Form 8-K/A
8-K/A — LATTICE SEMICONDUCTOR CORP
Accession: 0001193125-26-420671
Filed: 2026-10-13
Period: 2026-07-27
CIK: 0000855658
SIC: 3674 (SEMICONDUCTORS & RELATED DEVICES)
Item: Financial Statements and Exhibits
Documents
8-K/A — d116673d8ka.htm (Primary)
EX-23.1 (d116673dex231.htm)
EX-99.1 (d116673dex991.htm)
EX-99.2 (d116673dex992.htm)
EX-99.3 (d116673dex993.htm)
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XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K/A
8-K/A (Primary)
Filename: d116673d8ka.htm · Sequence: 1
8-K/A
LATTICE SEMICONDUCTOR CORP true 0000855658 0000855658 2026-07-27 2026-07-27
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 27, 2026
Lattice Semiconductor Corporation
(Exact name of registrant as specified in its charter)
Delaware
000-18032
93-0835214
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
5555 NE Moore Court
Hillsboro, Oregon 97124
(Address of principal executive offices, including zip code)
(503) 268-8000
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Common Stock, $.01 par value
LSCC
NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, 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. ☐
EXPLANATORY NOTE
This Amendment No. 1 to the Current Report on Form 8-K (this “Amendment”) is being filed by Lattice Semiconductor Corporation (“Lattice” or the “Company”) with the U.S. Securities and Exchange Commission for the purpose of amending and supplementing Item 9.01 of that certain Current Report on Form 8-K originally filed by the Company with the U.S. Securities and Exchange Commission on July 27, 2026 (the “Original Form 8-K”), in which the Company reported, among other things, the completion of the Company’s acquisition of AMI TopCo, Inc. (“AMI”) pursuant to that certain Agreement and Plan of Merger, dated as of May 4, 2026, by and among the Company, certain of its wholly owned subsidiaries, AMI and THL AMI Aggregator, LP (solely in its capacity as the representative of the securityholders of AMI) (the “Transaction”).
This Amendment amends the Original Form 8-K to provide the historical audited and unaudited financial statements of the business acquired and the pro forma combined financial information required by Items 9.01(a) and 9.01(b) of Form 8-K that were previously omitted from the Original Form 8-K in reliance on Items 9.01(a)(3) and 9.01(b)(2) of Form 8-K. This Amendment does not amend any other item of the Original Form 8-K, and all other information previously reported in or filed with the Original Form 8-K is hereby incorporated by reference in this Amendment.
Item 9.01
Financial Statements and Exhibits.
(a) Financial statements of businesses or funds acquired.
The audited consolidated financial statements of AMI as of and for the years ended December 31, 2025 and December 31, 2024, and the notes related thereto are filed as Exhibit 99.1 hereto and incorporated by reference herein.
The unaudited condensed consolidated financial statements of AMI as of June 30, 2026 and for the six months ended June 30, 2026 and June 30, 2025, and the notes related thereto are filed as Exhibit 99.2 hereto and incorporated by reference herein.
(b) Pro forma financial information.
The unaudited pro forma condensed combined balance sheets of the Company as of July 4, 2026, and the unaudited pro forma condensed combined statements of operations of the Company for the year ended January 3, 2026 and the six months ended July 4, 2026, in each case giving effect to the Transaction, and the notes related thereto are filed as Exhibit 99.3 hereto and incorporated by reference herein.
(d) Exhibits
Exhibit No.
Description
23.1
Consent of KPMG LLP, independent auditors of AMI.
99.1
Audited consolidated financial statements of AMI as of and for the years ended December 31, 2025 and 2024, and the notes related thereto.
99.2
Unaudited condensed consolidated financial statements of AMI as of June 30, 2026 and for the six months ended June 30, 2026 and June 30, 2025, and the notes related thereto.
99.3
Unaudited pro forma condensed combined balance sheets of the Company as of July 4, 2026, and the unaudited pro forma condensed combined statements of operations of the Company for the year ended January 3, 2026 and the six months ended July 4, 2026, and the notes related thereto.
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
LATTICE SEMICONDUCTOR CORPORATION
Dated: October 13, 2026
By:
/s/ Tracy Feanny
Tracy Feanny
Senior Vice President and General Counsel
EX-23.1
EX-23.1
Filename: d116673dex231.htm · Sequence: 2
EX-23.1
Exhibit 23.1
KPMG LLP
Suite 2000
303 Peachtree
Street, N.E.
Atlanta, GA 30308-3210
Consent of Independent Auditors
We
consent to the incorporation by reference in the registration statements (Nos. 333-176133, 333-182047, 333-188455, 333-195888, 333-220987, 333-224933, 333-227153,
333-232337, 333-253594, 333-271732, 333-284238 and
333-297737) on Form S-8 of Lattice Semiconductor Corporation of our report dated October 13, 2026, with respect to the consolidated financial statements of AMI
TopCo, Inc., which report appears in the Form 8-K/A of Lattice Semiconductor Corporation dated October 13, 2026.
/s/ KPMG LLP
Atlanta, Georgia
October 13, 2026
KPMG
LLP, a Delaware limited liability partnership, and its subsidiaries are part of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
EX-99.1
EX-99.1
Filename: d116673dex991.htm · Sequence: 3
EX-99.1
Exhibit 99.1
AMI TopCo, Inc. and Subsidiaries
Consolidated Financial Statements
December 31, 2025 and 2024
(With Independent Auditors’ Report Thereon)
AMI TopCo, Inc. and Subsidiaries
Consolidated Financial Statements
December 31, 2025 and 2024
Table
of Contents
Pages
Independent Auditors’ Report
1-2
Consolidated Balance Sheets
3
Consolidated Statements of Operations
4
Consolidated Statements of Comprehensive Loss
5
Consolidated Statements of Changes in Equity
6-8
Consolidated Statements of Cash Flows
9
Notes to Consolidated Financial Statements
10-36
Independent Auditors’ Report
To Management
AMI TopCo, Inc.:
Opinion
We have audited the consolidated financial
statements of AMI TopCo, Inc. and its subsidiaries (Successor) and AMI US Holdings, Inc. and its subsidiaries (Predecessor) (collectively, the Company), which comprise the consolidated balance sheets as of December 31, 2025 and 2024
(Successor), and the related consolidated statements of operations, comprehensive loss, changes in equity, and cash flows for the year ended December 31, 2025 and the period from October 18, 2024 to December 31, 2024 (Successor
periods), and the period from January 1, 2024 to October 17, 2024 (Predecessor period), and the related notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2025 and 2024, and the results of its operations and its cash flows for the Successor and Predecessor periods in accordance with U.S. generally accepted accounting principles.
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 Auditors’ Responsibilities for the Audit of the Consolidated 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
As discussed in Note 1 to the consolidated financial statements, effective October 17, 2024, AMI Buyer, Inc., an indirect wholly owned subsidiary of AMI
TopCo, Inc., acquired AMI US Holdings, Inc. and its subsidiaries in a business combination. As a result of the acquisition, the consolidated financial information for the periods after the acquisition is presented on a different cost basis than that
for the period before the acquisition and, therefore, is not comparable. Our opinion is not modified with respect to this matter.
Responsibilities of
Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the consolidated 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 for one year after the date that the consolidated financial statements are available to be
issued.
Page 1
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditors’ 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 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
consolidated financial statements.
In performing an audit in accordance with GAAS, we:
•
Exercise professional judgment and maintain professional skepticism throughout the audit.
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
•
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.
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.
Atlanta, Georgia
October 13, 2026
Page 2
AMI TopCo, Inc. and Subsidiaries (Successor)
Consolidated Balance Sheets as of December 31, 2025 and 2024
Notes
December 31, 2025
December 31, 2024
Assets
Current assets
Cash and cash equivalents
2(n)
$
37,775,933
$
20,842,136
Current portion of restricted cash
2(n)
17,628
544,204
Accounts receivable and contract assets, net of allowance for credit losses of $288,157 and
$385,169 at December 31, 2025 and 2024, respectively
42,851,626
41,133,562
Inventories, net of allowances for obsolete inventory of $6,671 and $98,736 at December 31, 2025
and 2024, respectively
375,597
345,315
Prepaid expenses and other current assets
4
2,870,401
2,494,695
Short-term investments
250,000
—
Total current assets
84,141,185
65,359,912
Restricted cash, net of current portion
2(n)
19,855
12,894
Property and equipment, net
5
3,788,094
4,117,630
Operating lease
right-of-use assets
10
9,050,598
10,625,406
Developed technology, net
6
78,277,108
87,172,234
Trademarks, net
6
11,404,016
12,230,230
Customer relationships, net
6
278,101,238
309,871,802
Goodwill
6
211,887,395
211,887,395
Deferred taxes, net
12
783,314
956,279
Other assets
852,082
945,812
Total assets
$
678,304,885
$
703,179,594
Liabilities and Equity
Current liabilities
Short-term borrowings
7
$
—
$
8,538,205
Current portion of long-term debt, net of current unamortized deferred financing costs
7
1,367,601
854,700
Current portion of operating lease liabilities
10
2,071,424
1,925,120
Current portion of contract liabilities
13
25,209,733
20,557,359
Accounts payable
5,796,212
4,602,142
Income tax payable
12
5,393,525
3,215,141
Accrued expenses and other current liabilities
8
23,984,407
25,622,921
Total current liabilities
63,822,902
65,315,588
Long-term debt, net of unamortized deferred financing costs and less current portion
7
263,607,818
265,987,615
Deferred tax liability
26,450,461
36,429,214
Operating lease liabilities, net of current portion
10
7,363,747
9,045,881
Contract liabilities
13
4,777,140
2,533,377
Other liabilities
9
2,154,807
1,886,354
Total liabilities
368,176,875
381,198,029
Shareholders’ equity
Preferred stock, $.01 par value, 1,000 shares authorized, none issued and outstanding
$
—
$
—
Series A, Common stock, $0.01 par value, 360,000 shares authorized, 337,185.40 issued and
outstanding as of December 31, 2025 and 2024
3,372
3,372
Series B, Common stock, $0.01 par value, 40,000 shares authorized, 70.13 issued and outstanding as
of December 31, 2025 and 2024
1
1
Additional paid in capital
339,790,450
337,510,348
Accumulated deficit
(29,323,471
)
(15,309,078
)
Accumulated other comprehensive deficit
(342,342
)
(223,078
)
Total equity
310,128,010
321,981,565
Commitments and contingencies
17
Total liabilities and equity
$
678,304,885
$
703,179,594
See accompanying notes to consolidated financial statements.
Page 3
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Consolidated Statements of Operations
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor
period), and from January 1, 2024 to October 17, 2024 (Predecessor period)
Notes
Successor Period
For the year ended
December 31, 2025
Successor Period
from October 18, 2024
to December 31, 2024
Predecessor Period
from January 1, 2024
to October 17, 2024
Revenues
13
$
194,702,004
$
36,029,101
$
137,815,312
License
106,467,314
20,596,763
75,149,643
Professional services
55,921,942
10,992,311
38,857,852
Hardware
32,312,748
4,440,027
23,807,817
Cost of revenue (exclusive of depreciation and amortization)
Cost of product
24,052,672
3,611,737
19,358,345
Cost of services (exclusive of depreciation and amortization)
41,745,470
7,781,457
34,561,728
Operating expenses
Research and development expenses
36,465,055
7,044,003
26,580,550
Selling, general and administrative expenses
36,768,678
8,321,147
34,006,677
Transaction costs
—
9,024,309
2,143,823
Depreciation and amortization
43,833,750
9,108,480
12,322,995
Interest expense, net
14
27,046,373
5,935,806
17,155,212
Other (income), net
15
(368,838
)
(272,605
)
(156,347
)
Total costs and expenses
209,543,160
50,554,334
145,972,983
Loss before income taxes
(14,841,157
)
(14,525,233
)
(8,157,671
)
(Benefit) provision for income tax
12
(826,764
)
(2,998,609
)
4,687,365
Net loss of AMI TopCo, Inc. and Subsidiaries and AMI US Holdings Inc. and
Subsidiaries
$
(14,014,393
)
$
(11,526,625
)
$
(12,845,036
)
See accompanying notes to consolidated financial statements.
Page 4
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Consolidated Statements of Comprehensive Loss
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
Successor Period
For the year ended
December 31, 2025
Successor Period
from October 18, 2024
to December 31, 2024
Predecessor Period
from January 1, 2024
to October 17, 2024
Net loss attributable to AMI TopCo, Inc. and Subsidiaries and AMI US Holdings Inc. and
Subsidiaries
$
(14,014,393
)
$
(11,526,625
)
$
(12,845,036
)
Actuarial (loss) gain including settlements on retirement benefit plans, net of taxes
(43,571
)
2,462
(155,673
)
Foreign currency translation adjustments
(75,693
)
(225,540
)
(127,749
)
Other comprehensive (loss)
(119,264
)
(223,078
)
(283,422
)
Total comprehensive (loss)
$
(14,133,657
)
$
(11,749,703
)
$
(13,128,458
)
See accompanying notes to consolidated financial statements.
Page 5
AMI TopCo, Inc. and Subsidiaries (Successor)
Consolidated Statements of Changes in Equity
For the year ended December 31, 2025
Series A Common Stock
Series B Common Stock
Additional Paid-in
capital
Accumulated
deficit
Accumulated Other
Comprehensive deficit
Total equity
No. of shares
Par value
No. of shares
Par value
Balance as at December 31, 2024
337,185.40
$
3,372
70.13
$
1
$
337,510,348
$
(15,309,078
)
$
(223,078
)
$
321,981,565
Share-based compensation expense
—
—
—
—
2,280,102
—
—
2,280,102
Net (loss)
—
—
—
—
(14,014,393
)
—
(14,014,393
)
Other comprehensive (loss)
—
—
—
—
—
—
(119,264
)
(119,264
)
Balance as at December 31, 2025
337,185.40
$
3,372
70.13
$
1
$
339,790,450
$
(29,323,471
)
$
(342,342
)
$
310,128,010
See accompanying notes to consolidated financial statements.
Page 6
AMI TopCo, Inc. and Subsidiaries (Successor)
Consolidated Statements of Changes in Equity
For the period from October 18, 2024 to December 31, 2024
Series A Common Stock
Series B Common Stock
Additional Paid-in
capital
Accumulated
deficit
Accumulated Other
Comprehensive deficit
No. of shares
Par value
No. of shares
Par value
Total equity
Balance as at October 18, 2024
337,185.40
$
3,372
70.13
$
1
$
337,252,156
$
(3,782,453
)
$
—
$
333,473,075
Share-based compensation expense
—
—
—
—
258,192
—
—
258,192
Net (loss)
—
—
—
—
—
(11,526,625
)
—
(11,526,625
)
Other comprehensive (loss)
—
—
—
—
—
—
(223,078
)
(223,078
)
Balance as at December 31, 2024
337,185.40
$
3,372
70.13
$
1
$
337,510,348
$
(15,309,078
)
$
(223,078
)
$
321,981,565
See accompanying notes to consolidated financial statements.
Page 7
AMI US Holdings, Inc. and Subsidiaries (Predecessor)
Consolidated Statements of Changes in Equity
For the period from January 1, 2024 to October 17, 2024
Equity shares
Additional Paid-in
capital
Accumulated
deficit
Accumulated Other
No. of shares
Par value
Comprehensive Income/(Deficit)
Total equity
Balance as at December 31, 2023
1,001
$
1
$
88,634,216
$
(55,726,756
)
$
420,396
$
33,327,855
Share-based compensation expense
—
—
515,903
—
—
515,903
Net (loss)
—
—
—
(12,845,036
)
—
(12,845,036
)
Other comprehensive (loss)
—
—
—
—
(283,422
)
(283,422
)
Balance as at October 17, 2024
$
1,001
$
1
$
89,150,119
$
(68,571,792
)
$
136,974
$
20,715,300
See accompanying notes to consolidated financial statements.
Page 8
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Consolidated Statements of Cash Flows
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor
period), and from January 1, 2024 to October 17, 2024 (Predecessor period)
Successor Period
For the year ended
December 31, 2025
Successor Period
from October 18, 2024
to December 31, 2024
Predecessor Period
from January 1, 2024
to October 17, 2024
Cash flows from operating activities
Net loss
$
(14,014,393
)
$
(11,526,625
)
$
(12,845,036
)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization
43,833,750
9,108,480
12,322,995
Deferred income taxes
(9,805,789
)
(4,874,118
)
(45,737
)
Share based compensation expense
2,280,102
258,192
515,903
Allowance for credit losses
(83,700
)
12,604
—
Amortization of debt issuance cost
1,382,399
284,055
1,974,870
23,592,369
(6,737,412
)
1,922,995
Changes in operating assets and liabilities
Accounts receivable and contract assets
(1,634,364
)
1,254,888
(3,737,165
)
Operating lease
right-of-use assets, prepayments, other current assets and other assets
1,191,177
420,789
395,439
Inventories
(30,282
)
101,212
361,355
Accounts payable
1,194,070
(1,070,700
)
3,679,372
Operating lease liability, accrued expenses, other current liabilities,
pension benefits and
other liabilities
(2,949,464
)
(12,791,672
)
24,470,610
Income tax payable
2,178,383
2,400,323
(851,131
)
Contract liabilities
6,896,137
(652,650
)
732,367
Net cash provided by (used in) operating activities
30,438,026
(17,075,221
)
26,973,843
Cash flows from investing activities
Purchases of property and equipment
(1,910,652
)
(594,711
)
(1,182,722
)
Payment for internally developed intangible assets (including intangibles assets under
development)
—
—
(1,347,198
)
Repayment of short-term borrowings for acquisition
—
(167,975,000
)
—
Acquisition of subsidiary, net of cash acquired
—
(400,425,213
)
—
Purchases of short-term investments
(250,000
)
—
—
Payment of accrued interest on long-term loan for acquisition
—
(874,621
)
—
Net cash (used in) investing activities
(2,160,652
)
(569,869,545
)
(2,529,920
)
Cash flows from financing activities
Proceeds from capital contribution
—
333,473,075
—
Proceeds from revolver loan
4,000,000
9,725,000
—
Repayments of revolver loan
(13,725,000
)
—
—
Proceeds from long-term borrowings
—
275,000,000
—
Payment of financing cost
—
(9,628,535
)
(1,004,875
)
Repayment of long-term debt
(2,062,500
)
—
(13,000,000
)
Net cash (used in) provided by financing activities
(11,787,500
)
608,569,540
(14,004,875
)
Net increase in cash and cash equivalents and restricted cash
16,489,874
21,624,774
10,439,047
Effect of exchange rate changes on cash and cash equivalents and restricted cash
(75,693
)
(225,540
)
(127,749
)
Cash and cash equivalents and restricted cash at the beginning of period
21,399,234
—
25,152,427
Cash and cash equivalents and restricted cash at the end of period
$
37,813,416
$
21,399,234
$
35,463,725
Cash payments for income taxes
$
(5,402,741
)
$
(1,325,766
)
$
(3,671,007
)
Cash payments for interest expenses
$
(26,223,054
)
$
—
$
(15,200,171
)
See accompanying notes to consolidated financial statements.
Page 9
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
1 Organization and nature of operations
AMI TopCo, Inc., along with its subsidiaries, is headquartered in Georgia, United States and is engaged in the design, development, sale, and support of
dynamic firmware solutions for the global computer marketplace. The Company sells its products, principally to Original Design Manufacturers (“ODMs”), Original Equipment Manufacturers (“OEMs”), and Cloud Service Providers
(“CSPs”) to the data center, cloud, embedded, and client markets, spanning key global markets including North America, Asia, and Europe.
AMI
TopCo, Inc. (“Company”), a Delaware corporation, was incorporated on August 23, 2024 to acquire, through its subsidiary AMI Buyer, Inc., from AMI CaymanCo Ltd (“Seller”), the outstanding common stock of AMI US Holdings, Inc.,
which further holds a controlling stake in seven entities along with their branches in Japan, Korea, and Taiwan (“AMI”).
On August 30, 2024,
AMI Buyer, Inc. (the “Acquirer”) entered into a Stock Purchase Agreement with the Seller for transfer of 100% of the outstanding common stock of AMI US Holdings, Inc., a Delaware corporation (“Acquiree” and the
“Predecessor”). On the Closing Date, October 17, 2024, AMI Buyer, Inc. completed the acquisition for a final purchase price of $604.7 million, which resulted in change of control over the Acquiree and all of its
subsidiaries. Upon consummation of the Closing of the Acquisition, the Company through its ownership in AMI Buyer, Inc. became the Holding Company of (a) AMI US Holdings, Inc.; (b) AMI New US LLC; (c) AMI HK HoldCo Limited;
(d) American Megatrends International GmbH; (e) American Megatrends International, LLC; (f) American Megatrends Information Technology (Kunshan) Co., Ltd.; (g) AMI India US LLC; (h) American Megatrends International India Pvt.
Ltd. and their branches. The Company along with all these acquired entities and their branches is referred to as “Successor” and/or “Group” and each separate entity is individually referred to as “Group Entity”.
The Acquisition established a new accounting basis for AMI. The fair value of AMI’s assets and liabilities were recorded as of the Acquisition Date
in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (ASC) Topic 805, Business Combinations. Those amounts differed materially from the recorded values of AMI’s assets and
liabilities reflected in its historical consolidated financial statements of AMI Cayman HoldCo Ltd., the previous holding company under AMI CaymanCo Ltd. As a result of the application of the acquisition method of accounting, the
Company’s consolidated balance sheets and consolidated statements of operations subsequent to October 17, 2024, will not be comparable in many respects to AMI’s consolidated balance sheets and consolidated statements of operations
prior to the Acquisition.
Accordingly, the consolidated financial statements for the financial year ended December 31, 2025 represent the results of
operations and the financial position of the Company whereas the comparative figures for the preceding financial year ended December 31, 2024 are shown as comprising of Predecessor period (January 1, 2024 to October 17, 2024) representing the
results of operations of AMI US Holdings, Inc. and subsidiaries prior to the Acquisition and the Successor period (October 18, 2024 to December 31, 2024) representing the results of operations and the financial position of the Company
subsequent to the completion of the acquisition, and have been separated by a black line within these consolidated financial statements.
The acquisition
was treated as a business combination under ASC 805, Business Combinations, and the identifiable assets acquired, and liabilities assumed were measured at the acquisition date fair value under ASC 820, Fair Value Measurement. See note
3 for further details regarding the acquisition.
As used throughout the consolidated financial statements, predecessor refers to AMI US Holdings, Inc.
and subsidiaries, successor refers to AMI TopCo, Inc. and subsidiaries as detailed in note 2(a) below and “we,” “our,” or “the Company” refers to both predecessor and successor entities.
2 Summary of significant accounting policies
(a)
Basis of presentation and principles of consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S.
generally accepted accounting principles (“U.S. GAAP”). The accompanying consolidated financial statements reflect all adjustments that management considers necessary for a fair presentation of the results of operations for these
periods. The Company’s reporting currency is United States Dollar (‘$’ or ‘USD’).
Page 10
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
The accompanying consolidated financial statements have been prepared on a consolidated basis and reflect the
financial statements of AMI TopCo, Inc., and its majority owned and controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements include the accounts of the following entities:
For the year-ended December 31, 2025 and the period from October 18, 2024 to December 31, 2024 (Successor periods)
i.
AMI TopCo Inc.
ii.
AMI Intermediate II, Inc.
iii.
AMI Intermediate, Inc.
iv.
AMI Buyer, Inc.
v.
AMI US Holdings, Inc.
vi.
AMI New US LLC
vii.
AMI HK HoldCo Limited
viii.
American Megatrends International GmbH
ix.
American Megatrends International, LLC
x.
American Megatrends Information Technology (Kunshan) Co., Ltd.
xi.
AMI India US LLC
xii.
American Megatrends International India Pvt. Ltd.
From January 1, 2024 to October 17, 2024 (Predecessor period)
i.
AMI US Holdings, Inc.
ii.
AMI New US LLC
iii.
AMI HK HoldCo Limited
iv.
American Megatrends International GmbH
v.
American Megatrends International, LLC
vi.
American Megatrends Information Technology (Kunshan) Co., Ltd.
vii.
AMI India US LLC
viii.
American Megatrends International India Pvt. Ltd.
(b) Use of estimates
The preparation of the consolidated
financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, which affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenue and expenses in the consolidated financial statements and accompanying notes. Estimates are based on historical experience, where applicable, and other assumptions which management believes
are reasonable under the circumstances. On an ongoing basis, the Company evaluates its estimates, including those related to the measurement of lease liabilities and right of use assets applied in lease accounting, revenue recognition on fixed price
service contracts, fair values of other financial instruments, measurement of defined benefit obligations, valuation of intangible assets and goodwill, useful lives of property and equipment, useful lives of intangible assets, inventory, allowance
for expected credit losses, valuation allowance of deferred tax assets, income tax uncertainties and other contingencies and commitments. These estimates are inherently subject to judgment and actual results could differ from those estimates.
Although these estimates and assumptions are based upon management’s best knowledge of current events and actions, actual results could differ from
these estimates.
Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
(c) Functional currency and translation
The
Company’s consolidated financial statements are reported in USD. The functional currency of each entity in the Company is its respective local currency except, for AMI HK HoldCo Limited where the local currency is not representative of the
functional currency and therefore USD is the functional currency. The translation of the functional currencies of the respective subsidiaries into USD is performed for balance sheet accounts using the exchange rates in effect as of the balance sheet
date and for revenues and expense accounts using a monthly average exchange rate prevailing during the respective periods.
Page 11
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
The gains or losses resulting from such translation are reported as currency translation adjustments under
other comprehensive loss, net, under accumulated other comprehensive deficit as a separate component of equity.
Transactions of each subsidiary in
currencies other than the subsidiary’s functional currency are translated into the respective functional currencies at the average monthly exchange rate prevailing during the period of the transaction. Monetary assets and liabilities of each
subsidiary denominated in currencies other than the subsidiary’s functional currency are translated into their respective functional currency at the rates of exchange prevailing at the balance sheet date. The gains or losses resulting from
foreign currency transactions are included in the consolidated statements of operations.
(d) Allowance for credit losses
The Company records an allowance for credit losses (ACL) under Subtopic 326-20 Financial Instruments – Credit
Losses-measured at amortized cost for the current expected credit losses (CECL) inherent in its financial assets measured at amortized cost and contract assets. The ACL is a valuation account deducted from the amortized cost basis to present the net
amount expected to be collected. The estimate of expected credit losses includes expected recoveries of amounts previously written off as well as amounts expected to be written off.
The estimate of expected credit losses is based on the Company’s historical loss experience, adjusted for current and reasonable and supportable
forecasts of economic conditions and other pertinent factors affecting the Company’s customers such as known credit risk or industry trends. The allowance is estimated over the contractual term of the financial asset adjusted for expected
prepayments. The Company does not have any off-balance-sheet credit exposures.
Subsequent changes (favorable and
unfavorable) in expected credit losses each period are recognized immediately in net income/loss as a credit loss expense or a reversal of credit loss expense.
Trade accounts receivable
The Company uses an aging
schedule to estimate the ACL for trade accounts receivable. This method categorizes trade receivables into different groups based on industry and the number of days past due. Past due status is measured based on the number of days since the payment
due date. The trade receivables are evaluated individually for expected credit losses if they no longer share similar risk characteristics.
The Company
maintains an allowance for credit losses for estimated losses incurred in its accounts receivable. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and the
Company’s customers’ financial condition, payment patterns and current receivables aging. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is
considered remote. The Company does not have any off-balance sheet credit exposure related to its customers.
Contract assets
The Company determines the ACL for
contract assets using estimates of probability of customer default and loss given default percentages applied to estimated exposure at default.
When
measuring expected credit losses, the Company considers customers’ historical payment patterns, customers’ credit ratings as published by credit rating agencies, and current and reasonable and supportable forecasts of economic conditions
in estimating customers’ probability of default, exposure at default and estimated loss given default. The Company collectively evaluates contract assets with similar industry risk and credit risk characteristics. In addition, the Company
evaluates the collectability of contract assets on an individual basis when they no longer have similar risk characteristics to determine if any are deemed uncollectible. Contract assets are written off against the allowance for credit losses when
deemed uncollectible.
Page 12
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
(e) Trade accounts receivable
Trade accounts receivable are recorded at the invoiced amount, net of an ACL, and do not bear interest. Amounts collected on trade accounts receivable are
included in the net cash provided by operating activities in the consolidated statements of cash flows. The payment terms are governed by the contract signed with the clients and are in the range of 30 days to 90 days. The Company also evaluates the
creditworthiness of clients as necessary, as described above.
(f) Revenue recognition
The Company earns revenue primarily from the licensing of BIOS or UEFI firmware products and Baseboard Management Controller (BMC) solutions and providing
support services to ODMs, OEMs, and CSPs. In addition, Company generates revenue from the sale of hardware products and other professional software engineering services.
Pursuant to ASC 606, Revenue from Contracts with Customers, the Company recognizes revenue at the time of transfer of control 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. Under this standard, revenue is based on a contract with a determinable transaction price and
distinct performance obligations with probable collectability. Revenues cannot be recognized until the performance obligation(s) are satisfied and control is transferred to the customer. This process involves identifying the customer contract,
determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when the performance obligations have been satisfied.
Revenue is recognized net of any taxes collected, which are subsequently remitted to governmental authorities.
i. License revenue
The Company generates revenue from the license of BIOS/UEFI, BMC, or other firmware product source codes embedded in a silicon vendor’s chipset to OEMs,
ODMs and CSPs under non-cancelable agreements provided for a finite term. These arrangements are entered into during various stages of the development phase of the chipsets that the firmware is embedded in and
provide the customer with access to the Company’s firmware source code for their own product development purposes. The contracts include maintenance and support services to develop and customize the source code for the customers’ needs.
These arrangements include the obligation to stand ready to provide frequent updates and enhancements based on changes required by the silicon vendor, the operating system provider, or the customer. The fees for license, maintenance and support
services are fixed and invoiced in advance annually or per the terms of the agreement.
Certain license arrangements include sales or usage-based
royalties in exchange for the right to distribute products that include the chipsets that are embedded with the Company’s firmware source code. These royalties are based on a price per unit sold and are typically variable consideration in
nature. In certain arrangements, a minimum volume of royalties are guaranteed over the course of the contract, which represents fixed consideration. Royalty fees are typically billed quarterly based on reporting from the customer regarding sales and
usage quantities.
Determining whether products and services are considered distinct performance obligations that should be accounted for separately
versus together requires significant judgment. The Company has concluded that (1) the licenses to access and distribute our source code in these contracts are not distinct from our obligation to provide unspecified updates to the source code
throughout the license term, because those promises represent inputs to a single, combined performance obligation, and (2) the rights to unspecified updates and enhancements are accounted for as part of the single performance obligation that
includes the licenses, updates, and technical support, because such rights are provided for the same period of time and have the same time-based pattern of transfer to the customer. In reaching this conclusion, the Company has considered the nature
of the obligation to customers, which is to provide an ongoing right to use the most up-to-date version of the firmware that protects the product from security,
compatibility and operability issues due to changes in the hardware and operating systems over time. The Company is required to provide on-going services to maintain the proper security, compatibility and
operability of the licensed source code within those chipsets so that the products continue to function to the customer’s standards.
Due to the
significance and criticality of the software updates and enhancements provided during the maintenance term, the license, update and support services are not distinct in the context of the contract and are considered a single performance obligation
whose fixed consideration is recognized on a straight-line basis over the term of the contract, consistent with the pattern of transfer.
Page 13
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
To the extent the royalties are variable in nature, given that they relate to the license of intellectual
property and the license of intellectual property is the predominant item to which the royalty relates, we recognize sales- or usage-based royalties at the later of when the sale or usage occurs or the performance obligation is satisfied or
partially satisfied.
ii. Professional services revenue
Time and material contracts
Revenue generated from time-and-material based contracts is recognized as the related services are performed. The Company’s right to consideration corresponds directly with the value to the
customer of the entity’s performance completed to date. As such, the Company recognizes revenue in the amount to which the entity has a right to invoice for those services performed, in accordance with the practical expedient in ASC 606-10-55-18.
Fixed price contracts
Revenue generated from fixed price contracts where performance obligations and control are satisfied over a period of time like technology
integration, system implementations and application development is recognized based on progress toward completion of the performance obligation using a percentage - of - completion (POC) method; efforts or costs expended have been used to measure
progress toward completion as there is a direct relationship between input and productivity. Any revision in the estimate of costs/hours to complete would result in an increase or decrease in revenue and such changes are recorded in the period in
which they are identified. Contract losses are determined to be the amount by which the estimated direct and incremental cost to complete exceeds the estimated future revenues that will be generated by the contract. These losses are included in
research and development and support expenses and recorded in accrued expenses and other current liabilities.
iii. Hardware revenue
The Company sells backplane controllers, MegaRAC development kits, and AST boards with BMC chips to OEM and ODM customers. The Company recognizes revenue when
control of the promised goods transfers to a customer, based on the shipping terms defined in purchase orders, in an amount that reflects the consideration which the Company expects to be entitled in exchange for transferring those products. Such
contracts do not include a significant financing component.
Shipping and handling costs associated with outbound freight, after control over a product
has transferred to a customer, are accounted for as a fulfillment cost and are included in other operating expenses as incurred.
The Company adjusts the
amounts of revenue for expected sales allowances, returns and claims based upon historical experience, however, these amounts are immaterial.
iv.
Contracts with Multiple Performance Obligations
When a sales arrangement contains multiple performance obligations, such as services, hardware and
license of software or combinations of each of them, revenue for each element is based on a five step approach as defined above. To the extent a contract includes multiple promised deliverables, judgment is applied to determine whether promised
deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct
performance obligations or series of distinct performance obligations, consideration is allocated among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which Company would sell a
promised good or service separately to the customer.
The Company determines the standalone selling prices based on its overall pricing objectives, taking
into consideration market conditions and other factors, including the value of its contracts, the software services sold, customer size and complexity, and the number and types of users under the contracts.
Page 14
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
Costs to obtain customer contracts
The Company has adopted the practical expedient to expense costs to obtain a contract if the amortization period for the assets that the Company otherwise
would have recognized is one year or less. These costs incurred are immaterial to the consolidated financial statements.
Contract assets and
liabilities
Contract assets primarily represent revenue earnings over time for which the Company does not presently have an unconditional right to
payment (generally not yet billable) based on the terms of the contracts. Contract assets are reported net of expected credit losses.
Contract
liabilities consist of amounts invoiced or paid by the Company’s customers for which the associated performance obligations have not been satisfied and revenue has not been recognized based on the Company’s revenue recognition criteria.
Contract assets and contract liabilities are reported in a net position on an individual contract basis at the end of each reporting period. Contract
assets are classified as current in the consolidated balance sheet when the Company expects to complete the related performance obligations and invoice the customers within one year of the balance sheet date, and as long-term when the Company
expects to complete the related performance obligations and invoice the customers more than one year out from the balance sheet date. Contract liabilities are classified as current in the consolidated balance sheet when the revenue recognition
associated with the related customer payments and invoicing is expected to occur within one year of the balance sheet date and as long-term when the revenue recognition associated with the related customer payments and invoicing is expected to occur
in more than one year from the balance sheet date.
(g) Inventories
Inventories primarily represent items of finished goods / hardware that are procured to fulfill customer contracts. Inventory is stated at the lower of cost
and net realizable value. Cost is determined by using the first-in, first-out method (FIFO) for all inventories. Inventory valuation reserves for obsolete and
slow-moving inventory are estimated based on a detailed analysis of inventory aging, historical usage trends, and expected future demand.
(h) Property
and equipment
Property and equipment represent the costs of furniture and fixtures, office equipment, computer equipment and networking equipment, and
leasehold improvements. Cost also includes any costs necessarily incurred to bring the asset to the condition and location necessary for its intended use.
Property and equipment are stated at cost, less accumulated depreciation and impairment losses. Depreciation is calculated using the straight-line method over
the assets’ estimated useful lives as follows:
Asset description
Asset life (in years)
Computer and networking equipment
3 to 5
Furniture, fixtures, and office equipment
5
Leasehold improvements
Lower of lease term or the estimated useful life of the improvement (ranging from 2 to 12 years)
Leasehold improvements related to office facilities are depreciated over the shorter of the lease term or the estimated useful
life of the improvement.
Subsequent expenditure related to property and equipment which is deemed to extend the useful economic life of an asset are
capitalized. Maintenance and repairs that do not improve efficiency or extend the estimated economic life of an asset are expensed as incurred. The gain or loss on disposal/write off of an item of property and equipment (calculated as the difference
between the carrying amount of the item and net proceeds from disposal) is recognized in the consolidated statements of operations under the caption ‘other (income), net’.
Page 15
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
(i) Leases
A lease is a contract that contains right to control the use of an identified asset for a period of time in exchange for consideration. The Company is a lessee
in operating leases for office space and accommodation for certain of its employees. The Company accounts for leases in accordance with Topic 842, Leases.
Right-of-use assets (ROU assets) represent the Company’s right to
control the underlying assets under lease, and the lease liability is the obligation to make the lease payments related to the underlying assets under lease. ROU assets are recognized on the lease commencement date and measured initially based on
the lease liability adjusted for any initial direct costs, prepaid rent, and lease incentives. ROU assets are depreciated over the lease term or useful life of the
right-of-use asset, whichever is less.
Subsequently, ROU assets are
measured at cost less any accumulated depreciation, accumulated impairment losses, if any, and adjusted for any remeasurement of the lease liability.
The
lease liabilities are initially measured at the present value of the unpaid lease payments discounted using the Company’s local incremental borrowing rate. The lease payments included in the measurement of the lease liabilities are comprised
of fixed payments less any lease incentives, variable lease payments that depends on an index or a rate, the exercise price of a purchase option if the Company is reasonably certain to exercise the option, and any payment of penalties for
terminating the lease, if the lease term reflects the Company exercising an option to terminate the lease. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the
carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or modification, if any.
The Company
monitors events or changes in circumstances that require a reassessment of one of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU
asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the ROU asset is reduced to zero and the remainder of the adjustment is recorded in profit or loss.
Variable lease payments associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which
those payments are assessed occurs. Variable lease payments are presented as operating expense in the Company’s consolidated statements of operations in the same line item as expense arising from fixed lease payments (operating leases).
The Company has elected to not recognize leases with a lease term of 12 months or less in the consolidated balance sheets and lease costs for those short-term leases are recognized on a straight-line basis over the lease term in the consolidated statements of operations.
For all asset classes, the Company has elected the lessee practical expedient to combine lease and non-lease
components and account for the combined unit as a single lease component in case there is no separate payment defined under the contract.
Operating lease
right-of-use assets are presented as operating lease right of use assets on the consolidated balance sheets. The current portion of operating lease liabilities is
included in current portion of operating lease liabilities, and the long-term portion is presented separately as operating lease liabilities, net of current portion on the consolidated balance sheets.
(j) Business Combination
The Company accounts for its
business combinations under the acquisition method of accounting. The Company records the assets acquired and liabilities assumed, including any contingent consideration, based on their estimated fair values at the date of acquisition. The excess of
the purchase price for acquisitions over the fair value of the net assets acquired, including other intangible assets, is recorded as goodwill.
Page 16
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities
assumed at the acquisition date as well as contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition
date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.
Upon the conclusion of
the measurement period, any subsequent adjustments are recorded to the Company’s consolidated statements of operations.
Identifiable intangible
assets acquired in a business combination are recognized separately from goodwill when they meet the contractual-legal or separability criteria and are measured at acquisition-date fair value.
Transaction costs are acquisition-related expenses that the acquirer incurs to affect a business combination. These costs include finder’s fees;
advisory, legal, accounting, valuation, and other professional or consulting fees; general administrative expenses; and the costs of registering and issuing debt and equity securities. The Company accounts for acquisition-related costs as expenses
in the periods in which the costs are incurred and the services are received, except for equity and debt issuance costs.
During 2024, transaction costs
incurred by the Acquirer that were contingent upon the consummation of the Acquisition have been recorded in the Successor Period. Acquisition-related expenses incurred by the acquiree prior to acquisition are recorded in the Predecessor Period
consolidated statement of operations.
The costs of issuing debt or equity securities are recognized in accordance with other applicable standards. Debt
issuance costs are reported in the consolidated balance sheet as a direct deduction from the face amount of that debt.
(k) Goodwill
Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually
identified and separately recognized. Our goodwill is contained within two reporting units, which are our product lines: Boot Firmware (“BFG”) and Manageability and Security (“MSG”). Goodwill is not amortized but is instead
tested for impairment annually during the fourth quarter and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. When evaluating whether goodwill is impaired, we make a qualitative assessment
to determine if it is more likely than not that a reporting unit’s fair value is less than the carrying amount. If the qualitative assessment determines that it is more likely than not that the fair value of a reporting unit is less than the
carrying amount, the fair value of a reporting unit is compared with its carrying value (including goodwill). If the fair value of a reporting unit is less than its carrying value, then goodwill impairment exists for that reporting unit. The
impairment loss, if any, is recognized for the amount by which the carrying value exceeds the fair value. If the fair value of a reporting unit exceeds its carrying value, no further impairment analysis is needed. Based on our annual qualitative
impairment test, we concluded that it is not more likely than not that the fair value of each reporting unit is less than its carrying amount.
(l)
Intangible assets
The identifiable intangible assets acquired consist primarily of trademarks, developed technology, and customer relationships. The
trademarks and developed technology have been fair valued, based on the ‘relief from royalty’ method. The relief-from-royalty method is a variation of an income approach that measures the fair value of an asset using a cost-savings
concept. This is based on the notion that, if the entity did not own the asset, it would pay a royalty to a third party for the right to use that asset. Therefore, the value of the asset is the fair value of the cost savings of not paying a royalty
to a third party.
Customer relationships were valued using the multi-period excess earnings method, which estimates fair value based on the present value
of the after-tax cash flows attributable to existing customer relationships after deducting contributory asset charges associated with supporting assets.
The Company also capitalizes certain technology-related development costs incurred in connection with developing technology when the initial design phase is
completed and commercial and technological feasibility has been established. Any development cost incurred before technological feasibility is established is expensed as incurred as research and development and support expenses. Technological
feasibility is established upon completion of a detailed design program or, in its absence, completion of a working model. Capitalized technology costs include only (i) external direct costs of materials and services utilized in developing or
obtaining software and technology and (ii) compensation and related benefits for employees who are directly associated with the project. These capitalized technology-related development costs are included in intangible assets.
Page 17
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
Intangible assets with definite lives are amortized over the estimated useful lives and are reviewed for
impairment, if indicators of impairment arise. The evaluation of impairment is based upon a comparison of the carrying amount of the intangible asset with the estimated future undiscounted net cash flows expected to be generated by the asset.
If estimated future undiscounted cash flows are less than the carrying amount of the asset, the asset is considered impaired. The impairment expense is determined by comparing the estimated fair value of the intangible asset to its carrying value,
with any shortfall from fair value recognized as an expense in the current period. The intangible assets with definite lives are amortized over the estimated useful lives of the assets as under:
Asset description
Asset life (in years)
Developed technology
10
Customer relationships
10
Trademarks
15
(m) Impairment of long-lived assets
The Company evaluates its held-and-used long-lived assets for indicators of
possible impairment when events or changes in circumstances indicate the carrying amount of an asset or asset group (collectively, the “asset group”) may not be recoverable. The Company measures the recoverability of the asset group by
comparing the carrying amount of such asset group to the future undiscounted cash flows it expects the asset group to generate. If the Company considers the asset group to be impaired, the impairment to be recognized equals the amount by which the
carrying value of the asset group exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.
There has been no impairment during the year ended December 31, 2025, the Successor Period ended December 31, 2024, or the Predecessor Period ended October 17, 2024.
(n) Cash and cash equivalents
Cash and cash equivalents
primarily represent cash and money market instruments in bank accounts. The Company considers all highly liquid investments and short-term deposits with an original maturity of three months or less, when purchased, to be cash equivalents.
Restricted cash
Restricted cash consists of funds that
are contractually restricted as to usage or withdrawal due to a contractual agreement with a lender for the repayment of borrowings.
The position of cash
and cash equivalents and restricted cash as of Balance Sheet Date, is as follows:
As of December 31, 2025
As of December 31, 2024
Cash and bank balances
$
37,775,933
$
20,842,136
Restricted cash – current
17,628
544,204
Restricted cash – non-current
19,855
12,894
Total
$
37,813,416
$
21,399,234
Page 18
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
(o) Income taxes
The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences
attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their tax bases and for all operating loss and tax credit carryforwards, if any. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax laws or rates is recognized
in the consolidated statements of operations in the period that includes the enactment date. If it is determined that it is more likely than not that future tax benefits associated with a deferred income tax asset will not be realized, a valuation
allowance is recorded.
The Company regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future
taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company’s judgment regarding future profitability may change due to many factors, including future market conditions and
the ability to successfully execute the business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, the Company’s income tax expense would increase or decrease in the period in which
the assessment is changed.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained.
Recognized income tax positions are measured as the largest amount that is greater than 50 percent likely of being realized upon settlement.
The
Company follows the specific identification approach for releasing stranded tax effects from accumulated other comprehensive income (“AOCI”) upon recognition of these AOCI items in the consolidated statements of operations.
(p) Employee benefits
Contributions to defined
contribution plans are charged to consolidated statements of operations in the period in which services are rendered by the covered employees. Current service costs for defined benefit plans are accrued in the period to which they relate. The
liability in respect of defined benefit plans is calculated annually by the Company using the projected unit credit method. Prior service cost, if any, resulting from an amendment to a plan is recognized and amortized over the remaining period of
service of the covered employees.
The Company records annual amounts relating to its defined benefit plans based on calculations that incorporate various
actuarial and other assumptions, including discount rates, mortality, compensation increases and turnover rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when
it is appropriate to do so. The effect of modifications to those assumptions is recorded in other comprehensive income (loss) and amortized to net periodic cost over future periods using the corridor method. The Company believes that the
assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions.
(q) Share-based
payment transactions
The Company recognizes and measures compensation expense for all share-based awards based on the grant date fair value. The
Company determines fair value attributable to respective classes of shares using an option pricing model. The model allocates fair value to the respective classes of shares using a waterfall model stipulated under the equity arrangement of
shareholders. During the year ended December 31, 2025 and the 2024 Successor period, the grant date fair value for option awards was determined using the Monte Carlo Option Pricing Model, whereas for the Predecessor period, the grant date fair value
for option awards was determined using the Black-Scholes model.
The fair value determined at the grant date is expensed over the vesting period of the
share-based awards. Share-based compensation recognized in the consolidated statements of operations is based on awards that are ultimately expected to vest. If the vesting is based on a contingent event which is considered not probable, related
costs are recognized only when such event is consummated.
Page 19
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
The Company accounts for forfeitures when they occur. Consequently, compensation cost previously recognized
for an employee share option is reversed in the period in which forfeiture of the award occurs. Previously recognized compensation cost is not reversed if an employee share option for which the requisite service has been rendered expires
unexercised.
With respect to modifications, the incremental impact of an increase in fair value is charged to the consolidated statements of operations
on the date of modification if the vesting period is complete, and over the remaining vesting period where the vesting period is not complete.
(r)
Commitments and contingencies
The Company records a liability for loss contingencies arising from claims, assessments, litigation, fines, penalties
and other sources when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. If it determines that a loss is reasonably possible and the loss or range of loss can be reasonably estimated, the
same is disclosed as possible loss in the accompanying notes to the consolidated financial statements.
The Company reviews the developments in
contingencies that could affect the amount of the provisions that have been previously recorded, and the matters and related reasonably possible losses disclosed. Adjustments are made to provisions and changes to corresponding disclosures
accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Significant judgment is required to determine both the probability and the estimated amount of loss. These estimates are based
on an assessment of the facts and circumstances at each balance sheet date and are subject to change based on new information and future events.
(s)
Financial instruments and significant customers
Financial instruments that potentially subject the Company to concentration on credit risk are
reflected principally in cash and cash equivalents, contract assets and accounts receivable. The Company evaluates the concentration of risk with respect to its receivable accounts and contracts to be low, as the Company does not foresee any
significant credit risk attached to receivables from customers owing to their past payment history and stable financial conditions. Revenues from one customer represented approximately $22.9 million, $4.4 million and $16.7 million,
representing approximately 11%, 12% and 12% of the total revenue for the year ended December 31, 2025 (Successor period), the period from October 18, 2024 to December 31, 2024 (Successor period) and the period from January 1,
2024 to October 17, 2024 (Predecessor period), respectively and are reported within revenue.
(t) Fair value measurements
The Company holds financial instruments that are measured at fair value or fair value is used for disclosure purposes. Fair value is determined in accordance
with a fair value hierarchy that prioritizes the inputs and assumptions used, and the valuation techniques used to measure fair value. The three levels of the fair value hierarchy are described as follows:
Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement
date.
Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or
indirectly, for substantially the full term of the asset or liability.
Level 3 inputs: Unobservable inputs for the asset or liability used to
measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of
assets and liabilities and placement within the fair value hierarchy levels. The Company determines the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability.
Page 20
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
The fair value of the Developed Technology and Trademarks was determined as $89,000,000 and $12,400,000
respectively using the relief-from-royalty method and classified in Level 3 of the fair value hierarchy. The fair value of the assets was estimated based on the present value of the royalty payments that the acquirer saves by owning the asset,
based on a market participant royalty rate. This approach includes management estimating revenues expected to be generated over the expected useful life of the assets, which requires significant judgment and has significant uncertainty associated
with it. In addition, the Company determines the appropriate discount rate to apply to the cash flows and calculates a tax amortization benefit. Under this approach, a royalty rate of 1% and 15% was used for Trademarks and Developed Technology,
respectively and the cash flows were discounted using a rate of 11%. The fair value of customer relationships was determined to be $316,400,000 using the multi-period excess earnings method and was classified within Level 3 of the fair value
hierarchy. The valuation was based on the present value of after-tax cash flows attributable to existing customers, after deducting contributory asset charges, and incorporated an annual customer-retention
factor of 95.0% and a discount rate of 11.0%. These assumptions require significant management judgment and have significant uncertainty associated with it. (see note 3 for further discussion)
(u) Expenses
Set forth below is a brief description of
the components of the Company’s expenses:
i.
Cost of product
Cost of product consists primarily of the cost of computer hardware sold in fulfilling customer contracts. Such costs are recognized in the period in which
the related revenue is recognized.
ii.
Cost of services (exclusive of depreciation and amortization)
Cost of services consists primarily of personnel-related costs, and other direct costs associated with providing support services and fulfilling customer
contracts. Such costs are recognized in the period in which the related revenue is recognized. Cost of services excludes depreciation of capitalized software and amortization of developed technology of $3,843,329 for the year ended December 31,
2025 (Successor period), $782,009 for the period from October 18, 2024 through December 31, 2024 (Successor period), and $1,626,512 for the period from January 1, 2024 through October 17, 2024 (Predecessor period).
iii.
Research and development expenses
Research, development expenses primarily consist of personnel and other direct costs pertaining to the operation and monitoring of software product
development and providing support services which are directly related to providing services that generate revenue and support operations of the Company. All research and development costs are expensed as incurred, with the exception of certain
technology-related development costs.
iv.
Selling, general and administrative expenses
Selling, general and administrative expenses include payroll and related costs for corporate, finance, legal, business development, supply chain management
and other support staff including bonus and share-based compensation expenses, professional fees, allowance for credit losses and other corporate expenses.
(v)
Recently issued accounting pronouncements
Recently Adopted
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides an exception to fair value measurement for contract
assets and contract liabilities related to revenue contracts acquired in a business combination. The ASU requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance
with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU is effective for the Company for annual and interim periods in fiscal
years beginning after December 15, 2022 and is applied to business combinations occurring on or after the effective date. The Company adopted this ASU effective January 1, 2023.
Page 21
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic
740): Improvements to Income Tax Disclosures. The Company adopted ASU 2023-09 prospectively for the year ended December 31, 2025. The amendments require consistent categories and greater
disaggregation in the income tax rate reconciliation and disclosure of income taxes paid, net of refunds received, disaggregated by federal, state, and foreign jurisdictions. Prior periods continue to be presented under the previous disclosure
requirements. The adoption affected disclosures and did not affect amounts recognized in the 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. This
ASU adds an illustrative example to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards should be accounted for in accordance with Topic 718. ASU 2024-01 is
effective for the Company’s annual reporting periods beginning after December 15, 2024. Adoption is either with a prospective method or a fully retrospective method of transition. Early adoption is permitted. The adoption of ASU 2024-01 did
not have a material effect on its consolidated financial statements.
In March 2024, the FASB issued ASU 2024-02,
Codification Improvements – Amendments to Remove References to the Concepts Statements. This ASU removes references to various FASB Concepts Statements to simplify the Codification and draw a distinction between authoritative and non-authoritative literature. ASU 2024-02 is effective for the Company’s annual reporting periods beginning after December 15, 2024. Adoption is either with a
prospective method or a fully retrospective method of transition. Early adoption is permitted. The Company adopted this ASU effective January 1, 2025 and there has been no material effect on its consolidated financial statements.
Effective in Future Years
In October 2023, the FASB
issued ASU 2023-06, Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The ASU modifies the disclosure or
presentation requirements of a variety of Topics in the Codification to align with the Securities and Exchange Commission (“SEC”)’s regulations. The ASU also makes those requirements applicable to entities that were not previously
subject to the SEC’s requirements. The ASU is effective for the Company two years after the effective date to remove the related disclosure from Regulation S-X or
S-K. If the SEC has not removed the applicable disclosure requirement by June 30, 2027, the related amendment will not become effective for any entity and will be removed from the Codification. As of the date
these consolidated financial statements have been made available for issuance, the SEC has not yet removed any related disclosure. The Company does not expect the adoption of ASU 2023-06 to have a material
effect on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-04, Debt –
Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This ASU clarifies the requirements for determining whether certain settlements of convertible
debt instruments should be accounted for as induced conversions. ASU 2024-04 is effective for the Company’s annual reporting periods beginning after December 15, 2025. Adoption is either with a
prospective method or a retrospective method of transition that is retrospective to the later of the beginning of earliest period presented and the date the entity adopted ASU 2020-06. Early adoption is
permitted for all entities that have adopted ASU 2020-06. The Company does not expect the adoption of ASU 2024-04 to have a material effect on its consolidated financial
statements.
In May 2025, the FASB issued ASU 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 for share-based consideration payable to a customer, including the interaction between
the guidance in Topic 606 and Topic 718. The amendments clarify that the variable consideration constraint guidance in Topic 606 should not be applied to share-based consideration that is measured and classified under Topic 718 and provide
additional guidance to improve consistency in accounting for such arrangements. ASU 2025-04 is effective for the Company’s annual reporting periods beginning after December 15, 2026. Adoption is
permitted using either a modified retrospective method or a retrospective method of transition. Early adoption is permitted. The Company does not expect the adoption of ASU 2025-04 to have a material effect on
its consolidated financial statements.
Page 22
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
In July 2025, the FASB issued ASU 2025-05, Financial
Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU provides a practical expedient that permits an entity to assume that current economic conditions as of the
balance sheet date do not change for the remaining life of the asset. Further, the ASU allows an entity, other than a public business entity, that elects the practical expedient to make an accounting policy election to consider collection activity
after the balance sheet date when estimating expected credit losses. ASU 2025-05 is effective for the Company for annual periods beginning after December 15, 2025. The ASU is applied prospectively
and early adoption is permitted. The Company does not expect the adoption of ASU 2025-05 to have a material effect 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. The
ASU amends the criteria for when an entity is required to start capitalizing costs for internal use software. The ASU is effective for the Company for annual periods beginning after December 15, 2027. Adoption is on either a prospective, modified
retrospective, or a fully retrospective basis. Early adoption is permitted. The Company is currently evaluating the effect that adoption of ASU 2025-06 will have on its consolidated financial statements.
Page 23
AMI TopCo, Inc. and Subsidiaries (Successor) and AMI US Holdings, Inc. and Subsidiaries
(Predecessor)
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
3
Acquisitions
On October 17, 2024, AMI TopCo, Inc., through its subsidiary AMI Buyer, Inc., acquired 100% of the outstanding common shares of AMI US Holdings, Inc. The
aggregate non-contingent portion of the purchase price was $604,738,201 and was paid in cash. The goodwill arising from the acquisition amounts to $211,887,395.
Under the purchase method of accounting, the total purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair
values. Included in the identifiable assets acquired and liabilities assumed at the date of acquisition are inputs (tangible and intangible assets), business processes and an organized workforce. The Company has determined that the acquired inputs
and processes significantly contribute to the ability to create revenue. The Company has concluded that the acquired set is a business.
AMI US Holdings,
Inc. is primarily engaged in the design, development, sale, and support of dynamic firmware solutions for the global computer marketplace. The acquisition widens the potential of the acquirer to expand its business through access to AMI US
Holdings’ customer base, workforce, technology and brand.
The following table summarizes the consideration paid for acquisition of AMI US Holdings,
Inc. and the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:
A.
Consideration transferred
Particulars
Amount
Cash
$
604,738,201
Fair value of total consideration transferred
$
604,738,201
Acquisition-related costs (Refer C below)
$
9,024,309
B
Recognized amounts of identifiable assets acquired and liabilities assumed as on October 17, 2024:
Particulars
Amount
Assets
Cash and cash equivalents
$
35,562,287
Accounts receivable
42,071,210
Inventory
446,527
Operating lease
right-of-use assets
11,163,645
Prepayments and other assets
3,590,541
Property and equipment
4,120,776
Intangible assets (Refer Note 1 and 2 below)
417,800,000
Liabilities
Accounts payable
(5,672,842
)
Deferred tax liability
(41,225,271
)
Operating lease liabilities
(11,509,899
)
Accrued expenses and other liabilities
(40,171,282
)
Contract liabilities
(23,324,886
)
Total identifiable net assets assumed
392,850,806
Goodwill
211,887,395
Total
$
604,738,201
Note 1: The identifiable intangible assets acquired consist primarily of trademarks, developed
technology, and customer relationships. The trademarks and developed technology have been fair valued, based on the ‘relief from royalty’ method. The relief-from-royalty method is a variation of an income approach that measures the fair
value of an asset using a cost-savings concept. This is based on the notion that, if the entity did not own the asset, it would pay a royalty to a third party for the right to use that asset. Therefore, the value of the asset is the fair value of
the cost savings of not paying a royalty to a third party. Customer relationships were valued using the multi-period excess earnings method, which estimates fair value based on the present value of the
after-tax cash flows attributable to existing customer relationships after deducting contributory asset charges associated with supporting assets.
Refer note no. 2(t) “Fair value measurements” for further details on the fair valuation of intangibles.
Note 2: The acquired intangible assets, all of which are being amortized, have a weighted average useful life of approximately 10-15 years. The intangible assets that make up that amount include Developed technology of $89,000,000 (10 years), Customer relationships of $316,400,000 (10 years) and Trademarks of $12,400,000 (15 years).
C.
Transaction costs
During the Successor period, the Company incurred transaction costs of $9,024,309 on legal fees, consultation and due diligence costs,
including $6,246,667 in fees due to an affiliate of Thomas H. Lee Partners, the owner of AMI TopCo, Inc. These costs have been recorded under Transaction costs in the accompanying consolidated statements of operations.
D.
Tax
As of October 17, 2024, $75,011,387 of the intangible assets and $67,704,049 of the goodwill are expected to be deductible for tax
purposes.
E.
Others
During the Predecessor period, transaction bonuses to the employees amounting to $14,099,722, and share-based compensation expense pertaining
to employees in non-US entities amounting to $3,845,063 were recorded in the consolidated statement of operations in connection with the acquisition.
Page 24
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor
period), and from January 1, 2024 to October 17, 2024 (Predecessor period)
4
Prepaid expenses and other current assets
December 31,
2025
December 31,
2024
Prepaid expenses and other current assets consist of the following:
Prepaid expenses
$
2,118,236
$
1,498,717
Other current assets
296,161
414,789
Capital advances
—
—
Indirect tax receivable
456,004
581,189
$
2,870,401
$
2,494,695
5
Property and equipment, net
December 31,
2025
December 31,
2024
The components of property and equipment, net were as follows:
Computer and networking equipment
$
7,388,561
$
6,030,704
Furniture, fixtures and office equipment
668,877
597,136
Leasehold improvements
3,582,054
3,276,580
Software
1,117,613
1,116,645
Less: accumulated depreciation and amortization
(8,969,011
)
(6,903,435
)
Property and equipment, net
$
3,788,094
$
4,117,630
Depreciation expense was $2,240,190, $777,289, and $1,283,854 for the year ended December 31, 2025
(Successor period), the period from October 18, 2024 to December 31, 2024 (Successor period), and the period from January 1, 2024 to October 17, 2024 (Predecessor period), respectively.
6
Intangibles, net and Goodwill
Intangibles, net
December 31, 2025
Gross carrying
amount
Accumulated
amortization
Net carrying
amount
The components of intangibles, net were as follows:
Developed technology
$
89,000,000
$
10,722,892
$
78,277,108
Trademarks
12,400,000
995,984
11,404,016
Customer relationships
316,400,000
38,298,762
278,101,238
Total
$
417,800,000
$
50,017,638
$
367,782,362
December 31, 2024
Gross carrying
amount
Accumulated
amortization
Net carrying
amount
Developed technology
$
89,000,000
$
1,827,766
$
87,172,234
Trademarks
12,400,000
169,770
12,230,230
Customer relationships
316,400,000
6,528,198
309,871,802
Total
$
417,800,000
$
8,525,734
$
409,274,266
Amortization expense was $41,491,904, and $8,525,734 for the year ended December 31, 2025 (Successor
period), the period from October 18, 2024 to December 31, 2024 (Successor period) and $10,569,756 for the period January 1, 2024 to October 17, 2024 (Predecessor period), respectively. The weighted average remaining amortization for
the intangibles for the year ended December 31, 2025 is 8.93 years, and for December 31, 2024 was 9.92 years. There has been no impairment recorded during the year ending ended December 31, 2025, for the Successor Period ended
December 31, 2024 and Predecessor Period ended October 17, 2024.
The estimated amortization expense schedule for intangible
assets based on current balance is as follows:
Year ending December 31, 2026
$
41,491,904
2027
41,491,904
2028
41,605,580
2029
41,491,904
2030
41,491,904
Thereafter
160,209,166
$
367,782,362
Goodwill
December 31,
2025
December 31,
2024
Goodwill
$
211,887,395
$
211,887,395
Less: impairment on goodwill
—
—
Goodwill
$
211,887,395
$
211,887,395
As described in Note 2(k), Goodwill is tested for impairment annually during the fourth quarter and whenever
events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. There has been no impairment recorded during the year ended December 31, 2025, for the Successor Period ended December 31, 2024 and Predecessor
Period ended October 17, 2024.
As of December 31, 2025, $64,826,274 of the intangible assets and $62,262,993 of the goodwill
are deductible for tax purposes.
Page 25
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
7
Borrowings
On October 17, 2024, the Company entered into a comprehensive credit agreement (‘Credit Agreement’) to avail a term loan
amounting to $275,000,000 and revolver line of credit amounting to $40,000,000 from “Bain Capital Credit, LP”. Borrowings under the Credit Agreement bear interest at London Interbank Offered Rate or Secured Overnight Financing Rate
(SOFR) or Alternate Base Rate (ABR) plus an applicable margin (5.07% as of December 31, 2025). The Credit Agreement is secured by substantially all assets.
The debt issuance cost for the term loan facility of $275,000,000 was $8,405,864 (including $3,150,000 in fees due to an affiliate of Thomas H.
Lee Partners, the owner of AMI TopCo, Inc.) which will be amortized using the effective interest method over a period of seven (7) years.
The Company had an existing credit facility from Midcap Financial Trust from the Predecessor Period with a revised maturity date of
April 1, 2027 (extended from the original maturity date of April 1, 2025 via an agreement dated April 5, 2024). Borrowings under the said credit agreement included a revolver line of credit amounting to $25,000,000 and a term loan
amounting to $190,000,000 was bearing interest at Secured Overnight Financing Rate (SOFR) or Alternate Base Rate (ABR) plus an applicable margin. The said credit agreement was secured by substantially all assets. The entire outstanding amount of
$167,975,000 against the said credit agreement was paid on October 17, 2024 and the said facility stands fully settled upon acquisition by AMI Buyer Inc. Accordingly, deferred financing cost amounting to $1,538,986 in respect of credit facility
from Midcap Financial Trust was fully amortized on October 17, 2024.
Short-term borrowings
There is no outstanding balance of the revolver line of credit as of December 31, 2025. The unutilized amount of the revolver facilities
is $40,000,000 as of December 31, 2025.
The debt issuance cost for the revolver line of credit of $40,000,000 was $1,222,671 which
will be amortized over a period of seven (7) years using the straight-line method.
December 31, 2025
December 31, 2024
Term loan from bank
$
272,937,500
$
275,000,000
Revolver loan
—
9,725,000
272,937,500
284,725,000
Less: current portion of long-term debt
(2,750,000
)
(2,062,500
)
Less: Total deferred financing costs (non current)
(6,579,682
)
(8,136,680
)
Less: Total deferred financing costs (current)
(1,382,399
)
(1,207,800
)
Total debt, excluding current maturities and deferred financing costs
$
262,225,419
$
273,318,020
Maturities of long-term debt outstanding, in principal amounts, at December 31, 2025 are summarized
below
Year
Total Principal Repayment
2026
$
2,750,000
2027
2,750,000
2028
2,750,000
2029
2,750,000
2030
2,750,000
Thereafter
259,187,500
$
272,937,500
8
Accrued expenses and other current liabilities
December 31, 2025
December 31, 2024
Accrued expenses and other current liabilities consists of the following:
Sales tax and other taxes payable
$
621,052
$
919,022
Accrued liabilities and expenses
3,330,999
5,078,738
Accrued interest
5,002,695
5,668,150
Employee related payables
14,869,761
13,741,057
Current portion of liability for pension benefits
159,900
215,954
$
23,984,407
$
25,622,921
Page 26
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
9
Other liabilities
December 31, 2025
December 31, 2024
Long term employee related payables
$
416,498
$
335,768
Long term portion of liability for pension benefits
1,738,309
1,550,586
$
2,154,807
$
1,886,354
10
Leases
The Company has leased buildings, vehicles, furniture and fixtures, leased lines, computer equipment from various lessors. The components of
lease are as summarized below:
Successor Period
For the year ended
December 31, 2025
Successor Period
from October 18, 2024 to December 31, 2024
Predecessor Period
from January 1, 2024 to October 17, 2024
Operating lease cost
$
2,808,155
$
566,197
$
1,970,161
Short term lease cost
256,570
78,507
240,967
Total lease cost
$
3,064,725
$
644,704
$
2,211,128
Included in ‘Cost of revenue’, ‘Research and Development and Support Expenses’ and
‘Selling, General and Administrative Expenses’ in the consolidated statements of operations are amounts of $1,298,442, $1,133,703 and $632,580 for the year 2025, and $269,278, $243,044 and $132,382 for the period from October 18,
2024 to December 31, 2024, and $896,998, $841,510 and $472,620 for the period from January 1, 2024 to October 17, 2024 respectively.
Amounts reported in the consolidated balance sheets as of December 31, 2025 and December 31, 2024 were as follows:
December 31, 2025
December 31, 2024
Operating leases:
Operating lease
right-of-use assets
$
9,050,598
$
10,625,406
Operating lease liabilities
9,435,171
10,971,001
Current
2,071,424
1,925,120
Non-current
$
7,363,747
$
9,045,881
December 31, 2025
December 31, 2024
Other Information
Weighted average remaining lease term - operating leases
4.72 years
5.55 years
Weighted average discount rates - operating leases
7.72
%
7.54
%
Cash paid for amounts included in the measurement of lease liabilities
For the year ended
Successor Period
Predecessor Period
December 31, 2025
from October 18, 2024 to December 31, 2024
from January 1, 2024 to October 17, 2024
Operating cash outflows from operating leases
$
2,679,338
$
452,669
$
2,122,287
The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on
an annual basis for the next five years and thereafter.
Year ending December 31, 2026
$
2,713,841
2027
2,586,745
2028
2,309,286
2029
1,238,119
2030
1,270,411
Thereafter
1,565,848
Total
11,684,250
Imputed interest
(2,249,079
)
Total lease liability
$
9,435,171
Page 27
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
11
Share-Based Compensation
AMI TopCo, Inc., a Delaware corporation, established a stock incentive plan known as “2024 Equity Incentive Plan” intended to
promote the long-term growth and profitability of the Company and its subsidiaries by providing those persons who are involved in the Company’s and its subsidiaries’ growth with an opportunity to acquire an ownership interest in the
Company, thereby encouraging such persons to contribute to and participate in the success of the Company and its subsidiaries.
Under the
Plan, the Company may make awards to present and future officers, directors, employees, consultants and other service providers of the Company or its subsidiaries as may be selected in the sole discretion of the Board of AMI TopCo, Inc.
The Board authorized and approved the “2024 Equity Incentive Plan” on December 2, 2024. The Plan authorizes grants to purchase
up to 37,473 shares of Common stock with an exercise price of $1,000 per share.
The plan comprises of the following:
a) Service-based options
b)
Performance-based options
a) Service-based options
Service-based options will be subject to time-vesting and will vest over a five (5) year period as follows:
i. twenty percent (20%) of the Service-based options shall vest on the first anniversary of the date of grant and
ii. an additional twenty percent (20%) will vest on each subsequent anniversary of the date of grant such that all service-based options shall
be vested as of the fifth (5th) anniversary of the date of grant. To receive each year’s vesting, the employee must remain continuously employed by the Company (or its subsidiaries) from the grant date through each vesting date.
b) Performance-based options
Performance-based options will be subject to the time and performance-based vesting criteria both of which must be satisfied for such options
to vest and become exercisable.
a) Time-Based Vesting. The time-based vesting criteria for the performance-based options will be
subject to the same service vesting requirements as the service-based options
b) Performance-Based Vesting. The vesting of
performance-based options is contingent upon the achievement of specific financial performance targets by the investor, as measured on the applicable measurement date. These targets are:
i. Investor IRR (Internal Rate of Return) must be at least 15%, and
ii. Investor MoM (Multiple on Money) must exceed 2.0.
If both conditions are met, the performance-based options will vest on a straight-line basis between 0% and 100%, depending on the level of MoM
achieved.
- If MoM is less than 2.0: No performance-based options will vest.
- If MoM is exactly 3.0 or higher: 100% of the performance-based options will vest.
- If MoM is between 2.0 and 3.0: A proportional percentage of the performance-based options will vest, increasing linearly from 0% to 100%.
In addition to meeting these performance thresholds, the employee must have been continuously employed or providing services to the
Company or its subsidiaries from the grant date through the applicable vesting date.
During the year 2025, the Company granted options to
purchase 17,614 shares with an exercise price of $1,000 and a fair value of $482.32 for the service-based options and $418.39 for the performance-based options.
The Company uses company-specific historical data to estimate the expected term of the options, such as grantee option exercise and grantee
post-vesting departure behavior. Separate groups of grantees that have similar historical exercise behaviour are considered separately for valuation purposes. Since the Company’s shares are not publicly traded and its shares are rarely traded
privately, expected volatility is estimated based on the average historical volatility of similar entities with publicly traded shares. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve at the date of
grant.
Page 28
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
The grant date fair value of each option award is estimated on the date of grant using the
Monte Carlo option pricing model. The weighted average assumptions for 2025 grants are provided in the following table
Service-based options
Performance-based options
Valuation Assumptions
Expected dividend yield
0%
0%
Expected volatility
100.20%
108.50%
Expected term (years)
4 years
4 years
Risk-free interest rate
3.70%
3.70%
Stock option activity during the periods indicated is as follows:
Service-based options
Performance-based options
Number of
Shares
Weighted-Average
Exercise Price
Weighted-Average
Remaining
Contractual Term
Number of
Shares
Weighted-Average
Exercise Price
Weighted-Average
Remaining
Contractual Term
Balance at December 31, 2024
6,258
$
1,000
9,387
$
1,000
Granted
7,046
$
1,000
10,568
$
1,000
Exercised
—
—
—
—
Forfeited
(1,379
)
$
1,000
(2,135
)
$
1,000
Expired
(45
)
$
1,000
—
—
Balance at December 31, 2025
11,880
1,000
9.15 years
17,820
1,000
9.15 years
Vested and Exercisable at December 31, 2025
—
—
The weighted average grant-date fair value of options granted during the year 2025 was $482.32 for
service-based options and $418.39 for performance-based options.
A summary of the status of the Company’s nonvested employee options
as of December 31, 2025 and changes during the year ended December 31, 2025, is presented below:
Service-based options
Performance-based options
Non Vested Shares
Number of
Shares
Weighted-Average
Grant-Date Fair
Value
Number of
Shares
Weighted-Average
Grant-Date Fair
Value
Balance at December 31, 2024
6,258
$
433.66
9,387
$
387.98
Granted
7,046
482.32
10,568
418.39
Vested
(2,091
)
453.20
—
—
Forfeited
(1,379
)
475.97
(2,135
)
413.59
Expired
—
—
—
—
Balance at December 31, 2025
9,834
$
458.44
17,820
$
402.95
At December 31, 2025, there was $2.91 million of total unrecognized compensation cost related to
nonvested stock options granted under the Plan. That cost is expected to be recognized over a weighted-average period of 3.93 years.
Probability of achievement of conditions attached to the vesting of performance-based option is not considered probable as at the reporting
date and accordingly, no cost has been recognized with respect to performance-based options.
Page 29
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
Share-Based Compensation - Successor period
The grant date fair value of each option award is estimated on the date of grant using the Monte Carlo option pricing model. The weighted
average assumptions for 2024 grants are provided in the following table
Service-based options
Performance-based options
Valuation Assumptions
Expected dividend yield
0%
0%
Expected volatility
97.20%
101.80%
Expected term (years)
5 years
5 years
Risk-free interest rate
3.90%
3.90%
Stock option activity during the periods indicated is as follows:
Service-based options
Performance-based options
Number of
Shares
Weighted-Average
Exercise Price
Number of
Shares
Weighted-Average
Exercise Price
Balance at October 17, 2024
—
—
Granted
6,258
$
1,000
9,387
$
1,000
Exercised
—
—
—
—
Forfeited
—
—
—
—
Expired
—
—
—
—
Balance at December 31, 2024
6,258
$
1,000
9,387
$
1,000
Vested and Exercisable at December 31, 2024
—
—
The weighted average grant-date fair value of options granted during the year 2024 was $433.66 for
service-based options and $387.98 for performance-based options.
A summary of the status of the Company’s nonvested employee
options as of December 31, 2024 and changes during the Successor period ended December 31, 2024, is presented below:
Non Vested Shares
Service-based options
Performance-based options
Number of
Shares
Weighted-Average
Grant-Date Fair
Value
Number of
Shares
Weighted-Average
Grant-Date Fair
Value
Balance at October 17, 2024
—
—
Granted
6,258
$
433.66
9,387
$
387.98
Vested
—
—
—
—
Forfeited
—
—
—
—
Balance at December 31, 2024
6,258
$
433.66
9,387
$
387.98
At December 31, 2024, there was $2.46 million of total unrecognized compensation cost related to
nonvested stock options granted under the Plan. That cost is expected to be recognized over a weighted-average period of 4.83 years.
Probability of achievement of conditions attached to the vesting of performance-based option is not considered probable as at the reporting
date and accordingly, no cost has been recognized with respect to performance-based options.
Page 30
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
Share-Based Compensation - Predecessor Period
Class C Units of the parent entity
The parent entity (AMI Cayman LP) is authorized to issue up to 25,000,000 Class C units in the form of equity incentive units to the
employees of the Company. Such equity incentive units will vest over a service period of up to five years. Awards to non-U.S. employees also include a performance condition related to a change in control of
the Company.
The fair value attributed to Class C Units is determined using the Black-Scholes option pricing model. Expected
volatility is based on the average historical volatility of similarly structured business services companies. The expected term of the units granted represents the period of time the units are expected to be outstanding. Parent entity uses the
simplified method under accounting standards to estimate the expected term of the units. The risk-free rate is based on U.S. Treasury yields in effect at the time of the grant for the expected term. Parent entity accounts for forfeitures in the
period they occur resulting in a reversal of all previously recognized compensation expense for awards forfeited. Assumptions for the grants made under this plan, are as follows:
No. of units
Outstanding, December 31, 2023
23,917,725
Granted
—
Settled during the period
(23,755,163
)
Forfeited
(162,562
)
Cancelled
—
Outstanding, October 17, 2024
—
A summary of the status of the Company’s nonvested units as of December 31, 2023 and
October 17, 2024 is presented below:
No. of units
Weighted average
grant date fair value
Nonvested, December 31, 2023
8,458,588
0.27
Granted
—
—
Forfeiture
(162,561
)
0.27
Vested (including accelerated vesting)
(8,296,027
)
0.27
Nonvested, October 17, 2024
—
—
On account of change of control during the 2024, all the grants issued by the Group were accelerated on the
date of change of control (i.e. October 17, 2024), as part of the original terms of the plan. The grants issued by the US entity are accounted as equity-settled share-based payments and the share-based payment costs were accelerated based on
the grant date fair value of such options. With respect to the grants issued by the non-US entities, the settlement for such grants were made by the respective issuing entities in cash, as part of the original
terms of the plan and accordingly, are treated as liability settled as at the date of change of control and the difference between the settlement price and cost accrued until the date of change of control were accounted for as stock compensation
expenses in the income statement. Based on the election made by the Group, these costs are entirely accounted for as expense in the Predecessor period.
Share-based compensation cost included in the consolidated statement of operations under selling, general and administrative expenses amounted
to $4,360,966 out of which $515,903 was recorded in Additional paid-in capital and $3,845,063 was recorded as a liability under accrued expenses and other current liabilities for the settlement of awards
issued by the non-US entities.
Page 31
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
12
Income Taxes
The individual entities within the Company file individual tax returns as per the regulations existing in their respective jurisdictions.
Income (Loss) before income taxes consisted of the following:
For the year ended
December 31, 2025
Successor Period
from October 18, 2024 to
December 31, 2024
Predecessor Period
from January 1, 2024 to
October 17, 2024
Income (Loss) before income taxes from continuing operations
(14,841,157
)
(14,525,233
)
(8,157,671
)
(14,841,157
)
(14,525,233
)
(8,157,671
)
For the year ended
December 31, 2025
Successor Period
from October 18, 2024 to
December 31, 2024
Predecessor Period
from January 1, 2024 to
October 17, 2024
U.S. operations
$
(24,887,627
)
$
(15,553,663
)
$
(16,502,014
)
Non U.S. operations
10,046,470
1,028,430
8,344,343
$
(14,841,157
)
$
(14,525,233
)
$
(8,157,671
)
Income tax expense/(benefit) attributable to income from operations
consisted of the following:
Current
Deferred
Total
For the year ended December 31, 2025;
U.S. federal
$
—
$
(9,375,677
)
$
(9,375,677
)
State and local
146,469
(603,188
)
(456,719
)
Non U.S. jurisdiction
9,283,184
(277,553
)
9,005,631
$
9,429,653
$
(10,256,417
)
$
(826,764
)
Current
Deferred
Total
Successor period ended December 31, 2024;
U.S. federal
$
186,799
$
(4,866,375
)
$
(4,679,576
)
State and local
20,236
70,317
90,553
Non U.S. jurisdiction
1,650,777
(60,363
)
1,590,414
$
1,857,812
$
(4,856,421
)
$
(2,998,609
)
Current
Deferred
Total
Predecessor period ended October 17, 2024;
U.S. federal
$
—
$
—
$
—
State and local
29,228
—
29,228
Non U.S. jurisdiction
4,668,785
(10,648
)
4,658,137
$
4,698,013
$
(10,648
)
$
4,687,365
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)
Improvements to Income Tax Disclosures, which require greater disaggregation of income tax disclosures around the effective rate reconciliation. The guidance in this update is effective for fiscal years beginning after December 15, 2024, and
the Company adopted it prospectively for the year ended December 31, 2025. Income tax expense (benefit) for the year ended December 31, 2025 differs from the amount of income tax determined by applying the applicable U.S. statutory federal
income tax rate to pretax loss as a result of the following differences:
Page 32
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
December 31, 2025
Amount
%
U.S. Federal Statutory Tax Rate
(3,116,643
)
21.0
%
State and Local Income Taxes, Net of Federal Income Tax Effect (a)
(456,719
)
3.1
%
Foreign Tax Effects
China
Withholding Tax
1,190,537
-8.0
%
Other
85,746
-0.6
%
Taiwan
Branch income
1,341,654
-9.0
%
Withholding Tax
7,208
0.0
%
Other
(47,113
)
0.3
%
India
Withholding Tax
805,835
-5.4
%
Statutory tax rate difference between India and United States
411,614
-2.8
%
Other
(63,036
)
0.4
%
Korea
Withholding Tax
707,054
-4.8
%
Other
(3,869
)
0.0
%
Other foreign jurisdictions
459,355
-3.1
%
Effect of Cross-Border Tax Laws
Branch income
1,728,171
-11.6
%
Global Intangible low-taxed income
332,788
-2.2
%
Foreign-derived intangible income
(986,972
)
6.7
%
Tax Credits
Foreign Tax Credits
(4,117,973
)
27.7
%
R&D Credits
(893,647
)
6.0
%
Nontaxable or Nondeductible Items
(166,199
)
1.1
%
Changes in Unrecognized Tax Benefits
2,196,614
-14.8
%
Other Adjustments
(241,168
)
1.6
%
Effective Tax Rate
(826,764
)
5.6
%
(a)
State taxes in California made up the majority (greater than 50 percent) of the tax effect in this category.
As previously disclosed, Income tax expense (benefit) for the Successor period and Predecessor period prior to the adoption of ASU 2023-09, differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pretax income as a result of the following differences:
Successor Period
from October 18, 2024 to
December 31, 2024
Predecessor Period
from January 1, 2024 to
October 17, 2024
Computed “expected” tax expense as per US Federal Tax Rate Increase (reduction) in
income taxes resulting from:
$
(3,050,298
)
$
(1,713,104
)
Change in valuation allowance on deferred tax assets
—
12,928,627
Transaction Costs
(794,315
)
(3,278,590
)
Non-deductible expenses
140,361
(1,753,263
)
Foreign tax credit carryforward
(1,152,444
)
(5,041,377
)
Foreign tax rate differential
441,743
451,143
Withholding tax
572,727
2,779,839
Others, net
845,340
314,089
Total expense/(benefit)
$
(2,998,609
)
$
4,687,365
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax
liabilities at December 31, 2025 are presented below:
December 31, 2025
December 31, 2024
Deferred tax assets:
Accrued expenses
$
1,883,252
$
1,148,227
Net operating loss carryforwards
1,576,547
1,661,322
Interest limitations
11,729,948
10,233,529
Stock Based Comp
432,501
47,726
Credit carryforwards
19,900,726
17,979,639
Research and Developmental Costs
7,754,361
8,088,797
Operating lease
right-of-use assets (net)
111,536
110,119
Others
292,317
53,518
Gross deferred tax assets
43,681,188
39,322,877
Valuation allowance
(6,212,965
)
(6,182,762
)
Total deferred tax assets
37,468,222
33,140,115
Deferred tax liabilities:
Goodwill and intangible assets
(63,080,213
)
(68,612,688
)
Property and equipment
(55,155
)
(362
)
Total non-current deferred tax liabilities
(63,135,368
)
(68,613,050
)
Net deferred tax asset (liability)
$
(25,667,146
)
$
(35,472,935
)
Page 33
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
Based on the available evidence, management believes that it is more likely than not that the U.S. and state
deferred tax assets will be realizable with the exception of unamortizable transaction costs and Georgia R&D credits for which the Company cannot forecast income of the appropriate source in order to be utilized. Accordingly, the Company has
provided a valuation allowance against these items as of December 31, 2025 and 2024.
The valuation allowance for deferred tax assets as of
December 31, 2025 and 2024 was $6.2 million and $6.2 million, respectively. The Company’s valuation allowance balance increased by an immaterial amount for the year ended December 31, 2025 as a result of additional
generated credit carryforwards.
The increase in the valuation allowance during calendar year 2025 was primarily due to additional immaterial increases in
state R&D carryforwards that are not expected to be realized. At the end of December 31, 2025, the valuation allowance was primarily related to unamortizable transaction costs, and disallowed state R&D credit carryforwards. The Company
will continue to evaluate the need for valuation allowances for its deferred tax assets.
In determining the need to establish or maintain a valuation
allowance, management considered the four sources of jurisdictional taxable income: (i) future reversals of existing taxable temporary differences; (ii) future taxable income exclusive of reversing temporary differences and carryforwards;
(iii) taxable income in prior carryback year(s) if carryback is permitted under the tax law; and (iv) viable and prudent tax planning strategies. Based on the available evidence and management’s expectations of generating sufficient
U.S. Federal and State taxable income, management believes that it is more likely than not that the U.S. and state deferred tax assets will be realizable with the exception of unamortizable transaction costs and Georgia R&D credits for which the
Company cannot forecast income of the appropriate source in order to be able to utilized. Accordingly, the Company has provided a valuation allowance against these items as of December 31, 2025 and 2024.
As of December 31, 2025, the Company had state NOL carryforwards of $24.6 million, and U.S. federal and state research and development tax credit
carryforwards were $4.1 million and $4.0 million, respectively. The Company also had foreign tax credit carryforwards of $11.8 million. If not utilized, certain state NOLs will begin to expire at various dates beginning in 2033, while
the federal and state tax credit carryforwards will start to expire in various amounts beginning in 2028.
Utilization of net operating loss and tax
credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code and similar state provisions. Annual limitations may result in expiration of net operating loss and tax
credit carryforwards before some or all of such amounts have been utilized.
The Company has not provided U.S. income taxes and foreign withholding taxes
on undistributed earnings of foreign subsidiaries because we intend to permanently reinvest such earnings outside the United States, with the exception of accumulated earnings in Germany. As of December 31, 2025 and 2024, the Company has recorded a
deferred tax liability of $57K and $71K, respectively for potential withholding tax which would be recognized upon remittance of a dividend from Germany to the United States.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law in the U.S. The OBBBA provides for the permanent extension of
certain expiring provisions of the Tax Cuts and Jobs Act and restores certain favorable corporate tax provisions, such as the current deduction for U.S.-based research expenditures. The impact of the OBBBA was not material to our consolidated
financial statements and related disclosures and is not material.
The Company recognizes financial statement benefit of a tax position only after
determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not
threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. As of December 31, 2025
and 2024, the Company had gross unrecognized tax benefits of $2.2 million and $0 million, respectively. If recognized, these unrecognized tax benefits would reduce income tax expense and the Company’s effective tax rate.
The following table summarizes the changes to unrecognized tax benefits for the fiscal years presented:
Balance at December 31, 2023
$
—
Balance at December 31, 2024
$
—
Additions based on tax positions related to the current year
$
—
Additions based on tax positions of prior years
$
2,196,614
Reductions for tax positions of prior years
$
—
Reduction as a result of lapse of applicable statute of limitations
$
—
Balance at December 31, 2025
$
2,196,614
The Company recognizes interest and penalties related to income tax matters as a component of income tax expense. There was no
accrued interest recorded as of December 31, 2025 and 2024.
The Company files income tax returns subject to varying statutes of limitations. The tax
years from 2019 and forward remain open to examination by the federal and state tax authorities due to net operating loss and overall credit carryforward positions. Non-U.S. tax returns generally remain open
to examination. As of December 31, 2025, the Company is currently under examination in Hong Kong. The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the
Company’s tax audits are resolved in a manner inconsistent with management’s expectations, the Company could adjust its provision for income taxes in the future.
Cash Taxes Paid
The Company adopted ASU 2023- 09, Income
Taxes (Topic 740) prospectively for the year ended December 31, 2025 and included the following table as a result of our adoption, which presents Income taxes paid, net of refunds, as follows:
Federal:
$
—
State:
$
—
Foreign:
Taiwan
$
2,123,187
China
$
2,071,503
India
$
1,081,332
Other
$
126,720
Total Foreign
$
5,402,741
Income taxes paid, net of refunds
$
5,402,741
Page 34
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor period), and
from January 1, 2024 to October 17, 2024 (Predecessor period)
13
Revenue from contract with customers
The following table presents the Company’s revenue disaggregated based on performance obligations:
For the year ended
December 31, 2025
Successor Period
from October 18, 2024 to
December 31, 2024
Predecessor Period
from January 1, 2024 to
October 17, 2024
License (including maintenance, royalty and labels)
$
106,467,314
$
20,596,763
$
75,149,643
Professional services
55,921,942
10,992,311
38,857,852
Hardware
32,312,748
4,440,027
23,807,817
$
194,702,004
$
36,029,101
$
137,815,312
As noted in Note 2(f), license revenue and certain professional service arrangements are recorded over time,
while hardware revenues are recorded at a point in time.
The following table presents disaggregated revenue by product type for the
following periods:
For the year ended
December 31, 2025
Successor Period
from October 18, 2024 to
December 31, 2024
Predecessor Period
from January 1, 2024 to
October 17, 2024
Boot Firmware Group (BFG)
$
104,301,322
$
19,951,652
$
71,343,821
Manageability Solution Group (MSG)
81,782,107
14,191,292
59,274,716
Hardware Engineering Group (HEG)
1,076,284
229,682
850,120
Security Software Group (SSG)
5,970,513
1,332,945
4,997,220
Cloud Service Group (CSG)
37,309
20,297
50,489
Meridian
1,534,469
303,233
1,298,946
$
194,702,004
$
36,029,101
$
137,815,312
Contract balances
The following table provides information about contract liabilities from contract with customers:
December 31, 2025
December 31, 2024
Contract liabilities - Current
$
25,209,733
$
20,557,359
Contract liabilities - Non current
4,777,140
2,533,377
$
29,986,873
$
23,090,736
The following table provides information about accounts receivable and contracts assets from contract with
customers:
December 31, 2025
December 31, 2024
Accounts receivable
$
33,569,635
$
33,743,183
Contract assets
9,570,148
7,775,548
Less: allowance for credit losses
(288,157
)
(385,169
)
$
42,851,626
$
41,133,562
The above table reflects the information of contract liabilities, which have been disclosed as a separate
caption in the consolidated balance sheets as of December 31, 2025 and December 31, 2024. The Contract liabilities include that portion of revenue for which payment has been received in advance from customers.
Revenue of $17,093,454 recognized during the year ended December 31, 2025 was included as part of the opening balance of contract
liability.
As of December 31, 2025, the aggregate transaction price allocated to unsatisfied or partially unsatisfied performance
obligations was $40,360,480. The Company expects to recognize approximately $21,346,943 within one year, $15,322,305 in one to two years, and $3,691,232 thereafter. The amount principally relates to fixed consideration under firmware license,
update, maintenance and support arrangements and fixed-price professional service contracts.
The Company has elected the optional
exemptions for contracts with an original expected duration of one year or less, performance obligations for which revenue is recognized in the amount the Company has a right to invoice, and sales- or usage-based royalties promised in exchange for
licenses of intellectual property.
Increase in the Company’s contract liabilities balance during the period is a result of normal
business activity and not materially impacted by any other factors.
Page 35
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the year ended December 31, 2025 (Successor period), and the period from October 18, 2024 to December 31, 2024 (Successor
period), and from January 1, 2024 to October 17, 2024 (Predecessor period)
14
Finance cost
For the year ended
December 31, 2025
Successor Period
from October 18, 2024 to
December 31, 2024
Predecessor Period
from January 1, 2024 to
October 17, 2024
Finance cost consists of the following:
Interest expense:
Long-term loan
$
25,210,658
$
5,464,655
$
15,317,237
Revolver loan
359,479
193,250
424,865
Bank charges and other
1,613,691
325,361
1,553,790
Interest income:
Fixed deposits
(137,455
)
(47,460
)
(140,680
)
Interest expense, net
$
27,046,373
$
5,935,807
$
17,155,212
15
Other (income), net
Successor Period
Predecessor Period
For the year ended
December 31, 2025
from October 18, 2024 to
December 31, 2024
from January 1, 2024 to
October 17, 2024
Other (income) consists of the following:
Foreign exchange gain, net
$
(219,691
)
$
(254,941
)
$
(117,945
)
Miscellaneous income
$
(149,147
)
(17,664
)
(38,402
)
$
(368,838
)
$
(272,605
)
$
(156,348
)
16
Related Party Transactions
The Company has entered into the following transactions with related parties.
During the year 2024, the Company entered into an advisory agreement with Thomas H. Lee Partners, the new majority partner in the Parent entity
of the Company. Thomas H. Lee Partners provides financial advisory and management consulting services, and the Company is obligated to reimburse all reasonable, documented, and
out-of-pocket fees and expenses. For the year 2025, the Company incurred fees of $1,343,175 recorded in Selling, general and administrative expenses and $208,013 as
reimbursement of travel expenses in the accompanying consolidated statement of operations. During the Successor period from October 18, 2024 to December 31, 2024, the Company incurred fees of $9,487,234, of which $3,150,000 were
capitalized as deferred financing costs, $6,246,667 were recorded as transaction costs and $90,567 was recorded in Selling, general and administrative expenses as reimbursement of travel expenses in the accompanying consolidated statement of
operations. The amortization of the deferred financing costs of $284,055 were recorded in Interest expense, net in the accompanying consolidated statement of operations during the Successor period.
During the Predecessor period (through October 17, 2024), the Company was party to an advisory agreement with HGGC Fund III GP, L.P., the
majority partner in the Parent entity of the Company during that time. Under the agreement, HGGC provided financial advisory and management consulting services. In return, the Company was obligated to reimburse HGGC for all reasonable, documented,
and out-of-pocket fees and expenses. For the period ended October 17, 2024, the Company incurred expenses of $2,732,393, which have been recorded in the
accompanying consolidated statements of operations.
17
Commitments and contingencies
Legal proceedings
The
Company and its subsidiaries are involved in certain claims and legal actions arising in the ordinary course of business. Although the amount of any ultimate liability with respect to such matters cannot be determined, in the opinion of management,
the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations.
18
Equity share capital
The authorized capital stock of the Company consists of (i) 400,000 shares of common stock, par value $0.01 per share (the “Company
Common Stock”), of which, 337,255.53 shares are issued and outstanding and (ii) 1,000 shares of undesignated preferred stock, par value $0.01 per share (the “Company Preferred Stock”) none of which are issued and outstanding. The
Company Common Stock consists of 360,000 shares of series A common stock (the “Series A Common Stock”), of which, 337,185.40 shares are issued and outstanding and 40,000 shares of series B common stock (the “Series B Common
Stock”), 70.13 of which are issued and outstanding. Series A and Series B Common Stock participate equally in dividends and liquidation distributions on a per-share basis; however, voting rights are held
exclusively by holders of Series A Common Stock, with one vote per share. Series B Common Stock does not carry any voting rights.
19
Subsequent events
In accordance with accounting standards, the Company has evaluated subsequent events through October
13, 2026, the date the consolidated financial statements were available for issuance. On July 27, 2026, Lattice Semiconductor Corporation (“Lattice”) completed its acquisition of AMI TopCo, Inc. The acquisition was effected pursuant
to the Agreement and Plan of Merger dated May 4, 2026 (the “Merger Agreement”) among Lattice, certain of its wholly owned subsidiaries, AMI TopCo, Inc., and THL AMI Aggregator, LP, acting solely in its capacity as representative of
AMI’s security holders. Under the Merger Agreement, total consideration was approximately $1.6 billion of which approximately $1 billion was settled in cash and remaining in shares of Lattice common stock and restricted stock units,
subject to adjustments as provided in the Merger Agreement. The entire outstanding debt including accrued interest amounting to $272.2 million with Bain Capital Credit LP, was paid on July 27, 2026 and the said facility stands fully settled
upon acquisition of AMI TopCo, Inc. by Lattice. Accordingly, deferred financing cost amounting to $7.2 million in the respect of the credit facility from Bain Capital Credit LP, was fully amortized on July 27, 2026. Other than this event, the
Company has concluded that there are no other subsequent events requiring recognition or disclosure have been incorporated in these consolidated financial statements.
Page 36
EX-99.2
EX-99.2
Filename: d116673dex992.htm · Sequence: 4
EX-99.2
Exhibit 99.2
AMI TopCo, Inc. and Subsidiaries
Consolidated Financial Statements
June 30, 2026 and December 31, 2025
(Unaudited)
AMI TopCo, Inc. and Subsidiaries
Consolidated Financial Statements
June 30, 2026 and December 31, 2025
Table of Contents
Pages
Consolidated Balance Sheets
1
Consolidated Statements of Operations
2
Consolidated Statements of Comprehensive Loss
3
Consolidated Statements of Changes in Equity
4-5
Consolidated Statements of Cash Flows
6
Notes to Consolidated Financial Statements
7-26
AMI TopCo, Inc. and Subsidiaries
Consolidated Balance Sheets
Notes
June 30, 2026
(Unaudited)
December 31, 2025
(Audited)
Assets
Current assets
Cash and cash equivalents
2(n)
$
30,274,536
$
37,775,933
Restricted cash
2(n)
2,184,514
17,628
Accounts receivable and contract assets, net of allowance for credit losses of $324,373 and
$288,157 at June 30, 2026 and December 31, 2025, respectively
12
50,690,813
42,851,626
Inventories, net of allowances for obsolete inventory of $186,681 and $6,671 at June 30, 2026
and December 31, 2025, respectively
144,924
375,597
Prepaid expenses and other current assets
3
3,364,761
2,870,401
Short-term investments
250,000
250,000
Total current assets
86,909,548
84,141,185
Restricted cash, net of current portion
2(n)
28,133
19,855
Property and equipment, net
4
5,573,083
3,788,094
Operating lease
right-of-use assets
9
12,267,275
9,050,598
Developed technology, net
5
73,866,101
78,277,108
Trademarks, net
5
10,994,304
11,404,016
Customer relationships, net
5
262,346,520
278,101,238
Goodwill
5
211,887,395
211,887,395
Deferred taxes, net
766,594
783,314
Other assets
1,164,563
852,082
Total assets
$
665,803,516
$
678,304,885
Liabilities and Equity
Current liabilities
Current portion of long-term debt, net of current unamortized deferred financing costs
6
$
1,367,601
$
1,367,601
Current portion of operating lease liabilities
9
1,908,873
2,071,424
Current portion of contract liabilities
12
27,810,414
25,209,733
Accounts payable
5,335,934
5,796,212
Income tax payable
4,116,994
5,393,525
Accrued expenses and other current liabilities
7
17,879,966
23,984,407
Total current liabilities
58,419,782
63,822,902
Long-term debt, net of unamortized deferred financing costs and less current portion
6
262,918,336
263,607,818
Deferred tax liability
20,616,598
26,450,461
Operating lease liabilities, net of current portion
9
11,040,677
7,363,747
Contract liabilities
12
5,147,833
4,777,140
Other liabilities
8
2,010,046
2,154,807
Total liabilities
360,153,272
368,176,875
Shareholders’ equity
Preferred stock, $.01 par value, 1,000 shares authorized, none issued and outstanding
—
—
Series A, Common stock, $0.01 par value, 360,000 shares authorized, 337,185.40 issued and
outstanding as of June 30, 2026 and December 31, 2025
3,372
3,372
Series B, Common stock, $0.01 par value, 40,000 shares authorized, 70.13 issued and outstanding as
of June 30, 2026 and December 31, 2025
1
1
Additional paid in capital
340,475,732
339,790,450
Accumulated deficit
(34,032,414
)
(29,323,471
)
Accumulated other comprehensive deficit
(796,447
)
(342,342
)
Total equity
305,650,244
310,128,010
Commitments and contingencies
16
Total liabilities and equity
$
665,803,516
$
678,304,885
See accompanying notes to consolidated financial statements.
Page 1
AMI TopCo, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Six Months ended June 30,
Notes
2026
2025
Revenues
12
$
102,256,226
$
92,541,142
License
66,502,548
49,785,769
Professional services
21,670,019
27,630,327
Hardware
14,083,659
15,125,046
Cost of revenue (exclusive of depreciation and amortization)
Cost of product
11,174,439
11,267,050
Cost of services (exclusive of depreciation and amortization)
22,193,580
20,319,637
Operating expenses
Research and development expenses
20,582,589
17,784,470
Selling, general and administrative expenses
22,071,394
18,327,014
Depreciation and amortization
21,781,184
21,757,225
Interest expense, net
13
12,762,038
14,002,178
Other (income), net
14
(375,958
)
656,161
Total costs and expenses
110,189,266
104,113,735
Loss before income taxes
(7,933,040
)
(11,572,593
)
(Benefit) provision for income tax
11
(3,224,097
)
(2,365,430
)
Net loss of AMI TopCo, Inc. and Subsidiaries
$
(4,708,943
)
$
(9,207,163
)
See accompanying notes to consolidated financial statements.
Page 4
AMI TopCo, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Loss
(Unaudited)
For the six months ended
June 30, 2026
For the six months ended
June 30, 2025
Net loss attributable to AMI TopCo, Inc. and Subsidiaries
$
(4,708,943
)
$
(9,207,163
)
Actuarial (loss) gain including settlements on retirement benefit plans, net of taxes
27,185
(45,842
)
Foreign currency translation adjustments
(481,290
)
536,070
Other comprehensive (loss)
(454,105
)
490,228
Total comprehensive (loss)
$
(5,163,048
)
$
(8,716,935
)
See accompanying notes to consolidated financial statements.
Page 5
AMI TopCo, Inc. and Subsidiaries
Consolidated Statements of Changes in Equity
(Unaudited)
Series A Common Stock
Series B Common Stock
Additional Paid-in
capital
Accumulated
deficit
Accumulated Other
comprehensive
deficit
Total equity
No. of shares
Par value
No. of shares
Par value
Balance as at December 31, 2025
337,185.40
$
3,372
70.13
$
1
$
339,790,450
$
(29,323,471
)
$
(342,342
)
$
310,128,010
Share-based compensation expense
—
—
—
—
685,282
—
—
685,282
Net (loss)
—
—
—
—
—
(4,708,943
)
—
(4,708,943
)
Other comprehensive (loss)
—
—
—
—
—
—
(454,105
)
(454,105
)
Balance as at June 30, 2026
337,185.40
$
3,372
70.13
$
1
$
340,475,732
$
(34,032,414
)
$
(796,447
)
$
305,650,244
See accompanying notes to consolidated financial statements.
Page 6
AMI TopCo, Inc. and Subsidiaries
Consolidated Statements of Changes in Equity
(Unaudited)
Series A Common Stock
Series B Common Stock
Additional Paid-in
capital
Accumulated
deficit
Accumulated Other
Comprehensive
deficit
Total equity
No. of shares
Par value
No. of shares
Par value
Balance as at December 31, 2024
337,185.40
$
3,372
70.13
$
1
$
337,510,348
$
(15,309,078
)
$
(223,078
)
$
321,981,565
Share-based compensation expense
—
—
—
—
1,340,027
—
—
1,340,027
Net (loss)
—
—
—
—
—
(9,207,163
)
—
(9,207,163
)
Other comprehensive (loss)
—
—
—
—
—
—
490,228
490,228
Balance as at June 30, 2025
337,185.40
$
3,372
70.13
$
1
$
338,850,375
$
(24,516,241
)
$
267,150
$
314,604,657
See accompanying notes to consolidated financial statements.
Page 7
AMI TopCo, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30, 2026
Six Months Ended
June 30, 2025
Cash flows from operating activities
Net loss
$
(4,708,943
)
$
(9,207,163
)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization
21,781,184
21,757,225
Deferred income taxes
(5,870,812
)
(4,560,409
)
Share-based compensation expense
685,282
1,340,027
Allowance for credit losses
45,548
(36
)
Amortization of debt issuance cost
685,519
685,518
12,617,778
10,015,162
Changes in operating assets and liabilities
Accounts receivable and contract assets
(7,884,735
)
(6,121,789
)
Operating lease
right-of-use assets, prepayments, other current assets and other assets
(4,020,259
)
(1,240,623
)
Inventories
230,673
(44,541
)
Accounts payable
(460,278
)
1,252,202
Operating lease liability, accrued expenses, other current liabilities, pension benefits and other
liabilities
(2,707,637
)
(5,771,626
)
Income tax payable
(1,276,531
)
279,338
Contract liabilities
2,971,374
3,838,299
Net cash provided by (used in) operating activities
(529,615
)
2,206,422
Cash flows from investing activities
Purchases of property and equipment
(3,077,075
)
(783,522
)
Net cash (used in) investing activities
(3,077,075
)
(783,522
)
Cash flows from financing activities
Repayments of revolver loan
—
(9,500,000
)
Repayment of long term debt
(1,375,000
)
(687,500
)
Net cash (used in) provided by financing activities
(1,375,000
)
(10,187,500
)
Net increase in cash and cash equivalents
(4,981,690
)
(8,764,600
)
Effect of exchange rate changes on cash and cash equivalents
(344,543
)
250,078
Cash and cash equivalents and restricted cash at the beginning of period
37,813,416
21,399,234
Cash and cash equivalents and restricted cash at the end of period
$
32,487,183
$
12,884,711
Cash payments for income taxes
$
(5,891,496
)
$
(2,153,348
)
Cash payments for interest expenses
$
(12,124,645
)
$
(13,726,599
)
See accompanying notes to consolidated financial statements.
Page 8
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
1 Organization and nature of operations
AMI TopCo, Inc.,
along with its subsidiaries, is headquartered in Georgia, United States and is engaged in the design, development, sale, and support of dynamic firmware solutions for the global computer marketplace. The Company sells its products, principally to
Original Design Manufacturers (“ODMs”), Original Equipment Manufacturers (“OEMs”), and Cloud Service Providers (“CSPs”) to the data center, cloud, embedded, and client markets, spanning key global markets
including North America, Asia, and Europe.
AMI TopCo, Inc. (“Company”), a Delaware corporation, was incorporated on August 23, 2024 to
acquire, through its subsidiary AMI Buyer, Inc., from AMI CaymanCo Ltd (“Seller”), the outstanding common stock of AMI US Holdings, Inc., which further holds a controlling stake in seven entities along with their branches in Japan,
Korea, and Taiwan (“AMI”).
On August 30, 2024, AMI Buyer, Inc. (the “Acquirer”) entered into a Stock Purchase Agreement with
the Seller for transfer of 100% of the outstanding common stock of AMI US Holdings, Inc., a Delaware corporation (“Acquiree” and the “Predecessor”). On the Closing Date, October 17, 2024, AMIBuyer, Inc. completed the
acquisition for a final purchase price of $604.7 million, which resulted in change of control over the Acquiree and all of its subsidiaries. Upon consummation of the Closing of the Acquisition, the Company through its ownership in AMI Buyer,
Inc., became the Holding Company of (a) AMI US Holdings, Inc.; (b) AMI New US LLC; (c) AMI HK HoldCo Limited; (d) American Megatrends International GmbH; (e) American Megatrends International, LLC; (f) American Megatrends
Information Technology (Kunshan) Co., Ltd.; (g) AMI India US LLC; (h) American Megatrends International India Pvt. Ltd. and their branches. The Company along with all these acquired entities and their branches is referred to as
“Successor” and/or “Group” and each separate entity is individually referred to as “Group Entity”.
The Acquisition
established a new accounting basis for AMI. The fair value of AMI’s assets and liabilities were recorded as of the Acquisition Date in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(ASC) Topic 805, Business Combinations. Those amounts differed materially from the recorded values of AMI’s assets and liabilities reflected in its historical consolidated financial statements of AMI Cayman HoldCo Ltd., the previous
holding company under AMI CaymanCo Ltd. As a result of the application of the acquisition method of accounting, the Company’s consolidated balance sheets and consolidated statements of operations subsequent to October 17, 2024, will not
be comparable in many respects to AMI’s consolidated balance sheets and consolidated statements of operations prior to the Acquisition.
Accordingly, the consolidated financial statements for the financial period ended June 30, 2026 and 2025 represent the results of operations and the
financial position of the Company whereas the comparative figures for the preceding financial year ended December 31, 2024 are shown as comprising of Predecessor period (January 1, 2024 to October 17, 2024) representing the results of
operations of AMI US Holdings, Inc. and subsidiaries prior to the Acquisition and the Successor period (October 18, 2024 to December 31, 2024) representing the results of operations and the financial position of the Company subsequent to the
completion of the acquisition, and have been separated by a black line within these consolidated financial statements.
The acquisition was treated as a
business combination under ASC 805, Business Combinations, and the identifiable assets acquired, and liabilities assumed were measured at the acquisition date fair value under ASC 820, Fair Value Measurement. See note 3 for further details
regarding the acquisition.
As used throughout the consolidated financial statements, predecessor refers to AMI US Holdings, Inc. and subsidiaries,
successor refers to AMI TopCo, Inc. and subsidiaries as detailed in note 2(a) below and “we,” “our,” or “the Company” refers to both predecessor and successor entities.
2 Summary of significant accounting policies
(a)
Basis of presentation and principles of consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S.
generally accepted accounting principles (“U.S. GAAP”). The accompanying consolidated financial statements reflect all adjustments that management considers necessary for a fair presentation of the results of operations for these
periods. The Company’s reporting currency is United States Dollar (‘$’ or ‘USD’).
Page 7
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
The accompanying consolidated financial statements have been prepared on a consolidated basis and reflect the
financial statements of AMI TopCo, Inc., and its majority owned and controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements include the accounts of the following entities:
For the period-ended June 30, 2026 and the year ended December 31, 2025
i.
AMI TopCo Inc.
ii.
AMI Intermediate II, Inc.
iii.
AMI Intermediate, Inc.
iv.
AMI Buyer, Inc.
v.
AMI US Holdings, Inc.
vi.
AMI New US LLC
vii.
AMI HK HoldCo Limited
viii.
American Megatrends International GmbH
ix.
American Megatrends International, LLC
x.
American Megatrends Information Technology (Kunshan) Co., Ltd.
xi.
AMI India US LLC
xii.
American Megatrends International India Pvt. Ltd.
(b) Use of estimates
The preparation of the consolidated
financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, which affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenue and expenses in the consolidated financial statements and accompanying notes. Estimates are based on historical experience, where applicable, and other assumptions which management believes
are reasonable under the circumstances. On an ongoing basis, the Company evaluates its estimates, including those related to the measurement of lease liabilities and right of use assets applied in lease accounting, revenue recognition on fixed price
service contracts, fair values of other financial instruments, measurement of defined benefit obligations, valuation of intangible assets and goodwill, useful lives of property and equipment, useful lives of intangible assets, inventory, allowance
for expected credit losses, valuation allowance of deferred tax assets, income tax uncertainties and other contingencies and commitments. These estimates are inherently subject to judgment and actual results could differ from those estimates.
Although these estimates and assumptions are based upon management’s best knowledge of current events and actions, actual results could differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in
which the estimates are revised and in any future periods affected.
(c) Functional currency and translation
The Company’s consolidated financial statements are reported in USD. The functional currency of each entity in the Company is its respective local
currency except, for AMI HK HoldCo Limited where the local currency is not representative of the functional currency and therefore USD is the functional currency. The translation of the functional currencies of the respective subsidiaries into USD
is performed for balance sheet accounts using the exchange rates in effect as of the balance sheet date and for revenues and expense accounts using a monthly average exchange rate prevailing during the respective periods. The gains or losses
resulting from such translation are reported as currency translation adjustments under other comprehensive deficit, net, under accumulated other comprehensive loss as a separate component of equity.
Transactions of each subsidiary in currencies other than the subsidiary’s functional currency are translated into the respective functional currencies
at the average monthly exchange rate prevailing during the period of the transaction. Monetary assets and liabilities of each subsidiary denominated in currencies other than the subsidiary’s functional currency are translated into their
respective functional currency at the rates of exchange prevailing at the balance sheet date. The gains or losses resulting from foreign currency transactions are included in the consolidated statements of operations.
Page 8
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
(d) Allowance for credit losses
The Company records an allowance for credit losses (ACL) under Subtopic 326-20 Financial Instruments – Credit
Losses-measured at amortized cost for the current expected credit losses (CECL) inherent in its financial assets measured at amortized cost and contract assets. The ACL is a valuation account deducted from the amortized cost basis to present the
net amount expected to be collected. The estimate of expected credit losses includes expected recoveries of amounts previously written off as well as amounts expected to be written off.
The estimate of expected credit losses is based on the Company’s historical loss experience, adjusted for current and reasonable and supportable
forecasts of economic conditions and other pertinent factors affecting the Company’s customers such as known credit risk or industry trends. The allowance is estimated over the contractual term of the financial asset adjusted for expected
prepayments. The Company does not have any off-balance-sheet credit exposures.
Subsequent changes (favorable and
unfavorable) in expected credit losses each period are recognized immediately in net income/loss as a credit loss expense or a reversal of credit loss expense.
Trade accounts receivable
The Company uses an aging
schedule to estimate the ACL for trade accounts receivable. This method categorizes trade receivables into different groups based on industry and the number of days past due. Past due status is measured based on the number of days since the payment
due date. The trade receivables are evaluated individually for expected credit losses if they no longer share similar risk characteristics.
The Company
maintains an allowance for credit losses for estimated losses incurred in its accounts receivable. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and the
Company’s customers’ financial condition, payment patterns and current receivables aging. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is
considered remote. The Company does not have any off-balance sheet credit exposure related to its customers.
Contract assets
The Company determines the ACL for
contract assets using estimates of probability of customer default and loss given default percentages applied to estimated exposure at default.
When
measuring expected credit losses, the Company considers customers’ historical payment patterns, customers’ credit ratings as published by credit rating agencies, and current and reasonable and supportable forecasts of economic conditions
in estimating customers’ probability of default, exposure at default and estimated loss given default. The Company collectively evaluates contract assets with similar industry risk and credit risk characteristics. In addition, the Company
evaluates the collectability of contract assets on an individual basis when they no longer have similar risk characteristics to determine if any are deemed uncollectible. Contract assets are written off against the allowance for credit losses when
deemed uncollectible.
(e) Trade accounts receivable
Trade accounts receivable are recorded at the invoiced amount, net of an ACL, and do not bear interest. Amounts collected on trade accounts receivable are
included in the net cash provided by operating activities in the consolidated statements of cash flows. The payment terms are governed by the contract signed with the clients and are in the range of 30 days to 90 days. The Company also evaluates the
creditworthiness of clients as necessary, as described above.
(f) Revenue recognition
The Company earns revenue primarily from the licensing of BIOS or UEFI firmware products and Baseboard Management Controller (BMC) solutions and providing
support services to ODMs, OEMs, and CSPs. In addition, Company generates revenue from the sale of hardware products and other professional software engineering services.
Page 9
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
Pursuant to ASC 606, Revenue from Contracts with Customers, the Company recognizes revenue at the time
of transfer of control 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. Under this standard, revenue is based on a contract
with a determinable transaction price and distinct performance obligations with probable collectability. Revenues cannot be recognized until the performance obligation(s) are satisfied and control is transferred to the customer. This process
involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when the
performance obligations have been satisfied. Revenue is recognized net of any taxes collected, which are subsequently remitted to governmental authorities.
i. License revenue
The Company generates revenue from
the license of BIOS/UEFI, BMC, or other firmware product source codes embedded in a silicon vendor’s chipset to OEMs, ODMs and CSPs under non-cancelable agreements provided for a finite term. These
arrangements are entered into during various stages of the development phase of the chipsets that the firmware is embedded in and provide the customer with access to the Company’s firmware source code for their own product development
purposes. The contracts include maintenance and support services to develop and customize the source code for the customers’ needs. These arrangements include the obligation to stand ready to provide frequent updates and enhancements based on
changes required by the silicon vendor, the operating system provider, or the customer. The fees for license, maintenance and support services are fixed and invoiced in advance annually or per the terms of the agreement.
Certain license arrangements include sales or usage-based royalties in exchange for the right to distribute products that include the chipsets that are
embedded with the Company’s firmware source code. These royalties are based on a price per unit sold and are typically variable consideration in nature. In certain arrangements, a minimum volume of royalties are guaranteed over the course of
the contract, which represents fixed consideration. Royalty fees are typically billed quarterly based on reporting from the customer regarding sales and usage quantities.
Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together requires
significant judgment. The Company has concluded that (1) the licenses to access and distribute our source code in these contracts are not distinct from our obligation to provide unspecified updates to the source code throughout the license
term, because those promises represent inputs to a single, combined performance obligation, and (2) the rights to unspecified updates and enhancements are accounted for as part of the single performance obligation that includes the licenses,
updates, and technical support, because such rights are provided for the same period of time and have the same time-based pattern of transfer to the customer. In reaching this conclusion, the Company has considered the nature of the obligation to
customers, which is to provide an ongoing right to use the most up-to-date version of the firmware that protects the product from security, compatibility and operability
issues due to changes in the hardware and operating systems over time. The Company is required to provide on-going services to maintain the proper security, compatibility and operability of the licensed source
code within those chipsets so that the products continue to function to the customer’s standards.
Due to the significance and criticality of the
software updates and enhancements provided during the maintenance term, the license, update and support services are not distinct in the context of the contract and are considered a single performance obligation whose fixed consideration is
recognized on a straight-line basis over the term of the contract, consistent with the pattern of transfer.
To the extent the royalties are variable in
nature, given that they relate to the license of intellectual property and the license of intellectual property is the predominant item to which the royalty relates, we recognize sales- or usage-based royalties at the later of when the sale or usage
occurs or the performance obligation is satisfied or partially satisfied.
ii. Professional services revenue
Time and material contracts
Revenue generated from time-and-material based contracts is recognized as the related services are performed. The Company’s right to consideration corresponds directly with the value to the
customer of the entity’s performance completed to date. As such, the Company recognizes revenue in the amount to which the entity has a right to invoice for those services performed, in accordance with the practical expedient in ASC 606-10-55-18.
Page 10
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
Fixed price contracts
Revenue generated from fixed price contracts where performance obligations and control are satisfied over a period of time like technology integration, system
implementations and application development is recognized based on progress toward completion of the performance obligation using a percentage - of - completion (POC) method; efforts or costs expended have been used to measure progress toward
completion as there is a direct relationship between input and productivity. Any revision in the estimate of costs/hours to complete would result in an increase or decrease in revenue and such changes are recorded in the period in which they are
identified. Contract losses are determined to be the amount by which the estimated direct and incremental cost to complete exceeds the estimated future revenues that will be generated by the contract. These losses are included in research and
development and support expenses and recorded in accrued expenses and other current liabilities.
iii. Hardware revenue
The Company sells backplane controllers, MegaRAC development kits, and AST boards with BMC chips to OEM and ODM customers. The Company recognizes revenue when
control of the promised goods transfers to a customer, based on the shipping terms defined in purchase orders, in an amount that reflects the consideration which the Company expects to be entitled in exchange for transferring those products. Such
contracts do not include a significant financing component.
Shipping and handling costs associated with outbound freight, after control over a product
has transferred to a customer, are accounted for as a fulfillment cost and are included in other operating expenses as incurred.
The Company adjusts the
amounts of revenue for expected sales allowances, returns and claims based upon historical experience, however, these amounts are immaterial.
iv.
Contracts with Multiple Performance Obligations
When a sales arrangement contains multiple performance obligations, such as services, hardware and
license of software or combinations of each of them, revenue for each element is based on a five step approach as defined above. To the extent a contract includes multiple promised deliverables, judgment is applied to determine whether promised
deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct
performance obligations or series of distinct performance obligations, consideration is allocated among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which Company would sell a
promised good or service separately to the customer.
The Company determines the standalone selling prices based on its overall pricing objectives, taking
into consideration market conditions and other factors, including the value of its contracts, the software services sold, customer size and complexity, and the number and types of users under the contracts.
Costs to obtain customer contracts
The Company has
adopted the practical expedient to expense costs to obtain a contract if the amortization period for the assets that the Company otherwise would have recognized is one year or less. These costs incurred are immaterial to the consolidated financial
statements.
Contract assets and liabilities
Contract assets primarily represent revenue earnings over time for which the Company does not presently have an unconditional right to payment (generally not
yet billable) based on the terms of the contracts. Contract assets are reported net of expected credit losses.
Contract liabilities consist of amounts
invoiced or paid by the Company’s customers for which the associated performance obligations have not been satisfied and revenue has not been recognized based on the Company’s revenue recognition criteria.
Page 11
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
Contract assets and contract liabilities are reported in a net position on an individual contract basis at
the end of each reporting period. Contract assets are classified as current in the consolidated balance sheet when the Company expects to complete the related performance obligations and invoice the customers within one year of the balance sheet
date, and as long-term when the Company expects to complete the related performance obligations and invoice the customers more than one year out from the balance sheet date. Contract liabilities are classified as current in the consolidated balance
sheet when the revenue recognition associated with the related customer payments and invoicing is expected to occur within one year of the balance sheet date and as long-term when the revenue recognition associated with the related customer payments
and invoicing is expected to occur in more than one year from the balance sheet date.
(g) Inventories
Inventories primarily represent items of finished goods / hardware that are procured to fulfill customer contracts. Inventory is stated at the lower of cost
and net realizable value. Cost is determined by using the first-in, first-out method (FIFO) for all inventories. Inventory valuation reserves for obsolete and
slow-moving inventory are estimated based on a detailed analysis of inventory aging, historical usage trends, and expected future demand.
(h) Property
and equipment
Property and equipment represent the costs of furniture and fixtures, office equipment, computer equipment and networking equipment, and
leasehold improvements. Cost also includes any costs necessarily incurred to bring the asset to the condition and location necessary for its intended use.
Property and equipment are stated at cost, less accumulated depreciation and impairment losses. Depreciation is calculated using the straight-line method over
the assets’ estimated useful lives as follows:
Asset description
Asset life (in years)
Computer and networking equipment
3 to 5
Furniture, fixtures, and office equipment
5
Leasehold improvements
Lower of lease term or the estimated useful life of the improvement (ranging from 2 to 12 years)
Leasehold improvements related to office facilities are depreciated over the shorter of the lease term or the estimated useful
life of the improvement.
Subsequent expenditure related to property and equipment which is deemed to extend the useful economic life of an asset are
capitalized. Maintenance and repairs that do not improve efficiency or extend the estimated economic life of an asset are expensed as incurred. The gain or loss on disposal/write off of an item of property and equipment (calculated as the difference
between the carrying amount of the item and net proceeds from disposal) is recognized in the consolidated statements of operations under the caption ‘other (income), net’.
(i) Leases
A lease is a contract that contains right to
control the use of an identified asset for a period of time in exchange for consideration. The Company is a lessee in operating leases for office space and accommodation for certain of its employees. The Company accounts for leases in accordance
with Topic 842, Leases.
Right-of-use assets (ROU assets) represent
the Company’s right to control the underlying assets under lease, and the lease liability is the obligation to make the lease payments related to the underlying assets under lease. ROU assets are recognized on the lease commencement date and
measured initially based on the lease liability adjusted for any initial direct costs, prepaid rent, and lease incentives. ROU assets are depreciated over the lease term or useful life of the right-of-use asset, whichever is less.
Subsequently, ROU assets are measured at cost less any accumulated
depreciation, accumulated impairment losses, if any, and adjusted for any remeasurement of the lease liability.
Page 12
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
The lease liabilities are initially measured at the present value of the unpaid lease payments discounted
using the Company’s local incremental borrowing rate. The lease payments included in the measurement of the lease liabilities are comprised of fixed payments less any lease incentives, variable lease payments that depends on an index or a
rate, the exercise price of a purchase option if the Company is reasonably certain to exercise the option, and any payment of penalties for terminating the lease, if the lease term reflects the Company exercising an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any
reassessment or modification, if any.
The Company monitors events or changes in circumstances that require a reassessment of one of its leases. When a
reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero.
In that case, the ROU asset is reduced to zero and the remainder of the adjustment is recorded in profit or loss.
Variable lease payments associated with
the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments are presented as operating expense in the Company’s consolidated
statements of operations in the same line item as expense arising from fixed lease payments (operating leases).
The Company has elected to not recognize
leases with a lease term of 12 months or less in the consolidated balance sheets and lease costs for those short-term leases are recognized on a straight-line basis over the lease term in the consolidated statements of operations.
For all asset classes, the Company has elected the lessee practical expedient to combine lease and non-lease
components and account for the combined unit as a single lease component in case there is no separate payment defined under the contract.
Operating lease
right-of-use assets are presented as operating lease right of use assets on the consolidated balance sheets. The current portion of operating lease liabilities is
included in current portion of operating lease liabilities, and the long-term portion is presented separately as operating lease liabilities, net of current portion on the consolidated balance sheets.
(j) Business Combination
The Company accounts for its
business combinations under the acquisition method of accounting. The Company records the assets acquired and liabilities assumed, including any contingent consideration, based on their estimated fair values at the date of acquisition. The excess of
the purchase price for acquisitions over the fair value of the net assets acquired, including other intangible assets, is recorded as goodwill.
While the
Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, the estimates are inherently uncertain and subject to
refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.
Upon the conclusion of the measurement period, any subsequent adjustments are recorded to the Company’s consolidated statements of operations.
Identifiable intangible assets acquired in a business combination are recognized separately from goodwill when they meet the contractual-legal or separability
criteria and are measured at acquisition-date fair value.
Transaction costs are acquisition-related expenses that the acquirer incurs to affect a
business combination. These costs include finder’s fees; advisory, legal, accounting, valuation, and other professional or consulting fees; general administrative expenses; and the costs of registering and issuing debt and equity securities.
The Company accounts for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received, except for equity and debt issuance costs.
During 2024, transaction costs incurred by the Acquirer that were contingent upon the consummation of the Acquisition have been recorded in the Successor
Period. Acquisition-related expenses incurred by the acquiree prior to acquisition are recorded in the Predecessor Period consolidated statement of operations.
Page 13
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
The costs of issuing debt or equity securities are recognized in accordance with other applicable standards.
Debt issuance costs are reported in the consolidated balance sheet as a direct deduction from the face amount of that debt.
(k) Goodwill
Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually
identified and separately recognized. Our goodwill is contained within two reporting units, which are our product lines: Boot Firmware (“BFG”) and Manageability and Security (“MSG”). Goodwill is not amortized but is instead
tested for impairment annually during the fourth quarter and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. When evaluating whether goodwill is impaired, we make a qualitative assessment
to determine if it is more likely than not that a reporting unit’s fair value is less than the carrying amount. If the qualitative assessment determines that it is more likely than not that the fair value of a reporting unit is less than the
carrying amount, the fair value of a reporting unit is compared with its carrying value (including goodwill). If the fair value of a reporting unit is less than its carrying value, then goodwill impairment exists for that reporting unit. The
impairment loss, if any, is recognized for the amount by which the carrying value exceeds the fair value. If the fair value of a reporting unit exceeds its carrying value, no further impairment analysis is needed. Based on our annual qualitative
impairment test, we concluded that it is not more likely than not that the fair value of each reporting unit is less than its carrying amount.
(l)
Intangible assets
The identifiable intangible assets acquired consist primarily of trademarks, developed technology, and customer relationships. The
trademarks and developed technology have been fair valued, based on the ‘relief from royalty’ method. The relief-from-royalty method is a variation of an income approach that measures the fair value of an asset using a cost-savings
concept. This is based on the notion that, if the entity did not own the asset, it would pay a royalty to a third party for the right to use that asset. Therefore, the value of the asset is the fair value of the cost savings of not paying a royalty
to a third party.
Customer relationships were valued using the multi-period excess earnings method, which estimates fair value based on the present value
of the after-tax cash flows attributable to existing customer relationships after deducting contributory asset charges associated with supporting assets.
The Company also capitalizes certain technology-related development costs incurred in connection with developing technology when the initial design phase is
completed and commercial and technological feasibility has been established. Any development cost incurred before technological feasibility is established is expensed as incurred as research and development and support expenses. Technological
feasibility is established upon completion of a detailed design program or, in its absence, completion of a working model. Capitalized technology costs include only (i) external direct costs of materials and services utilized in developing or
obtaining software and technology and (ii) compensation and related benefits for employees who are directly associated with the project. These capitalized technology-related development costs are included in intangible assets.
Costs incurred in connection with developing or obtaining software or technology for sale to customers which are under development and not put to use are
disclosed under “intangible assets under development.”
Intangible assets with definite lives are amortized over the estimated useful lives
and are reviewed for impairment, if indicators of impairment arise. The evaluation of impairment is based upon a comparison of the carrying amount of the intangible asset with the estimated future undiscounted net cash flows expected to be generated
by the asset. If estimated future undiscounted cash flows are less than the carrying amount of the asset, the asset is considered impaired. The impairment expense is determined by comparing the estimated fair value of the intangible asset to its
carrying value, with any shortfall from fair value recognized as an expense in the current period. The intangible assets with definite lives are amortized over the estimated useful lives of the assets as under:
Asset description
Asset life (in years)
Developed technology
10
Customer relationships
10
Trademarks
15
Page 14
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
(m) Impairment of long-lived assets
The Company evaluates its held-and-used long-lived assets for indicators of
possible impairment when events or changes in circumstances indicate the carrying amount of an asset or asset group (collectively, the “asset group”) may not be recoverable. The Company measures the recoverability of the asset group by
comparing the carrying amount of such asset group to the future undiscounted cash flows it expects the asset group to generate. If the Company considers the asset group to be impaired, the impairment to be recognized equals the amount by which the
carrying value of the asset group exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.
There has been no impairment during the period ended June 30, 2026, and the year ended December 31, 2025.
(n) Cash and cash equivalents
Cash and cash equivalents primarily represent cash and money market instruments in bank accounts. The Company considers all highly liquid investments
and short-term deposits with an original maturity of three months or less, when purchased, to be cash equivalents.
Restricted cash
Restricted cash consists of funds that are contractually restricted as to usage or withdrawal due to a contractual agreement with a lender for the repayment of
borrowings.
The position of cash and cash equivalents and restricted cash as of Balance Sheet Date, is as follows:
As of June 30, 2026
As of December 31, 2025
Cash and bank balances
$
30,274,536
$
37,775,933
Restricted cash – current
2,184,514
17,628
Restricted cash – non-current
28,133
19,855
Total
$
32,487,183
$
37,813,416
(o) Income taxes
The
Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statements carrying amounts of existing assets
and liabilities and their tax bases and for all operating loss and tax credit carryforwards, if any. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax laws or rates is recognized in the consolidated statements of operations in the period that includes the enactment date. If it
is determined that it is more likely than not that future tax benefits associated with a deferred income tax asset will not be realized, a valuation allowance is recorded.
The Company regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected
timing of the reversals of existing temporary differences and tax planning strategies. The Company’s judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully
execute the business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, the Company’s income tax expense would increase or decrease in the period in which the assessment is changed.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax
positions are measured as the largest amount that is greater than 50 percent likely of being realized upon settlement.
The Company follows the
specific identification approach for releasing stranded tax effects from accumulated other comprehensive income (“AOCI”) upon recognition of these AOCI items in the consolidated statements of operations.
Page 15
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
(p) Employee benefits
Contributions to defined contribution plans are charged to consolidated statements of operations in the period in which services are rendered by the covered
employees. Current service costs for defined benefit plans are accrued in the period to which they relate. The liability in respect of defined benefit plans is calculated annually by the Company using the projected unit credit method. Prior service
cost, if any, resulting from an amendment to a plan is recognized and amortized over the remaining period of service of the covered employees.
The
Company records annual amounts relating to its defined benefit plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, compensation increases and turnover rates. The Company reviews
its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in other comprehensive income (loss) and
amortized to net periodic cost over future periods using the corridor method. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions.
(q) Share-based payment transactions
The Company
recognizes and measures compensation expense for all share-based awards based on the grant date fair value. The Company determines fair value attributable to respective classes of shares using an option pricing model. The model allocates fair value
to the respective classes of shares using a waterfall model stipulated under the equity arrangement of shareholders. During the period ended June 30, 2026 and the year ended December 31, 2025, the grant date fair value for option awards
was determined using the Monte Carlo Option Pricing Model, whereas for the Predecessor period, the grant date fair value for option awards was determined using the Black-Scholes model.
The fair value determined at the grant date is expensed over the vesting period of the share-based awards. Share-based compensation recognized in the
consolidated statements of operations is based on awards that are ultimately expected to vest. If the vesting is based on a contingent event which is considered not probable, related costs are recognized only when such event is consummated.
The Company accounts for forfeitures when they occur. Consequently, compensation cost previously recognized for an employee share option is reversed in the
period in which forfeiture of the award occurs. Previously recognized compensation cost is not reversed if an employee share option for which the requisite service has been rendered expires unexercised.
With respect to modifications, the incremental impact of an increase in fair value is charged to the consolidated statements of operations on the date of
modification if the vesting period is complete, and over the remaining vesting period where the vesting period is not complete.
(r) Commitments and
contingencies
The Company records a liability for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources
when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. If it determines that a loss is reasonably possible and the loss or range of loss can be reasonably estimated, the same is disclosed
as possible loss in the accompanying notes to the consolidated financial statements.
The Company reviews the developments in contingencies that could
affect the amount of the provisions that have been previously recorded, and the matters and related reasonably possible losses disclosed. Adjustments are made to provisions and changes to corresponding disclosures accordingly to reflect the impact
of negotiations, settlements, rulings, advice of legal counsel, and updated information. Significant judgment is required to determine both the probability and the estimated amount of loss. These estimates are based on an assessment of the facts and
circumstances at each balance sheet date and are subject to change based on new information and future events.
Page 16
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
(s) Financial instruments and significant customers
Financial instruments that potentially subject the Company to concentration on credit risk are reflected principally in cash and cash equivalents, contract
assets and accounts receivable. The Company evaluates the concentration of risk with respect to its receivable accounts and contracts to be low, as the Company does not foresee any significant credit risk attached to receivables from customers owing
to their past payment history and stable financial conditions. Revenues from one customer represented approximately $10.2 million, which is approximately 10% of the total revenue for the Period ended June 30, 2026, and approximately
$12.7 million, which is approximately 14% of the total revenue for the Period ended June 30, 2025, are reported within revenue.
(t) Fair
value measurements
The Company holds financial instruments that are measured at fair value or fair value is used for disclosure purposes. Fair value
is determined in accordance with a fair value hierarchy that prioritizes the inputs and assumptions used, and the valuation techniques used to measure fair value. The three levels of the fair value hierarchy are described as follows:
Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or
indirectly, for substantially the full term of the asset or liability.
Level 3 inputs: Unobservable inputs for the asset or liability used to measure
fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of
assets and liabilities and placement within the fair value hierarchy levels. The Company determines the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability.
The fair
value of the Developed Technology and Trademarks was determined as $89,000,000 and $12,400,000 respectively using the relief-from-royalty method and classified in Level 3 of the fair value hierarchy. The fair value of the assets was estimated
based on the present value of the royalty payments that the acquirer saves by owning the asset, based on a market participant royalty rate. This approach includes management estimating revenues expected to be generated over the expected useful life
of the assets, which requires significant judgment and has significant uncertainty associated with it. In addition, the Company determines the appropriate discount rate to apply to the cash flows and calculates a tax amortization benefit. Under this
approach, a royalty rate of 1% and 15% was used for Trademarks and Developed Technology, respectively and the cash flows were discounted using a rate of 11%. The fair value of customer relationships was determined to be $ 316,400,000 using the
multi-period excess earnings method and was classified within Level 3 of the fair value hierarchy. The valuation was based on the present value of after-tax cash flows attributable to existing customers,
after deducting contributory asset charges, and incorporated an annual customer-retention factor of 95.0% and a discount rate of 11.0%. These assumptions require significant management judgment and have significant uncertainty associated with it.
(see note 3 for further discussion)
(u) Expenses
Set forth below is a brief description of the components of the Company’s expenses:
i. Cost of product
Cost of product
consists primarily of the cost of computer hardware sold in fulfilling customer contracts. Such costs are recognized in the period in which the related revenue is recognized.
ii. Cost of services (exclusive of depreciation and amortization)
Cost of services consists primarily of personnel-related costs, and other direct costs associated with providing support services and fulfilling customer
contracts. Such costs are recognized in the period in which the related revenue is recognized. Cost of services excludes depreciation of capitalized software and amortization of developed technology of $1,817,980 for the period ended June 30,
2026, and $1,907,439 for the period ended June 30, 2025.
Page 17
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
iii. Research and development expenses
Research, development expenses primarily consist of personnel and other direct costs pertaining to the operation and monitoring of software product development
and providing support services which are directly related to providing services that generate revenue and support operations of the Company. All research and development costs are expensed as incurred, with the exception of certain
technology-related development costs.
iv. Selling, general and administrative expenses
Selling, general and administrative expenses include payroll and related costs for corporate, finance, legal, business development, supply chain management and
other support staff including bonus and share-based compensation expenses, professional fees, allowance for credit losses and other corporate expenses.
(v)
Recently issued accounting pronouncements
Recently Adopted
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides an exception to fair value measurement for
contract assets and contract liabilities related to revenue contracts acquired in a business combination. The ASU requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in
accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU is effective for the Company for annual and interim periods
in fiscal years beginning after December 15, 2022 and is applied to business combinations occurring on or after the effective date. The Company adopted this ASU effective January 1, 2023.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax
Disclosures. The Company adopted ASU 2023-09 prospectively for the year ended December 31, 2025. The amendments require consistent categories and greater disaggregation in the income tax rate
reconciliation and disclosure of income taxes paid, net of refunds received, disaggregated by federal, state, and foreign jurisdictions. Prior periods continue to be presented under the previous disclosure requirements. The adoption affected
disclosures and did not affect amounts recognized in the 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. This ASU adds an illustrative example to demonstrate how an entity should apply the scope
guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards should be accounted for in accordance
with Topic 718. ASU 2024-01 is effective for the Company’s annual reporting periods beginning after December 15, 2024. Adoption is either with a prospective method or a fully retrospective method of
transition. Early adoption is permitted. The adoption of ASU 2024-01 did not have a material effect on its consolidated financial statements.
In March 2024, the FASB issued ASU 2024-02, Codification Improvements – Amendments to Remove References to
the Concepts Statements. This ASU removes references to various FASB Concepts Statements to simplify the Codification and draw a distinction between authoritative and non-authoritative literature. ASU 2024-02 is effective for the Company’s annual reporting periods beginning after December 15, 2024. Adoption is either with a prospective method or a fully retrospective method of transition. Early
adoption is permitted. The Company adopted this ASU effective January 1, 2025 and there has been no material effect on its consolidated financial statements.
Effective in Future Years
In October 2023, the FASB
issued ASU 2023-06, Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The ASU modifies the disclosure or
presentation requirements of a variety of Topics in the Codification to align with the Securities and Exchange Commission (“SEC”)’s regulations. The ASU also makes those requirements applicable to entities that were not previously
subject to the SEC’s requirements. The ASU is effective for the Company two years after the effective date to remove the related disclosure from Regulation S-X or
S-K. If the SEC has not removed the applicable disclosure requirement by June 30, 2027, the related amendment will not become effective for any entity and will be removed from the Codification. As of the
date these consolidated financial statements have been made available for issuance, the SEC has not yet removed any related disclosure. The Company does not expect the adoption of ASU 2023-06 to have a
material effect on its consolidated financial statements.
Page 18
AMI TopCo, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
For the period ended June 30, 2026, and the year ended December 31, 2025
In November 2024, the FASB issued ASU 2024-04, Debt – Debt
with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This ASU clarifies the requirements for determining whether certain settlements of convertible debt
instruments should be accounted for as induced conversions. ASU 2024-04 is effective for the Company’s annual reporting periods beginning after December 15, 2025. Adoption is either with a
prospective method or a retrospective method of transition that is retrospective to the later of the beginning of earliest period presented and the date the entity adopted ASU 2020-06. Early adoption is
permitted for all entities that have adopted ASU 2020-06. The Company does not expect the adoption of ASU 2024-04 to have a material effect on its consolidated financial
statements.
In May 2025, the FASB issued ASU 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 for share-based consideration payable to a customer, including the
interaction between the guidance in Topic 606 and Topic 718. The amendments clarify that the variable consideration constraint guidance in Topic 606 should not be applied to share-based consideration that is measured and classified under Topic
718 and provide additional guidance to improve consistency in accounting for such arrangements. ASU 2025-04 is effective for the Company’s annual reporting periods beginning after December 15, 2026.
Adoption is permitted using either a modified retrospective method or a retrospective method of transition. Early adoption is permitted. The Company does not expect the adoption of ASU 2025-04 to have a
material effect on its consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial
Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU provides a practical expedient that permits an entity to assume that current economic conditions as of the balance
sheet date do not change for the remaining life of the asset. Further, the ASU allows an entity, other than a public business entity, that elects the practical expedient to make an accounting policy election to consider collection activity after the
balance sheet date when estimating expected credit losses. ASU 2025-05 is effective for the Company for annual periods beginning after December 15, 2025. The ASU is applied prospectively and early
adoption is permitted. The Company does not expect the adoption of ASU 2025-05 to have a material effect 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. The
ASU amends the criteria for when an entity is required to start capitalizing costs for internal use of software. The ASU is effective for the Company for annual periods beginning after December 15, 2027. Adoption is on either a prospective,
modified retrospective, or a fully retrospective basis. Early adoption is permitted. The Company is currently evaluating the effect that adoption of ASU 2025-06 will have on its consolidated financial
statements.
Page 19
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
3
Prepaid expenses and other current assets
June 30, 2026
December 31, 2025
(Unaudited)
(Audited)
Prepaid expenses and other current assets consist of the following:
Prepaid expenses
$
2,508,417
$
2,118,236
Other current assets
228,004
296,161
Indirect tax receivable
628,340
456,004
$
3,364,761
$
2,870,401
4
Property and equipment, net
June 30, 2026
December 31, 2025
(Unaudited)
(Audited)
The components of property and equipment, net were as follows:
Computer and networking equipment
$
7,795,341
$
7,388,561
Furniture, fixtures and office equipment
1,089,415
668,877
Leasehold improvements
5,086,426
3,582,054
Software
1,067,288
1,117,613
Less: accumulated depreciation and amortization
(9,465,387
)
(8,969,011
)
Property and equipment, net
$
5,573,083
$
3,788,094
Depreciation expense was $1,250,746 and $1,073,218 for the six months ended June 30, 2026, and
June 30, 2025, respectively.
5
Intangibles, net and Goodwill, net
Intangibles, net
June 30, 2026
Gross carrying
amount
Accumulated amortization
Net carrying
amount
(Unaudited)
The components of intangibles, net were as follows:
Developed technology
$
89,000,000
$
15,133,899
$
73,866,101
Trademarks
12,400,000
1,405,696
10,994,304
Customer relationships
316,400,000
54,053,480
262,346,520
Total
$
417,800,000
$
70,593,075
$
347,206,925
December 31, 2025
Gross carrying
amount
Accumulated amortization
Net carrying
amount
(Audited)
Developed technology
$
89,000,000
$
10,722,892
$
78,277,108
Trademarks
12,400,000
995,984
$
11,404,016
Customer relationships
316,400,000
38,298,762
$
278,101,238
Total
$
417,800,000
$
50,017,638
$
367,782,362
Amortization expense was $20,575,437 and $20,575,437, for the six months ended June 30, 2026 and
June 30, 2025, respectively. The weighted average remaining amortization for the intangibles as of June 30, 2026 is 8.43 years, and as of December 31, 2025 was 8.93 years. There has been no impairment recorded during the six months
ended June 30 2026.
The estimated amortization expense schedule for intangible assets based on current balance is as follows:
Year ending December 31,
2026
20,916,467
2027
41,491,904
2028
41,605,580
2029
41,491,904
2030
41,491,904
Thereafter
160,209,166
347,206,925
Goodwill
June 30 , 2026
December 31, 2025
(Unaudited)
(Audited)
Goodwill
$
211,887,395
$
211,887,395
Less: impairment on goodwill
—
—
Goodwill
$
211,887,395
$
211,887,395
As described in Note 2(k), Goodwill is tested for impairment annually during the fourth quarter and whenever
events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. There has been no impairment recorded during the year ended December 31, 2025, for the Successor Period ended December 31, 2024 and Predecessor
Period ended October 17, 2024.
As of December 31, 2025, $64,826,274 of the intangible assets and $62,262,993 of the goodwill are
deductible for tax purposes.
Page 20
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
6
Borrowings
On October 17, 2024, the Company entered into a comprehensive credit agreement (‘Credit Agreement’) to avail a term loan
amounting to $275,000,000 and revolver line of credit amounting to $40,000,000 from “Bain Capital Credit, LP”. Borrowings under the Credit Agreement bear interest at London Interbank Offered Rate or Secured Overnight Financing Rate
(SOFR) or Alternate Base Rate (ABR) plus an applicable margin (5.07% as of December 31, 2025). The Credit Agreement is secured by substantially all assets.
The debt issuance cost for the term loan facility of $275,000,000 was $8,405,864 (including $3,150,000 in fees due to an affiliate of Thomas H.
Lee Partners, the owner of AMI TopCo, Inc.) which will be amortized using the effective interest method over a period of seven (7) years.
Short-term borrowings
There is no outstanding balance of the revolver line of credit as of June 30, 2026. The unutilized amount of the revolver facilities is
$40,000,000 as of June 30, 2026.
The debt issuance cost for the revolver line of credit of $40,000,000 was $1,222,671 which will be
amortized over a period of seven (7) years using the straight-line method.
June 30, 2026
December 31, 2025
(Unaudited)
(Audited)
Term-loan from bank
$
271,562,500
$
272,937,500
Revolver loan
—
—
271,562,500
272,937,500
Less: current portion of long-term debt
(2,750,000
)
(2,750,000
)
Less: Total deferred financing costs (Non current)
(5,894,164
)
(6,579,682
)
Less: Total deferred financing costs (current)
(1,382,399
)
(1,382,399
)
Total debt, excluding current maturities and deferred financing costs
$
261,535,937
$
262,225,419
Maturities of long-term debt outstanding, in principal amounts, at June 30, 2026 are summarized below
Year
Total Principal Repayment
2026
$
1,375,000
2027
2,750,000
2028
2,750,000
2029
2,750,000
2030
2,750,000
Thereafter
259,187,500
$
271,562,500
7
Accrued expenses and other current liabilities
June 30, 2026
December 31, 2025
(Unaudited)
(Audited)
Accrued expenses and other current liabilities consists of the following:
Sales tax and other taxes payable
$
520,687
$
621,052
Accrued liabilities and expenses
3,670,535
3,330,999
Accrued interest
4,911,147
5,002,695
Employee related payables
8,742,818
14,869,761
Current portion of liability for pension benefits
34,779
159,900
$
17,879,966
$
23,984,407
Page 21
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
8
Other liabilities
June 30, 2026
December 31, 2025
(Unaudited)
(Audited)
Long term accrued liabilities and expenses
—
Long term employee related payables
$
436,036
$
416,498
Long term portion of liability for pension benefits
1,574,010
1,738,309
$2,010,046
$
2,154,807
9
Leases
The Company has leased buildings, vehicles, furniture and fixtures, leased lines, computer equipment from various lessors. The components of
lease are as summarized below:
Six Months Ended
June 30, 2026
Six Months Ended
June 30, 2025
(Unaudited)
Operating lease cost
$
1,691,250
$
1,383,494
Short term lease cost
67,490
162,484
Total lease cost
$
1,758,740
$
1,545,978
Included in ‘Cost of revenue’, ‘Research and Development and Support Expenses’ and
‘Selling, General and Administrative Expenses’ in the consolidated statements of operations are amounts of $723,217, $670,625 and $364,898 for the six months ended June 30, 2026, and $652,463, $570,844 and $322,671 for the six
months ended June 30, 2025, respectively.
Amounts reported in the consolidated balance sheets as of June 30, 2026 and
December 31, 2025 were as follows:
June 30, 2026
December 31, 2025
(Unaudited)
(Audited)
Operating leases:
Operating lease
right-of-use assets
$
12,267,275
$
9,050,598
Operating lease liabilities
12,949,550
9,435,171
Current
1,908,873
2,071,424
Non-current
$
11,040,677
$
7,363,747
Other Information
June 30, 2026
December 31, 2025
(Unaudited)
(Audited)
Weighted average remaining lease term - operating leases
6.33 years
4.72 years
Weighted average discount rates - operating leases
8.05
%
7.72
%
Cash paid for amounts
included in the measurement of lease liabilities
Six Months Ended
June 30, 2026
Six Months Ended
June 30, 2025
(Unaudited)
Operating cash outflows from operating leases
$
1,368,698
$
1,416,557
The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis
for the next five years and thereafter.
Year ending December 31, 2026
$
1,394,365
2027
2,904,063
2028
2,730,586
2029
2,159,339
2030
2,200,860
Thereafter
5,780,768
Total
17,169,981
Imputed interest
(4,220,431
)
Total lease liability
$
12,949,550
Page 22
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
10
Share-Based Compensation
AMI TopCo, Inc., a Delaware corporation, established a stock incentive plan known as “2024 Equity Incentive Plan” intended to
promote the long-term growth and profitability of the Company and its subsidiaries by providing those persons who are involved in the Company’s and its subsidiaries’ growth with an opportunity to acquire an ownership interest in the
Company, thereby encouraging such persons to contribute to and participate in the success of the Company and its subsidiaries.
Under the
Plan, the Company may make awards to present and future officers, directors, employees, consultants and other service providers of the Company or its subsidiaries as may be selected in the sole discretion of the Board of AMI TopCo, Inc.
The Board authorized and approved the “2024 Equity Incentive Plan” on December 2, 2024. The Plan authorizes grants to
purchase up to 37,473 shares of Common stock with an exercise price of $1,000 per share.
The plan comprises of the following:
a) Service-based options
b)
Performance-based options
a) Service-based options
Service-based options will be subject to time-vesting and will vest over a five (5) year period as follows:
i. twenty percent (20%) of the Service-based options shall vest on the first anniversary of the date of grant and
ii. an additional twenty percent (20%) will vest on each subsequent anniversary of the date of grant such that all service-based options shall
be vested as of the fifth (5th) anniversary of the date of grant. To receive each year’s vesting, the employee must remain continuously employed by the Company (or its subsidiaries) from the grant date through each vesting date.
b) Performance-based options
Performance-based options will be subject to the time and performance-based vesting criteria both of which must be satisfied for such options
to vest and become exercisable.
a) Time-Based Vesting. The time-based vesting criteria for the performance-based options will
be subject to the same service vesting requirements as the service-based options
b) Performance-Based Vesting. The vesting of
performance-based options is contingent upon the achievement of specific financial performance targets by the investor, as measured on the applicable measurement date. These targets are:
i. Investor IRR (Internal Rate of Return) must be at least 15%, and
ii. Investor MoM (Multiple on Money) must exceed 2.0.
If both conditions are met, the performance-based options will vest on a straight-line basis between 0% and 100%, depending on the level of
MoM achieved.
- If MoM is less than 2.0: No performance-based options will vest.
- If MoM is exactly 3.0 or higher: 100% of the performance-based options will vest.
- If MoM is between 2.0 and 3.0: A proportional percentage of the performance-based options will vest, increasing linearly from 0% to 100%.
In addition to meeting these performance thresholds, the employee must have been continuously employed or providing services to the
Company or its subsidiaries from the grant date through the applicable vesting date.
During the six months ended June 30 2026, the
Company granted options to purchase 749 shares with an exercise price of $1,000 and a fair value of $482.32 for the service-based options and $418.39 for the performance-based options.
The Company uses company-specific historical data to estimate the expected term of the options, such as grantee option exercise and grantee
post-vesting departure behavior. Separate groups of grantees that have similar historical exercise behaviour are considered separately for valuation purposes. Since the Company’s shares are not publicly traded and its shares are rarely traded
privately, expected volatility is estimated based on the average historical volatility of similar entities with publicly traded shares. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve at the date of
grant.
Page 23
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
The grant date fair value of each option award is estimated on the date of grant using the
Monte Carlo option pricing model. The weighted average assumptions for the six months ended June 30, 2026 grants are provided in the following table
Service-based options
Performance-based options
Valuation Assumptions
Expected dividend yield
0%
0%
Expected volatility
100.20%
108.50%
Expected term (years)
4 years
4 years
Risk-free interest rate
3.70%
3.70%
Stock option activity during the periods indicated is as follows:
Service-based options
Performance-based options
Number of
Shares
Weighted-Average
Exercise Price
Weighted-Average
Remaining
Contractual Term
Number of
Shares
Weighted-Average
Exercise Price
Weighted-Average
Remaining
Contractual Term
Balance at December 31, 2025
11,880
$
1,000
9.15 years
17,820
$
1,000
9.15 years
Granted
300
$
1,000
449
$
1,000
Exercised
—
—
—
—
Forfeited
(181
)
—
(336
)
—
Expired
(45
)
—
—
—
Balance at June 30, 2026
11,954
1,000
8.68 years
17,933
1,000
8.68 years
Vested and Exercisable at June 30, 2026
—
—
The weighted average grant-date fair value of options granted during the six months ended 30 June 2026
was $482.32 for service-based options and $418.39 for performance-based options.
A summary of the status of the Company’s nonvested
employee options as of June 30, 2026 and changes during the six months ended June 30, 2026, is presented below:
Service-based options
Performance-based options
Non Vested Shares
Number of
Shares
Weighted-Average
Grant-Date Fair
Value
Number of
Shares
Weighted-Average
Grant-Date Fair
Value
Balance at December 31, 2025
9,834
$
458.44
17,820
$
402.95
Granted
300
482.32
449
418.39
Vested
—
—
—
—
Forfeited
(181
)
433.66
(336
)
387.98
Expired
—
—
—
—
Balance at June 30, 2026
9,953
$
459.61
17,933
$
403.61
At June 30, 2026, there was $2.3 million of total unrecognized compensation cost related to
nonvested stock options granted under the Plan. That cost is expected to be recognized over a weighted-average period of 3.47 years.
Probability of achievement of conditions attached to the vesting of performance-based option is not considered probable as at the reporting
date and accordingly, no cost has been recognized with respect to performance-based options.
11
Income Taxes
We are subject to federal and state income tax as well as income tax in the foreign jurisdictions in which we operate.
For the first six months of fiscal 2026 and 2025, we recorded an income tax benefit of $3.2 million and $2.4 million, respectively.
The difference between the U.S. federal statutory tax rate of 21% and our effective tax rates for six months ended June 30, 2026 resulted primarily from the impact of foreign income taxes and the research and development credit. The difference
between the U.S. federal statutory tax rate of 21% and our effective tax rates for six months ended June 30, 2025 resulted primarily from the impact of foreign income taxes and the research and development credit.
Page 24
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
12
Revenue from contract with customers
The following table presents the Company’s revenue disaggregated based on performance obligations:
For the six months ended
June 30, 2026
For the six months ended
June 30, 2025
(Unaudited)
License (including maintenance, royalty and labels)
$
66,502,548
$
49,785,769
Professional services
21,670,019
27,630,327
Hardware
14,083,659
15,125,046
$
102,256,226
$
92,541,142
As noted in Note 2(f), license revenue and certain professional service arrangements are recorded over time,
while hardware revenues are recorded at a point in time.
The following table presents disaggregated revenue by product type for the
following periods:
For the six months ended
June 30, 2026
For the six months ended
June 30, 2025
(Unaudited)
Boot Firmware Group (BFG)
$
54,327,582
$
50,262,976
Manageability Solution Group (MSG)
42,866,800
38,196,029
Hardware Engineering Group (HEG)
555,955
506,047
Security Software Group (SSG)
2,774,474
2,669,907
Cloud Service Group (CSG)
31,111
30,058
Meridian
1,700,304
876,125
$
102,256,226
$
92,541,142
Contract balances
The following table provides information about contract liabilities from contract with customers:
June 30, 2026
December 31,
2025
(Unaudited)
(Audited)
Contract liabilities - Current
$
27,810,414
$
25,209,733
Contract liabilities - Non current
5,147,833
4,777,140
$
32,958,247
$
29,986,873
The following table provides information about accounts receivable and contracts assets from contract with
customers:
June 30, 2026
December 31, 2025
(Unaudited)
(Audited)
Accounts receivable
$
47,427,099
$
33,569,635
Contract assets
3,588,087
9,570,148
Less: allowance for credit losses
(324,373
)
(288,157
)
$
50,690,813
$
42,851,626
The above table reflects the information of contract liabilities, which have been disclosed as a separate
caption in the consolidated balance sheets as of June 30, 2026 and as of December 31, 2025. The Contract liabilities include that portion of revenue for which payment has been received in advance from customers.
Revenue of $17,826,301 and $12,420,712 recognized during the period ended June 30,2026 and period ended June 30, 2025 respectively
were included as part of the opening balance of contract liability.
As of June 30, 2026, the aggregate transaction price allocated to
unsatisfied or partially unsatisfied performance obligations was $36,089,356. The Company expects to recognize approximately $23,709,997 within one year, $10,674,773 in one to two years, and $1,704,586 thereafter. The amount principally relates to
fixed consideration under firmware license, update, maintenance and support arrangements and fixed-price professional service contracts.
The Company has elected the optional exemptions for contracts with an original expected duration of one year or less, performance obligations
for which revenue is recognized in the amount the Company has a right to invoice, and sales- or usage-based royalties promised in exchange for licenses of intellectual property.
Increase in the Company’s contract liabilities balance during the period is a result of normal business activity and not materially
impacted by any other factors.
Page 25
AMI TopCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
13
Finance cost
For the six months ended
June 30, 2026
For the six months ended
June 30, 2025
(Unaudited)
Finance cost consists of the following:
Interest expense:
Long-term loan
$
12,033,096
$
12,913,429
Revolver loan
—
333,210
Bank charges and other
809,698
796,848
Interest income:
Fixed deposits
(80,756
)
(41,309
)
Interest expense, net
$
12,762,038
$
14,002,178
14
Other (income), net
For the six months ended
June 30, 2026
For the six months ended
June 30, 2025
(Unaudited)
Other (income) consists of the following:
Foreign exchange gain, net
$
(342,254
)
$
765,806
Miscellaneous income
(33,704
)
(109,645
)
$
(375,958
)
$
656,161
15
Related Party Transactions
The Company has entered into the following transactions with related parties.
During the year 2024, the Company entered into an advisory agreement with Thomas H. Lee Partners, the new majority partner in the Parent entity
of the Company. Thomas H. Lee Partners provides financial advisory and management consulting services, and the Company is obligated to reimburse all reasonable, documented, and
out-of-pocket fees and expenses. For the period ended 30 June 2026, the Company incurred fees of $ 765,406 recorded in Selling, general and administrative expenses
and $ 88,317 as reimbursement of travel expenses in the accompanying consolidated statement of operations. For the period ended 30 June 2025, the Company incurred fees of $521,271 recorded in Selling, general and administrative expenses and
$160,718 as reimbursement of travel expenses in the accompanying consolidated statement of operations.
16
Commitments and contingencies Legal proceedings
The Company and its subsidiaries are involved in certain claims and legal actions arising in the ordinary course of business. Although the
amount of any ultimate liability with respect to such matters cannot be determined, in the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial
position or results of operations.
17
Equity share capital
The authorized capital stock of the Company consists of (i) 400,000 shares of common stock, par value $0.01 per share (the “Company
Common Stock”), of which, 337,255.53 shares are issued and outstanding and (ii) 1,000 shares of undesignated preferred stock, par value $0.01 per share (the “Company Preferred Stock”) none of which are issued and outstanding. The
Company Common Stock consists of 360,000 shares of series A common stock (the “Series A Common Stock”), of which, 337,185.40 shares are issued and outstanding and 40,000 shares of series B common stock (the “Series B Common
Stock”), 70.13 of which are issued and outstanding. Series A and Series B Common Stock participate equally in dividends and liquidation distributions on a per-share basis; however, voting rights are held
exclusively by holders of Series A Common Stock, with one vote per share. Series B Common Stock does not carry any voting rights.
18
Subsequent events
In accordance with accounting standards, the Company has evaluated subsequent events through October 13, 2026, the date the consolidated
financial statements were available for issuance. On July 27, 2026, Lattice Semiconductor Corporation (“Lattice”) completed its acquisition of AMI TopCo, Inc. The acquisition was effected pursuant to the Agreement and Plan of Merger
dated May 4, 2026 (the “Merger Agreement”) among Lattice, certain of its wholly owned subsidiaries, AMI TopCo, Inc., and THL AMI Aggregator, LP, acting solely in its capacity as representative of AMI’s security holders. Under
the Merger Agreement, total consideration was approximately $1.6 billion of which approximately $1 billion was settled in cash and remaining in shares of Lattice common stock and restricted stock units, subject to adjustments as provided
in the Merger Agreement. The entire outstanding debt including accrued interest amounting to $272.2 million with Bain Capital Credit LP, was paid on July 27, 2026 and the said facility stands fully settled upon acquisition of AMI TopCo, Inc. by
Lattice. Accordingly, deferred financing cost amounting to $7.2 million in the respect of the credit facility from Bain Capital Credit LP, was fully amortized on July 27, 2026. Other than this event, the Company has concluded that there are no
other subsequent events requiring recognition or disclosure have been incorporated in these consolidated financial statements.
Page 26
EX-99.3
EX-99.3
Filename: d116673dex993.htm · Sequence: 5
EX-99.3
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Introduction
On July 27, 2026 (the “Closing
Date”), Lattice Semiconductor Corporation, a Delaware corporation (“Lattice” or the “Company”), completed the previously disclosed transactions contemplated by that certain Agreement and Plan of Merger by and among the
Company, certain of its wholly owned subsidiaries, AMI TopCo, Inc. (“AMI”) and THL AMI Aggregator, LP (“THL”) (solely in its capacity as the representative of securityholders of AMI), dated as of May 4, 2026 (the
“Merger Agreement”). Under the terms of the Merger Agreement, the Company acquired AMI (the “Acquisition”), for total consideration of approximately $1 billion in cash and approximately 5.2 million shares of Lattice
common stock and restricted stock units, subject to adjustments set forth in the Merger Agreement. The Company funded the cash consideration for the Acquisition (including refinancing outstanding indebtedness of AMI) from cash on hand and borrowings
pursuant to the previously disclosed Second Amended and Restated Credit Agreement (“Credit Agreement”), which provides for a senior secured revolving loan facility of $200 million dollars and a senior secured delayed draw term loan
facility of $950 million dollars. Pursuant to the Credit Agreement, the Company borrowed $925 million in aggregate principal amount of loans under the delayed draw term loan facility at the Closing Date, and a portion of these proceeds
were used to fund the cash consideration of the Acquisition.
The unaudited pro forma condensed combined financial information has been prepared in
accordance with Article 11 of Regulation S-X and should be read in conjunction with the accompanying notes.
The
unaudited pro forma condensed combined balance sheet as of July 4, 2026 combines the unaudited consolidated balance sheet of Lattice as of July 4, 2026 with the unaudited consolidated balance sheet of AMI as of June 30, 2026, giving
effect to the Acquisition as if it had been consummated on July 4, 2026.
The unaudited pro forma condensed combined statement of operations for the
six months ended July 4, 2026 combines the unaudited consolidated statement of operations of Lattice for the six months ended July 4, 2026 with the unaudited consolidated statement of operations of AMI for the six months ended
June 30, 2026, giving effect to the Acquisition as if it had been consummated on December 29, 2024.
The unaudited pro forma condensed combined
statement of operations for the year ended January 3, 2026 combines the audited consolidated statement of operations of Lattice for the year ended January 3, 2026 with the audited consolidated statement of operations of AMI for the year
ended December 31, 2025, giving effect to the Acquisition as if it had been consummated on December 29, 2024.
The unaudited pro forma condensed
combined financial information was derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes:
•
The historical audited consolidated financial statements of Lattice as of and for the year ended January 3,
2026, as included in the Company’s Annual Report on Form 10-K filed with the SEC on February 23, 2026;
•
The historical unaudited consolidated financial statements of Lattice as of and for the six months ended
July 4, 2026, as included in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 4, 2026;
•
The historical audited financial statements of AMI as of and for the year ended December 31, 2025, included
as an exhibit to the Form 8-K/A to which this unaudited pro forma condensed combined financial information is attached; and
•
The historical unaudited consolidated financial statements of AMI as of and for the six months ended
June 30, 2026, included as an exhibit to the Form 8-K/A to which this unaudited pro forma condensed combined financial information is attached.
Accounting for the Acquisition
The unaudited pro forma condensed combined financial information has been prepared using the acquisition method of accounting in accordance with accounting
principles generally accepted in the United States (“GAAP”). Lattice has been identified as an accounting acquirer for accounting purposes, and thus accounts for the Acquisition as a business combination in accordance with
Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). Under the acquisition method of accounting, AMI’s assets and liabilities are recorded at their respective fair values. Any difference between
the purchase price for AMI and the fair value of the identifiable net assets acquired (including intangibles) is recorded as goodwill. The assets and liabilities of AMI have been measured based on various preliminary estimates using assumptions that
Lattice’s management believes were reasonable and based on currently available information. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing this unaudited pro forma condensed
combined financial information.
Differences between these preliminary estimates and the final purchase accounting may occur, and the final purchase
accounting could be materially different from the preliminary estimates used to prepare the accompanying unaudited pro forma condensed combined financial information and could have a material impact on the combined Company’s future results of
operations and financial position.
Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial information appearing below does not consider any potential effects of changes in market conditions on
revenues or expense efficiencies, among other factors. In addition, as explained in more detail in the accompanying notes, the preliminary allocation of the pro forma purchase price reflected in the unaudited pro forma condensed combined financial
information is subject to adjustment and may vary significantly from what will be recorded upon completion of the final purchase price allocation.
The
unaudited pro forma condensed combined financial information has been prepared based on the aforementioned historical financial statements and the assumptions and adjustments as described in the notes to the unaudited pro forma condensed combined
financial information. The pro forma adjustments reflect transaction accounting adjustments related to the Acquisition, which are discussed in further detail below. The unaudited pro forma condensed combined financial information is presented for
illustrative purposes only and does not purport to represent the combined Company’s consolidated results of operations or the consolidated financial position that would actually have occurred had the Acquisition been consummated on the dates
assumed or to project the combined Company’s consolidated results of operations or consolidated financial position for any future date or period. The unaudited pro forma condensed combined financial information is presented for illustrative
purposes only and does not reflect the costs of any integration activities or cost savings or synergies that may be achieved because of the Acquisition.
The accounting policies followed in preparing the unaudited pro forma condensed combined financial information are those used by Lattice as set forth in the
audited historical financial statements. Based on the Company’s initial review, the Company has made pro forma adjustments to the timing and recognition of certain revenues of AMI to align the historical revenue recognition policies of the AMI
with the revenue recognition policies of the Company. Apart from this, there are no material adjustments required at this time to conform AMI’s historical financial information to Lattice’s significant accounting policies. A more
comprehensive comparison and assessment will occur, which may result in additional differences being identified. Additionally, Lattice has included certain preliminary presentation adjustments for consistency in the financial statement presentation.
See Notes 2 below for more information.
Lattice and AMI have not had any historical material relationship prior to the Acquisition. Accordingly, no pro
forma adjustments were required to eliminate activities between the companies.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of July 4, 2026
(in thousands)
Lattice
Semiconductor
Historical
AMI
Historical
As Adjusted
(Note 2)
Transaction
Accounting
Adjustments
(Note 3)
Financing
Adjustments
(Note 3)
Pro Forma
Combined
Assets
Current assets:
Cash and cash equivalents
$
173,305
$
30,525
$
(1,005,717
) (A)
$
918,358
(D)
$
90,253
(17,767
) (B)
(8,451
) (C)
Restricted cash
2,185
2,185
Accounts receivable, net
120,024
47,103
167,127
Inventories, net
100,501
145
100,646
Prepaid expenses and other current assets
44,308
16,340
(106
) (A)
60,542
Total current assets
438,138
96,298
(1,032,041
)
918,358
420,753
Restricted cash, net of current portion
28
28
Property and equipment, less accumulated depreciation
80,550
5,573
86,123
Operating lease
right-of-use assets
36,161
12,267
6,811
(A)
55,239
Intangible assets, net
20,082
347,207
203,794
(A)
571,083
Goodwill
315,358
211,887
840,039
(A)
1,367,284
Deferred income taxes
62,454
767
(59,987
) (A)
3,234
Other long-term assets
23,438
1,165
24,603
Total assets
$
976,181
$
675,192
$ (41,384
)
$
918,358
$
2,528,347
Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable
$
80,894
$
5,336
$
86,230
Accrued liabilities
32,691
15,128
8,283
(A)
52,605
(3,497
) (B)
Accrued payroll obligations
31,281
8,778
814
(A)
41,019
Lattice
Semiconductor
Historical
AMI
Historical
As Adjusted
(Note 2)
Transaction
Accounting
Adjustments
(Note 3)
Financing
Adjustments
(Note 3)
Pro Forma
Combined
146
(C)
Current portion of long-term debt
1,368
(1,368
) (A)
34,687
(D)
34,687
Current portion of contract liabilities
16,126
16,126
Total current liabilities
144,866
46,736
4,378
34,687
230,667
Long-term debt, net of unamortized deferred financing costs
262,918
(262,918
) (A)
883,671
(D)
883,671
Long-term operating lease liabilities, net of current portion
32,591
11,041
5,101
(A)
48,733
Contract liabilities, non-current
3,801
3,801
Other long-term liabilities
11,197
22,627
(19,769
) (A)
14,055
Total liabilities
188,654
347,123
(273,208
)
918,358
1,180,927
Contingencies
Equity
Common stock
1,372
3
44
(A)
1,419
Additional paid-in capital
537,179
340,476
242,237
(A)
1,119,892
Retained earnings
253,358
(11,614
)
11,614
(A)
230,491
(14,270
) (B)
(8,597
) (C)
Accumulated other comprehensive loss
(4,382
)
(796
)
796
(A)
(4,382
)
Total stockholders’ equity
787,527
328,069
231,824
—
1,347,420
Total liabilities and stockholders’ equity
$
976,181
$
675,192
$
(41,384
)
$
918,358
$
2,528,347
Please refer to the notes to the unaudited pro forma condensed combined financial information.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Six Months Ended July 4, 2026
(In thousands, except per share data)
Lattice
Semiconductor
Historical
AMI
Historical
As Adjusted
(Note 2)
Transaction
Accounting
Adjustments
(Note 4)
Financing
Adjustments
(Note 4)
Pro Forma
Combined
Revenue
$
371,976
$
104,209
$
476,185
Cost of revenue
113,012
30,217
(9
) (AA)
146,068
2,848
(DD)
Gross margin
258,964
73,992
(2,839
)
—
330,117
Operating expenses:
Research and development
115,067
17,857
(54
) (AA)
143,692
10,822
(DD)
Selling, general, and administrative
90,383
29,154
(323
) (AA)
130,358
11,144
(DD)
Amortization of acquired intangible assets
39
20,575
13,296
(AA)
33,910
Restructuring and other
625
625
Acquisition related
4,429
4,429
Total operating expenses
210,543
67,586
34,885
—
313,014
Income from operations
48,421
6,406
(37,724
)
—
17,103
Interest income (expense), net
1,181
(12,762
)
12,843
(EE)
(25,931
) (FF)
(24,669
)
Other income (expense), net
(5,119
)
376
(4,743
)
Income (loss) before income taxes
44,483
(5,980
)
(24,881
)
(25,931
)
(12,309
)
Income tax expense
3,307
(2,814
)
(5,225
) (GG)
(5,446
) (GG)
(10,178
)
Net income (loss)
$
41,176
$
(3,166
)
$
(19,656
)
$
(20,485
)
$
(2,131
)
Lattice
Semiconductor
Historical
AMI
Historical
As Adjusted
(Note 2)
Transaction
Accounting
Adjustments
(Note 4)
Financing
Adjustments
(Note 4)
Pro Forma
Combined
Net income (loss) per share:
Basic
$
0.30
(0.02
)
Diluted
$
0.29
(0.02
)
Shares used in per share calculations:
Basic
136,932
141,673
Diluted
140,024
141,673
Please refer to the notes to the unaudited pro forma condensed combined financial information.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended January 3, 2026
(In thousands, except per share data)
Lattice
Semiconductor
Historical
AMI
Historical
As Adjusted
(Note 2)
Transaction
Accounting
Adjustments
(Note 4)
Financing
Adjustments
(Note 4)
Pro Forma
Combined
Revenue
$
523,262
$
202,759
$
726,021
Cost of revenue
166,319
60,527
(11
) (AA)
232,530
5,695
(DD)
Gross margin
356,943
142,232
(5,684
)
—
493,491
Operating expenses:
Research and development
187,983
42,805
(27
) (AA)
252,405
21,644
(DD)
Selling, general, and administrative
153,632
38,042
175
(AA)
236,095
14,270
(BB)
8,597
(CC)
21,379
(DD)
Amortization of acquired intangible assets
52
41,492
26,251
(AA)
67,795
Restructuring and other
4,044
—
4,044
Total operating expenses
345,711
122,339
92,289
—
560,339
Income from operations
11,232
19,893
(97,973
)
—
(66,848
)
Interest income (expense), net
2,896
(27,046
)
27,184
(EE)
(53,348
) (FF)
(50,314
)
Other income (expense), net
(751
)
369
(382
)
Income (loss) before income taxes
13,377
(6,784
)
(70,789
)
(53,348
)
(117,544
)
Income tax expense
10,293
865
(14,866
) (GG)
(11,203
) (GG)
(14,911
)
Net income (loss)
$
3,084
$
(7,649
)
$
(55,923
)
$
(42,145
)
$
(102,633
)
Lattice
Semiconductor
Historical
AMI
Historical
As Adjusted
(Note 2)
Transaction
Accounting
Adjustments
(Note 4)
Financing
Adjustments
(Note 4)
Pro Forma
Combined
Net income (loss) per share:
Basic
$
0.02
$
(0.72
)
Diluted
$
0.02
$
(0.72
)
Shares used in per share calculations:
Basic
137,091
141,832
Diluted
138,238
141,832
Please refer to the notes to the unaudited pro forma condensed combined financial information.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. Basis of Presentation
The pro forma adjustments have
been prepared as if the Acquisition had been consummated on July 4, 2026, in the case of the unaudited pro forma condensed combined balance sheet, and on December 29, 2024, the beginning of the earliest period presented in the unaudited
pro forma condensed combined statements of operations, in the case of the unaudited pro forma condensed combined statements of operations, as if the Acquisition had been consummated.
The unaudited pro forma condensed combined financial information has been prepared assuming the acquisition method of accounting in accordance with GAAP.
Under this method, AMI’s assets and liabilities are recorded at their respective fair values. Any difference between the purchase price for AMI and the fair value of the identifiable net assets acquired (including intangibles) is recorded as
goodwill. The pro forma adjustments are based on preliminary accounting conclusions and are subject to potential revisions upon further analysis.
The pro
forma adjustments represent management’s estimates based on information available as of the date of this Form 8-K/A and are subject to change as additional information becomes available and additional
analyses are performed.
One-time direct and incremental transaction costs have been expensed as incurred under
ASC 805.
Lattice performed a preliminary review to identify any accounting policy differences between the accounting policies used in AMI’s
financial statements and those of the Company, where the impact was potentially material and could be reasonably estimated, with the Company identifying no differences apart from certain pro forma adjustments to the timing and recognition of certain
revenues of AMI to align the historical revenue recognition policies of the AMI with the revenue recognition policies of the Company. A more comprehensive comparison and assessment will occur, which may result in the identification of differences
that could be material.
2. Presentation Adjustments
The accounting policies used in the preparation of the unaudited pro forma condensed combined financial information are those set out in Lattice’s
unaudited condensed consolidated financial statements as of and for the six months ended July 4, 2026. Certain presentation adjustments are reflected in the unaudited pro forma condensed combined balance sheet and statement of operations to
conform presentation between Lattice and AMI.
Refer to the table below for a summary of identified presentation adjustments made to present AMI’s
consolidated balance sheet as of June 30, 2026, to conform presentation to that of Lattice (in thousands):
AMI Consolidated Balance Sheet Line
Items
Lattice Semiconductor Consolidated
Balance Sheet
Line Items
AMI
Historical
Presentation
Adjustments
Note
AMI Historical
(As Adjusted)
Assets
Assets
Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents
$
30,275
$
250
(e)
$
30,525
Restricted cash
Restricted cash
2,185
2,185
Accounts receivable and contract assets, net of allowance for credit losses
Accounts receivable, net
50,691
(3,588
)
(a)
47,103
Inventories, net of allowances for obsolete inventory
Inventories, net
145
145
Prepaid expenses and other current assets
Prepaid expenses and other current assets
3,365
12,975
(a), (d)
16,340
Short-term investments
250
(250
)
(e)
—
Total current assets
86,911
9,387
96,298
Restricted cash, net of current portion
Restricted cash, net of current portion
28
28
Property and equipment, net
Property and equipment, less accumulated depreciation
5,573
5,573
Operating lease
right-of-use assets
Operating lease
right-of-use assets
12,267
12,267
Developed technology, net
Intangible assets, net
73,866
273,341
(f)
347,207
Trademarks, net
10,994
(10,994
)
(f)
Customer relationship, net
262,347
(262,347
)
(f)
Goodwill
Goodwill
211,887
211,887
Deferred taxes, net
Deferred income taxes
767
767
Other assets
Other long-term assets
1,165
1,165
Total assets
Total assets
$
665,805
$
9,387
$
675,192
Liabilities and Equity
Liabilities and Stockholders’ equity
Current liabilities:
Current liabilities:
Current portion of long-term debt, net of current unamortized deferred financing costs
Current portion of long-term debt
$
1,368
$
1,368
Current portion of operating lease liabilities
1,909
(1,909
)
(b)
—
Current portion of contract liabilities
Current portion of contract liabilities
27,810
(11,684
)
(d)
16,126
Accounts payable
Accounts payable
5,336
5,336
AMI Consolidated Balance Sheet Line
Items
Lattice Semiconductor Consolidated
Balance Sheet
Line Items
AMI
Historical
Presentation
Adjustments
Note
AMI Historical
(As Adjusted)
Income tax payable
4,117
(4,117
)
(g)
—
Accrued expenses and other current liabilities
Accrued liabilities
17,880
(2,752
)
(b), (c), (g)
15,128
Accrued payroll obligations
—
8,778
(c)
8,778
Total current liabilities
Total current liabilities
58,420
(11,684
)
46,736
Long-term debt, net of unamortized deferred financing costs and less current portion
Long-term debt, net of unamortized deferred financing costs
262,918
262,918
Deferred tax liability
20,617
(20,617
)
(h)
—
Operating lease liabilities, net of current portion
Long-term operating lease liabilities, net of current portion
11,041
11,041
Contract liabilities
Contract liabilities, non-current
5,148
(1,347
)
(d)
3,801
Other liabilities
Other long-term liabilities
2,010
20,617
(h)
22,627
Total liabilities
Total liabilities
360,154
(13,031
)
347,123
Shareholders’ equity
Stockholders’ equity
Common stock
Common stock
3
3
Additional paid-in capital
Additional paid-in capital
340,476
340,476
Accumulated deficit
Retained earnings
(34,032
)
22,418
(d)
(11,614
)
Accumulated other comprehensive deficit
Accumulated other comprehensive loss
(796
)
(796
)
Total equity
Total stockholders’ equity
305,651
22,418
328,069
Commitments and contingencies
Contingencies
Total liabilities and equity
Total liabilities and stockholders’ equity
$
665,805
$
9,387
$
675,192
(a)
Reflects reclassification of the $3.6 million of contract assets from accounts receivable, net to prepaid
expenses and other current assets to conform AMI’s historical balances to the financial statement presentation of Lattice.
(b)
Reflects reclassification of $1.9 million of current portion of operating lease liabilities to accrued
liabilities to conform AMI’s historical balances to the financial statement presentation of Lattice.
(c)
Reflects reclassification of $8.8 million of payroll-related accrued liabilities from accrued liabilities
to accrued payroll obligations to conform AMI’s historical balances to the financial statement presentation of Lattice.
(d)
Reflects adjustments to contract asset and contract liability amounts to conform AMI’s balances with
Lattice’s accounting policy which include an increase of $9.4 million to prepaid expenses and other current assets; decreases of $11.7 million and $1.3 million to current portion of contract liabilities and contract liabilities,
non-current, respectively; and a net increase to retained earnings of $22.4 million.
(e)
Reflects reclassification of $0.3 million of short-term investments to cash and cash equivalents to conform
AMI’s historical balances to the financial statement presentation of Lattice.
(f)
Reflects reclassification of $273.3 million pertaining to AMI’s historical balances for Developed
technology, net; Trademarks, net; and Customer relationship, net to Intangible assets, net to conform AMI’s historical balances to the financial statement presentation of Lattice.
(g)
Reflects reclassification of $4.1 million of income tax payable to accrued liabilities to conform AMI’s
historical balances to the financial statement presentation of Lattice.
(h)
Reflects reclassification of $20.6 million of deferred tax liability to other long-term liabilities to conform
AMI’s historical balances to the financial statement presentation of Lattice.
Refer to the table below for a summary of
identified presentation adjustments made to present AMI’s consolidated statement of operations for the six months ended June 30, 2026, to conform presentation to that of Lattice (in thousands):
AMI Consolidated Statement of
Operations Line Items
Lattice Semiconductor Consolidated
Statement of Operations Line Items
AMI
Historical
Presentation
Adjustments
Note
AMI Historical
(As Adjusted)
Revenues
Revenue
$
104,209
(b), (c)
$
104,209
License
66,503
(66,503
)
(c)
—
Professional services
21,670
(21,670
)
(c)
—
Hardware
14,084
(14,084
)
(c)
—
Cost of revenue (exclusive of depreciation and amortization)
Cost of revenue
30,217
(a), (d)
30,217
Cost of product
11,174
(11,174
)
(d)
—
Cost of services (exclusive of depreciation and amortization)
22,194
(22,194
)
(d)
—
Operating expenses
Operating expenses:
Research and development expenses
Research and development
20,583
(2,726
)
(a)
17,857
Selling, general and administrative expenses
Selling, general, and administrative
22,071
7,083
(a)
29,154
Depreciation and amortization
21,781
(21,781
)
(a)
—
Amortization of acquired intangible assets
20,575
(a)
20,575
Interest expense, net
Interest income (expense), net
12,762
12,762
Other (income), net
Other income (expense), net
(376
)
(376
)
Total costs and expenses
110,189
—
110,189
Loss before income taxes
Income (loss) before income taxes
(7,932
)
1,952
(5,980
)
(Benefit) provision for income tax
Income tax expense
(3,224
)
410
(b)
(2,814
)
Net loss of AMI Top Co, Inc. and Subsidiaries
Net income (loss)
$
(4,708
)
$
1,542
$
(3,166
)
(a)
Reflects the reclassification of amounts between cost of revenue, research and development, selling, general,
and administrative and amortization of acquired intangible assets to conform with the financial statement presentation of Lattice.
(b)
Reflects an increase to revenue of $2.0 million to conform the amount recorded by AMI with Lattice’s
accounting policy and associated income tax expense impact based on the statutory rate of 21%.
(c)
Reflects the reclassification of AMI’s Licensing, Professional services, and Hardware revenues to
Revenues to conform with the financial statement presentation of Lattice.
(d)
Reflects the reclassification of AMI’s cost of product and Cost of services (exclusive of depreciation
and amortization) into a single line item of cost of revenue to conform with the financial statement presentation of Lattice.
Refer to
the table below for a summary of identified presentation adjustments made to present AMI’s consolidated statement of operations for the year months ended December 31, 2025, to conform presentation to that of Lattice (in thousands):
AMI Consolidated Statement of Operations
Line Items
Lattice Semiconductor Consolidated
Statement of Operations Line Items
AMI
Historical
Presentation
Adjustments
Note
AMI Historical
(Adjusted)
Revenues
Revenue
$
202,759
(b),(c)
$
202,759
License
106,467
(106,467
)
(c)
—
Professional services
55,922
(55,922
)
(c)
—
Hardware
32,313
(32,313
)
(c)
—
Cost of revenue (exclusive of depreciation and amortization)
Cost of revenue
60,527
(a),(d)
60,527
Cost of product
24,053
(24,053
)
(d)
—
Cost of services (exclusive of depreciation and amortization)
41,745
(41,745
)
(d)
—
Operating expenses
Operating expenses:
Research and development expenses
Research and development
36,465
6,340
(a)
42,805
Selling, general and administrative expenses
Selling, general, and administrative
36,769
1,273
(a)
38,042
Depreciation and amortization
43,834
(43,834
)
(a)
—
Amortization of acquired intangible assets
41,492
(a)
41,492
Interest expense, net
Interest income (expense), net
27,046
27,046
Other (income), net
Other income (expense), net
(369
)
(369
)
Total costs and expenses
209,543
—
209,543
Loss before income taxes
Income (loss) before income taxes
(14,841
)
8,057
(6,784
)
(Benefit) provision for income tax
Income tax expense
(827
)
1,692
(b)
865
Net loss of AMI Top Co, Inc. and Subsidiaries
Net income (loss)
(14,014
)
$
6,365
$
(7,649
)
(a)
Reflects the reclassification of amounts between cost of revenue, research and development, selling, general,
and administrative and amortization of acquired intangible assets to conform with the financial statement presentation of Lattice.
(b)
Reflects an increase to revenue of $8.1 million to conform the amount recorded by AMI with Lattice’s
accounting policy and associated income tax expense impact based on the statutory rate of 21%.
(c)
Reflects the reclassification of AMI’s Licensing, Professional services, and Hardware revenues to
Revenues to conform with the financial statement presentation of Lattice.
(d)
Reflects the reclassification of AMI’s cost of product and Cost of services (exclusive of depreciation
and amortization) into a single line item of cost of revenue to conform with the financial statement presentation of Lattice.
3.
Adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet as of July 4, 2026
The adjustments included in the unaudited pro forma
condensed combined balance sheet as of July 4, 2026 are as follows:
(A)
Reflects the purchase price allocation adjustments to record AMI’s assets and liabilities at estimated
fair value based on the consideration conveyed. The related income statement adjustments are reflected at adjustment (AA). Additionally, this adjustment reflects the recording of the preliminary estimate of goodwill and the elimination of the
historical equity balances of AMI.
The preliminary purchase price was allocated among the identified assets to be
acquired, based on a preliminary analysis. Goodwill is recognized as a result of the Acquisition, which represents the excess fair value of consideration over the fair value of the underlying net assets of AMI. The deferred income taxes represent
the deferred tax impact associated with the incremental differences in book and tax basis created from the preliminary purchase price allocation. The estimates of fair value are based upon preliminary valuation assumptions, and are believed to be
reasonable, but are inherently uncertain and unpredictable. As a result, actual results may differ from estimates, and the difference may be material.
The following is a preliminary estimate of the assets acquired and the liabilities assumed
by Lattice in the Acquisition, reconciled to the estimated purchase consideration (in thousands):
Net Assets Acquired
Preliminary
Fair Value
Cash and cash equivalents
$
30,525
Restricted cash
2,185
Accounts receivables
47,103
Inventories
145
Prepaid expenses and other current assets
16,234
Restricted cash, net of current portion
28
Property and equipment
5,573
Operating lease
right-of-use assets
19,078
Goodwill
1,051,926
Intangible assets (1)
551,000
Other long-term assets
1,165
Deferred income taxes
(59,220
)
Accounts payable
(5,336
)
Current portion of contract liabilities
(16,126
)
Accrued liabilities
(23,411
)
Accrued payroll obligations
(9,592
)
Contract liabilities, non-current
(3,801
)
Long-term operating lease liabilities, net of current portion
(16,142
)
Other long-term liabilities
(2,858
)
Total Fair Value
$
1,588,476
Consideration Transferred
Cash consideration (2)
$
733,492
Settlement of AMI’s debt (3)
272,224
Common Stock consideration (4)
582,760
Total Purchase Consideration
$
1,588,476
(1)
Intangible assets were comprised of the following:
Asset type
Fair value
(in thousands)
Useful Life
Valuation methodology
Tradename and Trademark
$
37,000
7 years
Relief from Royalty
Developed Technology – Boot Firmware
132,000
7 years
Relief from Royalty
Developed Technology – Manageability and Security
126,000
7 years
Relief from Royalty
Customer relationships
256,000
10 years
Multi-Period Excess Earnings
Total intangible assets
$
551,000
(2)
This amount represents cash consideration paid to AMI’s shareholders and vested option holders.
(3)
In addition to the purchase consideration provided in the form of cash, $272.2 million of AMI’s
outstanding long-term debt as of the Closing Date has been repaid. AMI’s debt was settled upon closing due to a change in control provision within their legacy debt agreement.
(4)
Equity consideration is provided in the form of Common Stock of Lattice and is calculated as 4,741,352 shares
of Lattice Common Stock issued to AMI shareholders, multiplied by $122.91, the closing share price of Lattice on July 27, 2026.
(B)
Reflects the impact of the cash payment made on the date of the Acquisition for $4.2 million of
Lattice’s transaction costs incurred and $13.6 million of the AMI liabilities assumed related to AMI’s transaction costs, as well as the accrual of $10.1 million of Lattice’s transaction costs incurred but not paid as of
the date of the Acquisition, primarily comprised of investment banking fees, legal fees, issuance costs, accounting and audit fees, and other related advisory costs. Additionally, this reflects the net $14.3 million decrease to retained earnings and
net $3.5 million decrease to accrued liabilities as a result of these adjustments. The related income statement adjustment incurred is reflected at adjustment (BB).
(C)
Reflects the impact of nonrecurring compensation costs related to cash payments made to certain AMI employees
in connection with the Acquisition, and the associated employer portion of payroll tax payable for such amounts. The related income statement adjustment is reflected at adjustment (CC).
(D)
Reflects the issuance of the term loan facility in an aggregate principal amount of $925 million, of which
$34.7 million is current, as adjusted for debt issuance costs of $6.6 million. The related income statement adjustment is reflected at adjustment (FF).
4. Adjustments to the Unaudited Pro Forma Condensed Combined Statement of operations for the Six Months ended July 4, 2026 and for the Year ended
January 3, 2026
(AA) Reflects the pro forma impacts related to the purchase price allocation discussed at adjustment (A). This includes the
following impacts:
•
Amortization expense on intangible assets - Reflects an increase in amortization expense (net off
historical amortization of intangibles already recorded) in the amount of $13.3 million for the six months ended July 4, 2026 and $26.3 million for the year ended January 3, 2026 pertaining to fair value adjustments and recording
of new intangible assets as of Closing Date, as well as application of useful lives as per the Company’s policy.
Asset type
Useful
Life
Fair value
Amortization for
the year ended
January 3,
2026
Amortization for
the six months
ended July 4,
2026
(in thousands)
Tradename and Trademark
7 years
$
37,000
$
5,286
$
2,643
Developed Technology – Boot Firmware
7 years
132,000
18,857
9,429
Developed Technology – Manageability and Security
7 years
126,000
18,000
9,000
Customer relationships
10 years
256,000
25,600
12,800
Total amortization to be recorded
$
67,743
$
33,872
Less: Historical amortization
(41,492
)
(20,575
)
Incremental amortization
$
26,251
$
13,297
•
Depreciation expense on Property and equipment - Reflects the $0.3 million net decrease in
depreciation expense resulting from the removal of the historical depreciation expense of $1.2 million and recognition of $0.9 million depreciation expense in applying the useful lives as per the Company’s policy for the six months
ended July 4, 2026, and the $0.2 million net decrease in depreciation expense resulting from the removal of the historical depreciation expense of $2.3 million and recognition of $2.1 million depreciation expense in applying the
useful lives as per the Company’s policy for the year ended January 3, 2026.
•
Operating lease cost on lease balances - Reflects a decrease in operating lease cost in the amount of
$0.1 million for the six months ended July 4, 2026 and an increase of $0.4 million for the year ended January 3, 2026 recorded within selling, general and administrative expense pertaining to remeasurement of the right-of-use assets and lease liabilities on Closing Date as part of Acquisition.
(BB)
Reflects the impact of nonrecurring expenses related to transaction costs in the amount of $14.3 million,
for the year ended January 3, 2026, primarily comprised of investment banking fees, legal fees, issuance costs, accounting and audit fees, and other related advisory costs. The related balance sheet statement adjustment is reflected at
adjustment (B).
(CC)
Reflects the impact of nonrecurring compensation costs related to cash payments made to certain employees and
associated payroll tax payable in the amount of $8.6 million in connection with the Acquisition. The related balance sheet adjustment is reflected at adjustment (C).
(DD)
Reflects the incremental stock-based compensation cost for new restricted stock units in the amount of
$24.8 million for the six months ended July 4, 2026 and $48.7 million for the year ended January 3, 2026.
(EE)
Reflects an elimination of interest expense amounting to $12.8 million for the six months ended
July 4, 2026 and $27.2 million for the year ended January 3, 2026 related to the repayment of long-term debt of AMI.
(FF)
Reflects interest expense amounting to $25.9 million for the six months ended July 4, 2026 and
$53.3 million for the year ended January 3, 2026 related to issuance of term loan facility as presented at adjustment (D). The term loan facility has a variable interest rate based on Secured Overnight Financing Rate (“SOFR”)
plus 1.75%. An increase or decrease of one-eighth of a percent in the interest rate would result in an increase or decrease in interest expense of $0.6 million and $1.2 million for the six months
ended July 4, 2026 and for the year ended January 3, 2026 respectively. This adjustment also includes the amortization of estimated debt issuance costs of $0.6 million and $1.2 million for the six months ended July 4, 2026
and for the year ended January 3, 2026, respectively, pertaining to the term loan facility as presented at adjustment (D).
(GG)
Reflects the tax impact of all pro forma adjustments for the six months ended July 4, 2026 and for the
year ended January 3, 2026, calculated using a statutory rate of 21%.
5. Unaudited Pro Forma Earnings Per Share
The pro forma net income per share calculations have been performed for the six months ended July 4, 2026 and for the year ended January 3, 2026,
assuming the Acquisition occurred on December 29, 2024.
For the Six
Months Ended
For the Year
Ended
July 4, 2026
January 3, 2026
(in thousands, except per share data)
Numerator
Pro forma net income (loss)
$
(2,131
)
$
(102,633
)
Denominator
Lattice weighted average number of common shares outstanding
136,932
137,091
Add: Shares issued to AMI shareholders in the Acquisition
4,741
4,741
Pro forma shares used in basic net income per share
141,673
141,832
Pro forma net income (loss) per share – Basic
$
(0.02
)
$
(0.72
)
Pro forma shares used in basic net income per share
141,673
141,832
Add: Dilutive effect of employee equity incentive awards (*)
—
—
Pro forma shares used in diluted net income (loss) per share (*)
141,673
141,832
Pro forma net income (loss) per share – Diluted (*)
$
(0.02
)
$
(0.72
)
(*)
Considering there is a net loss position for the six months ended July 4, 2026 and the year ended
January 3, 2026, the inclusion of additional shares issuable under employee equity incentive awards would only be anti-dilutive. As such, basic EPS and diluted EPS is calculated as same for the six months ended July 4, 2026 and the year
ended January 3, 2026.
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v3.26.3
Document and Entity Information
Jul. 27, 2026
Cover [Abstract]
Entity Registrant Name
LATTICE SEMICONDUCTOR CORP
Amendment Flag
true
Entity Central Index Key
0000855658
Document Type
8-K/A
Document Period End Date
Jul. 27, 2026
Entity Incorporation State Country Code
DE
Entity File Number
000-18032
Entity Tax Identification Number
93-0835214
Entity Address, Address Line One
5555 NE Moore Court
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Hillsboro
Entity Address, State or Province
OR
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97124
City Area Code
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Local Phone Number
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Security 12b Title
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Trading Symbol
LSCC
Security Exchange Name
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Entity Emerging Growth Company
false
Amendment Description
This Amendment No. 1 to the Current Report on Form 8-K (this “Amendment”) is being filed by Lattice Semiconductor Corporation (“Lattice” or the “Company”) with the U.S. Securities and Exchange Commission for the purpose of amending and supplementing Item 9.01 of that certain Current Report on Form 8-K originally filed by the Company with the U.S. Securities and Exchange Commission on July 27, 2026 (the “Original Form 8-K”), in which the Company reported, among other things, the completion of the Company’s acquisition of AMI TopCo, Inc. (“AMI”) pursuant to that certain Agreement and Plan of Merger, dated as of May 4, 2026, by and among the Company, certain of its wholly owned subsidiaries, AMI and THL AMI Aggregator, LP (solely in its capacity as the representative of the securityholders of AMI) (the “Transaction”). This Amendment amends the Original Form 8-K to provide the historical audited and unaudited financial statements of the business acquired and the pro forma combined financial information required by Items 9.01(a) and 9.01(b) of Form 8-K that were previously omitted from the Original Form 8-K in reliance on Items 9.01(a)(3) and 9.01(b)(2) of Form 8-K. This Amendment does not amend any other item of the Original Form 8-K, and all other information previously reported in or filed with the Original Form 8-K is hereby incorporated by reference in this Amendment.
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Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
+ References
No definition available.
+ Details
Name:
dei_EntityFileNumber
Namespace Prefix:
dei_
Data Type:
dei:fileNumberItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Two-character EDGAR code representing the state or country of incorporation.
+ References
No definition available.
+ Details
Name:
dei_EntityIncorporationStateCountryCode
Namespace Prefix:
dei_
Data Type:
dei:edgarStateCountryItemType
Balance Type:
na
Period Type:
duration
X
- Definition
The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
dei_EntityRegistrantName
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
The Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
dei_EntityTaxIdentificationNumber
Namespace Prefix:
dei_
Data Type:
dei:employerIdItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Local phone number for entity.
+ References
No definition available.
+ Details
Name:
dei_LocalPhoneNumber
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
+ Details
Name:
dei_PreCommencementIssuerTenderOffer
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
+ Details
Name:
dei_PreCommencementTenderOffer
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Title of a 12(b) registered security.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
+ Details
Name:
dei_Security12bTitle
Namespace Prefix:
dei_
Data Type:
dei:securityTitleItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Name of the Exchange on which a security is registered.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
+ Details
Name:
dei_SecurityExchangeName
Namespace Prefix:
dei_
Data Type:
dei:edgarExchangeCodeItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14a
-Subsection 12
+ Details
Name:
dei_SolicitingMaterial
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Trading symbol of an instrument as listed on an exchange.
+ References
No definition available.
+ Details
Name:
dei_TradingSymbol
Namespace Prefix:
dei_
Data Type:
dei:tradingSymbolItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
+ Details
Name:
dei_WrittenCommunications
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration