8-K/A - OMCC - Equibles

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 15, 2024

NICHOLAS FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-26680	59-2506879
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

26133 US Hwy 19 North, Suite 300 Clearwater, FL

33763

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (727) 726-0763

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	NICK	NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Explanatory Note

On June 15, 2024, Nicholas Financial, Inc. (the “Company”) closed the Share Purchase Agreement to acquire (the “Acquisition”) a majority ownership interest in Amplex Electric, Inc. ("Amplex”), 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 for a total purchase consideration of $18.4 million, which was paid in cash pursuant to the terms and conditions of the Share Purchase Agreement dated as of June 15, 2024.

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%.

This Current Report on Form 8-K/A amends Item 9.01 of the Current Report on Form 8-K filed by the Company on May 6, 2024 to include the historical financial statements of Amplex and the pro forma financial information required by Item 9.01 of Form 8-K, attached hereto as Exhibits 99.1, 99.2 and 99.3. The pro forma financial information included in this Form 8- K/A has been presented for informational purposes only, as required by Form 8-K. It does not purport to represent the actual results of operations that the Company and Amplex would have achieved had the companies been combined during the periods presented in the pro forma financial information and is not intended to project the future results of operations that the combined company may achieve as a result of the Company’s acquisition of Amplex. Except as described above, all other information in the Company’s Current Report on Form 8-K filed on May 6, 2024 remains unchanged.

Item 7.01 Regulation FD.

The information in this Item 7.01, including the exhibit hereto, (x) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and (y) shall not be incorporated by reference into any filing of the Company with the Securities and Exchange Commission, whether made before or after the date hereof, regardless of any general incorporation language in such filings (unless the Company specifically states that the information or exhibit in this particular report with respect to Item 7.01 are incorporated by reference).

Item 9.01 Financial Statements and Exhibits.

Financial Statements of Business Acquired.

The historical audited consolidated financial statements of Amplex and its subsidiaries as of October 31, 2023 and 2022 and for the years ended October 31, 2023 and 2022, including the notes related thereto and the related report of Bolinger, Segars, Gilbert & Moss, LLP, Amplex’s independent auditor, as of February 16, 2024 are filed as Exhibit 99.1 and incorporated herein by reference.

The historical unaudited interim condensed consolidated financial statements of Amplex and its subsidiaries as of April 30, 2024 and 2023 and for the six months ended April 30, 2024 and 2023, including the notes related thereto and the related review report of Bolinger, Segars, Gilbert & Moss, LLP, Amplex's independent accountants, as of August 27, 2024 are filed as Exhibit 99.2 and incorporated herein by reference.

Pro Forma Financial Information

Unaudited pro forma condensed consolidated statements of operations of the Company and Amplex for the three months ended June 30, 2024 and 2023, respectively, and the notes related thereto are filed as Exhibit 99.3 and incorporated herein by reference.

Exhibit Index

Exhibit No.	Description
99.1	Audited consolidated financial statements of Amplex and its subsidiaries as of October 31, 2023 and 2022 and for the years ended October 31, 2023 and 2022, including the notes related thereto and the related report of Bolinger, Segars, Gilbert & Moss, LLP.
99.2	Unaudited interim condensed consolidated financial statements of Amplex and its subsidiaries as of April 30, 2024 and 2023 and for the six months ended April 30, 2024 and 2023, including the notes related thereto and the related review report of Bolinger, Segars, Gilbert & Moss, LLP .
99.3	Unaudited pro forma condensed combined statements of operations of the Company and Amplex for the three months ended June 30, 2024 and 2023, respectively, and the notes related thereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

Signature	Title	Date
/s/ Mike Rost	Chief Executive Officer (Principal Executive Officer)	August 29, 2024
Mike Rost
/s/ Charlie Krebs	Chief Financial Officer (Principal Financial and Accounting Officer)	August 29, 2024
Charlie Krebs

EX-99.1

Exhibit 99.1

AMPLEX ELECTRIC, INC.

LUCKEY, OHIO

FINANCIAL STATEMENTS

FOR THE YEARS ENDED OCTOBER 31, 2023 AND 2022

AND

REPORT OF CERTIFIED PUBLIC ACCOUNTANTS

Bolinger, Segars, Gilbert & Moss, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

LUBBOCK, TEXAS

AMPLEX ELECTRIC, INC.

LUCKEY, OHIO

FINANCIAL STATEMENTS

FOR THE YEARS ENDED OCTOBER 31, 2023 AND 2022

AND

REPORT OF CERTIFIED PUBLIC ACCOUNTANTS

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

LUCKEY, OHIO

FINANCIAL STATEMENTS

FOR THE YEARS ENDED OCTOBER 31, 2023 AND 2022

TABLE OF CONTENTS

	Statement Identification	Page No.
Independent Auditor’s Report		1
Financial Statements
Balance Sheets	Exhibit A	3
Statements of Income	Exhibit B	4
Statements of Stockholders’ Equity	Exhibit C	5
Statements of Cash Flows	Exhibit D	6
Notes to Financial Statements		7

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

Bolinger, Segars, Gilbert & Moss, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

PHONE: (806) 747-3806

FAX: (806) 747-3815)

8215 NASHVILLE AVENUE

LUBBOCK, TEXAS 79423-1954

Independent Auditor’s Report

Board of Directors

Amplex Electric, Inc.

Luckey, Ohio

Opinion

We have audited the accompanying financial statements of Amplex Electric, Inc., which comprise the balance sheets as of October 31, 2023 and 2022 and the related statements of income, stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Amplex Electric, Inc. as of October 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Amplex Electric, Inc. (the Company) and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with GAAS; this includes the design, implementation, and maintenance of internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

Auditor’s Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial statements.

In performing an audit in accordance with GAAS, we:

Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Certified Public Accountants

Lubbock, Texas

February 16, 2024

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

Exhibit A

BALANCE SHEETS

OCTOBER 31, 2023 AND 2022

ASSETS

			2022
CURRENT ASSETS
Cash and Cash Equivalents	369,721		$	473,676
Accounts Receivable
Due from Customers (Less allowance for uncollectible accounts of 1,100 in 2023 and 1,600 in 2022)	132,663			104,891
Accounts Receivable - Affiliate	427,655			150,224
Materials and Supplies	553,545			528,738
Current Portion of Prepaid Fiber Lease	8,864			8,864
Prepayments	414,770			131,038
	1,907,218		$	1,397,431
OTHER NONCURRENT ASSETS
Investments in Equity Securities	—		$	306,163
Prepaid Fiber Lease, Less Current Portion	19,206			28,070
Intangibles, Net of Amortization	694,400			729,992
	713,606		$	1,064,225
PROPERTY AND EQUIPMENT
Plant In Service	21,039,423		$	15,781,988
Plant Under Construction	719,936			397,934
	21,759,359		$	16,179,922
Less: Accumulated Depreciation	7,351,112			5,772,658
	14,408,247		$	10,407,264
DEFERRED CHARGES	19,589		$	17,164
TOTAL ASSETS	17,048,660		$	12,886,084
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current Portion of Long-Term Debt	535,547		$	333,943
Accounts Payable	1,213,749			622,818
Other Current Liabilities	6,795			13,442
Deferred Service Revenues	475,152			438,156
Compensated Absences	108,423			74,497
Accrued Interest Payable	38,525			24,553
	2,378,191		$	1,507,409
NONCURRENT LIABILITIES
Long-Term Debt, Less Current Portion	6,627,108		$	4,582,804
Unamortized Debt Issuance Costs	(134,991	)		(139,241	)
Deferred Income Taxes	1,604,789			1,353,672
	8,096,906		$	5,797,235
STOCKHOLDERS' EQUITY
Common Stock, 25,000 Shares Authorized, 21,000 Shares Issued and Outstanding	50,000		$	50,000
Retained Earnings	6,523,563			5,531,440
	6,573,563		$	5,581,440
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	17,048,660		$	12,886,084

All values are in US Dollars.

See accompanying notes to financial statements.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

Exhibit B

STATEMENTS OF INCOME

FOR THE YEARS ENDED OCTOBER 31, 2023 AND 2022

	October 31,
		2023		2022
OPERATING REVENUES
Wireless Internet Services	$	7,299,416		$	7,180,643
Fiber Internet Services		2,045,394			1,315,378
VoIP Services		534,791			432,018
Streaming Video Services		555,682			354,751
Miscellaneous Income		356,780			191,005
Uncollectible Recoveries (Revenues)		1,047			(300	)
Total Operating Revenues	$	10,793,110		$	9,473,495
OPERATING EXPENSES
Cost of VoIP	$	83,325		$	76,156
Cost of Internet Services		663,478			563,730
Cost of Streaming Video		483,104			304,501
Plant Specific Operations		1,465,057			1,504,147
Plant Nonspecific Operations		956,182			612,686
Depreciation and Amortization		1,620,197			1,207,045
Customer Operations		639,617			567,239
Corporate Operations		3,090,847			2,909,060
General Taxes		155,520			144,846
Total Operating Expenses	$	9,157,327		$	7,889,410
OPERATING INCOME	$	1,635,783		$	1,584,085
OTHER INCOME (EXPENSE)
Interest and Dividend Income	$	11,831		$	2,326
Unrealized Gains (Losses) on Equity Securities					(1,301	)
Gain on Sale of Assets		28,186			8,950
Amortization of Debt Issuance Cost		(14,036	)		(10,421	)
Interest Expense		(417,483	)		(127,999	)
Other, Net		(1,041	)		10,422
	$	(392,543	)	$	(118,023	)
NET INCOME BEFORE INCOME TAXES	$	1,243,240		$	1,466,062
Income Tax Expense		251,117			307,127
NET INCOME	$	992,123		$	1,158,935

See accompanying notes to financial statements.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

Exhibit C

STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED OCTOBER 31, 2023 AND 2022

	Common Stock				Retained
	Shares		Cost		Earnings		Total
Balance, November 1, 2021	21,000	$	50,000	$	4,372,505	$	4,422,505
Net Income					1,158,935		1,158,935
Balance, October 31, 2022	21,000	$	50,000	$	5,531,440	$	5,581,440
Net Income					992,123		992,123
Balance, October 31, 2023	21,000	$	50,000	$	6,523,563	$	6,573,563

See accompanying notes to financial statements.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

Exhibit D

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED OCTOBER 31, 2023 AND 2022

	October 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	992,123		$	1,158,935
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
Depreciation		1,584,605			1,171,452
Amortization of Intangibles		35,592			35,593
Amortization of Debt Issuance Costs		14,036			10,421
Deferred Income Taxes		251,117			307,127
Gain on Sale of Assets		(28,186	)		(8,950	)
Unrealized Loss on Equity Securities					1,301
Receivables		(305,203	)		(71,688	)
Materials and Supplies		(24,807	)		(124,265	)
Prepayments		(283,732	)		11,087
Prepaid Fiber Lease		8,864			8,864
Accounts Payable		590,931			(43,727	)
Deferred Service Revenues		36,996			(33,208	)
Deferred Charges		(2,425	)		(17,164	)
Other Current Liabilities		41,251			36,757
Net Cash from Operating Activities	$	2,911,162		$	2,442,535
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to Telecommunications Plant	$	(5,557,402	)	$	(5,206,151	)
Sales of Equity Securities		301,163
Purchases of Equity Securities					(300,250	)
Net Cash from Investing Activities	$	(5,256,239	)	$	(5,506,401	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Long-Term Borrowing	$	2,413,605		$	3,043,897
Debt Issuance Costs		(9,786	)		(79,385	)
Repayment of Long-Term Debt		(167,697	)		(130,951	)
Net Cash from Financing Activities	$	2,236,122		$	2,833,561
NET CHANGE IN CASH AND CASH EQUIVALENTS	$	(108,955	)	$	(230,305	)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR		473,676			703,981
CASH AND CASH EQUIVALENTS - END OF YEAR	$	369,721		$	473,676
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest	$	417,483		$	127,999
Income Taxes	$	0		$	0

See accompanying notes to financial statements.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIAL STATEMENTS

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Amplex Electric, Inc. (the Company) is a provider of broadband internet, voice over internet protocol (VOIP), and video services within a service area located primarily in Northwest and Northcentral Ohio.

System of Accounts

The accounting records of the Company conform to the Uniform System of Accounts prescribed by the Federal Communications Commission for telephone companies.

Revenue Recognition

Monthly service plan revenues derived from VOIP and internet service are billed for services to be provided in the future. The portion of the revenues identified as out of period are deferred as service revenues at the end of each month.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, Topic 606, which provides a new framework for the recognition of revenue.

All revenues are accounted for under ASC 606 because all operating revenues are considered to be contracts with customers.

Generally, revenues that are derived from customers are cancellable on a short-term basis and are billed monthly and recognized as revenue in the month that the performance obligation is fulfilled.

Sales of equipment and other services that are provided are considered to be a separate performance obligation. When equipment and installation is a distinct performance obligation, the Company records the sale of the equipment when the customer takes possession of the products and services are accepted by the customer.

Revenue recognized from fixed term contracts that bundle services or equipment is allocated based on the standalone selling price of all required performance obligations of the contract and any discounts are recognized over the contract term. Promotional discounts relating to bundled services are attributed to each required component of the bundled services. There were no material costs to acquire customer contracts that would be required to be deferred and amortized over the contract period.

Deferred service revenues represent amounts billed to customers for internet services not performed as of the years ended October 31, 2023 and 2022.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIAL STATEMENTS

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers cash and working funds to be cash and cash equivalents.

Concentrations of Credit Risk

Although the Company maintains their deposits in federally insured institutions, deposits may at times exceed insured amounts. Deposit accounts are insured up to $250,000.

Investments

Topic 321 eliminates the distinction between trading and available for sale equity securities. Equity investments are valued at fair value with unrealized gains or losses recognized in net income. Prior amounts that were classified in Other Comprehensive Income are presented as a cumulative effect of the adoption of ASC 321 and are recorded in retained earnings.

Investment levels are based on inputs used to calculate fair market value of investments. Those inputs are defined for each level as follows:

Level 1 – Inputs include quoted prices in active markets for identical assets.

Level 2 – Inputs include available indirect information, such as quoted prices for similar assets in active markets, or quoted prices for identical or similar assets in markets that are not active.

Level 3 – Inputs are subjective and generally based on the entity’s own assumptions on how knowledgeable parties would price assets and are developed using the best information available in the circumstances.

Securities transactions are recognized on the trade date (the date the order to buy or sell is executed). Income from investments is recorded as earned on an accrual basis.

Materials and Supplies

Materials and supplies are stated at the lower of cost or net realizable value.

Advertising Costs

The Company’s policy is to directly expense all nondirect-response advertising costs as incurred. The total advertising costs for the years ended October 31, 2023 and 2022 were $159,531 and $130,036, respectively.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIAL STATEMENTS

Trade Accounts Receivable

In the normal course of business, the Company recognizes accounts receivable for services billed. Accounts receivable are ordinarily due 30 days after the issuance of the invoice. Accounts past due more than 45 days are considered delinquent. No interest is accrued on delinquent outstanding balances. The Company provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions.

Intangible Assets

Intangible assets with finite lives are being amortized on the straight-line basis over five years. Such assets are periodically evaluated as to the recoverability of carrying values.

Reclassifications

Certain amounts in the prior year financial statements have been reclassified for comparative purpose to conform to the presentation in the current year’s financial statements.

Marketable Equity Securities

The cost and fair value of equity securities as of October 31, 2022 are as follows:


		Cost		Unrealized<br><br>Gain		Fair Value	Investment<br><br>Level
Marketable Securities
Multisector Bond Mutual Funds	$	303,179	$	2,984	$	306,163	1

Unrealized holding gains and losses on such securities are included as a component of non-operating income. During the year ended October 31, 2023 the Company converted all investments into cash and cash equivalents.

Prepaid Fiber Leases

Prepaid fiber leases consist of Indefeasible Right of Use (IRU) for portions of dark fiber with a telecommunications carrier. The Company made payment to the carrier and recognizes the expense over a period equal to the term of the IRU agreement. Prepaid fiber lease expenses as of October 31, 2023 are expected to be recognized as follows:

2024	$	8,864
2025		8,864
2026		8,864
2027		1,478
	$	28,070

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIAL STATEMENTS

Intangible Assets

The carrying basis and accumulated amortization of recognized intangible assets at October 31, 2023 and 2022, were:

		October 31,
		2023			2022
Amortized Intangible Assets
Internal Use Software	$	177,962		$	177,962
Accumulated Amortization		(109,542	)		(73,950	)
	$	68,420		$	104,012
Unamortized Intangible Assets
ARIN allocated IPv4 Licenses	$	46,080		$	46,080
FCC CBRS Licenses		579,900			579,900
	$	625,980		$	625,980
Total	$	694,400		$	729,992

The Company’s future cash flows are not materially impacted by its ability to extend or renew agreements related to its amortizable intangible assets.

Amortization expense for the years ended October 31, 2023 and 2022, was $35,592 and $35,593, respectively. Estimated amortization expense for each of the following two years is:

2024	$	35,592
2025		32,828

Property and Equipment

Plant in service is stated at original cost. Upon sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts, and any gain or loss is recognized and included in gain (loss) on disposal of assets. The cost of maintenance and repairs is charged to operating expenses. The Company provides for depreciation on a straight-line basis at annual rates which will depreciate the property and equipment over its estimated useful life. Following are the major classes of property and equipment in service as of October 31, 2023 and 2022:

	Original Cost					Accumulated Depreciation
	October 31,				Depreciable		October 31,
		2023		2022	Life in Years		2023		2022
Vehicles and Work Equipment	$	1,361,184	$	1,228,233	5 - 7	$	1,138,960	$	975,599
Construction Equipment		312,219		301,686	5 - 10		116,138		68,310
Leasehold Improvements		176,613		175,953	15		35,863		23,123
Furniture and Fixtures		316,282		244,834	5		199,992		160,458
Network Equipment		4,849,570		4,391,578	5 - 7		3,142,085		2,329,500
Fiber Plant		11,444,284		7,171,367	15 - 30		706,930		381,957
Customer Premise Equipment		2,528,971		2,221,827	4 - 5		1,991,017		1,820,918
Video Equipment		14,985		14,985	5 - 7		6,411		4,091
Towers		35,315		31,525	5 - 10		13,716		8,702
	$	21,039,423	$	15,781,988		$	7,351,112	$	5,772,658

The Company recognized depreciation expense of $1,584,605 and $1,171,452 for the years ended October 31, 2023 and 2022, respectively.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIAL STATEMENTS

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. The objective of the asset and liability method is to establish deferred tax assets and liabilities for the temporary difference between the financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. Income taxes are provided for tax effects of transactions reported in the financial statements and consist of taxes currently due, plus deferred taxes related primarily to accelerated depreciation and net operating loss (NOL) carryovers. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will result in a tax expense or benefit when recognized.

Any net operating losses incurred and not utilized are either carried back to offset prior taxable income or carried forward to offset future taxable income, depending on the taxing jurisdiction. Generally, federal net operating losses may be carried forward to offset future taxable income for a period not exceeding 20 years; however, beginning in 2018, net operating losses that are incurred may be carried forward indefinitely. At October 31, 2023, the Company has federal net operating loss carryovers of $1,336,357 available for carryover. In accordance with ASU No. 2015-17 Income Taxes, the Company classifies all deferred taxes as noncurrent. The net deferred tax liability in the accompanying balance sheet include the following components at October 31, 2023 and 2022:

		October 31,
		2023		2022
Deferred Income Taxes
Deferred Federal Tax Assets	$	30,476	$	20,494
Deferred Tax Assets - NOL		1,246,712		280,608
Deferred Federal Tax Liabilities		(2,881,977)		(1,654,774)
	$	(1,604,789)	$	(1,353,672)

Income taxes reflected in the statements of income consist of the following:

		October 31,
		2023		2022
Federal Income Taxes
Deferred Tax Expense	$	251,117	$	307,127
Income Tax Expense	$	251,117	$	307,127

During the years ended October 31, 2023 and 2022, the cash paid for income taxes was $0 and $0, respectively.

The Company adheres to the “uncertain tax positions” provisions of accounting principles generally accepted in the United States of America. The Company determined that it is more likely than not that its tax positions will be sustained upon examination by the Internal Revenue Service (IRS) or other State taxing authority and that all tax benefits are likely to be realized upon settlement with taxing authorities.

The Company files income tax returns in the U.S. federal jurisdiction and in the State of Ohio. The Company is no longer subject to U.S. federal and state income tax examinations by federal and state taxing authorities for years before 2019 and 2018.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIAL STATEMENTS

Long Term Debt

Long-term debt consists of:

		October 31,
		2023		2022
Various Vehicle Notes, 3.75% to 4.99%	$	179,850	$	604,245
Live Oak Bank Commercial Note, 7.25%		5,000,000		2,416,624
Live Oak Bank Commercial Note, 5.00%		1,721,261		1,789,869
Live Oak Bank Commercial Note, 5.00%		114,536
Huntington Bank Commercial Note, 3.75%		147,008		106,009
	$	7,162,655	$	4,916,747
Less Current Portion		535,547		333,943
	$	6,627,108	$	4,582,804

As of October 31, 2023 the annual requirements for principal payments on long-term debt for the next five years are as follows:

2024	$	535,547
2025		527,852
2026		638,966
2027		550,492
2028		554,690
Thereafter		4,355,107
	$	7,162,654

The Company has entered into a commercial lending agreement with Live Oak Banking Company under the Small Business Administration (SBA) loan program. The note is for $2,825,000 and holds a variable interest rate of prime plus 1.75%. The loan is to be repaid over a period of 15 years, consisting of 30 monthly installment payments covering interest only and 150 monthly installment payments covering principal and interest. The payments will be completed in June 2034.

The Company has guaranteed the loan, along with its related party, Redbug Properties, LLC (Redbug Properties). The loan funds are to be used for upgrade and expansion of the existing telecommunications network and refinancing of the current land and building loan held by the related party, Redbug Properties. Loan funds, and the related liabilities, are recorded on the Company which holds the physical assets related to the borrowing.

Substantially all assets of the Company are pledged as security for the long-term debt under certain loan agreements with the Live Oak Banking Company.

During the years ended October 31, 2023 and 2022, the cash paid for interest on notes payable was $417,483 and $127,999, respectively.

Related Party Transactions

The Company rents its office facilities and certain transmission space from a company owned by the Company’s majority shareholders. The Company is on an annual rental agreement. During the years ended October 31, 2023 and 2022 amounts paid for rent were $150,000 and $157,650, respectively.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIAL STATEMENTS

The Company has entered into a debt agreement with Live Oak Bank to borrow funds. The Company has guaranteed the loan, along with its related party, Redbug Properties. The Company received funds in the amount of $958,208 on this loan that relate to refinancing of debt held by Redbug Properties. The loan funds, and the related liabilities were transferred to Redbug Properties, which holds the physical assets related to the debt refinanced.

Amounts receivable from and payable to affiliated companies as of October 31, 2023 and 2022, are as follows:

	October 31,
		2023		2022
Accounts Receivable from Red Bug, LLC	$	294,722	$	121,427
Accounts Receivable from Red Bug Properties, LLC		132,933		28,797
Net Accounts Receivable - Affiliates	$	427,655	$	150,224

Litigation

As of October 31, 2023, there were no claims, assessments, or pending litigation of a material nature against the Company.

RUS Reconnect

During 2023, the Company received approval for funding through RUS ReConnect Program for a total amount of $21,341,792 in order to serve certain census blocks in rural Northwest Ohio. The Company is required to provide service in these areas for 28 years, which is the composite economic life of the assets funded by the ReConnect loan.

Live Oak Bank

During October 2023, the Company entered into a commercial lending agreement with Live Oak Banking Company. The note is for $900,000 and holds a variable interest rate of prime plus 1.05%. The loan is to be repaid over a period of 7 years, consisting of 24 monthly installment payments covering interest only and 60 monthly installment payments covering principal and interest. The payments began on December 2023 and will be completed in October 2030.

Subsequent Events

The Company’s management has evaluated the subsequent events through February 16, 2024, the date the financial statements were available for issue.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

EX-99.2

Exhibit 99.2

AMPLEX ELECTRIC, INC.

LUCKEY, OHIO

FINANCIAL STATEMENTS

BALANCE SHEET DATES AS OF APRIL 30, 2024 AND OCTOBER 31, 2023

AND INCOME STATEMENTS AND CASH FLOWS

FOR THE SIX MONTHS ENDED APRIL 30, 2024 AND 2023

AND

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

Bolinger, Segars, Gilbert & Moss, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

LUBBOCK, TEXAS

AMPLEX ELECTRIC, INC.

LUCKEY, OHIO

FINANCIAL STATEMENTS

BALANCE SHEET DATES AS OF APRIL 30, 2024 AND OCTOBER 31, 2023

AND INCOME STATEMENTS AND CASH FLOWS

FOR THE SIX MONTHS ENDED APRIL 30, 2024 AND 2023

AND

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

AMPLEX ELECTRIC, INC.

LUCKEY, OHIO

FINANCIAL STATEMENTS

BALANCE SHEET DATES AS OF APRIL 30, 2024 AND OCTOBER 31, 2023 AND INCOME STATEMENTS AND CASH FLOWS

FOR THE SIX MONTHS ENDED APRIL 30, 2024 AND 2023

TABLE OF CONTENTS

	Statement	Page
	Identification	No.
Review Report of Independent Accountants		1
Financial Statements
Balance Sheets	Exhibit A	2
Statements of Income and Retained Earnings	Exhibit B	3
Statements of Cash Flows	Exhibit D	4
Notes to Financial Statements		5

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

Bolinger, Segars, Gilbert & Moss, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

PHONE: (806) 747-3806

FAX: (806) 747-3815

8215 Nashville Avenue

Lubbock, Texas 79423-1954

Independent Accountant’s Review Report

Board of Directors

Amplex Electric, Inc.

Luckey, Ohio

We have reviewed the accompanying financial statements of Amplex Electric, Inc., which comprise the balance sheets as of April 30, 2024 and October 31, 2023, and the related statements of income and retained earnings and cash flows for the six months ended April 30 2024 and 2023, and the related notes to the financial statements. A review includes primarily applying analytical procedures to management's financial data and making inquiries of management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement whether due to fraud or error.

Accountant’s Responsibility

Our responsibility is to conduct the review engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion.

Accountant’s Conclusion

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America.

Certified Public Accountants

Lubbock, Texas

August 27, 2024

-1-

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

-2-

AMPLEX ELECTRIC, INC.

Exhibit A

BALANCE SHEETS

APRIL 30, 2024 AND OCTOBER 31, 2023

ASSETS
			October 31,
			2023
CURRENT ASSETS
Cash and Cash Equivalents	283,210		$	369,721
Accounts Receivable Due from Customers (Less allowance for credit losses of 900 in 2024 and 1,600 in 2023)	121,310			132,663
Accounts Receivable - Affiliate	383,530			427,655
Materials and Supplies	507,184			553,545
Current Portion of Prepaid Fiber Lease	8,864			8,864
Prepayments	508,046			414,770
	1,812,144		$	1,907,218
OTHER NONCURRENT ASSETS
Prepaid Fiber Lease, Less Current Portion	14,774		$	19,206
Intangibles, Net of Amortization	676,603			694,400
	691,377		$	713,606
PROPERTY AND EQUIPMENT
Plant In Service	23,090,959		$	21,039,423
Plant Under Construction	1,223,837			719,936
	24,314,796		$	21,759,359
Less: Accumulated Depreciation	8,138,666			7,351,112
	16,176,130		$	14,408,247
DEFERRED CHARGES	8,146		$	19,589
TOTAL ASSETS	18,687,797		$	17,048,660
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current Portion of Long-Term Debt	1,026,231		$	535,547
Accounts Payable	1,423,788			1,213,749
Other Current Liabilities	8,600			6,795
Deferred Service Revenues	77,333			475,152
Compensated Absences	108,423			108,423
Accrued Interest Payable	46,219			38,525
	2,690,594		$	2,378,191
NONCURRENT LIABILITIES
Long-Term Debt, Less Current Portion	7,208,256		$	6,627,108
Unamortized Debt Issuance Costs	(127,076	)		(134,991	)
Deferred Income Taxes	1,756,344			1,604,789
	8,837,524		$	8,096,906
STOCKHOLDERS' EQUITY
Common Stock, 25,000 Shares Authorized, 21,000 Shares Issued and Outstanding	50,000		$	50,000
Retained Earnings	7,109,679			6,523,563
	7,159,679		$	6,573,563
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	18,687,797		$	17,048,660

All values are in US Dollars.

See accompanying notes to financial statements.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

-3-

AMPLEX ELECTRIC, INC.

Exhibit B

STATEMENTS OF INCOME AND RETAINED EARNINGS

FOR THE SIX MONTHS ENDED APRIL 30, 2024 AND 2023

	April 30,
	2024				2023
OPERATING REVENUES
Wireless Internet Services	$	3,524,411		$	3,610,191
Fiber Internet Services		1,272,477			917,450
VoIP Services		247,931			239,833
Streaming Video Services		326,590			266,386
Miscellaneous Income		289,105			261,400
Uncollectible Recoveries (Revenues)		225			(2,877	)
Total Operating Revenues	$	5,660,739		$	5,292,383
OPERATING EXPENSES
Cost of VoIP	$	44,270		$	41,146
Cost of Internet Services		310,079			305,088
Cost of Streaming Video		316,140			227,281
Plant Specific Operations		724,025			729,976
Plant Nonspecific Operations		453,468			494,372
Depreciation and Amortization		786,671			892,341
Customer Operations		341,913			299,287
Corporate Operations		1,597,007			1,445,222
General Taxes		60,271			81,729
Total Operating Expenses	$	4,633,844		$	4,516,442
OPERATING INCOME	$	1,026,895		$	775,941
OTHER INCOME (EXPENSE)
Interest and Dividend Income	$	177		$	4,355
Gain on Sale of Assets		1,200
Amortization of Debt Issuance Cost		(7,915	)		(6,936	)
Interest Expense		(282,863	)		(185,470	)
Other, Net		177			(6,195	)
	$	(289,224	)	$	(194,246	)
NET INCOME BEFORE INCOME TAXES	$	737,671		$	581,695
Income Tax Expense		151,555			247,390
NET INCOME	$	586,116		$	334,305
RETAINED EARNINGS - NOVEMBER 1,		6,523,563			5,531,440
RETAINED EARNINGS - APRIL 30,	$	7,109,679		$	5,865,745

See accompanying notes to financial statements.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

-4-

AMPLEX ELECTRIC, INC.

Exhibit C

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED APRIL 30, 2024 AND 2023

	April 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	586,116		$	334,305
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
Depreciation		751,079			892,341
Amortization of Intangibles		17,796			17,796
Amortization of Debt Issuance Costs		7,915			6,936
Deferred Income Taxes		151,555			247,390
Gain on Sale of Assets		(1,200	)
Receivables		55,478			(57,453	)
Materials and Supplies		46,360			(50,358	)
Prepayments		(93,275	)		(76,112	)
Prepaid Fiber Lease		4,432			4,432
Accounts Payable		(257,677	)		35,665
Other Current Liabilities		2,063			(77,536	)
Deferred Service Revenues		77,333			27,231
Deferred Charges		11,443			(8,208	)
Net Cash from Operating Activities	$	1,359,418		$	1,296,429
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to Telecommunications Plant	$	(2,517,762	)	$	(2,815,773	)
Net Activity on Equity Securities					455
Net Cash from Investing Activities	$	(2,517,762	)	$	(2,815,773	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Long-Term Borrowing	$	1,481,587		$	1,467,056
Repayment of Long-Term Debt		(409,754	)		(109,183	)
Net Cash from Financing Activities	$	1,071,833		$	1,357,873
NET CHANGE IN CASH AND CASH EQUIVALENTS	$	(86,511	)	$	(161,471	)
CASH AND CASH EQUIVALENTS - OCTOBER 31,		369,721			473,676
CASH AND CASH EQUIVALENTS - APRIL 30,	$	283,210		$	312,205
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest	$	282,863		$	185,470
Income Taxes	$	0		$	0

See accompanying notes to financial statements.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

-5-

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIALSTATEMENTS

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Amplex Electric, Inc. (the Company) is a provider of broadband internet, Voice Over Internet Protocol (VOIP), and video services within a service area located primarily in Northwest and Northcentral Ohio.

System of Accounts

The accounting records of the Company conform to the Uniform System of Accounts prescribed by the Federal Communications Commission for telephone companies.

Revenue Recognition

The FASB issued ASU 2014-09, Revenue from Contracts with Customers, Topic 606, which provides a new framework for the recognition of revenue.

All revenues are accounted for under ASC 606 because all operating revenues are considered to be contracts with customers.

Generally, revenues that are derived from customers are cancellable on a short-term basis and are billed monthly and recognized as revenue in the month that the performance obligation is fulfilled.

Deferred service revenues represent amounts billed to customers for internet services not performed as of April 30, 2024 and October 31, 2023.

Use of Estimates in the Preparation of Financial Statements

Cash and Cash Equivalents

The Company considers cash and working funds to be cash and cash equivalents.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

-6-

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIALSTATEMENTS

Concentrations of Credit Risk

Although the Company maintains their deposits in federally insured institutions, deposits may at times exceed insured amounts. Deposit accounts are insured up to $250,000.

Investments

The Company has adopted FASB ASU 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities, Topic 321, which provides guidance for the initial and subsequent recognition of financial assets. Topic 321 eliminates the distinction between trading and available for sale equity securities. Equity investments are valued at fair value with unrealized gains or losses recognized in net income. Prior amounts that were classified in Other Comprehensive Income are presented as a cumulative effect of the adoption of ASC 321 and are recorded in retained earnings.

Investment levels are based on inputs used to calculate fair market value of investments. Those inputs are defined for each level as follows:

Level 1 – Inputs include quoted prices in active markets for identical assets.

Level 2 – Inputs include available indirect information, such as quoted prices for similar assets in active markets, or quoted prices for identical or similar assets in markets that are not active.

Securities transactions are recognized on the trade date (the date the order to buy or sell is executed). Income from investments is recorded as earned on an accrual basis.

Materials and Supplies

Materials and supplies are stated at the lower of cost or net realizable value.

Advertising Costs

The Company’s policy is to directly expense all nondirect-response advertising costs as incurred. The total advertising costs for the six months ended April 30, 2024 and 2023 were $78,646 and $76,144, respectively.

Trade Accounts Receivable

Intangible Assets

Intangible assets with finite lives are being amortized on the straight-line basis over five years. Such assets are periodically evaluated as to the recoverability of carrying values.

Reclassifications

Certain amounts in the prior year financial statements have been reclassified for comparative purpose to conform to the presentation in the current year’s financial statements.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

-7-

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIALSTATEMENTS

Prepaid Fiber Leases

May 1, 2024 thru April 30, 2025	$	8,864
May 1, 2025 thru April 30, 2026		8,864
May 1, 2026 thru April 30, 2027		5,910
	$	23,638

Intangible Assets

The carrying basis and accumulated amortization of recognized intangible assets at April 30, 2024 and October 31, 2023, were:

	April 30, 2024			October 31, 2023
Amortized Intangible Assets
Internal Use Software	$	177,962		$	177,962
Goodwill - Xakbee		30,584
Accumulated Amortization		(157,923	)		(109,542	)
	$	50,623		$	68,420
Unamortized Intangible Assets
ARIN allocated IPv4 Licenses	$	46,080		$	46,080
FCC CBRS Licenses		579,900			579,900
	$	625,980		$	625,980
Total	$	676,603		$	694,400

The Company’s future cash flows are not materially impacted by its ability to extend or renew agreements related to its amortizable intangible assets.

Amortization expense for the six months ended April 30, 2024 and 2023, was $17,796 and $17,796, respectively. Estimated amortization expense for each of the following two years is:

May 1, 2024 thru April 30, 2025	$	35,592
May 1, 2025 thru April 30, 2026		15,031

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

-8-

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIALSTATEMENTS

Property and Equipment

	Original Cost					Accumulated Depreciation
		April 30,		October 31,	Depreciable		April 30,		October 31,
		2024		2023	Life in Years		2024		2023
Vehicles and Work Equipment	$	1,479,339	$	1,361,184	5 - 7	$	1,172,468	$	1,138,960
Construction Equipment		312,219		312,219	5 - 10		138,439		116,138
Leasehold Improvements		210,841		176,613	15		42,353		35,863
Furniture and Fixtures		320,896		316,282	5		213,077		199,992
Network Equipment		4,913,109		4,849,570	5 - 7		3,557,722		3,142,085
Fiber Plant		13,228,503		11,444,284	15 - 30		909,843		706,930
Customer Premise Equipment		2,575,752		2,528,971	4 - 5		2,081,045		1,991,017
Video Equipment		14,985		14,985	5 - 7		7,481		6,411
Towers		35,315		35,315	5 - 10		16,238		13,716
	$	23,090,959	$	21,039,423		$	8,138,666	$	7,351,112

The Company recognized depreciation expense of $751,079 and $892,341 for the six months ended April 30, 2024 and 2023, respectively.

Income Taxes

Any net operating losses incurred and not utilized are either carried back to offset prior taxable income or carried forward to offset future taxable income, depending on the taxing jurisdiction. Generally, federal net operating losses may be carried forward to offset future taxable income for a period not exceeding 20 years; however, beginning in 2018, net operating losses that are incurred may be carried forward indefinitely. At April 30, 2024, the Company has federal net operating loss carryovers of $5,806,109 available for carryover. In accordance with ASU No. 2015-17 Income Taxes, the Company classifies all deferred taxes as noncurrent. The net deferred tax liability in the accompanying balance sheet include the following components at April 30, 2024 and October 31, 2023:

		April 30, 2024			October 31, 2023
Deferred Income Taxes
Deferred Federal Tax Assets	$	31,061		$	30,476
Deferred Tax Assets - NOL		1,219,283			1,246,712
Deferred Federal Tax Liabilities		(3,006,688	)		(2,881,977	)
	$	(1,756,344	)	$	(1,604,789	)

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

-9-

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIALSTATEMENTS

Income taxes reflected in the statements of income consist of the following:

		April 30,
		2024		2023
Federal Income Taxes
Deferred Tax Expense	$	151,555	$	247,390
Income Tax Expense	$	151,555	$	247,390

During the six months ended April 30, 2024 and 2023, the cash paid for income taxes was $0 and $0, respectively.

Long Term Debt

Long-term debt consists of:

		April 30, 2024		October 31, 2023
Various Vehicle Notes, 3.75% to 4.99%	$	237,190	$	179,850
Live Oak Bank Commercial Note, 7.25%		4,810,129		5,000,000
Live Oak Bank Commercial Note, 5.00%		1,684,004		1,721,261
Live Oak Bank Commercial Note, 5.00%		900,000		114,536
Nicholas Financial Note, 9.55%		494,000
Huntington Bank Commercial Note, 3.75%		109,164		147,008
	$	8,234,487	$	7,162,655
Less Current Portion		1,026,231		535,547
	$	7,208,256	$	6,627,108

As of April 30, 2024 the annual requirements for principal payments on long-term debt for the next five years are as follows:

2024	$	1,026,231
2025		605,841
2026		725,253
2027		740,992
2028		765,957
Thereafter		4,370,213
	$	8,234,487

Substantially all assets of the Company are pledged as security for the long-term debt under certain loan agreements with the Live Oak Banking Company.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

-10-

AMPLEX ELECTRIC, INC.

NOTES TO FINANCIALSTATEMENTS

During the six months ended April 30, 2024 and 2023, the cash paid for interest on notes payable was $282,863 and $185,470, respectively.

Related Party Transactions

The Company rents its office facilities and certain transmission space from a company owned by the Company’s majority shareholders. The Company is on an annual rental agreement. During the six months ended April 30, 2024 and 2023 amounts paid for rent were $165,000 and $75,000, respectively.

Amounts receivable from and payable to affiliated companies as of April 30, 2024 and October 31, 2023, are as follows:

	April 30,		October 31,
	2024		2023
Accounts Receivable from Red Bug, LLC	$	250,597	$	294,722
Accounts Receivable from Red Bug Properties, LLC		132,933		132,933
Net Accounts Receivable - Affiliates	$	383,530	$	427,655

Litigation

As of April 30, 2024, there were no claims, assessments, or pending litigation of a material nature against the Company.

RUS Reconnect

Employee Incentive Stock Options

On December 31, 2022 the Company has granted options to purchase 90 shares of common stock to specified employees at a price per share of $742.86. As of April 30, 2024, none of the options have been exercised.

Subsequent Events

The Company’s management has evaluated the subsequent events through August 27, 2024, the date the financial statements were available for issue.

BOLINGER, SEGARS, GILBERT & MOSS, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

EX-99.3

EXHIBIT 99.3

NICHOLAS FINANCIAL, INC.

PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

(Unaudited)

Summary of Transaction

The foregoing description of the Acquisition is qualified in its entirety by reference to the full text of the Share Purchase Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K on May 6, 2024.

Pro Forma Information

The unaudited pro forma condensed combined statements of operations for the three months ended June 30, 2024 and June 30, 2023 combine the historical consolidated statements of operations of the Company and Amplex, giving effect to the Acquisition as if it had occurred on April 1, 2024 and April 1, 2023, respectively.

The unaudited pro forma condensed combined financial information (“pro forma information”) is based on, and should be read in conjunction with, the unaudited historical condensed consolidated financial statements of the Company as of June 30, 2024. The unaudited historical condensed combined financial statements of the Company as of June 30, 2024 include discontinued operations presentation related to the Company’s historical consumer finance business for which the historical assets were sold to Westlake Services, LLC dba Westlake Financial, a California limited liability company ("Westlake Financial"), as disclosed in the Company’s Current Report on Form 8-K on May 1, 2024.

The historical consolidated financial information has been adjusted in the pro forma information to give effect to pro forma events that are directly attributable to the Acquisition, factually supportable, and with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results of operations of more than one year.

The pro forma information has been prepared using the acquisition method of accounting in accordance with accounting principles generally accepted in the United States of America. The acquisition method of accounting is dependent upon certain valuations that are provisional and subject to change. The pro forma adjustments are based on the assumptions and information available at the time of the filing of this Form 8-K/A. The Company will finalize the acquisition accounting within the required measurement period, but no later than June 15, 2025.

The unaudited pro forma condensed combined statements of operations do not reflect any potential cost savings or synergies that may be realized as a result of the Acquisition and also do not reflect any integration-related costs to achieve those potential cost savings or synergies. The integration-related costs will continue to be expensed as incurred in the appropriate accounting periods following completion of the Acquisition. For a detailed discussion of these risk factors, please refer to the risk, uncertainties and other factors described in the Company’s filings with the Securities and Exchange Commission.

The pro forma information should be read in conjunction with the accompanying notes to the pro forma information. The pro forma information is not necessarily indicative of what the financial position or results of operations would have been had the Acquisition occurred as of the dates indicated nor does it project the future financial position or operating results of the combined company.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2024

	NICK (Historical)			Amplex (Historical)			Transaction Accounting Adjustments			Notes	Pro Forma Condensed Combined
Revenue
Wireless internet services	$	319		$	1,764		$	(319	)	A	$	1,764
Fiber internet services		106			713			(106	)	A		713
Other revenue		64			426			(64	)	A		426
Total revenue:		489			2,903			(489	)			2,903
Operating expenses
Cost of wireless and fiber internet services		30			167			(30	)	A		167
Cost of other revenue		36			196			(36	)	A		196
Plant specific operations		74			316			(74	)	A		316
Plant nonspecific operations		38			218			(38	)	A		218
General and administrative		3,764			2,272			(831	)	A		4,105
								(1,100	)	C
Depreciation and amortization		94			437			(80	)	A		597
								146		B
Total operating expenses		4,036			3,606			(2,043	)			5,599
(Loss) income from operations		(3,547	)		(703	)		1,554				(2,696	)
Other (expense) income
Interest expense, net		-			(300	)		300		E		-
Other income (expense)		-			50			-				50
Gain on sale of assets		-			1			-				1
Income from cash equivalents		411			-			-				411
Emigration tax expense		(1,711	)		-			-				(1,711	)
Loss on dissenting shareholders' liability		(829	)		-			-				(829	)
Total other expense, net		(2,129	)		(249	)		300				(2,078	)
(Loss) income before income taxes		(5,676	)		(952	)		1,854				(4,774	)
Income tax expense (benefit)		(128	)		-			128				-
(Loss) income from continuing operations		(5,548	)		(952	)		1,726				(4,774	)
Loss from continuing operations attributable to noncontrolling interest		(1	)		-			(13	)	D		(14	)
Loss from continuing operations attributable to redeemable noncontrolling interest		(210	)		-			(180	)	D		(390	)
(Loss) income from continuing operations attributable to common shareholders	$	(5,337	)	$	(952	)	$	1,919			$	(4,370	)
Net loss per share attributable to common shareholders from continuing operations:
Basic	$	(0.79	)								$	(0.65	)
Diluted	$	(0.79	)								$	(0.65	)

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2023

	NICK (Historical)			Amplex (Historical)			Transaction Accounting Adjustments			Notes	Pro Forma Condensed Combined
Revenue
Wireless internet services	$	-		$	1,826		$	-			$	1,826
Fiber internet services		-			468			-				468
Other revenue		-			362			-				362
Total revenue:		-			2,656			-				2,656
Operating expenses
Cost of wireless and fiber internet services		-			-			-				-
Cost of other revenue		-			147			-				147
Plant specific operations		-			349			-				349
Plant nonspecific operations		-			219			-				219
Fair value and other adjustments, net		-			-			-				-
General and administrative		1,478			1,023			-				2,501
Depreciation and amortization		22			404			170		F		596
Total operating expenses		1,500			2,142			170				3,812
(Loss) income from operations		(1,500	)		514			(170	)			(1,156	)
Other (expense) income
Interest expense, net		-			(134	)		134		H		-
Other income		12			1			-				13
Gain on sale of assets		-			-			-				-
Income from cash equivalents		-			-			-				-
Emigration tax expense		-			-			-				-
Loss on dissenting shareholders' liability		-			-			-				-
Other income		-			-			-				-
Total other income (expense), net		12			(133	)		134				13
(Loss) income before income taxes		(1,488	)		381			(36	)			(1,143	)
Income tax expense (benefit)		-			-			-				-
(Loss) income from continuing operations		(1,488	)		381			(36	)			(1,143	)
Loss from continuing operations attributable to noncontrolling interest		-						(8	)	G		(8	)
Income from continuing operations attributable to redeemable noncontrolling interest		-						112		G		112
(Loss) income from continuing operations attributable to common shareholders	$	(1,488	)	$	381		$	(140	)		$	(1,247	)
Net loss per share attributable to common shareholders from continuing operations:
Basic	$	(0.20	)								$	(0.17	)
Diluted	$	(0.20	)								$	(0.17	)

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Note 1 – Description of Transaction

On June 15, 2024, the Company closed upon the acquisition of 51% of the issued and outstanding common shares of Amplex for a total purchase consideration of $18.4 million, which was paid in cash pursuant to the terms and conditions of the Share Purchase Agreement dated as of June 15, 2024. 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.

Note 2 – Basis of Presentation

Pro Forma Presentation

The unaudited pro forma condensed combined financial information (“pro forma information”) has been prepared in accordance with Article 11, Pro Forma Financial Information, under Regulation S-X of the Securities and Exchange Act of 1934 (the “Exchange Act”), and is for informational purposes only.

The unaudited pro forma condensed combined statements of operations for the three months ended June 30, 2024 and 2023 combine the historical consolidated statements of operations of the Company and Amplex, giving effect to the Acquisition as if it had occurred on April 1, 2024 and 2023, respectively.

The historical consolidated financial information has been adjusted in the pro forma information to give effect to pro forma events that are directly attributable to the Acquisition, factually supportable, and with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on the results of operations of the combined company of more than one year.

The pro forma information has been prepared using the acquisition method of accounting in accordance with accounting principles generally accepted in the United States of America. Under the acquisition method of accounting, the Acquisition is accounted for by recognizing the acquired assets, including separately identifiable intangible assets, and assumed liabilities at their acquisition-date fair values. Any excess of the purchase consideration over the acquisition-date fair values of these identifiable assets and liabilities is recognized as goodwill. The pro forma adjustments are based upon the assumptions and information available at the time of the preparation of this Form 8-K/A and may be subject to change. The Company will finalize the acquisition accounting within the required measurement period, but no later than June 15, 2025. Differences between these estimates of fair value and the final acquisition accounting may occur, and those differences could have a material impact on the pro forma information and the combined company’s future results of operations and financial position. At the time of the filing of this Form 8-K/A, the Company does not expect material changes to the assets acquired or liabilities assumed.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The unaudited pro forma condensed combined statements of operations do not reflect any potential cost savings or synergies that may be realized as a result of the Acquisition and also do not reflect any integration-related costs to achieve those potential cost savings or synergies. Integration-related costs will continue to be expensed as incurred in the appropriate accounting periods following completion of the Acquisition. Although the Company projects that cost savings and synergies will result from the Acquisition, there can be no assurance that they will be achieved and such potential cost savings or synergies are subject to risks, uncertainties and other factors. For a detailed discussion of these risk factors, please refer to the risk, uncertainties and other factors described in the Company’s filings with the Securities and Exchange Commission.

Accounting policies

As part of preparing these unaudited pro forma condensed combined financial statements, certain reclassifications were made to align the Company and Amplex’s financial statement presentation. Upon consummation of the Transaction, management performed a comprehensive review of the two entities’ accounting policies and concluded that the differences between the accounting policies of the two companies are not material. The accounting policies used in the presentation of the pro forma information are those disclosed in the Company’s unaudited condensed consolidated financial statements for the three months ended June 30, 2024 and 2023, respectively.

Note 3 – Estimated Fair Value of Assets Acquired and Liabilities Assumed

The unaudited pro forma condensed combined financial information includes various assumptions, including those related to the preliminary purchase price allocation of the assets acquired and liabilities assumed from Amplex based on management's best estimates of fair value. The final purchase price allocation may vary based on final valuations and analyses of the fair value of the acquired assets and assumed liabilities. Accordingly, the pro forma adjustments are preliminary.

The following table shows the preliminary allocation of the purchase price for Amplex to the acquired identifiable assets, assumed liabilities and pro forma goodwill.

(In thousands)
Cash and cash equivalents
Accounts receivable
Materials and supplies
Operating lease right-of-use
Prepaid expenses and other assets
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
Lease liabilities
Deferred income taxes	4,668
Deferred revenue
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

All values are in US Dollars.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Note 4 – Statements of Operations Pro Forma Adjustments

Adjustments included in the columns under the heading “Notes” represent the following for the three months ended June 30, 2024:

Adjustments to remove the Amplex operating activity already included in the Company's statement of operations from the acquisition date of June 15, 2024 through June 30, 2024.
Adjustments for the amortization of intangible assets as well as depreciation of property, plant, and equipment are as follows:

	Three Months Ended June 30, 2024
Quarterly depreciation after purchase price allocation	$	447
Less: historical depreciation previously recorded		(428	)
Quarterly amortization after purchase price allocation		136
Less: historical amortization previously recorded		(9	)
Total	$	146

Elimination of direct, incremental transaction costs of the Acquisition totaling $1.1 million incurred by the Company and Amplex, which primarily relate to investment banking, advisory, legal, valuation and other professional services, that are reflected in the historical financial statements.
Adjustments to recognize the redeemable noncontrolling interests in Amplex related to the Company's 56.5% ownership position in Amplex as well as the noncontrolling interest in Red Bug, LLC and Red Bug Properties, Ltd. (collectively, the "Red Bug Entities", which are consolidated variable interest entities that the Company consolidates as Amplex was determined to be the primary beneficiary.
Adjustment to eliminate interest expense on loans paid off upon the Acquisition assuming the transaction was consummated on April 1, 2023, the beginning of the earliest period presented.

Adjustments included in the columns under the heading “Notes” represent the following for the three months ended June 30, 2023:

Adjustments for the amortization of intangible assets as well as depreciation of property, plant, and equipment are as follows:

	Three Months Ended June 30, 2023
Quarterly depreciation after purchase price allocation	$	447
Less: historical depreciation previously recorded		(404	)
Quarterly amortization after purchase price allocation		136
Less: historical amortization previously recorded		(9	)
Total	$	170

Adjustments to recognize the redeemable noncontrolling interests in Amplex related to the Company's 56.5% ownership position in Amplex as well as the noncontrolling interest in Red Bug, LLC and Red Bug Properties, Ltd. (collectively, the "Red Bug Entities"), which are consolidated variable interest entities that the Company consolidates as Amplex was determined to be the primary beneficiary.
Adjustment to eliminate interest expense on loans paid off upon the Acquisition assuming the transaction was consummated on April 1, 2023, the beginning of the earliest period presented.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Note 5 – Earnings per Share

The components of basic and diluted earnings per share were as follows:

	Three months ended June 30,
	(In thousands, except per share amounts)
		2024			2023
Numerator
Loss from continuing operations attributable to common shareholders		$	(4,370	)	$	(1,247	)
Denominator
Denominator for basic loss per share - weighted-average shares outstanding			6,749			7,279
Dilutive effect of stock options		5			10
Denominator for diluted earnings per share		$	6,754		$	7,289
Per share loss attributable to common shareholders from continuing operations
Basic		$	(0.65	)	$	(0.17	)
Diluted		$	(0.65	)	$	(0.17	)