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Note 3 - Acquisitions
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Business Combination Disclosure [Text Block]
3.
Acquisitions:
 
On
February
27,
2015,
Ting Fiber, Inc.,
one
of our wholly owned subsidiaries, acquired a
70%
ownership interest in the newly formed Ting Virginia, LLC and its subsidiaries, Blue Ridge Websoft, LLC (doing business as Blue Ridge
Internet Works), Fiber Roads, LLC and Navigator Network Services, LLC (the "BRI Group") for consideration of approximately
$3.5
million. The Company advanced in escrow
$3,125,000
during the year ended
December
 
31,
 
2014,
and paid the remaining purchase price of
$357,492
during the year ended
December
 
31,
 
2015.
Ting Virginia, LLC was an independent Internet service provider in Charlottesville, Virginia, doing business primarily as Blue Ridge Internet Works. The purchase price was primarily satisfied through an advance under our
2012
DLR Loan facility (note
8)
.
 
Ting Fiber, Inc. and the selling shareholders (the “
Minority Shareholders”) also agreed to certain put and call options with regard to the remaining
30%
interest in Ting Virginia, LLC retained by the Minority Shareholders. On the
second
anniversary of the closing date, Ting Fiber, Inc.
may
exercise a call option to purchase an additional
20%
ownership interest in Ting Virginia, LLC. Contingent upon the exercise of the call option by Ting Fiber, Inc. the Minority Shareholders
may
exercise a put option within
7
days following the exercise of the call option by Ting Fiber, Inc., to sell their remaining
10%
ownership interest in Ting Virginia, LLC. The consideration to be exchanged for the shares acquired or sold under the options shall be
$100,000
per percentage point of the additional equity interest acquired. The Company exercised its call option to purchase an additional
20%
on
February
1,
2017,
while the remaining
10%
put option was not exercised by the Minority Shareholders (Note
16(c))
.
 
In addition, on the
fourth
anniversary of the closing date, the Minority Shareholders
may
exercise a put option under which Ting Fiber, Inc. shall be obligated to purchase the Minority Shareholders
’ remaining interest for
$120,000
per percentage point of the additional equity interest acquired.
 
The Company has determined that the put options described above are embedded within the non-controlling interest shares that are subject to the put options. The redemption feature requires classification of the Minority Shareholders
’ Interest in the Consolidated Balance Sheets outside of equity under the caption “Redeemable non-controlling interest”. The present value of the liability at the acquisition date was
$3,000,000
and is being accreted to the estimated liability amount using a rate of
1.6%
from the acquisition date. During Fiscal
2016,
this amount was increased by
$49,492
to
$3,086,090,
to reflect the present value of this Redeemable non-controlling interest as at
December
31,
2016
as compared to a
$36,598
increase in Fiscal
2015.
 
The purchase consideration is comprised as follows:
 
Cash
   $
3,135,140
  
Less refund from working capital adjustment
    
(50,000
)
Repayment of debt
    
418,775
  
Redeemable non-controlling interest
    
3,000,000
  
    $
6,503,915
  
 
The following table represents the purchase price allocation based on the estimated fair values of the assets
 
Current assets (including cash of $21,423)
   $
338,577
  
Current liabilities
    
(529,702
)
         
Property and equipment, including:
        
Fiber network
    
3,456,024
  
Computer equipment
    
200,000
  
Furniture and equipment
    
5,000
  
Vehicles
    
92,000
  
Leasehold improvements
    
50,000
  
         
Intangible assets, including:
        
Network rights
    
692,000
  
Customer equipment and installations
    
68,000
  
         
Goodwill
    
2,132,016
  
         
Net assets acquired
   $
6,503,915