On April 18, 2024, the Company completed its continuation and domestication from British Columbia to the State of Delaware by filing its Certificate of Corporate Domestication and Certificate of Incorporation in the State of Delaware. The Company has estimated a potential tax liability due to Canada ranging between $1.7 million and $2.6 million. In June 2024, the Company made an estimated payment of $1.7 million to Canada and the Company expects to file a stub period created from the domestication in October 2024.

On November 13, 2023, the Company and Nicholas entered into the Purchase Agreement with Westlake Financial, pursuant to which the Company and Nicholas agreed to sell, and Westlake agreed to purchase substantially all of the Company’s and Nicholas’ assets, consisting of Nicholas’ motor vehicle retail installment sale contracts and unsecured consumer loan contracts (collectively, the “Contracts”) and the accounts receivable related to such Contracts (collectively, the “Receivables”).

As discussed in Note 12, Westlake Financial is an affiliate of WPM, and Nicholas entered into the Servicing Agreement with WPM on November 3, 2022, pursuant to which WPM commenced servicing of the Receivables under the Contracts in December 2022. In connection with entering into the Purchase Agreement, the Company ceased new originations, and WPM continued to service the Receivables for Nicholas until the closing of the transactions contemplated by the Purchase Agreement.

On April 26, 2024, the transactions contemplated by the Purchase Agreement closed with an aggregate purchase price of $65.6 million. After adjustments to the gross aggregate purchase price, the Company received net cash proceeds of $40.6 million and retained $25.9 million in principal and interest cash payments collected by the Company prior to the closing that otherwise would have been paid to Westlake.

Pursuant to the terms of the Purchase Agreement, Westlake was due to make additional payments to the Company based on a percentage of cash collections received over a predetermined threshold on the loan portfolio from September 30, 2023 through the closing of the disposition. Pursuant to the terms of the Purchase Agreement, Westlake made a $40.6 million payment to the Company at the closing of the disposition on April 26, 2024. The Company and Westlake subsequently determined that Westlake overpaid the Company approximately $2.6 million at the closing. The final determination of the amount to be repaid to Westlake is still being negotiated and has not been finalized as of the date of this filing. As such, the Company is not able to finalize the accounting related to the disposition at this time. The Company expects the ongoing negotiations with Westlake will be finalized in the second quarter of this fiscal year at which time the amount to be repaid and the calculation of the gain or loss from the disposition will be determined.

The following unaudited pro forma consolidated balance sheet as of March 31, 2024, presents the Company’s consolidated balance sheet as if the sale of substantially all finance receivables and repossessed assets occurred on March 31, 2024.


	March 31,			Transaction Accounting				Pro Forma Ending
	2024			Adjustments			Note	Balance
Assets
Cash and cash equivalents	$	18,982		$	40,634		A	$	59,616
Finance receivables held for sale, at a lower of amortized cost or fair value		38,773			(38,650	)	B		123
Repossessed assets held for sale, at lower of carrying value or fair value less cost to sell		668			(668	)	B		-
Prepaid expenses and other assets		438			-				438
Income taxes receivable		902			-				902
Property and equipment, net		75							75
Total assets	$	59,838		$	1,316			$	61,154
Liabilities and shareholders’ equity
Contingent liability	$	-		$	2,620		C	$	2,620
Accounts payable, accrued expenses, and other liabilities		996			-				996
Total liabilities		996			2,620				3,616
Commitments and contingencies (see Note 11)
Shareholders’ equity:
Preferred stock		-			-				-
Common stock		35,267			-				35,267
Treasury stock		(76,794	)		-				(76,794	)
Retained earnings		100,369			(1,304	)	D		99,065
Total shareholders’ equity		58,842			(1,304	)			57,538
Total liabilities and shareholders’ equity	$	59,838		$	1,316			$	61,154

On June 15, 2024, the Company closed the Share Purchase Agreement to acquire Amplex Electric, Inc., an Ohio corporation (“Amplex”), from the sellers (the “Sellers”), pursuant to which the Sellers have agreed to sell, and the Company has agreed to purchase 51% of the issued and outstanding common shares, no par value per share, of Amplex and the Company has agreed to make payment to holders of options for Amplex’s common shares in consideration of cancellation of such options for preliminary purchase consideration of $11.6 million, which was paid in cash on the date of closing. The acquisition will be accounted for using the acquisition method and the results of the acquired business will be included in the Company’s results of operations from the acquisition date. Based on the timing of the

acquisition and lack of available information, the Company determined it was impractical to disclose a preliminary purchase price allocation at this time. The Company is currently in the process of completing the accounting for the transaction and expects to have preliminary allocations of the purchase consideration to the assets acquired and liabilities assumed in the first quarter of the current fiscal year.

In conjunction with the closing of the Share Purchase Agreement, the Company purchased an additional 1,674 shares of Amplex common stock at the share purchase price of $1,792.55 per share for an aggregate purchase price of $3 million.

Between April 1, 2024 and June 1, 2024, the Company made Term Loan Advances to Amplex in the aggregate amount of $450 thousand. The Term Loan Advances were to be repaid at the earlier of a) the closing of the share purchase agreement and b) the first anniversary of the initial term loan advance date if the negotiations of the share purchase agreement are terminated. In conjunction with the closing of the Share Purchase Agreement, the Term Loan Advances with a total outstanding principal and accrued interest of $754 thousand was converted into 421 shares of Amplex common stock at the share purchase price of $1,792.55 per share.