The Company completed one acquisition during the fiscal year ended June 30, 2022. The acquisition was accounted for using the acquisition method of accounting. The estimated fair values were determined through established and generally accepted valuation techniques, including work performed by third-party valuation specialists. The purchase price of the acquisition has been allocated to tangible and identifiable intangible assets acquired and liabilities assumed. The fair value of working capital related items, such as other current assets and accrued liabilities, approximated their book values at the date of acquisition. Inventories were valued at fair value using the net realizable value approach. The total costs including the assumed profit were adjusted to present value using a discount rate considered appropriate. The resulting fair value approximates the amount the Company would be required to pay to a third party to assume the obligation. Intangible assets were valued using income approaches based on management projections, which the Company considers to be Level 3 inputs. Results of operations of the acquired entity are included in the Company’s operations beginning with the closing date of acquisition.

On September 14, 2021 (the “Acquisition Date”), the Company completed its acquisition (the “Acquisition”) of Ipanematech SAS (“Ipanema”), the cloud-native enterprise Software-Defined Wide Area Network (“SD-WAN”) business unit of InfoVista SAS ("InfoVista") pursuant to a Sale and Purchase Agreement. Under the terms of the Acquisition, the net consideration paid by Extreme to InfoVista was $70.9 million, which was funded entirely by cash. The primary reason for the acquisition was to acquire the talent and the technology to allow the Company to expand its portfolio with new cloud-managed SD-WAN and security offerings to support its enterprise customers.

The following table below summarizes the purchase price allocation of the tangible and identifiable intangible assets acquired and liabilities assumed (in thousands):


	Final Allocation as of June 30, 2022
Cash and cash equivalents	$	1,364
Accounts receivable, net		1,434
Inventories		274
Prepaid expenses and other current assets		610
Property and equipment		46
Other assets		21
Accounts payable		(976	)
Accrued compensation and benefits		(1,837	)
Accrued warranty		(41	)
Other accrued liabilities		(122	)
Deferred revenue		(10,134	)
Deferred taxes		(4,320	)
Other liabilities		(723	)
Net tangible liabilities		(14,404	)

Identifiable intangible assets		16,300
Goodwill		68,985
Total intangible assets acquired		85,285

Total net assets acquired	$	70,881

The following table presents details of the identifiable intangible assets acquired as part of the Ipanema acquisition (in thousands, except years)


Intangible Assets	Weighted Average Estimated Useful Life (in years)		Amount
Developed technologies		6	$	14,500
Customer relationships		4		1,800
Total identifiable intangible assets			$	16,300

The amortization for the developed technologies is recorded in “Cost of revenues” for product and the amortization for the remaining intangibles is recorded in “Amortization of intangibles assets” in the accompanying consolidated statements of operations. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Ipanema. The Company will not be entitled to amortization of the goodwill and intangible assets for tax purposes as this acquisition is a nontaxable stock acquisition.

The results of operations of Ipanema are included in the accompanying consolidated results of operations beginning September 15, 2021. The overall results of operations of Ipanema were not material to the consolidated financial statements of Extreme.

The following unaudited pro forma results of operations are presented as though the Acquisition had occurred as of July 1, 2020, the beginning of fiscal 2021, after giving effect to purchase accounting adjustments relating to deferred revenue, depreciation and amortization of intangibles and acquisition and integration costs.

The pro forma results of operations are not necessarily indicative of the combined results that would have occurred had the acquisition been consummated as of the beginning of fiscal 2021, nor are they necessarily indicative of future operating results. The unaudited pro forma results do not include the impact of synergies, nor any potential impacts on current or future market conditions, which could alter the unaudited pro forma results.

The unaudited pro forma financial information for the year ended June 30, 2022 combines the results for Extreme for such periods assuming the transaction closed on July 1, 2020, which include the results of Ipanema subsequent to the Acquisition Date, and Ipanema’s

historical results up to the Acquisition Date. The unaudited pro forma financial information for the year ended June 30, 2021 combines the historical results of operations for Extreme assuming the transaction closed on July 1, 2020 and historical results for Ipanema.

The following table summarizes the unaudited pro forma financial information (in thousands, except per share amounts):


	Year Ended
	June 30, 2022		June 30, 2021
Net revenue	$	1,115,942	$	1,031,825
Net income	$	53,659	$	(6,755	)
Net income per share – basic	$	0.41	$	(0.05	)
Net income per share – diluted	$	0.40	$	(0.05	)
Shares used in per share calculation – basic		129,437		124,019
Shares used in per share calculation – diluted		133,494		124,019