Company: EUDAW
Filing Date: 2025-06-24
Form Type: 424B5
Source: 0001641172-25-016185
Chunk: 32

Company: EUDA Health Holdings Ltd
Filing Date: 2025-06-24
Form: 424B5
Chunk 32
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 liabilities assumed.

The cost of the asset acquisition may exceed the fair value of FCL’s assets acquired and liabilities assumed. This discrepancy can arise from synergies among the acquired assets. Unlike in a business combination, goodwill is not recognized in an asset acquisition. Instead, any excess cost over fair value should generally be allocated to the acquired assets on a relative fair value basis, which may result in certain assets being recognized above their fair values, as measured in accordance with ASC 820.

The Company recognized an impairment of $14,762,562 on the intangible assets associated with the acquisition. This impairment arises because the transaction was treated as an asset acquisition under ASC 805 rather than a business combination, and the fair value was found to be less than the relative fair value of the identifiable intangible assets. As a result, no goodwill was recorded for the excess consideration over the net assets acquired.

This impairment does not imply a reduction in the overall intrinsic value of FCL, its physical condition, or its revenue-generating potential. It stems from the fair value allocation required by ASC 805 during the asset acquisition, followed by an independent valuation of the intangible assets in accordance with ASC 350.

The identifiable intangible assets, which include distribution contracts with Guangzhou Beauty Wellness Health Technology Co., Ltd (“GBHT”) and Guangzhou Yoroyal Medical Technology Co., Ltd (“Yoroyal”), were recognized with a fair values of $279,025 and $58,803, respectively, net of impairment loss. These contracts are amortized based on their economic benefit pattern, with useful lives estimated at two years for GBHT and three years for Yoroyal. The income method, typically used for valuing intangible assets that provide significant economic benefits for the acquirer, was applied to assess these assets.

While evaluating FCL as a potential candidate for asset acquisition, EUDA’s management considered FCL’s future market opportunities, potential for market entry, synergies, customer base, and growth potential.

Although FCL is a relatively new company, EUDA’s management and independent board members believe in FCL’s ability to generate future cash flows and the strategic benefits, such as expected synergies, cost savings, and revenue growth from operational integration, resulting from the acquisition. However, there is no assurance that the Company can achieve the desired strategic and financial benefits from this acquisition. See “Risk Factors - There is no assurance that the Company can achieve the desired strategic and financial benefits from its acquisition of CK Health” and “Risk Factors - CK Health is