Metallicus, a leader in blockchain technology for banking, recently announced its planned acquisition of FinTech Bonifii, formerly known as CU Ledger, a credit union service organization (CUSO). The acquisition will result in the formation of ‘Metal CUSO’, which will allow credit unions affiliated with Bonifii to leverage the capabilities of Metal Blockchain. 

Effective Jan. 1, 2025, Metallicus will acquire the assets of Bonifii in exchange for $10 million of Metallicus’ common stock warrants. This raised question as to whether owners of equity units in Bonifii should recognize a gain or loss based on the company sale in exchange for common stock warrants. A gain or loss should be recognized based on the consideration received and the institution’s cost basis or book value of their investment at the time of sale. According to accounting standards codification (ASC) 805-30-30-7, “consideration” transferred in a business combination shall be measured at fair value, which includes the sum of the equity interests issued by the acquirer. For example, if a credit union has a book value in its investment in Bonifii of $500,000 and an ownership percentage of 6%, the gain would be $100,000. The calculation is 6% of $10 million (value of warrants), or $600,000 less the book value of $500,000. The gain (or loss) will be dictated by how the credit union accounted for its investment in Bonifii prior to the acquisition.

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