Note 6. Acquisitions

Antenna Plus

On April 27, 2017, the Company completed the acquisition of substantially all of the assets of Antenna Plus. Antenna Plus is a supplier of antenna-based solutions for mobile and automotive fleet applications for government, public safety, and Industrial Internet of Things (IOT) markets. The acquisition provides leverage for the Company’s existing products into several new markets, including the fast-growing automotive fleet and industrial IOT space.

The transaction was completed pursuant to an Asset Purchase Agreement with MCA Financial Group, Ltd., acting as the court-appointed receiver for Antenna Plus. Upon the closing of the transaction, the Company paid to Antenna Plus total consideration of approximately $6.3 million in cash, net of post-closing working capital adjustments. In addition, the Company assumed certain contracts and other liabilities of Antenna Plus, as expressly set forth in the Asset Purchase Agreement.

The following table shows the allocation of the purchase price for Antenna Plus to the acquired identifiable assets, liabilities assumed and goodwill:

Consideration:
Cash	$	6,383,500
Working capital adjustments		(34,770	)
Fair value of total consideration transferred	$	6,348,730
Recognized amounts of identifiable assets acquired and liabilities assumed:
Accounts receivable	$	584,390
Inventory		432,770
Fixed assets		402,958
Intangible assets		2,600,000
Current liabilities		(121,879	)
Total identifiable net assets acquired		3,898,239
Goodwill		2,450,491
Total	$	6,348,730

Goodwill was primarily attributable to the anticipated synergies and economies of scale expected from the operations of the combined business. The synergies include certain cost savings, operating efficiencies, and other strategic benefits projected to be achieved as a result of the acquisition. Goodwill is expected to be deductible for tax purposes.

Revenue associated with the acquired Antenna Plus assets was $2.3 million for the three months ended March 31, 2018. Cost of goods sold associated with the acquired Antenna Plus assets was $0.9 million for the three months ended March 31, 2018. Net income associated with the acquired Antenna Plus assets was net income of $0.7 million for the three months ended March 31, 2018.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents combined results of operations for each of the periods presented, as if Antenna Plus had been acquired as of the beginning of the fiscal year 2017. The pro forma information includes adjustments to amortization and depreciation for intangible assets and property, plant and equipment acquired. The pro forma data are for informational purposes only and are not necessarily indicative of the consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2017 or of the results of future operations of the combined business. Consequently, actual results will differ from the unaudited pro forma information presented below:

	Three Months Ended March 31,
	2018			2017
Pro forma sales	$	13,305,098		$	13,026,993
Pro forma income from operations	$	(1,163,669	)	$	927,532
Pro forma net income	$	(1,105,791	)	$	887,143