On June 15, 2024 (the "Closing Date"), the Company closed a share purchase agreement to acquire 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 agreed to make payment to holders of options for Amplex’s common shares in consideration of cancellation of such options for total purchase consideration of $18.4 million, which was paid in cash on the date of closing (the "Amplex Acquisition"). Amplex is an Ohio-based provider of rural broadband services to business and residential customers. The Company acquired Amplex in order to provide better shareholder value over time. The financial results of Amplex have been included within the condensed consolidated financial statements since the Closing Date.

In conjunction with the closing of the Amplex Acquisition, the Company converted the outstanding principal and accrued interest of approximately $0.8 million under the Term Loan Advances into 421 shares of Amplex common stock at the share purchase price of $1,792.55 and purchased an additional 1,674 shares of Amplex common stock at a price of $1,792.55 per share for a total of $3.0 million. These transactions concurrently executed at the Transaction Closing Date increased the Company's ownership in Amplex to 56.5%.

In accordance with ASC 805, Business Combinations, the Amplex Acquisition was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and the liabilities assumed be recognized at their fair values as of the acquisition date. Goodwill is the excess purchase price over the preliminary estimated fair value of net assets acquired and liabilities assumed in the Amplex Acquisition. The purchase price allocation as of the date of acquisition was based on a preliminary valuation and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available. The primary areas that remain preliminary relate to the fair values of property, plant, and equipment, goodwill and intangible assets.

The fair value of the subscriber relationships were determined using the multi-period excess earnings method (“MPEEM”) under the income approach. This method reflects the present value of the operating cash flows generated by this asset after taking into account the cost to realize the revenue, and an appropriate discount rate to reflect the time value and risk associated with the invested capital. The Company utilized the relief-from-royalty method, a form of both the market and income approach, to determine the fair value of the trade names. Under this method, it is assumed that if the Company did not own the intangible asset, it would be willing to pay a royalty for its use. Internally developed software was valued using a cost approach, specifically the cost to re-create method. The cost to re-create method considers the cost required to recreate an identical asset considering current prices of direct and indirect costs. These costs are then adjusted for the developers’ profit, which reflects the expected return on the direct and indirect costs, and opportunity cost, which represents the forgone returns during the period when the asset is being developed. The Citizens Broadband Radio Service FCC license ("CBRS FCC license") was valued using a cost approach, specifically, the cost incurred by the business in acquiring the CBRS FCC license. In determining the fair value of the property, plant, and equipment, the Company used a combination of various valuation techniques including the income approach, the cost approach, and the market approach.

The Company's preliminary allocation of the purchase price to the assets acquired, liabilities assumed, and noncontrolling interest recognized and redeemable as of the Closing Date were as follows:


(In thousands)

Cash and cash equivalents	$	32
Accounts receivable		124
Materials and supplies		538
Operating lease right-of-use		502
Prepaid expenses and other assets		266
Property, plant, and equipment		23,750
Intangible assets		11,130
Goodwill		10,434
Total assets acquired		46,776

Accounts payable		1,260
Accrued expenses and other liabilities		231
Lease liabilities		502
Deferred income taxes		4,668
Deferred revenue		556
Total liabilities assumed		7,217

Total fair value of net assets acquired		39,559
Less: redeemable noncontrolling interest		(17,644	)
Less: noncontrolling interest		(3,551	)
Total purchase price	$	18,364

The Company incurred $1.1 million of transaction costs related to the acquisition of Amplex during the three months ended June 30, 2024. These costs are classified as general and administrative expenses in the Company's condensed consolidated statements of operations.

The following is the net impact of the Amplex Acquisition on the Company's condensed consolidated statements of operations since the Closing Date:


	For the Three Months Ended June 30,
(In thousands)	2024
Total revenue	$	489

Loss from continuing operations	$	(600	)

The following table represents the supplemental consolidated financial results of the Company on an unaudited pro forma basis, as if the acquisition had been consummated on April 1, 2023.


	(In thousands)
	For the Three Months Ended June 30,
	2024			2023
Revenue	$	4,213		$	9,775
Net loss from continuing operations		(5,959	)		(1,234	)
Net income from discontinued operations		2,059			3,044
Net (loss) income		(3,900	)		1,810
Per share amounts:
Basic loss per share from continuing operations		(0.88	)		(0.17	)
Diluted loss per share from continuing operations		(0.88	)		(0.17	)
Basic earnings per share from discontinued operations		0.31			0.42
Diluted earnings per share from discontinued operations		0.30			0.42
Basic (loss) earnings per share		(0.58	)		0.25
Diluted (loss) earnings per share		(0.58	)		0.25

The following table represents the supplemental schedule of noncash investing and financing activities:


	(In thousands)
	For the Three Months Ended June 30,
	2024			2023
Supplemental schedule of noncash investing and financing activities
Fair value of Amplex assets acquired	$	46,776		$	-
Less: redeemable noncontrolling interest		(17,644	)		-
Less: noncontrolling interest		(3,551	)		-
Less: cash paid for Amplex common stock		(18,364	)		-
Amplex liabilities assumed	$	7,217		$	-