| Summary of preliminary allocation of the purchase price |
| | | | Cash paid to Wilson-Davis shareholders | | $ | 8,092,569 | Short-term notes | | | 5,000,000 | Long-term notes | | | 7,971,197 | Value of shares transferred from sponsor | | | 6,000,000 | Total consideration paid | | | 27,063,766 | | | | | Allocated to: | | | | Cash | | $ | 11,333,271 | Cash segregated | | | 22,000,605 | Receivables | | | 4,065,148 | Trading Securities, market value | | | 6,875 | Prepaid Income Tax | | | 201,125 | Accounts payable, accrued expenses and other current liabilities | | | (28,045,034) | Current portion of lease liability | | | (161,212) | Property and equipment | | | 23,645 | Cash deposit BDs and Clearing Organizations | | | 3,536,664 | Operating Lease Right-to-Use Lease Assets | | | 395,063 | Other Assets | | | 385,058 | Stock loan | | | (1,431,068) | Long-term Lease liability | | | (239,629) | Subordinated Borrowing | | | (1,950,000) | Deferred tax liability | | | (3,724,270) | Trading Account deposit | | | (100,000) | Net assets acquired | | | 6,296,241 | Excess of purchase price over net liabilities assumed before allocation to identifiable intangible assets and goodwill | | $ | 20,767,525 |
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| Summary of identifiable intangible assets acquired |
| | | | | | | | | | | Estimated | | | | | | Useful Life | | | Amount | | (Years) | Customer Lists (a) | | $ | 14,625,000 | | 12 | Excess of purchase price | | | 20,767,525 | | — | Goodwill | | $ | 6,142,525 | | — |
(a) | The Wilson Davis customer relationships were valued using the Multi-Period Excess Earnings Method (“MPEEM”). The MPEEM reflects the present value of the operating cash flows generated by existing customer relationships 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 cash flows. |
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| Summary of pro forma adjustments |
| | | | | | June 30, 2024 | Transaction cost | | $ | (9,008,053) | Amortization of intangibles | | $ | — | Loss on AtlasClear acquisition | | $ | 86,392,769 | Interest earned on investments held in trust | | $ | (256,279) |
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