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Nicholas Financial(NICK) - 2025 Q2 - Quarterly Report

Revenue Performance - Total revenue for the three months ended September 30, 2024, was $3.0 million, a 100% increase compared to $0 for the same period in 2023[160]. - Total revenue for the six months ended September 30, 2024, was $3.4 million, a significant increase from $0 in the same period in 2023, attributed to new services from the acquisition of Amplex[168]. - Wireless internet services generated $1.764 million, fiber internet services generated $773 thousand, and other revenue generated $421 thousand for the three months ended September 30, 2024[160]. Operating Expenses - Total operating expenses for the three months ended September 30, 2024, were $3.983 million, a 148% increase compared to $1.609 million for the same period in 2023[161]. - General and administrative expenses increased by 61% to $2.553 million for the three months ended September 30, 2024, compared to $1.587 million in the prior year[161]. - Total operating expenses for the six months ended September 30, 2024, were $8.0 million, up from $3.1 million in the same period in 2023, reflecting the impact of the Amplex acquisition[169]. - General and administrative expenses increased to $6.3 million for the six months ended September 30, 2024, compared to $3.1 million for the same period in 2023, primarily due to additional professional fees and restructuring expenses related to the acquisition of Amplex[173]. Depreciation and Amortization - Depreciation and amortization expenses surged to $501 thousand for the three months ended September 30, 2024, compared to $22 thousand for the same period in 2023, representing a 2177% increase[161]. - Depreciation and amortization expenses rose to $595 thousand for the six months ended September 30, 2024, compared to $44 thousand for the same period in 2023, driven by increased property, plant, and equipment from the Amplex acquisition[174]. Acquisitions - The company completed the acquisition of 51% of Amplex Electric, Inc. on June 15, 2024, marking its entry into the broadband services market[155]. - The company closed the acquisition of 51% of Amplex for a total purchase consideration of $18.4 million[179]. - Amplex serves over 9,100 fixed wireless broadband customers and over 3,500 fiber customers, expanding the company's service offerings significantly[155]. Cash Flow - Net cash used in operating activities was $(553) thousand for the six months ended September 30, 2024, compared to $1.5 million provided in the same period in 2023[180]. - Net cash provided by investing activities decreased to $16.7 million for the six months ended September 30, 2024, primarily due to cash paid for the acquisition of Amplex[181]. Financial Reporting and Accounting - The company recognizes revenue primarily from wireless internet services, fiber internet services, and other services[210]. - Revenue from wireless and fiber internet, VOIP services, and video streaming services is recognized ratably as performance obligations are satisfied[213]. - The allowance for credit losses is determined using a loss-rate method based on an aging schedule and historical loss rates[199]. - The company accounts for business combinations using the acquisition accounting method, requiring fair value determination of identifiable assets and liabilities[195]. - All acquisition-related costs, except for debt or equity issuance costs, are expensed in the period incurred[197]. - The company evaluates the adequacy of the allowance for credit losses regularly, adjusting as necessary based on current information[200]. - The company does not recognize gain contingencies until they are realized, and legal costs related to loss contingencies are expensed as incurred[204]. - Fair value measurements are classified into three levels, with certain financial instruments carried at fair value presented within Level 1[208]. Other Financial Metrics - Cost of wireless and fiber internet services totaled $157 thousand for the three months ended September 30, 2024, compared to $0 for the same period in 2023[162]. - Plant specific and nonspecific operations expenses totaled $551 thousand for the three months ended September 30, 2024, compared to $0 for the same period in 2023[163]. - Loss on dissenting shareholders' liability was $1.1 million for the six months ended September 30, 2024, compared to $0 for the same period in 2023, reflecting changes in fair value related to the sale of assets to Westlake[176]. - Income from discontinued operations improved to $0.4 million for the six months ended September 30, 2024, compared to a loss of $5.8 million for the same period in 2023, due to decreased general and administrative expenses[177]. - The company incurred an emigration tax expense of $1.7 million for the six months ended September 30, 2024, as a result of its continuation and domestication to Delaware[175].