3. ACQUISITION OF BENCHMARK BUILDERS

On April 20, 2017, FTE acquired all of the issued and outstanding shares of common stock of Benchmark pursuant to the Amendment No. 1 to Stock Purchase Agreement, (and together with the Stock Purchase Agreement dated March 9, 2017, the “Amended Purchase Agreement”). The purchase price set forth in the Amended Purchase Agreement consists of (i) cash consideration of approximately $17,250 subject to certain prospective working capital adjustments (ii) 26,738,445 shares of FTE common stock with a fair value of $21,658, (iii) convertible promissory notes in the aggregate principal amount of $12,500 to certain stockholders of Benchmark (the “Series A Notes”, which mature on April 20, 2019) and (iv) promissory notes in the aggregate principal amount of $30,000 to certain stockholders of Benchmark (the “Series B Notes”, which mature on April 20, 2020). On April 20, 2017, in conjunction with the acquisition of Benchmark, FTE’s senior lender, Lateral, amended the original credit agreement to provide for approximately $10,110 towards the cash purchase price of the Benchmark acquisition, refinancing this new advance with the existing debt and extending the maturity date of the facility to March 31, 2019. In addition, certain sellers of Benchmark additionally provided approximately $7,500 towards the cash purchase price for which they received promissory notes in the aggregate principal amount of $7,500 to certain stockholders of Benchmark (the “Series C Notes”, which mature on October 20, 2018). The acquisition has been accounted for as a business combination.

The following is a summary of the consideration transferred for the acquisition of Benchmark:

The purchase price was assigned to the assets acquired based on their estimated fair values. The following is the preliminary purchase price allocation as of the April 20, 2017 closing date for Benchmark:

As discussed in Note 4, variations of the income approach were used to value the intangible assets. Goodwill of $46,922 was recorded related to this acquisition. The Company believes the goodwill related to the acquisition was a result of the expected growth platform to be used for growing the business. The Company’s finalization of the purchase price allocation, including assets acquired, intangible assets acquired, liabilities assumed, and deferred income taxes assumed, related to the acquisition was in process as of June 30, 2017. The Company expects to complete the purchase price allocation during 2017. As of April 20, 2017, goodwill that is currently expected to be deductible for tax purposes is $36,875 and will be amortized over 15 years.

The operating results of Benchmark for the period from April 21, 2017 to June 30, 2017, included revenues of $44,538 and net loss of $577 and have been included in the Company’s consolidated statements of operations for the three and six months ended June 30, 2017. The net loss for Benchmark reflects $2,310 of amortization expense in the Company’s consolidated statements of operations for the three and six months ended June 30, 2017, in connection with Benchmark’s intangible assets. The Company incurred a total of $1,409 and $1,419 in transaction costs in connection with the acquisition, which are included within the consolidated statement of operations for the three and six months ended June 30, 2017, respectively.

Unaudited Predecessor financial information has been provided in these condensed consolidated financial statements since the operations of the Company before the acquisition of Benchmark were insignificant relative to the operations acquired.

The unaudited pro forma combined results, which assumes the transaction was completed on January 1 of the respective six month periods, are as follows for the six months ended June 30, 2017 and 2016:

[*] The unaudited supplemental pro forma from April 1, 2017 through June 30, 2017 has been excluded as the activity for the period April 1, 2017 through April 20, 2017 was not material.

Significant adjustments included within the Company’s Proforma earnings and losses for the six months ended June 30, 2017 and 2016 are as follows: