Research Methodology

Overview

Approach

This analysis applies five standard professional equity valuation methods to AiRWA Inc. (NASDAQ: YYAI). Each method uses only data sourced from publicly filed SEC documents, audited financial statements, and confirmed company press releases. No projections rely on management guidance that has not been verified against independent filings.

Three scenarios — Bear, Base, Bull — are constructed for each method. Probability weights (25% / 55% / 20%) are applied to produce a blended price target of $12.00.

Method 1

Comparable Company Analysis

Peer groups were identified for each of YYAI's three distinct business segments. For YYEM AI Licensing: publicly traded AI intellectual property licensing and royalty companies with comparable margin profiles (6x–12x EV/Revenue). For aiRWA Exchange: Coinbase (4x–18x revenue) and recent private RWA tokenization platforms (10x–25x forward revenue). For Aberfeldy: enterprise AI companies with healthcare, manufacturing, and autonomous driving applications (4x–8x forward revenue). Multiples were applied at 6x, 8x, and 10x respectively for low/mid/high scenarios.

Method 2

Precedent Transaction Analysis

M&A transaction multiples were sourced from completed deals in AI licensing/IP monetization (8x–20x trailing revenue) and digital asset exchange infrastructure (15x–30x forward revenue) over the past three years. Conservative multiples (8x–12x) were applied to the lower end of YYAI's combined revenue base ($25M–$30M). Free cash of ~$32M was added to enterprise value to derive equity value per share.

Method 3

Discounted Cash Flow

WACC Justification: The base case uses 15% WACC, below the typical 20–25% range for early-stage companies, on the basis of three documented factors: (1) YYEM revenue is audited and generating real profit; (2) exchange revenue is anchored to a $500M definitive agreement filed with the SEC; (3) the Aberfeldy acquisition represents $140M in documented deployed capital at arm's-length price. Bear case applies 25% WACC. Bull case applies 18% WACC.

Terminal Value: Calculated as Year 5 FCF × (1 + growth rate) ÷ (WACC − growth rate), then discounted to present value by dividing by the Year 5 discount factor. The earlier version of this report contained an error in which the terminal value was not discounted — this has been corrected throughout all calculations. The corrected base case DCF per-share value is $7.08 (not the earlier $7.60).

FCF Margin: 40% applied throughout, consistent with asset-light IP licensing + exchange fee revenue at scale. Revenue ramp reflects YYEM contribution ($20M–$40M over 5 years) plus exchange JV ramp ($5M–$70M attributable over 5 years).

Method 4

Sum-of-the-Parts

Each asset assigned an independent multiple appropriate to its risk profile. Free cash at face value (no multiple). Aberfeldy at 50%/75%/100% of acquisition cost across scenarios, reflecting integration uncertainty. YYEM at 6x/8x/10x revenue. Aberfeldy AI forward revenue at 4x/6x/8x. Exchange JV at 5x/7x/10x forward revenue to YYAI's 51% share. Tarala optionality assigned $0.10/$0.45/$1.70 as a residual probability-weighted value. These are treated as independent valuations — no cross-segment synergy is assumed in the bear case.

Method 5

Price-to-Book Floor

Book value estimated by summing documented asset values: free cash (~$30M), Aberfeldy at acquisition cost ($140M), Solana tokens (~$30M at market), YYEM IP (~$20M conservative). Total ~$220M / 42.1M shares = $5.23/share. A 40% haircut scenario applies a uniform 40% discount to all assets, producing $132M / $3.14/share — the absolute liquidation floor. Current P/B of ~0.20x compared against distressed financial institution floor of ~0.40x.

Corrections Log

Revisions Made