Note 4 - Acquisition of G5 Infrared |
3 Months Ended |
|---|---|
Sep. 30, 2026 | |
| G5 Infrared [Member] | |
| Notes to Financial Statements | |
| Business Combination [Text Block] |
4. Acquisition of G5 Infrared
In February 2025, the Company acquired G5 Infrared LLC, a New Hampshire limited liability company (“G5 Infrared”), pursuant to a Membership Interest Purchase Agreement (the “G5 MIPA”) by and among the Company, G5 Infrared, the members of G5 Infrared (collectively, the “G5 Sellers”), and Kenneth R. Greenslade, solely in his capacity as G5 Sellers’ Representative. The Company has acquired from the G5 Sellers all of the issued and outstanding membership interests of G5 Infrared, which closed on February 18, 2025 (the “G5 Acquisition Date”).
Net assets and results of operations of G5 Infrared are reflected in our financial results commencing on the G5 Acquisition Date. Revenue generated by G5 Infrared is included in our infrared components and assemblies and modules product groups.
We accounted for the acquisition of G5 Infrared using the acquisition method of accounting, which required us to measure identifiable assets acquired and liabilities assumed in the acquiree at their fair values as of the G5 Acquisition Date, with the excess of the consideration transferred over those fair values recorded as goodwill.
The fair value of the aggregate consideration was approximately $27.1 million which consisted of (i) $20.3 million in cash, (ii) 1,972,501 shares of Class A Common Stock (at a value of $2.47 per share, which was the closing price on the G5 Acquisition Date), and (iii) potential earnout consideration paid annually in fiscal years 2026 and 2027 subject to achievement of certain revenue and EBITDA targets set forth in the G5 MIPA.
Earnout payments of an aggregate of up to $23.0 million of additional consideration may be paid annually in fiscal years 2026 and 2027 subject to achievement of certain minimum EBITDA and revenue targets for the one and two-year periods beginning on the first full calendar month commencing after the G5 Acquisition Date, as set forth in the G5 MIPA. The earnout liability is remeasured each reporting period, which adjustments are included in the “Change in fair value of acquisition liabilities” in the accompanying unaudited Condensed Consolidated Statement of Comprehensive Income (Loss). The first earnout period ended on February 28, 2026, and, based on the targets achieved, the first earnout payment was made to the G5 Sellers for $7.3 million in cash and $3.2 million in shares of Class A Common Stock (297,445 shares). Subsequently, on April 16, 2026, we executed a side letter agreement with the G5 Sellers which set the year two earnout payment amount and accelerated the payment timeline. Pursuant to the agreement, the earnout amount will be $9 million, comprised of $6.3 million in cash and $2.7 million in shares of Class A Common Stock, to be paid after January 1, 2027 and on or before January 15, 2027. The remaining earnout liability balance in the accompanying unaudited Condensed Consolidated Balance Sheets as of June 30, 2026 and September 30, 2026 includes the agreed-upon earnout amount. |