, including in jurisdictions where Rezolve has no local entity, employees or infrastructure.
Rezolve’s failure or perceived failure to comply with federal, state, and foreign laws, regulations, or other actual and asserted obligations regarding privacy, data protection or cybersecurity could lead to investigations, inquiries, and other proceedings by governmental authorities, significant fines, penalties and other liabilities imposed by regulators, as well as claims, demands and litigation by Rezolve’s merchants or their customers or other private actors. These matters could force Rezolve to spend money in efforts to defend or settle proceedings, result in the imposition of monetary and other liabilities, including orders to modify or cease certain practices and other obligations, divert management’s time and attention, increase Rezolve’s costs of doing business, and adversely affect Rezolve’s reputation and market position and the demand for Rezolve’s solutions. For example, noncompliance with the UK General Data Protection Regulation can trigger fines of up to 17.5 million pounds sterling ("GBP") or 4% of global annual revenues, whichever is higher. If Rezolve’s efforts to comply with laws, regulations and obligations are not or are not perceived to be successful, Rezolve may be subject to penalties and fines that could adversely impact its business, financial condition, and operating results, and could face significant impairment of its ability to conduct business in the United Kingdom, the European Economic Area, and other jurisdictions. In addition, if Rezolve’s security measures fail to protect credit card information adequately, Rezolve could be liable to both its merchants and their customers for their losses, as well as Rezolve’s payments processing partners under its agreements with them. As a result, Rezolve could be subject to fines and higher transaction fees, Rezolve could lose its ability to accept certain types of payments, Rezolve could face regulatory and private action, and Rezolve’s merchants could end their relationships with it. There can be no assurance that the limitations of liability in Rezolve’s contracts would be enforceable or adequate or would otherwise protect Rezolve from any such liabilities or damages with respect to any particular claim. The successful assertion of one or more large claims against Rezolve could have an adverse effect on Rezolve’s business, financial condition and results of operations.
Risks related to Rezolve’s Brand
Rezolve’s brand is important to its success. If Rezolve fails to effectively maintain, promote and enhance Rezolve’s brand, Rezolve’s business and competitive advantage may be harmed.
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Rezolve believes that maintaining, promoting and enhancing the Rezolve brand is important to expanding its business. Maintaining and enhancing Rezolve’s brand will depend largely on Rezolve’s ability to provide high-quality, well-designed, useful, reliable and innovative solutions, which Rezolve may not do successfully.
Errors, defects, disruptions or other performance problems with Rezolve’s platform may harm Rezolve’s reputation and brand. Rezolve may introduce new solutions or terms of service that its merchants and their customers do not like, which may negatively affect Rezolve’s brand. Additionally, if Rezolve’s merchants or their customers have a negative experience using Rezolve’s solutions such an experience may affect Rezolve’s brand.
Rezolve believes that the importance of brand recognition will increase as competition in its market increases. In addition to Rezolve’s ability to provide reliable and useful solutions at competitive prices, successful promotion of its brand will depend on the effectiveness of its marketing efforts. While Rezolve markets its platform primarily through advertisements, targeted media campaigns and social networking and media sites, Rezolve’s platform is also marketed through a number of free-traffic sources, including customer referrals and word-of-mouth. Rezolve’s efforts to market its brand have involved significant expenses, which Rezolve intends to increase. Rezolve’s marketing spend may not yield increased revenues, and even if it does, any increased revenues may not offset the expenses Rezolve incurs in building and maintaining its brand.
Activities of merchants or the content of their shops could damage Rezolve’s brand, subject Rezolve to liability and harm its business and financial results.
Rezolve’s terms of service prohibit Rezolve’s merchants from using Rezolve’s platform to engage in illegal activities, and Rezolve’s terms of service permit Rezolve to take down a merchant’s shop if Rezolve becomes aware of such illegal use. Merchants may nonetheless engage in prohibited or illegal activities or upload store content in violation of applicable laws, which could subject Rezolve to liability. Furthermore, Rezolve’s brand may be negatively impacted by the actions of merchants that are deemed to be hostile, offensive, inappropriate or illegal. Rezolve does not proactively monitor or review the appropriateness of the content of Rezolve’s merchants’ shops and Rezolve does not have control over merchant activities. The safeguards Rezolve has in place, including deep-learning tools which analyze text, URLs, images, audio and video for unwanted material (including, but not limited to, profanity, mature or adult material, content depicting violence, hate speech, depictions of illegal drugs and data or internet locations recognized as spam) may not be sufficient for Rezolve to avoid liability or avoid harm to Rezolve’s brand, especially if such hostile, offensive, inappropriate or illegal use is high profile, which could adversely affect Rezolve’s business and financial results.
If Rezolve fails to maintain a consistently high level of customer service, Rezolve’s brand, business and financial results may be harmed.
Rezolve believes its focus on customer service and support is critical to onboarding new merchants and growing its business. As a result, Rezolve has invested heavily in the quality and training of its support team along with the tools used to provide this service. If Rezolve is unable to maintain a consistently high level of customer service, Rezolve may lose customers. In addition, Rezolve’s ability to attract new merchants is highly dependent on its reputation and on positive recommendations from its existing merchants. If Rezolve fails to achieve and maintain a consistently high level of customer service, or there is a market perception that Rezolve does not maintain high-quality customer service, such failure or perception could adversely affect Rezolve’s reputation and the number of positive merchant referrals that it receives.
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Risks Relating to Rezolve’s Intellectual Property
Rezolve may be unable to maintain or protect its intellectual property rights and proprietary information, or obtain registrations in such rights or information, or otherwise prevent third parties from making unauthorized use of the foregoing, including its technology.
Rezolve’s intellectual property rights are important to its business. Rezolve relies on the rights and protections afforded by a combination of confidentiality clauses with employees and third parties, trade secrets, copyrights, patents and trademarks to protect its intellectual property, all of which offer only limited protection. The steps Rezolve takes to protect its intellectual property require significant resources and may be inadequate. Rezolve will not be able to protect its intellectual property if Rezolve is unable to enforce its rights or if Rezolve does not detect or is otherwise not made aware of unauthorized use of its intellectual property. Rezolve may be required to use significant resources to monitor and protect these rights. Despite Rezolve’s precautions, it may be possible for unauthorized third parties to copy its platform and use information that Rezolve regards as proprietary to create services that compete with, or otherwise undermine, Rezolve’s. Certain license provisions protecting against unauthorized use, copying, transfer and disclosure of Rezolve’s intellectual property and/or proprietary information may be unenforceable under the laws of certain jurisdictions and foreign countries, or, if legally enforceable, may otherwise be difficult to enforce for other business and legal reasons.
Rezolve enters into confidentiality and invention assignment agreements with its employees and consultants and enters into confidentiality agreements with the parties with whom it has strategic relationships and business alliances. No assurance can be given that these agreements will be effective in controlling access to Rezolve’s proprietary information and trade secrets. The confidentiality agreements on which Rezolve relies to protect certain technologies may be breached, may not be adequate to protect Rezolve’s confidential information, trade secrets and proprietary technologies and may not provide an adequate remedy in the event of unauthorized use or disclosure of its confidential information, trade secrets or proprietary technology. Further, these agreements do not prevent Rezolve’s competitors or others from independently developing software that is substantially equivalent or superior to Rezolve’s software. In addition, others may independently discover Rezolve’s trade secrets and confidential information, and in such cases, Rezolve likely would not be able to assert any trade secret rights against such parties. Additionally, Rezolve may from time to time be subject to opposition or similar proceedings with respect to applications for registrations of its intellectual property, including its patents and trademarks. While Rezolve aims to acquire adequate protection of its brand through trademark registrations in key markets, occasionally, third parties may have already registered or otherwise acquired rights to identical or similar marks for similar, related, or complementary services. Rezolve relies on its brand and trademarks to identify its platform and to differentiate its platform and services from those of its competitors, and if Rezolve is unable to adequately protect its trademarks, third parties may use its brand names or trademarks similar to Rezolve’s in a manner that may cause confusion in the market, which could decrease the value of Rezolve’s brand and adversely affect Rezolve’s business and competitive advantages.
Policing unauthorized use of Rezolve’s intellectual property and misappropriation of Rezolve’s technology and trade secrets is difficult and Rezolve may not always be aware of such unauthorized use or misappropriation. Despite Rezolve’s efforts to protect its intellectual property rights, unauthorized third parties may attempt to use, copy or otherwise obtain and market or distribute its intellectual property rights or technology or otherwise develop services with the same or similar functionality as Rezolve’s platform. If Rezolve’s competitors infringe, misappropriate or otherwise misuse Rezolve’s intellectual property rights and Rezolve is not adequately protected, or if Rezolve’s competitors are able to develop a platform with the same or similar functionality as Rezolve’s without infringing Rezolve’s intellectual property, Rezolve’s competitive advantage and results of operations could be harmed. Litigation brought to protect and enforce Rezolve’s intellectual property rights could be costly, time consuming and distracting to management and could result in the impairment, dilution, or loss of portions of Rezolve’s intellectual property rights. As a result, Rezolve may be aware of infringement by its competitors but may choose not to bring litigation to enforce its intellectual property rights due to the strategic considerations, cost and distraction of, and the commitment of time required by, bringing such litigation. Furthermore, if Rezolve does decide to bring litigation, its efforts to enforce its intellectual property rights may be met with defenses, counterclaims or countersuits challenging or opposing Rezolve’s right to use and otherwise exploit particular intellectual property rights, services and technology or the enforceability of Rezolve’s intellectual property rights. Rezolve’s inability to protect its proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of Rezolve’s management’s attention and resources, could delay further sales or the implementation of Rezolve’s services and offerings, impair the functionality of Rezolve’s platform, prevent or delay introductions of new or enhanced services or offerings, result in Rezolve substituting inferior or more costly technologies into Rezolve’s platform or injure Rezolve’s reputation. Furthermore, many of Rezolve’s current and potential competitors have the ability to dedicate substantially greater resources to developing and protecting their technology or intellectual property rights than Rezolve does.
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Rezolve may be subject to claims by third parties of intellectual property infringement.
The software industry is characterized by the existence of a large number of patents and frequent claims and related litigation regarding patents and other intellectual property rights. Third parties may have in the past asserted, and may in the future assert, that Rezolve’s platform, solutions, technology, methods or practices infringe, misappropriate or otherwise violate their intellectual property or other proprietary rights. Such claims may be made by Rezolve’s competitors seeking to obtain a competitive advantage or by other parties. Additionally, in recent years, non-practicing entities have begun purchasing intellectual property assets for the purpose of making claims of infringement and attempting to extract settlements from companies like Rezolve. The risk of claims may increase as the number of solutions that Rezolve offers and competitors in Rezolve’s market increases and overlaps occur. In addition, to the extent that Rezolve gains greater visibility and market exposure, Rezolve faces a higher risk of being the subject of intellectual property infringement claims.
Any such claims, regardless of merit, that result in litigation could result in substantial expenses, divert the attention of management, cause significant delays in introducing new or enhanced services or technology, materially disrupt the conduct of Rezolve’s business and have a material and adverse effect on Rezolve’s brand, business, financial condition and results of operations. It is possible that patents have been issued to third parties that cover all or a portion of Rezolve’s business. As a consequence of any patent or other intellectual property claims, Rezolve could be required to pay substantial damages, develop non-infringing technology, enter into royalty-bearing licensing agreements, stop selling or marketing some or all of Rezolve’s solutions or re-brand its solutions. Rezolve may also be obligated to indemnify its merchants or partners or pay substantial settlement costs, including royalty payments, in connection with any such claim or litigation and to obtain licenses, modify applications or refund fees, which could be costly. If it appears necessary, Rezolve may seek to secure license rights to intellectual property that Rezolve is alleged to infringe at a significant cost, potentially even if Rezolve believes such claims to be without merit. If required licenses cannot be obtained, or if existing licenses are not renewed, litigation could result. Litigation is inherently uncertain and can cause Rezolve to expend significant resources, time and attention to it, even if Rezolve is ultimately successful. Any adverse decision could result in a loss of Rezolve’s proprietary rights, subject Rezolve to significant liabilities, require Rezolve to seek licenses for alternative technologies from third parties, prevent Rezolve from offering all or a portion of its solutions and otherwise negatively affect its business and operating results.
Rezolve’s use of “open-source” software could negatively affect its ability to sell its solutions and subject Rezolve to possible litigation.
Rezolve’s solutions incorporate and are significantly dependent on the use and development of “open-source” software and Rezolve intends to continue the use and development of open-source software in the future. Such open-source software is generally licensed by its authors or other third parties under open-source licenses and is typically freely accessible, usable and modifiable. Pursuant to such open-source licenses, Rezolve may be subject to certain conditions, including requirements that Rezolve offers its proprietary software that incorporates the open-source software for no cost, that Rezolve makes available source code for modifications or derivative works it creates based upon, incorporating or using the open-source software and that Rezolve licenses such modifications or derivative works under the terms of the particular open-source license. If an author or other third party that uses or distributes such open-source software were to allege that Rezolve had not complied with the conditions of one or more of these licenses, Rezolve could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of Rezolve’s solutions that contained or are dependent upon the open-source software and which are required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of Rezolve’s solutions. Litigation related to the use of open-source software could be costly for Rezolve to defend, have a negative effect on its operating results and financial condition or require it to devote additional research and development resources to change its platform. The terms of many open-source licenses to which Rezolve is subject have not been interpreted by U.S. or foreign courts. As there is little or no legal precedent governing the interpretation of many of the terms of certain of these licenses, the potential impact of these terms on Rezolve’s business is uncertain and may result in unanticipated obligations regarding Rezolve’s solutions and technologies. It is Rezolve’s view that it does not distribute its software, since no installation of software is necessary and its platform is accessible solely through the “cloud.” Nevertheless, this position could be challenged. Any requirement to disclose Rezolve’s proprietary source code, termination of open-source license rights or payments of damages for breach of contract could be harmful to Rezolve’s business, results of operations or financial condition, and could help Rezolve’s competitors develop products, offerings and services that are similar to or better than Rezolve’s.
In addition to risks related to license requirements, usage of open-source software can lead to greater risks than the use of third-party commercial software, as open source licensors generally do not provide warranties, controls on the origin or development of the software, or remedies against the licensors. Many of the risks associated with usage of open source software cannot be eliminated and could adversely affect Rezolve’s business.
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Although Rezolve believes that it has complied with its obligations under the various applicable licenses for open-source software, it is possible that Rezolve may not be aware of all instances where open-source software has been incorporated into its proprietary software or used in connection with its solutions or its corresponding obligations under open-source licenses. Rezolve has open-source software usage policies or monitoring procedures in place but cannot assure that such policies and procedures will be effective in avoiding improper use of open-source software. To the extent that Rezolve has failed to comply with its obligations under particular licenses for open-source software, Rezolve may lose the right to continue to use and exploit such open-source software in connection with its operations and solutions, which could disrupt and adversely affect its business.
Risks Related to Rezolve's AI Technology and Platform
If Rezolve fails to properly develop, invest in, and manage its AI technologies, including its proprietary brainpowa LLM and Brain Commerce suite, Rezolve's business, financial condition and results of operations could be materially adversely affected.
Rezolve has incorporated, and expects to continue to incorporate, machine learning and generative artificial intelligence technologies into its product offerings, including its Brain Commerce, Brain Checkout, and Brain Assistant solutions. Rezolve’s flagship product, Brain Commerce, is powered by brainpowa, Rezolve’s proprietary Large Language Model engineered specifically for commerce applications. Rezolve expects that increased investment will be required in the future to continuously improve its AI technologies. As with many technological innovations, there are significant risks involved in developing, maintaining, and deploying AI technologies and there can be no assurance that Rezolve’s usage of, or investments in, such AI technologies will always be beneficial to its products, services, or business, including its efficiency or profitability.
Rezolve is in varying stages of development in relation to its products involving AI technologies. The continuous development, maintenance, and operation of Rezolve’s AI technologies, including brainpowa, is complex, and may involve unforeseen difficulties including material performance problems, undetected defects, or errors. Rezolve may not be successful in its ongoing development and maintenance of these technologies in the face of novel and evolving technical, reputational, and market factors. Any of the foregoing could adversely affect Rezolve’s business, financial condition and results of operations.
Rezolve’s AI technologies, including brainpowa, may produce inaccurate, misleading, biased, or otherwise flawed outputs, which could harm Rezolve’s reputation, business, and customer relationships.
Rezolve’s Brain Commerce and brainpowa LLM provide product recommendations, product discovery, and customer support to merchants and their customers. There is a risk that AI technologies could produce inaccurate or misleading data, “hallucinated” outputs that appear correct but are factually inaccurate, biased or discriminatory results, or other unexpected results or behaviors, all of which could harm Rezolve’s reputation, business, or customer relationships. While Rezolve takes measures designed to ensure the accuracy of AI-generated insights, including the use of patented validation processes intended to eliminate hallucinations, those measures may not always be successful, and in some cases, Rezolve may need to rely on users to report such inaccuracies.
AI technologies, including generative AI, may use algorithms, datasets, or training methodologies that may be flawed or contain deficiencies that may be difficult to detect during testing. If the content, analyses, or recommendations that AI applications assist in producing are, or are alleged to be, deficient, inaccurate, unreliable, misleading, biased, discriminatory, or otherwise flawed, any of which may not be easily detectable, Rezolve’s business and reputation may be adversely affected. The use of AI technologies presents emerging ethical and social issues, including concerns regarding transparency, explainability, accountability, and intellectual property, that may result in brand or reputational harm, competitive harm, and/or legal liability. Any of the foregoing could adversely affect Rezolve’s business, financial condition and results of operations.
Rezolve’s AI technology relies on the quality and availability of training data, and if such data is incomplete, inaccurate, biased, or becomes unavailable, Rezolve’s AI technologies may not perform as expected.
Rezolve’s brainpowa LLM and other AI technologies are developed, tuned, and trained using various datasets, including proprietary data, merchant data, and third-party data sources. If the data used to train or tune Rezolve’s AI models is incomplete, inadequate, drifts over time, or contains biases, the performance of Rezolve’s products and business, as well as its reputation, could suffer. In addition, if Rezolve does not have or cannot retain sufficient rights to use the data on which its AI models rely, or if access to third-party data sources becomes limited or unavailable, the efficacy of Rezolve’s AI technology and its ability to continue to improve such technology would be adversely affected. Any of the foregoing could result in sub-optimal product recommendations, incorrect outputs, or other errors that could harm Rezolve’s reputation and customer relationships, and could adversely affect Rezolve’s business, financial condition and results of operations.
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The markets for Rezolve’s AI-powered commerce solutions are rapidly evolving, highly competitive, and subject to shifting customer needs and frequent introductions of new LLM technologies. As the markets in which Rezolve operates continue to mature and new AI technologies and competitors enter such markets, Rezolve expects competition to intensify.
Rezolve competes across multiple dimensions of its Brain Commerce suite, including AI-powered site search and product discovery, conversational commerce, instant checkout solutions, and AI-driven customer support. Brain Commerce, powered by brainpowa, competes with a fragmented landscape of established technology providers, emerging AI startups, and the internal development efforts of large retailers.
Rezolve’s competitors or other third parties may incorporate AI technologies into their products more quickly or more successfully than Rezolve, which could impair Rezolve’s ability to compete effectively. Microsoft and Google, Rezolve’s strategic partners, also offer competing AI and commerce solutions and could choose to prioritize their own products or work with competing AI commerce providers. While Rezolve has partnership agreements with these companies, such agreements are non-exclusive and do not prohibit them from working with competitors or offering competing services. In addition, Shopify, BigCommerce, and other leading e-commerce platforms may elect to develop or integrate competing AI-powered search, discovery, and checkout solutions, potentially bundling AI capabilities into their existing platforms at no additional cost to merchants. Leading LLM providers such as OpenAI, Anthropic, and others are developing increasingly sophisticated AI capabilities that could be directly integrated into commerce applications by retailers or competing platforms, potentially at substantially lower costs than Rezolve’s solutions or even at no incremental cost to end users.
With respect to Rezolve’s products and services that incorporate AI technology, the market for such products and services is rapidly evolving and important assumptions about the characteristics of targeted markets, pricing, sales cycles, cost, performance, and perceived value associated with Rezolve’s products or services may be inaccurate. Rezolve cannot be sure that the market will continue to grow or that it will grow in ways Rezolve anticipates. In addition, market acceptance of products and services that incorporate AI technology is uncertain. As AI-powered agents and automation become more sophisticated, individual users of Rezolve’s platform may become substantially more productive, enabling customers to achieve similar outcomes with fewer user licenses accessing its platform. This AI-driven efficiency could result in merchants reducing their usage or seat counts at renewal, negatively impacting Rezolve's revenue even as they derive equal or greater value from its products and services. Any of the foregoing competitive pressures could result in price reductions, fewer orders, reduced revenue and gross margins, increased net losses and loss of market share, which could adversely affect Rezolve’s business, financial condition and results of operations.
Risks Relating to Legal and Regulatory Compliance
Claims for indemnification by Rezolve’s directors and officers may reduce Rezolve’s available funds to satisfy successful third-party claims against Rezolve and may reduce the amount of money available to Rezolve.
Rezolve’s Articles provide that Rezolve will indemnify its directors and officers, in each case, to the fullest extent permitted by English law. More particularly, as permitted by English law, Rezolve’s Articles and its indemnification agreements entered into with its directors and officers provide that, subject to the exceptions and limitations listed below, every person who is, or has been, a director or officer of Rezolve or a direct or indirect subsidiary of Rezolve shall be indemnified by Rezolve to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him or her in connection with any claim, action, suit or proceeding which he or she becomes involved as a party or otherwise by virtue of his or her being or having been such director or officer and against amounts paid or incurred by him or her in the settlement thereof. The words “claim”, “action”, “suit” or “proceeding” include all claims, actions, suits or proceedings (civil, criminal or otherwise including appeals) actual or threatened, and the words “liability” and “expenses” include without limitation attorneys’ fees, costs, judgments, amounts paid in settlement and other liabilities. However, no indemnification shall be provided to any director or officer of Rezolve or a direct or indirect subsidiary of Rezolve (i) by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties of a director or officer, (ii) with respect to any matter as to which any director or officer has been finally adjudicated to have acted in bad faith and against the interest of Rezolve, or (iii) in the event of a settlement, unless approved by a court or the board of directors. Rezolve may, to the fullest extent permitted by law, purchase and maintain insurance or furnish similar protection or make other arrangements, against any liability asserted against a director or officer or incurred by or on behalf of him or her in his or her capacity as a director or officer of Rezolve or a direct or indirect subsidiary of Rezolve. The right of indemnification will be severable, will not affect any other rights to which any director or officer of Rezolve or a direct or indirect subsidiary of Rezolve may now or in the future be entitled, will continue as to a person who has ceased to be such director or officer and will inure to the benefit of the heirs, executors and administrators of such a person. The right to indemnification is not exclusive and will not affect any rights to indemnification to which corporate personnel, including directors and officers, may be entitled by contract or otherwise under law. Expenses in connection with the preparation and representation of a defense of any claim, action, suit or proceeding will be advanced by Rezolve prior to final disposition thereof upon receipt of any undertaking by or on behalf of the officer or director, to repay such amount if it is ultimately determined that he or she is not entitled to indemnification.
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Rezolve is subject to anti-corruption and anti-bribery laws and similar laws, and non-compliance with such laws can subject Rezolve to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect its business, prospects, financial condition, results of operations and reputation.
Rezolve is subject to the U.S. Foreign Corrupt Practices Act, the UK Bribery Act 2010, and possibly other anti-bribery and anti-corruption laws and anti-money laundering laws in countries outside of the United States where Rezolve conducts its activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees, agents, representatives, business partners, and third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector.
Rezolve may leverage third parties to sell its offerings and conduct its business abroad. Rezolve, its employees, agents, representatives, business partners and third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities, and Rezolve may be held liable for the corrupt or other illegal activities of these employees, agents, representatives, business partners or third-party intermediaries even if Rezolve does not explicitly authorize such activities. Rezolve cannot assure you that all of its employees and agents will not take actions in violation of applicable law, for which Rezolve may be ultimately held responsible. As Rezolve increases its international sales and business, Rezolve’s risks under these laws may increase.
These laws also require that Rezolve keeps accurate books and records and maintains internal controls and compliance procedures designed to prevent any such actions. While Rezolve has policies and procedures to address compliance with such laws, Rezolve cannot assure you that none of its employees, agents, representatives, business partners or third-party intermediaries will take actions in violation of Rezolve’s policies and applicable law, for which Rezolve may be ultimately held responsible.
Any allegations or violation of anti-corruption and anti-bribery laws could subject Rezolve to whistleblower complaints, adverse media coverage, investigations, severe civil and criminal sanctions, settlements, prosecution, enforcement actions, fines, damages, loss of export privileges, suspension or debarment from government contracts and other collateral consequences and remedial measures, all of which could adversely affect Rezolve’s business, prospects, financial condition, results of operations and reputation. Responding to any investigation or action will likely result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees.
Enhanced trade tariffs, import restrictions, export restrictions, United States regulations or other trade barriers may materially harm Rezolve’s business.
Rezolve is continuing to expand its international operations and sales as part of its strategy which may present various risks to its business. Countries have imposed tariffs on imports from various jurisdictions, including on imports from jurisdictions where Rezolve sources products, which could increase the prices that Rezolve pays for certain products. Furthermore, governments have, and may continue to, impose tariffs and other trade restrictions that could increase the costs of Rezolve’s offerings in certain jurisdictions. The increased cost of Rezolve’s offerings may result in Rezolve losing Channels or merchants, which, in turn, could reduce Rezolve’s sales and harm Rezolve’s business and financial condition. Rezolve’s business also may be adversely impacted by retaliatory trade measures taken by the U.S. government or non-U.S. governments, which could materially harm Rezolve’s business, financial condition and operations. Rezolve’s business also could be adversely impacted by new economic sanctions, trade sanctions, and export controls. The imposition of economic sanctions, trade sanctions, or export controls could limit Rezolve’s ability to make sales in certain jurisdictions or to source products from certain jurisdictions, which could harm Rezolve’s business and its financial condition. Further, the continued threats of tariffs, trade restrictions (including sanctions and export controls) and trade barriers may have a disruptive impact on the global economy. Any such changes could directly and adversely impact Rezolve’s business and financial condition.
From time to time, Rezolve may be involved in legal proceedings and commercial or contractual disputes, which could have an adverse impact on Rezolve’s profitability and consolidated financial position.
Rezolve may be involved in legal proceedings and commercial or contractual disputes that, from time to time, are significant. Such claims may include, without limitation, commercial or contractual disputes, including disputes with merchants, intellectual property matters, personal injury claims, tax matters, and employment matters. For example, Rezolve has been notified that a civil complaint was filed against the Company and Daniel Wagner in the Supreme Court of the State of New York, New York County, by JBAAM Special Opportunities Fund II LLC and YA II PN, Ltd., in connection with the parties’ securities purchase agreement dated February 21, 2025. Efforts to defend against such claims may entail significant costs and harm Rezolve’s reputation, all of which could adversely affect Rezolve’s business, financial condition and results of operations.
Certain provisions of the Articles and English law could deter takeover attempts.
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Certain provisions in the Articles and the application of the UK Takeover Code to Rezolve could delay, prevent or make more difficult a merger, tender offer, proxy contest or change of control. Rezolve’s shareholders might view any transaction of this type as being in their best interest since the transaction could result in a higher stock price than the then-current market price for Ordinary Shares.
Risks Related to Ownership of Ordinary Shares and Rezolve Operating as a Public Company
The trading price of Ordinary Shares could be volatile, and the value of our Ordinary Shares may decline.
We cannot predict the prices at which our Ordinary Shares will trade. The price of our Ordinary Shares is likely to be volatile and could be subject to fluctuations in response to various factors, some of which are beyond our control. These fluctuations could cause you to lose all or part of your investment in our Ordinary Shares as you might be unable to sell your shares at or above the price you paid. Factors that could cause fluctuations in the trading price of our Ordinary Shares include the following:
In addition, if the market for technology stocks or the stock market in general experiences a loss of investor confidence, the trading price of Ordinary Shares could decline for reasons unrelated to our business, financial condition or results of operations. The trading price of Ordinary Shares might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. In the past, following periods of volatility in the trading price of a company’s securities, securities class action litigation has often been brought against that company. If our share price is volatile, we may become the target of securities litigation.
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Securities litigation could result in substantial costs and divert our management’s attention and resources from our business. This could have an adverse effect on our business, financial condition and results of operations.
A market for our securities may not be sustained, which would adversely affect the liquidity and price of our Ordinary Shares.
An active trading market for our securities may not be sustained. In addition, the price of our securities can vary due to general economic conditions and forecasts, Rezolve’s general business condition and the release of Rezolve’s financial reports. Additionally, if our securities become delisted from Nasdaq and are quoted on the OTC Bulletin Board (an inter-dealer automated quotation system for equity securities that is not a national securities exchange) or Rezolve’s securities are not listed on Nasdaq and are quoted on the OTC Bulletin Board, the liquidity and price of our securities may be more limited than if we were quoted or listed on the New York Stock Exchange, Nasdaq or another national securities exchange. The lack of an active market may impair your ability to sell your Rezolve securities at the time you wish to sell them or at a price that you consider reasonable. An inactive market may also impair our ability to raise capital by selling securities and may impair our ability to acquire other businesses or technologies using our shares as consideration, which, in turn, could materially adversely affect our business.
There can be no assurance that Rezolve will be able to comply with the continued listing standards of Nasdaq.
If Nasdaq delists Rezolve’s securities from trading on its exchange for failure to continue to comply with its listing standards, Rezolve and its stockholders could face significant material adverse consequences including:
If securities or industry analysts publish reports that are interpreted negatively by the investment community or publish negative research reports about our business, our share price and trading volume could decline.
The trading market for our Ordinary Shares depends, to some extent, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts or the information contained in their reports. If one or more analysts publish research reports that are interpreted negatively by the investment community, or have a negative tone regarding our business, financial condition or results of operations, industry or end-markets, our share price could decline. In addition, if a majority of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
We are an “emerging growth company,” and our election to comply with the reduced disclosure requirements as a public company may make our Ordinary Shares less attractive to investors.
We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and we may remain an emerging growth company until the earlier of (i) the last day of the fiscal year (A) following the fifth anniversary of the closing of the initial public offering ("IPO") of Armada Acquisition Corp. I, (B) in which we have total annual gross revenue of at least $1.235 billion, or (C) in which we are deemed to be a large accelerated filer, which means the market value of our outstanding Ordinary Shares that are held by non-affiliates exceeds $700 million as of the prior June 30, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three year period.
For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, being required to provide fewer years of audited financial statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may choose to take advantage of some, but not all, of these reduced reporting burdens. Accordingly, the information we provide to our shareholders may be different than the information you receive from other public companies in which you hold stock.
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Rezolve is a “foreign private issuer” and, as a result, we are permitted to rely on exemptions from certain stock exchange corporate governance standards applicable to U.S. issuers. This may afford less protection to holders of Ordinary Shares.
As a foreign private issuer whose ordinary shares are listed on the Nasdaq, we are permitted to follow certain home country corporate governance practices in lieu of requirements under U.S. securities laws that apply to U.S. domestic public companies, provided that we disclose the requirements we are not following and describe the home country practices we are following. Certain of the requirements that we are permitted to not comply with as a foreign private issuer include:
We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a semi-yearly basis as press releases, distributed pursuant to the Nasdaq rules. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.
In addition, as a foreign private issuer we will be exempt from the provisions of Regulation Fair Disclosure (“Regulation FD”), which prohibits issuers from making selective disclosure of material nonpublic information. Even though we intend to comply voluntarily with Regulation FD, these exemptions and leniencies will reduce the frequency and scope of information and protections to which our shareholders are entitled as investors.
Furthermore, Rezolve shares are not listed, and we do not currently intend to list Rezolve shares on any market in the United Kingdom, Rezolve’s country of incorporation. As a result, we are not subject to the reporting and other requirements of companies listed in the United Kingdom.
We may lose our foreign private issuer status in the future, which could result in significant additional cost and expense.
In order to maintain our current status as a foreign private issuer, either (a) more than 50% of our outstanding voting securities must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive officers or directors may not be U.S. citizens or residents, (ii) more than 50% of our assets cannot be located in the United States and (iii) our business must be administered principally outside the United States. In the future, if we lose our foreign private issuer status as of the last date of our second fiscal quarter, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms beginning on the following January 1, which are more detailed and extensive than the forms available to a foreign private issuer. We would also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. For example, pursuant to the Holding Foreign Insiders Accountable Act enacted on December 18, 2025, our directors and officers are subject to the insider reporting obligations under Section 16(a) of the Exchange Act, including the requirement to file Forms 3, 4 and 5, effective March 18, 2026. Our principal shareholders who are not our officers or directors, however, will remain exempt from Section 16(a) reporting requirements. In addition, we may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The additional requirements that we would become subject to if we were to lose our foreign private issuer status could lead us to incur significant additional legal, accounting and other expenses.
Our issuance of additional Ordinary Shares in connection with financings, acquisitions, investments, our stock incentive plans, or otherwise will dilute all other shareholders.
We expect to issue additional capital stock in the future that will result in dilution to all other shareholders. We expect to grant equity awards to employees, directors, consultants and contractors under our stock incentive plans. We may issue shares in the future and pursuant to the SEPA (as defined below) and other convertible securities. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in complementary companies, offerings or technologies
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and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause shareholders to experience significant dilution of their ownership interests and the per share value of our Ordinary Shares to decline.
We incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices.
As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company, which we expect to further increase after we are no longer an “emerging growth company” and/or a foreign private issuer. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Nasdaq listing requirements, and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel are not experienced in managing a public company and are required to devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.
U.S. holders that directly or indirectly own 10% or more of our equity interests may be subject to adverse U.S. federal income tax consequences under rules applicable to U.S. shareholders of controlled foreign corporations.
A non-U.S. corporation generally will be classified as a controlled foreign corporation for U.S. federal income tax purposes (a “CFC”), if “10% U.S. equity holders” (as defined below) own, directly, indirectly or constructively, more than 50% of either (i) the total combined voting power of all classes of stock of such corporation entitled to vote or (ii) the total value of the stock of such corporation. We do not currently expect that Rezolve will be classified as a CFC, but CFC status is determined after taking into account complex constructive ownership rules, the application of which may depend on circumstances we are not aware of, and, accordingly, there can be no assurance in this regard. However, certain of Rezolve’s non-U.S. subsidiaries may be classified as CFCs (including, for taxable years beginning before January 1, 2026, as a result of the application of certain constructive ownership rules which treat Rezolve’s U.S. subsidiaries as owning the equity of those non-U.S. subsidiaries), and it is possible that we may be classified as a CFC either now or in the future. The U.S. federal income tax consequences for U.S. holders who at all times are not 10% U.S. equity holders of any applicable CFC would not be affected by the CFC rules. However, a U.S. holder that owns (or is treated as owning, directly, indirectly or constructively, including by applying certain attribution rules) 10% or more of the combined voting power of all classes of our stock entitled to vote or the total value of our equity interests (including equity interests attributable to a deemed exercise of options and convertible debt instruments), or a “10% U.S. equity holder”, of us or an applicable subsidiary, if we or an applicable subsidiary were classified as a CFC, would generally be subject to current U.S. federal income taxation on a portion of our or our applicable subsidiaries’ earnings and profits (as determined for U.S. federal income tax purposes), regardless of whether such 10% U.S. equity holder receives any actual distributions. In addition, if we or an applicable subsidiary were classified as a CFC, a portion of any gains realized on the sale of our common shares by a 10% U.S. equity holder may be treated as ordinary income. A 10% U.S. equity holder will also be subject to additional U.S. federal income tax information reporting requirements with respect to our subsidiaries that are classified as CFCs and with respect to us (if we or any of our subsidiaries were classified as a CFC) and substantial penalties may be imposed for noncompliance. We cannot provide any assurances that Rezolve will assist U.S. holders in determining whether Rezolve or any of its subsidiaries are treated as a controlled foreign corporation for U.S. federal income tax purposes or whether any U.S. holder is treated as a 10% U.S. equity holder with respect to any of such controlled foreign corporations or furnish to any holder information that may be necessary to comply with reporting and tax paying obligations if Rezolve, or any of its subsidiaries, is treated as a controlled foreign corporation for U.S. federal income tax purposes. Each U.S. holder should consult its own tax advisor regarding the CFC rules and whether such U.S. holder may be a 10% U.S. equity holder for purposes of these rules.
Our U.S. shareholders may suffer adverse tax consequences if we are classified as a “passive foreign investment company.”
A non-U.S. corporation generally will be treated as a “passive foreign investment company” (“PFIC”), for U.S. federal income tax purposes, in any taxable year if either (1) at least 75% of its gross income for such year is passive income or (2) at least 50% of the value of its assets (generally based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or are held for the production of passive income. Based on the current and anticipated composition of the income, assets and operations of Rezolve and its subsidiaries and certain factual assumptions, Rezolve does not currently expect to be treated as a PFIC for the taxable year ending December 31, 2025. However, there can be no assurances in this regard, because PFIC status is determined annually and requires a factual determination that depends on, among other things, the composition of a company’s income, assets and activities in each taxable year, and can only be made annually after the close of each taxable year, and is thus subject to significant uncertainty. Furthermore, because the value of our gross assets is likely to be determined in part by reference to our market capitalization, a decline in the value of our Ordinary Shares may result in Rezolve becoming a PFIC. Accordingly, there can be no assurance that we will not be considered a PFIC for any taxable year. If we are a PFIC for any taxable year during which a U.S. holder holds our Ordinary Shares, certain adverse U.S. federal income tax consequences could apply to such U.S. holder (as defined in
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“Material Tax Considerations - Material U.S. Federal Income Tax Considerations”). Prospective U.S. holders should consult their tax advisors regarding the potential application of the PFIC rules to them.
The Internal Revenue Service may not agree that Rezolve should be treated as a non-U.S. corporation for U.S. federal income tax purposes.
Although Rezolve is incorporated in England and Wales, the Internal Revenue Service (“IRS”) may assert that it should be treated as a U.S. corporation (and therefore a U.S. tax resident) for U.S. federal income tax purposes pursuant to Section 7874 of the Code. For U.S. federal income tax purposes, a corporation is generally considered a U.S. “domestic” corporation (or U.S. tax resident) if it is organized in the United States, and a corporation is generally considered a “foreign” corporation (or non-U.S. tax resident) if it is not a U.S. corporation. Because Rezolve is an entity incorporated in England and Wales, it would generally be classified as a foreign corporation (or non-U.S. tax resident) under these rules. Section 7874 of the Code provides an exception under which a foreign incorporated and foreign tax resident entity may, in certain circumstances, be treated as a U.S. corporation for U.S. federal income tax purposes.
Rezolve does not currently expect to be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code. However, the application of Section 7874 of the Code is complex and is subject to detailed regulations (the application of which is uncertain in various respects and would be impacted by changes in such U.S. Treasury regulations with possible retroactive effect) and is subject to certain factual uncertainties. Accordingly, there can be no assurance that Rezolve will not be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code.
If Rezolve were treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code, Rezolve and certain Rezolve shareholders would be subject to significant adverse tax consequences, including a higher effective corporate income tax rate on Rezolve and future withholding taxes on certain Rezolve shareholders, depending on the application of any income tax treaty that might apply to reduce such withholding taxes.
Item 4. Information on the Company
The purpose of this standard is to provide information about the company’s business operations, the products it makes or the services it provides, and the factors that affect the business. The standard also is intended to provide information regarding the adequacy and suitability of the company’s properties, plants and equipment, as well as its plans for future increases or decreases in such capacity.
Rezolve AI plc (the “Company”, “Rezolve”, “Rezolve Ai” “we” or “our”) was incorporated in England and Wales as a private limited company on January 5, 2023 under the name Rezolve Group Limited with company number 14573691 and changed its name on June 5, 2023 to Rezolve AI Limited. On March 28, 2025, Rezolve AI Limited altered its legal status under English law from a private limited company and re-registered as a public limited company. In connection with the re-registration as a public limited company in England and Wales, the Company changed its name from Rezolve AI Limited to Rezolve AI plc. Rezolve Limited was incorporated in England and Wales as a private limited company on September 11, 2015 under the name Soul Seeker Limited with company number 09773823. As further discussed below, on July 4, 2024, Rezolve Limited effected the Pre-Closing Demerger (as defined below), resulting in certain of its business and assets being transferred to the Company in exchange for the issue by the Company of shares of the same classes as in Rezolve Limited for distribution among the original shareholders of Rezolve Limited in proportion to their holdings of shares of each class in Rezolve Limited as at immediately prior to the Pre-Closing Demerger.
The mailing address of Rezolve AI plc’s registered office is 21 Sackville Street, London, W1S 3DN, United Kingdom, +44 204 625 9700 and its principal executive office is 21 Sackville Street, London, W1S 3DN, United Kingdom.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. As a foreign private issuer, Rezolve is exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. Our corporate website is https://www.rezolve.com.
The Business Combination
On August 15, 2024 (the “Closing Date”) Armada Acquisition Corp. I, a Delaware corporation (“Armada”), the Company and Rezolve Merger Sub, Inc., a Delaware corporation (“Rezolve Merger Sub”), consummated the business combination (the "Business
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Combination") pursuant to the terms of the Business Combination Agreement, dated as of December 17, 2021 (as amended or supplemented from time to time, the “Business Combination Agreement”), pursuant to which, among other things, (i) on July 4, 2024, Rezolve Limited, a private limited company organized under the laws of England and Wales ("Rezolve Limited") effected a pre-closing demerger (the “Pre-Closing Demerger”) pursuant to UK legislation under which (x) part of Rezolve Limited’s business and assets (being all of its business and assets except for certain shares in Rezolve Information Technology (Shanghai) Co Ltd and its wholly owned subsidiary Nine Stone (Shanghai) Ltd and Rezolve Information Technology (Shanghai) Co Ltd Beijing Branch) were transferred to the Company in exchange for the issue by the Company of shares of the same classes as in Rezolve Limited for distribution among the original shareholders of Rezolve Limited in proportion to their holdings of shares of each class in Rezolve Limited as at immediately prior to the Pre-Closing Demerger, (y) the Company assumed the secured convertible notes issued by Rezolve Limited and (z) Rezolve Limited was wound up, (ii) on the Closing Date, the Company effected a company reorganization whereby the Company’s series A shares were reclassified as Ordinary Shares and (iii) on the Closing Date, Armada merged with and into Rezolve Merger Sub, with Armada surviving as a wholly owned subsidiary of Rezolve, with shareholders of Armada receiving Ordinary Shares in exchange for their existing Armada common stock and Armada warrant holders having their warrants automatically exchanged for warrants of Ordinary Shares Rezolve. Upon the closing of the Business Combination, the Company became the direct parent of Armada.
Who Are We?
Rezolve (NASDAQ: RZLV) is an inescapable infrastructure layer for the agentic commerce era — the only enterprise platform purpose-built to unify AI-driven discovery, conversation, checkout, fulfillment, payments and service into a single execution layer. We operate at a massive global scale: 113.9 billion+ API calls processed in 2025, reaching 66.1 million consumer devices via our SDK, and detecting 306.7 million physical-to-digital intersections. Our client roster includes some of the world's most recognized retail and financial services brands — Adidas, H&M, ASOS, Sephora, Tommy Hilfiger, PUMA, Urban Outfitters, Tod’s, Standard Chartered, and Commerzbank, among others.
The Rezolve platform combines a decade of e-commerce innovation with the most advanced agentic AI capabilities available in production today. Our mission is to make digital commerce feel effortless, intelligent, and human. We believe buying and selling online should feel less like a transaction — and more like a trusted conversation.
What Do We Do?
Rezolve turns intent into transaction. We are the foundational infrastructure for the agentic economy — an AI-led platform that combines enriched data ingestion, adaptive merchandising, conversational and next-generation payment experiences into a single, governed, enterprise-ready environment. By sitting directly inside the operational core of merchant systems, Rezolve enables AI agents to execute transactions, not simply respond to queries.
Rezolve's flagship product, Brain Commerce, powered by our proprietary large language model ("LLM") brainpowa, transforms the online shopping experience. Brain Commerce improves conversion rates, increases average order value ("AOV"), and reduces cart abandonment.
Traditional LLMs are based upon probabilistic algorithms, which means there is a change of hallucination. In order to take advantage of LLMs for the B2B industry, Rezolve Ai needed to solve for the hallucination problem. Rezolve Ai holds a robust and growing portfolio of patents including specialized IP in AI Visualization that solve for the hallucination problem at its core. This enables a Zero-Hallucination guarantee for product catalogue retrieval, a mission-critical requirement for B2B and enterprise-grade AI that separates Rezolve from generic, probabilistic language models
Where traditional e-commerce relies on static search, rigid funnels, and fragmented checkout, Rezolve acts on intent — not just clicks — enabling experiences that feel natural, trusted, and frictionless at scale. Our platform is structured around two core product suites:
Brain Commerce
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Conversational AI: Conversational AI acts as a digital sales associate — understanding intent, guiding decisions, and converting uncertainty into confident purchases. It increases conversion, AOV, and satisfaction while scaling expert assistance without headcount growth.
Discovery AI: Discovery AI interprets intent across text, image, and behavior, connecting shoppers to the right products faster. This drives higher search revenue, fewer dead ends, and more efficient merchandising.
Data Intelligence & Enablement: Data Intelligence & Enablement cleans, enriches, and activates product and behavioral data so discovery, personalization, and AI execution perform at their best. It turns data into a growth lever rather than a bottleneck.
Brain Checkout
Purchase Suite: Purchase Suite removes friction from cart to payment, enabling conversational, instant, and AI-initiated transactions. It increases completion rates while introducing margin-positive payment options.
Click & Collect: Click & Collect uses precise arrival intelligence and predictive timing to streamline pickups, reduce wait times, and increase throughput — especially during peak periods.
Together, these systems enable what we call agentic commerce: intent-driven, AI-mediated, autonomous execution across the full journey from discovery through to fulfilment — for both human shoppers and AI agents acting on their behalf.
Rezolve Strategic Partnerships
Rezolve collaborates with a carefully selected ecosystem of world-class technology leaders to deliver best-in-class agentic commerce solutions to retailers and brands globally. As a strategic partner of Microsoft, Rezolve leverages Azure AI Services and a ready-to-deploy, Azure-native architecture — available directly through the Microsoft Azure Marketplace — to bring enterprise-grade scalability, security, and 99.9%+ uptime to every deployment.
Rezolve is also a chosen strategic partner of Google, integrating Google Vertex AI Search with Commerce to power enhanced search and discovery, while drawing on Google Cloud's enterprise infrastructure and advanced analytics to deliver smarter, real-time targeting for retail clients.
Through our strategic partnership with Tether and the integration of SmartPay, Rezolve is architecting a next-generation, stablecoin-enabled settlement rail. This allows merchants to bypass the archaic clearing houses and 'toll bridges' of traditional card networks, returning the economic advantage to the merchant and enabling seamless, zero-fee transactions globally. Alongside these anchor partnerships, we work with a broader network of global system integrators and commerce platforms to ensure comprehensive commerce and payment coverage across global markets.
Together, these alliances reflect our commitment to building an open, interoperable commerce execution layer that empowers brands to thrive in the era of AI-mediated commerce.
What Do We Want to Become?
Our vision is to become the market leader of AI for Business end to end. Our Brain Commerce and Brain Checkout is the foundation required to help businesses transform from a traditional digital ecosystem to an fully leveraging the new AI ecosystem to deliver solutions. Businesses are looking for solutions to their core business not the current hype of AI and blockchain. We offer tangible, proven solutions that address the core of revenue generation for our customers.
We are not building a product feature. We are building the foundational layer of the next era of commerce. The $300–500 billion global agentic commerce market projected by 2030 (Bain & Company) represents the commercial opportunity; our ambition is to be the platform that enables brands to capture it — rather than cede it to third-party AI intermediaries.
Recent Developments
Reward Acquisition
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On February 10, 2026, the Company completed the acquisition (the “Reward Acquisition”) of all of the issued share capital of Reward Loyalty UK Limited (“Reward”) pursuant to a sale and purchase agreement (the “Reward Purchase Agreement”) with the shareholders listed on Schedule 1 thereto and Peter West.
Reward develops and operates customer engagement, loyalty and commerce technology platforms, especially for banks, payment networks and retail partners.
Reward had issued share capital of £1,870,723.53 divided into 1,564,179 ordinary shares of £1.00 each, 287,968 A ordinary shares of £1.00 each, 276,700 B ordinary shares of £0.01 each, 200,800 C ordinary shares of £0.01 each and 1,380,153 D ordinary shares of £0.01 each (together the "Sale Shares"). The Reward Purchase Agreement contained customary representations, warranties, covenants deliverables for closing, which occurred on February 10, 2026.
The initial purchase price for the Reward Acquisition was approximately $239.6 million in cash, subject to certain adjustments as described in further detail in the Reward Purchase Agreement.
Daniel Wagner, the Chief Executive Officer and a Director of Rezolve, previously served as a director of Reward. Prior to the execution of the Reward Purchase Agreement, Mr. Wagner resigned from the board of Reward and did not participate in Reward's evaluation, negotiation or approval of the Reward Acquisition. Mr. Wagner did not hold any shares of Reward at the time the Reward Purchase Agreement was executed or at the closing of the Reward Acquisition. Accordingly, the Reward Acquisition did not constitute a related party transaction under applicable securities laws or the Company’s governance policies.
Other Acquisitions
Subsequent to the balance sheet date, the Company completed three acquisitions for an aggregate consideration, consisting of approximately $9.4 million in cash and approximately $19.4 million in equity consideration. The acquisitions are expected to enhance the Company’s products and service offerings and expand its geographic presence.
Due to the timing of the acquisitions, the Company has not completed the accounting for these acquisitions. Accordingly, the initial accounting for the acquisitions is incomplete as of the date of issuance of these combined consolidated financial statements. The Company is in the process of evaluating the fair value of the assets acquired and liabilities assumed, including the identification and valuation of intangible assets and goodwill, if applicable.
Techouts Purchase Agreement
On December 5, 2025, the Company entered into a purchase agreement with Rezolve Technology (India) Private Limited (“Rezolve India”) and Amith Paruchuri, Krishna Kumari, and Paruchuri Sri Krishna Devarayulu (collectively, the “Techouts Sellers”), pursuant to which the Company agreed to acquire the entire issued and to be issued share capital of Techouts Solutions India Private Limited and Techouts Inc. (the "Techouts Acquisition").
The Techouts Acquisition closed on December 5, 2025. As consideration for the acquisition, the Techouts Sellers received equity consideration consisting of the equivalent of $11.1 million in the Company’s Ordinary Shares. In addition, the Techouts Sellers are entitled to receive up to two additional payments of contingent consideration in the form of the Company’s Ordinary Shares if certain EBITDA targets are achieved during two post-acquisition measurement periods as defined in the purchase agreement.
Crownpeak Purchase Agreement
On December 1, 2025, the Company completed the acquisition (the “Crownpeak Acquisition”) of the issued share capital of Crownpeak Intermediate Holdings, Inc., (“Crownpeak”), pursuant to a sale and purchase agreement (the “Crownpeak Purchase Agreement”) with Crownpeak Technology Holdings, Inc, (the “Crownpeak Seller”).
The purchase price for the Crownpeak Acquisition was $81.0 million. The consideration under the Crownpeak Purchase Agreement is composed of the following to be issued by the Company to the Crownpeak Seller: (i) a promissory note in the initial principal amount of $50,000,000, made up of a $20,000,000 tranche (the “First Crownpeak Loan Note”) and a $30,000,000 tranche (the “Second Crownpeak Loan Note” and together with the First Crownpeak Loan Note, the “Crownpeak Loan Notes”); and (ii) 11,127,780 ordinary shares with an approximate value of $31.0 million based on an issuance price of $2.79 per Ordinary Share.
The Crownpeak Loan Notes will accrue interest at a rate of 10% per annum and are payable in kind or in cash. The First Crownpeak Loan Note matures on April 1, 2027 and the Second Crownpeak Loan Note matures on December 31, 2027. The Company assumed approximately $151.9 million of the aggregate principal amount of outstanding term loans and revolving loans and approximately $1.8 million of accrued and unpaid exit and amendment fees, of which, $50.0 million was paid by the Company at the closing.
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Scale-Up Purchase Agreement
On October 29, 2025, Company entered into a purchase agreement with Scale Up Holding LLC (“Scale Up”) and its shareholders (the “Scale Up Sellers”) to acquire 100% of the issued and outstanding share capital of Scale Up (the "Scale Up Acquisition"). The Scale Up Acquisition was completed on October 29, 2025.
As consideration, the Scale Up Sellers are entitled to contingent consideration in the form of an earn-out arrangement, structured as four separate payments over a four-year period following the closing date. The earn-out payments are subject to the achievement of specified annual revenue and EBITDA targets of Scale Up. The earn-out consideration may be settled, at the sole discretion of Rezolve, in either Ordinary Shares or cash.
Subsquid Purchase Agreement
On October 8, 2025, the Company entered into a purchase agreement with Marcel Fohrmann (the “Subsquid Seller”), the beneficial owner of all of the issued and outstanding equity interests in Subsquid Labs GmbH (“Subsquid”), pursuant to which the Company agreed to acquire 100% of the issued and to be issued share capital of Subsquid (the “Subsquid Acquisition”). The Subsquid Acquisition was completed on October 9, 2025.
The aggregate consideration transferred to the Subsquid Seller in connection with the Subsquid Acquisition consists of the following components: (i) a cash payment of $3.6 million paid at closing; (ii) the equivalent of $1.5 million in Ordinary Shares to be issued as soon as reasonably practicable after the closing date; and (iii) a commitment by the Company to purchase the equivalent of $10.0 million of SQD Tokens within 14 days following the closing date. Additionally, the Company agreed to purchase the equivalent of 1% of its annual revenues of SQD Tokens in each of 2025, 2026 and 2027.
Smartpay and Truther Purchase Agreements
On October 2, 2025, the Company entered into an asset purchase agreement with Smartpay Digital Services Limitada, a Brazilian limited liability company (sociedade limitada) (“Smartpay”), and Rocelo Lopes (the “Smartpay Seller”), the founder and beneficial owner of all of the equity interests in Smartpay. Pursuant to the agreement, the Company acquired the assets used in Smartpay’s digital payment platform (the “Smartpay Acquisition”). The Smartpay Acquisition closed on October 2, 2025. As consideration for the Smartpay acquisition, the Smartpay Seller received USD Tether (“USDT”) 1.9 million. The Smartpay Seller will also receive USDT 2.0 million in Ordinary Shares. This equivalent of USDT 2.0 million in Ordinary Shares to be issued as soon as reasonably practicable after the closing date have not been issued as of December 31, 2025.
On October 2, 2025, the Company entered into an asset purchase agreement with Truther Digital Services Limitada, a Brazilian limited liability company (sociedade limitada) (“Truther”), and Rocelo Lopes (the “Truther Seller”), the founder and beneficial owner of all of the equity interests in Truther. Pursuant to the agreement, the Company acquired the assets used in Truther’s digital payment platform (the “Truther Acquisition”). The Truther Acquisition closed on October 2, 2025. As consideration for the Truther acquisition, the Truther Seller received USDT 0.1 million.
ViSenze Purchase Agreement
On August 7, 2025, the Company entered into a purchase agreement with ViSenze PTE Ltd (“ViSenze”) and its owners (the “ViSenze Sellers”), to acquire the entire issued and to be issued share capital of ViSenze (the "ViSenze Acquisition"). On August 7, 2025, Rezolve closed the ViSenze Acquisition. As consideration for the ViSenze Acquisition, the ViSenze Sellers received $1.0 million in Rezolve's Ordinary Shares. The ViSenze Sellers will also receive an earn-out consideration in Rezolve's Ordinary Shares based on the annual recurring revenue of ViSenze over a 24 month period from the closing date.
Prediqt Purchase Agreement
On June 2, 2025, the Company entered into a purchase agreement with Subhalakshmi Samanta, Kalpadip Basu, Kalyan Kar, Indranil Mukhopadhyay and Sauvik Bannerjjee (the “Prediqt Sellers”) to acquire the entire issued and to be issued share capital of Prediqt Business Solutions Private Limited (the “Prediqt Acquisition”).
Sauvik Bannerjjee has served as the CEO Products, Technology, and Digital Services of Rezolve since August 2022. Mr. Banerjjee is also an executive officer of Rezolve.
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On June 2, 2025, the Company closed the Prediqt Acquisition. As consideration for the Prediqt Acquisition, the Company paid a cash consideration of $100,000 to the Prediqt Sellers.
Mpower Purchase Agreement
On May 31, 2025, the Company entered into a purchase agreement with Avirup Chakraverty and Mirali Mulodjanov (the “Mpower Sellers”) to acquire the entire issued and to be issued share capital of Mpower Plus Global Limited (the “Mpower Acquisition”).
On May 31, 2025, the Company closed the Mpower Acquisition. As consideration for the Mpower Acquisition, the Company issued an aggregate of 804,833 of its Ordinary Shares to the Mpower Sellers.
The GroupBy Acquisition
On February 11, 2025, Rezolve entered into a purchase agreement (the “GroupBy Purchase Agreement”), by and among the Company, GroupBy Inc., an Ontario, Canada corporation (“GroupBy”), GroupBy International Ltd., an Ontario, Canada corporation (“GroupBy International”) and Fortis Advisors LLC, a Delaware limited liability company, as the representative of the sellers party thereto (the “GroupBy Sellers”), pursuant to which the Company agreed to purchase, and the GroupBy Sellers agreed to sell, the entire issued and to be issued share capital of each of GroupBy and GroupBy International (the “GroupBy Acquisition”).
On March 25, 2025, Rezolve closed the GroupBy Acquisition. As consideration for the GroupBy Acquisition, the Company issued an aggregate of 3,999,902 of its Ordinary Shares in a private placement to the GroupBy Sellers.
The Bluedot Acquisition
On February 4, 2025, Rezolve entered into a purchase agreement (the “Bluedot Purchase Agreement”), by and between the Company and DBLP Sea Cow Ltd, a limited company organized under the laws of the Seychelles (“DBLP”), pursuant to which the Company agreed to purchase, and DBLP agreed to sell, the entire issued and to be issued share capital of each of Bluedot Industries, Inc., a Delaware corporation, and Bluedot Industries Pty. Ltd. (together, “Bluedot”), an Australian proprietary limited company registered in Victoria on December 7, 2013 with Australian Company Number 165 206 566 (the “Bluedot Acquisition”).
On February 20, 2025, Rezolve closed the Bluedot Acquisition. As consideration for the Bluedot Acquisition, Rezolve issued 819,737 ordinary shares of the Company in a private placement to DBLP.
Industry Overview and Trends
The global proliferation of mobile devices has fundamentally altered the way in which consumers engage with brands and retailers. As of December 31, 2021, there were approximately 5.48 billion unique mobile phone users globally, representing approximately two-thirds of the entire worldwide population. Approximately 92% of these unique mobile users are estimated to have smart phones with internet connectivity. The number of unique mobile phone users with internet connectivity globally has tripled since December 2012.
This massive shift towards a global, mobile economy caused important paradigm shifts with regard to merchant strategy and consumer decision making. In conjunction with the trend of mobile proliferation, consumers tended to interact with merchants primarily through expensive third-party facilitators resulting in both limited consumer engagement and eroded profit margins for merchants. Regardless of the interaction, consumers prioritize seamless buying interactions and omnichannel purchasing experiences. Merchants prefer direct interactions with consumers to build relationships and better understand consumer purchasing trends; historically, merchants have struggled with meeting consumer needs while managing costs and addressing technical challenges.
Consumers Are Increasingly Engaging Through Digital Channels
Globally, mobile commerce sales during the year ended December 31, 2021 were expected to exceed $3.5 trillion, representing 73% of all e-commerce sales. How consumers discover, learn about and ultimately purchase products has transformed and continues to evolve as technology improves. A consumer may discover a product on social media, learn more about the product through reviews and blogs, physically see the product at a nearby brick-and-mortar store, assess price comparisons of the product using a mobile phone, and ultimately purchase the product from a different merchant.
Given heightened access to information and data concern for rising inflation, consumers have become increasingly focused and educated on both products and pricing. For example, according to a March 2023 report by INMAR Intelligence, 52% of shoppers find grocery purchase inspiration on social media, almost matching in-store display inspiration at 54%. Consumers have more choices than ever before with regard to what they buy and who they buy from, which has set an extremely high bar for consumer expectations and
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merchant standards. We believe consumers want an experience and product that allows them to express their own unique personalities, styles and interests. Good consumer experiences drive consumer loyalty and attract new consumers through word of mouth and online reviews. A disappointing consumer experience may result in the permanent loss of customers and irreparable damage to the merchant’s reputation on social media.
While the growth in digital consumption has increasingly become mainstream for shopping, it has not completely replaced traditional offline purchasing. Consumers have adopted an “Online to Offline” model which lends itself to mobile applications. 38% of U.S shoppers start their journey on a smartphone and finish their purchase offline, according to an April 2019 report by RetailMeNot.
Merchants Have Lost Connectivity to the End Consumer
We believe it is imperative for merchants to have a dynamic and comprehensive view of their customers, product, merchandising & marketing strategy and associated data. The proliferation of intermediaries has resulted in a fragmented view of customer wants and needs. For example, according to a January 2022 report, 40% of brands say offering experiential retail would be a top priority for them in the next year, but 57% of these brands say coordinating it will be a top challenge, while 55% of retailers report concerns with respect to driving in-store traffic. To help boost sales, retailers look to sell through online marketplaces such as Amazon, which as of February 2021, represented about 40% of total US retail eCommerce sales. This limited connectivity to the end-consumer puts pressure on profit margins and allows proprietary data to spread to competing platforms. At the same time, the lost interaction deprives a merchant of critical data and direct relationships that help them market to and engage with their customers.
Merchants simultaneously try to interact with consumers at a local level. According to a September 2021 report, 47% of global consumers are likely to buy from brands with a local presence; however, retailers have experienced headwinds while seeking to increase consumer retention and generate repeat traffic to their local stores. Currently, geolocation services are limited given the complicated nature of engaging with local consumers daily. Marketing to multitudes of consumers while providing a frictionless platform from outreach to engagement to eventual purchase can be highly costly and difficult to execute. Merchants therefore seek to actively engage with consumers through omnichannel experiences to maximize connectivity in a cost-efficient manner.
Consumers Expect a Seamless Interaction Between Offline and Online Channels
Consumers expect to be able to seamlessly access a merchant’s online store from their mobile device, tablet and computer, and expect the same breadth of information from online channels as they would receive in a brick-and-mortar store. A merchant’s failure to deliver on any channel can frustrate consumers and lead them to shop elsewhere. The technical requirements to deliver seamless access are complex and ever evolving. As a result, according to a September 2021 report, approximately 53% of global brands are already investing in providing an omnichannel consumer experience, seeking to eliminate friction during the purchasing process and enhance sales. SMBs are also looking to adopt omnichannel strategies but face similar issues regarding complicated data integration and continuous investment. Improving marketing and consumer engagement is important for many brands irrespective of size.
Merchants Are Struggling to Differentiate
In a world where consumers have more choices than ever, differentiating a merchant’s brand takes on increased importance. A merchant needs to stand out from the crowd. If a consumer searches a third-party marketplace or e-Commerce site and selects a merchant’s product from among thousands of search results, the consumer is more likely to remember the brand of the third-party site than the brand of the merchant. The average shopper is increasingly paying close attention to the values of consumer-goods brands. 82% of shoppers want a consumer brand’s values to align with their own, according to an April 2022 report, and 75% of shoppers reported parting ways with a brand over a conflict in values. Experiences that enable merchants to connect directly with consumers allow merchants to make a memorable impression. Globally, 60% of consumers say they will make repeat purchase at a retailer after a personalized shopping experience, according to a June 2021 report.
A merchant’s brand and personality must shine through in every interaction to help build customer loyalty. Unfortunately, merchants have difficulty in getting consistent data due to fragmented interactions with consumers resulting in difficulties in creating personalized experiences.
Complicated Experiences Result in Lost Opportunities with Consumers
Consumers expect every interaction to be quick, problem-free, intuitive and secure. Consumers will abandon a website that is not loaded quickly and are reluctant to return to a website that has trouble with performance. Consumers tend to hold merchants responsible for the entire retail experience, regardless of whether a merchant or a third party provides the platform. Consumers value their time spent on making purchases and seek to find methods to reduce that time – 76% of consumers say they shop on mobile devices because it “saves them time,” according to a July 2020 report. However, even mobile apps can be time consuming if the sale
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process is not simple. Merchants that are able to offer one-click engagement, are far less likely to lose the attention of the consumer in the purchasing decision. If a consumer tries to purchase a product from a brick-and-mortar store but in-store inventory is unavailable, a merchant should be able to search its dynamic inventory count and ship the product to the consumer’s home before the consumer looks elsewhere. 46% of global online shoppers confirmed inventory online before shopping offline according to a February 2019 report. In fact, retailers that implemented personalized experiences on-site or through marketing efforts experienced a 25% sales lift, according to a June 2019 report.
Our Solution
We provide an AI- and cloud-based advertising, engagement and commerce platform designed for merchants of all sizes. We are bringing conversational AI to digital retail. Our proprietary LLM, brainpowa, has been built specifically with retail in mind, allowing authentic, human-level conversations for sales interactions in any of 96 languages.
Our platform provides the following key benefits to merchants:
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We have agreements with distribution and consumer-facing networks, which we refer to as our Channels, to sign up merchants to the Rezolve platform. Our Channels also receive significant benefits from deploying our solutions to their merchant base.
The Opportunity
We believe we have a significant opportunity to transform how retail customers discover, engage and shop online. Our mobile commerce provides a natural interactive experience for your customers where they may enjoy a conversational approach to shopping.
Our enterprise SaaS commerce platform has a global reach including in our key geographies: United States, Latin America, and Europe. We believe that there are significant geographies and distribution channels to expand to as we establish new strategic alliances in new geographies.
Following the completion of the Pre-Closing Demerger, we ceased operations in China and are currently focused on growing our footprint in other geographic markets, but at a future date, we will consider re-engaging with the Chinese market.
We initially entered the Chinese market in 2016 in order to trial the Rezolve platform on a large scale. This was done with support from China Union Pay (“CUP”) and All-in-pay (“AP”). Rezolve’s former subsidiary, Rezolve Information Technology (Shanghai) Limited (“Rezolve Shanghai”) is a Wholly owned Foreign Entity (“WoFE”), which limits its influence locally in China. A WoFE in China must generally contract with a local third-party company if it wants to do business with a state-owned enterprise (“SOE”), such as CUP. This requirement is part of the foreign investment restrictions and regulations in China that aim to protect local interests and limit foreign control over certain sectors of the economy. Our board of directors’ decision to abandon operations in China completely and approve the Pre-Closing Demerger was based, in part, on our inability to complete an audit as a result of not having access to certain information from our local third-party company.
If in the future, a new Rezolve entity can be accredited to operate directly with CUP and AP, the board will consider re-entering the China market. However, the current focus is on rolling out our technologies with partners in other markets around the world.
We believe Rezolve’s Brain Commerce, Brain Checkout and Brain Assistant offerings will operate in large global market opportunities. We believe Rezolve’s Brain Commerce can supplement existing retailer site search platforms and that AI enabled search platforms, like Rezolve’s will replace all existing retailer site search platforms.
As the global economy becomes more connected and transactions become increasingly digital, retail spend is expected to continue growing in the coming years. Buy Now participates in a $250 billion retail sales market (applying Rezolve’s 1.0% transaction fee to the $25 trillion in global retail sales in 2021). The velocity of this transition is unprecedented. Third-party forecasts from eMarketer (Dec 2025) project that US ecommerce sales driven through AI platforms will exceed $20 billion in 2026 and skyrocket to over $144 billion by 2029 representing nearly 9% of the total retail ecommerce market. Rezolve is architecting the infrastructure required to capture this $144 billion structural shift.
We believe that the market for our GeoZone offering can be measured as a proxy of global location based advertising, which is poised for rapid growth over the next few years as it is expected to become a widespread advertising practice. Global location based advertising spending was approximately $80.5 billion in 2022 and is expected to grow at a 13.3% CAGR to $219.4 billion in 2027 according to a Global Industry Analysts report.
Location-based advertising allows organizations to target consumers at a granular, consumer level with online or offline messaging based on their physical location. Location-based marketing has become an important and high ROI method of customer engagement as smartphone user penetration rates increase globally. Using location data through smartphone geolocators, marketing teams are able to reach consumers based on qualifiers like proximity to a store, events happening in their region, and more.
Location-based marketing has proven effective across customer lifecycles from discovery and purchase to engagement and retention. When used properly, location-based marketing allows marketers to focus on specific customer segments with targeted offers, while improving customer experience for a population that increasingly values instant gratification.
Search advertising, which is targeted marketing based on search terms, or keywords, entered on a search engine, allows advertisers to target consumers and tailor advertisements based on their search history and consumer profiles. Search advertising has expanded over
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the recent years as mobile search has started to outpace desktop searches in 2021 according to Statista’s Digital Market Outlook. Consumers continue to use search engines as a primary means of buying decisions and is a mainstay for most businesses.
Key web search statistics:
Growth Strategy
Key elements of our strategy include:
The Rezolve Platform
The cloud-based Rezolve AI platform integrates the features and functionalities that merchants need to seamlessly transact across different Channels. Capabilities include:
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Engagement Opportunities
We expect our platform to integrate with and address the following engagement opportunities:
Technology
The Rezolve platform is a multi-tenant cloud-based system that is engineered for high scalability, reliability and performance.
We host our platform using cloud-based servers. Maintaining the integrity and security of our technology infrastructure is critical to our business, and we plan to invest further in our data center and network infrastructure to meet our merchants’ needs and maintain their trust. The key attributes of our platform are as follows:
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Our Channels
We have preliminarily established relationships with Channels such as Microsoft and Google among others. Our Channels are either categorized as merchant acquirors or consumer acquirors or sometimes they represent both. Merchant acquirors typically have large merchant-based customers and upsell/cross sell Rezolve to those customers with Rezolve’s support. Merchant acquirors include (but are not limited to) payment gateways, banks, telecommunications companies, eCommerce or point-of-sale providers, and media entities (such as broadcasters, social media firms and publishers). The type of partnership entered into with these firms determines the level of revenue share, for example, referral, reseller or white label reseller. Larger merchants can have their own mobile app strategy, and, in these cases, our merchant acquirer Channels promote the use of Rezolve technology embedded into their apps directly (using Rezolve’s SDK and mobile application libraries). All merchants are encouraged to use our Rezolve Experience Platform to create engagements with their end-customers, whether it is labeled with the brand of the Channel or our brand.
Competition
Our market is transforming, competitive and highly fragmented, and we expect competition to increase in the future. We believe the principal competitive factors in our market are:
With respect to each of these factors, we believe that we provide a number of favorable offerings.
We believe no individual competitor or AI or LLM company offers an integrated, cloud-based commerce platform with comparable functionality to our eCommerce-specific AI platform with its fully conversational discovery experience and connects the upper and lower funnel journeys for an end-to-end user experience that is seamless and frictionless. However, certain competitors such as Shopify or BigCommerce or individual merchants with access to large numbers of consumers, may elect to piece together technology from other companies, including AI-driven search and relevance platforms or digital assistants such as Cohere or Zoovu, that overlaps with certain functions and features that we provide.
Intellectual Property
Our intellectual property and proprietary rights are important to our business. In our efforts to safeguard them, we rely on a combination of copyright, trade secret, trademark, patent and other rights in jurisdictions in which we conduct our business. We also have confidentiality and/or license agreements with employees, contractors, merchants, distributors and other third parties that limit access to and use of our proprietary intellectual property. Though we rely, in part, upon these legal and contractual protections, we believe that factors such as the skills and ingenuity of our employees, as well as the functionality and frequent enhancements to our platform, make our intellectual property rights difficult to replicate.
We have several US and international patents pending for our eCommerce-specific AI Platform and Language Model such as for its Hierarchical Data relations generator machine, which employs supervised learning models to analyze the product catalogue ingested to build a multidimensional relationship hierarchy that feeds the embedding process, and for its eCommerce Product categorization
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dictionary that analyzes the product title, images and description data to identify nested categories the product belongs to. Rezolve does this regardless of merchant specified categories which is only reinforced by Merchant provided categories to build a deep and wide category classification that aides the embedding process.
We have been issued trademark registrations in Canada, Japan, Mexico, China, Europe, the U.S. and the UK including the term “Rezolve.” We have pending patent applications in the U.S., Canada, China, Europe, Japan, South Korea, Mexico, and Hong Kong. We are subject to certain risks related to our intellectual property. For more information, see “Risk Factors—Risks Related to our Business and Industry.”
Facilities
We are headquartered in London, England, United Kingdom.
Government Regulation
We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business online, many of which are still evolving and could be interpreted in ways that could harm our business. Concern about the use of SaaS platforms for illegal conduct, such as money laundering or to support terrorist activities, may in the future result in legislation or other governmental action that could require changes to our platform.
We are subject to laws and regulations that govern or restrict our business and activities in certain countries and with certain persons. We are currently subject to a variety of laws and regulations in the U.S., Mexico, the UK, Europe, India and elsewhere related to payment processing, including those governing cross-border and domestic money transmission, gift cards and other prepaid access instruments, electronic funds transfers, foreign exchange, anti-money laundering, counter-terrorist financing, banking and import and export restrictions. Depending on how our merchant solutions evolve, we may be subject to additional laws.
We are also subject to various laws, regulations, and obligations regarding privacy, data protection, and cybersecurity. Some jurisdictions require companies to notify individuals of data security breaches involving certain types of personal data and our agreements with certain merchants require us to notify them in the event of a security incident. We post on our website our privacy policy and terms of service, which describe our practices concerning the use, transmission and disclosure of merchant data and data relating to their customers. Any actual or perceived failure by us to comply with our posted privacy policy or laws, regulations, or obligations relating to privacy, data protection or cybersecurity could lead to investigations, inquiries, and other proceedings by governmental authorities, significant fines, penalties and other liabilities imposed by regulators, as well as claims, demands, and litigation by our merchants or their customers or other private actors, any of which could harm our business, financial condition, and results of operations. Laws, regulations, and other actual and asserted obligations relating to privacy, data protection and cybersecurity evolve rapidly and are subject to varying interpretations, and we may not be or may not have been compliant with such laws, regulations or obligations, and we may face allegations that our activities or practices are not or have not been, compliant with each such law, regulation or other obligation. Because our services are accessible worldwide, certain foreign jurisdictions have claimed and others may claim that we are required to comply with their laws, regulations, and obligations, including in jurisdictions where we have no local entity, employees or infrastructure. Working to comply with these varying international requirements could cause us to incur additional costs and change our business practices.
Further, our reputation and brand may be negatively affected by the actions of merchants or their users that are deemed to be hostile, offensive, inappropriate or unlawful. We do not monitor or review the appropriateness of the content accessible through merchants’ shops in connection with our services, and we do not have control over the activities in which merchants’ customers engage. While we have adopted policies regarding illegal or offensive use of our platform, merchants or their customers could nonetheless engage in these activities. The safeguards we have in place may not be sufficient to avoid harm to our reputation and brand, especially if such hostile, offensive or inappropriate use was high profile, which could adversely affect our ability to expand our merchant subscription base and harm our business and financial results. It is possible that we could also be subject to liability. In many jurisdictions, laws relating to the liability of providers of online services for activities of their customers and other third parties are currently being tested by a number of claims, including actions based on defamation, invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories based on the nature of the relevant content. Any court ruling or other governmental regulation or action that imposes liability on providers of online services in connection with the activities of their customers or their customers’ users could harm our business. In such circumstances we may also be subject to liability under applicable law in a way which may not be fully mitigated by our terms of service. Any liability attributed to us could adversely affect our brand, reputation, our ability to expand our subscriber base and our financial results.
Legal Proceedings
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From time to time, we may become involved in legal or regulatory proceedings arising in the ordinary course of our business. We are not currently a party to any material litigation or regulatory proceeding and we are not aware of any pending or threatened litigation or regulatory proceeding against us that could have a material adverse effect on our business, operating results, financial condition or cash flows.
A list of the subsidiaries of the Company is included in Exhibit 8.1 to this Annual Report on Form 20-F.
For more information on property, plant and equipment see Note 6 “Property, plant and equipment” and Note 15 “Leases” to the Company's combined consolidated financial statements as of and for the year ended December 31, 2025, included in Item 18 of this Report.
We are headquartered in London, England, United Kingdom. The address of our global head office is 21 Sackville Street, London, W1S 3DN, United Kingdom.
Item 4A. Unresolved Staff Comments
None.
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Item 5. Operating and Financial Review and Prospects
You should read the following discussion of our operating and financial review and prospects together with our consolidated financial statements included in Item 18 in this annual report.
The following discussion and analysis contain forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of factors, including, but not limited to, those under Item 3. D “Risk Factors” and elsewhere in this annual report.
Overview
We operate a global, AI-driven commerce platform designed to enable merchants to transform consumer intent into completed transactions. Our platform integrates discovery, conversation, checkout, payments, and fulfillment into a single execution layer, allowing merchants to deliver seamless, personalized, and frictionless digital commerce experiences at scale.
Our solution is built on proprietary artificial intelligence and machine learning technologies, including our Brain Commerce platform, which enhances product discovery, improves conversion rates, increases average order value, and reduces cart abandonment. By embedding our technology directly into the operational infrastructure of merchants, we enable both human users and AI agents to execute transactions rather than simply interact with content.
We generate revenue primarily from our cloud-based software solutions and transaction-based services, including software-as-a-service (SaaS) offerings such as search, discovery, and engagement tools. Our ability to grow revenue is driven by expanding our merchant base, increasing adoption of our platform capabilities, and scaling transaction volumes across our ecosystem.
Our operating results have been significantly influenced by strategic acquisitions, continued investment in product innovation, and the expansion of our global commercial operations. In particular, acquisitions completed during the year have accelerated revenue growth and increased our operating scale, while also contributing to higher operating expenses associated with integration, personnel, and platform development.
We expect to continue investing in research and development, sales and marketing, and platform infrastructure to support the growth of the emerging agentic commerce market. As a result, we anticipate that our operating expenses will remain significant as we scale the business, expand our capabilities, and deepen our relationships with enterprise merchants globally.
Our operating results may fluctuate from period to period due to a variety of factors, including the timing of acquisitions, merchant onboarding and transaction volumes, seasonality in consumer spending, and macroeconomic conditions affecting technology investment and retail demand.
Management has assessed whether they believe there are events or conditions that give rise to doubt the ability of the Company to continue as a going concern for a period of twelve months after the preparation of the consolidated financial statements. The assessment includes knowledge of the Company’s subsequent financial position, the estimated economic outlook and identified risks and uncertainties in relation there to.
Despite ongoing operating losses, our liquidity position, supported by the $250 million financing completed in January 2026 and existing cash resources, provides sufficient runway for at least the next twelve months. Accordingly, management believes there is no substantial doubt regarding the Company’s ability to continue as a going concern.
Key Factors Affecting Our Performance
We believe our future performance will depend on many factors, including the following:
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Components of our Results of Operations
Revenues
We generate revenue across our three lines of business, as further described below. Revenue is recognized in accordance with the nature of the products and services provided within each line of business.
Our continuing strategy focuses on providing a technology platform to merchants in order to facilitate outreach to consumers. Conversational commerce provides customers with the best possible sales interaction allowing merchants to generate incremental revenue through an exceptional user experience. Merchants are billed on a monthly basis for the services rendered.
Revenue generated from cloud-based software solutions, include the SaaS (software as a service) products such as the following:
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These cloud-based software solutions are sold to customers through hosting arrangements, whereby we run the software applications on our own platforms. Access to these platforms are provided to customers on either a consumption or subscription basis and generally have contract terms longer than a year. Revenues related to cloud-based software solutions provided on a consumption basis are recognized when the customer utilizes the cloud-based software solutions, based on the quantity consumed. Revenues related to cloud-based software solutions provided on a subscription basis are recognized ratably over the contract term as the customer receives and consumes the benefits of the cloud-based software solutions. Usage-based fees earned in exchange for the use of the Company’s software licenses and subscription services in excess of committed usage are recognized in the period when usage occurs.
The Company may receive upfront, non-refundable consideration at which time the performance obligation has not yet been satisfied and will only be satisfied over time (over the duration of the contract term). This upfront, non-refundable consideration (deferred revenue) is recognized as revenue over time as the performance obligation is satisfied. The deferred revenue balance of $1,172,056 at December 31, 2024 resulted from the retrospective adjustment to the comparative Combined Consolidated Financial Statements as if Rezolve and Bluedot Industries had been combined from the beginning of the comparative period, as the entities were under common control for the entire comparative period. The deferred revenue balance of $46,500,843 at December 31, 2025 resulted from upfront payment received from contracts with customers for SaaS products and contracts with customers for geofencing software. The customer contracts generating this upfront revenue were acquired through acquisitions completed during year ended December 31, 2025.
Revenue related to configuration and ongoing technical support services are recognized ratably over the contract term as the customer receives and consumes the benefits of these services.
Revenues from the sale of professional services include information technology ("IT") and information technology enabled ("ITE") services. The Company provides professional services, which include project managers, specialists and engineers, recommending, designing and implementing IT solutions. The Company is primarily responsible for the fulfillment and acceptability of the professional services and has control over how to provide the requested services. As a result, the Company is the principal, and professional services revenue is recognized on a gross basis ratably over the contract term as the customer receives and consumes the benefits of these services.
Operating Expenses
Operating expenses consist of cost of revenues, employee benefit expenses, consultancy expense, sales and marketing expenses, business development expenses, general and administrative expenses, and depreciation and amortization.
Interest expense
Interest expense consists primarily of costs associated with short term and long term debt and convertible debt.
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Other (expense)/income
Other (expense)/income during the year ended December 31, 2025 consists primarily of the following items:
Income Taxes
Income tax benefit consists primarily of the realization of a deferred tax liability, net of current income taxes payable related to the jurisdictions in which we conduct business. Our effective tax rate is affected by tax rates in jurisdictions and the relative amounts of income we earn in those jurisdictions, changes in the valuation of our deferred tax assets and liabilities, applicability of any valuation allowances, and changes in tax laws in jurisdictions in which we operate.
Results of Operations for years ended December 31, 2025 and 2024
The following tables set forth our consolidated statements of operations for the years ended December 31, 2025 and December 31, 2024:
|
|
Year ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Revenue |
$ |
|
46,800,099 |
|
$ |
|
2,013,567 |
|
Operating expenses/(income) |
|
|
|
|
|
|
||
Cost of revenue |
|
|
15,922,202 |
|
|
|
192,829 |
|
Sales and marketing expenses (including related party transactions of $1,833,486 and $1,011,119, see note 14) |
|
|
12,062,375 |
|
|
|
6,684,870 |
|
General and administrative expenses (including related party transactions of $8,120,684 and $68,413,399, see note 14) |
|
|
90,366,226 |
|
|
|
132,022,084 |
|
Depreciation and amortization expenses |
|
|
6,965,148 |
|
|
|
226,305 |
|
Research and development expenses |
|
|
11,198,074 |
|
|
|
1,152,807 |
|
Other operating (income)/expense, net |
|
|
(2,857,071 |
) |
|
|
255,412 |
|
Total operating expenses |
$ |
|
133,656,954 |
|
$ |
|
140,534,307 |
|
Operating loss |
|
|
(86,856,855 |
) |
|
|
(138,520,740 |
) |
Other (expense)/income |
|
|
|
|
|
|
||
Interest expense |
|
|
(3,507,201 |
) |
|
|
(10,645,464 |
) |
(Loss)/gain on derivatives |
|
|
(2,889,175 |
) |
|
|
19,001,681 |
|
Loss on extinguishment |
|
|
(29,950,161 |
) |
|
|
(44,332,819 |
) |
Gain on revaluation of financial asset |
|
|
5,645,839 |
|
|
|
— |
|
Gain on bargain purchase |
|
|
61,298,445 |
|
|
|
— |
|
Impairment loss |
|
|
(63,345,577 |
) |
|
|
— |
|
Other non-operating income, net |
|
|
465,518 |
|
|
|
1,289,944 |
|
Total other expenses, net |
$ |
|
(32,282,312 |
) |
$ |
|
(34,686,658 |
) |
Loss before taxes |
|
|
(119,139,167 |
) |
|
|
(173,207,398 |
) |
Provision for income taxes |
|
|
17,728,939 |
|
|
|
(243,735 |
) |
Net loss for the year |
$ |
|
(101,410,228 |
) |
$ |
|
(173,451,133 |
) |
Comparison of the years ended December 31, 2025 and 2024
We operate as a single operating segment. While our Chief Operating Decision Maker evaluates our financial performance on a consolidated basis, management supplements this analysis with additional information by line of business where it believes such detail
49
enhances investors’ understanding of our results of operations. We generate revenue and incur expenses across three primary lines of business: Brain Commerce, Enterprise Services, and Brain Checkout, each of which is described in further detail above.
Revenues
The following shows total revenue for the year ended December 31, 2025, as compared to the year ended December 31, 2024:
|
Year ended |
|
|
Change |
|
|||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
$ |
|
|
% |
|
||||
Revenue |
$ |
|
46,800,099 |
|
|
$ |
|
2,013,567 |
|
|
$ |
|
44,786,532 |
|
|
|
2224 |
% |
Revenue increased to $46.8 million for the year ended December 31, 2025 from $2.0 million for the year ended December 31, 2024. The increase was primarily attributable to growth across all lines of business through strategic acquisitions completed during the year ended December 31, 2025, which significantly expanded our revenue base. The increase was further driven by strong revenue growth from our cloud-based software solutions, including our software-as-a-service (SaaS) offerings such as search experience tools and geofencing software.
Operating Expenses
The following shows operating expenses for the year ended December 31, 2025, as compared to the year ended December 31, 2024:
|
Year ended |
|
|
Change |
|
|||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
$ |
|
|
% |
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
$ |
|
15,922,202 |
|
|
$ |
|
192,829 |
|
|
$ |
|
15,729,373 |
|
|
|
8,157 |
% |
Sales and marketing expenses |
|
|
12,062,375 |
|
|
|
|
6,684,870 |
|
|
|
|
5,377,505 |
|
|
|
80 |
% |
General and administrative expenses |
|
|
90,366,226 |
|
|
|
|
132,022,084 |
|
|
|
|
(41,655,858 |
) |
|
|
(32 |
)% |
Depreciation and amortization expenses |
|
|
6,965,148 |
|
|
|
|
226,305 |
|
|
|
|
6,738,843 |
|
|
|
2,978 |
% |
Research and development expenses |
|
|
11,198,074 |
|
|
|
|
1,152,807 |
|
|
|
|
10,045,267 |
|
|
|
871 |
% |
Other operating (income)/expense, net |
|
|
(2,857,071 |
) |
|
|
|
255,412 |
|
|
|
|
(3,112,483 |
) |
|
|
(1,219 |
)% |
Total operating expenses |
$ |
|
133,656,954 |
|
|
$ |
|
140,534,307 |
|
|
$ |
|
(6,877,353 |
) |
|
|
|
|
Percentages have been rounded for presentation purposes and may differ from unrounded results.
Cost of Revenues
Cost of revenues increased to $15.9 million for the year ended December 31, 2025 from $$0.2 million for the year ended December 31, 2024. The increase was primarily attributable to higher sales volumes during 2025, which resulted in increased direct costs associated with generating revenue in the Brain Commerce and Enterprise Services lines of business. These costs consisted principally of payroll and employee benefits for personnel and consultants providing professional services, as well as fees incurred under platform and services agreements.
Sales and Marketing Expenses
Sales and marketing expenses increased by $5.4 million, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily attributable to higher advertising and promotional expenses, increased employee salaries and benefits, and higher consultancy fees in the Brain Commerce and Enterprise Services lines of business. These increases were driven by business growth and the impact of acquisitions completed during the year ended December 31, 2025, which expanded our sales and marketing activities and related personnel.
General and Administrative Expenses
General and administrative expenses decreased by $41.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease was primarily attributable to a reduction in share-based compensation expense, reflecting a lower number of share options granted during the year ended December 31, 2025, of approximately 5.6 million options, compared to approximately 13.6 million options granted during the year ended December 31, 2024.
The decrease in share-based compensation expense was partially offset by higher transaction-related legal and professional fees
50
incurred in connection with our recent acquisition activities across all lines of business. In addition, increased consultancy fees, driven by business growth and the acquisitions completed during the year ended December 31, 2025, also contributed to the offset across all lines of business.
Research and Development Expenses
Research and Development expenses increased by $10.0million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
This was primarily due an increase costs incurred during the post-development phase and other IT operating costs attributable to business growth and the acquisitions completed during the year ended December 31, 2025 in the Brain Commerce and Brain Checkout lines of business.
Other operating (income)/expense
Other operating income, net of operating expenses, increased by $3.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 . The increase was primarily attributable to proceeds from sales of SQD tokens to third parties and employees in the Brain Checkout line of business. These amounts were partially offset by related operating expenses associated with such activities.
Depreciation and Amortization Expenses
Depreciation and amortization expenses increased from $0.2 million for the year ended December 31, 2024 to $7.0 million for the year ended December 31, 2025. This was primarily due to the increase in amortization expense recognized on intangible assets acquired in business combinations during the year ended December 31, 2025 across all line of business.
Other (expense)/income
The following shows interest expense and other (expense)/income for the year ended December 31, 2025, as compared to the year ended December 31, 2024:
|
Year ended |
|
|
Change |
|
|||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
$ |
|
|
% |
|
||||
Other (expense) income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
$ |
|
(3,507,201 |
) |
|
$ |
|
(10,645,464 |
) |
|
$ |
|
7,138,263 |
|
|
|
(67 |
)% |
Gain/(loss) on derivatives |
|
|
(2,889,175 |
) |
|
|
|
19,001,681 |
|
|
|
|
(21,890,856 |
) |
|
|
(115 |
)% |
Gain/(loss) on extinguishment |
|
|
(29,950,161 |
) |
|
|
|
(44,332,819 |
) |
|
|
|
14,382,658 |
|
|
|
(32 |
)% |
Gain on revaluation of financial asset |
|
|
5,645,839 |
|
|
|
|
— |
|
|
|
|
5,645,839 |
|
|
|
100 |
% |
Gain on bargain purchase |
|
|
61,298,445 |
|
|
|
|
— |
|
|
|
|
61,298,445 |
|
|
|
100 |
% |
Impairment loss |
|
|
(63,345,577 |
) |
|
|
|
— |
|
|
|
|
(63,345,577 |
) |
|
|
100 |
% |
Other non-operating income (expense), net |
|
|
465,518 |
|
|
|
|
1,289,944 |
|
|
|
|
(824,426 |
) |
|
|
(64 |
)% |
Total other expenses, net |
$ |
|
(32,282,312 |
) |
|
$ |
|
(34,686,658 |
) |
|
$ |
|
2,404,346 |
|
|
|
|
|
Interest expense decreased by $7.1 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024. This was primarily due a decrease in the outstanding balance of the convertible debt. On December 27, 2024, 10.8 million ordinary shares were issued to settle $20.8 million and $0.9 million of interest, respectively, related to the outstanding convertible notes of Apeiron Investment Group. On January 15, 2025 and February 13, 2025, respectively, a further 3.0 million and 8.0 million ordinary shares were issued to settle $20.8 million and $0.9 million of principle and interest, respectively, related to the outstanding convertible notes of Bradley Wickens. Refer to the "Liquidity and capital resources" section below for more information.
The net loss on derivatives of $(2.9) million is primarily due to the remeasurement of a derivative asset and derivative liabilities at fair value through profit and loss. The outstanding derivative liabilities as at December 31, 2025 were triggered by conversion features embedded in promissory notes issued by advisors J.V.B. Financial Group and Northlands Securities. On August 15, 2024, the Company recognized derivative liabilities and an offsetting debt discount associated with the embedded conversion features in its senior secured convertible notes, convertible promissory notes and advisors loans. The Company previously did not bifurcate the embedded conversion features as derivatives due to the lack of an underlying share price prior to the Company's acquisition of Armada and listing of its Ordinary Shares on the Nasdaq. Refer to the Liquidity and Resources section below for more information.
51
The loss on extinguishment of $30.0 million is primarily due to conversion of the outstanding convertible notes of Bradley Wickens and the settlement of the outstanding debt balance with Western Alliance Bank. Refer to the Liquidity and Resources section below for more information.
The gain on the revaluation of financial asset relates to the settlement of the outstanding debt balance with Western Alliance Bank. In accordance with the terms of the subscription letter, Western Alliance Bank is to return any money received in excess of $12.3 million from the subsequent sale of the 5.9 million Ordinary shares. The receivable (financial asset) due from Western Alliance Bank involve returns that may vary in amount, such that the ultimate payout will depend on the price per Ordinary Share on the day that Western Alliance Bank sells all or part of the 5.9 million Ordinary Shares. The Company elected to recognize this hybrid financial instrument at fair value with changes in fair value recognized currently in earnings, therefore no bifurcation of any embedded derivatives were required. The Company recognized a gain of $5.6 million on the remeasurement of this financial assets during the year ended December 31, 2025.
The Company recognized a gain on bargain purchase of $61.3 million in connection with the acquisition of Subsquid. The gain arose because the fair value of the net assets acquired exceeded the purchase consideration. For additional information regarding the acquisition and the calculation of the gain on bargain purchase, see Note 4 to the Company’s combined consolidated financial statements for the year ended December 31, 2025 .
The impairment loss relates to SQD tokens acquired by the Company both as part of the Subsquid acquisition and through market purchases during the fourth quarter of 2025. During the fourth quarter of 2025, the market price of the SQD token experienced a significant decline, which the Company determined to be a triggering event requiring an interim impairment assessment. The Company identified the principal market for SQD tokens and determined the fair value based on observable market transactions. The SQD tokens were written down to the lowest observable market price during the reporting period. As a result, the Company recognized an impairment charge of $63.3 million in the combined consolidated statements of operations for the year ended December 31, 2025.
Other non-operating income, net of other non-operating expenses, decreased to $0.5 million for the year ended December 31, 2025, as compared to $1.3 million for year ended December 31, 2024. The decrease was primarily attributable to changes in foreign exchange gains and losses, reflecting fluctuations in exchange rates and the increased exposure to foreign currency transactions resulting from business growth and the acquisitions completed during the year ended December 31, 2025.
Non-GAAP financial measures
Annual Recurring Revenue
The Company uses certain non-GAAP financial measures, which include Annual Recurring Revenue (ARR) or “ARR exit rate”, as we believe this measure can provide meaningful information regarding our operating performance. This non-GAAP measures should be evaluated in addition to and not as a substitute for our financial results presented in accordance with U.S. GAAP.
Annual Recurring Revenue (“ARR”) is a non-GAAP operating metric that represents the annualized value of recurring subscription and contract revenue under customer agreements in effect at the measurement date. A contract is included in ARR for an applicable period if it is active at the end of that applicable period and is excluded if it is not active at the end of that applicable period. This measure includes revenue from subscription contracts as well as recurring professional services agreements. While ARR represents the annualized revenue the Company would expect to receive from customers assuming no increases or reductions in contractual arrangements, the measure can be affected by contract start and end dates and should be viewed independently of the Company’s GAAP revenue as ARR is an operating metric and is not intended to be combined with or to replace revenue. ARR is not a forecast of future revenue and does not consider other sources of revenue that are not recurring in nature. ARR does not have a standardized meaning and is not necessarily comparable to similarly titled measures presented by other companies. ARR is forward-looking and differs from GAAP revenue, which is recognized over time in accordance with ASC 606 based on delivery of services. As a result, ARR is not directly reconcilable to GAAP revenue because it includes the value of contracted future revenues that have not yet been recognized and excludes non-recurring and usage-based revenue recognized under GAAP.
For the month of December 2025, the Company generated total revenues of $19.4 million, as disclosed in Note 2.17 of the Company's audited Combined Consolidated Financial Statements for the years ended December 31, 2025 and 2024. When annualizing total revenues for the month of December 2025, this implies $232.8 million in ARR.
EBITDA
52
EBITDA is a non-GAAP financial measure. We define EBITDA as net income (loss) adjusted for interest expense, income tax, depreciation of property and equipment and amortization of acquired intangibles. EBITDA should not be considered as a substitute for other measures of financial performance reported in accordance with GAAP. Although it is frequently used by investors and securities analysts in their evaluations of companies, EBITDA has limitations as an analytical tool, including:
We compensate for the inherent limitations associated with using EBITDA through disclosure of these limitations, presentation of the Rezolve Financial Statements in accordance with GAAP and reconciliation of EBITDA and to the most directly comparable GAAP measure, net income (loss).
The table below provides a reconciliation of our net income (loss) to EBITDA (non GAAP):
|
Year ended December 31, |
|
|||||||
|
|
2025 |
|
|
|
2024 |
|
||
Net income (loss) |
$ |
|
(101,410,228 |
) |
|
$ |
|
(173,451,133 |
) |
Add (subtract) |
|
|
|
|
|
|
|
||
Interest expense |
|
|
3,507,201 |
|
|
|
|
10,645,464 |
|
Provision for income tax expense |
|
|
(17,728,939 |
) |
|
|
|
243,735 |
|
Depreciation and amortization |
|
|
6,965,148 |
|
|
|
|
226,305 |
|
EBITDA (non-GAAP) |
$ |
|
(108,666,818 |
) |
|
$ |
|
(162,335,629 |
) |
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as EBITDA adjusted for the items listed below. Although it is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, including:
We compensate for the inherent limitations associated with using Adjusted EBITDA through disclosure of these limitations, presentation of the Rezolve Financial Statements in accordance with GAAP and reconciliation of Adjusted EBITDA and to the most directly comparable GAAP measure, net income (loss).
53
Rezolve believes that the presentation of adjusted EBITDA provides important supplemental information to management and investors regarding financial and business trends relating to the Company’s financial condition, results of operations and the valuation of the Company.
Adjusted EBITDA is used by management to understand and track underlying earnings performance by excluding one-time and non-recurring costs. The Company believe it is appropriate to exclude these costs from Adjusted EBITDA as they relate to:
Internally adjusted EBITDA and contribution margins are significant measures used by management for purposes of:
The table below provides a reconciliation of our net income (loss) to Adjusted EBITDA (non-GAAP):
54
|
Year ended December 31, |
|
||||||
|
|
2025 |
|
|
2024 |
|
||
Net income (loss) |
$ |
|
(101,410,228 |
) |
$ |
|
(173,451,133 |
) |
Add (subtract) |
|
|
|
|
|
|
||
Interest expense |
|
|
3,507,201 |
|
|
|
10,645,464 |
|
Provision for income tax expense |
|
|
(17,728,939 |
) |
|
|
243,735 |
|
Depreciation and amortization |
|
|
6,965,148 |
|
|
|
226,305 |
|
EBITDA (non-GAAP) |
$ |
|
(108,666,818 |
) |
$ |
|
(162,335,629 |
) |
Add (subtract) |
|
|
|
|
|
|
||
Unrealized foreign exchange (gain) loss |
|
|
(516,654 |
) |
|
|
1,289,938 |
|
Business development expenses |
|
|
195,008 |
|
|
|
4,750,430 |
|
Share-based compensation issued to related parties |
|
|
5,325,000 |
|
|
|
63,001,392 |
|
Share-based compensation for consultancy services |
|
|
— |
|
|
|
217,365 |
|
Share-based compensation for employees |
|
|
3,804,637 |
|
|
|
4,314,649 |
|
Loss / (gain) on derivatives |
|
|
2,889,175 |
|
|
|
(19,001,681 |
) |
Loss on extinguishment |
|
|
29,950,161 |
|
|
|
44,332,819 |
|
Share-based compensation - employees shares restrictions lifted |
|
|
— |
|
|
|
18,836,099 |
|
Gain on revaluation of financial asset |
|
|
(5,645,839 |
) |
|
|
— |
|
Gain on bargain purchase |
|
|
(61,298,445 |
) |
|
|
— |
|
Impairment loss |
|
|
63,345,577 |
|
|
|
— |
|
Ordinary shares issued in lieu of cash payment for services |
|
|
222,486 |
|
|
|
— |
|
Ordinary shares issued to Radio Group to settle termination of ANY acquisition in Germany |
|
|
876,000 |
|
|
|
— |
|
Legal costs incurred in connection with the Company's SPAC transaction |
|
|
1,398,866 |
|
|
|
— |
|
Costs related to the demerger of Rezolve Limited |
|
|
517,798 |
|
|
|
— |
|
Legal and professional cost associated with acquisitions |
|
|
8,623,127 |
|
|
|
— |
|
Adjusted EBITDA (non-GAAP) |
$ |
|
(58,979,921 |
) |
$ |
|
(44,594,618 |
) |
Total Number of Customers
We believe the size of our customer base is a key indicator of our market penetration, while the number of customers we transact with during a given period reflects the growth and activity level of our business. For each reporting period, we define the total number of customers as the number of distinct customers with whom we have transacted.
As of March 2026, we have more than 950 customers. We continue to expand this base by onboarding new customers and increasing adoption of our Brain Commerce suite among existing customers.
While customer count is an important measure of market traction, it does not fully reflect the economic value of our relationships, as it does not account for the size, contract value, or spending levels of individual customers. Accordingly, we will continue to provide updates on customer growth alongside other metrics to give a more complete picture of our business performance.
Management has assessed whether they believe there are events or conditions that give rise to doubt the ability of the Company to continue as a going concern for a period of twelve months after the preparation of the consolidated financial statements. The assessment includes knowledge of the Company’s subsequent financial position, the estimated economic outlook and identified risks and uncertainties in relation.
The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the foreseeable future.
However, certain conditions and events raise substantial doubt about the Company’s ability to continue as a going concern for a least one year from the date these combined consolidated financial statements are issued.
Management's plans to alleviate the substantial doubt about the Company’s ability to continue as a going concern, as described above, includes the following actions:
55
The Company has recently raised gross proceeds of $520.7 million from the following transactions:
56
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Short-term debt and other liabilities |
|
|
|
|
|
|
||
Short-term debt |
$ |
|
102,142,933 |
|
$ |
|
— |
|
Short-term debt to related parties |
|
|
11,973 |
|
|
|
5,102,211 |
|
Ordinary shares payable |
|
|
10,660,000 |
|
|
|
1,206,609 |
|
Convertible debt |
|
|
— |
|
|
|
10,288,123 |
|
Short term convertible debt to related party |
|
|
— |
|
|
|
95,309 |
|
Share-based payment liability |
|
|
1,400,000 |
|
|
|
1,400,000 |
|
Convertible promissory notes |
|
|
426,537 |
|
|
|
6,428,825 |
|
Advisors loans |
|
|
— |
|
|
|
12,812,366 |
|
Long-term debt and other liabilities |
|
|
— |
|
|
|
— |
|
Long-term debt |
|
|
50,092,029 |
|
|
|
— |
|
Total short-term and long-term debt and other liabilities |
$ |
|
164,733,472 |
|
$ |
|
37,333,443 |
|
Short-term and long-term debt
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Short-term debt |
|
|
|
|
|
|
||
Senior-secured term-loan facility (the "Facility") |
$ |
|
— |
|
$ |
|
— |
|
Non-Banking Financial Company loan (Prediqt) |
|
|
107,986 |
|
|
|
— |
|
Monroe debt |
|
|
101,540,086 |
|
|
|
— |
|
Other short-term debt |
|
|
494,861 |
|
|
|
— |
|
Total short-term debt |
$ |
|
102,142,933 |
|
$ |
|
— |
|
Long-term debt |
|
|
|
|
|
|
||
Non-Banking Financial Company loan (Prediqt) |
$ |
|
78,454 |
|
$ |
|
— |
|
Crownpeak promissory notes |
|
|
50,000,000 |
|
|
|
— |
|
Other long-term debt |
|
|
13,575 |
|
|
|
— |
|
Total long-term debt |
|
|
50,092,029 |
|
|
|
— |
|
Senior-secured term-loan facility
On January 23, 2025, the Company entered into a senior-secured term-loan facility (the “Facility”) with Joh. Berenberg, Gossler & Co. KG, a financial institution established under the laws of the Federal Republic of Germany (the “Lender”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Facility.
The committed amount of the Facility is $30.0 million (the “Committed Amount”). The Company may draw the Committed Amount, in full but not in part, until February 20, 2025 upon the satisfaction or waiver of certain customary conditions precedent.
Following a draw of the Committed Amount, the Company must repay the Facility in five (5) monthly installments of $6.0 million beginning on August 15, 2025. If the Company fails to make a scheduled repayment, a 5% fee will be added to the outstanding balance remaining under the Facility. The Company may, in its sole discretion, make prepayments of at least $3.0 million.
The Facility bears no interest. However, the Company will pay a $3.0 million arrangement fee to the Lender on the earlier of (i) the drawing the Committed Amount and (ii) February 21, 2025. The arrangement fee was deducted from the Committed Amount disbursed to the Company. As set forth in the Facility, the arrangement fee will be reduced in connection with any prepayments made by the Company.
In connection with the Facility, the Company has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The Company has also agreed to repay the Facility in accordance with the amortization schedule described above, beginning on August 15, 2025, and may use the proceeds it receives under or in connection with that certain Second Amended and Restated Standby Equity Purchase Agreement entered with YA II PN, Ltd. on September 6, 2024 to do so. The Second Amended and Restated Standby Equity Purchase Agreement was terminated on December 19, 2025.
The Facility contains customary events of default for similar financing transactions, including, among other things, if a change of control of the Company occurs. At any time after an event of default, the Lender may accelerate and make payable all or part of the Facility. The Facility is governed by the laws of Germany, and the courts of Hamburg have exclusive jurisdiction over any disputes arising out of or in connection with the Facility.
The Lender or its affiliates have in the past provided and may from time to time in the future provide, investment banking and other
57
services to the Company.
The Company has recognized interest expense on the Facility using the effective interest method. In accordance with ASC 470 and ASC 835, the arrangement fee is accounted for as a debt discount and amortized to interest expense over the term of the Facility using the effective interest method. As a result, the Facility has an effective interest rate of approximately 14.2%.
The Company received net cash proceeds of $27.0 million upon issuance and recorded the Facility at its face value of $30.0 million, net of the $3.0 million debt discount. The loan was repaid in installments of $6.0 million beginning on August 15, 2025. Interest expense recognized from the amortization of the debt discount for the year ended December 31, 2025, was $3.0 million. As at December 31, 2025, no amounts remain payable on the Facility.
Prediqt acquisition
As a result of the Prediqt acquisition, the Company acquired loans owed to Non-Banking Financial Companies (NBFCs) in India. These loans carry an interest rate ranging between 17% to 22%. Amounts due within the next 12 months have been classified in short-term debt. Amounts due beyond 12 months have been classified as long-term debt.
Additionally, as part of the Prediqt acquisition, the Company acquired as interest free loans owed to directors of Prediqt. These loans are repayable on demand and presented within "Short-term debt".
Monroe Debt - Crownpeak acquisition
The Company assumed approximately $151.9 million of the aggregate principal amount of outstanding term loans and revolving loans and approximately $1.8 million of accrued and unpaid exit and amendment fees, of which, $50.0 million was paid by the Company at the closing.
In connection with the Crownpeak Acquisition (see Note 4), on December 1, 2025, the Company entered into an amended and restated credit agreement (“A&R Credit Agreement”) with the lenders party thereto and Monroe Capital Management Advisors, LLC which amended and restated in its entirety the prior Crownpeak credit agreement, dated February 28, 2019.
Under the A&R Credit Agreement, the prior Crownpeak credit agreement was amended and restated in full as of December 1, 2025. In connection with the Crownpeak acquisition, $42.5 million of the outstanding term loans and $7.5 million of revolving loans were repaid in full together with accrued interest and fees. All revolving commitments were terminated, and accrued exit and amendment fees were paid. After giving effect to these transactions, the remaining outstanding term loans, of $103.6 million, under the prior facility continued as term loans.
The term loans mature on December 31, 2026. Amounts outstanding bear interest at a rate per annum equal to the Term Secured Overnight Financing Rate (“Term SOFR”) plus an applicable margin of 5.50% per annum. Following certain specified events of default, default interest of an additional 2.00% per annum applies to the applicable interest rate.
The term loans have financial maintenance covenants, including a maximum consolidated leverage ratio for Crownpeak and its subsidiaries, tested quarterly, and a requirement that the Company maintain minimum liquidity of at least $10 million at all times. The A&R Credit Agreement also provides an equity cure right permitting specified equity contributions to cure non-compliance with the financial maintenance covenants, subject to customary limitations and conditions. The Company is in compliance with all debt covenants as of December 31, 2025.
Crownpeak promissory notes
In connection with the Crownpeak Acquisition, the purchase consideration composed of the following to be issued by the Company to the Crownpeak Seller: (i) a promissory note in the initial principal amount of $50.0 million, made up of a $20.0 million tranche (the “First Loan Note”) and a $30.0 million tranche (the “Second Loan Note” and together with the First Loan Note, the “Loan Notes”); and (ii) 11.1 million ordinary shares with an approximate value of $31.0 million based on an issuance price of $2.79 per ordinary share.
The Loan Notes will accrue interest at a rate of 10.0% per annum and are payable in kind or in cash. The First Loan Note matures on April 1, 2027 and the Second Loan Note matures on December 31, 2027. The Company assumed approximately $151.9 million of the aggregate principal amount of outstanding term loans and revolving loans and approximately $1.8 million of accrued and unpaid exit and amendment fees, of which, $50.0 million was paid by the Company at the closing.
Short-term debt to related parties
Unsecured interest free loans taken from related parties DBLP Sea Cow Ltd are repayable on demand. During the year ended December 31, 2025, the Company settled short-term debt owed to DBLP Sea Cow Ltd. of $6.0 million by paying cash of $5.1 million and issuing 0.8 million ordinary shares. The shares were issued at their fair value of $2.06 on the date of issuance. The loss on
58
extinguishment of $0.8 million with DBLP Sea Cow Ltd, a significant shareholder, was treated as a capital transaction and recorded in additional paid in capital.
Ordinary shares payable
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Ordinary shares payable |
|
|
|
|
|
|
||
Techouts acquisition |
$ |
|
8,660,000 |
|
$ |
|
— |
|
Smartpay and Truther acquisition |
|
|
2,000,000 |
|
|
|
— |
|
Rights issue |
|
|
— |
|
|
|
1,206,609 |
|
Total |
$ |
|
10,660,000 |
|
$ |
|
1,206,609 |
|
On May 25, 2023, the Company offered to all existing investors and employees of the Company an advanced subscription agreement for ordinary shares of the Company at a discount from the pre-close equity value of the Company per share (“the Rights Issue”) in connection with its business combination with Armada Acquisition Corp I (refer to note 2.1). The Company issued 11.0 million ordinary shares in December 2024 to subscribers of the rights issue. On January 24, 2025, the Company issued a further 0.2 million ordinary shares to a subscriber of the rights issue to whom they were owed ordinary shares payable as at December 31, 2024. On April 16, 2025, the Company issued 4.2 million ordinary shares to DBLP Sea Cow Ltd, a related party, to settle the outstanding liability.
Ordinary shares payable as of December 31, 2025 is solely comprised of ordinary shares payable in relation to acquisitions made in during the year.
Convertible debt
On December 17, 2021, the Company and Armada Acquisition Corp I, a special purpose acquisition company (“SPAC”) listed on the Nasdaq Capital Market (“NASDAQ”), and certain other parties entered into a definitive agreement for a business combination that would result in Rezolve becoming a publicly listed company upon completion of the aforementioned transaction. The transaction included a $41.0 million fully committed private placement of ordinary shares of the combined company (the “PIPE”), $20.0 million of which has been advanced to Rezolve pursuant to a secured convertible loan note as further described below.
In accordance with the executed subscription agreements, the investors that pre-funded the PIPE entered into an agreement to purchase secured convertible notes of the Company for a total of $20.0 million. Prior to amending the terms on May 23, 2023 (further below), these notes were due to mature on December 16, 2023, and were redeemable by the noteholder on the occurrence of:
Immediately prior to an IPO or SPAC transaction, the principal amount and accrued interest is converted into ordinary shares at a 30% discount to the pre-close equity value of the Company.
The interest rate is 20% per annum, and is reduced in the following events to:
Upon the issuance of the notes, the amount pre-funded by each participating investor reduces their remaining respective commitment in the PIPE.
The secured convertible notes has been accounted for as a liability in accordance with ASC 470–20. The Company has adopted ASU 2020-06, and therefore no bifurcation of the beneficial conversion feature has been recorded in equity. Debt discount, comprised of the fair value of the warrants issued to lenders with issuance of the convertible debt aggregating approximately $2.1 million were initially recorded as a reduction to the principal amount of the debt and will be amortized to interest expense on a straight line basis over the contractual terms of the secured convertible loan notes until May 23, 2023. The Company estimated that the difference between amortizing the debt discounts and the issuance costs using the straight line method as compared to using effective interest rate method was immaterial. As noted below, senior secured convertible note has been accounted for as a troubled debt restructuring since May 23, 2023 and as a result the effective interest rate method has been applied prospectively from this date. Debt discount, comprised of the fair value of the warrants issued to lenders with issuance of the convertible debt aggregating approximately $2.1 million were initially
59
recorded as a reduction to the principal amount of the debt and will be amortized to interest expense using the effective interest method.
The Company has not incurred any significant debt issuance costs and has expensed them as incurred.
On May 23, 2023, the Company executed a further amendment to the secured convertible loan notes.
The amendments are as follows:
The definition of “Extraordinary Transactions” covers the occurrence of (a) making, or permitting any subsidiary to make, any loan or advance to any person unless such person is wholly owned by Rezolve or, in the case of a natural person, is an employee or director of Rezolve and such loan or advance is made in the ordinary course of business under the terms of an employee share or option plan that has been notified to the noteholders; (b) guaranteeing, directly or indirectly, or permitting any subsidiary to guarantee, directly or indirectly, any indebtedness except for trade accounts of Rezolve or any subsidiary arising in the ordinary course of business; (c) changing the principal business of Rezolve, entering new lines of business, or exiting the current lines of business; (d) selling, assigning, licensing, charging, pledging, or encumbering material technology or intellectual property, other than licenses granted in the ordinary course of business (e) entering into any corporate strategic relationship, joint venture, cooperation or other similar agreement, other than in the ordinary course of business; (f) acquiring or disposing of assets (including shares) (x) where the consideration paid or received exceeds 20% of the average market capitalization of Rezolve for the 90 calendar days prior to such M&A (merger or acquisition) transaction (calculated based on the volume-weighted average share price of the Rezolve shares in that period) or (y) other than (A) on arm’s length terms, and (B) for the purpose of promoting the success of Rezolve; (g) amending the Articles of Association of Rezolve in a manner that is adverse to the noteholders; (h) effecting any merger, combination, reorganization, scheme of arrangement, restructuring plan or other similar transaction; and (i) liquidating, dissolving or winding up the affairs of Rezolve.
Upon execution of the amendment the secured convertible notes are then referred to as “the senior secured convertible notes”.
60
The carrying value of the convertible debt as at December 31, 2023 does not include the $8.5 million of notes issuable upon completion of the Demerger. These were contingent upon completion of the Demerger therefore upon close of the Demerger on July 4, 2024, they were issued. The issuance of the Demerger notes do no result in any further cash to be received by the Company, rather they are treated as interest payable at maturity. The Demerger notes trigger a remeasurement of the senior secured convertible notes and the effective interest rate used to account for the senior secured convertible notes as a troubled debt restructuring.
On December 5, 2024, pursuant to the terms of the Loan Note Instrument, one of the holders of the Senior Secured Convertible Notes converted all of their $8.0 million outstanding Convertible Notes at a conversion price of $7 per ordinary share. The Company recognized a gain on extinguishment of $1.3 million, equal to the book value of the debt less the fair value of the ordinary shares issued on conversion.
On December 17, 2024, the Company, Apeiron Investment Group Ltd. and Bradley Wickens, the beneficial holders of the majority of Senior Secured Convertible Notes entered into an agreement (the “Agreement”) to amend the Loan Note Instrument (the “Amendment”) and that the beneficial holders shall procure that the registered nominees holding their Convertible Notes provide the necessary consents to the Amendment. Pursuant to the Amendment, the conversion price with respect to approximately $41.9 million of outstanding Senior Secured Convertible Notes was revised to equal $2.00 per ordinary share.
Pursuant to the Agreement, Apeiron Investment Group and Bradley Wickens will also procure that the registered nominees holding $41.5 million of outstanding Convertible Notes and accrued interest of $1.9 million (on behalf of Apeiron Investment Group Ltd. and Bradley Wickens) will exercise their option to convert all such outstanding Convertible Notes, at a conversion price of $2.00 per ordinary share. On December 27, 2024, 10.8 million ordinary shares were issued to settle $20.8 million and $0.9 million of interest, respectively. On January 15, 2025 and February 13, 2025, respectively, a further 3.0 million and 8.0 million ordinary shares were issued to settle $20.8 million and $0.9 million of principle and interest. Debt conversion expense of $20.6 million was recognized within "Loss on extinguishment" in the Company's Combined Consolidated Statement of Operations in the year ended December 31, 2025.
Short term convertible debt to related party
Short term convertible debt to a related party of $0.1 million, included in the Company’s senior secured convertible note includes $0.1 million of convertible debt, $22,399 of accrued interest and a debt discount of $39,352.
Share-based payment liability
On October 7, 2021, the Group acquired Jaymax International Service Inc. (“Jaymax”) (later renamed to “Rezolve Taiwan Limited”). As part of the acquisition of Jaymax, the Company agreed to issue $1.4 million in Rezolve ordinary shares to Jaymax’s former owner for completion of a 3-year non-compete period which began on the October 7, 2021. The cost of the share-based payment is considered to have vested immediately upon commencement of the non-compete period as the Company’s assumption is that it is more likely than not that the former owner will not breach the non-compete agreement. The share-based payment liability is to be settled by a fixed dollar amount of shares. At December 31, 2024 and December 31, 2025 the liability is equal its present value of $1.4 million as the term of the non-compete agreement ended on October 7, 2024. The Company has yet to settle it in ordinary shares as at December 31, 2025.
Convertible promissory notes
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Convertible promissory notes |
|
|
|
|
|
|
||
YA notes |
$ |
|
— |
|
$ |
|
2,250,245 |
|
Convertible promissory notes |
|
|
426,537 |
|
|
|
1,146,966 |
|
Promissory note from sponsor |
|
|
— |
|
|
|
3,031,614 |
|
Total |
$ |
|
426,537 |
|
$ |
|
6,428,825 |
|
Yorkville Standby Equity Purchase Agreement (“SEPA”)
On February 2, 2024, the Company obtained an unsecured loan of $2.0 million from YA II PN, LTD (“Yorkville” or “YA”) with principal amount of $2.5 million. The Yorkville Note was issued at a 20% discount to the principal amount, and has a maturity date
61
falling 6 months from the date of issue (unless extended by Yorkville) subject to acceleration upon the occurrence of an event of default.
The interest rate was agreed at 10.0% per annum from the date the agreement was executed. Interest increases to 18.0% upon the occurrence of an event of default. Whilst the Yorkville Note is not directly secured, Yorkville is entitled to share recoveries enforced under various debentures granted by Rezolve pursuant to an intercreditor agreement with Apeiron Investment Group Ltd.
The Yorkville Note is convertible into ordinary shares in Rezolve AI plc upon public listing (or if an event of default occurs or the note reaches maturity). Conversion is at the option of the noteholder at a conversion price calculated by reference to the lower of (i) a fixed price of $10.00 per share or (ii) a variable price based on 90% of the lowest daily volume weighted average ("VWAP") during 10 consecutive trading days immediately prior to conversion provided that such variable price shall not be lower than the floor price of $2.00 per share.
In connection with the Yorkville note, an additional convertible promissory note (“the Other Promissory notes”) was offered to certain other investors on the same terms as the Yorkville Note. The Other Promissory Notes have a face value of $2.9 million and were issued at a 20% discount. The interest rate was agreed at 10.0% per annum from the date the agreement was executed. Interest increases to 18% upon the occurrence of an event of default. The Other Promissory notes have a maturity date six months from issue.
The Other Promissory Notes are convertible into ordinary shares in Rezolve AI plc upon public listing (or if an event of default occurs or the note reaches maturity). Conversion is at the option of the noteholder at a conversion price calculated by reference to the lower of (i) a fixed price of $10.00 per share or (ii) a variable price based on 90% of the lowest daily volume weighted average share price ("VWAP") during 10 consecutive trading days immediately prior to conversion provided that such variable price shall not be lower than the floor price of $2.00 per share.
On September 6, 2024, Yorkville and the Company amended and restated the Yorkville Note (the “Second A&R YA Agreement”) to incorporate an additional prepaid advance arrangement pursuant to which Yorkville committed to provide the Company with prepaid advances in an aggregate original principal amount of an additional $7.5 million, which will be in three tranches, with the first tranche in an original principal amount of $2.5 million (the "First YA Note") funded upon execution of the Second A&R YA Agreement, the second tranche in an original principal amount of $2.5 million funded upon filing of the Company’s F-1 registration statement, and the third tranche in an original principal amount of $2.5 million to be funded upon the effectiveness of the F-1 registration statement. The Second A&R YA Agreement superseded the YA Agreement. The maturity date of the Yorkville Note and the Other Promissory Notes were extended to September 11th, 2025.
In connection with the Second A&R YA Agreement and upon effectiveness of the F-1 Registration Statement originally filed with U.S. Securities and Exchange Commission on September 6, 2024, and declared effective on November 27, 2024, on November 29, 2024, Rezolve issued YA a promissory note in the principal amount of $2.5 million (the “Third YA Note”, and together with the First YA Note and Second YA Note, the "YA Notes"), reflecting the third tranche of the prepaid advances. The YA Notes bear interest at an annual rate of 10.0% of the outstanding principal balance of the YA Notes and mature on September 11, 2025. Under the YA Notes, YA may elect to convert all or part of the amount outstanding under the Note into ordinary shares of Rezolve at the Conversion Price (as defined in the Note), subject to certain limitations. Rezolve has the right to redeem early a portion or all amounts outstanding under the Note upon 10 days written notice upon the occurrence of certain events.
In December 2024, the Company received the Noteholder's request to convert of all of the principal and interest outstanding under the YA Notes. In connection therewith, the Company issued an aggregate of 4.3 million Ordinary Shares (including in payment of a fee to YA) in December 2024. As of December 31, 2024, $2.7 million in principal and interest was outstanding, which was subsequently settled in 1.4 million Ordinary Shares on February 5, 2025, and no further amounts remain outstanding. A loss on extinguishment of $1.5 million was recognized in the Company's Combined Consolidated Statements of Operations for the year ended December 31, 2025.
Promissory notes
In February 2024, certain persons (including Apeiron Investment Group Ltd and certain related parties of Rezolve) entered into Subscription Agreements to subscribe for the Promissory Notes with a total principal amount of $2.9 million in consideration for an advance by each subscriber to Rezolve Limited the “Net Investment Amount”.
The Promissory Notes were issued during the course of February, 2024, pursuant to the terms of the Promissory Note Instruments.
With effect from the completion of the Pre-Closing Demerger, the rights and obligations of Rezolve Limited under the Subscription Agreements and the Promissory Note Instruments were novated to Rezolve AI plc.
62
Pursuant to the Promissory Note Instruments, the Promissory Notes will mature on the date falling 6 months from the date of their issue (or as extended at the option of the noteholder) unless an event of default occurs that triggers an acceleration of the repayment obligation, and bears interest of 10.0% per annum (except if an event of default has occurred and is continuing, an 18% interest rate will apply). The Promissory Notes are freely transferable in whole or in part, subject to the terms of the Promissory Notes Instrument.
The Promissory Notes are convertible into ordinary shares in Rezolve AI plc. The noteholders may elect to convert all or part of the amount outstanding under their Promissory Note into ordinary shares at the Conversion Price, however subject to the conversion limitation whereby the issue of Ordinary Shares upon conversion would not exceed the Exchange Cap (unless Rezolve shareholders have approved such issuances, or if Rezolve is permitted to follow (and has elected to do so) its home country practices instead of the stockholder approval requirements of Nasdaq Rule 5635).
Rezolve has the right to redeem early a portion or all amounts outstanding under the Promissory Notes pursuant to a Redemption Notice, provided that on the date of the Redemption Notice the VWAP of the ordinary shares in Rezolve AI plc is less than the Promissory Note Conversion Fixed Price. Upon such early redemption of a Promissory Note, and in addition to the principal and interest outstanding, a redemption premium of 10.0% of the principal amount being redeemed is payable to the noteholder. Upon receipt of a Redemption Notice, the noteholder shall have 10 trading days to elect to convert all or any portion of the Promissory Note.
Following the public listing of the ordinary shares in Rezolve AI plc, if a “Promissory Note Trigger Event” occurs (being where (i) the daily VWAP is less than the Floor Price for five (5) trading days during a period of seven (7) consecutive trading days (the “Promissory Note Floor Price Trigger”), or (ii) Rezolve AI plc has issued in excess of 99% of the ordinary shares available under the Exchange Cap unless Rezolve AI plc shareholders have approved such issuances, or if Rezolve AI plc is permitted to follow (and has elected to do so) its home country practices instead of the stockholder approval requirements of Nasdaq Rule 5635) (the “Promissory Note Exchange Cap Trigger”), then Rezolve AI plc shall make monthly payments equal to 25% of the original principal of such Promissory Note per month (or, if lesser, the then outstanding principal of the Promissory Note) plus a payment premium of 10.0% of the principal amount being paid, plus any accrued and unpaid interest as of each payment date, with such monthly payment obligation to cease if any time after the date of a Promissory Note Trigger Event, (i) in the event of a Promissory Note Floor Price Trigger, the daily VWAP is greater than 110% of the Floor Price for any 5 of 7 consecutive trading days, or the date Rezolve AI plc reduces the Floor Price (in accordance with its rights to do so under the Promissory Note Instruments), or (ii) in the event of an Exchange Cap Trigger, the date Rezolve AI plc has obtained stockholder approval to increase the number of ordinary shares under the Exchange Cap (or if the Exchange Cap no longer applies), unless a subsequent Promissory Note Trigger Event occurs.
On December 30, 2024, the Company repaid $1.5 million of principal and interest to noteholders and related persons. As at December 31, 2024, certain noteholders and related parties have agreed to convert an aggregate of $1.2 million of principal and interest into 0.4 million Ordinary Shares. The outstanding balance at June 30, 2025 is $.05 million (net of debt discount), which the Company intends to settle by conversion into Ordinary Shares.
Cohen & Company Financial Management LLC
On August 14, 2024 Rezolve AI issued a promissory note to pay to Cohen & Company Financial Management LLC (“Cohen”) as an agent for Armada, in the principal sum of $3.1 million (the “Original Amount”), with the Original Amount, the accrued interest thereon and other amounts due and payable (unless prepaid earlier or converted into shares of common stock) on August 14, 2027 (the “Maturity Date’). The note bears interest at 4.95% per annum. Starting from January 31, 2025, upon Cohen’s request, Rezolve AI shall pay Cohen the principal amount plus all of the accrued interest in increments of 1/18 of the outstanding principal amount (the “Amortization Payment”) on a date determined by Cohen (a “Payment Date”) until the Original Amount has been paid in full prior to or on the Maturity Date or, if earlier, upon acceleration, of prepayment of the note in accordance with the terms of the note. At the option of the Company, the Amortization Payments shall be made in cash or in shares of common stock of Rezolve AI, based on the price described in the promissory note. From and after January 15, 2025, Cohen shall have the right, at Cohen’s sole option, on any business day, to convert at the conversion price described in the note all or any portion of the outstanding principal amount of the note up to an amount described in the note. The promissory note was settled on February 10, 2025 by issuing 1.3 million ordinary shares, and no further amounts remain outstanding. A loss on extinguishment of $1.1 million was recognized in the Company's Combined Consolidated Statement of Operations in the year ended December 31, 2025.
Advisors loans
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Advisors loans |
|
|
|
|
|
|
||
Northland Securities |
$ |
|
— |
|
$ |
|
5,491,806 |
|
J.V.B Financial Group |
|
|
— |
|
|
|
7,320,560 |
|
Total |
$ |
|
— |
|
$ |
|
12,812,366 |
|
63
The Company issued the following promissory notes to financial advisors for fees payable contingent on the close of the Business Combination with Armada:
Northland Securities
On July 30, 2024 the Company issued a promissory note to Northland Securities, Inc. (“Northland”) for an amount of $5.1 million and agreed to pay interest on the principal amount outstanding from time to time from July 30, 2024 until the note is fully paid, at the rate of 10.0% per annum, compounded annually. The timing and repayment amounts under the note will depend on the amounts of financing raised by the Company and its direct and indirect parent companies after completion of the Business Combination. If more than (a) $25.0 million in proceeds is raised while the note is outstanding, 50% of the outstanding principal and all accrued and unpaid interest on the note shall become immediately due and payable and (b) if more than $50.0 million in gross proceeds is raised, all of the outstanding principal and all accrued and unpaid interest shall become immediately due and payable. In the event that the Company and its direct and indirect parent companies after completion of the Business Combination have less than $20.0 million in cash, cash equivalents and marketable securities as of December 31, 2024, the Company may, at its option, on or before March 31, 2025, convert all but $1.1 million into shares of the Company’s common stock at a price of $10.00 per share. In the event the Company and its direct and indirect parent companies after completion of the Business Combination have $20.0 million or more in cash, cash equivalents and marketable securities as of any time on or prior to December 31, 2025, Northland may, at its option on or prior to June 30, 2026, sell any or all of the shares of the Company’s common stock received pursuant to the prior sentence to the Company at a price of $10.00 per share. As of December 31, 2025, the fair value of this put option is $2.9 million as determined by a third party valuation specialist and is recognized within "Derivative liabilities" on the Company's Combined Consolidated Balance Sheets. The note was entered into in full satisfaction of the cash payments otherwise due to Northland by the Company at the time of closing and which are described above. All of the Company’s obligations under the Note were guaranteed by Rezolve AI plc. The Company settled the promissory note with Northland on January 30, 2025 by issuing 0.4 million ordinary shares and paying $3.5 million in cash. A gain of $1.0 million was recognized within "Loss on extinguishment" in the Company's Combined Consolidated combined Statement of Operations in the year ended December 31, 2025. No further amounts remain outstanding.
J.V.B. Financial Group
On August 14, 2024 the Company issued a promissory note to J.V.B. Financial Group, LLC (“JVB”) ) for an amount of $7.5 million and agreed to pay interest on the principal amount outstanding from time to time from August 14, 2024 until the note is fully paid, at the rate of 4.95% per annum. The note is to be repaid in installments of $0.6 million (“Amortization Payment”) beginning on January 31, 2025, and on each month end thereafter until December 31, 2025. The Company may, in its sole discretion, elect to pay all or any portion of the Amortization Payment or any interest due and payable on the maturity date in ordinary shares of Rezolve AI, with the number of such shares determined by dividing the Amortization Payment by a price per ordinary share equal to 95% of the arithmetic average of the daily volume weighted average share price ("VWP") for the 5 days ending on the day immediately preceding the due date of the Amortization Payment. The note was entered into in full satisfaction of the cash payments otherwise due to JVB by the Company at the time of closing and which are described above. All of the Company’s obligations under the Note were guaranteed by Rezolve AI plc. On February 26, 2025, the Company issued 0.8 million ordinary shares to settle $2.0 million of principle outstanding to the JVB promissory note.
Other
In connection with the closing of the GroupBy acquisition, the Company entered into a subscription letter with Western Alliance Bank (“WAB”) pursuant to which the Company agreed to issue to WAB a number of Ordinary Shares which is equal to $12.3 million in order to settle debt owed by Groupby to WAB. In consideration for the allotment of these Ordinary Shares, WAB irrevocably and unconditionally released and discharged the Company from the obligations owed by the Company to WAB.
The Company issued 5.9 million Ordinary shares to WAB to settle the debt. The debt was settled in June 2025 upon issuance of 5.9 million Ordinary shares at $2.10 per share, and a loss on extinguishment of $4.4 million was recognized in the Company's Combined Consolidated Statement of Operations.
In accordance with the terms of the subscription letter, WAB is to return any money received in excess of $12.3 million from the subsequent sale of the 5.9 million Ordinary shares. The receivable (financial asset) due from WAB involve returns that may vary in amount, such that the ultimate payout will depend on the price per Ordinary Share on the day that WAB sells all or part of the 5.9 million Ordinary Shares. The Company elected to recognize this hybrid financial instrument at fair value with changes in fair value recognized currently in earnings, therefore no bifurcation of any embedded derivatives were required. During the year ended December 31, 2025, the Company recognized gain on revaluation of the financial asset of $5.6 million in the Combined Consolidated Statement of Operations. The receivable was settled in full by December 31, 2025.
Fair value measurement
64
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price at which an asset could be exchanged or a liability transferred in an orderly transaction between knowledgeable, willing parties in the principal or most advantageous market for the asset or liability. Where available, fair value is based on observable market prices or derived from such prices. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.
The Company reports all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
Level 3—Inputs are unobservable inputs for the asset or liability.
The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety.
Fair value measurement at reporting date:
Description |
|
Level 1 |
|
|
Level 2 |
|
Level 3 |
|
||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|||
Fair value on recurring basis |
|
|
|
|
|
|
|
|
|
|||
(1) Share-based payment liability |
$ |
|
1,400,000 |
|
$ |
— |
|
$ |
— |
|
||
(2) Derivative liability |
$ |
— |
|
$ |
|
2,881,469 |
|
$ |
— |
|
||
(3) Crypto intangible assets |
$ |
|
102,801 |
|
$ |
— |
|
$ |
— |
|
||
(4) Contingent consideration |
$ |
— |
|
$ |
— |
|
$ |
|
51,050,570 |
|
||
Fair value on non-recurring basis |
|
|
|
|
|
|
|
|
|
|||
(5) Other digital assets |
$ |
— |
|
$ |
|
16,373,705 |
|
$ |
— |
|
||
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
Fair value on recurring basis |
|
|
|
|
|
|
|
|
|
|||
(1) Share-based payment liability |
$ |
|
1,400,000 |
|
$ |
— |
|
$ |
— |
|
||
(2) Derivative liability |
$ |
— |
|
$ |
|
2,579,875 |
|
$ |
— |
|
||
(2) Derivative asset |
$ |
— |
|
$ |
|
2,587,581 |
|
$ |
— |
|
||
65
The derivative asset at December 31, 2024 pertained to an option held by the Company to convert a promissory note payable to Northland Securities. In the event that the Company and its direct and indirect parent companies after completion of the Business Combination have less than $20.0 million in cash, cash equivalents and marketable securities as of December 31, 2024, the Company may, at its option, on or before March 31, 2025, convert all of the advisor's loan payable but $1.1 million into shares of the Company’s common stock at a price of $10.00 per share.
The derivative liabilities were triggered by conversion features embedded in promissory notes held by investors Cohen & Company Financial Management LLC, J.V.B. Financial Group and Northlands Securities. On August 15, 2024, the Company recognized derivative liabilities and an offsetting debt discount associated with the embedded conversion features in its senior secured convertible notes (see note 8), convertible promissory notes and advisors loans. The Company previously did not bifurcate the embedded conversion features as derivatives due to the lack of an underlying share price prior to the Company's acquisition of Armada and listing of its Ordinary Shares on the NASDAQ.
The carrying amount of the Company’s cash, accounts receivable, accounts payable and accrued expenses approximated their fair values due to their short term to maturity.
Concentration of credit risk
Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivables. The Company’s cash in deposited in accounts at large financial institutions. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash are held.
Accounts receivable are potentially subject to credit risk concentration. The Company has not experienced any material losses related to concentrations during the periods presented.
At December 31, 2025 and 2024, the following customers represent more than 10% of total accounts receivable.
|
|
December 31, 2025 |
December 31, 2024 |
||||
Servicios Liverpool, S.A. de C.V. |
|
17 |
% |
|
— |
|
% |
La Liga |
|
Less than 10% |
|
100 |
|
% |
|
Balance Sheet Information
The following table sets forth our unrestricted cash and cash equivalents on our balance sheet and undrawn amounts under our revolving credit facility as of December 31, 2025 and December 31, 2024:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Unrestricted cash and cash equivalents |
$ |
|
111,112,251 |
|
$ |
|
10,441 |
|
Available liquidity |
$ |
|
111,112,251 |
|
$ |
|
10,441 |
|
Cash Flows
The following table summarizes our cash flows for the periods presented:
66
|
Year ended December 31, |
|
||||||
|
|
2025 |
|
|
2024 |
|
||
Net cash used in operating activities |
$ |
|
(63,147,255 |
) |
$ |
|
(22,382,670 |
) |
Net cash used in investing activities |
|
|
(24,708,239 |
) |
|
|
(3,532,110 |
) |
Net cash provided by financing activities |
|
|
188,814,700 |
|
|
|
35,449,213 |
|
Effect of exchange rate changes on cash and |
|
|
423,499 |
|
|
|
38,527 |
|
Net (decrease) increase in cash and cash equivalents |
$ |
|
101,382,705 |
|
$ |
|
9,572,960 |
|
Operating Activities
Net cash used in operating activities was $63.1 million for the year ended December 31, 2025. This was primarily attributable to a net loss of $101.4 million, partially offset by adjustments for non-cash items such as share-based compensation expenses, interest expense, net gains on derivatives and net losses on extinguishments of debt. In addition, non-cash impacts related to the acquisition of Subsquid affected operating cash flows, including the gain on bargain purchase and the impairment loss recognized on the SQD utility tokens.
Net cash used in operating activities was $22.4 million for the year ended December 31, 2024, which resulted primarily from a net loss of $173.5 million from operating activities, adjusted for non-cash items such as share-based compensation expenses, advisor loans, interest expense, net gains on derivatives and net losses on extinguishments of debt.
Investing Activities
Net cash used in investing activities was $24.7 million for the year ended December 31, 2025, which resulted primarily cash payments for acquisitions, cash acquired in acquisitions, cash paid for other digital assets and from costs incurred to continue the development of our Rezolve platform and related technology.
Net cash used in investing activities was $3.5 million for the year ended December 31, 2024, which resulted primarily from costs incurred to continue the development of our Rezolve platform and related technology.
Financing Activities
Net cash provided by financing activities of $188.8 million for the year ended December 31, 2025 was primarily due to proceeds from convertible promissory notes, proceeds from the issuance ordinary shares and proceeds from long-term debt partially offset by repayments of debt obligations.
Net cash provided by financing activities of $35.4 million for the year ended December 31, 2024 was primarily due to proceeds from convertible promissory notes, proceeds from the issuance ordinary shares and proceeds from short-term debt from related parties partially offset by repayments of debt obligations to related parties and repayments of promissory notes.
Commitments
Microsoft, Google and Amazon Web Services
The Company’s commitments to purchase eligible services and offerings from Microsoft, Google and Amazon Web Services
is summarized in the table below:
|
|
Future commitment amount in USD millions |
|
||
Microsoft |
|
$ |
|
150 |
|
|
|
|
36 |
|
|
Amazon Web Services |
|
|
|
43 |
|
Total Commitment |
|
$ |
|
229 |
|
On October 3, 2024, the Company announced that it entered into a commercial agreement with Microsoft Corporation. Through this collaboration, Rezolve’s Brain Suite, including Brain Commerce, Brain Checkout, and Brain Assistant, will be powered by Microsoft Azure and available globally via Microsoft’s Azure Marketplace and co-sell channels. The Company is committed to spend $150.0 million under this agreement to purchase eligible services and offerings from Microsoft over the next 5 years.
67
On November 20, 2024, the Company announced that it entered into a commercial agreement with Google Cloud EMEA Ltd (“Google”). Through this collaboration, Google will resell Rezolve AI’s Brain Suite. The Company is committed to spend $10.0 million to purchase eligible services and offerings from Google over the next 3 years. On March 25, 2025, in connection with the GroupBy acquisition (see Note 4), the Company assumed a commitment to spend $26.0 million to purchase eligible services and offerings from Google over the next 5 years.
On December 1, 2025, in connection with the Crownpeak acquisition, the Company assumed a commitment to spend $43.0 million with Amazon Web Services to purchase eligible services and offerings from Amazon Web Services over the next 5 years.
Off-Balance Sheet Arrangements
As of December 31, 2025, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.
Please refer to “Item 4. Information on the Company-B. Business Overview” and “Item 4. Information on the Company-B. Business Overview-Intellectual Property.”
Please refer to “Item 4.B—Business Overview—Industry Overview and Trends.”
The Rezolve AI plc and Subsidiaries Combined Consolidated Financial Statements are prepared in conformity with U.S. generally accepted accounting principles. In preparing the Rezolve AI plc and Subsidiaries Combined Consolidated Financial Statements, we make assumptions, judgments and estimates that can have a significant impact on amounts reported in the Rezolve AI plc and Subsidiaries Consolidated Financial Statements. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. We regularly reevaluate our assumptions, judgments and estimates.
Our significant accounting policies are described in Note 2, “Basis of presentation and summary of significant accounting policies” in the notes to the Rezolve AI plc and Subsidiaries Combined Consolidated Financial Statements included elsewhere in this Report on Form 20-F.
Critical accounting estimates are those estimates that involve a significant level of estimation uncertainty and could have a material impact on our financial condition or results of operations. We have critical accounting estimates in the areas of the valuation of acquisition-related assets and liabilities, deferred income taxes and related valuation allowances, fair value measurements, useful lives of long-lived assets, capitalized software and share-based compensation. We believe that these accounting policies, as described below involve a greater degree of judgment and complexity. Accordingly, these are the policies we think are the most critical to aid in fully understanding and evaluating our financial condition and results of operations
Revenue recognition
Under ASC 606, we determine revenue recognition through the following steps:
68
For revenue generated from contracts with customers involving another party, the Company evaluates whether it is acting as the principal or the agent in the transaction. This determination requires significant judgment and impacts the amount and timing of revenue recognized. The Company determines whether it is a principal or an agent, which is dependent on whether the Company has control of the specified goods or services before they are transferred to the customer, whether the Company is primarily responsible for fulfillment, whether the Company has inventory risk and whether the Company has latitude in establishing price. Revenues are recognized on a gross basis if the Company is acting in the capacity of a principal and on a net basis if it’s acting in the capacity of an agent.
The Company generates revenues primarily from two sources: (i) subscription-based SaaS offerings under our Brain Commerce platform, and (ii) professional services delivered on a cost-plus basis. These revenues are recognized in line with the nature of the services provided, as described below.
Revenue generated from cloud-based software solutions, include the SaaS (software as a service) products such as the following:
These cloud-based software solutions are sold to customers through hosting arrangements, whereby we run the software applications on our own platforms. Access to these platforms are provided to customers on either a consumption or subscription basis and generally have contract terms longer than a year. Revenues related to cloud-based software solutions provided on a consumption basis are recognized when the customer utilizes the cloud-based software solutions, based on the quantity consumed. Revenues related to cloud-based software solutions provided on a subscription basis are recognized ratably over the contract term as the customer receives and consumes the benefits of the cloud-based software solutions. Usage-based fees earned in exchange for the use of the Company’s software licenses and subscription services in excess of committed usage are recognized in the period when usage occurs.
The Company may receive upfront, non-refundable consideration at which time the performance obligation has not yet been satisfied and will only be satisfied over time (over the duration of the contract term). This upfront, non-refundable consideration (deferred revenue) is recognized as revenue over time as the performance obligation is satisfied.
Revenue related to configuration and ongoing technical support services are recognized ratably over the contract term as the customer receives and consumes the benefits of these services.
69
Revenues from the sale of professional services include information technology ("IT") and information technology enabled ("ITE") services. The Company provides professional services, which include project managers, specialists and engineers, recommending, designing and implementing IT solutions. The Company is primarily responsible for the fulfillment and acceptability of the professional services and has control over how to provide the requested services. As a result, the Company is the principal, and professional services revenue is recognized on a gross basis ratably over the contract term as the customer receives and consumes the benefits of these services.
The Company also continues earns revenue from commission from sales of football tickets for La Liga in Spain through its platform technology. La Liga pays a commission for each football ticket sold through our platform technology. Revenue is recognized in accordance with ASC 606 “Revenue from Contracts with Customers” at the point in time when a football ticket is sold on our platform technology.
Valuation of assets and liabilities
Accounting for business combinations requires significant judgments when allocating the purchase price to the estimated fair values of assets acquired and liabilities assumed at the acquisition date. Determination of fair value involves estimates and assumptions which can be complex. The valuation of certain assets and liabilities requires significant judgment and assumptions such as estimation of future cash flows, discount rates, market data of comparable assets and companies, useful lives among others. While management’s estimates of fair value are based on assumptions that are believed to be reasonable, these assumptions are inherently uncertain as they pertain to forward-looking views of our business and market conditions. The judgments made in this valuation process could materially impact our consolidated financial statements.
Determining the useful life of intangible assets requires management judgment and is based on an evaluation of several factors including estimated design life, information from our research and development department and our overall strategy for the use of the assets. If the useful life of our significant assets changes, this change could impact our operating results.
Deferred income taxes and related valuation allowances
We are subject to income taxes in the United Kingdom and numerous foreign jurisdictions. Significant judgment is required in determining our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets that are not more likely than not to be realized.
Tax valuation allowances are established to reduce deferred tax assets, such as tax loss carryforwards, to net realizable value. Factors considered in estimating net realizable value include historical results by tax jurisdiction, carryforward periods, income tax strategies and forecasted taxable income.
Capitalized software
Costs incurred internally in researching and developing internal-use software are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software costs are capitalized until the product is ready for its intended use. Judgment is required in determining when technological feasibility of a product is established. The Company has not commenced amortizing the in-development software as it not yet ready for its intended use. The Company reviews internal-use software for impairment when an event or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable.
Share-based compensation
We recognize the cost of employee services received in exchange for awards of equity instruments, such as share options (time-vested), based on the fair value of those awards at the date of grant. We use the Black-Scholes-Merton (“Black-Scholes”) option pricing model to estimate the fair value of stock option awards. The Black-Scholes model uses various assumptions to estimate the fair value of stock option awards. These assumptions include the expected term of stock option awards, expected volatility rate, risk-free interest rate and expected dividend yield. While these assumptions do not require significant judgment, as the significant inputs are determined from historical experience or independent third-party sources, changes in these inputs could result in significant changes in the fair value of stock option awards.
Recently Issued and Adopted Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 3, "Recently issued and adopted accounting pronouncements" to the Rezolve AI plc and Subsidiaries Consolidated Financial Statements included elsewhere in this Report.
Quantitative and Qualitative Disclosures About Market Risk
70
Interest Rate Risk
We have limited interest rate risk. The convertible debt and the convertible promissory notes are non-interest bearing and the accrued interest converts into ordinary shares upon maturity. The short-term Monroe debt has a variable interest rate linked to SOFR (refer to Liquidity and Capital Resources section above).
Foreign currency risk
During the year ended December 31, 2025, the Company’s revenue was denominated in US Dollar, the Euro (“EUR”), Great British Pounds (“GBP”), Australian Dollars (“AUD”), Swiss Franc (“CHF”), Polish Zloty (“PLN”), Singapore Dollar (“SGD”) and Indian Rupees (“INR”). Based upon the Company’s level of operations for the year ended December 31, 2025 , a sensitivity analysis shows that a 10% appreciation or depreciation in these currencies against the US dollar would have increased or decreased, respectively, the Company’s revenue for the year ended December 31, 2025 by the following:
During the year ended December 31, 2024, the Company's revenue was denominated in EUR and AUD. Based on the Company's level of operations for the year ended December 31, 2024, a sensitivity analysis shows that a 10% appreciation or depreciation in these currencies against the US dollar would have increased or decreased, respectively, the Company’s revenue for the year ended December 31, 2024 by the following:
Inflation Risk
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.
Credit Risk
Cash and cash equivalents, other receivables, and accounts receivable are potentially subject to credit risk concentration. We have not experienced any material losses related to these concentrations during the years presented. We are in the process of spreading deposit risk across a number of financial institutions rated AA+ or AAA.
71
Item 6. Directors, Senior Management and Employees
The following sets forth the names, business addresses and functions of the Company’s directors and senior management as of the date of this report. The Company’s Articles of Association provide that the Company Board of Directors (the “Company Board”) has three classes of directors with the directors of each class serving staggered three-year terms. Class II directors shall serve a term expiring at Company’s 2026 annual meeting of shareholders and Class III directors shall serve a term expiring at Company’s 2027 annual meeting of shareholders. The Company currently has no Class I directors.
Name |
|
Age |
|
Position |
Directors |
|
|
|
|
Daniel Wagner |
|
62 |
|
Class III Director |
Anthony Sharp |
|
63 |
|
Non-Executive Director - Class II Director |
Sir David Wright |
|
81 |
|
Non-Executive Director - Class II Director |
Stephen Perry |
|
65 |
|
Non-Executive Director - Class II Director |
Derek Smith |
|
80 |
|
Non-Executive Director - Class II Director |
|
|
|
|
|
Executive Officers |
|
|
|
|
Daniel Wagner |
|
62 |
|
Chief Executive Officer and Director |
Arthur Yao |
|
51 |
|
Chief Operating and Financial Officer |
Sauvik Banerjjee |
|
49 |
|
Global President and Chief Digital Officer |
Crispin Lowery |
|
54 |
|
Chief Revenue Officer |
Executive Director
Daniel Wagner.
Mr. Wagner founded Rezolve and has served as Chief Executive Officer and as a director on the board of directors of Rezolve Limited since June 2016. Prior to joining Rezolve, Mr. Wagner founded M.A.I.D. in 1984, an online information service, and built the business into a leading player, when it was sold to Thomson Reuters for $500 million. He then developed Venda in 1998, a provider of on-demand enterprise eCommerce (which included Tesco, Laura Ashley, Neiman Marcus, Lands End, Under Armor and TJX Companies among its clients), which was sold in 2014 to NetSuite, a subsidiary of Oracle Corporation. Mr. Wagner has founded numerous other internet-commerce businesses including SmartLogik in 2000, BuyaPowa in 2010, Powa in 2009, and Attraqt in 2003. Rezolve believes Mr. Wagner is qualified to serve on the board because of his historical knowledge, operational expertise, leadership and the continuity that he brings to our board as our founder and Chief Executive Officer.
Non-Executive Directors
Dr. Stephen Perry.
Dr. Perry served on the board of directors of Rezolve as a non-executive director from October 2016 to April 2019 and rejoined in January 2022. Dr. Perry also serves as a Senior Advisor for Fintech and Payments. Prior to joining Rezolve, he worked at Visa for 25 years, first, as Head of Strategy, then as Chief Financial Officer for three years, then as Chief Commercial Officer for 15 years and finally as Chief Digital Officer until December 2015. He also served as an advisor for B-Secur from 2016 to 2018, an advisory board member of Syntel from 2016 to 2017, a non-executive director of MYPINPAD from 2016 to 2018, an advisor for Splitit from 2016 to 2019, an advisor for Good Causes from 2017 to 2019, a strategic advisor for A2P from 2017 to 2019, a non-executive chairman for V9 Group from 2016 to 2020, a non-executive director for Bink from 2016 to 2021, an advisor for 1818 Venture Capital from 2019 to 2021. He also serves as the non-executive chair of Willo and myNexus. He holds a degree in Economics from Wolverhampton Polytechnic, a Masters in Economics from the University of London and a PhD from Keele University. He was awarded the honour of Order of Merit (Cavalieri) in Italy in 2005. He also serves as a non-executive director at CREATIVE UK since February 2025 and as a non-executive Chair at CREATIVE UK INVESTMENT COMPANY since May 2024. Rezolve believes Dr. Perry is qualified to serve on the board because of his experience as a director of technology companies and his experience with investments in technology companies.
Dr. Derek Smith.
Dr. Smith has served on the board of directors of Rezolve since January 2022. He has also served as chairman of Rhinegold Publishing Ltd from 2007 to 2019. He also served on the board of Opinion Research Corporation from 1997 to 2003. Dr Smith has a BA in Economics from the University of Nottingham and a PhD in Economics from the University of Nottingham. Rezolve believes Dr. Smith is qualified to serve on the board because of his history of holding leadership roles in various companies.
72
Anthony Sharp.
Mr. Sharp has served as a director on the board of directors of Rezolve since August 2016. Prior to joining Rezolve, he has been an early-stage investor, including in lastminute.com, GoAmerica, and Silicon.com. He has participated on 42 boards across the fintech, security, marine, media, leisure, manufacturing, hospitality and property sectors as a chairman, non-executive director and executive director. Rezolve believes Mr. Sharp is qualified to serve on the board because of his long history of serving on the boards of various companies.
Sir David Wright.
Sir Wright has served as a director on the board of directors of Rezolve since August 2019. Prior to joining Rezolve, he was Vice-Chairman of Barclays from 2003 to 2018, Private Secretary to HRH The Prince of Wales from 1988 to 1990 and the first CEO of British Trade International, subsequently UK Trade and Investment, from 1976 to 1980. He served as ambassador to South Korea from 1990 to 1994 and ambassador to Japan from 1996 to 1999. He also holds the honours of GCMG (Knight Grand Cross of the Order of St Michael and St George) and LVO (Lieutenant Royal Victorian Order Grand Cordon of the Rising Sun). Rezolve believes Sir David Wright is qualified to serve on the board because of his diverse diplomatic and financial experience.
Executive Officers
Arthur Yao.
Mr. Yao has served as Chief Operating and Financial Officer of Rezolve since October 2025. In this role, he is responsible for the Company’s financial management and operational functions. Prior to his current position, Mr. Yao served as Deputy Chief Executive Officer of the Company, where he focused on strategic initiatives and international expansion. Before that, he served as Chief Executive Officer, Rezolve China. Prior to joining Rezolve AI plc in February 2017, Mr. Yao held senior leadership positions at Genpact, including Head of Asia Technology Services, where he was responsible for overseeing regional operations and technology services delivery. Mr. Yao has more than 25 years of experience in technology, operations and business management.
Crispin Lowery.
Mr. Lowery has served as Chief Revenue Officer of Rezolve since October 2025. Prior to serving as Chief Revenue Officer, Mr. Lowery was the Executive Vice President, Growth of Rezolve. Mr. Lowery previously led Microsoft's Retail and Consumer Goods (EMEA) business and has held leadership roles at Google, Apple, Tesco, O2, Clarks and Nike. Mr. Lowery brings two decades of experience across enterprise technology and retail operations.
Sauvik Banerjjee.
Mr. Banerjjee has served as the CEO Products, Technology, and Digital Services of Rezolve since August 2022. Prior to serving as the Chief Executive Officer of Products, Technology, and Digital Services of Rezolve, Mr. Banerjee was the Chief Technology Officer and founding team member at Tata Digital and Tata Neu- The Super App. He was also the founding Chief Technology Officer of TataCli0. Prior to that, he held various management positions, including positions at SAP, Accenture and Infosys. He completed research on Natural Language Processing and Physical Robotics at the University of Sunderland and the University of Durham, and he holds a Master’s Degree in Economics and Financial Computing from the University of Calcutta.
Rezolve Executive Officer and Director Compensation
The aggregate cash compensation paid by Rezolve and its subsidiaries to its executive officers and directors for the year ended December 31, 2025 was $1,943,650.
Executive Officer and Director Compensation
Rezolve’s policies with respect to the compensation of its executive officers will be administered by its board of directors in consultation with the compensation committee. The compensation decisions regarding Rezolve’s executives will be based on the need to attract individuals with the skills necessary for the company to achieve its business plan, to reward those individuals fairly over
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time, and to retain those individuals who continue to perform at or above the company’s expectations. To that end, following completion of the Business Combination, Rezolve has established an executive compensation program that is competitive with other similarly-situated companies in its industry. This compensation program includes a base salary, cash annual bonus and long-term equity compensation awards that are, in each case, consistent with market practices and designed to incentivize, motivate and retain key employees.
Service Agreement with Daniel Wagner
Daniel Wagner is currently engaged as Rezolve’s Chief Executive Officer under a service agreement entered into on April 1, 2016. He is entitled to a base salary of £600,000 per annum. In addition to his base salary, he is entitled to participate in a bonus scheme pursuant to the terms set forth in his agreement, which may be paid from time to time at the discretion of the compensation committee.
The agreement may be terminated by either party on one year’s written notice or, immediately by us, in the event of default, which includes, but is not limited to circumstances in which, Mr. Wagner is disqualified from acting as a director, convicted of a criminal offence, declared bankrupt, found guilty of fraud or conducting gross misconduct. In the event of early termination not caused by an event of default, we may exercise our discretion to make a payment in lieu of notice to Mr. Wagner. The agreement includes certain restrictive covenants, and, upon termination, Mr. Wagner is restricted from becoming involved, directly or indirectly, with any business which is similar to or competitive with Rezolve, for a period of six months.
Non-executive Director Letters of Appointment (Anthony Sharp, Sir David Wright, Derek Smith, Stephen Perry)
Terms of non-executive director appointment letters (Anthony Sharp, Sir David Wright, Derek Smith, and Stephen Perry)
Rezolve has entered into letters of appointment with the above named non-executive directors which provides each director with cash compensation of £75,000 per annum for service on our board of directors. The appointment of Rezolve’s non-executive directors is for an initial period of three years and can be terminated thereafter by either Rezolve or the director upon three calendar months’ written notice.
Under the non-executive director appointment letters, Rezolve may also terminate each appointment with immediate effect and without notice including when the non-executive director is disqualified from acting as a director; is not re-elected as a director when the director submits himself or herself for re-election; vacates their office under Rezolve’s Articles; commits a material breach of his or her obligations under the letter of appointment and it is not remedied within 14 days of Rezolve specifying the breach and requiring its remedy; has been guilty of any fraud or dishonesty or acts in any manner which, in Rezolve’s opinion, brings or is likely to bring Rezolve into disrepute or is materially adverse to Rezolve’s interests.
Independence of Directors
As a result of the Ordinary Shares and Rezolve Warrants being listed on Nasdaq, we adhere to the rules of Nasdaq in determining whether a director is independent. Our board of directors has consulted, and will consult, with its counsel to ensure that our board of directors’ determinations are consistent with those rules and all relevant securities and other laws and regulations regarding the independence of directors. Nasdaq listing standards define an “independent director” as a person, other than an executive officer of a company or any other individual having a relationship which, in the opinion of Rezolve's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that each of our directors, except for Daniel Wagner, is independent.
Rezolve Board of Directors Composition
Our board of directors is comprised of five directors (provided that Daniel Wagner has the right to appoint an additional director to the Board from time to time), four of whom qualify as independent directors as defined in the Nasdaq listing requirements. Daniel Wagner serves as the Chairman of the board of directors and Anthony Sharp serves as deputy Chairman.
Directors may be appointed and removed by an ordinary resolution of the shareholders. In addition, directors may be appointed either to fill a vacancy arising from the resignation of a former director or as an addition to the existing board by the affirmative vote of a simple majority of the directors present and voting at a board meeting. A director may be removed by a resolution passed by all of the other directors at a meeting of the directors, or by written notice from all of the other directors. Each of our directors holds office until he or she resigns or is vacated from office. There will be a three-year rotation pattern.
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Our board is divided into three classes serving staggered three year terms. Upon expiration of the term of a class of directors, directors in that class will be eligible to be elected for a new three-year term at the annual meeting of stockholders in the year in which their term expires. As a result of this classification of directors, it generally takes at least two annual meetings of stockholders for stockholders to effect a change in a majority of the members of our board of directors. As of the date of this Annual Report on Form 20-F, there is currently no Class I director. Messrs. Anthony Sharp, Sir David Wright, Stephen Perry and Derek Smith, are Class II directors and will serve until our annual meeting in 2026. Mr. Dan Wagner is a Class III directors and will serve until our annual meeting in 2027.
Our board of directors has determined that Anthony Sharp, Sir David Wright, Stephen Perry and Derek Smith satisfy the general independence requirements under SEC and Nasdaq rules. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act and the listing requirements of Nasdaq.
Role of Rezolve Board of Directors in Risk Oversight
One of the key functions of our board of directors is to provide informed oversight of our risk management process. Our board of directors does not have a standing risk management committee but our board of directors oversees risk management, and the various standing committees of the board of directors address the risks inherent in their respective areas of oversight. In particular, the board of directors is responsible for monitoring and assessing strategic risk exposure, and our audit committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management will take to monitor and control such exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The audit committee also monitors compliance with legal and regulatory requirements. Our compensation committee also assesses and monitors whether our compensation plans, policies and programs comply with applicable legal and regulatory requirements.
Committees of the Rezolve Board of Directors
Following the Closing, the board of directors established three standing committees: (i) an audit committee (the "Audit Committee"), (ii) a compensation committee (the "Compensation Committee"), and (iii) a nominating and corporate governance committee (the "Nominating and Corporate Governance Committee"). In addition, from time to time, special committees may be established under the direction of our board of directors when necessary to address specific issues.
Audit Committee
Our Audit Committee is responsible for, among other things:
Our Audit Committee consists of Anthony Sharp, Derek Smith and Stephen Perry, with Anthony Sharp serving as the chair of the committee. Each of the directors who serves on the Audit Committee qualifies as an independent director according to the applicable rules and regulations of the SEC and Nasdaq with respect to audit committee membership. In addition, all of the Audit Committee members meet the requirements for financial literacy under applicable SEC and Nasdaq rules and at least one of the Audit Committee
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members will qualify as an “audit committee financial expert,” as such term is defined in Item 407(d) of Regulation S-K. Our board of directors has adopted a written terms of reference for the Audit Committee, which is available on our website.
Compensation Committee
Our Compensation Committee is responsible for, among other things:
Our Compensation Committee consists of Anthony Sharp and Steve Perry, with Steve Perry serving as the chair of the committee. Our board of directors has adopted a written terms of reference for the Compensation Committee, which is available on our website.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee is responsible for, among other things:
Our Nominating and Corporate Governance Committee consists of Daniel Wagner, Sir David Wright and Derek Smith, with Derek Smith serving as the chair of the committee. Our board of directors has adopted a written terms of reference for the Nominating and Corporate Governance Committee, which is available on our website.
Code of Ethics
Our board of directors has adopted a Code of Ethics applicable to our directors, executive officers and team members that complies with the rules and regulations of the SEC and Nasdaq. The Code of Ethics is available on our website.
Limitation on Liability and Indemnification of Officers and Directors
English law limits in certain respects the extent to which a company’s Articles of Association may provide for indemnification of officers and directors. Accordingly a provision will be void if it provides an indemnity against (i) any liability of the director to pay a fine imposed in criminal proceedings, or a sum payable to a regulatory authority as a penalty for non-compliance with a regulatory requirement or (ii) liability incurred by the director in defending criminal proceedings in which he is convicted, in defending civil proceedings brought by the company in which judgment is given against him or in connection with an application for relief in which the court refuses to grant him relief. Our Articles of Association provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. In addition, we have entered into indemnification agreements with each of our executive officers and directors. The indemnification agreements provide the indemnitees with contractual rights to indemnification, and expense advancement and reimbursement, to the fullest extent permitted under English law, subject to certain exceptions contained in
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those agreements. We have also purchased a policy of directors’ and officers’ liability insurance effective upon completion of the Business Combination that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
These indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duties. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit Rezolve and its shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against its officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
Policies and Procedures for Related Person Transactions
The Rezolve board of directors has adopted a written related person transaction policy that sets forth the following policies and procedures for the review and approval or ratification of related person transactions. A “related person transaction” is a transaction, arrangement or relationship in which Rezolve or any of its subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest. A “related person” means:
Rezolve has policies and procedures designed to minimize potential conflicts of interest arising from any dealings it may have with its affiliates and to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from time to time. Specifically, pursuant to its audit committee charter, the audit committee will have the responsibility to review related party transactions.
As of December 31, 2025, we had 573 employees and 230 contractors. None of our employees is represented by a labor organization or is a party to a collective bargaining arrangement. We consider our relationship with our employees to be excellent.
Information regarding the ownership of Ordinary Shares by our directors and executive officers is set forth in Item 7.A of this Report.
The Company, during or after the last completed fiscal year, was not required to prepare an accounting restatement that required recovery of erroneously awarded compensation.
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Item 7. Major Shareholders and Related Party Transactions
A. Major shareholders.
The following table sets forth information relating to the beneficial ownership of our Ordinary Shares as of March 30, 2026 by:
The SEC has defined “beneficial ownership” of a security to mean the possession, directly or indirectly, of voting power and/or investment power over such security. A shareholder is also deemed to be, as of any date, the beneficial owner of all securities that such shareholder has the right to acquire within 60 days after that date through (i) the exercise of any option, warrant or right, (ii) the conversion of a security, (iii) the power to revoke a trust, discretionary account or similar arrangement, or (iv) the automatic termination of a trust, discretionary account or similar arrangement. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, Ordinary Shares subject to options or other rights (as set forth above) held by that person that are currently exercisable, or will become exercisable within 60 days thereafter, are deemed outstanding, while such shares are not deemed outstanding for purposes of computing percentage ownership of any other person. Each person named in the table has sole voting and investment power with respect to all of the Ordinary Shares shown as beneficially owned by such person, except as otherwise indicated in the table or footnotes below. The Company’s major shareholders do not have different voting rights from other holders of Ordinary Shares.
The percentage of Ordinary Shares beneficially owned is computed on the basis of 336,327,587 Ordinary Shares outstanding.
Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Ordinary Shares beneficially owned by them. To our knowledge, no Ordinary Shares beneficially owned by any executive officer, director or director nominee have been pledged as security.
Name of Beneficial Owners(1) |
|
|
|
|
|
|
||
Directors and Executive Officers |
|
Number of Shares |
|
|
% |
|
||
Daniel Wagner |
|
|
51,920,666 |
|
(2) |
|
15.44 |
% |
Anthony Sharp |
|
|
2,087,643 |
|
(3) |
* |
|
|
Sir David Wright |
|
|
545,343 |
|
(4) |
* |
|
|
Stephen Perry |
|
|
1,420,156 |
|
(5) |
* |
|
|
Derek Smith |
|
|
659,729 |
|
(6) |
* |
|
|
Arthur Yao |
|
|
2,501,716 |
|
(7) |
* |
|
|
Sauvik Banerjee |
|
|
724,748 |
|
(8) |
* |
|
|
Crispin Lowery |
|
|
500,000 |
|
(9) |
* |
|
|
All directors and executive officers as a group |
|
|
60,360,001 |
|
|
|
17.95 |
% |
Five Percent Holders |
|
|
|
|
|
|
||
Adam Wagner |
|
|
48,128,411 |
|
(10) |
|
14.31 |
% |
DBLP Sea Cow Limited(11) |
|
|
47,222,161 |
|
(11) |
|
14.04 |
% |
Igor Lychagov |
|
|
35,843,258 |
|
|
|
10.66 |
% |
Brad Wickens |
|
|
25,764,806 |
|
(12) |
|
7.66 |
% |
Apeiron Investment Group Limited |
|
|
25,097,545 |
|
(13) |
|
7.46 |
% |
Brooks Newmark |
|
|
17,395,676 |
|
(14) |
|
5.17 |
% |
* Less than one percent.
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The following is a description of certain related party transactions we have entered into since December 31, 2023 with any of our executive officers, directors or their affiliates and holders of more than 10% of any class of our voting securities in the aggregate, which we refer to as related parties, other than compensation arrangements.
Investor Rights Agreement
At the Closing, the Company entered into that certain Investor Rights Agreement with certain directors and officers and certain other parties identified therein (such persons, the “Holders”) (the “Investor Rights Agreement”). Pursuant to the terms of the Investor Rights Agreement, the Holders are entitled to certain piggyback registration rights and customary demand registration rights. The Investor Rights Agreement provides that the Company will use its commercially reasonable efforts to maintain the effectiveness of a shelf registration statement registering the shares held by the Holders for resale.
Pursuant to the Investor Rights Agreement, subject to certain exceptions, the Holders agreed to not transfer or make any announcement of any intention to effect a transfer, in respect of the shares beneficially owned or otherwise held by the Holders prior to the termination of the applicable lock-up period, subject to certain customary exceptions, including: (i) transfers to permitted transferees upon written notice to the Company, such as a member of the person’s immediate family or to a trust, the beneficiary of which is a member of the person’s immediate family or an affiliate of such person; (ii) to a charitable organization upon written notice
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to the Company, by the laws of descent and distribution upon death, or pursuant to a qualified domestic relations order; and (iii) pursuant to any liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange Ordinary Shares for cash, securities, or other property.
Bluedot Acquisition
On February 4, 2025, the Company entered into the Bluedot Purchase Agreement, by and between the Company and DBLP , pursuant to which the Company agreed to purchase, and DBLP agreed to sell, the entire issued and to be issued share capital of Bluedot.
On February 20, 2025, Rezolve closed the Bluedot Acquisition. As consideration for the Bluedot Acquisition, Rezolve issued 819,737 Ordinary Shares of the Company in a private placement to DBLP.
DBLP is a related party and is wholly legally owned by Daniel Wagner. Daniel Wagner is also a director of DBLP.
Relationship with Daniel Wagner
We have debt outstanding to DBLP, which is wholly legally owned by Daniel Wagner, in the amount $44,891. The loans provided by DBLP were to provide liquidity to Rezolve. There are no formal loan documents in place and the loan is non-interest bearing and remains callable at any time. We expect the loan to be called and repaid in 2026.
Rezolve and DBLP entered into a rolling annual consultancy agreement dated November 1, 2016. Pursuant to the terms of the agreement, DBLP is to be paid between $20,000 and $50,000 for each month of the term of the agreement. The agreement does not have a fixed term and has a rolling minimum 12 calendar month period and shall continue for as long as Rezolve requires services from DBLP.
None.
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Item 8. Financial Information
See Item 18 of this Report for consolidated financial statements and other financial information.
A discussion of significant changes in our business can be found under “Item 5—Recent Developments.”
Item 9. The Offer and Listing.
The Ordinary Shares and Public Warrants are listed on Nasdaq under the symbol “RZLV” and “RZLV.W”, respectively.
Not applicable.
See “—Offer and Listing Details” above.
Not applicable.
Not applicable.
Not applicable.
Item 10. Additional Information.
Not applicable.
The information required to be disclosed under this item is incorporated by reference to Exhibit 3.2 filed herein
Reward Acquisition
On February 10, 2026, the Company completed the acquisition (the “Reward Acquisition”) of all of the issued share capital of Reward Loyalty UK Limited (“Reward”) pursuant to a sale and purchase agreement (the “Reward Purchase Agreement”) with the shareholders listed on Schedule 1 thereto and Peter West.
Reward develops and operates customer engagement, loyalty and commerce technology platforms, especially for banks, payment networks and retail partners.
Reward had issued share capital of £1,870,723.53 divided into 1,564,179 ordinary shares of £1.00 each, 287,968 A ordinary shares of £1.00 each, 276,700 B ordinary shares of £0.01 each, 200,800 C ordinary shares of £0.01 each and 1,380,153 D ordinary shares of £0.01 each (together the "Sale Shares"). The Reward Purchase Agreement contained customary representations, warranties, covenants deliverables for closing, which occurred on February 10, 2026.
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The initial purchase price for the Reward Acquisition was approximately $239.6 million in cash (the “Reward Purchase Price”) as provided below and subject to certain adjustments as described in further detail in the Reward Purchase Agreement.
Daniel Wagner, the Chief Executive Officer and a Director of Resolve, previously served as a director of Reward. Prior to the execution of the Reward Purchase Agreement, Mr. Wagner resigned from the board of Reward and did not participate in Reward's evaluation, negotiation or approval of the Reward Acquisition. Mr. Wagner did not hold any shares of Reward at the time the Reward Purchase Agreement was executed or at the closing of the Reward Acquisition. Accordingly, the Reward Acquisition did not constitute a related party transaction under applicable securities laws or the Company's governance policies.
Crownpeak Purchase Agreement
On December 1, 2025, the Company completed the acquisition (the “Crownpeak Acquisition”) of the issued share capital of Crownpeak Intermediate Holdings, Inc.,(“Crownpeak”), pursuant to a sale and purchase agreement (the “Crownpeak Purchase Agreement”) with Crownpeak Technology Holdings, Inc, (the “Crownpeak Seller”).
The purchase price for the Crownpeak Acquisition was $81.0 million. The consideration under the Crownpeak Purchase Agreement is composed of the following to be issued by the Company to the Crownpeak Seller: (i) a promissory note in the initial principal amount of $50,000,000, made up of a $20,000,000 tranche (the “First Crownpeak Loan Note”) and a $30,000,000 tranche (the “Second Crownpeak Loan Note” and together with the First Loan Note, the “Crownpeak Loan Notes”); and (ii) 11,127,780 ordinary shares with an approximate value of $31.0 million based on an issuance price of $2.79 per ordinary share.
The Crownpeak Loan Notes will accrue interest at a rate of 10% per annum and are payable in kind or in cash. The First Crownpeak Loan Note matures on April 1, 2027 and the Second Crownpeak Loan Note matures on December 31, 2027. The Company assumed approximately $151.9 million of the aggregate principal amount of outstanding term loans and revolving loans and approximately $1.8 million of accrued and unpaid exit and amendment fees, of which, $50.0 million was paid by the Company at the closing.
Subsquid Purchase Agreement
On October 8, 2025, the Company entered into a purchase agreement with Marcel Fohrmann (the “Subsquid Seller”), the beneficial owner of all of the issued and outstanding equity interests in Subsquid Labs GmbH (“Subsquid”), pursuant to which the Company agreed to acquire 100% of the issued and to be issued share capital of Subsquid (the “Subsquid Acquisition”). The Subsquid Acquisition was completed on October 9, 2025.
The aggregate consideration transferred to the Subsquid Seller in connection with the Subsquid Acquisition consists of the following components: (i) a cash payment of $3.6 million paid at closing; (ii) the equivalent of $1.5 million in Rezolve AI plc ordinary shares to be issued as soon as reasonably practicable after the closing date; and (iii) a commitment by the Company to purchase the equivalent of $10.0 million of SQD Tokens within 14 days following the closing date. Additionally, the Company agreed to purchase the equivalent of 1% of its annual revenues of SQD Tokens in each of 2025, 2026 and 2027.
Smartpay and Truther Purchase Agreements
On October 2, 2025, the Company entered into an asset purchase agreement with Smartpay Digital Services Limitada, a Brazilian limited liability company (sociedade limitada) (“Smartpay”), and Rocelo Lopes (the “Smartpay Seller”), the founder and beneficial owner of all of the equity interests in Smartpay. Pursuant to the agreement, the Company acquired the assets used in Smartpay’s digital payment platform (the “Smartpay Acquisition”). The Smartpay Acquisition closed on October 2, 2025. As consideration for the Smartpay Acquisition, the Smartpay Seller received USD Tether (“USDT”) 1.9 million. The Smartpay Seller will also receive USDT 2.0 million in Rezolve's Ordinary Shares. This equivalent of USDT 2.0 million in Rezolve's Ordinary Shares to be issued as soon as reasonably practicable after the closing date have not been issued as of December 31, 2025.
On October 2, 2025, the Company entered into an asset purchase agreement with Truther Digital Services Limitada, a Brazilian limited liability company (sociedade limitada) (“Truther”), and Rocelo Lopes (the “Truther Seller”), the founder and beneficial owner of all of the equity interests in Truther. Pursuant to the agreement, the Company acquired the assets used in Truther’s digital payment platform (the “Truther Acquisition”). The Truther Acquisition closed on October 2, 2025. As consideration for the Truther Acquisition, the Truther Seller received USDT 0.1 million.
Yorkville Convertible Promissory Note and Capital Commitment
On February 23, 2023, Rezolve Limited entered into a $250 million standby equity purchase agreement with YA II PN, LTD (“YA”), a Cayman Islands exempt limited company, which was amended and restated on February 2, 2024 to provide for, inter alia, Rezolve AI Limited joining as a party to the agreement (“YA Agreement”). Pursuant to the YA Agreement, Rezolve has the right to sell to YA up to $250,000,000 Ordinary Shares, subject to certain limitations and conditions set forth in the YA Agreement, from time to time
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during the term of the YA Agreement. In connection with the amendment and restatement of the YA Agreement, on February 2, 2024, Rezolve Limited and Rezolve issued a convertible note with a total principal amount of $2.5 million (the “YA Note”) to YA, pursuant to the terms of a convertible promissory note instrument entered into by Rezolve Limited and Rezolve (“YA Note Instrument”).
On September 6, 2024, YA and Rezolve amended and restated the YA Agreement (the “A&R YA Agreement”) to incorporate an additional prepaid advance arrangement pursuant to which YA committed to provide Rezolve with prepaid advances in an aggregate original principal amount of an additional $7.5 million, payable in three tranches, with the first tranche in an original principal amount of $2.5 million that was funded as part of the Second YA Note (as defined below), the second tranche in an original principal amount of $2.5 million that was funded as part of the Second YA Note and the third tranche in an original principal amount of $2.5 million that was funded as part of the Third YA Note (as defined below). The A&R YA Agreement superseded the original agreement.
In connection with the execution of the A&R YA Agreement, YA and Rezolve also entered into a second amendment to convertible promissory note and acknowledgement (the “YA Note Amendment” and the YA Note, as amended by the YA Note Amendment, the “Amended YA Note”) whereby certain terms of the YA Note were amended. In particular, the YA Note Amendment extended the maturity date of the YA Note to September 11, 2025, provides that for purposes of determining the Triggered Principal Amount, the term “Other Notes” will not include the additional promissory notes issuable pursuant to the A&R YA Agreement, and reduced the floor price to $0.25 per share.
Also in connection with the A&R YA Agreement, on September 9, 2024, Rezolve issued YA a promissory note in the principal amount of $5 million (the “Second YA Note”), reflecting the first and second tranche of the prepaid advances, and on November 29, 2024, upon effectiveness of the F-1 Registration Statement originally filed with the U.S. Securities and Exchange Commission on September 6, 2024, and declared effective on November 27, 2024, Rezolve issued YA a promissory note in the principal amount of $2,500,000 (the "Third YA Note", and together with the Amended YA Note and Second YA Note, the "YA Notes"). On December 19, 2025, the A&R YA Agreement was terminated. As of December 31, 2025, each of the YA Notes had been satisfied in full.
Securities Purchase Agreement
On February 21, 2025 (the “Effective Date”), the Company entered into a Securities Purchase Agreement (the “Bitcoin SPA”) with each of the investors listed on the Schedule of Buyers attached thereto (the “Buyers”).
Pursuant to the Bitcoin SPA, the Company agreed to (i) sell to the Buyers up to $1 billion of convertible notes and (ii) use all of the proceeds it receives from the sale of such convertible notes to cause a newly formed, wholly owned subsidiary of the Company , to purchase and hold Bitcoin, subject to certain conditions being met, as set out in the terms of such convertible notes. The Bitcoin SPA was terminated on December 19, 2025.
GroupBy Purchase Agreement
On February 11, 2025, the Company entered into a purchase agreement (the "GroupBy Purchase Agreement"), by and among the Company, GroupBy Inc. ("GroupBy"), GroupBy International ("GroupBy International") and Fortis Advisors LLC, a Delaware limited liability company, as the representative of the sellers party thereto (the “Sellers”), pursuant to which the Company agreed to purchase, and the Sellers agreed to sell, the entire issued and to be issued share capital of each of GroupBy and GroupBy International (the “GroupBy Acquisition”).
On March 25, 2025, the Company closed the GroupBy Acquisition. As consideration for the GroupBy Acquisition, the Company issued an aggregate of 3,999,902 Ordinary Shares in a private placement to the Sellers. In addition, the Company intends to grant stock options exercisable for an aggregate of 3,098,270 Ordinary Shares to certain individuals pursuant to the GroupBy Purchase Agreement.
Bluedot Purchase Agreement
On February 4, 2025, the Company entered into the Bluedot Purchase Agreement, by and between the Company and DBLP, pursuant to which the Company agreed to purchase, and DBLP agreed to sell, the entire issued and to be issued share capital of Bluedot.
On February 20, 2025, Rezolve closed the Bluedot Acquisition. As consideration for the Bluedot Acquisition, Rezolve issued 819,737 ordinary shares of the Company in a private placement to DBLP.
DBLP is a related party and is wholly legally owned by Daniel Wagner and was beneficially owned by John Wagner prior to his death. Daniel Wagner is a director of DBLP.
Investor Rights Agreement
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At the closing of the Business Combination with Armada, the Company entered into that certain Investor Rights Agreement with certain directors and officers and certain other parties identified therein (such persons, the “Holders”) (the “Investor Rights Agreement”). Pursuant to the terms of the Investor Rights Agreement, the Holders are entitled to certain piggyback registration rights and customary demand registration rights. Pursuant to its obligations under the Investor Rights Agreement, the Company has filed with the SEC a shelf registration statement for the resale of certain shares held by the Holders. The Company will use its commercially reasonable efforts to maintain the effectiveness of such registration statement.
Lock-In Agreements
At the closing of the Business Combination with Armada, the Company entered into separate Lock-In Agreements (the “Lock-In Agreements”) with certain holders of the Company (such persons, the “Rezolve Holders”), pursuant to which the Ordinary Shares held by the Rezolve Holders were locked-up and subject to transfer restrictions for 180 days following the Closing, subject to certain customary exceptions.
Under English law, there are no exchange control restrictions on investments in, or payments on, the Ordinary Shares. There are no special restrictions in the Articles of Association of the Company or English law that limit the right of shareholders who are not citizens or residents of the United Kingdom to hold or vote the Ordinary Shares.
Material United Kingdom Tax Considerations
The following statements are based on current UK law as applied in England and HMRC published practice (which may not be binding on HMRC) as at the date of this document, both of which are subject to change, possibly with retrospective effect.
These statements are intended only as a general guide and are not a complete analysis of all potential UK tax consequences relating to the holding or disposing of Ordinary Shares or Warrants. They do not purport to provide any analysis of the UK tax consequences of the Business Combination.
The statements apply only to persons who hold Ordinary Shares or Warrants as an investment and who are the absolute beneficial owners of the Ordinary Shares or Warrants. The statements do not apply to special categories of holders such as dealers in securities, insurance companies, collective investment schemes, charities, exempt pension funds or holders who have, or are deemed to have, acquired their Ordinary Shares or Warrants by virtue of an office or employment.
The statements are not directed at and do not apply to persons who are resident, or in the case of individuals, domiciled for tax purposes in the UK.
IF YOU ARE IN ANY DOUBT AS TO YOUR TAX POSITION, YOU SHOULD CONSULT YOUR PROFESSIONAL TAX ADVISER.
Taxation of Rezolve
Rezolve is subject to UK corporation tax on its taxable profits and gains, as it is tax resident in the UK. The Business Combination will not give rise to any taxable profits or gains for Rezolve.
Taxation of Disposals
Holders who are not resident in the UK will not generally be subject to UK taxation of capital gains on the disposal or deemed disposal of Ordinary Shares or Warrants unless they are carrying on a trade, profession or vocation in the UK through a branch or agency there (or, in the case of a company, they are carrying on a trade in the UK through a permanent establishment there) in connection with which the Ordinary Shares or Warrants are used, held or acquired. Non-UK tax resident holders may be subject to non-UK taxation on any gain under local law.
An individual holder who has been resident for tax purposes in the UK but who ceases to be so or becomes treated as resident outside the UK for the purposes of a double tax treaty for a period of five years or less and who disposes of all or part of his or her Ordinary Shares or Warrants during that period may be liable to capital gains tax on his or her return to the UK, subject to any available exemptions or reliefs.
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Taxation of Dividends
Rezolve is not required to withhold UK tax when paying a dividend.
Rezolve shareholders resident outside the UK will generally not be subject to UK taxation on dividend income unless they are carrying on a trade, profession or vocation through a branch or agency in the UK (or, in the case of a corporate holder, they are carrying on a trade in the UK through a permanent establishment there) and the dividends are either a receipt of that trade, profession or vocation (or, in the case of a corporate holder, Ordinary Shares are used by, or held by or for, that UK permanent establishment). Rezolve shareholders resident outside the UK should consult their own tax adviser concerning their tax position on dividends received from Rezolve.
Stamp Duty and Stamp Duty Reserve Tax (“SDRT”)
No UK stamp duty or UK SDRT should arise on the issue of Ordinary Shares.
An agreement to transfer Ordinary Shares or Warrants other than to a depository trust company (“DTC”) will normally give rise to a charge to UK SDRT at the rate of 0.5% of the amount or value of the consideration payable for the transfer, subject to the application of certain exclusions and reliefs. SDRT is, in general, payable by the purchaser. Instruments transferring Ordinary Shares or Warrants will generally be subject to UK stamp duty at the rate of 0.5% of the consideration given for the transfer (rounded up to the next £5), subject to the application of certain exclusions and reliefs. The purchaser normally pays the stamp duty. Any SDRT should be cancelled and any SDRT that has been paid should be repaid where an instrument of transfer has been executed in respect of the transfer of securities within six years of the incident giving rise to the SDRT and stamp duty has been paid on that instrument of transfer.
The transfer of existing Ordinary Shares or Warrants to a DTC will normally give rise to a charge to UK stamp duty or SDRT at the higher rate of 1.5% of the amount or value of the consideration payable for the transfer (subject to certain exceptions). Although the DTC should be liable for any UK stamp duty or SDRT, this will be payable by the existing holder in practice. However, no stamp duty or SDRT should, in practice, be required to be paid in respect of transfers or agreements to transfer Ordinary Shares or Warrants within the facilities of the DTC, provided the transfer from a holder of Ordinary Shares or Warrants to a DTC occurs within four months of the listing.
Material U.S. Federal Tax Considerations
This section describes the material U.S. federal income tax considerations of the ownership and disposition of Ordinary Shares and Warrants. This discussion applies only to Ordinary Shares and Warrants held as capital assets for U.S. federal income tax purposes (generally, property held for investment) and does not discuss all aspects of U.S. federal income taxation that might be relevant to holders in light of their particular circumstances or status, including alternative minimum tax and Medicare contribution tax consequences, or holders who are subject to special rules, including:
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This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the "Code"), its legislative history, existing and proposed U.S. Department of the Treasury regulations promulgated under the Code (the “Treasury Regulations”), published rulings by the IRS and court decisions, all as of the date hereof. These laws are subject to change, possibly on a retroactive basis. This discussion is necessarily general and does not address all aspects of U.S. federal income taxation, including the effect of the U.S. federal alternative minimum tax, or U.S. federal estate and gift tax, or any state, local or non-U.S. tax laws to a holder of Ordinary Shares or Warrants. We have not and do not intend to seek any rulings from the IRS regarding the Business Combination. Additionally, we have not sought, and will not seek, an opinion of counsel, and the completion of the Business Combination is not conditioned on the receipt of an IRS ruling or opinion of counsel. There is no assurance that the IRS will not take positions concerning the tax consequences of the Business Combination that are different from those discussed below, or that any such different positions would not be sustained by a court.
Except as specifically provided, the discussion below applies only to U.S. holders. For purposes of this discussion, a U.S. holder means a beneficial owner of Ordinary Shares or Warrants that is, for U.S. federal income tax purposes:
Holders who are not U.S. holders should consult with their own tax advisors regarding the U.S. federal income tax consequences of holding Rezolve Securities.
ALL HOLDERS OF ORDINARY SHARES AND WARRANTS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF ORDINARY SHARES AND WARRANTS, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE, AND LOCAL AND NON-U.S. TAX LAWS.
Distributions on Ordinary Shares
Subject to the discussion under the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company Rules,” the gross amount of any distribution on Ordinary Shares that is made out of Rezolve’s current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) generally will be taxable to a U.S. holder as ordinary dividend income on the date such distribution is actually or constructively received. Any such dividends generally will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from other U.S. corporations. To the extent that the amount of the distribution exceeds Rezolve’s current and accumulated earnings and profits (as determined under U.S. federal income tax principles), such excess amount will be treated first as a non-taxable return of capital to the extent of the U.S. holder’s tax basis in its Ordinary Shares, and thereafter as capital gain recognized on a sale or exchange.
Dividends received by non-corporate U.S. holders (including individuals) from a “qualified foreign corporation” may be eligible for reduced rates of taxation, provided that certain holding period requirements and other conditions are satisfied. For these purposes, a non-U.S. corporation will be treated as a qualified foreign corporation if it is eligible for the benefits of a comprehensive income tax treaty with the United States that meets certain requirements. There is currently an income tax treaty between the United States and the United Kingdom. Notwithstanding, there can be no assurances that Rezolve will be eligible for benefits of an applicable comprehensive income tax treaty with the United States. A non-U.S. corporation is also treated as a qualified foreign corporation with respect to dividends it pays on shares that are readily tradable on an established securities market in the United States. U.S. Treasury guidance indicates that shares listed on Nasdaq (which Ordinary Shares are expected to be) will be considered readily tradable on an established securities market in the United States. There can be no assurance that Ordinary Shares will be considered readily tradable on an established securities market in future years. Non-corporate U.S. holders that do not meet a minimum holding period requirement during which they are not protected from the risk of loss or that elect to treat the dividend income as “investment income” pursuant to Section 163(d)(4) of the Code (dealing with the deduction for investment interest expense) will not be eligible for the reduced rates of taxation regardless of Rezolve’s status as a qualified foreign corporation. In addition, the rate reduction will not apply
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to dividends if the recipient of a dividend is obligated to make related payments with respect to the positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met. Rezolve will not constitute a qualified foreign corporation for purposes of these rules if it is a passive foreign investment company for the taxable year in which it pays a dividend or for the preceding taxable year. See the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company Rules.”
Subject to certain conditions and limitations, withholding taxes, if any, on dividends paid by Rezolve may be treated as foreign taxes eligible for credit against a U.S. holder’s U.S. federal income tax liability under the U.S. foreign tax credit rules. For purposes of calculating the U.S. foreign tax credit, dividends paid on Ordinary Shares will generally be treated as income from sources outside the United States and will generally constitute passive category income. The rules governing the U.S. foreign tax credit are complex. U.S. holders should consult their own tax advisors regarding the availability of the U.S. foreign tax credit under particular circumstances.
Sale, Exchange, Redemption or Other Taxable Disposition of Ordinary Shares and Warrants
Subject to the discussion under the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company Rules,” a U.S. holder generally will recognize gain or loss on any sale, exchange, redemption or other taxable disposition of Ordinary Shares or Warrants in an amount equal to the difference between (i) the amount realized on the disposition and (ii) such U.S. holder’s adjusted tax basis in such shares and/or warrants. Any gain or loss recognized by a U.S. holder on a taxable disposition of Ordinary Shares or Warrants generally will be capital gain or loss and will be long-term capital gain or loss if the holder’s holding period in such shares and/or warrants exceeds one year at the time of the disposition. Preferential tax rates may apply to long-term capital gains of non-corporate U.S. holders (including individuals). The deductibility of capital losses is subject to limitations. Any gain or loss recognized by a U.S. holder on the sale or exchange of Ordinary Shares or Warrants generally will be treated as U.S. source gain or loss.
Exercise or Lapse of a Warrant
A U.S. holder generally will not recognize gain or loss upon the acquisition of an Ordinary Share on the exercise of a Warrant for cash. A U.S. holder’s tax basis in a Ordinary Shares received upon exercise of the Warrant generally should be an amount equal to the sum of the U.S. holder’s tax basis in the Warrant exchanged therefor and the exercise price. The U.S. holder’s holding period for an Ordinary Share received upon exercise of the Warrant will begin on the date following the date of exercise (or possibly the date of exercise) of the Warrant and will not include the period during which the U.S. holder held the Warrant. If a Warrant is allowed to lapse unexercised, a U.S. holder generally will recognize a capital loss equal to such holder’s tax basis in the Warrant.
Possible Constructive Distributions
The terms of each Warrant provide for an adjustment to the number of Ordinary Shares for which the Warrant may be exercised or to the exercise price of the Warrant in certain events, as discussed in the section entitled “Description of Rezolve Securities.” An adjustment which has the effect of preventing dilution generally is not taxable. A U.S. holder of a Warrant would, however, be treated as receiving a constructive distribution from Rezolve if, for example, the adjustment increases the holder’s proportionate interest in Rezolve’s assets or earnings and profits (e.g., through an increase in the number of Ordinary Shares that would be obtained upon exercise of such warrant) as a result of a distribution of cash to the holders of the Ordinary Shares which is taxable to the U.S. holders of such shares as described under the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — Distributions on Ordinary Shares.” Such constructive distribution would be subject to tax as described under that section in the same manner as if the U.S. holder of such warrant received a cash distribution from Rezolve equal to the fair market value of such increased interest. The rules regarding constructive distributions are complex. U.S. holders should consult their own tax advisors regarding the application of the rules to them in light of their own circumstances.
Passive Foreign Investment Company Rules
Generally. The treatment of U.S. holders of the Ordinary Shares could be materially different from that described above if Rezolve is treated as a passive foreign investment company ("PFIC") for U.S. federal income tax purposes. A PFIC is any foreign corporation with respect to which either: (i) 75% or more of the gross income for a taxable year constitutes passive income for purposes of the PFIC rules, or (ii) 50% or more of such foreign corporation’s assets in any taxable year (generally based on the quarterly average of the value of its assets during such year) is attributable to assets, including cash, that produce passive income or are held for the production of passive income. Passive income generally includes dividends, interest, certain royalties and rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains. The determination of whether a foreign corporation is a PFIC is based upon the composition of such foreign corporation’s income and assets (including, among others, its proportionate share of the income and assets of any other corporation in which it owns, directly or indirectly, 25% (by value) of the stock), and the nature of such foreign corporation’s activities. A separate determination must be made after the close of each taxable
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year as to whether a foreign corporation was a PFIC for that year. Once a foreign corporation qualifies as a PFIC it is, with respect to a shareholder during the time it qualifies as a PFIC, and subject to certain exceptions, always treated as a PFIC with respect to such shareholder, regardless of whether it satisfied either of the qualification tests in subsequent years.
Based on the projected composition of Rezolve’s income and assets, including goodwill, Rezolve does not currently expect to be classified as a PFIC for its taxable year that includes the date of the Business Combination. The tests for determining PFIC status are applied annually after the close of the taxable year, and it is difficult to predict accurately future income and assets relevant to this determination. The fair market value of the assets of Rezolve is expected to depend, in part, upon (a) the market value of the Ordinary Shares, and (b) the composition of the assets and income of Rezolve. Further, because Rezolve may value its goodwill based on the market value of the Ordinary Shares, a decrease in the market value of the Ordinary Shares and/or an increase in cash or other passive assets (including as a result of the Business Combination) would increase the relative percentage of its passive assets. Moreover, any interest income that Rezolve earns on its cash deposits would generally be treated as passive income and increase the risk that Rezolve would be treated as a PFIC. The application of the PFIC rules is subject to uncertainty in several respects and, therefore, no assurances can be provided that Rezolve will not be a PFIC for the taxable year that includes the date of the Business Combination or in a future year.
If Rezolve is or becomes a PFIC during any year in which a U.S. holder holds Ordinary Shares, there are three separate taxation regimes that could apply to such U.S. holder under the PFIC rules, which are the (i) excess distribution regime (which is the default regime), (ii) mark-to-market regime and (iii) QEF regime. A U.S. holder who holds (actually or constructively) stock in a foreign corporation during any year in which such corporation qualifies as a PFIC is subject to U.S. federal income taxation under one of these three regimes. The effect of the PFIC rules on a U.S. holder will depend upon which of these regimes applies to such U.S. holder. However, dividends paid by a PFIC are generally not eligible for the lower rates of taxation applicable to qualified dividend income (“QDI”) under any of the foregoing regimes.
Excess Distribution Regime. If a U.S. holder does not make a mark-to-market election, as described below, the U.S. holder will be subject to the default “excess distribution regime” under the PFIC rules with respect to (i) any gain realized on a sale or other disposition (including a pledge) of Ordinary Shares, and (ii) any “excess distribution” received on Ordinary Shares (generally, any distributions in excess of 125% of the average of the annual distributions on Ordinary Shares during the preceding three years or the U.S. holder’s holding period, whichever is shorter). Generally, under this excess distribution regime:
The tax liability for amounts allocated to years prior to the year of disposition or excess distribution will be payable generally without regard to offsets from deductions, losses and expenses. In addition, gains (but not losses) realized on the sale of Ordinary Shares cannot be treated as capital gains, even if you hold the shares as capital assets. Further, no portion of any distribution will be treated as QDI.
Mark-to-Market Regime. Alternatively, a U.S. holder may make an election to mark marketable shares in a PFIC to market on an annual basis. PFIC shares generally are marketable if: (i) they are “regularly traded” on a national securities exchange that is registered with the Securities and Exchange Commission or on the national market system established under Section 11A of the Securities Exchange Act; or (ii) they are “regularly traded” on any exchange or market that the Treasury Department determines to have rules sufficient to ensure that the market price accurately represents the fair market value of the stock. It is expected that Ordinary Shares, which are expected to be listed on Nasdaq, will qualify as marketable shares for the PFIC rules purposes, but there can be no assurance that Ordinary Shares will be “regularly traded” for purposes of these rules. Pursuant to such an election, a U.S. holder would include in each year as ordinary income the excess, if any, of the fair market value of such stock over its adjusted basis at the end of the taxable year. A U.S. holder may treat as ordinary loss any excess of the adjusted basis of the stock over its fair market value at the end of the year, but only to the extent of the net amount previously included in income as a result of the election in prior years. A U.S. holder’s adjusted tax basis in the PFIC shares will be increased to reflect any amounts included in income, and decreased to reflect any amounts deducted, as a result of a mark-to-market election. Any gain recognized on a disposition of Ordinary Shares will be treated as ordinary income and any loss will be treated as ordinary loss (but only to the extent of the net amount of income previously included as a result of a mark-to-market election). A mark-to-market election only applies for the taxable year in which the election was made, and for each subsequent taxable year, unless the PFIC shares ceased to be marketable or the IRS consents to the revocation of the election. U.S. holders should also be aware that the Code and the Treasury Regulations do not allow a mark-to-market election with respect to stock of lower-tier PFICs that is non-marketable. There is also no provision in the Code,
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Treasury Regulations or other published authority that specifically provides that a mark-to-market election with respect to the stock of a publicly-traded holding company (such as Rezolve) effectively exempts stock of any lower-tier PFICs from the negative tax consequences arising from the general PFIC rules. U.S. holders should consult their own tax advisors to determine whether the mark-to-market tax election is available to them and the consequences resulting from such election. In addition, U.S. holders of Warrants will not be able to make a mark-to-market election with respect to their Warrants.
QEF Regime. Alternatively, a U.S. holder of a PFIC may avoid the adverse PFIC tax consequences described above in respect of stock of the PFIC (but not warrants) by making and maintaining a timely and valid qualified electing fund (“QEF”) election (if eligible to do so) to include in income its pro rata share of the PFIC’s net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the first taxable year of the U.S. holder in which or with which the PFIC’s taxable year ends and each subsequent taxable year. In order to comply with the requirements of a QEF election, a U.S. holder must receive a PFIC Annual Information Statement from the PFIC. Rezolve does not presently intend to provide a PFIC Annual Information Statement in order for U.S. holders to make or maintain a QEF election. However, as described above, Rezolve does not currently expect to be classified as a PFIC for the taxable year that includes the Business Combination.
PFIC Reporting Requirements. A U.S. holder of Ordinary Shares will be required to file an annual report on IRS Form 8621 containing such information with respect to its interest in a PFIC as the IRS may require. Failure to file IRS Form 8621 for each applicable taxable year may result in substantial penalties and result in the U.S. holder’s taxable years being open to audit by the IRS until such Forms are properly filed. U.S. holders of the Ordinary Shares should consult their tax advisors regarding the requirement to file IRS Form 8621 and the potential application of the PFIC regime.
Additional Reporting Requirements
Certain U.S. holders holding specified foreign financial assets with an aggregate value in excess of the applicable dollar thresholds are required to report information to the IRS relating to Ordinary Shares, subject to certain exceptions (including an exception for Ordinary Shares held in accounts maintained by U.S. financial institutions), by attaching a complete IRS Form 8938 to their tax return, for each year in which they hold Ordinary Shares. Substantial penalties apply to any failure to file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not willful neglect. Also, in the event a U.S. holder does not file IRS Form 8938 or fails to report a specified foreign financial asset that is required to be reported, the statute of limitations on the assessment and collection of U.S. federal income taxes of such U.S. holder for the related taxable year may not close before the date which is three years after the date on which the required information is filed. U.S. holders should consult their tax advisors regarding the effect, if any, of these rules on the ownership and disposition of Ordinary Shares.
Information Reporting and Backup Withholding
Information reporting requirements may apply to dividends received by U.S. holders of Ordinary Shares, and the proceeds received on the disposition of Ordinary Shares effected within the United States (and, in certain cases, outside the United States), in each case other than U.S. holders that are exempt recipients (such as corporations). Backup withholding (currently at a rate of 24%) may apply to such amounts if the U.S. holder fails to provide an accurate taxpayer identification number (generally on an IRS Form W-9 provided to the paying agent of the U.S. holder’s broker) or is otherwise subject to backup withholding. Any redemptions treated as dividend payments with respect to Ordinary Shares and proceeds from the sale, exchange, redemption or other disposition of Ordinary Shares may be subject to information reporting to the IRS and possible U.S. backup withholding.
Information returns may be filed with the IRS in connection with distributions on, and proceeds from the sale or other disposition of the Ordinary Shares, and non-U.S. holders may be subject to backup withholding on amounts received in respect of their Ordinary Shares, unless the non-U.S. holder furnishes to the applicable withholding agent the required certification as to its non-U.S. status, such as by providing a valid IRS Form W-8BEN, IRS Form W-8BEN-E or IRS Form W-8ECI, as applicable, or the non-U.S. holder otherwise establishes an exemption. Dividends paid with respect to Ordinary Shares and proceeds from the sale of other disposition of Ordinary Shares received in the United States by a non-U.S. holder through certain U.S.-related financial intermediaries may be subject to information reporting and backup withholding unless such non-U.S. holder provides proof of an applicable exemption or complies with certain certification procedures described above, and otherwise complies with the applicable requirements of the backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against the holder’s U.S. federal income tax liability, and a holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for a refund with the IRS and furnishing any required information. U.S. holders should consult their own tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
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Not applicable.
Not applicable.
Documents concerning the Company referred to in this Report may be inspected at the principal executive offices of the Company at 21 Sackville Street, London, W1S 3DN, United Kingdom.
The Company is subject to certain of the informational filing requirements of the Exchange Act. Since the Company is a “foreign private issuer,” it is exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and the officers, directors and principal shareholders of the Company are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act with respect to their purchase and sale of Ordinary Shares. In addition, the Company is not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. public companies whose securities are registered under the Exchange Act. However, the Company is required to file with the SEC an Annual Report on Form 20-F containing financial statements audited by an independent public accounting firm.
We maintain a corporate website at http://www.rezolve.com. Information contained on, or that can be accessed through our website does not constitute a part of this Annual Report on Form 20-F. We also make available on our website's investor relations page at http://ir.rezolve.com, free of charge, our Annual Report and the text of our reports on Form 6-K, including any amendments to these reports, as well as certain other SEC filings, as soon as reasonably practical after they are electronically filed with or furnished to the SEC. The information contained on our website is not incorporated by reference in this Annual Report.
Not applicable.
Not applicable.
Item 11. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risks primarily from changes in foreign currency exchange rates, credit risk and revenue risk. The information required under this Item 11 is set forth in Note 2.23 to our audited combined consolidated financial statements as of and for the year ended December 31, 2025 included elsewhere in this Annual Report on Form 20-F.
Item 12. Description of Securities Other than Equity Securities.
A. Debt Securities
Not applicable.
B. Warrants and Rights
See Exhibit 2.1 to this Annual Report on Form 20-F.
C. Other Securities
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Not applicable.
D. American Depositary Shares
Not applicable.
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies.
Not applicable.
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.
Not applicable.
Item 15. Controls and Procedures.
A. Disclosure Controls and Procedures Evaluation
Management carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) under the supervision and the participation of the Group’s management, which is responsible for the management of the internal controls, and which includes our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively). The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to Rezolve’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
Based upon our evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective as described below.
B. Management’s Annual Report on Internal Control over Financial Reporting
As required by section 404 of the Sarbanes Oxley (SOX) Act, our management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Management has conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, based on the criteria set forth in the Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Additionally, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions or that the degree of compliance with policies or procedures may deteriorate.
Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2025 due to the existence of material weaknesses described below.
Material Weaknesses
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Management identified the following material weaknesses in the Company’s internal control over financial reporting:
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Management is in the process of designing and implementing remediation measures, as described below, to address the identified material weaknesses, including the implementation of a formal consolidation system, enhancement of review and oversight controls over subsidiary reporting, and strengthening of the finance function to improve segregation of duties. However, these material weaknesses will not be considered remediated until the applicable controls have been implemented, tested, and operating effectively for a sufficient period of time.
Management’s Plan to Remediate the Material Weakness
Management has implemented, and continues to implement, remediation measures to address the material weaknesses in the Company’s internal control over financial reporting and to enhance the overall control environment.
The Audit Committee will oversee the implementation of these remediation measures.
While progress has been made, the material weaknesses will not be considered fully remediated until the enhanced controls have been implemented and have operated effectively for a sufficient period of time, and management has concluded, through testing, that these controls are operating effectively.
Notwithstanding the identified material weaknesses in internal control over financial reporting, management, including the Company’s Chief Executive Officer and Chief Financial Officer, has concluded that the combined consolidated financial statements included in this Report fairly present, in all material respects, the Company’s financial position, results of operations, and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles.
C. Attestation Report of the Registered Public Accounting Firm
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This Annual Report on Form 20-F does not include an attestation report of the Company’s registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
D. Changes in Internal Control over Financial Reporting
Other than those disclosed above, there have been no changes in Rezolve's internal control over financial reporting that have occurred during the period covered by this annual report on Form 20-F, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
The scope of management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025 excluded the internal controls over financial reporting of businesses acquired during the year then ended. This exclusion is in accordance with guidance issued by the staff of the U.S. Securities and Exchange Commission, which permits registrants to omit an assessment of internal control over financial reporting for acquisitions completed during the fiscal year in which the acquisition occurred.
Item 16. [Reserved]
Item 16A. Audit Committee Financial Expert.
The Company's board of directors has determined that Sir David Wright (the chairperson of the Audit Committee) qualifies as an “audit committee financial expert.” Sir Wright is an independent director under the applicable Nasdaq rules and Rule 10A-3 under the Exchange Act.
Item 16B. Code of Ethics.
We have adopted a Code of Ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. Our Code of Ethics is available on our website. We intend to disclose any amendment to our Code of Ethics, or any waivers of its requirements, in our Annual Report on Form 20-F. For the year ended December 31, 2025, we did not grant any waivers of the Code of Ethics.
Item 16C. Principal Accountant Fees and Services.
Audit and Non‑Audit Fees
The following table sets forth the fees billed to us by our independent registered public accounting firms Grassi & Co., CPAs, P.C (PCAOB firm ID 606) in the fiscal years ended December 31, 2025 and 2024:
|
Year ended December 31, |
|
||||||
|
2025 |
|
2024 |
|
||||
Audit Fees |
$ |
|
1,233,600 |
|
$ |
|
475,650 |
|
Audit related fees |
|
|
— |
|
|
|
— |
|
Other fees |
|
|
— |
|
|
|
— |
|
|
$ |
|
1,233,600 |
|
$ |
|
475,650 |
|
93
Item 16D. Exemptions from the Listing Standards for Audit Committees.
None.
Item 16E Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
During the year ended December 31, 2025, no purchases of our equity securities registered pursuant to Section 12 of the Exchange Act were made by or on behalf of us or any affiliated purchaser.
Item 16F. Change in Registrant’s Certifying Accountant.
Not applicable.
Item 16G. Corporate Governance.
Nasdaq Rule 5620
On June 4, 2025, we notified Nasdaq that we intend to follow our home country practice in lieu of following Nasdaq Rule 5620, which requires that a listed company that is not a limited partnership shall solicit proxies and provide proxy statements for all meetings of Shareholders and shall provide copies of such proxy solicitation to Nasdaq. Under English Law, a limited company can call a shareholder annual general meeting by sending a notice of the annual general meeting to inter alia its registered shareholders as at a determined record date setting out the resolution(s) to be considered, without issuing a proxy statement.
Nasdaq Rule 5635
On December 18, 2024, we notified Nasdaq that we intend to follow our home country practice in lieu of following Nasdaq Listing Rule 5635, which requires that a listed company obtain shareholder approval prior to an issuance of securities in connection with: (i) the acquisition of the stock or assets of another company; (ii) equity-based compensation of officers, directors, employees or consultants; (iii) a change of control; and (iv) private placements of common stock (or securities convertible into or exercisable for common stock) equal to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance for less than the greater of book or market value of the stock
Foreign Private Issuer Exemption
We are a “foreign private issuer,” as defined by the SEC. As a result, in accordance with Nasdaq rules, we will comply with home country governance requirements and certain exemptions thereunder rather than complying with Nasdaq corporate governance standards. While we expect to voluntarily follow most Nasdaq corporate governance rules, we may choose to take advantage of certain limited exemptions, such as:
94
Furthermore, Nasdaq Listing Rule 5615(a)(3) provides that a foreign private issuer, such as us, may rely on home country corporate governance practices in lieu of certain of the rules in the Nasdaq Listing Rule 5600 Series and Rule 5250(d), provided that we nevertheless comply with Nasdaq’s Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640) and that we have an audit committee that satisfies Rule 5605(c)(3), consisting of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii). We intend to comply with the Nasdaq corporate governance rules applicable to foreign private issuers, which means that we are permitted to follow certain corporate governance rules that conform to U.K. requirements in lieu of many of the Nasdaq corporate governance rules. Accordingly, our shareholders will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. We may utilize these exemptions for as long as we continue to qualify as a foreign private issuer.
Controlled Company Exemption
Daniel Wagner, the Rezolve Founder and Chief Executive Officer controls 75% of the voting power of our outstanding capital stock. As a result, we are a “controlled company” within the meaning of the Nasdaq listing standards. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:
In the event that we cease to be a “controlled company” and our shares continue to be listed on the Nasdaq, we will be required to comply with these provisions within the applicable transition periods.
Corporate Governance
We are a “foreign private issuer,” under the securities laws of the U.S. and the rules of Nasdaq. Under the applicable securities laws of the U.S., “foreign private issuers” are subject to different disclosure requirements than U.S. domiciled issuers. Under Nasdaq’s rules, a “foreign private issuer” is subject to less stringent corporate governance and compliance requirements and subject to certain exceptions, Nasdaq permits a “foreign private issuer” to follow its home country’s practice in lieu of the listing requirements of Nasdaq. Accordingly, our shareholders may not receive the same protections afforded to shareholders of companies that are subject to all of Nasdaq’s corporate governance requirements.
In addition, we are an “emerging growth company” as defined in the JOBS Act and have elected to comply with certain reduced public company reporting requirements.
Item 16H. Mine Safety Disclosure
Not applicable.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
Item 16J. Insider Trading Policies
We have
Item 16K. Cybersecurity.
95
Risk Management and Strategy
We have processes for assessing, identifying, and managing material risks from cybersecurity threats. The Company has designed and implemented a cybersecurity incident response plan and related processes, which are overseen by cybersecurity professionals.
Cybersecurity threats are identified and escalated to the audit committee or member thereof pursuant to criteria set forth in these processes. These processes also include overseeing and identifying risks from cybersecurity threats associated with the use of third-party service providers, if any.
We have implemented third-party risk management processes to manage material risks from cybersecurity threats associated with reliance on vendors, critical service providers, and other third parties we
The audit committee is responsible for establishing and monitoring the integrity and effectiveness of controls and other procedures, which are designed to ensure that (1) all information required to be disclosed is recorded, processed, summarized, and reported accurately and on a timely basis, and (2) all such information is accumulated and communicated to management and the audit committee, as appropriate, to allow for timely decisions regarding such disclosures. The controls and procedures subject to the audit committee’s oversight include processes related to managing material risks from cybersecurity threats. Accordingly, the Company’s cybersecurity processes have been
For additional information, see “Item 1.D. Risk Factors - A denial of service attack or security breach or incident could delay or interrupt service to Rezolve’s merchants and their customers, harm Rezolve’s reputation and subject Rezolve to significant liability.”
Governance
The Audit Committee operates under a written charter adopted by the Company’s board of directors (the "Board of Directors"). The Audit Committee oversees, among other things, a system of internal controls, including internal controls designed to assess, identify, and manage material risks from cybersecurity threats.
The Audit Committee is informed of material risks, if any, from cybersecurity threats pursuant to escalation criteria set forth in the Company’s disclosure controls and procedures. Further, at least once per quarter, the Company’s Chief Information Security Officer ("CISO") reports material risks, if any, from cybersecurity threats to the Company’s Audit Committee and/or Board of Directors.
The Company’s management, including members of its Audit Committee and the Company’s CISO, also assess and manage material risks, if any, from cybersecurity threats.
The audit committee is composed entirely of non-employee directors. The audit committee is responsible for establishing and monitoring the integrity and effectiveness of controls and other procedures, including controls and procedures related to managing material risks from cybersecurity threats, which are designed to ensure that (1) all information required to be disclosed is recorded, processed, summarized, and reported accurately and on a timely basis, and (2) all such information is accumulated and communicated to management and the Board of Directors, as appropriate, to allow for timely decisions regarding such disclosures.
The Company’s
The Company’s CISO's relevant cybersecurity expertise is comprised of 15+ years' experience within IT and Cyber Security; 1st Class BSc Hons Degree, Computer Science, ISO27001 Lead Auditor and Implementor; detailed knowledge of Security Frameworks including PCI DSS, ISO27001 and SOC. Risk Management and mitigation.
96
The Company’s CISO is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents pursuant to criteria set forth in the Company’s incident response plan and related processes. The Company’s CISO is also informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents pursuant to notification criteria set forth in the Company’s contracts with third-party service providers. Further, the Company’s CISO is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents pursuant to reports prepared by consultants, auditors, and other third parties retained by the Company, if necessary, to investigate cybersecurity incidents.
The Company’s CISO or a delegate thereof also prepares a report for the audit committee and the Board of Directors, concerning material risks, if any, from cybersecurity threats at least once per quarter, and more often to the extent necessary pursuant to the escalation criteria set forth in the Company’s processes described herein.
97
PART III
Item 17. Financial Statements.
The Company has responded to Item 18 in lieu of this item.
Item 18. Financial Statements.
The audited combined consolidated financial statements of the Company as of and for the years ended December 31, 2025 and 2024 are included in pages F-2 to F-74 of this Report.
The audited consolidated financial statements of Crownpeak Intermediate Holdings Inc. and subsidiaries as of and for years ended January 31, 2025 and 2024 are included in pages F-74 to F-102 of this Report.
The unaudited condensed consolidated financial statements of Crownpeak Intermediate Holdings Inc. and subsidiaries as of and for the six months ended July 31, 2025 and 2024 are included in pages F-102 to F-121 of this Report.
98
FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
REZOLVE AI plc
Combined Consolidated Financial Statements
As of and for the years ended December 31, 2025 and 2024
Report of Independent Registered Public Accounting Firm (PCAOB firm ID |
F-2 |
Combined Consolidated Balance Sheets as of December 31, 2025 and 2024 |
F-3 |
Combined Consolidated Statements of Operations for the Years ended December 31, 2025 and 2024 |
F-4 |
Combined Consolidated Statement of Comprehensive Loss for the Years ended December 31, 2025 and 2024 |
F-5 |
Combined Consolidated Statements of Stockholders’ Deficit for the Years ended December 31, 2025 and 2024 |
F-6 |
Combined Consolidated Statements of Cash Flows for the Years ended December 31, 2025 and December 31, 2024 |
F-8 |
Notes to the Combined Consolidated Financial Statements |
F-10 |
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Financial Statements
As of and for years ended January 31, 2025 and 2024
Independent Auditor's Report |
|
|
F-74 |
Consolidated Balance Sheets as of January 31, 2025 and January 31, 2024 |
|
|
F-76 |
Consolidated Statements of Operations and Comprehensive Loss for the years ended January 31, 2025 and January 31, 2024 |
|
|
F-77 |
Consolidated Statements Stockholders’ (Deficit) Equity for the years ended January 31, 2025 and January 31, 2024 |
|
|
F-78 |
Consolidated Statements of Cash Flows for the years ended January 31, 2025 and January 31, 2024 |
|
|
F-79 |
Notes to the Consolidated Financial Statements |
|
|
F-80 |
Independent Auditors' opinion issued by ba audit group gmbh for the financial statements of Crownpeak Technology GmbH as of January 31, 2025 and for the year ended January 31, 2025 |
|
|
F-96 |
Independent Auditors' opinion issued by ba audit group gmbh for the financial statements of Crownpeak Technology GmbH as of January 31, 2024 and for the year ended January 31, 2024 |
|
|
F-99 |
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
Unaudited condensed consolidated financial statements
As of and for the six months ended July 31, 2025 and 2024
Unaudited Condensed Consolidated Balance Sheets as of July 31, 2025 and January 31, 2025 |
|
|
F-102 |
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the years ended January 31, 2025 and January 31, 2024 |
|
|
F-103 |
Unaudited Condensed Consolidated Statements Stockholders’ Deficit for the six months ended July 31, 2025 and July 31, 2024 |
|
|
F-104 |
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended July 31, 2025 and July 31, 2024 |
|
|
F-105 |
Notes to the Unaudited Condensed Consolidated Financial Statements |
|
|
F-106 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Rezolve AI plc and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying combined consolidated balance sheets of Rezolve AI plc and Subsidiaries (the Company) as of December 31, 2025 and 2024, and the related combined consolidated statements of operations, comprehensive loss, shareholders’ equity (deficit), and cash flows for each of the years in the two year period ended December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the combined consolidated financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These combined consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s combined consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
We have served as the Company’s auditor since 2024
March 30, 2026
F-2
REZOLVE AI PLC AND SUBSIDIARIES
Combined Consolidated Balance Sheets
|
December 31, 2025 |
|
December 31, 2024 |
|
||||
Assets |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
$ |
|
|
$ |
|
|
||
Accounts receivable and unbilled receivable, net |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Other receivables |
|
|
|
|
|
— |
|
|
Derivative asset |
|
|
— |
|
|
|
|
|
Total current assets |
|
|
|
|
|
|
||
Non-current assets |
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
|
||
Intangible assets, net |
|
|
|
|
|
|
||
Crypto intangible assets, net |
|
|
|
|
|
— |
|
|
Other digital assets, net |
|
|
|
|
|
— |
|
|
Goodwill |
|
|
|
|
|
— |
|
|
Right of use assets |
|
|
|
|
|
— |
|
|
Equity method investments |
|
|
|
|
|
— |
|
|
Other non-current assets |
|
|
|
|
|
|
||
Total non-current assets |
|
|
|
|
|
|
||
Total assets |
$ |
|
|
$ |
|
|
||
Liabilities and Shareholders’ Equity/(Deficit) |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable |
$ |
|
|
$ |
|
|
||
Due to related party |
|
|
|
|
|
|
||
Accrued expenses and other payables |
|
|
|
|
|
|
||
Short term debt |
|
|
|
|
|
— |
|
|
Short term debt to related party |
|
|
|
|
|
|
||
Short term convertible debt |
|
|
|
|
|
|
||
Short term convertible debt to related party |
|
|
— |
|
|
|
|
|
Convertible promissory notes |
|
|
|
|
|
|
||
Ordinary Shares Payable |
|
|
|
|
|
|
||
Share-based payment liability |
|
|
|
|
|
|
||
Advisors loans |
|
|
— |
|
|
|
|
|
Derivative liabilities |
|
|
|
|
|
|
||
Income taxes payable |
|
|
|
|
|
— |
|
|
Deferred revenue |
|
|
|
|
|
|
||
Warrant liability |
|
|
|
|
|
— |
|
|
Lease liabilities, current portion |
|
|
|
|
|
— |
|
|
Contingent consideration, current portion |
|
|
|
|
|
— |
|
|
Other current liabilities |
|
|
|
|
|
|
||
Total current liabilities |
$ |
|
|
$ |
|
|
||
Non-current liabilities |
|
|
|
|
|
|
||
Long term debt |
|
|
|
|
|
— |
|
|
Lease liabilities, non-current portion |
|
|
|
|
|
— |
|
|
Deferred tax liabilities |
|
|
|
|
|
— |
|
|
Contingent consideration, non-current portion |
|
|
|
|
|
— |
|
|
Other non-current liabilities |
|
|
|
|
|
— |
|
|
Total non current liabilities |
$ |
|
|
$ |
|
— |
|
|
Total liabilities |
$ |
|
|
$ |
|
|
||
(refer to note 18) |
|
|
|
|
|
|
||
Shareholders’ Equity/(Deficit) |
|
|
|
|
|
|
||
Ordinary shares, £ |
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
|
||
Share subscription receivable |
|
|
( |
) |
|
|
( |
) |
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss |
|
|
|
|
|
|
||
Total Shareholders’ Equity/(Deficit) |
$ |
|
|
$ |
|
( |
) |
|
Total liabilities and shareholders’ equity/(deficit) |
$ |
|
|
$ |
|
|
||
The accompanying notes are an integral part of these combined consolidated financial statements.
F-3
REZOLVE AI PLC AND SUBSIDIARIES
Combined Consolidated Statements of Operations
|
|
Year ended |
|
|
Year ended |
|
||
Revenue |
|
$ |
|
|
$ |
|
||
Operating expenses/(income) |
|
|
|
|
|
|
||
Cost of revenue |
|
|
|
|
|
|
||
Sales and marketing expenses (including related party transactions of $ |
|
|
|
|
|
|
||
General and administrative expenses (including related party transactions of $ |
|
|
|
|
|
|
||
Depreciation and amortization expenses |
|
|
|
|
|
|
||
Research and development expenses |
|
|
|
|
|
|
||
Other operating (income)/expense, net |
|
|
( |
) |
|
|
|
|
Total operating expenses/(income) |
|
$ |
|
|
$ |
|
||
Operating loss |
|
$ |
( |
) |
|
$ |
( |
) |
Other (expense)/income |
|
|
|
|
|
|
||
Interest expense |
|
|
( |
) |
|
|
( |
) |
(Loss)/gain on derivatives |
|
|
( |
) |
|
|
|
|
Loss on extinguishment |
|
|
( |
) |
|
|
( |
) |
Gain on revaluation of financial asset |
|
|
|
|
|
|
||
Gain on bargain purchase |
|
|
|
|
|
|
||
Impairment loss |
|
|
( |
) |
|
|
|
|
Other non-operating income, net |
|
|
|
|
|
|
||
Total other expenses, net |
|
$ |
( |
) |
|
$ |
( |
) |
Loss before provision for income taxes |
|
|
( |
) |
|
|
( |
) |
Provision for income taxes |
|
|
|
|
|
( |
) |
|
Net loss and comprehensive loss |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss per share, basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
Weighted average shares, basic and diluted |
|
|
|
|
|
|
||
The accompanying notes are an integral part of these combined consolidated financial statements.
F-4
REZOLVE AI PLC AND SUBSIDIARIES
Combined Consolidated Statements of Comprehensive Loss
|
|
Year ended |
|
|
Year ended |
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive loss, net of tax |
|
|
|
|
|
|
||
Foreign currency translation gain |
|
|
|
|
|
|
||
Total comprehensive loss |
|
$ |
( |
) |
|
$ |
( |
) |
The accompanying notes are an integral part of these combined consolidated financial statements.
F-5
REZOLVE AI PLC AND SUBSIDIARIES
Combined Consolidated Statements of Shareholders’ Equity/(Deficit)
|
|
Ordinary shares |
|
|
Series A shares |
|
|
Additional |
|
|
Accumulated |
|
|
Share |
|
|
Accumulated |
|
|
Total |
|
||||||||||||||||||||||
|
|
Shares |
|
|
Value |
|
|
Shares |
|
|
Value |
|
|
Capital |
|
|
Deficit |
|
|
receivable |
|
|
income |
|
|
Deficit |
|
||||||||||||||||
Balance as at January 1, 2025 |
|
|
|
|
$ |
|
|
|
|
— |
|
|
$ |
|
— |
|
|
$ |
|
|
|
$ |
|
( |
) |
|
$ |
|
( |
) |
|
$ |
|
|
|
$ |
|
( |
) |
||||
Share-based compensation- employees |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||
Shares issued to advisors |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Shares issued on conversion of senior secured notes |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Issuance of ordinary shares upon conversion of advanced subscription |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Issuance of ordinary shares under Yorkville Standby Equity Purchase Agreement |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Issuance of ordinary shares upon conversion of Yorkville Note |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued upon exercise of share options by consultants |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
||
Ordinary shares issued upon exercise of share options under LTIP by employees |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
( |
) |
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued upon exercise of share options under LTIP by related parties |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
||
Ordinary shares issued to Radio Group to settle termination of ANY acquisition in Germany |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued upon conversion of convertible notes |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued in upon conversion of promissory notes |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued upon acquisition of GroupBy |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued in lieu of cash payment for services |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued upon acquisition of Bluedot Innovation |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued to DBLP under the rights issue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
||||||||
Ordinary shares issued in upon conversion of promissory note to J.V.B. Financial Group |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary share-based compensation issued to related parties |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued upon acquisition of Mpower |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued to DBLP upon settlement of related party payable |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued to Western Alliance Bank to settle debt assumed in the GroupBy acquisition |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued in July 2025 private placement offering |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued upon acquisition of ViSenze |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued in September 2025 private placement offering |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued upon acquisition of Subsquid |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued upon exercise of warrants issued to former Subsquid shareholder |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued upon acquisition of Crownpeak |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued upon exercise of warrants issued to institutional investor |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Issuance costs for ordinary shares issued in private placements offerings |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
Adjustment to excise tax withholding recognized at the time of the SPAC transaction |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
Foreign currency translation gain |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
||
Balance as at December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
— |
|
|
$ |
|
— |
|
|
$ |
|
|
|
$ |
|
( |
) |
|
$ |
|
( |
) |
|
$ |
|
|
|
$ |
|
|
|||||
F-6
REZOLVE AI PLC AND SUBSIDIARIES
Combined Consolidated Statements of Shareholders’ Equity/(Deficit) (continued)
|
|
Ordinary shares |
|
|
Series A shares |
|
|
Additional |
|
|
Accumulated |
|
|
Share |
|
|
Accumulated |
|
|
Total |
|
||||||||||||||||||||||
|
|
Shares |
|
|
Value |
|
|
Shares |
|
|
Value |
|
|
Capital |
|
|
Deficit |
|
|
receivable |
|
|
income |
|
|
Deficit |
|
||||||||||||||||
Balance as at January 1, 2024 |
|
|
|
|
$ |
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
( |
) |
|
$ |
|
( |
) |
|
$ |
|
( |
) |
|
$ |
|
( |
) |
|||||
Ordinary shares issued in lieu of cash payment for services |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Warrants issued with loan |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||
Recapitalization upon demerger of Rezolve Limited to Rezolve AI plc |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
( |
) |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|||
Share-based compensation - employees shares restrictions lifted |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Share-based compensation - related parties |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||
Share-based compensation- employees |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||
Share-based payments for consultancy |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||
Share-based compensation in lieu of services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Issuance of ordinary shares upon acquisition of Armada |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
||
Warrants exercised |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued on conversion of advisors loans |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Shares issued under the rights issue |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
( |
) |
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued on conversion of senior secured convertible notes |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Ordinary shares issued on conversion of convertible promissory loans |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Shareholder contribution attributable to Bluedot Industries prior to common control transaction |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||
Share issuance for Bluedot common control transaction |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
||||
Net loss |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
Foreign currency translation gain |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
||
Balance as at December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
— |
|
|
$ |
|
— |
|
|
$ |
|
|
|
$ |
|
( |
) |
|
$ |
|
( |
) |
|
$ |
|
|
|
$ |
|
( |
) |
||||
The accompanying notes are an integral part of these combined consolidated financial statements.
F-7
REZOLVE AI PLC AND SUBSIDIARIES
Combined Consolidated Statements of Cash Flows
|
|
Year ended |
|
|
Year ended |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
$ |
|
( |
) |
$ |
|
( |
) |
Adjustments to reconcile net loss to net cash (used in) operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Impairment of loans receivable |
|
|
— |
|
|
|
|
|
Share-based compensation - employees shares restrictions lifted |
|
|
— |
|
|
|
|
|
Share-based compensation for employees |
|
|
|
|
|
|
||
Share-based compensation issued to related parties |
|
|
|
|
|
|
||
Share-based compensation for consultancy services |
|
|
— |
|
|
|
|
|
Ordinary shares issued in lieu of cash payment for services |
|
|
|
|
|
|
||
Advisor loan issued for services - Northlands Securities |
|
|
— |
|
|
|
|
|
Advisor loan issued for services - J.V.B. Financial Group |
|
|
— |
|
|
|
|
|
Advisor loan issued for services- Cantor Fitzgerald |
|
|
— |
|
|
|
|
|
Interest expense, net |
|
|
|
|
|
|
||
Loss/(gain) on derivatives |
|
|
|
|
|
( |
) |
|
Loss on extinguishment |
|
|
|
|
|
|
||
Unrealized foreign exchange (gain)/loss |
|
|
|
|
|
( |
) |
|
Gain on revaluation of financial asset |
|
|
( |
) |
|
|
— |
|
Movement in deferred tax liabilities |
|
|
( |
) |
|
|
— |
|
Impairment loss |
|
|
|
|
|
— |
|
|
Gain on bargain purchase |
|
|
( |
) |
|
|
— |
|
Ordinary shares issued to Radio Group to settle termination of ANY acquisition in Germany |
|
|
|
|
|
— |
|
|
Non-cash component of lease expense |
|
|
|
|
|
— |
|
|
Non-cash component of transaction related expenses |
|
|
|
|
|
— |
|
|
Non-cash component of warrant expense |
|
|
|
|
|
— |
|
|
Loss on share issuance |
|
|
|
|
|
— |
|
|
Other non-cash expenses |
|
|
— |
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Increase in accounts receivable |
|
|
( |
) |
|
|
( |
) |
Increase in prepaid expense and other current assets with related parties |
|
|
|
|
|
|
||
Decrease/(Increase) in prepaid expense and other current assets |
|
|
( |
) |
|
|
( |
) |
Increase in accounts payable, accrued expenses and other payables |
|
|
|
|
|
|
||
(Decrease)/Increase in payables due to related parties |
|
|
( |
) |
|
|
|
|
Increase in deferred revenue |
|
|
|
|
|
|
||
Increase in other current liabilities |
|
|
|
|
|
— |
|
|
Increase in non-current liabilities |
|
|
|
|
|
— |
|
|
Decrease in lease liabilities |
|
|
( |
) |
|
|
— |
|
Net cash used in operating activities |
$ |
|
( |
) |
$ |
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchase of property and equipment |
|
|
( |
) |
|
|
( |
) |
Additions to intangible assets |
|
|
( |
) |
|
|
( |
) |
Additions to other digital assets |
|
|
( |
) |
|
|
— |
|
Acquisition of Prediqt |
|
|
( |
) |
|
|
— |
|
Acquisition of Subsquid |
|
|
( |
) |
|
|
— |
|
Investment in Art Equities |
|
|
( |
) |
|
|
— |
|
Cash acquired in business combinations |
|
|
|
|
|
— |
|
|
Net cash used in investing activities |
$ |
|
( |
) |
$ |
|
( |
) |
F-8
REZOLVE AI PLC AND SUBSIDIARIES
Combined Consolidated Statements of Cash Flows (continued)
|
|
Year ended |
|
|
Year ended |
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from merger with Armada |
$ |
|
— |
|
$ |
|
|
|
Proceeds from rights issuance |
|
|
— |
|
|
|
|
|
Proceeds from short-term debt from related party |
|
|
— |
|
|
|
|
|
Repayment of short-term debt obligation from related parties |
|
|
( |
) |
|
|
( |
) |
Proceeds from convertible promissory loans |
|
|
— |
|
|
|
|
|
Repayment of promissory notes |
|
|
— |
|
|
|
( |
) |
Proceeds from promissory notes |
|
|
|
|
|
|
||
Repayments of rights issue |
|
|
— |
|
|
|
( |
) |
Proceeds from issuance of ordinary shares |
|
|
|
|
|
|
||
Payment of issuance costs related to issuance of ordinary shares |
|
|
( |
) |
|
|
( |
) |
Proceeds from exercise of warrants |
|
|
|
|
|
|
||
Proceeds from long-term debt obligation |
|
|
|
|
|
— |
|
|
Repayment of long-term debt obligation |
|
|
( |
) |
|
|
— |
|
Repayment of debt related to Crownpeak acquisition |
|
|
( |
) |
|
|
— |
|
Net cash flow generated from financing activities |
$ |
|
|
$ |
|
|
||
Effect of exchange rate changes on cash |
|
|
|
|
|
|
||
Net change in cash |
$ |
|
|
$ |
|
|
||
Cash and cash equivalents, beginning of year |
$ |
|
|
$ |
|
|
||
Cash and cash equivalents, end of year |
$ |
|
|
$ |
|
|
||
Supplemental disclosures |
|
|
|
|
|
|
||
Share-based payment for development of intangible asset |
$ |
|
— |
|
$ |
|
|
|
Cash paid for interest |
$ |
|
|
$ |
|
|
||
Cash paid for taxes |
$ |
|
|
$ |
|
— |
|
|
Debt acquired in Crownpeak acquisition |
$ |
|
|
$ |
|
— |
|
|
Number of shares issued as consideration for acquisitions |
|
|
|
|
|
— |
|
|
The accompanying notes are an integral part of these combined consolidated financial statements.
F-9
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Rezolve Group Limited (“Rezolve” or “the Company”) was incorporated in England and Wales on
Rezolve AI plc is a technology company that builds and sells artificial intelligence-driven commerce and engagement solutions for retailers, brands, manufacturers, banks, and other enterprise customers.
Rezolve completed the following acquisitions during the year ended December 31, 2025, see Note 4 for more information:
F-10
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
The mailing address of Rezolve’s registered office is 21 Sackville Street, London, W1S 3DN, United Kingdom.
The Combined Consolidated Financial Statements of Rezolve AI plc and subsidiaries (together “the Company” or “we”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The Combined Consolidated Financial Statements have been prepared using the United Stated Dollar (“$” or “US dollar”) as the reporting currency.
The accompanying Combined Consolidated Financial Statements include the financial statements of Rezolve AI plc, Rezolve Limited, its consolidated subsidiaries, with the exception of the subsidiaries Rezolve Information Technology (Shanghai) Co., Ltd. (“Rezolve China”) and Rezolve China’s subsidiary Nine Stone (Shanghai) Ltd (“Nine Stone”) (collectively “the Chinese Business”) which were abandoned on January 3, 2023 (see below).
On January 3, 2023, the Company’s directors approved a plan to abandon its operations in China completely. Subsequently, on January 5, 2023, the Company’s directors approved an application to the United Kingdom (the “UK”) tax authorities requesting tax clearance for a solvent demerger (the “Pre-Closing Demerger” or “Demerger”) of the Company under section 110 of the UK Insolvency Act, 1986 which clearance was subsequently granted. Our board of directors decision to abandon operations in China completely and approve the Pre-Closing Demerger was based, in part, on our inability to complete an audit as a result of not having access to certain information from our local third-party company.
The Pre-Closing Demerger was completed on July 4, 2024. A new holding company Rezolve AI plc was established. Rezolve Limited’s business and assets (being all of its business and assets except for certain shares in Rezolve Information Technology (Shanghai) Co Ltd and its wholly owned subsidiary Nine Stone (Shanghai) Ltd and Rezolve Information Technology (Shanghai) Co Ltd Beijing Branch) were transferred to the Company in exchange for the issue by the Company of shares of the same classes as in Rezolve Limited for distribution among the original shareholders of Rezolve Limited in proportion to their holdings of shares of each class in Rezolve Limited as at immediately prior to the Pre-Closing Demerger. Therefore upon the completion of the Pre-Closing Demerger, Rezolve AI plc ended up with the same business as Rezolve Limited but without the Chinese business.
On August 15, 2024, Armada Acquisition Corp. I, a Delaware corporation (“Armada”), Rezolve AI plc and Rezolve Merger Sub, Inc., a Delaware corporation (“Rezolve Merger Sub”), consummated a business combination (the “Business Combination”) pursuant to which the Company effected a company reorganization whereby the Company’s series A shares were reclassified as ordinary shares and Armada merged with and into Rezolve Merger Sub, with Armada surviving as a wholly owned subsidiary of Rezolve, with shareholders of Armada receiving ordinary shares of the Company in exchange for their existing Armada common stock and Armada warrant holders having their warrants automatically exchanged for warrants of the Company (see note 8). Upon the closing of the Business Combination, the Company became the direct parent of Armada. The Business Combination was accounted for as a reverse merger under ASC 805, whereby Rezolve AI plc was deemed to be the accounting acquirer for financial reporting purposes and Armada was treated as the accounting acquiree. This determination was primarily based on the expectation that, immediately following the reverse merger: former Rezolve AI plc’s stockholders own a substantial majority of the voting rights in the combined company; former Rezolve AI plc’s largest stockholders retain the largest interest in the combined company and former Rezolve AI plc’s executive management team became the management team of the combined company.
F-11
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
For accounting purposes the Business Combination, accounted for as a reverse merger, was treated as the equivalent of Rezolve AI plc issuing
The net liabilities of Armada are recorded at their acquisition-date fair value in the Combined Consolidated Financial Statements as follows:
Cash and cash equivalents |
$ |
|
|
|
Prepaid expenses |
|
|
|
|
Accounts payable and accrued expenses |
|
|
( |
) |
Debt (promissory notes) |
|
|
( |
) |
Other current liabilities |
|
|
( |
) |
Net liabilities acquired |
$ |
|
( |
) |
Accumulated Deficit |
$ |
|
( |
) |
These Combined Consolidated Financial Statements of Rezolve AI plc and subsidiaries have been prepared on the following basis:
On February 4, 2025, the Company entered into a purchase agreement with DBLP Sea Cow Ltd (“DBLP”), to acquire the entire issued and to be issued share capital of each of Bluedot Industries, Inc. and Bluedot Industries Pty. Ltd, together “Bluedot Industries”. DBLP is a related party and is wholly legally owned by Daniel Wagner, a director of DBLP and the Company. Prior to his death, DBLP was beneficially owned by John Wagner, Daniel Wagner's father and a former director of Rezolve. On February 20, 2025, the Company closed the Bluedot Industries acquisition and issued ordinary shares as consideration to DBLP. Refer to Note 4 for more information.
The Bluedot Industries acquisition was accounted for as a transfer of entities under common control and all periods presented reflect the financial position, results of operations and cash flows of these entities as if they had been combined as of the beginning of the period.
F-12
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
The comparative Combined Consolidated Financial Statements have also been retrospectively adjusted to furnish information on a comparative basis as if the two companies (Rezolve and Bluedot Industries) had been combined from the beginning of the comparative period, as the entities were under common control for the entire comparative period, as shown below.
|
|
December 31, 2024 as previously reported |
|
|
Adjustments for Bluedot Industries common control transaction |
|
|
December 31, 2024 retrospectively adjusted |
|
|||
Assets |
|
|
|
|
|
|
|
|
|
|||
Current assets |
|
|
|
|
|
|
|
|
|
|||
Cash |
$ |
|
|
$ |
|
|
$ |
|
|
|||
Accounts receivable, net |
|
|
|
|
|
|
|
|
|
|||
Prepaid expenses and other current assets |
|
|
|
|
|
|
|
|
|
|||
Derivative asset |
|
|
|
|
|
— |
|
|
|
|
||
Total current assets |
$ |
|
|
$ |
|
|
$ |
|
|
|||
Non-current assets |
|
|
|
|
|
|
|
|
|
|||
Property and equipment, net |
|
|
|
|
|
|
|
|
|
|||
Intangible assets |
|
|
|
|
|
— |
|
|
|
|
||
Other non-current assets |
|
|
— |
|
|
|
|
|
|
|
||
Total non-current assets |
$ |
|
|
$ |
|
|
$ |
|
|
|||
Total assets |
$ |
|
|
$ |
|
|
$ |
|
|
|||
Liabilities and Shareholders’ deficit |
|
|
|
|
|
|
|
|
|
|||
Current liabilities |
|
|
|
|
|
|
|
|
|
|||
Accounts payable |
$ |
|
|
$ |
|
|
$ |
|
|
|||
Due to related party |
|
|
|
|
|
|
|
|
|
|||
Accrued expenses and other payables |
|
|
|
|
|
— |
|
|
|
|
||
Short term debt to related party |
|
|
|
|
|
— |
|
|
|
|
||
Short term convertible debt |
|
|
|
|
|
— |
|
|
|
|
||
Short term convertible debt to related party |
|
|
|
|
|
— |
|
|
|
|
||
Convertible promissory notes |
|
|
|
|
|
— |
|
|
|
|
||
Ordinary Shares Payable |
|
|
|
|
|
— |
|
|
|
|
||
Share-based payment liability |
|
|
|
|
|
— |
|
|
|
|
||
Advisors loans |
|
|
|
|
|
— |
|
|
|
|
||
Derivative liabilities |
|
|
|
|
|
— |
|
|
|
|
||
Deferred revenue |
|
|
— |
|
|
|
|
|
|
|
||
Other current liabilities |
|
|
— |
|
|
|
|
|
|
|
||
Total current liabilities |
$ |
|
|
$ |
|
|
$ |
|
|
|||
Total liabilities |
$ |
|
|
$ |
|
|
$ |
|
|
|||
Commitments (refer to note 18) |
|
|
|
|
|
|
|
|
|
|||
Shareholders’ deficit |
|
|
|
|
|
|
|
|
|
|||
Ordinary shares |
|
|
|
|
|
|
|
|
|
|||
Additional paid-in capital |
|
|
|
|
|
|
|
|
|
|||
Share subscription receivable |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss |
|
|
( |
) |
|
|
|
|
|
|
||
Total stockholders’ deficit |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
Total liabilities and stockholders’ deficit |
$ |
|
|
$ |
|
|
$ |
|
|
|||
F-13
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
|
|
Year ended December 31, 2024 as previously reported |
|
|
Adjustments for Bluedot Industries common control transaction |
|
|
Year ended December 31, 2024 retrospectively adjusted |
|
|||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Operating expenses |
|
|
|
|
|
|
|
|
|
|||
Cost of revenue |
|
|
|
|
|
|
|
|
|
|||
Sales and marketing expenses |
|
|
|
|
|
|
|
|
|
|||
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization expenses |
|
|
|
|
|
|
|
|
|
|||
Research and development expenses |
|
|
— |
|
|
|
|
|
|
|
||
Other operating expense, net |
|
|
|
|
|
— |
|
|
|
|
||
Total operating expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Operating loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other (expense)/income |
|
|
|
|
|
|
|
|
|
|||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gain on derivatives |
|
|
|
|
|
— |
|
|
|
|
||
Loss on extinguishment |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Other non-operating income (expense), net |
|
|
|
|
|
( |
) |
|
|
|
||
Total other expenses, net |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Loss before taxes |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income tax expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net loss and comprehensive loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss per share, basic and diluted |
|
$ |
( |
) |
|
|
— |
|
|
$ |
( |
) |
Weighted average shares, basic and diluted |
|
|
|
|
|
|
|
|
|
|||
We consolidate investments in companies in which we control directly or indirectly through the control of more than
The Company’s investments companies with interests ranging between
All intercompany balances and transactions have been eliminated.
A list of subsidiaries and Rezolve AI plc’s holding as of December 31, 2025 is as follows:
F-14
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Name of the entity |
|
Date of incorporation or acquisition (*) |
|
Country of |
|
Group |
Rezolve Taiwan Inc. |
|
|
|
|||
Rezolve Technology (India) Private Limited |
|
|
|
|||
Rezolve Mobile Commerce Inc. |
|
|
|
|||
Rezolve Technology S.L. |
|
|
|
|||
Rezolve AI IP Holdings Limited |
|
|
|
|||
Rezolve Ai Finance LLC |
|
|
|
|||
Rezolve Ai Finance Holdings LLC |
|
|
|
|||
Armada Acquisition Corp. I |
|
|
|
|||
GroupBy Inc. |
|
* |
|
|||
GroupBy International Ltd |
|
* |
|
|||
GroupBy USA Inc. |
|
* |
|
|||
GroupBy UK Ltd |
|
* |
|
|||
Bluedot Industries Pty. Ltd |
|
* |
|
|||
Bluedot Industries, Inc. |
|
* |
|
|||
Bluedot Innovation Pty. Ltd |
|
* |
|
|||
Prediqt Business Solutions Private Limited |
|
* |
|
|||
Mpower Plus Global Limited |
|
* |
|
|||
Mpower Plus Poland SP Z o.o |
|
* |
|
|||
Mpower Plus France SARL |
|
* |
|
|||
Mpower Plus B.V. |
|
* |
|
|||
Mpower PLUS Global PTE. Ltd. |
|
* |
|
|||
Mpower Plus Hungary KFT |
|
* |
|
|||
MPower Plus BVBA |
|
* |
|
|||
MPower Plus Deutschland GmbH |
|
* |
|
|||
MPower Plus Global Malaysia SDN BHD |
|
* |
|
|||
MP PLUS RM S.R.L |
|
* |
|
|||
Visenze Pte. Ltd. |
|
* |
|
|||
Visenze Inc. |
|
* |
|
|||
Visenze Technology (Beijing) Co., Ltd |
|
* |
|
|||
Subsquid Labs GmbH |
|
* |
|
|||
Scale Up Commerce Ltd. |
|
* |
|
|||
Crownpeak Intermediate Holdings, Inc. |
|
* |
|
|||
Crownpeak Technology, Inc. |
|
* |
|
|||
Magus Research Limited |
|
* |
|
|||
Evidon, Inc. |
|
* |
|
|||
e-Spirit Inc. |
|
* |
|
|||
Crownpeak Technology,GmbH. |
|
* |
|
|||
Ilumino, LLC |
|
* |
|
|||
Aegean Bidco Limited |
|
* |
|
|||
ATTRAQT Group Limited |
|
* |
|
|||
ATTRAQT Limited |
|
* |
|
|||
ATTRAQT, Inc. |
|
* |
|
|||
Early Birds SAS |
|
* |
|
|||
Fredhopper B.V. |
|
* |
|
|||
Spring Technologies EOOD |
|
* |
|
|||
Fredhopper (Australia) Pyt Ltd. |
|
* |
|
|||
Fredhopper GmbH |
|
* |
|
|||
Fredhopper SARL |
|
* |
|
|||
Techouts Inc. |
|
* |
|
|||
Techouts Solutions India Private Limited |
|
* |
|
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are
F-15
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable, provided that early adoption is permitted by the new or revised accounting standard. The Company has elected to not opt out of such extended transition period, which means that the Company, as an emerging growth company, can adopt new or revised standard at the same time as private companies. While the Company may early adopt the new or revised standard if the standard permits, it is able to avail itself of any additional transition time which is granted to private companies. This may make comparison of the Company’s Combined Consolidated Financial Statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Pursuant to ASC 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), management must evaluate whether there are conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these Combined Consolidated Financial Statements are issued. In accordance with ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been fully implemented as of the issuance date if (a) it is probable that management’s plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the foreseeable future.
As of December 31, 2025, the Company had an accumulated deficit of $
Management's plans to alleviate the substantial doubt about the Company’s ability to continue as a going concern, as described above, includes the following actions:
The Company has recently raised $
F-16
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
The preparation of financial statements in conformity with US GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and to disclose contingent assets and liabilities at the date of financial statements and the results of operations during the reporting period. Estimates and assumptions are used in accounting for, among other things, the valuation of acquisition-related assets and liabilities, deferred income taxes and related valuation allowances, fair value measurements, useful lives of long-lived assets, capitalized software and share-based compensation. Management believes that the estimates used in the preparation of the Combined Consolidated Financial Statements are prudent and reasonable. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from estimates
The functional currency of the Company is the US dollar, being the currency in which the Company and its predecessor company, Rezolve Limited, predominantly generates cash through financing transactions and expended cash in. The subsidiaries have different functional currencies such as the Euro, British Pounds, Australian Dollars, Brazilian Real, Polish Zloty, Swiss Franc and Indian Rupee and New Taiwan Dollar which have been determined on the basis of the primary economic environment in which each entity of the Company operates. Management believes that each individual entity’s functional currency reflects the transactions, events and conditions under which the entity conducts its business.
Transactions denominated in currencies other than our or our subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Assets and liabilities denominated in currencies other than the functional currency are remeasured using the current exchange rate for monetary accounts and historical exchange rates for non-monetary accounts, with exchange differences on remeasurement included in other income (expense), net in our consolidated statements of operations. Foreign subsidiaries that utilize foreign currency as their functional currency translate such currency into U.S. dollars using (i) the exchange rate on the balance sheet dates for assets and liabilities, (ii) the average exchange rates prevailing during the period for revenues and
F-17
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
expenses, and (iii) historical exchange rates for equity. Any translation adjustments resulting from this process are shown separately as a component of accumulated other comprehensive income (loss) within shareholder’s deficit in the combined consolidated balance sheets and the combined consolidated statement of comprehensive income (loss).
With the exception of certain material transactions, the cash flows from our operations in foreign countries are translated at the average rate for the applicable period in our combined consolidated statements of cash flows. The impacts of material transactions generally are recorded at the applicable spot rates in our combined consolidated statements of operations and cash flows. The effects of exchange rates on cash balances held in foreign currencies are separately reported in our combined consolidated statements of cash flows.
Cash comprises cash on hand and in current accounts which are readily available. The Company considers cash equivalents to be highly liquid investments with an original maturity at purchase of three months or less.
The Company’s cash are deposited in accounts at large, creditworthy financial institutions and is insured in accordance with the regulations of the financial institution's jurisdiction, for example the Company's cash held with financial institutions in the United Kingdom is insured up to £
The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash are held. The Company has not experienced any losses associated with cash held with financial institutions.
Accounts receivable and unbilled receivable, net consisted of the following as of:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Accounts receivable |
$ |
|
|
$ |
|
|
||
Allowance for credit losses |
|
|
( |
) |
|
|
— |
|
Unbilled receivable |
|
|
|
|
|
— |
|
|
Accounts receivable and unbilled receivable, net |
$ |
|
|
$ |
|
|
||
Account receivable consists primarily of amounts related to fees charged to customers. Unbilled receivables arise when the timing of our billing to customers differs from the timing of revenue recognition for the obligations performed. Credit is extended based on evaluation of a customer’s financial condition and generally collateral is not required. Accounts receivable is stated at amounts due from customers net of an allowance for expected credit losses.
The allowance for expected credit losses is based upon our current estimate of lifetime expected credit losses related to uncollectible accounts receivable. The Company evaluates the need for an allowance for expected credit losses based on historical collection trends, prevailing and anticipated macroeconomic conditions and specific customer credit risk. The Company adopted ASU 2025-05 for the year ended December 31, 2025. ASU 2025-05 provides entities with an additional practical expedient for estimating expected credit losses on current accounts receivable arising from revenue transactions under ASC 606. Under this practical expedient, the Company is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable remain unchanged for the remaining life of those assets.
Accounts receivable at December 31, 2024 did not have any allowances created for expected credit losses. For the year ended December 31, 2024,
The Company evaluates the facts and circumstances of each acquisition to determine whether the transaction should be accounted for as an asset acquisition or a business combination.
F-18
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
The Company accounts for a business combination using the acquisition method of accounting under ASC 805. The acquisition method of accounting requires that purchase price of the acquisition be allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded to goodwill. The Company's preliminary estimates of fair values of the net assets acquired are based on the information that was available at the date of acquisition, and the Company continues to evaluate the underlying inputs and assumptions used in its valuations. Accordingly, these preliminary estimates are subject to change during the measurement period, which is up to one year from the date of the acquisition. A decrease in the fair value of assets acquired or an increase in the fair value of liabilities assumed in the acquisition from those valuations would result in a corresponding increase in the amount of goodwill from the acquisition. The acquisition-related transaction costs incurred by the Company are accounted for as expenses in the periods in which the costs were incurred and the services were received.
The Company accounts for an acquisition that is not business combination as an asset acquisition under ASC 805. The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. The Company use a cost accumulation model to determine the cost of the asset acquisition. Ordinary shares issued as consideration in an asset acquisition are measured based on the acquisition date fair value of the equity interests issued. Direct transaction costs are recognized as part of the cost of an asset acquisition. The cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. If applicable, any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values.
The Company accounts for a transfer of net assets or an exchange of equity interests between entities under common control as a common control transaction. Under ASC 810-10-15-8, a controlling financial interest defined as ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity or individual, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity. Under ASC 805-50-25-2, the Company (receiving entity), initially recognizes the assets and liabilities received at their carrying amounts in the financial statements of the transferring entity on the date of the transfer. Under ASC 805-50-30-5, the Company recognizes the difference between the proceeds transferred and the carrying amounts of the net assets received in equity (Additional Paid-in Capital). If a transaction combines two or more commonly controlled entities that historically have not been presented together, the resulting financial statements are, in effect, considered to be those of a different reporting entity. The resulting change in reporting entity requires retrospective combination of the entities for all periods presented as if the combination had been in effect since inception of common control in accordance with ASC 250-10-45-21.
For additional information about acquisitions, see Note 4.
Property and equipment are stated at cost of acquisition less accumulated depreciation and accumulated impairment provisions, however, there have been no indicators identified during the reporting periods.
An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the net carrying amount of the asset) is included in the consolidated statement of comprehensive operations, in the year the asset is derecognized.
Depreciation on property and equipment is charged to expense on a systematic basis over the useful life of assets as estimated by the management. Depreciation is computed using the straight-line method.
Assets |
|
Useful life |
Computers |
|
|
Office equipment |
|
Repairs and maintenance of property and equipment are expensed as incurred; enhancements and improvements that extend the life of property and equipment are capitalized into their cost.
F-19
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Computer software
Computer software acquired separately is measured on initial recognition at cost. Following initial recognition, such assets are carried at cost less any accumulated amortization and any accumulated impairment losses, however, there have been no indicators of impairment identified during the years ended December 31, 2025 and December 31, 2024.
Computer software assets are amortized over their useful economic life less their estimated residual value and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the net carrying amount of the asset and are recognized in profit or loss in the consolidated statement of operations when the asset is derecognized.
The initial useful lives of computer software assets as estimated by management are summarized as follows:
Assets |
|
Useful life |
Software |
|
Internal-use software
We capitalize internal and external costs directly associated with the development of internal-use software. Maintenance and training costs, as well as costs incurred during the preliminary stage of an internal-use software development project, are expensed as incurred.
The Company has not commenced amortizing the in-development software as it not yet ready for its intended use. The Company reviews internal-use software for impairment when an event or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. There were no indicators of impairment for internal-use software as of December 31, 2025 and December 31, 2024 and the years then ended.
Developed technology
We have developed technology that were acquired through a business combination. At the time of each acquisition, fair value was estimated using a relief from royalty method which included various assumptions requiring judgment, including projected future cash flows, discount rates, and market royalty rates.
The Company reviews developed technology for impairment when an event or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. There were no indicators of impairment for developed technology as of December 31, 2025 and December 31, 2024 and the years then ended. For additional information, see Notes 4 and 7.
Assets |
|
Useful life |
Developed technology |
|
Customer contracts and related relationships
We have customer contracts and related relationships that were acquired through a business combination. At the time of each acquisition, fair value was estimated using an excess earnings methodology (MPEEM - Multi-Period Excess Earnings Method). The MPEEM is a variation of discounted cash-flow analysis which utilizes internally developed discounted future cash flow models and third-party valuation specialist models, which include various assumptions requiring judgment, including projected future cash flows and discount rates.
The Company reviews customer contracts and related relationships for impairment when an event or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. There were no indicators of impairment for customer contracts and related relationships as of December 31, 2025 and December 31, 2024 and the years then ended. For additional information, see Notes 4 and 7.
Assets |
|
Useful life |
Customer contracts and related relationships |
|
Recruitment database
We have a recruitment database that was acquired through a business combination. At the time of the acquisition, fair value was estimated using a replacement cost method. The replacement cost method considers an estimate of the costs to recreate the
F-20
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
recruitment database (software, data acquisition, labor, overhead), opportunity costs representing forgone returns and obsolescence of the recruitment database.
The Company reviews the recruitment database for impairment when an event or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. There were no indicators of impairment for the recruitment database as of December 31, 2025 and the year then ended. For additional information, see Notes 4 and 7.
Assets |
|
Useful life |
Recruitment database |
|
Crypto intangible assets, net
Crypto intangible assets consists of crypto assets such as Bitcoin (“BTC”) and Ethereum (“ETH”).
The Company accounts for its crypto assets in accordance with ASC 350-60, Intangibles—Goodwill and Other—Crypto Assets. The Company’s crypto assets meet the definition of in-scope crypto intangible assets under this guidance.
The Company accounts for its crypto intangible assets as indefinite-lived intangible assets, as there are no legal, regulatory, contractual, competitive, economic, or other factors that limit their useful lives. Accordingly, crypto intangible assets such as BTC and ETH are considered to have indefinite useful lives.
Crypto intangible assets received in exchange for goods or services are initially measured at their fair value on the transaction date. Crypto intangible assets purchased for cash are initially recorded at cost, which includes the purchase price and any directly attributable transaction costs or fees. Subsequent to initial recognition, the Company measures all in-scope crypto intangible assets at fair value at each reporting period, with changes in fair value recognized in earnings in the period in which they occur.
Crypto intangible assets are presented separately from other intangible assets on the Company’s combined consolidated balance sheet within Crypto intangible assets, net. Gains and losses resulting from changes in fair value are included in Other income (expense), net in the combined consolidated statements of operations. For additional information, see Note 7.
Other digital assets consist of SQD tokens, a utility token created and issued by Subsquid.
The SQD tokens do not qualify as a crypto asset within the scope of ASC 350-60.
In-scope and out-of-scope crypto intangible assets are subject to the same recognition and initial measurement guidance when purchased or otherwise acquired. SQD tokens that are purchased or otherwise acquired are initially measured at fair value on the transaction date. The fair value of SQD tokens is determined using a market approach based on the traded price observed on the transaction date. There is no pricing information available from a National Price Desk for SQD tokens that would otherwise represent a quoted price in an active market and qualify as a Level 1 input in the fair value hierarchy. Accordingly, the Company estimates fair value using pricing information obtained from market aggregators that compile trading data from active exchanges. The prices obtained from these market aggregators represent observable market data but are not directly quoted prices for identical assets in an active market. As a result, the Company classifies the inputs used in determining the fair value of SQD tokens as Level 2 inputs within the fair value hierarchy. These prices reflect active market transactions for SQD tokens at or near the measurement date.
For SQD tokens that are self-issued by Subsquid, rather than purchased or otherwise acquired, no specific capitalization criteria are met. Accordingly, costs incurred in connection with the creation of SQD tokens are expensed as incurred and are not capitalized, resulting in a carrying amount of
The Company accounts for the SQD tokens as indefinite-lived intangible assets, as there are no legal, regulatory, contractual, competitive, economic, or other factors that limit their useful lives. Accordingly, utility tokens such as SQD tokens are considered to have indefinite useful lives.
Other digital assets are presented separately from other intangible assets on the Company’s combined consolidated balance sheet within Other digital assets , net.
Indefinite-lived digital assets are not amortized but are reviewed for impairment at least annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Such events or circumstances may include significant declines in market prices, adverse regulatory or legal developments, or other market-based indicators.
F-21
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
During the fourth quarter of 2025, the market price of the SQD token experienced a significant decline, which the Company determined to be a triggering event requiring an interim impairment assessment. The SQD tokens were written down to the lowest observable market price during the reporting period. As a result, the Company recognized an impairment charge of approximately $
For additional information, see Notes 4 and 7.
Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified or separately recognized. Goodwill is subject to an impairment test at least annually or when events or changes in circumstances indicate that it may be impaired. In assessing impairment, the Company performs either a quantitative or a qualitative analysis.
Determining the fair value of the Company’s single reporting unit for goodwill requires significant estimates and judgments by management. When a quantitative analysis is performed, the Company generally uses the income approach, which requires several estimates, including future cash flows consistent with management’s strategic plans, sales growth rates and the selection of royalty rates and discount rates. There were no indicators of impairment for goodwill identified as of December 31, 2025 and the year then ended. For additional information, see Notes 4 and 7.
The Company reviews assets, including the property and equipment and definite-life intangible assets, for impairment when an event or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from use of the asset and its eventual disposition are less than the carrying amount. Impairment loss, if any, is measured as the difference between the fair value of an asset, as measured by discounted cash flows and the asset’s carrying value. There were no indicators of impairment for any of the long-lived assets as of December 31, 2025 and December 31, 2024 and the years then ended.
At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease.
ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The interest rate used to determine the present value of the future lease payments is the Company's incremental borrowing rate, because the interest rate implicit in the Company's leases is not readily determinable. The Company's incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located.
The operating lease ROU asset also includes any prepaid lease payments and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Certain lease agreements contain variable payments, which are expensed as incurred and not included in the lease assets and liabilities. These amounts primarily include payments for maintenance and utilities. Operating lease expense (excluding variable lease costs) is recognized on a straight-line basis over the lease term. See Note 15.
Convertible notes are regarded as hybrid instruments, consisting of a liability component and an equity component.
The host instrument (i.e., convertible note or debt element of the outstanding instruments) is classified as a financial liability and recorded at the present value of the Company’s obligation to make future interest payments in cash and settle the redemption value of the instrument in cash. The carrying value of the host instrument is accounted for at amortized cost and is therefore accreted to the original face value of the instrument, over the life, using the effective interest method.
When the Company issues debt with a conversion feature, we assess, in accordance with ASC 480-10 -Distinguishing Liabilities from Equity and ASC 815 - Derivatives and Hedging, whether the conversion feature meets the requirements to be treated as a derivative, as follows: (a) one or more underlying’s, typically the price of our common stock; (b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; (c) no initial net investment, which typically excludes the amount
F-22
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
borrowed; and (d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash.
The conversion features of convertible debt instruments issued by the Company, that meet the requirements to be bifurcated and treated as derivatives, are recorded as either financial assets or financial liabilities, in accordance with the substance of the contractual arrangements and the definitions of either a financial asset or a financial liability. These financial assets or a financial liabilities are initially recognized at fair value and classified as derivative assets or liabilities in the consolidated balance sheet. Changes in the fair value of the derivative assets or liabilities are subsequently accounted for directly through the consolidated statements of operations and comprehensive income (loss) and are included in operating activities in the consolidated statements of cash flows as non-cash adjustment.
The conversion options are valued using certain directly and indirectly observable inputs and are classified as Level 2 in the fair value hierarchy in accordance with ASC 820 - Fair Value Measurement. The Company utilizes a third party valuation expert to determine the estimated fair value of the derivatives. The third party valuation expert estimates the fair value of the derivative using a Geometric Brownian Motion based Monte Carlo simulation to project the underlying metric value to ultimately determine the fair value upon the date of issuance. This model incorporates the most recent data available including risk-free interest rate, expected life of options, expected dividend yield, expected stock price volatility, and the Company's share price. The derivative is revalued at the end of each reporting period and any change in fair value is recorded as a gain or loss in the statement of operations.
The Company also considers the impact, if any, of the dilutive effect of the shares of its common stock issuable upon conversion of the outstanding convertible debt in its diluted income per share.
Deferred financing costs include debt discounts and debt issuance costs related to a recognized debt liability and are presented in the balance sheet as a direct reduction from the carrying value of the debt liability. Amortization of deferred financing costs are included as a component of interest expense. Deferred financing costs are amortized using the effective interest method.
When the terms of a financial asset involve returns that vary in timing or amounts, the Company evaluates the financial asset to determine if there are any freestanding or embedded derivatives that should be accounted for separately. The Company separates the embedded derivative from its host contract and account for as a derivative instrument “if and only if” all of the specified criteria in ASC 815 are met.
The fair value option (FVO) for financial instruments under ASC 825-10 can generally be applied to hybrid instruments, subject to certain limitations. In addition, ASC 815 provides an instrument-by-instrument fair value election for hybrid financial instruments that would require an embedded derivative to be bifurcated. Under either election, the hybrid financial instrument is carried at fair value with the change in fair value recognized currently in earnings, except for the effect of changes in own credit, which are recognized in other comprehensive income.
The Company holds deposits in certain stable coins, including US Dollar Tether (“USDT”) and USD Coin (“USDC”). Stable coins differ from other crypto assets in that they are designed to maintain a stable value by pegging their price to a fiat currency. USDT and USDC are each intended to maintain a value of approximately one US dollar per token. These stable coins meet the definition of a financial asset under ASC 825-10-20 because they represent a contractual claim on the issuer that obligates the issuer to deliver cash (US dollars) upon redemption. As a result, the Company accounts for these stable coin holdings as financial assets rather than as crypto intangible assets. Because the stable coins are designed to maintain a value equivalent to one U.S. dollar and are redeemable with the issuer, the carrying value of the Company’s stable coin deposits approximates fair value. Stable coin deposits of $
Under ASC 606, the Company determines revenue recognition through the following steps:
F-23
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
For revenue generated from contracts with customers involving another party, the Company evaluates whether it is acting as the principal or the agent in the transaction. This determination requires significant judgment and impacts the amount and timing of revenue recognized. The Company determines whether it is a principal or an agent, which is dependent on whether the Company has control of the specified goods or services before they are transferred to the customer, whether the Company is primarily responsible for fulfillment, whether the Company has inventory risk and whether the Company has latitude in establishing price. Revenues are recognized on a gross basis if the Company is acting in the capacity of a principal and on a net basis if it’s acting in the capacity of an agent.
The Company generates revenues primarily from
Revenue generated from cloud-based software solutions, include the SaaS (software as a service) products such as the following:
These cloud-based software solutions are sold to customers through hosting arrangements, whereby we run the software applications on our own platforms. Access to these platforms are provided to customers on either a consumption or subscription basis and generally have contract terms longer than a year. Revenues related to cloud-based software solutions provided on a consumption basis are recognized when the customer utilizes the cloud-based software solutions, based on the quantity consumed. Revenues related to cloud-based software solutions provided on a subscription basis are recognized ratably over the contract term as the customer receives
F-24
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
and consumes the benefits of the cloud-based software solutions. Usage-based fees earned in exchange for the use of the Company’s software licenses and subscription services in excess of committed usage are recognized in the period when usage occurs.
The Company may receive upfront, non-refundable consideration at which time the performance obligation has not yet been satisfied and will only be satisfied over time (over the duration of the contract term). This upfront, non-refundable consideration (deferred revenue) is recognized as revenue over time as the performance obligation is satisfied. The deferred revenue balance of $
Revenue related to configuration and ongoing technical support services are recognized ratably over the contract term as the customer receives and consumes the benefits of these services.
Revenues from the sale of professional services include information technology ("IT") and information technology enabled ("ITE") services. The Company provides professional services, which include project managers, specialists and engineers, recommending, designing and implementing IT solutions. The Company is primarily responsible for the fulfillment and acceptability of the professional services and has control over how to provide the requested services. As a result, the Company is the principal, and professional services revenue is recognized on a gross basis ratably over the contract term as the customer receives and consumes the benefits of these services.
The Company also continues earns revenue from commission from sales of football tickets for La Liga in Spain through its platform technology. La Liga pays a commission for each football ticket sold through our platform technology. Revenue is recognized in accordance with ASC 606 “Revenue from Contracts with Customers” at the point in time when a football ticket is sold on our platform technology.
Disaggregation of revenue
The following table presents revenue by geographical region:
|
|
Year ended December 31, 2025 |
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Year ended December 31, 2024 |
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North America |
$ |
|
|
$ |
|
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||
United Kingdom and Europe |
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|
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|
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Asia Pacific |
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Total Revenue |
$ |
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|
$ |
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||
For the year ended December 31, 2025, the Company had one customer that accounted for more than 10% of the Company’s total revenue.
For the year ended December 31, 2024,
In the month ended December 31, 2025, the Company reported total revenue of $
Costs capitalized to obtain contracts with customers
Contract costs primarily consist of sales commission that qualify for capitalization since these payments are directly related to sales achieved during a time period. When the Company recognizes revenue related to these customer contracts ratably over the contract term as the customer receives and consumes the benefits of the cloud-based software solutions and services, the commission costs related to these customer contracts are amortized ratably over the same period.
Costs to obtain a contract that will be amortized within the succeeding 12-month period are classified as current and included in prepaid expenses and other current assets on the combined consolidated balance sheets. The remaining balance is classified as non-current and are included in other non-current assets on the combined consolidated balance sheets. Amortization expense is included in
F-25
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
sales and marketing expenses in the combined consolidated statements of operations. Deferred commissions are periodically analyzed for impairment.
The Company did
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December 31, 2025 |
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December 31, 2024 |
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||||
Opening balance, net |
|
$ |
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— |
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|
$ |
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— |
|
Acquired through business combinations |
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— |
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Additions during the year |
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— |
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Amortization during the year |
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|
( |
) |
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|
|
— |
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Closing balance, net |
|
$ |
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|
|
$ |
|
— |
|
|
Cost of revenues consists of expenses incurred directly in relation to the earning of revenues such as payroll and benefits for IT consultants and partner’s fees.
Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Group’s is the Company’s CODM.
At December 31, 2025, there have not been any changes in the internal organization that affects how the CODM allocates resources and assesses the performance of the Company.
As the Company operates as
The CODM does not review assets at a different level or category than those disclosed in the consolidated balance sheet.
Credits for research and development activities relate to government incentives on qualifying research and development expenditures in the United Kingdom. These refundable credits are recognized within other non-operating income when they are filed with the government authorities and there is no uncertainty on the realization of the credits until they are refundable.
The Company measures the cost of share-based awards granted to employees, non-employees and directors based on the grant-date fair value of the awards. The grant-date fair value of the share options is calculated using a Black-Scholes Merton option pricing model. The value of the portion of the award, after considering potential forfeitures, that is ultimately expected to vest is recognized as expense in our statements of operations on a over the requisite service periods. The Company elected to recognize the effect of forfeitures in the period that they occur.
F-26
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Authorized and Outstanding Shares
As of December 31, 2025 and December 31, 2024, the Company has one class of issued shares, ordinary shares. On August 15, 2024, the Company’s series A shares were reclassified as ordinary shares, see note 2.1.
Each ordinary shareholder are entitled to
The authorized and outstanding shares as of December 31, 2025 and December 31, 2024 as are follows, reflecting the impact of the Pre-Closing Demerger transaction whereby share in Rezolve AI plc was issued to shareholders of Rezolve Limited for each 6.13 shares held (see note 2.1):
Accumulated deficit includes current and prior period losses. Accumulated other comprehensive losses primarily consists of foreign currency translation reserves. Additional paid in capital primarily consists of additional subscription consideration received over and above the par value of the shares as well as the fair value of share-based payments.
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price at which an asset could be exchanged or a liability transferred in an orderly transaction between knowledgeable, willing parties in the principal or most advantageous market for the asset or liability. Where available, fair value is based on observable market prices or derived from such prices. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.
The Company reports all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety.
Fair value measurement at reporting date:
F-27
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Description |
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Level 1 |
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Level 2 |
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Level 3 |
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December 31, 2025 |
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Fair value on recurring basis |
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(1) Share-based payment liability |
$ |
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|
$ |
— |
|
$ |
— |
|
|||
(2) Derivative liability |
$ |
— |
|
$ |
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|
$ |
— |
|
|||
(3) Crypto intangible assets |
$ |
|
|
$ |
— |
|
$ |
— |
|
|||
(4) Contingent consideration |
$ |
— |
|
$ |
— |
|
$ |
|
|
|||
Fair value on non-recurring basis |
|
|
|
|
|
|
|
|
|
|||
(5) Other digital assets |
$ |
— |
|
$ |
|
|
$ |
— |
|
|||
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
Fair value on recurring basis |
|
|
|
|
|
|
|
|
|
|||
(1) Share-based payment liability |
$ |
|
|
$ |
— |
|
$ |
— |
|
|||
(2) Derivative liability |
$ |
— |
|
$ |
|
|
$ |
— |
|
|||
(2) Derivative asset |
$ |
— |
|
$ |
|
|
$ |
— |
|
|||
The derivative asset at December 31, 2024 pertained to an option held by the Company to convert a promissory note payable to Northland Securities (see note 8). In the event that the Company and its direct and indirect parent companies after completion of the Business Combination have less than $
The derivative liabilities were triggered by conversion features embedded in promissory notes held by investors Cohen & Company Financial Management LLC (see note 8), J.V.B. Financial Group and Northlands Securities (see note 8). On August 15, 2024, the Company recognized derivative liabilities and an offsetting debt discount associated with the embedded conversion features in its senior secured convertible notes (see note 8), convertible promissory notes (see note 8) and advisors loans (see note 8). The Company previously did not bifurcate the embedded conversion features as derivatives due to the lack of an underlying share price prior to the Company's acquisition of Armada and listing of its Ordinary Shares on the NASDAQ.
The carrying amount of the Company’s cash, accounts receivable, accounts payable and accrued expenses approximated their fair values due to their short term to maturity.
F-28
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Credit risk
Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivables. The Company’s cash in deposited in accounts at large financial institutions. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash are held.
Accounts receivable are potentially subject to credit risk concentration. The Company has not experienced any material losses related to concentrations during the periods presented.
At December 31, 2025 and 2024, the following customers represent more than 10% of total accounts receivable.
|
|
December 31, 2025 |
December 31, 2024 |
||||
Servicios Liverpool, S.A. de C.V. |
|
% |
|
— |
|
% |
|
La Liga |
|
Less than |
|
|
% |
||
Accounts payable include balances for work incurred by third parties for the benefit of the Company.
Foreign currency risk
During the year ended December 31, 2025, the Company’s revenue was denominated in US Dollar, the Euro (“EUR”), Great British Pounds (“GBP”), Australian Dollars (“AUD”), Swiss Franc (“CHF”), Polish Zloty (“PLN”), Singapore Dollar (“SGD”) and Indian Rupees (“INR”). Based upon the Company’s level of operations for the year ended December 31, 2025 , a sensitivity analysis shows that a
During the year ended December 31, 2024, the Company's revenue was denominated in EUR and AUD. Based on the Company's level of operations for the year ended December 31, 2024, a sensitivity analysis shows that a
The Company accounts for income taxes and the related accounts in accordance with ASC 740, Income Taxes. Deferred income tax assets and liabilities are computed annually, for differences between the carrying amounts and the tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when it is necessary to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes includes both current taxes for the period plus or minus the change during the period in deferred tax assets and liabilities.
Tax benefits from uncertain tax position are recognized for financial statement purposes only when it is more-likely-than-not that the position will be sustained with the local taxing authority. Measurement of the tax effects of positions that meet this recognition threshold is based on the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement with the taxing authorities.
F-29
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
As a result of operating losses in most of the geographies where the Company operates, we concluded that our deferred tax assets on unutilized tax losses were not more likely than not to be realized in the future and a full valuation allowance has been recorded.
In accordance with ASC 260 Earnings Per Share, basic earnings per share, basic net loss per share is based on the weighted average number of ordinary shares issued and outstanding and is calculated by dividing net loss attributable to ordinary shareholders by the weighted average shares outstanding during the period.
Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares used in the net loss per share calculation plus the number of ordinary shares that would be issued assuming conversion of all potentially dilutive securities outstanding. If the Company reports a net loss, the computation of diluted loss per share excludes the effect of dilutive ordinary share equivalents, as their effect would be antidilutive. Diluted loss per share is equal to the net loss per share as all potentially dilutive securities are anti-dilutive in the periods presented. For the years ended December 31, 2025 and 2024 the Company incurred net losses and therefore no potential dilutive ordinary share were utilized in the calculation of losses per share.
If the Company reports net income, basic earnings per share is based on the weighted average number of ordinary and series A preferred shares issued and outstanding and is calculated by dividing net income attributable to ordinary and series A preferred shareholders by the weighted average shares outstanding during the period.
Diluted earnings per share is calculated by dividing net income attributable to ordinary and series A preferred shareholders by the weighted average number of ordinary and series A preferred shares used in the net earnings per share calculation plus the number of ordinary shares that would be issued assuming conversion of all potentially dilutive securities outstanding.
The series A preferred shares are entitled to the same dividend rights as the ordinary shares and therefore as participating securities, are included in the basic and diluted earnings per share calculation. The holders of the series A preferred shares do not have a contractual obligation to share in the losses of the Company. The Company computes earnings per share using the two-step method for its series A preferred and ordinary shares.
The following table presents the potential shares of ordinary shares outstanding that were excluded from the computation of diluted net loss per share of ordinary shares as of the periods presented because including them would have been antidilutive:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Convertible debt (note 8) |
|
|
|
|
|
|
||
Shares payable (note 8) |
|
|
|
|
|
|
||
Warrants |
|
|
|
|
|
|
||
Share options |
|
|
|
|
|
|
||
Convertible promissory notes |
|
|
|
|
|
|
||
Advisors Loans (note 8) |
|
— |
|
|
|
|
||
Total |
|
|
|
|
|
|
||
The Company uses the “if converted” method for calculating the dilutive effect of the convertible debt, shares payable and series A preferred shares and the treasury share method for calculating the dilutive effect of the options and warrants. The series A preferred shares are convertible at the rate of one series A preferred share into one ordinary share in the event of an initial public offering. The Company included the deferred shares as they are expected to be converted to ordinary shares in the future.
Advertising costs are expensed as incurred. See Note 13 for more information.
Certain amounts reported in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported net income, total assets, total liabilities, or shareholders’ equity. During the year ended December 31, 2024, research and development expenses were presented in the combined consolidated statement of operations within
F-30
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
the General and administrative expenses line. In the combined consolidated statement of operations for the year ended December 31, 2025, research and development expenses from the comparative period have been reclassified to conform to the current period presentation.
In December 2025, the Financial Accounting Standards Board (the “FASB”) issued ASU 2025‑11, Interim Reporting (Topic 270): Narrow‑Scope Improvements. The amendments clarify the applicability, content, and disclosure requirements for interim financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). The objective of ASU 2025‑11 is to improve the clarity and navigability of Topic 270 by consolidating existing interim reporting guidance, specifying required disclosures, and establishing a principle that entities disclose events and changes occurring after the most recent annual reporting period that have a material impact on the entity. ASU 2025‑11 is effective for interim periods within annual periods beginning after December 15, 2028, with early adoption permitted. The Company is evaluating the impact on the Company’s interim reporting and disclosures.
In December 2025, the FASB issued ASU No. 2025-10, Accounting for Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (ASU 2025-10) to establish authoritative guidance on the recognition, measurement, and presentation of government grants received by business entities. The guidance will be effective for the annual periods beginning after December 15, 2029 including interim periods within those annual periods. Early adoption is permitted. Upon adoption, the guidance can be applied using a modified prospective, modified retrospective, or under a retrospective approach. The Company is currently evaluating the impact of ASU 2025-10 on its consolidated financial statements.
In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815) - Hedge Accounting Improvements (“ASU 2025-09”). The amendments in this update aim to better align financial reporting with an entity's risk management strategies. It makes improvements in five key areas to help entities achieve and maintain hedge accounting for highly effective economic hedges. Improvements include changes to similar risk assessment for cash flow hedges, a new model for Choose-Your-Rate debt instruments, a principles-based approach for non-financial forecasted transactions, clarification on net written options, and addressing the mismatch in dual-hedge accounting ASU 2025-09 is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact of ASU 2025-09 on its consolidated financial statements.
In November 2025, the FASB issued ASU 2025-08 "Financial Instruments — Credit Losses (Topic 326): Purchased Loans." ASU 2025-08 expands the population of acquired financial assets subject to the gross-up approach to purchased seasoned loans. Under the gross-up approach, acquired financial assets that are determined to be seasoned are recognized at amortized cost basis offset by allowance for credit losses at acquisition. No provision for loan losses is recognized at acquisition. All non-purchase credit deteriorated loans acquired in a business combination are deemed seasoned. Other non-purchase credit deteriorated loans are deemed seasoned if purchased at least ninety days after origination and the acquirer was not involved in the origination. This update is effective for annual and interim periods beginning after December 15, 2026, with early adoption permitted. Entities should apply the amendments prospectively to loans acquired on or after the adoption date. The Company is currently evaluating the impact of the adoption of ASU 2025-08 on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging and Revenue from Contracts with Customers, which refines the scope of the guidance on derivatives in ASC 815 and clarifies the guidance on share-based payments from a customer in ASC 606. This ASU is effective for fiscal years beginning after December 15, 2026, including interim periods within those annual reporting periods, with early adoption permitted. The guidance can be applied prospectively to new contracts entered into on or after the date of adoption or on a modified retrospective basis for contracts existing as of the beginning of the annual reporting period of adoption. The Company is currently evaluating the impacts of ASU 2025-07 on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025‑06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"). ASU 2025-06 removes the existing project stage model and introduces new capitalization criteria based on management authorization and the probability of project completion. It also clarifies the treatment of software development uncertainty and incorporates guidance on website development costs. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements.
F-31
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
In July 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 also provides an accounting policy election which allows an entity to consider cash collection activity after the balance sheet date when estimating expected credit losses on current accounts receivable and current contract assets. The accounting policy election is available to entities other than public business entities, and it may only be made if the above practical expedient is also elected. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company adopted the guidance for the year ended December 31, 2025. The adoption did not have a material effect on its consolidated financial statements.
In May 2025, the FASB issued ASU No. 2025-04, “Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer.” This ASU clarifies the accounting treatment of share-based compensation payable to a customer. This guidance is effective for the Company for fiscal years beginning after December 15, 2026. The Company is currently evaluating the impact of adopting ASU 2025-04 on its consolidated financial statements and related disclosures.
In May 2025, the FASB issued ASU No. 2025-03, “Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity.” This ASU clarifies the guidance regarding the identification of the accounting acquirer in a business combination in which the legal acquiree is a variable interest entity. This guidance is effective for the Company for fiscal years beginning after December 15, 2026. The Company is currently evaluating the impact of adopting ASU 2025-03 on its consolidated financial statements and related disclosures.
In March 2025, the FASB issued ASU 2025-02, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122 (“ASU 2025-02”). This update revises the SEC paragraphs in the Codification, primarily within Liabilities (Topic 405), to align with the SEC staff’s issuance of SAB 122, which rescinds SAB 121 related to safeguarding obligations for crypto-asset platforms. The update does not create new GAAP requirements but removes obsolete SEC guidance superseded by SAB 122. ASU 2025-02 is effective for annual reporting periods beginning after December 15, 2024, with retrospective application required. The Company adopted the guidance for the year ended December 31, 2025. The adoption did not have a material effect on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). The ASU requires a public business entity to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis including purchases of inventory, employee compensation, depreciation, and intangible asset amortization for each income statement line item that contains those expenses. ASU 2024-03, as clarified by ASU 2025-01 is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with prospective or retrospective application permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements and related disclosures.
In March 2024, Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements (“ASU 2024-02”), which is intended to simplify the Codification and draw a distinction between authoritative and non-authoritative literature. ASU 2024-02 is effective for annual reporting periods beginning after December 15, 2025, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company adopted the guidance for the year ended December 31, 2025. The adoption did not have a material effect on its consolidated financial statements.
In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires additional disclosures related to rate reconciliation, income taxes paid, and other disclosures. Under ASU 2023-09, for each annual periods presented, public entities are required to (1) disclose specific categories in the tabular rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires all reporting entities to disclose on an annual basis the amount of income taxes paid disaggregated by federal, state, and foreign taxes as well as the amount of income taxes paid by individual jurisdiction. ASU
F-32
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
2023-09 is effective for the Company for annual periods beginning after December 15, 2025, and can be applied on a prospective basis with an option to apply the standard retrospectively. Early adoption is permitted. The Company adopted the guidance on a prospective basis for the year ended December 31, 2025. The adoption did not have a material effect on its consolidated financial statements.
GroupBy Acquisition
On
GroupBy is an enterprise-grade site search, product discovery, and merchandising solutions provider. GroupBy will both strengthen the Company's market position in transforming digital commerce experiences and extend its North American footprint, opening doors to new growth opportunities and deepening relationships with enterprise clients.
On
The Company accounted for the GroupBy acquisition using the acquisition method of accounting under ASC 805. The acquisition method of accounting requires that purchase price of the acquisition be allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded to goodwill. The Company's estimates of fair values of the net assets acquired are based on the information that was available at the date of acquisition, and the Company continues to evaluate the underlying inputs and assumptions used in its valuations.
The fair value of identifiable intangible assets, including customer contracts and developed technology, was determined with the assistance of an independent third-party valuation specialist using valuation methodologies consistent with the fair value measurement framework in ASC 820, including the relief-from-royalty method and the multi-period excess earnings (MME) method.
In accordance with ASC 805-10-25-13 through 25-19, the Company may record adjustments to the fair values of the assets acquired and liabilities assumed during the measurement period, which is the period not to exceed one year from the acquisition date. Any such adjustments will be recognized retrospectively, as if the accounting had been completed as of the acquisition date. The Company expects to finalize the purchase price allocation during the twelve-month period ending March 25, 2026.
The total purchase price consideration of $
F-33
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Consideration |
|
|
|
|
|
|
$ |
|
|
||
Fair value of total consideration transferred |
|
$ |
|
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed: |
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
|
Developed technology (intangible asset) |
|
|
|
|
|
Customer contracts and related relationships (intangible asset) |
|
|
|
|
|
Other non-current assets |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
|
( |
) |
Deferred revenue |
|
|
|
( |
) |
Debt |
|
|
|
( |
) |
Deferred tax liabilities |
|
|
|
( |
) |
Other liabilities |
|
|
|
( |
) |
Total identifiable net assets |
|
$ |
|
( |
) |
Goodwill |
|
|
|
|
|
Total estimated preliminary purchase price allocation |
|
$ |
|
|
|
The Company recognized $
The following table presents amounts of GroupBy's revenue and net loss included in the Company's condensed interim combined consolidated statements of operations for year ended December 31, 2025 and the unaudited pro forma combined results of the Company and GroupBy as if the Groupby acquisition had occurred on January 1, 2024:
|
|
Revenue |
|
|
Net (loss)/income |
|
||||
GroupBy actual from March 25, 2025 to December 31, 2025 |
|
$ |
|
|
|
$ |
|
( |
) |
|
Unaudited pro forma combined from January 1, 2025 to December 31, 2025 |
|
|
|
|
|
|
|
( |
) |
|
Unaudited pro forma combined from January 1, 2024 to December 31, 2024 |
|
|
|
|
|
|
|
( |
) |
|
Bluedot Acquisition
On
DBLP is a related party and is wholly legally owned by Daniel Wagner, a director of DBLP and the Company. Prior to his death, DBLP was beneficially owned by John Wagner, a former director of Rezolve.
On March 17, 2025, the Company entered into a share purchase agreement with Tanist Group Limited (“Tanist Group”) pursuant to which the Company acquired
Bluedot Industries, Inc., Bluedot Industries Pty. Ltd. and Bluedot Innovation Pty. Ltd, together “Bluedot”, is a developer of mobile location technology.
On
F-34
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
The Company accounted for the acquisition of Bluedot Innovation as an asset acquisition under ASC 805. The total consideration transferred was allocated to the acquired assets based on their relative fair values using a cost accumulation model. Because the transaction was accounted for as an asset acquisition, goodwill was not recognized. As a result, the Company recognized an intangible asset for patents and trademarks acquired of $
Mpower acquisition
On
Mpower provides information technology consultancy services through the placement of information technology consultants at customers to fulfill both their local and global information technology needs.
On
The Company accounted for the Mpower acquisition using the acquisition method of accounting under ASC 805. The acquisition method of accounting requires that purchase price of the acquisition be allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded to goodwill. The Company's estimates of fair values of the net assets acquired are based on the information that was available at the date of acquisition, and the Company continues to evaluate the underlying inputs and assumptions used in its valuations.
The fair value of identifiable intangible assets, including customer contracts and the recruitment database, was determined with the assistance of an independent third-party valuation specialist using valuation methodologies consistent with the fair value measurement framework in ASC 820, including the replacement method and the multi-period excess earnings (MME) method.
In accordance with ASC 805-10-25-13 through 25-19, the Company may record adjustments to the fair values of the assets acquired and liabilities assumed during the measurement period, which is the period not to exceed one year from the acquisition date. Any such adjustments will be recognized retrospectively, as if the accounting had been completed as of the acquisition date. The Company expects to finalize the purchase price allocation during the twelve-month period ending May 31, 2026.
The total purchase price consideration of $
F-35
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Consideration |
|
|
|
|
|
|
$ |
|
|
||
Fair value of total consideration transferred |
|
$ |
|
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed: |
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
|
Customer contracts and related relationships (intangible asset) |
|
|
|
|
|
Recruitment database (intangible asset) |
|
|
|
|
|
Other assets |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
|
( |
) |
Accrued expenses and other payables |
|
|
|
( |
) |
Deferred tax liabilities |
|
|
|
( |
) |
Other liabilities |
|
|
|
( |
) |
Total identifiable net assets |
|
$ |
|
|
|
Goodwill |
|
|
|
|
|
Total estimated preliminary purchase price allocation |
|
$ |
|
|
|
The impact of transaction costs, primarily related to regulatory, financial advisory, and legal fees, recognized in operating expenses in the combined consolidated statements of operations during the year ended December 31, 2025 was not material.
Pro forma results of operations have not been presented as the impact on the Company’s combined consolidated statements of operations for the year ended December 31, 2025 is not material.
Prediqt acquisition
On
Sauvik Bannerjjee has served as the CEO Products, Technology, and Digital Services of Rezolve since August 2022. Mr. Banerjjee is also an executive officer of Rezolve.
Prediqt provides technology-enabled services, intelligent business solutions, predictive prowess, AI and analytics to assist businesses in leveraging insights for strategic decision-making.
On
The Company accounted for the Prediqt acquisition using the acquisition method of accounting under ASC 805. The acquisition method of accounting requires that purchase price of the acquisition be allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded to goodwill. The Company's estimates of fair values of the net assets acquired are based on the information that was available at the date of acquisition, and the Company continues to evaluate the underlying inputs and assumptions used in its valuations.
The fair value of identifiable intangible assets, including customer contracts, was determined with the assistance of an independent third-party valuation specialist using valuation methodologies consistent with the fair value measurement framework in ASC 820, including the relief-from-royalty method and the multi-period excess earnings (MME) method.
In accordance with ASC 805-10-25-13 through 25-19, the Company may record adjustments to the fair values of the assets acquired and liabilities assumed during the measurement period, which is the period not to exceed one year from the acquisition date. Any such adjustments will be recognized retrospectively, as if the accounting had been completed as of the acquisition date. The Company expects to finalize the purchase price allocation during the twelve-month period ending June 2, 2026.
F-36
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
The total purchase price consideration of $
Consideration |
|
|
|
|
|
|
Cash consideration |
|
$ |
|
|
|
|
Fair value of total consideration transferred |
|
$ |
|
|
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
|
Customer contracts and related relationships (intangible asset) |
|
|
|
|
|
|
Fixed assets |
|
|
|
|
|
|
Other assets |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
|
( |
) |
|
Debt |
|
|
|
( |
) |
|
Other liabilities |
|
|
|
( |
) |
|
Total identifiable net assets |
|
$ |
|
|
|
|
Gain on bargain purchase |
|
|
|
( |
) |
|
Total estimated preliminary cost allocation |
|
$ |
|
|
|
|
The impact of transaction costs, primarily related to regulatory, financial advisory, and legal fees, recognized in operating expenses in the combined consolidated statements of operations during the year ended December 31, 2025 was not material.
Pro forma results of operations have not been presented as the impact on the Company’s combined consolidated statements of operations for the year ended December 31, 2025 is not material.
ViSenze acquisition
On
ViSenze provides commerce search and product discovery solutions for retailers. ViSenze’s artificial intelligence and machine learning platform offers semantic search and product recommendation capabilities that utilize multi-modal data to interpret customer intent and shopping objectives, enabling retailers to enhance product discovery and customer engagement.
On
The Company accounted for the ViSenze acquisition using the acquisition method of accounting under ASC 805. The acquisition method of accounting requires that purchase price of the acquisition be allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded to goodwill. The Company's estimates of fair values of the net assets acquired are based on the information that was available at the date of acquisition, and the Company continues to evaluate the underlying inputs and assumptions used in its valuations.
F-37
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
The fair value of identifiable intangible assets, including customer contracts and developed technology, was determined with the assistance of an independent third-party valuation specialist using valuation methodologies consistent with the fair value measurement framework in ASC 820, including the relief-from-royalty method and the multi-period excess earnings (MME) method.
In accordance with ASC 805-10-25-13 through 25-19, the Company may record adjustments to the fair values of the assets acquired and liabilities assumed during the measurement period, which is the period not to exceed one year from the acquisition date. Any such adjustments will be recognized retrospectively, as if the accounting had been completed as of the acquisition date. The Company expects to finalize the purchase price allocation during the twelve-month period ending August 7, 2026.
The total purchase price consideration of $
Consideration |
|
|
|
|
|
|
$ |
|
|
||
Contingent consideration |
|
|
|
|
|
Fair value of total consideration transferred |
|
$ |
|
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed: |
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
|
Developed technology (intangible asset) |
|
|
|
|
|
Customer contracts and related relationships (intangible asset) |
|
|
|
|
|
Other non-current assets |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
|
( |
) |
Deferred revenue |
|
|
|
( |
) |
Debt |
|
|
|
( |
) |
Other liabilities |
|
|
|
( |
) |
Total identifiable net assets |
|
$ |
|
|
|
Goodwill |
|
|
|
|
|
Total estimated preliminary purchase price allocation |
|
$ |
|
|
|
Goodwill generated from this business combination is primarily attributable to synergies between the Company's and ViSenze's respective products and services. Goodwill will not be deductible for tax purposes.
The impact of transaction costs, primarily related to regulatory, financial advisory, and legal fees, recognized in operating expenses in the combined consolidated statements of operations during the year ended December 31, 2025 was not material.
Pro forma results of operations have not been presented as the impact on the Company’s combined consolidated statements of operations for the year ended December 31, 2025 is not material.
Smartpay and Truther acquisitions
On
Smartpay operates a crypto-based digital payment platform that enables users to generate payment links for multiple cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Arbitrum, Base, and Binance Coin (BNB). The platform automatically forwards approximately
The Smartpay Acquisition closed on October 2, 2025. As consideration for the Smartpay acquisition, the Smartpay Seller received USD Tether (“USDT”)
F-38
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
of December 31, 2025. The Company recognized a liability equivalent to USDT
The Company accounted for the Smartpay Acquisition as an asset acquisition in accordance with ASC 805. The total consideration transferred was allocated to the acquired assets based on their relative fair values using a cost accumulation model. Because the transaction was accounted for as an asset acquisition, goodwill was not recognized. As a result, the Company recognized an intangible asset related to Smartpay’s digital payment platform with a value of $
On
Truther operates an open finance platform that integrates blockchain technology with the traditional financial system. The platform enables users to buy and sell crypto currencies, including USDT, BTC, and VRL, and provides functionality for instant PIX payments, bill payments, ATM withdrawals, and self-custody of digital assets through user-controlled private keys. The platform is designed to facilitate transactions between blockchain-based assets and traditional financial infrastructure in compliance with applicable regulatory requirements.
The Truther Acquisition closed on October 2, 2025. As consideration for the Truther acquisition, the Truther Seller received USDT
The Company accounted for the Truther Acquisition as an asset acquisition in accordance with ASC 805. The total consideration transferred was allocated to the acquired assets based on their relative fair values using a cost accumulation model. Because the transaction was accounted for as an asset acquisition, goodwill was not recognized. As a result, the Company recognized an intangible asset related to Truther’s digital payment platform with a value of $
Subsquid acquisition
On
Our acquisition of Subsquid provides Rezolve with a proprietary, distributed blockchain database. This removes reliance on third-party ledgers and allows Rezolve to run its own massive global transaction ledger on decentralized enterprise data infrastructure. Subsquid has also issued a proprietary utility token, SQD tokens, which are purchased by customers and used to access and consume blockchain data and related services made available through Subsquid’s platform.
The aggregate consideration transferred to the Subsquid Seller in connection with the Subsquid Acquisition consists of the following components: (i) a cash payment of $
For shares issued as consideration in the acquisition, the fair value of the equity securities included in the consideration transferred was determined based on the volume-weighted average price (“VWAP”), as defined in the purchase agreement.
The Company accounted for the Subsquid acquisition using the acquisition method of accounting under ASC 805. The acquisition method of accounting requires that purchase price of the acquisition be allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded to goodwill. The Company's estimates of fair values of the net assets acquired are based on the information that was available at the date of acquisition, and the Company continues to evaluate the underlying inputs and assumptions used in its valuations.
In accordance with ASC 805-10-25-13 through 25-19, the Company may record adjustments to the fair values of the assets acquired and liabilities assumed during the measurement period, which is the period not to exceed one year from the acquisition date. Any such adjustments will be recognized retrospectively, as if the accounting had been completed as of the acquisition date. The Company expects to finalize the purchase price allocation during the twelve-month period ending October 9, 2026.
The total purchase price consideration of $
F-39
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Consideration |
|
|
|
|
|
Cash consideration |
|
$ |
|
|
|
|
|
|
|
||
SQD tokens |
|
|
|
|
|
Fair value of total consideration transferred |
|
$ |
|
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed: |
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
Short-term investments |
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
|
Property and equipment |
|
|
|
|
|
Other digital assets - SQD tokens |
|
|
|
|
|
Intangible assets -other |
|
|
|
|
|
Other non-current assets |
|
|
|
|
|
Accrued expenses and other payables |
|
|
|
( |
) |
Deferred tax liabilities |
|
|
|
( |
) |
Total identifiable net assets |
|
$ |
|
|
|
Gain on bargain purchase |
|
|
|
( |
) |
The gain on bargain purchase was recognized only after reassessing whether the items exchanged in the business combination were appropriately recognized and measured. The gain on bargain purchase was primarily driven by the valuation of the SQD tokens acquired on the acquisition date; in accordance with ASC 805, the SQD tokens held by Subsquid at the acquisition date were measured at fair value, which was determined using a Level 2 fair value input based on prices obtained from the market aggregators which represent observable market data but are not directly quoted prices for identical assets in an active market. See note 2.11 and note 2.23 for more information.
The impact of transaction costs, primarily related to regulatory, financial advisory, and legal fees, recognized in operating expenses in the combined consolidated statements of operations during the year ended December 31, 2025 was not material.
Pro forma results of operations have not been presented as the impact on the Company’s combined consolidated statements of operations for the year ended December 31, 2025 is not material.
Scale-Up acquisition
On October 29, 2025, the Company entered into a purchase agreement with Scale Up Holding LLC and its shareholders (the “Scale Up Sellers”) to acquire
Scale Up operates the software platform which provides its customers with tools for analyzing profitability, advertising performance, and automating reimbursement claims against third parties.
As consideration, the Scale Up Sellers are entitled to contingent consideration in the form of an earn-out arrangement, structured as four separate payments over a four-year period following the closing date. The earn-out payments are subject to the achievement of specified annual revenue and EBITDA targets of Scale Up. The earn-out consideration may be settled, at the sole discretion of Rezolve AI plc, in either ordinary shares of Rezolve AI plc or cash. The earn-out payments are accounted for as contingent consideration. As the monetary value of this contingent consideration is based solely on variations in annual revenue and EBITDA earned by Scale Up in the earnout periods, the Company recorded it as a liability at its fair value as of the acquisition date. The Company will remeasure the liability for the contingent consideration at fair value each reporting period until the contingency is resolved. The Company will recognize changes in fair value in earnings each period. At December 31, 2025, the Company recognized a liability of $
The Company accounted for the acquisition of Scale Up as an asset acquisition under ASC 805. The total consideration transferred was allocated to the acquired assets based on their relative fair values using a cost accumulation model. Because the transaction was accounted for as an asset acquisition, goodwill was not recognized. As a result, the Company recognized intangible assets for intellectual property of $
F-40
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Crownpeak acquisition
On December 1, 2025, the Company completed the acquisition (the “Crownpeak Acquisition”) of the issued share capital of Crownpeak Intermediate Holdings, Inc.,(“Crownpeak”), pursuant to a sale and purchase agreement (the “Crownpeak Purchase Agreement”) with Crownpeak Technology Holdings, Inc, (the “Crownpeak Seller”).
Crownpeak provides enterprise software solutions designed to support digital experience management and product discovery. Its offerings include Fredhopper, an artificial intelligence-driven product discovery and search platform, and FirstSpirit, an enterprise content management system. These solutions enable businesses to maintain control over their digital content, scale their digital operations, and deliver inclusive, accessible, and personalized digital experiences to their customers.
The purchase price for the Crownpeak Acquisition was $
The Loan Notes will accrue interest at a rate of
The Company accounted for the Crownpeak acquisition using the acquisition method of accounting under ASC 805. The acquisition method of accounting requires that purchase price of the acquisition be allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded to goodwill. The Company's estimates of fair values of the net assets acquired are based on the information that was available at the date of acquisition, and the Company continues to evaluate the underlying inputs and assumptions used in its valuations.
The fair value of identifiable intangible assets, including customer contracts and developed technology, was determined with the assistance of an independent third-party valuation specialist using valuation methodologies consistent with the fair value measurement framework in ASC 820, including the relief-from-royalty method and the multi-period excess earnings (MME) method.
In accordance with ASC 805-10-25-13 through 25-19, the Company may record adjustments to the fair values of the assets acquired and liabilities assumed during the measurement period, which is the period not to exceed one year from the acquisition date. Any such adjustments will be recognized retrospectively, as if the accounting had been completed as of the acquisition date. The Company expects to finalize the purchase price allocation during the twelve-month period ending December 1, 2026.
The total purchase price consideration of $
F-41
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Consideration |
|
|
|
|
|
|
$ |
|
|
||
First Loan Notes |
|
|
|
|
|
Second Loan Notes |
|
|
|
|
|
Fair value of total consideration transferred |
|
$ |
|
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed: |
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
|
Property and equipment |
|
|
|
|
|
Trade Names (intangible asset) |
|
|
|
|
|
Developed technology (intangible asset) |
|
|
|
|
|
Customer contracts and related relationships (intangible asset) |
|
|
|
|
|
Right of use assets |
|
|
|
|
|
Other non-current assets |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
|
( |
) |
Accrued expenses and other payables |
|
|
|
( |
) |
Debt |
|
|
|
( |
) |
Deferred revenue |
|
|
|
( |
) |
Lease liabilities |
|
|
|
( |
) |
Other current liabilities |
|
|
|
( |
) |
Deferred tax liabilities |
|
|
|
( |
) |
Other non-current liabilities |
|
|
|
( |
) |
Total identifiable net assets |
|
$ |
|
( |
) |
Goodwill |
|
|
|
|
|
Goodwill generated from this business combination is primarily attributable to synergies between the Company's and Crownpeak's respective products and services. Goodwill will not be deductible for tax purposes.
The Company recognized $
The following table presents amounts of Crownpeak's revenue and net loss included in the Company's combined consolidated statements of operations for year ended December 31, 2025 and the unaudited pro forma combined results of the Company and Crownpeak as if the Crownpeak acquisition had occurred on January 1, 2024:
|
|
Revenue |
|
|
Net (loss)/income |
|
||||
Crownpeak actual from December 1, 2025 to December 31, 2025 |
|
$ |
|
|
|
$ |
|
|
||
Unaudited pro forma combined from January 1, 2025 to December 31, 2025 |
|
|
|
|
|
|
|
( |
) |
|
Unaudited pro forma combined from January 1, 2024 to December 31, 2024 |
|
|
|
|
|
|
|
( |
) |
|
Art Equities Reef acquisition
On November 24, 2025, the Company acquired a
Art Equities maintains separate capital accounts for each investor. The Company determined that it does not have a controlling financial interest in Art Equities; however, the Company has the ability to exercise significant influence over the operating and financial policies of Art Equities. Accordingly, the Company accounts for its investment in Art Equities under the equity method of accounting.
The Company initially measured its investment using a cost accumulation model, which included the cash consideration paid of $
F-42
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Techouts acquisition
On December 5, 2025, the Company entered into a purchase agreement with (i) Rezolve AI plc (the “Company”), (ii) Rezolve Technology (India) Private Limited (“Rezolve India”), and (iii) Amith Paruchuri, Krishna Kumari, and Paruchuri Sri Krishna Devarayulu (collectively, the “Techouts Sellers”), pursuant to which the Company agreed to acquire the entire issued and to be issued share capital of Techouts Solutions India Private Limited (“Techouts India”) and Techouts Inc. (“Techouts US,” and together with Techouts India, the “Techouts Companies” or “Techouts”).
Techouts is primarily engaged in software publishing, software consultancy, and software development services. Its activities include the production, supply, and documentation of ready-made (non-customized) software; development of customized software solutions based on customer specifications; software maintenance; and web and application design services.
The Techouts acquisition closed on December 5, 2025. As consideration for the acquisition, the Techouts Sellers received equity consideration consisting of the equivalent of $
The Company accounted for the Techouts acquisition using the acquisition method of accounting under ASC 805. The acquisition method of accounting requires that purchase price of the acquisition be allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded to goodwill. The Company's estimates of fair values of the net assets acquired are based on the information that was available at the date of acquisition, and the Company continues to evaluate the underlying inputs and assumptions used in its valuations.
The fair value of identifiable intangible assets, including customer contracts, was determined with the assistance of an independent third-party valuation specialist using valuation methodologies consistent with the fair value measurement framework in ASC 820, including the relief-from-royalty method and the multi-period excess earnings (MME) method.
In accordance with ASC 805-10-25-13 through 25-19, the Company may record adjustments to the fair values of the assets acquired and liabilities assumed during the measurement period, which is the period not to exceed one year from the acquisition date. Any such adjustments will be recognized retrospectively, as if the accounting had been completed as of the acquisition date. The Company expects to finalize the purchase price allocation during the twelve-month period ending December 5, 2026.
The total purchase price consideration of $
F-43
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
|
|
|
|
|
|
Consideration |
|
|
|
|
|
Ordinary shares of Rezolve (1) |
|
$ |
|
|
|
Contingent consideration |
|
|
|
|
|
Fair value of total consideration transferred |
|
$ |
|
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed: |
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
Short term loans and advances receivable |
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
|
Property and equipment |
|
|
|
|
|
Customer contracts and related relationships (intangible asset) |
|
|
|
|
|
Other non-current assets |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
|
( |
) |
Other current liabilities |
|
|
|
( |
) |
Deferred tax liabilities |
|
|
|
( |
) |
Other non-current liabilities |
|
|
|
( |
) |
Total identifiable net assets |
|
$ |
|
|
|
Goodwill |
|
|
|
|
|
(1) The equivalent of $
Goodwill generated from this business combination is primarily attributable to synergies between the Company's and Techouts's respective products and services. Goodwill will not be deductible for tax purposes.
The impact of transaction costs, primarily related to regulatory, financial advisory, and legal fees, recognized in operating expenses in the combined consolidated statements of operations during the year ended December 31, 2025 was not material.
Pro forma results of operations have not been presented as the impact on the Company’s combined consolidated statements of operations for the year ended December 31, 2025 is not material.
F-44
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||||
Prepaid expenses |
|
$ |
|
|
|
$ |
|
|
||
Receivable from government authorities |
|
|
|
|
|
|
|
|||
Input tax credits and prepaid tax |
|
|
|
|
|
|
|
|
||
Current contract costs (1) |
|
|
|
|
|
|
|
— |
|
|
Other current assets |
|
|
|
|
|
|
|
|
||
Total |
|
$ |
|
|
|
$ |
|
|
||
(1) Represents the current portion of the asset recognized from the costs to obtain contracts with customers. See Note 2.17 for more information.
|
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Computers |
|
$ |
|
|
$ |
|
|
||
Office equipment |
|
|
|
|
|
|
|
||
Less—Accumulated depreciation |
|
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
|
||
Depreciation expense for the years ended December 31, 2025 and 2024 was $
During the year ended December 31, 2025, our business combinations generated $
The following table sets forth the major categories of the intangible assets at December 31, 2025:
F-45
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
|
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
In-development intangible asset, net |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
||
Software |
|
$ |
|
|
$ |
|
|
||
Less—Accumulated amortization for Software |
|
|
|
( |
) |
|
|
( |
) |
Software, net |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
||
Developed technology |
|
|
|
|
|
|
— |
|
|
Less—Accumulated amortization for Developed technology |
|
|
|
( |
) |
|
|
— |
|
Developed technology, net |
|
$ |
|
|
$ |
|
— |
|
|
|
|
|
|
|
|
|
|
||
Customer contracts and related relationships |
|
|
|
|
|
|
— |
|
|
Less—Accumulated amortization for Customer contracts and related relationships |
|
|
|
( |
) |
|
|
— |
|
Customer contracts and related relationships, net |
|
$ |
|
|
$ |
|
— |
|
|
|
|
|
|
|
|
|
|
||
Patents and trademarks |
|
|
|
|
|
|
— |
|
|
Less—Accumulated amortization for Patents and trademarks |
|
|
|
( |
) |
|
|
— |
|
Patents and trademarks, net |
|
$ |
|
|
$ |
|
— |
|
|
|
|
|
|
|
|
|
|
||
Recruitment database |
|
|
|
|
|
|
— |
|
|
Less—Accumulated amortization for Recruitment database |
|
|
|
( |
) |
|
|
— |
|
Recruitment database, net |
|
$ |
|
|
$ |
|
— |
|
|
|
|
|
|
|
|
|
|
||
Intangible assets, net |
|
$ |
|
|
$ |
|
|
||
The following table sets forth crypto intangible assets and other digital assets at December 31, 2025:
|
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Crypto intangible assets, net |
|
$ |
|
|
$ |
|
— |
|
|
|
|
|
|
|
|
|
|
||
Other digital assets |
|
|
|
|
|
|
— |
|
|
Less—Impairment charge for Other digital assets |
|
|
|
( |
) |
|
|
— |
|
Other digital assets, net |
|
$ |
|
|
$ |
|
— |
|
|
Amortization expense for software for the years ended December 31, 2025 and 2024 was $
As of December 31, 2025, expected amortization expense for intangible assets over its remaining life is as follows:
2026 |
|
$ |
|
|
|
2027 |
|
|
|
|
|
2028 |
|
|
|
|
|
2029 |
|
|
|
|
|
2030 |
|
|
|
|
|
Thereafter |
|
|
|
|
|
|
|
$ |
|
|
F-46
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Short-term debt and other liabilities |
|
|
|
|
|
|
||
Short-term debt (8.1) |
$ |
|
|
$ |
|
— |
|
|
Short-term debt to related parties (8.2) |
|
|
|
|
|
|
||
Ordinary shares payable (8.3) |
|
|
|
|
|
|
||
Convertible debt (8.4) |
|
|
— |
|
|
|
|
|
Short term convertible debt to related party (8.5) |
|
|
— |
|
|
|
|
|
Share-based payment liability (8.6) |
|
|
|
|
|
|
||
Convertible promissory notes (8.7) |
|
|
|
|
|
|
||
Advisors loans (8.8) |
|
|
— |
|
|
|
|
|
Long-term debt and other liabilities |
|
|
|
|
|
|
||
Long-term debt (8.1) |
|
|
|
|
|
— |
|
|
Total short-term and long-term debt and other liabilities |
$ |
|
|
$ |
|
|
||
8.1 Short-term and long-term debt
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Short-term debt |
|
|
|
|
|
|
||
Senior-secured term-loan facility (the "Facility") |
$ |
|
— |
|
$ |
|
— |
|
Non-Banking Financial Company loan (Prediqt) |
|
|
|
|
|
— |
|
|
Monroe debt |
|
|
|
|
|
— |
|
|
Other short-term debt |
|
|
|
|
|
— |
|
|
Total short-term debt |
$ |
|
|
$ |
|
— |
|
|
Long-term debt |
|
|
|
|
|
|
||
Non-Banking Financial Company loan (Prediqt) |
$ |
|
|
$ |
|
— |
|
|
Crownpeak promissory notes |
|
|
|
|
|
— |
|
|
Other long-term debt |
|
|
|
|
|
— |
|
|
Total long-term debt |
|
|
|
|
|
— |
|
|
Senior-secured term-loan facility
On January 23, 2025, the Company entered into a senior-secured term-loan facility (the “Facility”) with Joh. Berenberg, Gossler & Co. KG, a financial institution established under the laws of the Federal Republic of Germany (the “Lender”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Facility.
The committed amount of the Facility is $
Following a draw of the Committed Amount, the Company must repay the Facility in five (
The Facility bears
In connection with the Facility, the Company has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The Company has also agreed to repay the Facility in accordance with the amortization schedule described above, beginning on
The Facility contains customary events of default for similar financing transactions, including, among other things, if a change of
F-47
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
control of the Company occurs. At any time after an event of default, the Lender may accelerate and make payable all or part of the Facility. The Facility is governed by the laws of Germany, and the courts of Hamburg have exclusive jurisdiction over any disputes arising out of or in connection with the Facility.
The Lender or its affiliates have in the past provided and may from time to time in the future provide, investment banking and other services to the Company.
The Company has recognized interest expense on the Facility using the effective interest method. In accordance with ASC 470 and ASC 835, the arrangement fee is accounted for as a debt discount and amortized to interest expense over the term of the Facility using the effective interest method. As a result, the Facility has an effective interest rate of approximately
The Company received net cash proceeds of $
Prediqt acquisition
As a result of the Prediqt acquisition (Note 4), the Company acquired loans owed to Non-Banking Financial Companies ("NBFCs") in India. These loans carry an interest rate ranging between
Additionally, as part of the Prediqt acquisition, the Company acquired as interest free loans owed to directors of Prediqt. These loans are repayable on demand and presented within "Short-term debt".
Monroe Debt - Crownpeak acquisition
The Company assumed approximately $
In connection with the Crownpeak Acquisition (see Note 4), on December 1, 2025, the Company entered into an amended and restated credit agreement (“A&R Credit Agreement”) with the lenders party thereto and Monroe Capital Management Advisors, LLC which amended and restated in its entirety the prior Crownpeak credit agreement, dated February 28, 2019.
Under the A&R Credit Agreement, the prior Crownpeak credit agreement was amended and restated in full as of December 1, 2025. In connection with the Crownpeak acquisition, $
The term loans mature on
The term loans have financial maintenance covenants, including a maximum consolidated leverage ratio for Crownpeak and its subsidiaries, tested quarterly, and a requirement that the Company maintain minimum liquidity of at least $
As of December 1, 2025, the term loans have been accounted for as a troubled debt restructuring.
The carrying amount of the short term debt under troubled debt restructuring was as follows:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Short term debt under troubled debt restructuring |
|
|
|
|
|
|
||
Short term debt under troubled debt restructuring |
$ |
|
|
$ |
|
— |
|
|
Accrued interest on short term debt under troubled debt restructuring |
|
|
|
|
|
— |
|
|
Debt issuance costs on short term debt under troubled debt restructuring |
|
|
( |
) |
|
|
— |
|
Total short term debt under troubled debt restructuring |
$ |
|
|
$ |
|
— |
|
|
Crownpeak promissory notes
F-48
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
In connection with the Crownpeak Acquisition, the purchase consideration composed of the following to be issued by the Company to the Crownpeak Seller: (i) a promissory note in the initial principal amount of $
The Loan Notes will accrue interest at a rate of
8.2. Unsecured interest free loans taken from related parties DBLP Sea Cow Ltd are repayable on demand. During the year ended December 31, 2025, the Company settled short-term debt owed to DBLP Sea Cow Ltd. of $
8.3
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Ordinary shares payable |
|
|
|
|
|
|
||
Techouts acquisition |
$ |
|
|
$ |
|
— |
|
|
Smartpay and Truther acquisition |
|
|
|
|
|
— |
|
|
Rights issue |
|
|
— |
|
|
|
|
|
Total |
$ |
|
|
$ |
|
|
||
On May 25, 2023, the Company offered to all existing investors and employees of the Company an advanced subscription agreement for ordinary shares of the Company at a discount from the pre-close equity value of the Company per share (“the Rights Issue”) in connection with its business combination with Armada Acquisition Corp I (refer to note 2.1). The Company issued
Ordinary shares payable as of December 31, 2025 is solely comprised of ordinary shares payable in relation to acquisitions made during the year. See Note 4 for further details.
8.4. On December 17, 2021, the Company and Armada Acquisition Corp I, a special purpose acquisition company (“SPAC”) listed on the Nasdaq Capital Market (“NASDAQ”), and certain other parties entered into a definitive agreement for a business combination that would result in Rezolve becoming a publicly listed company upon completion of the aforementioned transaction. The transaction included a $
In accordance with the executed subscription agreements, the investors that pre-funded the PIPE entered into an agreement to purchase secured convertible notes of the Company for a total of $
Immediately prior to an IPO or SPAC transaction, the principal amount and accrued interest is converted into ordinary shares at a
The interest rate is
F-49
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Upon the issuance of the notes, the amount pre-funded by each participating investor reduces their remaining respective commitment in the PIPE.
The secured convertible notes has been accounted for as a liability in accordance with ASC 470–20. The Company has adopted ASU 2020-06, and therefore no bifurcation of the beneficial conversion feature has been recorded in equity. Debt discount, comprised of the fair value of the warrants issued to lenders with issuance of the convertible debt aggregating approximately $
The Company has not incurred any significant debt issuance costs and has expensed them as incurred.
On May 23, 2023, the Company executed a further amendment to the secured convertible loan notes.
The amendments are as follows:
The definition of “Extraordinary Transactions” covers the occurrence of (a) making, or permitting any subsidiary to make, any loan or advance to any person unless such person is wholly owned by Rezolve or, in the case of a natural person, is an employee or director of Rezolve and such loan or advance is made in the ordinary course of business under the terms of an employee share or option plan that has been notified to the noteholders; (b) guaranteeing, directly or indirectly, or permitting any subsidiary to guarantee, directly or indirectly, any indebtedness except for trade accounts of Rezolve or any subsidiary arising in the ordinary course of business; (c)
F-50
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
changing the principal business of Rezolve, entering new lines of business, or exiting the current line of business; (d) selling, assigning, licensing, charging, pledging, or encumbering material technology or intellectual property, other than licenses granted in the ordinary course of business (e) entering into any corporate strategic relationship, joint venture, cooperation or other similar agreement, other than in the ordinary course of business; (f) acquiring or disposing of assets (including shares) (x) where the consideration paid or received exceeds
Upon execution of the amendment the secured convertible notes are then referred to as “the senior secured convertible notes”.
The execution of the senior secured convertible notes has been accounted for as a troubled debt restructuring since May 23, 2023. No gain has been recognized.
The carrying value of the convertible debt as at December 31, 2023 does not include the $
On December 5, 2024, pursuant to the terms of the Loan Note Instrument, one of the holders of the Senior Secured Convertible Notes converted all of their $
On December 17, 2024, the Company, Apeiron Investment Group Ltd. and Bradley Wickens, the beneficial holders of the majority of Senior Secured Convertible Notes entered into an agreement (the “Agreement”) to amend the Loan Note Instrument (the “Amendment”) and that the beneficial holders shall procure that the registered nominees holding their Convertible Notes provide the necessary consents to the Amendment. Pursuant to the Amendment, the conversion price with respect to approximately $
Pursuant to the Agreement, Apeiron Investment Group and Bradley Wickens will also procure that the registered nominees holding $
The carrying amount of the convertible debt under troubled debt restructuring was as follows:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Convertible debt |
|
|
|
|
|
|
||
Convertible debt under troubled debt restructuring |
$ |
|
— |
|
$ |
|
|
|
Accrued interest on debt under troubled debt restructuring |
|
|
— |
|
|
|
|
|
Discount on convertible debt under troubled debt restructuring |
|
|
— |
|
|
|
( |
) |
Debt issuance costs on debt under troubled debt restructuring |
|
|
— |
|
|
|
( |
) |
Total convertible debt |
$ |
|
|
$ |
|
|
||
Short term convertible debt to related party |
|
|
|
|
|
|
||
Accrued interest on convertible debt to related party |
|
|
— |
|
|
|
|
|
Discount on convertible debt to related party |
|
|
— |
|
|
|
( |
) |
Total short term convertible debt to related party |
|
|
|
|
|
|
||
Total convertible debt under troubled debt restructuring |
$ |
|
|
$ |
|
|
||
F-51
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
8.5 Short term convertible debt to a related party of $
8.6 On October 7, 2021, the Group acquired Jaymax International Service Inc. (“Jaymax”) (later renamed to “Rezolve Taiwan Limited”). As part of the acquisition of Jaymax, the Company agreed to issue $
8.7 Convertible Promissory notes
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Convertible promissory notes |
|
|
|
|
|
|
||
YA notes |
$ |
|
— |
|
$ |
|
|
|
Convertible promissory notes |
|
|
|
|
|
|
||
Promissory note from sponsor |
|
|
— |
|
|
|
|
|
Total |
$ |
|
|
$ |
|
|
||
Yorkville Standby Equity Purchase Agreement (“SEPA”)
On February 2, 2024, the Company obtained an unsecured loan of $
The interest rate was agreed at
The Yorkville Note is convertible into ordinary shares in Rezolve AI plc upon public listing (or if an event of default occurs or the note reaches maturity). Conversion is at the option of the noteholder at a conversion price calculated by reference to the lower of (i) a fixed price of $
In connection with the Yorkville note, an additional convertible promissory note (“the Other Promissory notes”) was offered to certain other investors on the same terms as the Yorkville Note. The Other Promissory Notes have a face value of $
The Other Promissory Notes are convertible into ordinary shares in Rezolve AI plc upon public listing (or if an event of default occurs or the note reaches maturity). Conversion is at the option of the noteholder at a conversion price calculated by reference to the lower of (i) a fixed price of $
On September 6, 2024, Yorkville and the Company amended and restated the Yorkville Note (the “Second A&R YA Agreement”) to incorporate an additional prepaid advance arrangement pursuant to which Yorkville committed to provide the Company with prepaid advances in an aggregate original principal amount of an additional Seven Million Five Hundred Thousand Dollars ($
F-52
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
funded upon the effectiveness of the F-1 registration statement. The Second A&R YA Agreement superseded the YA Agreement. The maturity date of the Yorkville Note and the Other Promissory Notes were extended to September 11th, 2025.
In connection with the Second A&R YA Agreement and upon effectiveness of the F-1 Registration Statement originally filed with U.S. Securities and Exchange Commission on September 6, 2024, and declared effective on November 27, 2024, on November 29, 2024, Rezolve issued YA a promissory note in the principal amount of $
In December 2024, the Company received the Noteholder's request to convert of all of the principal and interest outstanding under the YA Notes. In connection therewith, the Company issued an aggregate of
Promissory notes
In February 2024, certain persons (including Apeiron Investment Group Ltd and certain related parties of Rezolve) entered into Subscription Agreements to subscribe for the Promissory Notes with a total principal amount of $
The Promissory Notes were issued during the course of February, 2024, pursuant to the terms of the Promissory Note Instruments.
With effect from the completion of the Pre-Closing Demerger, the rights and obligations of Rezolve Limited under the Subscription Agreements and the Promissory Note Instruments were novated to Rezolve AI plc.
Pursuant to the Promissory Note Instruments, the Promissory Notes will mature on the date falling 6 months from the date of their issue (or as extended at the option of the noteholder) unless an event of default occurs that triggers an acceleration of the repayment obligation, and bears interest of
The Promissory Notes are convertible into ordinary shares in Rezolve AI plc. The noteholders may elect to convert all or part of the amount outstanding under their Promissory Note into ordinary shares at the Conversion Price, however subject to the conversion limitation whereby the issue of Ordinary Shares upon conversion would not exceed the Exchange Cap (unless Rezolve shareholders have approved such issuances, or if Rezolve is permitted to follow (and has elected to do so) its home country practices instead of the stockholder approval requirements of Nasdaq Rule 5635).
Rezolve has the right to redeem early a portion or all amounts outstanding under the Promissory Notes pursuant to a Redemption Notice, provided that on the date of the Redemption Notice the VWAP of the ordinary shares in Rezolve AI plc is less than the Promissory Note Conversion Fixed Price. Upon such early redemption of a Promissory Note, and in addition to the principal and interest outstanding, a redemption premium of
Following the public listing of the ordinary shares in Rezolve AI plc, if a “Promissory Note Trigger Event” occurs (being where (i) the daily VWAP is less than the Floor Price for
F-53
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
On December 30, 2024, the Company repaid $
Cohen & Company Financial Management LLC
On August 14, 2024 Rezolve AI issued a promissory note to pay to Cohen & Company Financial Management LLC (“Cohen”) as an agent for Armada, in the principal sum of $
8.8 Advisors loans
The Company issued the following promissory notes to financial advisors for fees payable contingent on the close of the Business Combination with Armada:
Northland Securities
On July 30, 2024 the Company issued a promissory note to Northland Securities, Inc. (“Northland”) for an amount of $
J.V.B. Financial Group
On August 14, 2024 the Company issued a promissory note to J.V.B. Financial Group, LLC (“JVB”) ) for an amount of $
F-54
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Rezolve AI plc. On February 26, 2025, the Company issued
The following amounts for advisors loans remain outstanding as of December 31, 2025 :
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Advisors loans |
|
|
|
|
|
|
||
Northland Securities |
$ |
|
|
$ |
|
|
||
J.V.B Financial Group |
|
|
|
|
|
|
||
Total |
$ |
|
|
$ |
|
|
||
8.9 Other
In connection with the closing of the GroupBy acquisition (Note 4), the Company entered into a subscription letter with Western Alliance Bank (“WAB”) pursuant to which the Company agreed to issue to WAB a number of Ordinary Shares which is equal to $
The Company issued
In accordance with the terms of the subscription letter, WAB is to return any money received in excess of $
Subscription Agreements
On February 1, 2024, pursuant to the Promissory notes issued to certain institutional investors, each holder of a Promissory note was also granted a freely transferable warrant (“Subscription Agreement Warrants”) by Rezolve upon completion of the Business Combination. The Subscription Agreement Warrants have an exercise price of $
In certain circumstances, the Company may make an offer to all holders of its Ordinary Shares for the purchase by the Company of any of its Ordinary Shares. If such as offer is made by the Company, the Company shall give each holder of a Subscription Agreement Warrants at least 21 days’ notice that they are required to exercise their Subscription Agreement Warrants. If the holders of the Subscription Agreement Warrants do not exercise their Subscription Agreement Warrants within 14 days of receiving notice, the Company are authorized to execute a transaction to exercise the Subscription Agreement Warrants, deliver the Ordinary Shares to the holder and cancel the Subscription Agreement Warrants.
The Subscription Agreement Warrants qualify for equity classification under ASC 815-40 as it is considered indexed to the Company's stock under ASC 815-40-15 and the Subscription Agreement Warrants permit the Company to share settle it. In no event will the Company be required to net cash settle any Subscription Agreement Warrants. The Company recorded these Subscription Agreement Warrants at fair value in equity on the date of issuance. The initial carrying amount of a freestanding equity-classified instrument is not subsequently adjusted to fair value unless, in subsequent periods, the instrument no longer qualifies for equity classification and so must be reclassified as an asset or a liability. The
Armada warrants
F-55
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
On August 15, 2024, under the terms of the Business Combination, each outstanding Armada Warrant was exchanged for a Rezolve Warrant that entitles the holder to purchase
The Rezolve Warrants qualify for equity classification under ASC 815-40 as it is considered indexed to the Company's stock under ASC 815-40-15 and Rezolve Warrants permit the Company to share settle it. In no event will the Company be required to net cash settle any Rezolve Warrant. The Company recorded these warrants in equity on the date of issuance which was August 15, 2024 when the Business Combination was consummated as part of the accounting for the Business Combination as a reverse merger under ASC 805.
The Rezolve Warrants trade under the symbol on the Nasdaq Stock Market LLC under the symbol RZLV.W. The initial carrying amount of a freestanding equity-classified instrument is not subsequently adjusted to fair value unless, in subsequent periods, the instrument no longer qualifies for equity classification and so must be reclassified as an asset or a liability. The
Warrants issued to institutional investors
On December 23, 2024, the Company completed a registered offering of (i)
The offering price of each Ordinary Share and accompanying Offering Warrant was $
The Offering Warrants have an exercise price of $
In consideration of H.C. Wainwright & Co., LLC serving as the placement agent of this offering, the Company paid the H.C. Wainwright & Co., LLC a cash fee equal to
The Ordinary Shares and Offering Warrants were offered pursuant to a registration statement on Form F-1 (File No. 333-283622), as amended, which was declared effective by the Securities and Exchange Commission on December 19, 2024.
The Company received net proceeds of approximately $
The Offering Warrants qualify for equity classification under ASC 815-40 as it is considered indexed to the Company's stock under ASC 815-40-15 and the Offering Warrants permit the Company to share settle it. In no event will the Company be required to net cash settle any Offering Warrants. The Company recorded these Offering Warrants at fair value in equity on the date of issuance. The initial carrying amount of a freestanding equity-classified instrument is not subsequently adjusted to fair value unless, in subsequent periods, the instrument no longer qualifies for equity classification and so must be reclassified as an asset or a liability.
The
Warrants issued to Green Trident
On October 9, 2025, in connection with the acquisition of Subsquid (see Note 4), the Company entered into a consulting service agreement and a warrant agreement with Green Trident FZ-LLC (“Green Trident”).
Pursuant to the service agreement, Green Trident provides consulting services to Subsquid, including services in the capacity of chief technology officer. The service agreement remains in effect until terminated by either party upon six months’ prior written notice.
Under the warrant agreement, the Company issued warrants to Green Trident that entitle Green Trident to purchase a variable number of the Company’s ordinary shares at an exercise price of £
F-56
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Because the warrants embody an obligation that may require settlement in a variable number of the Company’s ordinary shares, the warrants are classified as a liability and measured at fair value, with changes in fair value recognized in earnings, in accordance with ASC 480-10-25-14. The fair value of the warrants is estimated using a Monte Carlo simulation in a risk-neutral framework. Specifically, the future stock price of the Company is simulated assuming a Geometric Brownian Motion (GBM) in a risk-neutral framework. For each simulated path, the applicable share price is calculated to determine the number of warrant shares. For each path, the future payoff from the exercise date to the valuation date are discounted at the risk-free rate. Finally, the value of the warrants is calculated as the average present value over all future modeled payoffs.
The expense and corresponding warrant liability for each tranche are recognized on a straight-line basis over the period in which the related consulting services are rendered, from the issuance date of the applicable tranche through its respective exercise date. The first tranche of warrants were exercised during December 2025. As of December 31, 2025, the fair value of the warrant liability, for the second and third tranches of warrants, recognized in the combined consolidated balance sheet was $
During the year ended December 31, 2025, the Company issued the following ordinary shares in lieu of cash payment:
During the year ended December 31, 2024, the Company issued the following ordinary shares in lieu of cash payment:
In accordance with the guidance in ASC 505, the ordinary shares issued in lieu of cash payment for services were measured based on the fair value of services received or the ordinary shares granted, whichever was more reliably determinable. As the ordinary shares are publicly traded, the market price of the ordinary shares were readily and reliably determinable. The Company recognized expense and equity equal to the number of ordinary shares issued multiplied by the fair value per share on date of issuance. The equity impact consisted of ordinary shares at par value and the remaining proceeds in additional paid-in capital.
F-57
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
2024 LTIP Plan
The Company granted
to DBLP Sea Cow Ltd. (principal shareholder, and company owned by founder, chairman and CEO Dan Wagner). The share options issued to DBLP Sea Cow Ltd. vested on the date of grant. A total of
Option holders have a
|
Grants in 2024 under the 2024 LTIP |
|
||
Expected term—years (1) |
|
|
||
Current share value |
$ |
|
|
|
Expected volatility (2) |
|
|
||
Risk-free interest rate (3) |
|
|
||
Dividend yield (4) |
|
|
||
Share option activity in the year
In August 2025, the Company granted
Option holders have a
The Company did not issue it's 2025 LTIP to directors, executives and employees until February 4, 2026.
The Company’s share option activity for the year ended December 31, 2025 was as follows:
|
|
Number of |
|
|
Weighted- |
|
|
Weighted- |
|
|
Aggregate |
|
||||||
Outstanding as of December 31, 2024 |
|
|
|
|
£ |
|
|
|
|
|
|
$ |
|
|
||||
Issued to related parties |
|
|
|
|
£ |
|
|
— |
|
|
|
|
|
|||||
Issued to employees |
|
|
|
|
£ |
|
|
|
|
|
|
|
|
|||||
Exercised by related parties |
|
|
( |
) |
|
£ |
|
|
|
— |
|
|
|
|
|
|||
Exercised by employees |
|
|
( |
) |
|
£ |
|
|
|
— |
|
|
|
|
|
|||
Cancelled/Forfeited |
|
|
( |
) |
|
£ |
|
|
|
— |
|
|
|
|
|
|||
Outstanding as of December 31, 2025 |
|
|
|
|
£ |
|
|
|
|
|
|
$ |
|
|
||||
Vested and exercisable |
|
|
|
|
£ |
|
|
|
|
|
$ |
|
|
|||||
Vested and expected to vest |
|
|
|
|
£ |
|
|
|
|
|
$ |
|
||||||
F-58
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
The weighted-average grant date fair-value per share of the options granted during the year December 31, 2025 and December 31, 2024 was $
As of December 31, 2025, the Company had $
Amendment to Long-Term Incentive Plan
On December 12, 2025, the Company’s Board of Directors (the “Board”) approved an amendment (the “Plan Amendment”) to the Company’s existing Long Term Incentive Plan, including Annex 1 thereto (the “LTIP”), which was approved by the Company’s Remuneration Committee on December 18, 2025. The Plan Amendment (i) permits the Company to grant awards under the LTIP by unilateral deed of grant with participants being sent an award certificate, thereby enabling awards to be granted to participants without requiring their counter-signature and streamlining the grant process; (ii) amends the evergreen pool in Section 2.2 of the LTIP, to permit the Board, once per calendar year and at any time on or after January 1, 2025, to reserve an additional pool of up to
F-59
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
|
December 31, 2025 |
|
December 31, 2024 |
|
||||
Employee related payables |
$ |
|
|
$ |
|
|
||
Accrued expenses |
|
|
|
|
|
|
||
VAT, duty and excise tax liability |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total |
$ |
|
|
$ |
|
|
||
F-60
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Sales and marketing expenses
|
|
December 31, 2025 |
|
December 31, 2024 |
|
||||
Advertisement and publicity expenses |
|
$ |
|
|
$ |
|
|
||
Employee salaries and benefits |
|
|
|
|
|
|
|
||
Consultancy charges |
|
|
|
|
|
|
|
||
Share-based payments to employees |
|
|
|
|
|
|
|
||
Share-based payments to related parties |
|
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
|
||
General and administrative expenses
|
|
December 31, 2025 |
|
December 31, 2024 |
|
||||
IT expenses |
|
$ |
|
|
$ |
|
|
||
Legal and professional expenses |
|
|
|
|
|
|
|
||
Business development expenses |
|
|
|
|
|
|
|
||
Employee salaries and benefits |
|
|
|
|
|
|
|
||
Consultancy charges |
|
|
|
|
|
|
|
||
Share-based payments to employees |
|
|
|
|
|
|
|
||
Share-based payments to related parties |
|
|
|
|
|
|
|
||
Share-based payments for consultancy |
|
|
|
— |
|
|
|
|
|
Transaction related expenses |
|
|
|
|
|
|
— |
|
|
Other |
|
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
|
||
Other non-operating income (expense), net
|
|
December 31, 2025 |
|
December 31, 2024 |
|
||||
Foreign exchange gain/(loss) |
|
$ |
|
|
$ |
|
|
||
R&D credits |
|
|
|
— |
|
|
|
— |
|
Other, net |
|
|
|
( |
) |
|
|
|
|
Total |
|
$ |
|
|
$ |
|
|
||
F-61
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Key managerial personnel (KMP) and Members of their immediate families
Dan Wagner |
|
Chief Executive Officer and Director |
Arthur Yao |
|
Chief Operating and Financial Officer |
Sauvik Banerjjee |
|
Global President and Chief Digital Officer |
Salman Ahmad |
|
Chief Technology Officer |
Peter Vesco |
|
Chief Commercial Officer and General Manager (EMEA) |
Richard Burchill |
|
Group finance director |
Anthony Sharp |
|
Non-Executive Director - Class II Director |
Sir David Wright |
|
Non-Executive Director - Class II Director |
Steve Perry |
|
Non-Executive Director - Class II Director |
Derek Smith |
|
Non-Executive Director - Class II Director |
John Wagner |
|
Former Non-Executive Director - Class II Director (deceased) |
Igor Lychagov |
|
Non-Executive director (resigned May 19, 2023) |
Susan Wagner |
|
Member |
Transactions and outstanding balances of related parties were as follows:
Transactions during the year
F-62
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
|
|
Year ended December 31, 2025 |
|
|
Year ended December 31, 2024 |
|
||
Share Capital Issued at nominal value |
|
|
|
|
|
|
||
Brooks Newmark |
$ |
— |
|
$ |
|
|
||
Steve Perry |
|
|
|
|
|
|
||
Peter Vesco |
|
|
|
|
|
— |
|
|
DBLP Sea Cow Ltd. |
|
|
|
|
|
— |
|
|
Igor Lychagov |
|
— |
|
|
|
|
||
Convertible promissory notes repaid |
|
|
|
|
|
|
||
DBLP Sea Cow (2) |
|
— |
|
|
|
|
||
Adam Wagner |
|
— |
|
|
|
|
||
Estate of John Wagner |
|
|
|
|
|
|
||
Anthony Sharp |
|
|
|
|
|
|
||
Arthur Yao |
|
— |
|
|
|
|
||
Loans Repaid |
|
|
|
|
|
|
||
DBLP Sea Cow (2) |
|
— |
|
|
— |
|
||
Convertible promissory notes taken |
|
|
|
|
|
|
||
DBLP Sea Cow Ltd. |
|
— |
|
|
|
|
||
Adam Wagner |
|
— |
|
|
|
|
||
John Wagner |
|
— |
|
|
|
|
||
Arthur Yao |
|
— |
|
|
|
|
||
Steve Perry |
|
— |
|
|
— |
|
||
Sauvik Banerjee |
|
— |
|
|
— |
|
||
|
|
|
|
|
|
|
||
Debt converted into shares, including interest |
|
|
|
|
|
|
||
Igor Lychagov |
|
— |
|
|
|
|
||
Steve Perry |
|
|
|
|
— |
|
||
Convertible Loans taken |
|
|
|
|
|
|
||
Steve Perry |
|
— |
|
|
— |
|
||
Loans Taken |
|
|
|
|
|
|
||
Dan Wagner |
|
— |
|
|
|
|
||
Igor Lychagov |
|
— |
|
|
— |
|
||
Loans repaid |
|
|
|
|
|
|
||
Daniel Wagner |
|
|
|
|
— |
|
||
DBLP Sea Cow Ltd. (2) |
|
|
|
|
— |
|
||
Managerial remuneration |
|
|
|
|
|
|
||
Key Management Personnel |
|
|
|
|
|
|
||
Dan Wagner |
|
|
|
|
|
|
||
Crispin Lowery |
|
|
|
|
— |
|
||
Salman Ahmad |
|
|
|
|
|
|
||
Richard Burchill |
|
|
|
|
|
|
||
Sauvik Banerjee |
|
|
|
|
— |
|
||
|
$ |
|
|
$ |
|
|
||
Sales and marketing |
|
|
|
|
— |
|
||
General and Administrative |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|
||
Share-based compensation |
|
|
|
|
|
|
||
DBLP Sea Cow (2) |
|
|
|
|
|
|
||
Richard Burchill |
|
|
|
|
|
|
||
Salman Ahmad |
|
|
|
|
|
|
||
Peter Vesco |
|
|
|
|
|
|
||
Arthur Yao (1) |
|
|
|
|
|
|
||
Sauvik Banerjee |
|
— |
|
|
— |
|
||
|
$ |
|
|
$ |
|
|
||
Sales and marketing |
|
|
|
|
|
|
||
General and Administrative |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|
||
Consulting fees |
|
|
|
|
|
|
||
DBLP Sea Cow (2) |
|
|
|
|
|
|
||
Peter Vesco |
|
|
|
|
|
|
||
Arthur Yao (1) |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|
||
Sales and marketing |
|
|
|
|
|
|
||
General and Administrative |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|
||
Director remuneration |
|
|
|
|
|
|
||
Sir David Wright |
|
|
|
|
|
|
||
Anthony Sharp |
|
|
|
|
|
|
||
Steve Perry |
|
|
|
|
|
|
||
Derek Smith |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|
||
F-63
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
Sales and marketing |
|
— |
|
|
— |
|
||
General and Administrative |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|
||
Management remuneration |
|
|
|
|
|
|
||
Sales and marketing |
|
|
|
|
|
|
||
General and Administrative |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|
||
Business development expenses |
|
|
|
|
|
|
||
Rezolve China (3) |
$ |
|
|
$ |
|
|
||
Outstanding balances as at reporting date
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Short term debt to related party |
|
|
|
|
|
|
||
DBLP Sea Cow (2) |
$ |
|
|
$ |
|
|
||
Daniel Wagner |
|
|
— |
|
|
|
|
|
Igor Lychagov |
|
|
— |
|
|
|
— |
|
|
$ |
|
|
$ |
|
|
||
Due to related party |
|
|
|
|
|
|
||
DBLP Sea Cow (2) |
|
|
|
|
|
— |
|
|
Daniel Wagner |
|
|
— |
|
|
|
|
|
Arthur Yao |
|
|
|
|
|
|
||
Peter Vesco |
|
|
— |
|
|
|
— |
|
Steve Perry |
|
|
— |
|
|
|
|
|
Sauvik Banerjjee |
|
|
— |
|
|
|
— |
|
Anthony Sharp |
|
|
— |
|
|
|
— |
|
|
$ |
|
|
$ |
|
|
||
Short term convertible debt |
|
|
|
|
|
|
||
Steve Perry |
$ |
|
— |
|
$ |
|
|
|
F-64
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
On January 24, 2025, the Company entered into a lease agreement for its office located at 21 Sackville Street, London, W1S 3DN, United Kingdom. The lease agreement is for a term of
On March 25, 2025, the Company closed the GroupBy acquisition, refer to Note 4 for more information. GroupBy's registered office is located at 250 The Esplanade, Suite 500, Toronto, Ontario, Canada. At the date of acquisition, this lease agreement had a remaining term of
On April 10, 2025, the Company entered into a lease agreement for its office located at 499 Park Avenue, New York, New York 10022. The lease agreement is for a term of
On May 31, 2025, the Company closed the Mpower acquisition, refer to Note 4 for more information. Mpower has registered offices in London, United Kingdom and Germany, Frankfurt. At the date of acquisition, these lease agreements had remaining terms of
On June 2, 2025, the Company closed the Prediqt acquisition, refer to Note 4 for more information. Prediqt has registered offices in three locations in India. At the date of acquisition, these lease agreements had remaining terms of
On August 15, 2025, the Company closed the ViSenze acquisition, refer to Note 4 for more information. Visenze has one registered office in Singapore. At the date of acquisition, this lease agreement had a remaining term of
On December 1, 2025, the Company closed the Crownpeak acquisition, refer to Note 4 for more information. Crownpeak has registered offices in London, United Kingdom; Dortmund, Germany and Sofia, Bulgaria. At the date of acquisition, these lease agreements had remaining terms of
On December 5, 2025, the Company closed the Techouts acquisition, refer to Note 4 for more information. Techouts has registered offices in Herndon, Virginia and two locations in India. At date of acquisition, these lease agreements had remaining terms of
The components of lease expense were as follows:
F-65
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
|
|
Year ended December 31, 2025 |
|
|
Year ended December 31, 2024 |
|
||
Operating lease costs |
$ |
|
|
$ |
|
— |
|
|
Variable lease costs |
|
|
|
|
|
— |
|
|
Short-term lease costs |
|
|
|
|
|
— |
|
|
Total lease costs |
$ |
|
|
$ |
|
— |
|
|
Supplemental cash flow information related to leases was as follows:
|
|
Year ended December 31, 2025 |
|
|
Year ended December 31, 2024 |
|
||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
||
Operating cash flows from operating leases |
$ |
|
|
$ |
|
— |
|
|
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
|
|
|
||
Operating leases |
$ |
|
|
$ |
|
— |
|
|
Total |
$ |
|
|
$ |
|
— |
|
|
Supplemental balance sheet information related to leases was as follows:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Weighted average remaining lease term in years |
$ |
|
|
$ |
|
— |
|
|
Weighted average discount rate |
|
|
% |
|
|
— |
|
|
The following table outlines maturities of the Company's lease liabilities:
At December 31, 2025 |
|
Operating leases |
|||
2026 |
$ |
|
|
|
|
2027 |
|
|
|
|
|
2028 |
|
|
|
|
|
2029 |
|
|
|
|
|
2030 |
|
|
|
|
|
Thereafter |
|
|
|
|
|
Total lease payments |
$ |
|
|
|
|
Less imputed interest |
|
|
|
|
|
Total |
$ |
|
|
|
|
Current portion of lease liabilities |
|
|
|
|
|
Non current portion of lease liabilities |
|
|
|
|
|
Total lease liabilities |
$ |
|
|
|
|
The Company files its primary tax return in the United Kingdom (“the UK”). Its subsidiaries file income tax returns in various global jurisdictions. The income taxes of the Company are presented on a separate return basis for each tax-paying entity.
The components of the Company's loss (income) before income taxes are as follows:
|
December 31, 2025 |
|
December 31, 2024 |
|
||||
UK |
$ |
|
|
$ |
|
|
||
Foreign |
|
|
|
|
|
|
||
Total |
$ |
|
|
$ |
|
|
||
F-66
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
The components of the Company's income tax expense are as follows:
|
December 31, 2025 |
|
December 31, 2024 |
|
||||
Current expense: |
|
|
|
|
|
|
||
United Kingdom |
$ |
|
|
$ |
|
|
||
Foreign |
|
|
|
|
|
|
||
Total current: |
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
||
Deferred (benefit)/expense: |
|
|
|
|
|
|
||
United Kingdom |
$ |
|
( |
) |
$ |
|
|
|
Foreign |
|
|
( |
) |
|
|
|
|
Total deferred: |
$ |
|
( |
) |
$ |
|
|
|
|
|
|
|
|
|
|
||
Total income tax (benefit)/expense: |
$ |
|
( |
) |
$ |
|
|
|
A reconciliation of the provision for income taxes to the amount computed by applying the
|
|
December 31, 2025 |
|
|||||
|
|
Tax Expense / (Benefit) |
|
|
Income Tax Rate |
|
||
Tax at U.K. federal statutory rate |
$ |
|
( |
) |
|
|
% |
|
State and local income taxes, net of federal income tax effect |
|
|
|
|
|
% |
||
Foreign income tax effects |
|
|
|
|
|
|
||
United States |
|
|
|
|
|
|
||
Valuation allowance |
|
|
|
|
|
( |
)% |
|
Deferred Adjustments |
|
|
( |
) |
|
|
% |
|
Other Items |
|
|
( |
) |
|
|
% |
|
Canada |
|
|
|
|
|
|
||
Valuation allowance |
|
|
|
|
|
( |
)% |
|
Permanent Differences |
|
|
|
|
|
( |
)% |
|
Other Items |
|
|
( |
) |
|
|
% |
|
Switzerland |
|
|
|
|
|
|
||
Statutory rate difference |
|
|
|
|
|
( |
)% |
|
Valuation allowance |
|
|
|
|
|
% |
||
Permanent Differences |
|
|
( |
) |
|
|
% |
|
Other Items |
|
|
|
|
|
( |
)% |
|
Other foreign jurisdictions |
|
|
|
|
|
( |
)% |
|
Effect of changes in tax laws or rates enacted in the current period |
|
|
|
|
|
% |
||
Effects of cross-border tax laws |
|
|
|
|
|
% |
||
Tax Credits |
|
|
|
|
|
% |
||
Valuation Allowance |
|
|
|
|
|
( |
)% |
|
Nontaxable or nondeductible items |
|
|
|
|
|
|
||
Non-Trade Loan Relationship Debits |
|
|
|
|
|
( |
)% |
|
Impairment Losses |
|
|
|
|
|
( |
)% |
|
Other |
|
|
|
|
|
( |
)% |
|
Other Items |
|
|
|
|
|
|
||
Net Operating Loss Adjustments |
|
|
( |
) |
|
|
% |
|
Deferred Adjustments |
|
|
( |
) |
|
|
% |
|
Changes in unrecognized tax benefits |
|
|
|
|
|
% |
||
|
$ |
|
( |
) |
|
|
% |
|
F-67
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
|
|
December 31, 2024 |
|
|
Loss before income taxes |
$ |
|
( |
) |
Income tax benefit at statutory tax rates (a) |
|
|
|
|
Effect of: |
|
|
|
|
Non-deductible or non-taxable foreign currency exchange results |
|
|
( |
) |
International rate differences (b) |
|
|
( |
) |
Non-deductible expenses |
|
|
( |
) |
Change in valuation allowance |
|
|
( |
) |
Income tax expense |
$ |
|
|
|
The amount of cash paid for income taxes (net of refunds) for the year ended December 31, 2025 is as follows:
|
|
December 31, 2025 |
|
|
United Kingdom |
$ |
|
|
|
Foreign |
|
|
|
|
India |
|
|
|
|
Singapore |
|
|
|
|
Canada |
|
|
|
|
Poland |
|
|
|
|
Germany |
|
|
|
|
Other |
|
|
|
|
Total income taxes paid, net of refunds |
$ |
|
|
|
The Company and its subsidiaries are liable to income taxes in their respective jurisdiction. The Company has unused tax losses as follows as at December 31, 2025:
|
Tax loss |
|
|
Expiration period |
||
United Kingdom |
$ |
|
|
|
Indefinite |
|
United States |
|
|
|
|
Pre-TCJA 20, Post-TCJA Indefinite |
|
Spain |
|
|
|
|
Indefinite |
|
Singapore |
|
|
|
|
Indefinite |
|
Canada |
|
|
|
|
20 years |
|
Other |
|
|
|
|
Various |
|
Total |
$ |
|
|
|
|
|
United States federal and state laws can impose substantial restrictions on the utilization of net operating loss and tax credit carryforwards in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. The Company expects that the majority of its United States net operating losses and other tax attributes are subject to Section 382, primarily in relation to its acquisition of Crownpeak (see Note 4). The Company has not completed a formal study to determine limitations at this time on these United States tax attributes. Such a study could result in limitations on the utilization of these net operating loss and other tax attribute carryforwards. As of December 31, 2025 our United States tax attributes are fully offset with valuation allowances with no tax benefit recorded in the combined consolidated financial statements.
The tax effects of temporary differences that give rise to the significant portions of our deferred tax assets and liabilities are presented below:
F-68
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
|
December 31, 2025 |
|
December 31, 2024 |
|
||||
Deferred Tax Assets: |
|
|
|
|
|
|
||
Net Operating Losses |
$ |
|
|
$ |
|
|
||
Other |
|
|
|
|
— |
|
||
Derivative Assets |
|
|
|
|
|
|
||
Convertible Debt |
|
|
|
|
|
|
||
Share-Based Payment Liability |
|
|
|
|
|
|
||
Disallowed Interest Carryforward |
|
|
|
|
— |
|
||
Lease Liabilities |
|
|
|
|
— |
|
||
Transaction Costs |
|
|
|
|
— |
|
||
Total |
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
||
Deferred Tax Liabilities: |
|
|
|
|
|
|
||
Derivative Liabilities |
$ |
|
( |
) |
$ |
|
( |
) |
Right of Use Assets |
|
|
( |
) |
|
— |
|
|
Intangible Assets |
|
|
( |
) |
|
|
( |
) |
Accrued Expenses |
|
|
( |
) |
|
— |
|
|
Total |
$ |
|
( |
) |
$ |
|
( |
) |
|
|
|
|
|
|
|
||
Net Deferred Tax Asset/(Liability): |
$ |
|
|
$ |
|
|
||
Valuation Allowance |
|
|
( |
) |
|
|
( |
) |
Net Deferred Tax Asset/(Liability), net of Valuation Allowance: |
$ |
|
( |
) |
$ |
|
|
|
Valuation allowances are recognized on deferred tax assets if the Company believes it is more likely than not that some or all of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, the Company considers all available evidence, including historical operating results, projections of future taxable income, the reversal of existing taxable temporary differences, and tax planning strategies. As of December 31, 2025, the Company recorded valuation allowances of $
The Company files income tax returns as prescribed by the tax laws of its operating jurisdictions. In the normal course of business, the Company is subject to examination by tax authorities. In connection with such reviews, disputes could arise with the taxing authorities over the interpretation or application of certain income tax rules related to our business in that tax jurisdiction. Such disputes may result in future tax and interest and penalty assessments by these taxing authorities. The ultimate resolution of tax contingencies will take place upon the earlier of (i) the settlement date with the applicable taxing authorities in either cash or agreement of income tax positions or (ii) the date when the tax authorities are statutorily prohibited from adjusting the Company’s tax computations.
The Company has
F-69
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
17. Commitments and contingencies
Commitments
Microsoft, Google and Amazon Web Services
The Company’s future commitments to purchase eligible services and offerings from Microsoft, Google and Amazon Web Services
is summarized in the table below:
|
|
Future commitment amount in USD millions |
|
||
Microsoft |
|
$ |
|
|
|
|
|
|
|
||
Amazon Web Services |
|
|
|
|
|
Total Commitment |
|
$ |
|
|
|
On October 3, 2024, the Company announced that it entered into a commercial agreement with Microsoft Corporation. Through this collaboration, Rezolve’s Brain Suite, including Brain Commerce, Brain Checkout, and Brain Assistant, will be powered by Microsoft Azure and available globally via Microsoft’s Azure Marketplace and co-sell channels. The Company is committed to spend $
On December 1, 2025, in connection with the Crownpeak acquisition (see Note 4), the Company assumed a commitment to spend $
SQD tokens
In connection with the acquisition of Subsquid (see Note 4), the Company entered into a contractual commitment to purchase SQD tokens on the open market. Under the terms of the arrangement, the Company is required to acquire SQD tokens in an amount equal to
The SQD token purchase commitment is based on a percentage of the Company's recognized revenue for the applicable fiscal year and will be settled through market purchases at prevailing market prices. The aggregate amount of future purchases will vary depending on the Company's actual revenue and the market price of SQD tokens at the time of acquisition.
Legal Proceedings
From time to time, we may become involved in legal or regulatory proceedings arising in the ordinary course of our business. Other than as described below, we are not currently a party to any material litigation or regulatory proceeding and we are not aware of any pending or threatened litigation or regulatory proceeding against us that could have a material adverse effect on our business, operating results, financial condition or cash flows.
JBAAM
As previously reported on its Report of Foreign Private Issuer on Form 6-K, filed on July 25, 2025, the Company has been notified that a civil complaint (the “Complaint”) was filed against the Company and Daniel Wagner on July 16, 2025 in the Supreme Court of the State of New York, New York County, by JBAAM Special Opportunities Fund II LLC (“JBA”) and YA II PN, Ltd. ("YA"), in connection with the parties’ securities purchase agreement dated February 21, 2025 (the “February SPA”), which never closed.
The Company believed the Complaint was without merit and vigorously defended the matter through all appropriate legal channels,
F-70
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
including the potential pursuit of counterclaims regarding certain other financing agreements the parties had entered into (collectively, the "Financing Arrangements"). On December 19, 2025, the Company entered into a Confidential Settlement Agreement and Conditional Mutual Release dated December 19, 2025 (the “Settlement Agreement”) with YA and Yorkville Advisors Global, LP (together the “Yorkville Parties”); Dan Wagner (“Wagner” and together with the Company, the “Rezolve Parties”); JBA; and Andrew Weksler (“Weksler,” and collectively with JBA, the Rezolve Parties, and the Yorkville Parties, the “Parties”), pursuant to which the Company agreed to pay YA (i) a commitment fee of $
In connection with entering into the Settlement Agreement, the Parties exchanged mutual releases and discharge each other of any obligations arising under the Financing Arrangements, which became effective on December 19, 2025 upon payment of the Commitment Fee and the First Settlement Payment and delivery of the executed Promissory Note by the Company to YA. Upon effectiveness of the Parties’ releases, the pending New York litigation was discontinued with prejudice, and any prior documents entered into in connection with the Financing Arrangements were terminated, except as expressly preserved in the Settlement Agreement.
The Settlement Agreement includes customary confidentiality and assignment provisions and explicitly states that nothing in the Agreement shall be construed as an admission of liability by any of the Parties.
Upon execution of the Settlement Agreement and in consideration of the terms and conditions of the Settlement Agreement, the Company also executed a promissory note in favor of YA in an aggregate amount of $
Wondr Gaming Corporation
On July 27, 2021, GroupBy, Inc. issued a Statement of Claim against Wondr Gaming Corporation for breach of contract and in the alternative for unjust enrichment. As this gain is not yet realizable or realized, the Company has not recognized a gain contingency for the amount of damages sought as of December 31, 2025.
Wondr Gaming Corporation has defended and made a counterclaim against GroupBy, Inc. The Company believes that there is very little merit to the counterclaim and intends to vigorously defend the matter through all appropriate legal channels. The Company has not recorded an accrual related to this matter as of December 31, 2025 as it determined that any such loss contingency was not probable or reasonably estimable.
CVS Pharmacy
On April 28, 2022, R2 Solutions LLC sued CVS Pharmacy, Inc. for patent infringement. The claim of infringement relates to, among other things, online search technologies. On July 21, 2022, CVS Pharmacy, Inc. notified GroupBy Inc. that it was of the view that the Hosting Services Agreement between the two parties requires GroupBy Inc. to indemnify CVS Pharmacy, Inc. in respect of the R2 Solutions LLC claim. To the Company's knowledge, no specific amount of damages or compensation has been sought from GroupBy Inc. to date. The status of the litigation is that R2 Solutions LLC and CVS Pharmacy, Inc. settled. Since that time, and to the Company's knowledge, CVS Pharmacy, Inc. has not contacted GroupBy Inc. to pursue any claim for indemnification in respect of this litigation. The Company has not recorded an accrual related to this matter as of December 31, 2025 as it determined that any such loss contingency was not probable or reasonably estimable.
F-71
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
For financial statements as of December 31, 2025, we have evaluated subsequent events through March 30, 2026, which is the date such financial statements are available to be issued.
Securities Purchase Agreements
On
In connection with the offering, the Company also entered into a Placement Agent Agreement (the "Placement Agent Agreement") on January 20, 2026, with A.G.P./Alliance Global Partners (the “Lead Placement Agent”) and Titan Partners Group LLC, a division of American Capital Partners, LLC ("Titan" and, together with the Lead Placement Agent, the "Placement Agents"), pursuant to which the Placement Agents served as the exclusive placement agents in connection with the January 2026 Offering. The Company agreed to pay the Placement Agents a fee in cash equal to
Reward Acquisition
On
Reward develops and operates customer engagement, loyalty and commerce technology platforms, especially for banks, payment networks and retail partners.
Reward had issued share capital of £
The initial purchase price for the Reward Acquisition was approximately $
At the closing, the Company paid the Reward Purchase Price to the Paying Agent (as defined in the Reward Purchase Agreement) for distribution, net of the completion accounts adjustment retention amount of $
The Company accounted for the Reward acquisition using the acquisition method of accounting under ASC 805. The acquisition method of accounting requires that purchase price of the acquisition be allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded to goodwill. The Company's estimates of fair values of the net assets acquired are based on the information that was available at the date of acquisition, and the Company continues to evaluate the underlying inputs and assumptions used in its valuations. In accordance with ASC 805-10-25-13 through 25-19, the Company may record adjustments to the fair values of the assets acquired and liabilities assumed during the measurement period, which is the period not to exceed one year from the acquisition date. Any such adjustments will be recognized retrospectively, as if the accounting had been completed as of the acquisition date. The Company expects to finalize the determination of the fair values of assets acquired and liabilities assumed within the one-year measurement period permitted under ASC 805. Therefore the initial accounting for this acquisition is incomplete as of the date of issuance of these consolidated financial statements.
F-72
REZOLVE AI PLC AND SUBSIDIARIES
Notes to Combined Consolidated Financial Statements
The table below represents an initial allocation of the preliminary consideration to Reward’s tangible and intangible assets to be acquired and liabilities to be assumed based on the preliminary estimate of their respective fair values.
Consideration |
|
|
|
|
Cash |
$ |
|
|
|
Fair value of total consideration transferred |
$ |
|
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed: |
|
|
|
|
Current assets (1) |
$ |
|
|
|
Property, plant & equipment |
|
|
|
|
Trade names and Trademarks |
|
|
|
|
Developed Technology |
|
|
|
|
Customer Relationships |
|
|
|
|
Non competition agreement |
|
|
|
|
Right of use assets |
|
|
|
|
Non-current liabilities (2) |
|
|
( |
) |
Current liabilities (3) |
|
|
( |
) |
Total identifiable net assets |
$ |
|
|
|
Goodwill |
|
|
|
|
Total estimated preliminary purchase price allocation |
$ |
|
|
|
Other acquisitions
Subsequent to the balance sheet date, the Company completed three acquisitions for an aggregate consideration, consisting of approximately $
Due to the timing of the acquisitions, the Company has not completed the accounting for these acquisitions. Accordingly, the initial accounting for the acquisitions is incomplete as of the date of issuance of these combined consolidated financial statements. The Company is in the process of evaluating the fair value of the assets acquired and liabilities assumed, including the identification and valuation of intangible assets and goodwill, if applicable.
F-73
INDEPENDENT AUDITOR’S REPORT
Board of Directors
Crownpeak Intermediate Holdings, Inc.
Opinion
We have audited the consolidated financial statements of Crownpeak Intermediate Holdings, Inc. and Subsidiaries (the “Company”), which comprise the consolidated balance sheets as of January 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the “financial statements”).
In our opinion, based upon our audits and the report of the other auditors, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2025 and 2024, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
We did not audit the financial statements of Crownpeak Germany GmbH, a wholly-owned subsidiary, whose financial statements reflect total assets constituting approximately 15% and 12%, respectively, of consolidated total assets at January 31, 2025 and 2024, and total revenues constituting approximately 27% and 25%, respectively, of consolidated total revenues for the years then ended. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Crownpeak Germany GmbH, is based solely on the report of the other auditors. Those statements, which were prepared in accordance with German legally required accounting principles, as issued by the German Commercial Code (HGB), were audited by other auditors, whose report has been furnished to us. We have applied audit procedures on the conversion adjustments to the financial statements of Crownpeak Germany GmbH, which conform those financial statements to accounting principles generally accepted in the United States of America. Our opinion, insofar as it relates to the amounts included for Crownpeak Germany GmbH, prior to these conversion adjustments, is based solely on the report of the other auditors.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter – Substantial Doubt About the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has $141.4 million of debt that matures on November 30, 2025, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Managements’ evaluation of the events and conditions and management's plans to mitigate this matter are also described in Note 2. Our opinion is not modified with respect to this matter.
Emphasis of Matter – Correction of an Error
As discussed in Note 3 to the financial statements, the balance sheet as of January 31, 2025, has been restated to correct an error. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
F-74
Board of Directors
Crownpeak Intermediate Holdings, Inc.
Independent Auditors' Report
Page 2
override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ SingerLewak LLP
San Jose, California
July 31, 2025, except for Note 3 as to which the date is October 31, 2025
F-75
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN 000'S OF U.S. DOLLARS, EXCEPT SHARE DATA)
As of January 31, 2025 (restated) and 2024
|
2025 |
|
|
2024 |
|
|||
Assets |
|
|
|
|
|
|||
Current assets |
|
|
|
|
|
|
||
Cash |
$ |
7,280 |
|
|
$ |
4,908 |
|
|
Accounts receivable, net |
|
12,132 |
|
|
|
13,874 |
|
|
Deferred commissions, current |
|
1,465 |
|
|
|
983 |
|
|
Prepaid expenses and other current assets |
|
1,855 |
|
|
|
3,108 |
|
|
Total current assets |
|
|
22,732 |
|
|
|
22,873 |
|
Capitalized software, net |
|
3,295 |
|
|
|
4,167 |
|
|
Fixed assets, net |
|
279 |
|
|
|
523 |
|
|
Goodwill |
|
|
106,315 |
|
|
|
108,248 |
|
Intangible assets, net |
|
|
47,744 |
|
|
|
57,667 |
|
Right-of-use assets |
|
|
1,163 |
|
|
|
2,001 |
|
Deferred commissions, net of current portion |
|
3,717 |
|
|
|
2,273 |
|
|
Deposits and other assets |
|
|
246 |
|
|
|
454 |
|
Total assets |
|
$ |
185,491 |
|
|
$ |
198,206 |
|
Liabilities |
|
|
|
|
|
|||
Current liabilities |
|
|
|
|
|
|||
Debt, net of debt issuance costs |
$ |
133,297 |
|
|
$ |
— |
|
|
Revolving line of credit |
|
|
7,500 |
|
|
|
2,500 |
|
Lease liability, current |
|
410 |
|
|
|
1,241 |
|
|
Accounts payable |
|
6,984 |
|
|
|
10,390 |
|
|
Accrued expenses |
|
|
10,390 |
|
|
|
11,739 |
|
Deferred revenue |
|
29,661 |
|
|
|
30,915 |
|
|
Total current liabilities |
|
|
188,242 |
|
|
|
56,785 |
|
Debt, net of debt issuance costs |
|
— |
|
|
|
128,848 |
|
|
Lease liability, non current |
|
750 |
|
|
|
1,152 |
|
|
Deferred tax liability |
|
7,036 |
|
|
|
7,284 |
|
|
Total liabilities |
|
|
196,028 |
|
|
|
194,069 |
|
Stockholders' (Deficit) Equity |
|
|
|
|
|
|||
Common stock: $.001 par value: 100 shares issued and outstanding |
|
— |
|
|
|
— |
|
|
Paid in capital |
|
135,117 |
|
|
|
120,438 |
|
|
Accumulated deficit |
|
(142,542 |
) |
|
|
(117,365 |
) |
|
Accumulated other comprehensive (loss) income |
|
(3,112 |
) |
|
|
1,064 |
|
|
Total stockholders' (deficit) equity |
|
|
(10,537 |
) |
|
|
4,137 |
|
Total liabilities and stockholders’ (deficit) equity |
|
$ |
185,491 |
|
|
$ |
198,206 |
|
See notes to the consolidated financial statements.
F-76
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(EXPRESSED IN 000'S OF U.S. DOLLARS)
Years Ended January 31, 2025 and 2024
|
|
2025 |
|
|
2024 |
|
||
Revenue |
|
|
|
|
|
|
||
Subscription and support - recurring |
|
$ |
64,794 |
|
|
$ |
68,612 |
|
Professional services and other - non-recurring |
|
|
9,110 |
|
|
|
12,415 |
|
Total revenue |
|
|
73,904 |
|
|
|
81,027 |
|
Cost of revenue |
|
|
26,203 |
|
|
|
32,068 |
|
Gross profit |
|
|
47,701 |
|
|
|
48,959 |
|
Operating expenses |
|
|
|
|
|
|
||
Compensation and benefits |
|
|
30,683 |
|
|
|
27,210 |
|
Research and development |
|
|
5,142 |
|
|
|
7,087 |
|
Marketing |
|
|
1,248 |
|
|
|
2,002 |
|
Depreciation and amortization |
|
|
6,704 |
|
|
|
6,575 |
|
General and administrative |
|
|
12,746 |
|
|
|
14,407 |
|
ROU impairment loss |
|
|
— |
|
|
|
826 |
|
Total operating expenses |
|
|
56,523 |
|
|
|
58,107 |
|
Loss from operations |
|
|
(8,822 |
) |
|
|
(9,148 |
) |
Other income (expense) |
|
|
|
|
|
|
||
Other income, net |
|
|
1,045 |
|
|
|
2,261 |
|
Interest expense |
|
|
(16,745 |
) |
|
|
(18,482 |
) |
Total other expense, net |
|
|
(15,700 |
) |
|
|
(16,221 |
) |
Loss before income taxes |
|
|
(24,522 |
) |
|
|
(25,369 |
) |
Income tax (expense) benefit |
|
|
(655 |
) |
|
|
723 |
|
Net loss |
|
$ |
(25,177 |
) |
|
$ |
(24,646 |
) |
Other comprehensive (loss) income |
|
|
|
|
|
|
||
Foreign currency translation adjustments |
|
|
(4,176 |
) |
|
|
820 |
|
Total comprehensive loss |
|
$ |
(29,353 |
) |
|
$ |
(23,826 |
) |
See notes to the consolidated financial statements.
F-77
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT)/EQUITY
(EXPRESSED IN 000'S OF U.S. DOLLARS, EXCEPT SHARE DATA)
Years Ended January 31, 2025 and 2024
|
Common |
|
Common |
|
Paid in |
|
Accumulated |
|
Accumulated Other |
|
|
|
||||||
|
Shares |
|
Stock |
|
Capital |
|
Deficit |
|
Comprehensive Income (Loss) |
|
Total |
|
||||||
Balance at January 31, 2023 |
|
100 |
|
$ |
— |
|
$ |
120,438 |
|
$ |
(92,719 |
) |
$ |
244 |
|
$ |
27,963 |
|
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(24,646 |
) |
|
— |
|
|
(24,646 |
) |
Foreign currency translation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
820 |
|
|
820 |
|
Balance at January 31, 2024 |
|
100 |
|
$ |
— |
|
$ |
120,438 |
|
$ |
(117,365 |
) |
$ |
1,064 |
|
$ |
4,137 |
|
Capital contribution |
|
— |
|
|
— |
|
|
14,000 |
|
|
— |
|
|
— |
|
|
14,000 |
|
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(25,177 |
) |
|
— |
|
|
(25,177 |
) |
Employee stock-based compensation |
|
— |
|
|
— |
|
|
679 |
|
|
— |
|
|
— |
|
|
679 |
|
Foreign currency translation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,176 |
) |
|
(4,176 |
) |
Balance at January 31, 2025 |
|
100 |
|
$ |
— |
|
$ |
135,117 |
|
$ |
(142,542 |
) |
$ |
(3,112 |
) |
$ |
(10,537 |
) |
See notes to the consolidated financial statements.
F-78
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN 000'S OF U.S. DOLLARS, EXCEPT SHARE DATA)
Years Ended January 31, 2025 and 2024
|
|
2025 |
|
|
2024 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net loss |
$ |
|
(25,177 |
) |
$ |
|
(24,646 |
) |
Adjustments to reconcile net loss to cash used in operating activities: |
|
|
|
|
|
|
||
Provision for expected credit losses |
|
|
73 |
|
|
|
618 |
|
Depreciation and amortization |
|
|
10,658 |
|
|
|
9,326 |
|
Amortization of debt discount |
|
|
614 |
|
|
|
1,334 |
|
Amortization of acquired deferred revenue |
|
|
— |
|
|
|
(514 |
) |
Loss on disposal of property and equipment |
|
|
2 |
|
|
|
89 |
|
Non-cash lease expense |
|
|
838 |
|
|
|
1,750 |
|
ROU impairment loss |
|
|
— |
|
|
|
826 |
|
Paid-in-kind capitalized interest |
|
|
4,485 |
|
|
|
— |
|
Provision for deferred income tax benefit |
|
|
(248 |
) |
|
|
(1,799 |
) |
Net changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
1,669 |
|
|
|
4,299 |
|
Deferred commissions |
|
|
(1,926 |
) |
|
|
(2,022 |
) |
Prepaid expenses and other current assets |
|
|
1,253 |
|
|
|
859 |
|
Deposits |
|
|
208 |
|
|
|
(23 |
) |
Accounts payable |
|
|
(3,406 |
) |
|
|
4,058 |
|
Accrued expenses |
|
|
(1,349 |
) |
|
|
(2,861 |
) |
Deferred revenue |
|
|
(1,254 |
) |
|
|
379 |
|
Lease liabilities |
|
|
(1,233 |
) |
|
|
(2,166 |
) |
Net cash used in operating activities |
|
|
(14,793 |
) |
|
|
(10,493 |
) |
Cash flows from investing activities |
|
|
|
|
|
|
||
Capital expenditures |
|
|
(99 |
) |
|
|
(406 |
) |
Capitalized software development |
|
|
(841 |
) |
|
|
(3,886 |
) |
Net cash used in investing activities |
|
|
(940 |
) |
|
|
(4,292 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
||
Capital contribution |
|
|
14,679 |
|
|
|
— |
|
Principal payments on long-term debt |
|
|
(650 |
) |
|
|
— |
|
Proceeds from line of credit |
|
|
5,000 |
|
|
|
2,500 |
|
Net cash provided by financing activities |
|
|
19,029 |
|
|
|
2,500 |
|
Effect of exchange rates on changes in cash |
|
|
(924 |
) |
|
|
(1,082 |
) |
Net increase (decrease) in cash |
|
|
2,372 |
|
|
|
(13,367 |
) |
Cash - beginning balance |
|
|
4,908 |
|
|
|
18,275 |
|
Cash - ending balance |
$ |
|
7,280 |
|
$ |
|
4,908 |
|
Supplemental disclosure of cash flow data: |
|
|
|
|
|
|
||
Cash paid for interest |
$ |
|
10,274 |
|
$ |
|
16,500 |
|
Cash paid for income taxes |
$ |
|
82 |
|
$ |
|
324 |
|
Noncash investing and financing activities |
|
|
|
|
|
|
||
Initial recognition of right of use assets and liability, arising from new leases during the year |
$ |
|
— |
|
$ |
|
1,383 |
|
See notes to the consolidated financial statements.
F-79
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Crownpeak Intermediate Holdings, Inc., a Delaware corporation, (the “Company”) is the holding parent company for the following subsidiaries: Crownpeak Technology, Inc., a wholly-owned Delaware corporation, (“Crownpeak”), Magus Research Limited, a wholly-owned private United Kingdom company, Evidon, Inc., a wholly-owned Delaware corporation, e-Spirit Inc., a wholly- owned Delaware corporation, Crownpeak Technology GmbH (formerly e-Spirit GmbH), a wholly- owned private German company, Ilumino, LLC, a wholly-owned Ohio corporation, Aegean Bidco Ltd., a wholly-owned private United Kingdom company that is a holding parent company for the following subsidiaries: Attraqt Group PLC, a wholly-owned private United Kingdom company, Attraqt Limited, a wholly-owned private United Kingdom company, Attraqt Inc., a wholly-owned Delaware corporation, Early Birds SAS, a wholly-owned private France company, Fredhopper B.V., a wholly-owned private Netherlands company, Spring Technologies EOOD, a wholly-owned private Bulgaria company, Fredhopper (Australia) Pty Ltd., a wholly-owned private Australia company, Fredhopper GmbH, a wholly-owned private Germany company and Fredhopper Sarl, a wholly- owned private France company. The Company offers the leading cloud-based Digital Experience Management and Digital Quality Management platforms, creating a unique market leader in the space. The Company is headquartered in Denver, Colorado with additional offices in London, United Kingdom; Dortmund, Germany; Paris, France and Amsterdam, Netherlands.
Crownpeak was founded in 2001 and is the only cloud-first Digital Experience Management (DXM) platform with a native Digital Quality Management (DQM) offering operating as a Software as a Service (“SaaS”) platform. Crownpeak is the only enterprise DXM platform purpose-built to scale efficiently with customers as they grow, simplifying the deployment, management and adherence to regulatory/policy compliance of global sites by any size team, across all digital touchpoints (e.g., desktop websites, mobile, social media). As the web content “system of record” for a diverse set of multi-billion-dollar global enterprises, the Crownpeak platform is deeply embedded in the underlying operations of its customers which, when coupled with multi- year contractual obligations, allows Crownpeak to derive highly visible and stable recurring revenue streams.
These consolidated financial statements of the Company as of and for the years ended January 31, 2025 and 2024, are comprised of the Company and its subsidiaries (together referred to as the "Group").
The Company has prepared these financial statements under the going concern basis of accounting following Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements - Going Concern”, which was codified as Accounting Standards Codification (“ASC”) 205-40 (“ASC 205-40”).
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying consolidated financial statements, the Company has $141.4 million of debt outstanding on January 31, 2025 that matures on November 30, 2025. This condition raises substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance date of these consolidated financial statements. Management is actively addressing this uncertainty by pursuing refinancing or an extension of the Company’s outstanding debt, either with its primary lender or alternative financing sources, with the support of the Company’s principal investor. The Company believes these actions will mitigate the current uncertainty and support the Company’s ability to continue as a going concern. Discussions with the primary lender are already underway and the Company expects to complete an amended credit agreement, including an extension of this debt. The consolidated financial statements do not include any adjustments related to any potential uncertainty about the Company’s ability to continue as a going concern.
F-80
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
3. Basis of preparation and restatement
Presentation
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United Sates (GAAP). The preparation of financial statements in conformity with GAAP requires the use of certain accounting estimates. It also requires Management to exercise its judgment in the process of applying the Group’s accounting policies. The Group’s most significant estimates relate to impairment evaluations of intangible assets and goodwill, accounts receivable allowance for credit losses, as well as, the valuation of deferred tax assets and the related valuation allowance.
The Group is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognizes deferred tax assets and liabilities based on the Group’s current understanding of tax laws as applied to the Group’s circumstances. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provisions in the period in which such determination is made.
Restatement
The balance sheet as of January 31, 2025 has been restated to correct an error. The Company’s debt at January 31, 2025 totaling $133,297 was improperly shown as a non-current liability in the originally issued financial statements when it should have been classified as a current liability based upon its maturity date. The restated January 31, 2025 balance sheet corrects this error and reflects the Company’s debt as a current liability. This error correction had no impact on the results of operations or accumulated deficit. It was a reclassification from non-current liabilities to current liabilities.
4. Significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.
Subsidiaries and Principles of Consolidation
Subsidiaries are all entities over which the Group has control. Subsidiaries are consolidated from the date on which control is transferred to the Group until the date on which control ceases. The accounts of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Inter-company transactions and balances between Group companies are eliminated in consolidation.
Foreign Currency Translation
The Company’s foreign subsidiaries utilize functional currencies other than U.S. dollars. Assets and liabilities recorded for entities using other functional currencies are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average rates of exchange prevailing over the period. Translation adjustments resulting from these processes are charged to or credited to other comprehensive income (loss).
Cash
Cash includes cash on hand and deposits held available on demand with financial institutions. The Company continually monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. Periodically during the years, the Company maintained balances in various operating accounts in excess of insured limits.
Accounts Receivable, Net
F-81
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Accounts receivable are recorded at the invoiced amount, do not include interest and the Company generally does not require collateral. On a quarterly basis the Company reviews accounts for collectability and establishes an allowance for probable credit losses. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current credit risk rating, collection pattern of customers, as well as for changes in economic environmental conditions. The Company writes off accounts against the allowance once all efforts at collection have been exhausted.
The following table presents the activity in the allowance for credit losses for the years ended January 31, 2025 and 2024:
Beginning balance as of February 1, 2023 |
|
$ |
557 |
|
Current-period provision for expected credit losses |
|
|
618 |
|
Write-offs charged against the allowance |
|
|
(173 |
) |
Recoveries of amounts collected |
|
|
— |
|
Ending balance as of January 31, 2024 |
|
$ |
1,002 |
|
Current-period provision for expected credit losses |
|
|
73 |
|
Write-offs charged against the allowance |
|
|
(187 |
) |
Recoveries of amounts collected |
|
|
— |
|
Ending balance as of January 31, 2025 |
|
$ |
888 |
|
Capitalized Software Development Costs
The Company develops internal-use software as required to support its operations. Costs incurred to develop internal-use software during the application development stage are capitalized and reported at cost, subject to an impairment test. Application development stage costs generally include costs associated with software configuration, coding, installation and testing. Costs of significant upgrades and enhancements that result in additional functionality are also capitalized whereas costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred. Capitalized costs are amortized using the straight-line method over three years. The Company assesses the potential impairment of capitalized internal-use software whenever events or changes in circumstances indicate that the carrying value of the internal-use software may not be recoverable. As of January 31, 2025 and 2024, the Company had capitalized internal use software costs totaling $3.3 million and $4.2 million (net of accumulated amortization of $2.3 million and $0.6 million), respectively.
Fixed Assets, Net
Fixed assets are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the following estimated useful lives:
Computer and similar equipment |
|
3 years |
Furniture and fixtures |
|
3-5 years |
Software and licences |
|
3 years |
Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term.
Goodwill
The Company’s goodwill was recorded as a result of business combinations using the acquisition method of accounting. The Company does not amortize goodwill but tests it at least annually for recoverability. During the years ended January 31, 2025 and 2024, no impairment of goodwill was recorded.
Intangible Assets, Net
Intangible assets are stated at cost, less accumulated amortization. Amortization is computed using the straight-line method over the following estimated useful lives:
F-82
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Developed technology |
|
6-11 years |
Customer relationships |
|
11-15 years |
Non-compete agreements |
|
2-3 years |
Trade names |
|
5-6 years |
Customer relationships amortization is computed over the term of expected cash flows. As the cash flows are consistent period-to-period due to the subscription nature of the services, management determined amortization of the customer relationship intangible assets using the straight-line method would approximate the cash flow approach.
The Company evaluates the recoverability of its intangible assets, if circumstances indicate impairment may have occurred. During the years ended January 31, 2025 and 2024, there was no impairment of intangible assets recorded.
Long-lived Assets
Management reviews long-lived assets for impairment whenever changes in events or circumstances indicate the assets may be impaired. Pursuant to ASC 360, an impairment loss is to be recorded when the net book value of the asset exceeds the undiscounted cash flows expected to be generated by the asset.
If the asset is determined to be impaired, the asset is written down to its net realizable value and the loss is recognized in other income (expense) in the period when the determination is made. No impairment of long-lived assets has been recorded as of January 31, 2025 and 2024.
Revenue, Contract Assets and Contract Liabilities
The Company recognizes revenue in accordance with FASB ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606"), revenue recognition guidance which requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To do this, the Company applies the five-step model in the FASB’s guidance, which requires the Company to: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation. In addition, the Company elected to apply certain of the permitted practical expedients within the revenue recognition guidance and make certain accounting policy elections including those related to significant financing components and sales taxes. The Company elected the portfolio practical expedient as it expects that revenue recognition would not differ materially from recognition of individual contracts. The Company will continue to use judgment on a go forward basis and if any of its contracts should materially change, the Company will reassess whether a portfolio approach is appropriate. Refer to Note 5 for a detailed discussion of accounting policies related to revenue recognition, including contract liabilities and contract assets.
Research and Development Costs
Research and development costs, which include costs incurred to develop internal-use software that do not meet the criteria under ASC 350 to be capitalized, are charged to expense as incurred and totaled $5.1 million and $7.1 million for the years ended January 31, 2025 and 2024, respectively.
Marketing Costs
The Company expenses the costs of marketing, including advertising and promotional expenses, as incurred. Marketing expense was $1.2 million and $2 million for the years ended January 31, 2025 and 2024, respectively.
Other Comprehensive Income (Loss)
The Company utilizes FASB ASC Topic No. 220, “Reporting Comprehensive Income” (“ASC 220”). ASC 220 establishes standards for reporting other comprehensive income (loss) and its components within a financial statement. Other comprehensive income, as defined, includes all changes in equity during a period from non-owner sources. The Company records foreign currency translation adjustments through other comprehensive income (loss).
F-83
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Income Taxes
The Company accounts for income taxes under FASB ASC Topic No. 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for the expected future consequences of events that have been included within the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end and for net operating loss and tax credit carryforwards based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.
ASC 740 clarifies the accounting for uncertainty in income taxes recognized within an entity’s financial statements and prescribes a recognition and measurement of tax position taken or expected to be taken in a tax return. ASC 740 provides guidance on derecognition of tax benefits, classification in the balance sheet, interest and penalties, accounting in interim periods, disclosure and transition. The Company has determined that there are no significant unrecognized tax benefits that would affect the effective tax rate.
The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits as income tax expense.
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), which introduces additional disclosure requirements for the relevant income tax disclosures. The additional disclosures require an entity to disclose income taxes paid by jurisdiction. The amendments should be applied prospectively. The amendments in this update are effective for fiscal years beginning after December 15, 2025. The Company is currently evaluating the impact of ASU 2023-09 within its consolidated financial statements.
In March 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The ASU adds an example with four fact patterns to ASC 718-10, Compensation – Stock Compensation – Overall, in order to assist preparers of financial statements in determining whether profits interest units should be accounted for within the scope of the guidance in ASC 718 or ASC 710, Compensation - General. The ASU only addresses the scope determination and does not amend the recognition or measurement guidance in either ASC 710 or ASC 718. This ASU is effective for fiscal years beginning on February 1, 2026. The Company early adopted this ASU for the year ended January 31, 2024 and adoption had no significant impacts on the financial statements.
F-84
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606. The core principle of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This principle is achieved by applying the following five-step approach:
The Company also sells an on-premise product under perpetual licenses along with maintenance and support, principally in the German market. Revenue from perpetual licenses is recognized upon delivery of the license and maintenance and support is recognized ratably over the maintenance and support period. In the statement of operations license revenue is included within Professional services and other- nonrecurring and the maintenance and support is included within Subscription and support-recurring.
The Company invoices customers based upon the terms of the agreement. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue.
Point in time and over time revenue recognition
Total revenue recognized was as follows:
|
|
2025 |
|
|
2024 |
|
||
Subscription – over time |
|
$ |
64,794 |
|
|
$ |
68,612 |
|
Professional services and others – over time |
|
|
6,192 |
|
|
|
9,010 |
|
Advertising services – point in time |
|
|
2,325 |
|
|
|
2,756 |
|
Licensing revenue – point in time |
|
|
593 |
|
|
|
649 |
|
Total revenue |
|
$ |
73,904 |
|
|
$ |
81,027 |
|
Payment Terms and Right of Return
Payment terms are negotiated individually with the customers and invoices are generally due within 30 days, as such there is not a significant financing component in the contracts with customers. The Company does not offer rights of return or discounts in the normal course of business.
F-85
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Incremental Costs of a Contract
The Company has determined they have incremental costs of a contract for commission plans with employees. The commission plans include base commissions, quota achievement bonuses, new logo bonuses, multi-year contract bonuses and quarterly earned incentives. Commissions incurred as part of obtaining initial contracts are capitalized in accordance with ASC 340-40 “Other Assets and Deferred Costs” as contract assets and are amortized over an average customer life of 5 years. Such capitalization and amortization are applied on a portfolio basis as the portfolio approach would not be materially different than if such costs were accounted for on an individual contract basis.
Contract Liabilities
Contract liabilities are recorded when cash payments are received or invoices issued in accordance with the contract in advance of performance. The current portion of contract liabilities represents the amounts that are expected to be recognized as revenue within one year of the consolidated balance sheet date.
Opening Balances
The opening balances of contract assets and liabilities, both current and noncurrent, as of February 1, 2023 are as follows:
Accounts Receivable |
$ |
|
13,040 |
|
Deferred Commissions |
|
|
1,254 |
|
Deferred Revenue |
|
|
26,236 |
|
F-86
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Cash and Cash Equivalents
Cash and accounts receivable balances are subject to credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the consolidated balance sheets. Management monitors its exposure to credit risk on an ongoing basis. Concentration of credit risk exists at times when cash balances exceed federal insurance limits.
Customer Concentration
As of and for the year ended January 31, 2025, no customers represented more than 10% of total accounts receivable and no customer represented more than 10% of total revenues. As of and for the year ended January 31, 2024, no customer represented more than 10% of total accounts receivable, and one customer represented more than 10% of total revenues.
Reclassification
Certain amounts in the financial statements for the year ended January 31, 2024 have been reclassified to conform to the current year presentation. Such reclassifications had no impact on the previously reported net loss or accumulated deficit.
Prepaid expenses and other current assets consisted of the following as of January 31:
|
|
2025 |
|
|
2024 |
|
||
Prepaid expenses |
|
$ |
1,724 |
|
|
$ |
2,743 |
|
Other current assets |
|
|
131 |
|
|
|
365 |
|
Prepaid and other current assets |
|
$ |
1,855 |
|
|
$ |
3,108 |
|
Fixed assets consisted of the following as of January 31:
|
|
2025 |
|
|
2024 |
|
||
Computers and similar equipment |
|
$ |
1,136 |
|
|
$ |
1,118 |
|
Furniture and fixtures |
|
|
231 |
|
|
|
194 |
|
Leasehold improvements |
|
|
220 |
|
|
|
204 |
|
Total |
|
$ |
1,587 |
|
|
$ |
1,516 |
|
Accumulated depreciation |
|
|
(1,308 |
) |
|
|
(993 |
) |
Fixed assets, net |
|
$ |
279 |
|
|
$ |
523 |
|
Depreciation expense for the years ended January 31, 2025 and 2024 was $0.3 million and $0.4 million, respectively.
F-87
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
The following table reflects goodwill and changes to goodwill during the year ended January 31:
Balance as of January 31, 2023 |
$ |
|
106,597 |
|
Foreign currency translation adjustment |
|
|
1,651 |
|
Balance as of January 31, 2024 |
$ |
|
108,248 |
|
Foreign currency translation adjustment |
|
|
(1,933 |
) |
Balance as of January 31, 2025 |
$ |
|
106,315 |
|
Intangible assets consisted of the following as of January 31, 2025:
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net Carrying Amount |
|
|||
Customer relationships |
$ |
|
64,323 |
|
$ |
|
(30,673 |
) |
$ |
|
33,650 |
|
Developed technology |
|
|
27,725 |
|
|
|
(13,764 |
) |
|
|
13,961 |
|
Trade names |
|
|
3,059 |
|
|
|
(2,927 |
) |
|
|
132 |
|
R&D |
|
|
821 |
|
|
|
(821 |
) |
|
|
— |
|
Non-compete agreements |
|
|
177 |
|
|
|
(176 |
) |
|
|
1 |
|
Intangible assets, net |
$ |
|
96,105 |
|
$ |
|
(48,361 |
) |
$ |
|
47,744 |
|
Intangible assets consisted of the following as of January 31, 2024:
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net Carrying Amount |
|
|||
Customer relationships |
$ |
|
65,630 |
|
$ |
|
(24,736 |
) |
$ |
|
40,894 |
|
Developed technology |
|
|
27,725 |
|
|
|
(11,588 |
) |
|
|
16,137 |
|
Trade names |
|
|
3,059 |
|
|
|
(2,466 |
) |
|
|
593 |
|
R&D |
|
|
821 |
|
|
|
(814 |
) |
|
|
7 |
|
Non-compete agreements |
|
|
177 |
|
|
|
(141 |
) |
|
|
36 |
|
Intangible assets, net |
$ |
|
97,412 |
|
$ |
|
(39,745 |
) |
$ |
|
57,667 |
|
Amortization expense for the years ended January 31, 2025 and 2024 was $8.6 million and $8.9 million, respectively (including $2.2 million and $2.6 million, respectively, recorded as part of cost of revenue).
As of January 31, 2025, amortization expense for future periods for the intangible assets will be as follows for the years ended January 31:
|
Intangibles |
|
|
2026 |
$ |
7,968 |
|
2027 |
|
7,676 |
|
2028 |
|
6,740 |
|
2029 |
|
5,232 |
|
2030 |
|
5,232 |
|
Thereafter |
|
14,896 |
|
Total |
$ |
47,744 |
|
F-88
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Credit Agreement
On February 28, 2019, the Company entered into a new agreement (the “Credit Agreement”) with Monroe Capital Management Advisors, LLC (“Monroe Capital”). This resulted in a new $60.0 million Term Loan (the “Initial Term Loan”). Proceeds were used to pay off the $40.4 million PNC Initial Term Loan and Amendments, and related accrued interest of $0.3 million, pay loan origination costs of $1.6 million, distribute $13.6 million back to K1 Investment Management, and add $4.0 million to the Company’s cash accounts. Debt issuance costs of $1.6 million were capitalized and are being amortized over the life of the Credit Agreement.
The $60.0 million Term Loan under the Credit Agreement is secured by substantially all the assets of the Company. Term Loan bears interest payable monthly with a variable interest rate per annum equal to SOFR Rate margin plus the greater of (i) SOFR Rate or (ii) 1.0%. The SOFR Rate margin is based on a recurring revenue leverage ratio calculation as defined in the Credit Agreement. As of January 31, 2025 and 2024, the interest rate was 12% and 12.6%, respectively.
The loan agreement specifies certain financial covenants that the Company must comply with. As of January 31, 2025 and 2024, the Company was in compliance with these covenants.
The Company signed an amendment agreement (Amendment #4) with Monroe Capital on September 27, 2022 to increase the Term Loan from $60.0 million to $80 million and to increase the revolving line of credit from $2.5 to $7.5 million. The amendment also added a Second Delayed Draw Term Loan to the available credit facilities of $50.0 million to finance future acquisitions if drawn down before March 27, 2023 to finance future acquisitions. Additionally, the maturity date for all debt facilities was extended to February 28, 2025.
On April 26, 2024, the Company signed an amendment agreement (Amendment #7) to its credit agreement. As a result of this amendment, the Company made an election to change the basis for loan compliance to EBITDA instead of based on revenues. Additionally, the maturity date of the loan was extended to November 30, 2025 and the Company has agreed to pay an exit fee of $1,029, which is due on the loan's maturity date of November 30, 2025. For the year ended January 31, 2025, the Company recognized $491 in expense related to the exit fee.
On August 4, 2024, the Company signed an amendment agreement (Amendment #8) with Monroe Capital. As a result of this amendment, repayments of principal for the Term Loan and Delayed Draw Term Loan are no longer required each quarter and interest payments may be treated as Paid in Kind for the period August 1, 2024 to May 1, 2025. In lieu of payments, this amount will be accrued and added to principal outstanding and the interest rate will be increased by 1.00% for the related period. Paid in Kind interest amounted to $4.5 million for the year ended January 31, 2025. The loan is due in full upon maturity. The outstanding principal balance was $78.5 and $79.1 million as of January 31, 2025 and 2024, respectively.
Delayed Draw Term Loan
As of January 31, 2025 and 2024, the borrowings against the Delayed Draw Term Loan were $50.9 million. As of January 31, 2025 and 2024, the interest rate was 12% and 12.6%. The loan is due in full upon maturity.
The Company’s term debt is due in full upon maturity. The outstanding balance of all term debt (net of unamortized debt issuance costs of $0.6 million and $1.2 million) was $133.3 million and $130 million as of January 31, 2025 and 2024, respectively.
Line of Credit
There is an available $7.5 million Revolving Credit line under the amendment to the Credit Agreement (the “Revolver”). The Revolver bears interest payable monthly with a variable interest rate per annum equal to the SOFR Rate Margin plus the greater of (i) SOFR Rate or (ii) 1.0%. The Revolver matures November 30, 2025.
The Company drew an additional $5.0 million on the revolving line of credit increasing the balance to $7.5 million as of January 31, 2025.
F-89
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
As of January 31, 2025 and 2024, there was $7.5 million and $2.5 million outstanding on the line of credit, respectively. As of January 31, 2025 and 2024, the Company was compliant with all covenants set forth in the Credit Agreement.
As of January 31, 2025 all outstanding debt totaling $141.4 million is due November 30, 2025. Management believes it will be able to successfully refinance the Company’s credit facility.
Subsequent to January 31, 2025 the Company began negotiations with the lender to modify the debt and extend the maturity date, however as of the issuance date of these financial statements no new agreement is in place.
The Company follows the lease accounting guidance under ASC 842. Topic 842 requires lessees to recognize a right–of–use asset and a corresponding lease liability for most leases. The Company is the lessee in all current lease agreements. As permitted under the new guidance, management elected to utilize and apply the package of practical expedients to leases that commenced before the effective date of adopting ASC 842:
The Company has also elected the private company alternative to use the U.S. risk-free interest rate in determining the present value of lease payments when the incremental borrowing rate is not known. The lease term for all of its leases includes the non-cancellable period of the lease plus any additional periods covered by either an option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.
The Company leases its Dortmund, Muenster, Sofia, Paris, Boston, Amsterdam and London offices under operating lease agreements that are renewable on a periodic basis at both the Company’s option as well as the lessor. Rent expense under operating leases is recognized on a straight-line basis over the noncancelable lease term, taking into consideration any scheduled rent escalations and incentives. The Company did not have any finance leases as of January 31, 2025 and 2024. The Company subleased the Boston office for the year ended January 31, 2024. Sublease proceeds for the years ended January 31, 2024 were $0.3 million.
The following is a schedule by years of future minimum rental commitments for operating leases that have an initial or remaining non-cancelable lease term in excess of one year (net of sublease payments) as of January 31, 2025:
2026 |
|
$ |
479 |
|
2027 |
|
|
352 |
|
2028 |
|
|
245 |
|
2029 |
|
|
239 |
|
Total lease payments |
|
$ |
1,315 |
|
Less: imputed interest |
|
|
(155 |
) |
Present value of lease liability |
|
$ |
1,160 |
|
The rent expense associated with ongoing operating leases was $1.5 million and $1.7 million for the years ended January 31, 2025 and 2024, respectively. Cash paid related to operating lease rent payments for the years ended January 31, 2025 and 2024 totaled $1.9 million and $2.1 million, respectively. The balance sheet classification, weighted average remaining lease term, and weighted average discount rate related to operating leases under ASC 842 as of January 31, 2025 and 2024, were:
F-90
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
|
|
2025 |
|
|
2024 |
|
||
ROU lease asset |
|
$ |
1,163 |
|
|
$ |
2,001 |
|
Lease liability: |
|
|
|
|
|
|
||
Current lease liability |
|
|
410 |
|
|
|
1,241 |
|
Long-term lease liability |
|
|
750 |
|
|
|
1,152 |
|
Total lease liability |
|
$ |
1,160 |
|
|
$ |
2,393 |
|
Weighted average remaining lease term (years) |
|
|
1.16 |
|
|
|
3.00 |
|
Weighted average discount rate |
|
|
4.39 |
% |
|
|
3.60 |
% |
During the year ended January 31, 2024, the Company decided to exit the Denver lease as they no longer had use for the office space and there was no ability to sublease the office space. The lease was determined to be abandoned in line with ASC 360 and the right of use asset was written down to $0, as the Company would not obtain any future economic benefits from the underlying asset. For the year ended January 31, 2024, the Company recorded $0.8 million as an impairment loss associated with the abandonment.
Accrued expenses consisted of the following as of January 31:
|
|
2025 |
|
|
2024 |
|
||
Accrued expenses |
|
$ |
4,418 |
|
|
$ |
5,641 |
|
Accrued compensation |
|
|
2,790 |
|
|
|
3,197 |
|
Accrued interest |
|
|
2,419 |
|
|
|
1,194 |
|
Business acquisition liabilities |
|
|
— |
|
|
|
470 |
|
Sales tax payable |
|
|
763 |
|
|
|
1,237 |
|
Accrued expenses |
|
$ |
10,390 |
|
|
$ |
11,739 |
|
Trade Loan
On November 11, 2022, the Company, through Attraqt Group PLC, executed a trade loan agreement with Barclays Bank PLC (“Barclays”). The trade loan agreement enables the Company to send Barclays invoices to pay totaling up to £1.5 million, or $1.85 million with a minimum loan period of 30 days and a maximum loan period of 90 days. The trade loan accrues interest based on the reference rate plus the margin rate of 2.5%. As of January 31, 2024, the interest rate was 7.0%. This loan is included in the accrued expenses balance as shown in the table above. The trade loan was terminated in 2024.
F-91
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Crownpeak 401(k) Plan
Crownpeak established a 401(k) plan (the “401k Plan”) covering all eligible employees, as defined in the 401k Plan agreement. The assets of the 401k Plan are held separately from those of Crownpeak in an independently administered fund. During the years ended January 31, 2025 and 2024, Crownpeak made contributions of $0.3 million and $0.4 million, respectively, to the 401k Plan.
Magus Pension Plan
Magus operates a defined contribution pension plan (the “Pension Plan”) covering all eligible employees, as defined in the Pension Plan agreement. The assets of the Pension Plan are held separately from those of Magus in an independently administered fund. During the years ended January 31, 2025 and 2024, Magus made contributions of $0.1 million and $0.1 million, respectively, to the Pension Plan.
Attraqt Pension Plan
Attraqt operates a defined contribution pension plan (the “Attraqt Pension Plan”) covering all eligible employees, as defined in the Attraqt Pension Plan agreement. The assets of the Attraqt Pension Plan are held separately from those of Attraqt in an independently administered fund. During the years ended January 31, 2025 and 2024, Attraqt made contributions of $0.4 million and $0.2 million, respectively, to the Attraqt Pension Plan.
As of January 31, 2025 and 2024 the authorized, issued and outstanding capital stock of the Company consisted of 100 shares of common stock with a $0.001 par value. During the year ended January 31, 2025, the Company received contributions of $14 million from its primary stockholder, K1 investments.
Management Incentive Unit Plan
In 2015, the Board approved the authorization to grant incentive units to employees through the Crownpeak Holdings, LLC 2015 Incentive Unit Plan (the “2015 Plan”). The purpose of the 2015 Plan is to incentivize certain officers, employees, managers, consultants and advisers (“2015 Plan Participants”) of the Company to promote the growth and success of the Company and its affiliates by granting, or offering opportunities to acquire, incentive units of the Company. The availability and offering of Incentive Units under the Plan are intended to enhance the Company’s and its subsidiaries’ ability to attract and retain high-caliber managerial talent, whose contributions are critical to the Company’s sustained growth, progress, and profitability.
Incentive units represent a non–voting interest in the Company and are subordinate to all common units.
As of January 31, 2025 and 2024, there were 25,279,277 and 40,285,188 management incentive units granted and outstanding with participation thresholds ranging from $0.95 to $1.06 per unit. Incentive unitholders are entitled to distributions from the Company after the cumulative distributions to unitholders of other specified classes of units have exceeded the participant threshold. The 2015 Plan entitles participants to participate in distributions, once the performance conditions are met or time has passed for time-based units. Granted management incentive units are generally 50% time-based and 50% performance-based vesting. The time-based management incentive units generally become vested 25% at a one-year cliff and then quarterly over four years of continued employment and expire in ten years. The performance-based management incentive units generally become vested when the Company’s majority unitholder achieves a total equity return multiple, generally a multiple of two. The Company has not made any distributions as of January 31, 2025.
F-92
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
No compensation expense has been recognized for the years ended January 31, 2025 and 2024 as the amounts were not significant.
Management incentive unit plan details as of January 31 are as follows:
|
|
2025 |
|
|
2024 |
|
||
Vested time-based management incentive units |
|
|
15,439,796 |
|
|
|
11,363,854 |
|
Unvested time-based units |
|
|
4,333,170 |
|
|
|
11,265,532 |
|
Unvested performance-based units |
|
|
5,506,312 |
|
|
|
17,655,802 |
|
Unit Option Plan
In 2023, the Board approved the authorization to grant incentive units options to employees through the CrownPeak Holdings, LLC 2023 Incentive Unit Option Plan (the “2023 Plan”). The purpose of the 2023 Plan is to incentivize certain officers, employees, managers, consultants and advisers (“2023 Plan Participants”) of the Company to promote the growth and success of the Company and its affiliates by granting, or offering opportunities to acquire, option units of the Company.
The Board approved the grant of incentive unit options totaling 20,072,423 and 2,555,900 unit options during the fiscal years ended January 31, 2025, and 2024, respectively. Granted option units can be 50% time-based and 50% performance-based vesting, 100% time-based vesting and 100% performance-based vesting. The time-based option units become vested 25% at a one-year cliff and then quarterly over four years of continued employment and expire in ten years. The performance-based option units become vested when the Company’s majority unitholder achieves a total equity return multiple of two and expire in ten years.
As of January 31, 2025 and 2024, there were 19,778,823 option units and 3,224,708 option units granted and outstanding, respectively, with an exercise price of $1.09 per unit and an expiration date of ten years after the grant date. Upon exercise, the option units are converted to common units and have no participation threshold.
For the years ended January 31, 2025 and 2024 total compensation expense related to the 2023 Plan was $679 and $0, respectively.
Incentive unit option plan details as of January 31 are as follows:
|
|
2025 |
|
|
2024 |
|
||
Unit options authorized |
|
|
37,565,219 |
|
|
|
37,565,219 |
|
Unallocated unit options |
|
|
17,786,396 |
|
|
|
34,340,512 |
|
Vested time-based unit options |
|
|
431,045 |
|
|
|
140,638 |
|
Unvested time-based unit options |
|
|
8,760,831 |
|
|
|
1,471,716 |
|
Unvested performance-based unit options |
|
|
10,586,947 |
|
|
|
1,612,354 |
|
F-93
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
The provision for income tax consisted of the following for the years ended January 31, 2025 and 2024:
|
|
2025 |
|
|
2024 |
|
||
Current federal tax expense (benefit) |
$ |
|
— |
|
$ |
|
— |
|
Current state tax expense (benefit) |
|
|
26 |
|
|
|
(31 |
) |
Current foreign tax expense |
|
|
877 |
|
|
|
1,107 |
|
Total current tax expense |
|
|
903 |
|
|
|
1,076 |
|
Deferred federal tax expense |
|
|
— |
|
|
|
— |
|
Deferred state tax expense |
|
|
— |
|
|
|
— |
|
Deferred foreign tax benefit |
|
|
(248 |
) |
|
|
(1,799 |
) |
Total deferred tax benefit |
|
|
(248 |
) |
|
|
(1,799 |
) |
Total income tax expense (benefit) |
$ |
|
655 |
|
$ |
|
723 |
|
Significant components of the Company’s deferred tax assets consisted of the following at January 31:
|
|
2025 |
|
|
2024 |
|
||
Net deferred tax assets (liabilities) - domestic |
|
|
|
|
|
|
||
Net operating loss carryforwards |
$ |
|
26,288 |
|
$ |
|
21,844 |
|
R&D tax credit carryovers |
|
|
820 |
|
|
|
820 |
|
Disallowed business interest expense |
|
|
7,642 |
|
|
|
7,642 |
|
Goodwill and intangible assets basis differences |
|
|
(516 |
) |
|
|
(794 |
) |
Stock-based compensation |
|
|
165 |
|
|
|
— |
|
Total net domestic deferred tax assets |
|
|
34,399 |
|
|
|
29,512 |
|
Valuation allowance |
|
|
(34,399 |
) |
|
|
(29,512 |
) |
Net domestic deferred tax assets |
$ |
|
— |
|
$ |
|
— |
|
Net deferred tax assets (liabilities) - foreign |
|
|
|
|
|
|
||
Germany intangible assets basis differences |
$ |
|
(3,576 |
) |
$ |
|
(4,280 |
) |
UK net operating loss carryovers |
|
|
3,777 |
|
|
|
5,472 |
|
UK intangible asset basis differences |
|
|
(7,237 |
) |
|
|
(8,476 |
) |
Net foreign deferred tax liabilities |
$ |
|
(7,036 |
) |
$ |
|
(7,284 |
) |
A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized.
The difference between the provision for income taxes and the income tax determined by applying the statutory federal income tax of 21%, to income before taxes, is primarily due to increases in the valuation allowance and state and foreign taxes.
The net valuation allowance increased by $4.9 million and $6.3 million in 2025 and 2024, respectively.
As of January 31, 2025, the Company had federal and state net operating loss carryforward (“NOLS”) of approximately $107.4 million and $59.4 million, respectively. The federal NOLS begin expiring in 2025 and state NOLS begin expiring in 2028. Federal NOLS generated after December 31, 2017 totaling approximately $46.5 million can be carried forward indefinitely. The Tax Reform Act of 1986 limits the use of net operating loss and tax credit carryforwards in certain situations where equity transactions result in a change of ownership as defined by the Internal Revenue Code Section 382. In the event the Company should experience an ownership change, as defined, utilization of its U.S. net operating loss carryforwards and tax credits could be limited.
As of January 31, 2025 and 2024, the Company has federal disallowed business interest carry forwards of approximately $31.4 million which can be carried forward indefinitely.
For UK tax purposes, as of January 31, 2025 and 2024, the Company had approximately $15.1 million and $17.6 million, respectively, of net operating loss carryovers which can be carried forward indefinitely.
F-94
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
As of January 31, 2025 and 2024, the Company had federal research and development tax credit forwards of approximately $0.8 million. The federal credits will begin to expire in 2025.
For US federal and state tax purposes the Company’s tax returns generally remain open to examination for all prior periods due to the potential future usage of income tax credit and net operating loss carryovers to offset future taxable income prior to expiration of the tax credit and net operating loss carryovers. For the UK, the Company’s tax returns are generally open to examination for one year after the statutory filing date. For Germany, the Company’s tax returns are generally open to examination for 4 years after filing. As of January 31, 2025 the Company’s German subsidiary was undergoing tax audits for tax years 2019-2021.
The Group has contingent liabilities associated with legal claims arising in the ordinary course of business. In the ordinary course of conducting its business, the Company, from time to time, may become involved in various lawsuits. Some of these proceedings may result in judgments being assessed against the Company which may have an impact on net loss. The Company does not believe that these proceedings, individually or in aggregate, are material to its business or financial condition.
The Company is a wholly-owned subsidiary of Crownpeak Technology Holdings, LLC (“Holdings”), which is a wholly-owned subsidiary of K1 Investment Management. K1 Investment Management is a California-based private equity firm.
K1 provides consulting services to the Group in accordance with a Consulting Agreement effective November 23, 2015. The Group also reimburses K1 and/or its affiliates for their reasonable out-of-pocket expenses incurred in connection with the provision of services. Consulting fees and reasonable out-of-pocket expenses were $1 million and $0.9 million for the years ended January 31, 2025 and 2024, respectively.
The Company has performed an evaluation of subsequent events through July 31, 2025, which is the date the financial statements were available to be issued.
F-95
Independent Auditor’s Report
To the Crownpeak Technology GmbH, Dortmund
Audit Opinions
We have audited the annual financial statements of Crownpeak Technology GmbH, Dortmund, – which comprise the balance sheet as at 31 January 2025 and the income statement for the financial year from 1 February 2024 to 31 January 2025 and notes to the financial statements, including the presentation of the recognition and measurement policies. In addition, we have audited the management report of Crownpeak Technology GmbH for the financial year from 1 February 2024 to 31 January 2025.
In our opinion, on the basis of the knowledge obtained in the audit,
Pursuant to § 322 para. 3 sent. 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the annual financial statements and of the management report.
Basis for the Audit Opinions
We conducted our audit of the annual financial statements and of the management report in accordance with § 317 HGB and in compliance with German Generally Accepted Standards for Financial Statements Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Our responsibilities under those requirements and principles are further described in the “Auditor's Responsibilities for the Audit of the Annual Financial Statements and of the Management Report” section of our auditor’s report. We are independent of the Company in accordance with the requirements of German commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions on the annual financial statements and on the management report.
Responsibilities of the Executive Directors for the Annual Financial Statements and the Management Report
The executive directors are responsible for the preparation of the annual financial statements that comply, in all material respects, with the requirements of German commercial law applicable to business corporations, and that the annual financial statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Company in compliance with German Legally Required Accounting Principles. In addition, the executive directors are responsible for such internal control as they, in accordance with German Legally Required Accounting Principles, have determined necessary to enable the preparation of annual financial statements that are free from material misstatement, whether due to fraud (i.e. fraudulent financial reporting and misappropriation of assets) or error.
In preparing the annual financial statements, the executive directors are responsible for assessing the Company’s ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for financial reporting based on the going concern basis of accounting, provided no actual or legal circumstances conflict therewith.
Furthermore, the executive directors are responsible for the preparation of the management report that, as a whole, provides an appropriate view of the Company’s position and is, in all material respects, consistent with the annual financial
F-96
statements, complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In addition, the executive directors are responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the management report.
Auditor’s Responsibilities for the Audit of the Annual Financial Statements and of the Management Report
Our objectives are to obtain reasonable assurance about whether the annual financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the management report as a whole provides an appropriate view of the Company’s position and, in all material respects, is consistent with the annual financial statements and the knowledge obtained in the audit, complies with German legal requirements and appropriately present the opportunities and risks of future development, as well as to issue an auditor’s report that includes our audit opinions on the annual financial statements and on the management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with § 317 HGB and German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual financial statements and this management report.
We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
F-97
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Berlin, 11 July 2025
/s/ ba audit gmbh
Wirtschaftsprüfungsgesellschaft
Berlin
F-98
Independent Auditors’ opinion
To Crownpeak Technology GmbH, Dortmund
Opinions
We have audited the annual financial statements of Crownpeak Technology GmbH, Dortmund, which comprise the balance sheet as of 31 January 2024, the income statement for the financial year from 1 February 2023 to 31 January 2024, and the notes to the financial statements, including the recognition and measurement policies presented therein. In addition, we have audited the management report of Crownpeak Technology GmbH for the financial year from 1 February 2023 to 31 January 2024.
In our opinion, on the basis of the knowledge obtained in the audit,
Pursuant to § 322 para. 3 sent 1 HGB [“Handelsgesetzbuch”: German Commercial Code], we declare that our audit has not led to any reservations relating to the legal compliance of the annual financial statements and of the management report.
Basis for the opinions
We conducted our audit of the annual financial statements and of the management report in accordance with § 317 HGB and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Our responsibilities under those requirements, principles and standards are further described in the “Auditor ’s responsibilities for the audit of the annual financial statements and of the management report” section of our auditor’s report. We are independent of the Company in accordance with the requirements of German commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the annual financial statements and on the management report.
Responsibilities of management for the annual financial statements and the management report
Management is responsible for the preparation of the annual financial statements that comply, in all material respects, with the requirements of German commercial law applicable to business corporations, and that the annual financial statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Company in compliance with the German legally required accounting principles. In addition, management is responsible for such internal control as it, in accordance with German legally required accounting principles has determined necessary to enable the preparation of annual financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the annual financial statements, management is responsible for assessing the Company’s ability to continue as a going concern. It also has the responsibility for disclosing, as applicable, matters related to going concern. In addition, it is responsible for financial reporting based on the going concern basis of accounting, provided no actual or legal circumstances conflict therewith.
Furthermore, management is responsible for the preparation of the management report that as a whole provides an appropriate view of the Company’s position and is, in all material respects, consistent with the annual financial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. In addition, management is responsible for such arrangements and measures (systems) as it has considered necessary to enable the preparation of a management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the management report.
Auditor’s responsibilities for the audit of the annual financial statements and the management report
F-99
Our objectives are to obtain reasonable assurance about whether the annual financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the management report as a whole provides an appropriate view of the Company’s position and, in all material respects, is consistent with the annual financial statements and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor ’s report that includes our opinions on the annual financial statements and the management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with § 317 HGB as well as in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the IDW will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual financial statements and this management report.
We exercise professional judgment and maintain professional scepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Berlin, 31 July 2024
F-100
/s/ ba audit gmbh
Wirtschaftsprüfungsgesellschaft
Berlin
F-101
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN 000'S OF U.S. DOLLARS, EXCEPT SHARE DATA)
As of July 31, 2025 and January 31, 2025
|
|
|
|
|
(Audited) |
|
||
|
July 31, 2025 |
|
|
January 31, 2025 |
|
|||
Assets |
|
|
|
|
|
|||
Current assets |
|
|
|
|
|
|
||
Cash |
$ |
7,343 |
|
|
$ |
7,280 |
|
|
Accounts receivable, net |
|
6,388 |
|
|
|
12,132 |
|
|
Deferred commissions, current |
|
1,560 |
|
|
|
1,465 |
|
|
Prepaid expenses and other current assets |
|
3,281 |
|
|
|
1,855 |
|
|
Total current assets |
|
|
18,572 |
|
|
|
22,732 |
|
Capitalized software, net |
|
3,318 |
|
|
|
3,295 |
|
|
Fixed assets, net |
|
189 |
|
|
|
279 |
|
|
Goodwill |
|
|
109,549 |
|
|
|
106,315 |
|
Intangible assets, net |
|
|
44,762 |
|
|
|
47,744 |
|
Right-of-use assets |
|
|
1,427 |
|
|
|
1,163 |
|
Deferred commissions, net of current portion |
|
3,668 |
|
|
|
3,717 |
|
|
Deposits and other assets |
|
|
204 |
|
|
|
246 |
|
Total assets |
|
$ |
181,689 |
|
|
$ |
185,491 |
|
Liabilities |
|
|
|
|
|
|||
Current liabilities |
|
|
|
|
|
|||
Revolving line of credit |
|
$ |
7,500 |
|
|
$ |
7,500 |
|
Debt, net of debt issuance costs |
|
135,804 |
|
|
|
133,297 |
|
|
Lease liability, current |
|
581 |
|
|
|
410 |
|
|
Accounts payable |
|
6,269 |
|
|
|
6,984 |
|
|
Accrued expenses |
|
|
14,792 |
|
|
|
10,390 |
|
Deferred revenue |
|
24,909 |
|
|
|
29,661 |
|
|
Total current liabilities |
|
|
189,855 |
|
|
|
188,242 |
|
Lease liability, non current |
|
846 |
|
|
|
750 |
|
|
Deferred tax liability |
|
7,641 |
|
|
|
7,036 |
|
|
Total liabilities |
|
|
198,342 |
|
|
|
196,028 |
|
Stockholders' Deficit |
|
|
|
|
|
|||
Common stock: $.001 par value: 100 shares issued and outstanding |
|
— |
|
|
|
— |
|
|
Paid in capital |
|
135,642 |
|
|
|
135,117 |
|
|
Accumulated deficit |
|
(155,321 |
) |
|
|
(142,542 |
) |
|
Accumulated other comprehensive income (loss) |
|
3,026 |
|
|
|
(3,112 |
) |
|
Total stockholders' deficit |
|
|
(16,653 |
) |
|
|
(10,537 |
) |
Total liabilities and stockholders’ deficit |
|
$ |
181,689 |
|
|
$ |
185,491 |
|
See notes to the unaudited condensed consolidated financial statements.
F-102
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(EXPRESSED IN 000'S OF U.S. DOLLARS)
Six months ended July 31, 2025 and July 31, 2024
|
|
2025 |
|
|
2024 |
|
||
Revenue |
|
|
|
|
|
|
||
Subscription and support - recurring |
|
$ |
31,753 |
|
|
$ |
33,687 |
|
Professional services and other - non-recurring |
|
|
4,100 |
|
|
|
5,293 |
|
Total revenue |
|
|
35,853 |
|
|
|
38,980 |
|
Cost of revenue |
|
|
12,246 |
|
|
|
14,380 |
|
Gross profit |
|
|
23,607 |
|
|
|
24,600 |
|
Operating expenses |
|
|
|
|
|
|
||
Compensation and benefits |
|
|
12,984 |
|
|
|
15,968 |
|
Research and development |
|
|
2,049 |
|
|
|
3,087 |
|
Marketing |
|
|
453 |
|
|
|
854 |
|
Depreciation and amortization |
|
|
3,452 |
|
|
|
3,645 |
|
General and administrative |
|
|
4,195 |
|
|
|
6,244 |
|
Total operating expenses |
|
|
23,133 |
|
|
|
29,798 |
|
Income/(Loss) from operations |
|
|
474 |
|
|
|
(5,198 |
) |
Other income (expense) |
|
|
|
|
|
|
||
Other (expense) income, net |
|
|
(3,312 |
) |
|
|
1,473 |
|
Interest expense |
|
|
(9,201 |
) |
|
|
(8,169 |
) |
Total other expense, net |
|
|
(12,513 |
) |
|
|
(6,696 |
) |
Loss before income taxes |
|
|
(12,039 |
) |
|
|
(11,894 |
) |
Income tax expense |
|
|
(740 |
) |
|
|
(374 |
) |
Net loss |
|
$ |
(12,779 |
) |
|
$ |
(12,268 |
) |
Other comprehensive income (loss) |
|
|
|
|
|
|
||
Foreign currency translation adjustments |
|
|
6,138 |
|
|
|
(337 |
) |
Total comprehensive loss |
|
$ |
(6,641 |
) |
|
$ |
(12,605 |
) |
See notes to the unaudited condensed consolidated financial statements.
F-103
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(EXPRESSED IN 000'S OF U.S. DOLLARS, EXCEPT SHARE DATA)
Six months ended July 31, 2025 and July 31, 2024
|
Common |
|
Common |
|
Paid in |
|
Accumulated |
|
Accumulated Other |
|
|
|
||||||
|
Shares |
|
Stock |
|
Capital |
|
Deficit |
|
Comprehensive Income (Loss) |
|
Total |
|
||||||
Balance at January 31, 2024 |
|
100 |
|
$ |
— |
|
$ |
120,438 |
|
$ |
(117,365 |
) |
$ |
1,064 |
|
$ |
4,137 |
|
Capital contribution |
|
— |
|
|
— |
|
|
6,000 |
|
|
— |
|
|
— |
|
|
6,000 |
|
Employee stock-based compensation |
|
— |
|
|
— |
|
|
188 |
|
|
— |
|
|
— |
|
|
188 |
|
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(12,268 |
) |
|
— |
|
|
(12,268 |
) |
Foreign currency translation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(337 |
) |
|
(337 |
) |
Balance at July 31, 2024 |
|
100 |
|
$ |
— |
|
$ |
126,626 |
|
$ |
(129,633 |
) |
$ |
727 |
|
$ |
(2,280 |
) |
Balance at January 31, 2025 |
|
100 |
|
|
— |
|
|
135,117 |
|
|
(142,542 |
) |
|
(3,112 |
) |
|
(10,537 |
) |
Employee stock-based compensation |
|
— |
|
|
— |
|
|
525 |
|
|
— |
|
|
— |
|
|
525 |
|
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(12,779 |
) |
|
— |
|
|
(12,779 |
) |
Foreign currency translation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,138 |
|
|
6,138 |
|
Balance at July 31, 2025 |
|
100 |
|
$ |
— |
|
$ |
135,642 |
|
$ |
(155,321 |
) |
$ |
3,026 |
|
$ |
(16,653 |
) |
See notes to the unaudited condensed consolidated financial statements.
F-104
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN 000'S OF U.S. DOLLARS, EXCEPT SHARE DATA)
Six months ended July 31, 2025 and July 31, 2024
|
|
|
2025 |
|
|
2024 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
|
||
Net loss |
|
$ |
|
(12,779 |
) |
$ |
|
(12,268 |
) |
Adjustments to reconcile net loss to cash used in operating activities: |
|
|
|
|
|
|
|
||
Provision for expected credit losses |
|
|
|
261 |
|
|
|
3 |
|
Depreciation and amortization |
|
|
|
5,088 |
|
|
|
5,382 |
|
Amortization of debt discount |
|
|
|
271 |
|
|
|
378 |
|
Non-cash lease expense |
|
|
|
251 |
|
|
|
439 |
|
Employee stock-based compensation |
|
|
|
525 |
|
|
|
188 |
|
Paid-in-kind capitalized interest |
|
|
|
2,236 |
|
|
|
— |
|
Net changes in operating assets and liabilities: |
|
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
|
5,483 |
|
|
|
4,198 |
|
Deferred commissions |
|
|
|
(46 |
) |
|
|
(501 |
) |
Prepaid expenses and other current assets |
|
|
|
(1,426 |
) |
|
|
(751 |
) |
Deposits |
|
|
|
42 |
|
|
|
(13 |
) |
Accounts payable |
|
|
|
(715 |
) |
|
|
(1,963 |
) |
Accrued expenses |
|
|
|
4,402 |
|
|
|
591 |
|
Deferred revenue |
|
|
|
(4,752 |
) |
|
|
(4,019 |
) |
Lease liabilities |
|
|
|
(248 |
) |
|
|
(440 |
) |
Net cash used in operating activities |
|
|
|
(1,407 |
) |
|
|
(8,776 |
) |
Cash flows from investing activities |
|
|
|
|
|
|
|
||
Capital expenditures |
|
|
|
(113 |
) |
|
|
(88 |
) |
Capitalized software development |
|
|
|
(570 |
) |
|
|
(416 |
) |
Net cash used in investing activities |
|
|
|
(683 |
) |
|
|
(504 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
||
Capital contribution |
|
|
|
— |
|
|
|
6,000 |
|
Principal payments on long-term debt |
|
|
|
— |
|
|
|
(650 |
) |
Proceeds from line of credit |
|
|
|
— |
|
|
|
5,000 |
|
Net cash provided by financing activities |
|
|
|
— |
|
|
|
10,350 |
|
Effect of exchange rates on changes in cash |
|
|
|
2,153 |
|
|
|
(1,415 |
) |
Net increase (decrease) in cash |
|
|
|
63 |
|
|
|
(345 |
) |
Cash - beginning balance |
|
|
|
7,280 |
|
|
|
4,908 |
|
Cash - ending balance |
|
$ |
|
7,343 |
|
$ |
|
4,563 |
|
Supplemental disclosure of cash flow data: |
|
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
6,409 |
|
$ |
|
6,775 |
|
Cash paid for income taxes |
|
$ |
|
202 |
|
$ |
|
67 |
|
Noncash investing and financing activities |
|
|
|
|
|
|
|
||
Initial recognition of right of use assets and liability, arising from new leases during the year |
|
$ |
|
515 |
|
$ |
|
— |
|
See notes to the unaudited condensed consolidated financial statements.
F-105
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Crownpeak Intermediate Holdings, Inc., a Delaware corporation, (the “Company”) is the holding parent company for the following subsidiaries: Crownpeak Technology, Inc., a wholly-owned Delaware corporation, (“Crownpeak”), Magus Research Limited, a wholly-owned private United Kingdom company, Evidon, Inc., a wholly-owned Delaware corporation, e-Spirit Inc., a wholly- owned Delaware corporation, Crownpeak Technology GmbH (formerly e-Spirit GmbH), a wholly- owned private German company, Ilumino, LLC, a wholly-owned Ohio corporation, Aegean Bidco Ltd., a wholly-owned private United Kingdom company that is a holding parent company for the following subsidiaries: Attraqt Group PLC, a wholly-owned private United Kingdom company, Attraqt Limited, a wholly-owned private United Kingdom company, Attraqt Inc., a wholly-owned Delaware corporation, Early Birds SAS, a wholly-owned private France company, Fredhopper B.V., a wholly-owned private Netherlands company, Spring Technologies EOOD, a wholly-owned private Bulgaria company, Fredhopper (Australia) Pty Ltd., a wholly-owned private Australia company, Fredhopper GmbH, a wholly-owned private Germany company and Fredhopper Sarl, a wholly- owned private France company. The Company offers the leading cloud-based Digital Experience Management and Digital Quality Management platforms, creating a unique market leader in the space. The Company is headquartered in Denver, Colorado with additional offices in London, United Kingdom; Dortmund, Germany; Paris, France and Amsterdam, Netherlands.
Crownpeak was founded in 2001 and is the only cloud-first Digital Experience Management (DXM) platform with a native Digital Quality Management (DQM) offering operating as a Software as a Service (“SaaS”) platform. Crownpeak is the only enterprise DXM platform purpose-built to scale efficiently with customers as they grow, simplifying the deployment, management and adherence to regulatory/policy compliance of global sites by any size team, across all digital touchpoints (e.g., desktop websites, mobile, social media). As the web content “system of record” for a diverse set of multi-billion-dollar global enterprises, the Crownpeak platform is deeply embedded in the underlying operations of its customers which, when coupled with multi-year contractual obligations, allows Crownpeak to derive highly visible and stable recurring revenue streams.
These unaudited condensed consolidated financial statements of the Company as of July 31, 2025 and January 31, 2025 and for the six months ended July 31, 2025 and 2024, are comprised of the Company and its subsidiaries (together referred to as the "Group").
C
F-106
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
The Company has prepared these financial statements under the going concern basis of accounting following Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements - Going Concern”, which was codified as Accounting Standards Codification (“ASC”) 205-40 (“ASC 205-40”).
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying unaudited condensed consolidated financial statements, the Company has incurred net losses, negative cash flows from operations, and has $143.3 million of debt outstanding on July 31, 2025 that matures on May 29, 2026. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance date of these unaudited condensed consolidated financial statements.
Management is actively addressing this uncertainty by pursuing refinancing or an extension of the Company’s outstanding debt, either with its primary lender or alternative financing sources, with the support of the Company’s principal investor. The Company believes these actions will mitigate the current uncertainty and support the Company’s ability to continue as a going concern. As discussed in Note 19, on December 1, 2025, the Company was acquired. The unaudited condensed consolidated financial statements do not include any adjustments related to any potential uncertainty about the Company’s ability to continue as a going concern.
3. Basis of preparation
Presentation
The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of financial statements in conformity with GAAP requires the use of certain accounting estimates. It also requires Management to exercise its judgment in the process of applying the Group’s accounting policies. The Group’s most significant estimates relate to impairment evaluations of intangible assets and goodwill, accounts receivable allowance for credit losses, as well as, the valuation of deferred tax assets and the related valuation allowance.
The Group is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognizes deferred tax assets and liabilities based on the Group’s current understanding of tax laws as applied to the Group’s circumstances. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provisions in the period in which such determination is made.
F-107
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
4. Significant accounting policies
The principal accounting policies applied in the preparation of these unaudited condensed consolidated financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.
Subsidiaries and Principles of Consolidation
Subsidiaries are all entities over which the Group has control. Subsidiaries are consolidated from the date on which control is transferred to the Group until the date on which control ceases. The accounts of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Inter-company transactions and balances between Group companies are eliminated in consolidation.
Foreign Currency Translation
The Company’s foreign subsidiaries utilize functional currencies other than U.S. dollars. Assets and liabilities recorded for entities using other functional currencies are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average rates of exchange prevailing over the period. Translation adjustments resulting from these processes are charged to or credited to other comprehensive income (loss).
Cash
Cash includes cash on hand and deposits held available on demand with financial institutions. The Company continually monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. Periodically during the years, the Company maintained balances in various operating accounts in excess of insured limits.
Accounts Receivable, Net
Accounts receivable are recorded at the invoiced amount, do not include interest and the Company generally does not require collateral. On a quarterly basis the Company reviews accounts for collectability and establishes an allowance for probable credit losses. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current credit risk rating, collection pattern of customers, as well as for changes in economic environmental conditions. The Company writes off accounts against the allowance once all efforts at collection have been exhausted.
The following table presents the activity in the allowance for credit losses for the six months ended July 31, 2025 and 2024:
Beginning balance as of February 1, 2024 |
|
$ |
1,002 |
|
Current-period provision for expected credit losses |
|
|
3 |
|
Write-offs charged against the allowance |
|
|
(27 |
) |
Recoveries of amounts collected |
|
|
— |
|
Ending balance as of July 31, 2024 |
|
$ |
978 |
|
Beginning balance as of February 1, 2025 |
|
$ |
888 |
|
Current-period provision for expected credit losses |
|
|
261 |
|
Write-offs charged against the allowance |
|
|
(224 |
) |
Recoveries of amounts collected |
|
|
— |
|
Ending balance as of July 31, 2025 |
|
$ |
925 |
|
F-108
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Capitalized Software Development Costs
The Company develops internal-use software as required to support its operations. Costs incurred to develop internal-use software during the application development stage are capitalized and reported at cost, subject to an impairment test. Application development stage costs generally include costs associated with software configuration, coding, installation and testing. Costs of significant upgrades and enhancements that result in additional functionality are also capitalized whereas costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred. Capitalized costs are amortized using the straight-line method over three years. The Company assesses the potential impairment of capitalized internal- use software whenever events or changes in circumstances indicate that the carrying value of the internal-use software may not be recoverable. As of July 31, 2025 and January 31, 2025, the Company had capitalized internal-use software costs totaling $3.3 million and $3.3 million (net of accumulated amortization of $2.0 million and $1.1 million), respectively.
Fixed Assets, Net
Fixed assets are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the following estimated useful lives:
Computer and similar equipment |
|
3 years |
Furniture and fixtures |
|
3-5 years |
Software and licences |
|
3 years |
Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term.
Goodwill
The Company’s goodwill was recorded as a result of business combinations using the acquisition method of accounting. The Company does not amortize goodwill but tests it at least annually for recoverability. As of January 31, 2025, no impairment of goodwill was recorded. For the six months ended July 31, 2025 and 2024, no impairment of goodwill was recorded.
Intangible Assets, Net
Intangible assets are stated at cost, less accumulated amortization. Amortization is computed using the straight-line method over the following estimated useful lives:
Developed technology |
|
6-11 years |
Customer relationships |
|
11-15 years |
Non-compete agreements |
|
2-3 years |
Trade names |
|
5-6 years |
Customer relationships amortization is computed over the term of expected cash flows. As the cash flows are consistent period-to-period due to the subscription nature of the services, management determined amortization of the customer relationship intangible assets using the straight-line method would approximate the cash flow approach.
The Company evaluates the recoverability of its intangible assets, if circumstances indicate impairment may have occurred. As of January 31, 2025, no impairment of intangible assets was recorded. For the six months ended July 31, 2025 and 2024, there was no impairment of intangible assets recorded.
F-109
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Long-lived Assets
Management reviews long-lived assets for impairment whenever changes in events or circumstances indicate the assets may be impaired. Pursuant to ASC 360, an impairment loss is to be recorded when the net book value of the asset exceeds the undiscounted cash flows expected to be generated by the asset.
If the asset is determined to be impaired, the asset is written down to its net realizable value and the loss is recognized in other income (expense) in the period when the determination is made. As of January 31, 2025, no impairment of long-lived assets was recorded. For the six months ended July 31, 2025 and 2024, there was no impairment of long-lived assets recorded.
Revenue, Contract Assets and Contract Liabilities
The Company recognizes revenue in accordance with FASB ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606"), revenue recognition guidance which requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To do this, the Company applies the five-step model in the FASB’s guidance, which requires the Company to: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation. In addition, the Company elected to apply certain of the permitted practical expedients within the revenue recognition guidance and make certain accounting policy elections including those related to significant financing components and sales taxes. The Company elected the portfolio practical expedient as it expects that revenue recognition would not differ materially from recognition of individual contracts.
The Company will continue to use judgment on a go forward basis and if any of its contracts should materially change, the
Company will reassess whether a portfolio approach is appropriate. Refer to Note 5 for a detailed discussion of accounting policies related to revenue recognition, including contract liabilities and contract assets.
Research and Development Costs
Research and development costs, which include costs incurred to develop internal-use software that do not meet the criteria under ASC 350 to be capitalized, are charged to expense as incurred and totaled $2.0 million and $3.1 million for the six months ended July 31, 2025 and 2024, respectively.
Marketing Costs
The Company expenses the costs of marketing, including advertising and promotional expenses, as incurred. Marketing expense was $0.45 million and $0.85 million for the six months ended July 31, 2025 and 2024, respectively.
Other Comprehensive Income (Loss)
The Company utilizes FASB ASC Topic No. 220, “Reporting Comprehensive Income” (“ASC 220”). ASC 220 establishes standards for reporting other comprehensive income (loss) and its components within a financial statement. Other comprehensive income, as defined, includes all changes in equity during a period from non-owner sources. The Company records foreign currency translation adjustments through other comprehensive income (loss).
Income Taxes
The Company accounts for income taxes under FASB ASC Topic No. 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for the expected future consequences of events that have been included within the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end and for net operating loss and tax credit carryforwards based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.
F-110
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
ASC 740 clarifies the accounting for uncertainty in income taxes recognized within an entity’s financial statements and prescribes a recognition and measurement of tax position taken or expected to be taken in a tax return. ASC 740 provides guidance on derecognition of tax benefits, classification in the balance sheet, interest and penalties, accounting in interim periods, disclosure and transition. The Company has determined that there are no significant unrecognized tax benefits that would affect the effective tax rate.
The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits as income tax expense.
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), which introduces additional disclosure requirements for the relevant income tax disclosures. The additional disclosures require an entity to disclose income taxes paid by jurisdiction. The amendments should be applied prospectively. The amendments in this update are effective for fiscal years beginning after December 15, 2025. The Company is currently evaluating the impact of ASU 2023-09 within its consolidated financial statements.
In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The ASU adds an example with four fact patterns to ASC 718-10, Compensation – Stock Compensation – Overall, in order to assist preparers of financial statements in determining whether profits interest units should be accounted for within the scope of the guidance in ASC 718 or ASC 710, Compensation - General. The ASU only addresses the scope determination and does not amend the recognition or measurement guidance in either ASC 710 or ASC 718. This ASU is effective for fiscal years beginning on February 1, 2026. The Company early adopted this ASU for the year ended January 31, 2024 and adoption had no significant impact on the consolidated financial statements.
F-111
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606. The core principle of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This principle is achieved by applying the following five-step approach:
The Company also sells an on-premise product under perpetual licenses along with maintenance and support, principally in the German market. Revenue from perpetual licenses is recognized upon delivery of the license and maintenance and support is recognized ratably over the maintenance and support period. In the statement of operations license revenue is included within Professional services and other- nonrecurring and the maintenance and support is included within Subscription and support-recurring.
The Company invoices customers based upon the terms of the agreement. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue.
Point in time and over time revenue recognition
Total revenue recognized was as follows for the six months ended July 31:
|
|
2025 |
|
|
2024 |
|
||
Subscription – over time |
|
$ |
31,753 |
|
|
$ |
33,687 |
|
Professional services and others –over time |
|
|
2,914 |
|
|
|
3,787 |
|
Advertising services – point in time |
|
|
931 |
|
|
|
1,183 |
|
Licensing revenue – point in time |
|
|
255 |
|
|
|
323 |
|
Total revenue |
|
$ |
35,853 |
|
|
$ |
38,980 |
|
F-112
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Payment Terms and Right of Return
Payment terms are negotiated individually with the customers and invoices are generally due within 30 days, as such there is not a significant financing component in the contracts with customers. The Company does not offer rights of return or discounts in the normal course of business.
Incremental Costs of a Contract
The Company has determined they have incremental costs of a contract for commission plans with employees. The commission plans include base commissions, quota achievement bonuses, new logo bonuses, multi-year contract bonuses and quarterly earned incentives. Commissions incurred as part of obtaining initial contracts are capitalized in accordance with ASC 340-40 “Other Assets and Deferred Costs” as contract assets and are amortized over an average customer life of 5 years. Such capitalization and amortization are applied on a portfolio basis as the portfolio approach would not be materially different than if such costs were accounted for on an individual contract basis.
Contract Liabilities
Contract liabilities are recorded when cash payments are received or invoices issued in accordance with the contract in advance of performance. The current portion of contract liabilities represents the amounts that are expected to be recognized as revenue within one year of the consolidated balance sheet date.
Opening Balances
The opening balances of contract assets and liabilities, both current and noncurrent, as of February 1, 2024 are as follows:
Accounts Receivable |
$ |
|
13,874 |
|
Deferred Commissions |
|
|
3,256 |
|
Deferred Revenue |
|
|
30,915 |
|
Cash and Cash Equivalents
Cash and accounts receivable balances are subject to credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the consolidated balance sheets. Management monitors its exposure to credit risk on an ongoing basis. Concentration of credit risk exists at times when cash balances exceed federal insurance limits.
Customer Concentration
As of and for the six months ended July 31, 2025, no customers represented more than 10% of total accounts receivable and no customer represented more than 10% of total revenues. As of January 31, 2025, no customers represented more than 10% of total accounts receivable. For the six months ended July 31, 2024, no customer represented more than 10% of total revenues.
F-113
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Prepaid expenses and other current assets consisted of the following as of:
|
|
July 31, 2025 |
|
|
January 31, 2025 |
|
||
Prepaid expenses |
|
$ |
3,165 |
|
|
$ |
1,724 |
|
Other current assets |
|
|
116 |
|
|
|
131 |
|
Prepaid and other current assets |
|
$ |
3,281 |
|
|
$ |
1,855 |
|
Fixed assets consisted of the following as of:
|
|
July 31, 2025 |
|
|
January 31, 2025 |
|
||
Computers and similar equipment |
|
$ |
1,220 |
|
|
$ |
1,136 |
|
Furniture and fixtures |
|
|
244 |
|
|
|
231 |
|
Leasehold improvements |
|
|
236 |
|
|
|
220 |
|
Total |
|
$ |
1,700 |
|
|
$ |
1,587 |
|
Accumulated depreciation |
|
|
(1,511 |
) |
|
|
(1,308 |
) |
Fixed assets, net |
|
$ |
189 |
|
|
$ |
279 |
|
Depreciation expense for the six months ended July 31, 2025 and 2024 was $0.1 million and $0.2 million, respectively.
The following table reflects goodwill and changes to goodwill as of July 31, 2025 and January 31, 2025:
Balance as of January 31, 2025 |
$ |
|
106,315 |
|
Foreign currency translation adjustment |
|
|
3,234 |
|
Balance as of July 31, 2025 |
$ |
|
109,549 |
|
F-114
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Intangible assets consisted of the following as of July 31, 2025:
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net Carrying Amount |
|
|||
Customer relationships |
$ |
|
65,874 |
|
$ |
|
(34,668 |
) |
$ |
|
31,206 |
|
Developed technology |
|
|
28,781 |
|
|
|
(15,328 |
) |
|
|
13,453 |
|
Trade names |
|
|
3,081 |
|
|
|
(2,978 |
) |
|
|
103 |
|
R&D |
|
|
681 |
|
|
|
(681 |
) |
|
|
— |
|
Non-compete agreements |
|
|
182 |
|
|
|
(182 |
) |
|
|
— |
|
Intangible assets, net |
$ |
|
98,599 |
|
$ |
|
(53,837 |
) |
$ |
|
44,762 |
|
Intangible assets consisted of the following as of January 31, 2025:
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net Carrying Amount |
|
|||
Customer relationships |
$ |
|
64,323 |
|
$ |
|
(30,673 |
) |
$ |
|
33,650 |
|
Developed technology |
|
|
27,725 |
|
|
|
(13,764 |
) |
|
|
13,961 |
|
Trade names |
|
|
3,059 |
|
|
|
(2,927 |
) |
|
|
132 |
|
R&D |
|
|
821 |
|
|
|
(821 |
) |
|
|
— |
|
Non-compete agreements |
|
|
177 |
|
|
|
(176 |
) |
|
|
1 |
|
Intangible assets, net |
$ |
|
96,105 |
|
$ |
|
(48,361 |
) |
$ |
|
47,744 |
|
Amortization expense for the six months ended July 31, 2025 and 2024 was $4.2 million and $4.3 million, respectively (including $1.1 million and $1.1 million, respectively, recorded as part of cost of revenue).
As of July 31, 2025, amortization expense for future periods for the intangible assets will be as follows for the years ended January 31:
|
Intangibles |
|
|
2026 |
$ |
4,163 |
|
2027 |
|
7,676 |
|
2028 |
|
6,740 |
|
2029 |
|
5,232 |
|
2030 |
|
5,232 |
|
Thereafter |
|
15,719 |
|
Total |
$ |
44,762 |
|
|
|
|
|
F-115
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
Credit Agreement
On February 28, 2019, the Company entered into a new agreement (the “Credit Agreement”) with Monroe Capital Management Advisors, LLC (“Monroe Capital”). This resulted in a new $60.0 million Term Loan (the “Initial Term Loan”). Proceeds were used to pay off the $40.4 million PNC Initial Term Loan and Amendments, and related accrued interest of $0.3 million, pay loan origination costs of $1.6 million, distribute $13.6 million back to K1 Investment Management, and add $4.0 million to the Company’s cash accounts. Debt issuance costs of $1.6 million were capitalized and are being amortized over the life of the Credit Agreement.
The $60.0 million Term Loan under the Credit Agreement is secured by substantially all the assets of the Company. Term Loan bears interest payable monthly with a variable interest rate per annum equal to SOFR Rate margin plus the greater of (i) SOFR Rate or (ii) 1.0%. The SOFR Rate margin is based on a recurring revenue leverage ratio calculation as defined in the Credit Agreement. As of July 31, 2025 and January 31, 2025, the interest rate was 12% and 12%, respectively.
The loan agreement specifies certain financial covenants that the Company must comply with. As of July 31, 2025 and January 31, 2025, the Company was in compliance with these covenants.
The Company signed an amendment agreement (Amendment #4) with Monroe Capital on September 27, 2022 to increase the Term Loan from $60.0 million to $80 million and to increase the revolving line of credit from $2.5 to $7.5 million. The amendment also added a Second Delayed Draw Term Loan to the available credit facilities of $50.0 million to finance future acquisitions if drawn down before March 27, 2023 to finance future acquisitions. Additionally, the maturity date for all debt facilities was extended to February 28, 2025.
On April 26, 2024, the Company signed an amendment agreement (Amendment #7) to its credit agreement. As a result of this amendment, the Company made an election to change the basis for loan compliance to EBITDA instead of based on revenues. Additionally, the maturity date of the loan was extended to November 30, 2025 and the Company has agreed to pay an exit fee of $1,029, which is due on the loan's maturity date of November 30, 2025. For the six months ended July 31, 2025 and 2024, the Company recognized $323 and $168 in expense related to the exit fee, respectively.
On August 4, 2024, the Company signed an amendment agreement (Amendment #8) with Monroe Capital. As a result of this amendment, repayments of principal for the Term Loan and Delayed Draw Term Loan are no longer required each quarter and interest payments may be treated as Paid in Kind for the period August 1, 2024 to May 1, 2025. In lieu of payments, this amount will be accrued and added to principal outstanding and the interest rate will be increased by 1.00% for the related period. Paid in Kind interest amounted to $2.2 million for the six months ended July 31, 2025. The loan is due in full upon maturity. The outstanding principal balance was $83.2 and $78.5 million as of July 31, 2025 and January 31, 2025, respectively.
Delayed Draw Term Loan
As of July 31, 2025 and January 31, 2025, the borrowings against the Delayed Draw Term Loan were $53.4 and $50.9 million, respectively. As of July 31, 2025 and January 31, 2025, the interest rate was 12% and 12%. The loan is due in full upon maturity.
The Company’s term debt is due in full upon maturity. The outstanding balance of all term debt (net of unamortized debt issuance costs of $0.3 million and $0.6 million) was $135.8 million and $133.3 million as of July 31, 2025 and January 31, 2025, respectively.
Line of Credit
There is an available $7.5 million Revolving Credit line under the amendment to the Credit Agreement (the “Revolver”). The Revolver bears interest payable monthly with a variable interest rate per annum equal to the SOFR Rate Margin plus the greater of (i) SOFR Rate or (ii) 1.0%. The Revolver matures November 30, 2025. The Company drew an additional $5.0 million on the revolving line of credit increasing the balance to $7.5 million as of January 31, 2025.
As of July 31, 2025 and January 31, 2025, there was $7.5 million outstanding on the line of credit. As of July 31, 2025 and
F-116
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
January 31, 2025, the Company was compliant with all covenants set forth in the Credit Agreement.
As of July 31, 2025 all outstanding debt totaling $143.3 million is due November 30, 2025.
On August 4, 2025, the Company entered into Amendment #9 with the lender to extend the maturity date of the outstanding debt to May 29, 2026 and add an exit fee totaling $729 payable upon the earlier to occur of: a) acceleration of the debt, b) repayment in full of the debt c) the consummation of a junior capital raise or d) the maturity date.
The Company follows the lease accounting guidance under ASC 842. Topic 842 requires lessees to recognize a right–of–use asset and a corresponding lease liability for most leases. The Company is the lessee in all current lease agreements. As permitted under the new guidance, management elected to utilize and apply the package of practical expedients to leases that commenced before the effective date of adopting ASC 842:
The Company has also elected the private company alternative to use the U.S. risk-free interest rate in determining the present value of lease payments when the incremental borrowing rate is not known. The lease term for all of its leases includes the non-cancellable period of the lease plus any additional periods covered by either an option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.
The Company leases its Dortmund, Muenster, Sofia, Paris, Boston, Amsterdam and London offices under operating lease agreements that are renewable on a periodic basis at both the Company’s option as well as the lessor. Rent expense under operating leases is recognized on a straight-line basis over the noncancelable lease term, taking into consideration any scheduled rent escalations and incentives. The Company did not have any finance leases as of July 31, 2025 and January 31, 2025.
The following is a schedule by years of future minimum rental commitments for operating leases that have an initial or remaining non-cancelable lease term in excess of one year (net of sublease payments) as of July 31, 2025, for the years ended January 31:
2026 |
|
$ |
322 |
|
2027 |
|
|
598 |
|
2028 |
|
|
377 |
|
2029 |
|
|
219 |
|
Total lease payments |
|
$ |
1,516 |
|
Less: imputed interest |
|
|
(89 |
) |
Present value of lease liability |
|
$ |
1,427 |
|
The rent expense associated with ongoing operating leases was $0.5 million and $0.7 million for the six months ended July 31, 2025 and 2024, respectively. Cash paid related to operating lease rent payments for the six months ended July 31, 2025 and 2024 totaled $0.3 million and $0.6 million, respectively. The balance sheet classification, weighted average remaining lease term, and weighted average discount rate related to operating leases under ASC 842 as of July 31, 2025 and January 31, 2025, were:
F-117
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
|
|
July 31, 2025 |
|
|
January 31, 2025 |
|
||
ROU lease asset |
|
$ |
1,427 |
|
|
$ |
1,163 |
|
Lease liability: |
|
|
|
|
|
|
||
Current lease liability |
|
|
581 |
|
|
|
410 |
|
Long-term lease liability |
|
|
846 |
|
|
|
750 |
|
Total lease liability |
|
$ |
1,427 |
|
|
$ |
1,160 |
|
Weighted average remaining lease term (years) |
|
|
2.66 |
|
|
|
1.16 |
|
Weighted average discount rate |
|
|
4.31 |
% |
|
|
4.39 |
% |
Accrued expenses consisted of the following as of July 31, 2025 and January 31, 2025:
|
|
July 31, 2025 |
|
|
January 31, 2025 |
|
||
Accrued expenses |
|
$ |
4,614 |
|
|
$ |
4,418 |
|
Accrued compensation |
|
|
4,388 |
|
|
|
2,790 |
|
Accrued interest |
|
|
5,211 |
|
|
|
2,419 |
|
Sales tax payable |
|
|
579 |
|
|
|
763 |
|
Accrued expenses |
|
$ |
14,792 |
|
|
$ |
10,390 |
|
Crownpeak 401(k) Plan
Crownpeak established a 401(k) plan (the “401k Plan”) covering all eligible employees, as defined in the 401k Plan agreement. The assets of the 401k Plan are held separately from those of Crownpeak in an independently administered fund. For the six months ended July 31, 2025 and 2024, Crownpeak made contributions of $0.1 million and $0.2 million, respectively, to the 401k Plan.
Magus Pension Plan
Magus operates a defined contribution pension plan (the “Pension Plan”) covering all eligible employees, as defined in the Pension Plan agreement. The assets of the Pension Plan are held separately from those of Magus in an independently administered fund. For the six months ended July 31, 2025 and 2024, Magus made contributions of $0.05 million and $0.05 million, respectively, to the Pension Plan.
Attraqt Pension Plan
Attraqt operates a defined contribution pension plan (the “Attraqt Pension Plan”) covering all eligible employees, as defined in the Attraqt Pension Plan agreement. The assets of the Attraqt Pension Plan are held separately from those of Attraqt in an independently administered fund. For the six months ended July 31, 2025 and 2024, Attraqt made contributions of $0.2 million and $0.2 million, respectively, to the Attraqt Pension Plan.
F-118
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
As of July 31, 2025 and January 31, 2025 the authorized, issued and outstanding capital stock of the Company consisted of 100 shares of common stock with a $0.001 par value. For the six months ended July 31, 2024, the Company received contributions of $6 million from its primary stockholder, K1 investments.
Management Incentive Unit Plan
In 2015, the Board approved the authorization to grant incentive units to employees through the Crownpeak Holdings, LLC 2015 Incentive Unit Plan (the “2015 Plan”). The purpose of the 2015 Plan is to incentivize certain officers, employees, managers, consultants and advisers (“2015 Plan Participants”) of the Company to promote the growth and success of the Company and its affiliates by granting, or offering opportunities to acquire, incentive units of the Company. The availability and offering of Incentive Units under the Plan are intended to enhance the Company’s and its subsidiaries’ ability to attract and retain high-caliber managerial talent, whose contributions are critical to the Company’s sustained growth, progress, and profitability.
Incentive units represent a non–voting interest in the Company and are subordinate to all common units.
As of July 31, 2025 and January 31, 2025, there were 25,279,277 management incentive units granted and outstanding with participation thresholds ranging from $0.95 to $1.06 per unit. Incentive unitholders are entitled to distributions from the Company after the cumulative distributions to unitholders of other specified classes of units have exceeded the participant threshold. The 2015 Plan entitles participants to participate in distributions, once the performance conditions are met or time has passed for time-based units. Granted management incentive units are generally 50% time-based and 50% performance-based vesting. The time-based management incentive units generally become vested 25% at a one-year cliff and then quarterly over four years of continued employment and expire in ten years. The performance-based management incentive units generally become vested when the Company’s majority unitholder achieves a total equity return multiple, generally a multiple of two. The Company has not made any distributions as of July 31, 2025 and January 31, 2025.
No compensation expense has been recognized for the six months ended July 31, 2025 and 2024 as the amounts were not significant.
Management incentive unit plan details as of July 31, 2025 and January 31, 2025 are as follows:
|
|
July 31, 2025 |
|
|
January 31, 2025 |
|
||
Vested time-based management incentive units |
|
|
15,968,882 |
|
|
|
15,439,796 |
|
Unvested time-based units |
|
|
3,804,083 |
|
|
|
4,333,170 |
|
Unvested performance-based units |
|
|
5,506,312 |
|
|
|
5,506,312 |
|
Unit Option Plan
In 2023, the Board approved the authorization to grant incentive units options to employees through the CrownPeak Holdings, LLC 2023 Incentive Unit Option Plan (the “2023 Plan”). The purpose of the 2023 Plan is to incentivize certain officers, employees, managers, consultants and advisers (“2023 Plan Participants”) of the Company to promote the growth and success of the Company and its affiliates by granting, or offering opportunities to acquire, option units of the Company.
The Board approved the grant of incentive unit options totaling 20,072,423 and 2,555,900 unit options during the fiscal years ended January 31, 2025 and 2024, respectively. For the six months ended July 31, 2025 and 2024 incentive unit option grants were zero and 2,262,523 unit options, respectively. Granted option units can be 50% time-based and 50% performance-based vesting, 100% time-based vesting and 100% performance-based vesting. The time-based option units become vested 25% at a one-year cliff and then quarterly over four years of continued employment and expire in ten years. The performance-based option
F-119
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
units become vested when the Company’s majority unitholder achieves a total equity return multiple of two and expire in ten years.
As of July 31, 2025 and January 31, 2025, there were 19,607,801 and 19,778,823 unit options granted and outstanding, respectively, with an exercise price of $1.09 per unit and an expiration date of ten years after the grant date. Upon exercise, the option units are converted to common units and have no participation threshold.
For the six months ended July 31, 2025 and 2024 total compensation expense related to the 2023 Plan was $525 and $188, respectively.
Incentive unit option plan details as of July 31, 2025 and January 31, 2025 are as follows:
|
|
July 31, 2025 |
|
|
January 31, 2025 |
|
||
Unit options authorized |
|
|
37,565,219 |
|
|
|
37,565,219 |
|
Unallocated unit options |
|
|
17,957,418 |
|
|
|
17,786,396 |
|
Vested time-based unit options |
|
|
630,153 |
|
|
|
431,045 |
|
Unvested time-based unit options |
|
|
8,525,902 |
|
|
|
8,760,831 |
|
Unvested performance-based unit options |
|
|
10,451,747 |
|
|
|
10,586,947 |
|
The Group has contingent liabilities associated with legal claims arising in the ordinary course of business. In the ordinary course of conducting its business, the Company, from time to time, may become involved in various lawsuits. Some of these proceedings may result in judgments being assessed against the Company which may have an impact on net loss. The Company does not believe that these proceedings, individually or in aggregate, are material to its business or financial condition.
The Company is a wholly-owned subsidiary of Crownpeak Technology Holdings, LLC (“Holdings”), which is a wholly-owned subsidiary of K1 Investment Management (K1). K1 is a California-based private equity firm.
K1 provides consulting services to the Group in accordance with a Consulting Agreement effective November 23, 2015. The Group also reimburses K1 and/or its affiliates for their reasonable out-of-pocket expenses incurred in connection with the provision of services. Consulting fees and reasonable out-of-pocket expenses were $0.5 million and $0.5 million for the six months ended July 31, 2025 and 2024, respectively.
F-120
CROWNPEAK INTERMEDIATE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN 000’S OF U.S. DOLLARS, UNLESS OTHERWISE STATED)
On August 4, 2025, the Company entered into Amendment #9 with the lender to extend the maturity date of the outstanding debt to May 29, 2026 and add an exit fee totaling $729 payable upon the earlier to occur of: a) acceleration of the debt, b) repayment in full of the debt c) the consummation of a junior capital raise or d) the maturity date.
In September 2025, the CEO departed and as a result 12,090,000 incentive unit options were forfeited. In September 2025 the Company appointed a new CEO who was granted 4,587,155 incentive unit options.
On December 1, 2025, the Company was acquired by Rezolve AI plc, pursuant to a sale and purchase agreement (the “Purchase Agreement”) subject to completion of customary closing conditions. The initial purchase price for the acquisition was $90.0 million, subject to certain adjustments as described in the Purchase Agreement, and is composed of the following: (i) a promissory note in the initial principal amount of $50 million, made up of a $20.0 million tranche (the “First Loan Note”) and a $30.0 million tranche (the “Second Loan Note” and together with the First Loan Note, the “Loan Notes”); and (ii) 11,127,780 ordinary shares, nominal value £0.0001 per share (“Ordinary Shares”), of Rezolve AI plc (such shares issued as consideration, the “Consideration Shares”), or approximately $33.7 million in Ordinary Shares based on the 5- day VWAP for the Ordinary Shares.
The Loan Notes will accrue interest at a rate of 10% per annum and are payable in kind or in cash. The First Loan Note matures on April 1, 2027 and the Second Loan Note matures on December 31, 2027. Additionally, Rezolve AI plc assumed approximately $151.9 million of the aggregate principal amount of outstanding term loans and revolving loans and approximately $1.8 million of accrued and unpaid exit and amendment fees, of which $50.0 million was paid by Rezolve AI plc at the closing.
The Company has performed an evaluation of subsequent events through December 9, 2025, which is the date the financial statements were available to be issued.
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Item 19. Exhibits.
The following exhibits are filed as part of this annual report:
Exhibit Number |
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Description |
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1.1 |
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Articles of Association (incorporated by reference to Exhibit 3.1 of Rezolve's Report on Form 6-K, filed with the SEC on March 31, 2025). |
2.1 |
|
Warrant Agreement, dated August 15, 2024, by and among Rezolve AI Limited and Computershare Inc. and its affiliate, Computershare Trust Company, N.A. (incorporated by reference to Exhibit 4.3 of Rezolve AI Limited’s Shell Company Report on Form 20-F, filed with the SEC on August 21, 2024). |
2.2 |
|
Warrant Assignment, Assumption and Amendment Agreement, dated August 15, 2024, by and among Rezolve AI Limited and Computershare Inc. and its affiliate, Computershare Trust Company, N.A. (incorporated by reference to Exhibit 4.4 of Rezolve AI Limited’s Shell Company Report on Form 20-F, filed with the SEC on August 21, 2024). |
2.3 |
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Form of Warrant (incorporated by reference to Exhibit 4.1 of Rezolve AI Limited's Report on Form 6-K, filed with the SEC on December 23, 2024), |
2.4* |
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Description of Securities Registered under Section 12 of the Exchange Act. |
4.1 |
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Business Combination Agreement, dated December 17, 2021, as amended on November 10, 2023 and as further amended and restated on June 16, 2024, as amended on August 4, 2024 (incorporated by reference to Exhibit 2.1 of Rezolve AI Limited’s Registration Statement on Form F-4, Amendment No. 2, filed with the SEC on September 25, 2024). |
4.2 |
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First Amendment to the Business Combination Agreement, dated as of August 4, 2024, by and among Armada Rezolve Limited, Rezolve and Rezolve Merger Sub (incorporated by reference to Exhibit 2.2 of Rezolve AI Limited’s Registration Statement on Form F-4, Amendment No. 2, filed with the SEC on September 25, 2024). |
4.3 |
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Investor Rights Agreement, dated August 15, 2024, by and among Rezolve AI Limited and the holders party thereto (incorporated by reference to Exhibit 4.6 of Rezolve AI Limited’s Shell Company Report on Form 20-F, filed with the SEC on August 22, 2024). |
4.4 |
|
Form of Lock-In Agreement, dated August 15, 2024, by and among Rezolve AI Limited and the holders party thereto (incorporated by reference to Exhibit 4.7 of Rezolve AI Limited’s Shell Company Report on Form 20-F, filed with the SEC on August 22, 2024). |
4.5 |
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Loan Note Instrument dated December 16, 2021, as amended and restated on November 21, 2022, and as further amended and restated on May 23, 2023 (incorporated by reference to Exhibit 10.17 of Rezolve AI Limited’s Registration Statement on Form F-4, Amendment No. 6, filed with the SEC on June 11, 2024). |
4.6 |
|
Binding Term Sheet, dated August 30, 2021, by and among Rezolve, Radio Group and the other parties thereto (incorporated by reference to Exhibit 10.18 of Rezolve AI Limited’s Registration Statement on Form F-4, Amendment No. 5, filed with the SEC on May 20, 2024). |
4.7 |
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Amendment to Binding Term Sheet, dated May 24, 2023, by and among Rezolve, Radio Group and the other parties thereto (incorporated by reference to Exhibit 10.19 of Rezolve AI Limited’s Registration Statement on Form F-4, Amendment No. 5, filed with the SEC on May 20, 2024). |
4.8 |
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Contractual Relationship, dated April 30, 2023 (incorporated by reference to Exhibit 10.22 of Rezolve AI Limited’s Registration Statement on Form F-4, Amendment No. 5, filed with the SEC on May 20, 2024). |
4.9 |
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Power of Disposal over ANY Lifestyle Marketing GmbH, dated November 17, 2023 (incorporated by reference to Exhibit 10.23 of Rezolve AI Limited’s Registration Statement on Form F-4, filed with the SEC on May 20, 2024). |
4.10 |
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Loan Agreement, dated September 28, 2023, by and among Rezolve, Radio Group and the other parties thereto (incorporated by reference to Exhibit 10.24 of Rezolve AI Limited’s Registration Statement on Form F-4, filed with the SEC on May 20, 2024). |
4.11 |
|
Amended and Restated Standby Equity Purchase Agreement, dated as of February 2, 2024, by and between YA II PN, Ltd., Armada Acquisition Corp. I, Rezolve Limited and Rezolve AI Limited (incorporated by reference to Exhibit 2.1 of Aramada's Current Report on Form 8-K, filed with the SEC on February 9, 2024). |
4.12 |
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Second Amended and Restated Standby Equity Purchase Agreement, dated as of September 6, 2024, by and between YA II PN, Ltd. and Rezolve AI Limited (incorporated by reference to Exhibit 99.1 of Rezolve's Report on Form 6-K, filed with the SEC on September 13, 2024). |
4.13 |
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Promissory Note, dated as of September 9, 2024, by and among YA II PN, Ltd. and Rezolve AI Limited (incorporated by reference to Exhibit 99.2 of Rezolve’s Report on Form 6-K, filed with the SEC on September 13, 2024). |
4.14 |
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Promissory Note, dated as of November 29, 2024, by and among YA II PN, Ltd. and Rezolve AI Limited (incorporated by reference to Exhibit 99.1 of Rezolve's Report on Form 6-K, filed December 5, 2024). |
4.15 |
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Letter Agreement, dated as of December 17, 2024, by and among the Company, Apeiron Investment Group Ltd. and Bradley Wickens (incorporated by reference to Exhibit 10.2 of Rezolve's Report on Form 6-K, filed December 18, 2024). |
4.16 |
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Form of Deed of Amendment (incorporated by reference to Exhibit 10.3 of Rezolve's Report on Form 6-K, filed December 18, 2024). |
F-122
4.17 |
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Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of Rezolve's Report on Form 6-K, filed December 23, 2024). |
4.18 |
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Loan Agreement, dated January 23, 2025, between Rezolve AI Ltd., as borrower, and Joh. Berenberg, Gossler & Co. KG, as lender (incorporated by reference to Exhibit 10.1 of Rezolve's Report on Form 6-K, filed January 29, 2025. |
4.18 |
|
Purchase Agreement, dated February 4, 2025, by and between Rezolve AI Limited and DBLP Sea Cow Ltd. (incorporated by reference to Exhibit 10.1 of Rezolve's Report on Form 6-K, filed February 7, 2025). |
4.19*
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|
Purchase Agreement, dated February 10, 2026, by and among Rezolve AI plc and the shareholders listed on Schedule 1 thereto and Peter West. |
4.20 |
|
Purchase Agreement, dated February 11, 2025, by and among Rezolve AI Limited, GroupBy Inc, GroupBy International Ltd. and Fortis Advisors LLC, as representative of the sellers party thereto (incorporated by reference to Exhibit 10.1 of Rezolve's Report on Form 6-K, filed February 11, 2025). |
4.21 |
|
Form of Securities Purchase Agreement, dated February 21, 2025, between Rezolve AI Ltd., and each of the investors listed on the Schedule of Buyers attached thereto (incorporated by reference to Exhibit 10.1 of Rezolve's Report on Form 6-K, filed February 25, 2025). |
4.22 |
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Form of Convertible Note (incorporated by reference to Exhibit 10.2 of Rezolve's Report on Form 6-K, filed February 25, 2025). |
4.23 |
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Amendment to the Purchase Agreement, dated February 28, 2025, by and among Rezolve AI Limited and Fortis Advisors LLC, as representative of the sellers party thereto (incorporated by reference to Exhibit 10.1 of Rezolve's Report on Form 6-K, filed March 6, 2025). |
8.1* |
|
List of Subsidiaries of Rezolve AI plc. |
11.1 |
|
Insider Trading Policy (incorporated by reference to Exhibit 11.1 of Rezolve's Shell Company Report on Form 20-F, filed August 21, 2024). |
11.2 |
|
Rezolve AI Limited Code of Ethics (incorporated by reference to Exhibit 11.2 of Rezolve's Shell Company Report on Form 20-F, filed August 21, 2024). |
12.1* |
|
Section 302(a) Certification of Principal Executive Officer. |
12.2* |
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Section 302(a) Certification of Principal Financial Officer. |
13.1** |
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Section 906 Certification of Principal Executive Officer. |
13.2** |
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Section 906 Certification of Principal Financial Officer. |
15.1* |
|
Unaudited Pro Forma Condensed Combined Financial Statements of Rezolve. |
15.2* |
|
Consent of Grassi & Co., CPAs, P.C. |
15.3* |
|
Consent of SingerLewak LLP. |
15.4* |
|
Consent of ba audit gmbh Wirtschaftsprüfungsgesellschaft |
97* |
|
Compensation Recovery Policy. |
101.INS* |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
101.SCH* |
|
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |
104* |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
** Furnished herewith.
F-123
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
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Rezolve AI plc |
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Date: March 30, 2026 |
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By: |
/s/ Daniel Wagner |
|
|
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Daniel Wagner |
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|
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Chief Executive Officer |
F-124