8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 8-K/A

_________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):   November 10, 2014

_________________________

INVISA, INC.

(Exact name of registrant as specified in its Charter)

Nevada	000-50081	65-1005398
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

1800 2nd Street, Suite 965

Sarasota, FL 34236

(Address of principal executive offices)

(941) 870-3950

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

_________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

1

Item 2.01 Completion of Acquisition or Disposition of Assets.

On November 10, 2014, we filed a Current Report on Form 8-K reporting that on November 10, 2014, we had closed our acquisition of all of the ownership interests in Uniroyal Engineered Products, LLC (“UEP”) and all of the ordinary common stock of Engineered Products Acquisition Limited (“EPAL”).

This Form 8-K/A amends the Form 8-K that we filed on November 10, 2014 to provide certain more detailed information about the two companies subject to such acquisitions and to include UEP’s audited financial statements for the years ended December 30, 2012 and December 29, 2013 and EPAL’s audited consolidated financial statements for the year ended December 31, 2013, together with the unaudited condensed financial statements as of June 29, 2014 and June 30, 2013 and the unaudited pro forma consolidated financial information related to our acquisitions required by Items 9.01(a) and 9.01(b) of Form 8-K.

Forward Looking Statements: Statements in this Current Report that are not strictly historical in nature constitute “forward looking statements.” Such statements include, but are not limited to, statements about Invisa, UEP, EPAL and/or the combined entity, events occurring after the date hereof and any other statements relating to the post-acquisition company or activities or opportunities pre or post acquisition. Such statements may include, without limitation, statements with respect to the Company’s plans, objectives, expectations and intentions and other statements identified by words such as “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans” or any similar expression. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results of Invisa, UEP, EPAL and/or the combined entity to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to the benefits, risks, uncertainties, difficulties or delays related to the acquisitions and activities or conduct of the businesses after the acquisitions. All forward-looking statements are qualified in their entirety by this cautionary statement, and none of Invisa, UEP nor EPAL undertakes any obligation to revise or update this press release to reflect events, developments or circumstances after the date hereof.

Business

UEP

General 

UEP is the successor to a long line of businesses that have manufactured vinyl coated fabrics. Its best known brand, Naugahyde^®, is the product of many improvements on a rubber-coated fabric developed a century ago in Naugatuck, Connecticut. UEP designs, manufactures and markets a wide selection of vinyl coated fabric products under a portfolio of nationally recognized brand names. We believe that it has continued to be a leading supplier in its marketplace because of its ability to provide specialized materials with performance characteristics customized to the end-user specifications, complemented by technical and customer support for the use of its products in manufacturing.

Products 

UEP’s products have undergone considerable evolution and today are distinguished by superior performance in a wide variety of applications as alternatives to leather, cloth and other synthetic fabric coverings. UEP’s product lines consist of more than 600 SKUs with combinations of colors, textures, patterns and other properties. UEP’s products are differentiated by unique protective top finishes, adhesive back coatings and transfer print capabilities. Additional process capabilities include embossing grains and patterns, and rotogravure printing. 

2

UEP’s Naugahyde vinyl coated fabrics products have various high performance characteristics and capabilities. They are durable, stain resistant, easily processed, more cost-effective and better performing than traditional leather or fabric coverings. UEP’s products are frequently used in applications that require rigorous performance characteristics such as automotive and non-automotive transportation, certain indoor/outdoor furniture, commercial and hospitality seating, healthcare facilities and athletic equipment. Materials manufactured by UEP come in a wide range of colors and textures and can be hand or machine sewn, laminated to an underlying structure, thermoformed to cover various substrates or made into a variety of shapes for diverse end-uses. 

The automotive sector represented approximately 44% of the total sales of UEP in 2013. UEP’s products are used primarily in the following automotive applications: 

· Seating

· Door panels

· Head and arm rests

· Security shades

· Components

The transportation and contract sector represented 38% of UEP’s 2013 sales and primarily consisted of seating products for original equipment manufacturers of non-automotive and light truck vehicles in the following five categories: 

· Personal watercraft, ATV’s, snowmobiles, golf carts

· Light and heavy industrial equipment and agricultural equipment (tractors, bulldozers)

· Recreational vehicles, vans and motor homes

· Heavy and medium trucks

· Mass Transit (trains, buses)

The distribution market sector represented approximately 17% of UEP’s 2013 sales and consists primarily of nationwide sales of the standard Naugahyde product line to local furniture shops, smaller furniture manufacturers and companies serving the hospitality and automotive and marine aftermarkets for refurbishing and replacement. The sales organization employed to service this market is a network of approximately 40 distributor locations. 

Products are developed and marketed based upon the performance characteristics required by end-users. For example, for recreational products used outdoors, such as boats, personal watercraft, golf carts and snowmobiles, a Naugahyde product designed primarily for durability and weatherability is used. UEP also manufactures a line of products called BeautyGard^®, with water-based topcoats that contain agents to protect against bacterial and fungal micro-organisms and can withstand repeated cleaning, a necessity in the restaurant and healthcare industries. These topcoats are environmentally friendlier than solvent-based topcoats. The line is widely used in hospitals and other healthcare facilities. Flame and smoke retardant Naugahyde vinyl coated fabrics are used for a variety of commercial and institutional furniture applications, including hospitals restaurants and residential care centers and seats for school busses and aircraft. In its Stoughton, Wisconsin plant UEP has two production lines that produce coated fabrics in more than 1,200 colors, textures, patterns and other properties. 

UEP believes that it is one of the few manufacturers that can produce vinyl coated fabrics and laminated composites through a continuous cast manufacturing process. The continuous cast method yields a material with a soft finish, deep grain pattern, wide temperature tolerance range and high malleability factor for thermoforming. In addition, UEP possesses plastisol-compounding capability, a variety of proprietary formulations and highly versatile finishing processes. UEP believes that its products are differentiated in the market by unique protective topcoat finishes and adhesive back coats, as well as rotogravure printing, which imparts multiple features, character prints and non-registered prints. UEP also has the in-house capability to perform transfer printing as well as micro-perforation, which provides product breathability. 

3

UEP owns the following proprietary brands and trademarks: 

· All-American^®

· BeautyGard^®

· Chameá™

· Flame Blocker™

· Naugaform^®

· Naugahyde^®

· NaugaSatin ™

· NaugaSoft^®

· NaugaSylk™

· Spirit Millennium^®

UEP’s management believes that UEP is the industry’s technology leader in continuous cast formable products (versus a simple cut-and-sew process). UEP maintains its leadership through a strong research and development effort that provides strong product development capability. This yields enhanced product characteristics, lower cost of material combinations and new proprietary product formulations. UEP estimates that approximately 40% of its non-automotive sales relate to products developed to customer specifications. 

UEP achieved ISO 9001:2008 status in 1999 and has renewed it annually since then. 

UEP maintains its process technology as trade secrets. It holds no patents. 

Research and Development 

UEP is actively engaged in research and development programs designed to develop new products, manufacturing processes, systems and technologies, while reducing costs to customers and enhancing existing product lines. We believe that investment in research and development has been an important factor in establishing and maintaining UEP’s competitive position in many of the specialized niche markets in which its products are sold. Product performance capabilities and characteristics are continually adjusted to meet customer needs. UEP spent $764,988 for research and development in 2012 and $764,952 in 2013.

Competition

UEP competes primarily on the basis of style, color, product breadth and quality, as well as price and customer service. 

The vinyl coated fabrics market in North America is highly fragmented. The uses of vinyl coated fabrics include automotive, furniture, industrial, protective clothing, wall coverings, book coverings, non-automotive transportation and awnings and tents. 

End users of UEP’s non-automotive products include John Deere, Caterpillar, Applebee’s, Polaris and Freightliner. 32.6% of UEP’s non-automotive sales in 2013 were contributed by its top 25 customers. UEP’s automotive customers and end users include BOS Automotive Products, Faurecia Automotive Seating, Johnson Controls Inc., Lear Corporation, PolyOne Automotive Solutions, Ford, General Motors, Daimler-Benz and Harley Davidson. UEP’s largest customer contributed approximately 25% to its total sales in 2013.

4

The following table sets forth product applications in the markets in which UEP actively competes and UEP’s competitors in those markets. 

Markets	Key Uses	Primary Competitors
Automotive	Interior components Seating applications Security shades	Canadian General-Tower Limited Haartz Corporation Morbern, Inc.
Transportation and Contract	ATV/snowmobile/PWC/golf carts Heavy/light equipment RVs/motor homes	Canadian General-Tower Limited Morbern, Inc. Spradling International Inc.
Distribution	Approximately 40 distributor and reseller locations	OMNOVA Solutions Morbern, Inc.
Contract	Office/contract/institutional furniture Restaurant booth /medical/dental/salon	OMNOVA Solutions Morbern, Inc. Spradling International Inc.
Other	Home furnishings/dinettes	Enduratex Spradling International Inc.

UEP’s sales are made in the following sectors: automotive, transportation and contract, distribution and other. The 2011, 2012 and 2013 sales from each market segment were as follows: 

Sector	2011 Net Sales	2012 Net Sales	2013 Net Sales
Automotive	50.4%	48.3%	43.6%
Transportation and Contract	32.8%	33.6%	38.1%
Distribution	16.2%	17.6%	17.2%
Other	0.6%	0.5%	1.1%

Marketing 

Products are developed and marketed based upon the performance characteristics required by end-users. UEP currently serves over 700 non-automotive customers through direct sales to industrial customers and through four salesmen and a distributor network, 16.4 percent of UEP’s non-automotive sales in 2013 were made through distributors. UEP serves its automotive customers through sales staff in Nappanee, Indiana and Detroit. 

UEP maintains a website for its principal non-automotive products at www.naugahyde.com. 

Raw Materials 

The principal raw materials for UEP’s coated fabrics are casting paper, knit fabric, PVC plastic resins, pigments and plasticizers. UEP has multiple sources for these materials. 

5

Wardle Storeys

General 

EPAL is a holding company for the wholly owned operating subsidiaries doing business as Wardle Storeys. 

Wardle Storeys, based in Earby in the Northwest of England, is a leading manufacturer of polymer films and coated fabrics. Like UEP, it is a successor to businesses that were founded over a century ago. With a focus on surface design and technical product innovation, Wardle Storeys supplies international markets in several sectors. 

Products 

Wardle Storeys engages in the manufacture and supply of polymer films and coated fabrics. It offers products for various interior trim components, including instrument panels, door casings, seating, gear lever and steering column gaiters, headliners, and load space covers; and vinyl sheeting that is used in medical, nuclear protection, personal protection, moisture barriers, pool liners, pram and nursery, cinema screens, and decorative surface applications. 

Wardle Storeys also provides hi-loft, anti-squeak finishes, automotive foils and coated fabrics for car interiors, contract furniture/upholstery seating materials, marine internal linings and trims, and healthcare coverings.

Wardle Storeys is a long-established supplier to the global automotive industry. It designs, develops and manufactures an extensive range of products to meet customer process requirements and OEM (original equipment manufacturer) specifications. 

For the automotive market Wardle Storeys manufactures products for interior trim components from floor to headliner which are produced to meet specific component production requirements such as cut and sew, vacuum forming/covering, R&S (Riders and Sliders) Rim, compression molding, and high frequency welding. Some products are supplied with micro perforations, which are necessary on most compression molding processes. Materials can also be combined with polyurethane or polypropylene foam laminated with either flame or hot melt adhesive for seating, fascia and door applications. 

As a committed supply partner in a global market, Wardle Storeys seeks to ensure that every product fully meets customer requirements of specification, reliability and performance. Wardle Storeys achieved ISO TS 16949 status in February 2004, and is approved to the European Council Directive 96/98 EX on Marine Equipment as amended for Module D Production Quality Assurance. 

With a focus on surface design and technical product innovation, Wardle Storeys supplies international markets in many sectors including the following: 

Sector	Products
Automotive	foils and coated fabrics for car interiors
Contract furniture / upholstery	high performance seating materials
Marine	internal linings and trim
Healthcare	protective coverings and laminates
Child care	printed polymer sheeting
Transportation	bus seat covering material
Industrial Equipment	materials for industrial applications

6

Wardle Storeys believes that is also a market leader in the manufacture of vinyls for use in the manufacture of pram and nursery products. 

Wardle Storeys’ well established brand names include: Amblon®, Ambla®, Velbex®, Cirroflex®, Vynide® and Plastolene®. Wardle Storeys manufactures expanded PVC on three coating lines. The characteristics and products of these brands are described in the following chart.

Coating Line	Brand	Characteristics/Products
Spread Coating	Amblon	Amblon is the trade name for unsupported expanded vinyl for applications such as fascias, door panels, seat backs and trim.  Amblon is suitable for vacuum forming, vacuum covering and other related polyurethane foam processes.
	Ambla	Ambla is the trade name for supported expanded vinyl using various backing fabrics.  Ambla is supplied for applications such as seating, head rests, gear lever gaiters, consoles and door panels.  It is suitable for cut and sew, stick down, and certain vacuum forming processes.
Calendering	Velbex	Velbex is an unsupported solid vinyl sheeting product supplied for products such as sun visors, floor mats and water shedders. It is suitable for high frequency, ultrasonic and vibrational welding techniques.
Lamination	Cirroflex / Vynide	Cirroflex and Vynide are solid vinyl sheeting products supported by a range of woven, knitted and non-woven fabrics.  Cirroflex is used in areas where a lighter weight product is required, such as headlining and seating.  Vynide is used in areas where a more robust material is required, such as piping and gear level applications.
	Plastolene	Plastolene is a solid vinyl sheeting reinforced with woven or warp knitted scrims.  It is supplied for interior security covers and general strengthening applications and is suitable for all welding techniques.

For automotive products each material is produced to specific OEM requirements and can be modified to suit individual process needs, generating performance based products required to produce Tier 1 components. This involves close cooperation with all parties at the beginning of new programs, where new technologies/materials can be introduced and product development is required to achieve component production and in performance requirements. 

Wardle Storeys maintains its process technology as trade secrets. It holds no patents. 

Research and Development 

In-house design and innovative product development are key features of Wardle Storeys’ export-oriented business. Its in-house design studio enables Wardle Storeys to develop new designs for customers and then deliver them in sample form or by computer-aided design (CAD). 

Wardle Storeys’ in-house design team has access to a vast range of grain, prints and surface effects, which are constantly evolving and increasing. Further trends are captured and expressed in Wardle Storeys’ own concept work and exclusive designs are developed from customer requests. Wardle Storeys’ CAD systems allow fast creation and display of design innovation. “Drape” software enables computer generated designs to be shown in situ in interiors of vehicles before the expense of production is incurred. A silicone cast surface-modeling system permits the transfer of material surface finishes, including leather and fabrics, onto vinyl foils for customer review before investment in tooling. Diverse production systems and equipment create an extensive automotive product range. Hi-Loft and anti-squeak finish (ASF) are examples of product developments providing customers with cost reduction and material performance enhancements. 

Wardle Storeys spent approximately $502,203 in 2013 and $566,642 in 2012 for research and development.

7

Competition 

Approximately 85% of Wardle Storeys’ revenue for 2013 was derived from automotive customers. The automotive concentration has been a mainstay of Wardle Storeys for more than 25 years. The remaining 15% was from customers supplying industrial sectors such as contract upholstery (restaurants, stadiums, and airports), marine, healthcare, and industrial equipment. 

Markets	Key Uses	Primary Competitors
Automotive	interior components seating applications security shades	Benecke-Kaliko AG Hornschuch Group GmbH Vulcaflex S.p.A.
Industrial / contract	contract upholstery marine healthcare industrial	Hornschuch Group GmbH Alcor Gislaved Folie AB Griffine Enduction

Marketing 

For the automotive industry Wardle Storeys has a direct sales team of five salespersons who deal with OEMs, a Tier 1 support manager and agents and distributors to support activity in the four main market areas of the U.K., Germany, Turkey and Italy. For industrial products in the UK, Wardle Storeys sells both direct to end users and also via non-exclusive distributors. The direct sales team consists of three persons based in the UK. 

For industrial sales in other countries, Wardle Storeys uses agents and an independent distribution network, primarily in Scandinavia, France, Germany and Hong Kong. The industrial business is supported mainly from stock and via a catalogue. The major brand name for the industrial products is Ambla, and Wardle Storeys maintains a separate website for this business at www.ambla.com. 

Wardle Storeys’ top 25 customers account for approximately 89% of its sales. No individual automotive customer represented more than 12% of its total sales, and no single industrial customer accounted for more than 8% of its total sales in 2013. 

Raw Materials 

The principal raw materials for Wardle Storeys’ foils and coated fabrics are casting paper, knit fabric, PVC resins and plasticizers. Wardle Storeys has multiple sources for most of these materials. 

Both Companies

Employees

UEP and Wardle Storeys maintain stable, experienced and productive workforces, currently employing a total of 190 employees at UEP and 220 at Wardle Storeys.

Most of the employees of UEP and Wardle Storeys who are involved in the production process are located at manufacturing facilities in Stoughton, Wisconsin and Earby, England. The production employees at the Stoughton, Wisconsin facility are represented by Local 1207 of the United Steel Workers (formerly P.A.C.E). The term of the collective bargaining agreement for UEP’s represented employees extends to March 2018. Most of the employees at Wardle Storeys’ Earby facility are represented by UNITE. The collective bargaining agreement with UNITE does not specify a termination date.

8

Costs of Environmental Compliance

Both UEP and Wardle Storeys believe that they are in compliance with all applicable environmental laws and regulations. Neither company has made any material expenditure to maintain such compliance during the past two fiscal years, nor does either company anticipate having to make any material expenditure to maintain such compliance in the foreseeable future.

Wardle Storeys aims to comply with all existing regulatory legislation at European, national and local levels and adopts a positive stance in anticipating future, more stringent regulatory requirements. It endeavors to minimize waste throughout the production facility with better utilization of raw materials, energy and water and to prevent at the source the emission of pollutants into the environment. Wardle Storeys is committed to continual improvements in environmental performance, and it achieved ISO 14001 status in 2000.

Anticipated Synergies of the UEP and Wardle Storeys Businesses 

The acquisition by Invisa combines UEP with Wardle Storeys, creating one of the top-ten vinyl coated fabric suppliers in the world. The combination is a vinyl coated fabrics company with over $100 million in annualized sales. Approximately two-thirds of the revenue generated by the combined companies is from automotive OEMs and suppliers, and one-third is from other sources, including transportation, recreational and industrial customers. 

The combination occurs at a time when the automotive markets are gaining momentum in both America and Europe. Also, the companies believe that there are significant synergistic opportunities in purchasing, as well as cross-fertilization in selling opportunities and design and technology exchanges. 

UEP has been exploring international growth opportunities, particularly in Europe, to expand its automotive and non-automotive business markets. The business combination with Wardle Storeys is expected to complement UEP’s technical expertise and access to customers abroad. This should enable the combined company to improve its market share in both the automotive and non-automotive industries. 

A predecessor of UEP formerly operated a manufacturing site for Naugahyde products in the UK, which was eventually sold. UEP anticipates that Wardle Storeys’ well-established sales networks could help reinvigorate the brand in the UK and Europe. 

The companies anticipate that the integration of their design team will enable them to offer an unprecedented choice of colors and patterns in non-automotive products. 

Description of Property

UEP leases its production facility and headquarters in Stoughton, Wisconsin (near Madison). The term of its lease extends to October 31, 2033 with an option to renew the lease for an additional five years. This facility consists of an approximately 230,000 square foot building with production, laboratory and administrative office space and a warehouse. UEP also leases several nearby buildings used for storage. The plant achieved ISO 9001:2008 certification and renews this certification on an annual basis. Major equipment at the production facility includes two cast coating lines, five rotogravure printers, four paper reconditioning machines one buffer, four standard embossers, one GAP embosser, two micro-perforators, nine inspection stations with automatic data collection, bulk material handling systems and warehouse bar coding and locator systems. Laboratory facilities at the Stoughton facility replicate the production floor capabilities and enhance UEP’s research and development capability. 

UEP has two efficient, major cast coating production lines that produce vinyl coated fabrics in more than 1,200 different colors, patterns and textures through a proprietary manufacturing process. 2013 production was approximately 7.8 million linear yards. UEP currently uses approximately 62% of full capacity of the plant. 

9

Wardle Storeys operates in a leased facility of approximately 250,000 square feet at West Craven Business Park, Earby, Barnoldswick, Lancashire. The term of its lease extends to March 2, 2029. Wardle Storeys achieved ISO TS 16949 status in February 2004, and is approved to the European Council Directive 96/98 EC on Marine Equipment as amended for Module D Production Quality Assurance. Major equipment at the production facility includes three coating lines, six inspection tables, four printers, one calender, three laminators, one embosser, and one perforating process. Current production is approximately 5.6 million linear yards, 700,000 panels and 1.9 million components, representing approximately 60% of full capacity of the plant.

Legal Proceedings

Neither UEP nor Wardle Storeys is involved in any material pending legal proceedings other than ordinary routine litigation incidental to their businesses. 

Executive Officers of the Coated Fabrics Segment

UEP is led by a management team with extensive experience. Howard R. Curd, Chairman and Chief Executive Officer, has over 40 years in executive and operational management. Howard F. Curd, President, brings 20 years of experience in investment banking, financing, and mergers and acquisitions. George L. Sanchez, Executive Vice President - Operations, has over 25 years of financial and manufacturing management experience. Bernard A. Wagner, Senior Vice President and Chief Financial Officer, a certified public accountant, has over 30 years of financial management experience, including prior experience as the chief financial officer of public companies. Larry E. Bressler, Senior Vice President of Automotive Sales, has approximately 40 years of experience in new product development and operational management. Ted R. Torres, Senior Vice President of Sales and Marketing for the Company’s core (non-automotive) markets, has over 20 years of domestic and international sales and marketing experience and new product development. UEP has recently bolstered its technology, sales, and operational management to better serve the automotive marketplace.

Wardle Storeys is also led by an equally motivated management team with experience serving their target markets. Stewart Quinn, Director of Operations and Finance, has a background in all aspects of finance with experience including financial, management, manufacturing and commercial accounting roles spread across a number of different market sectors. He is a qualified Chartered Management Accountant. Adrian Howarth is an experienced Manufacturing Manager and has focused heavily on introducing lean manufacturing techniques. Tom Paterson, Automotive Sales Manager, has been with Wardle Storeys since 1979 beginning in quality control, moving into technical services, and serving the last 12 years as Automotive Sales Manager.

Certain Transactions with Related Persons

Prior to the acquisition by Invisa, UEP was a party to an agreement with a company owned by its Chief Executive Officer, which provided for that company to provide management and administrative services to UEP. The management agreement was assigned to Invisa at the time of the acquisition. 

During 2013 UEP sold real estate and certain insurance policies for $2,117,098 to a related party owned by the majority owners of UEP. The proceeds were used to reduce UEP’s term debt and line of credit obligations by the same amount. Additionally, as part of the transaction with the related party, UEP leased the real estate it had sold plus additional land from the related company. The term of the lease runs to October 31, 2033. 

The Chief Executive Officer of UEP holds four subordinated secured promissory notes dated October 17, 2003, of UEP. The aggregate principal amount of the four notes is $2,000,000. The notes carry an interest rate of 9.25% per annum. Payment of the principal amount, which was due on October 17, 2013, was deferred, with payment of $600,000 being due on October 17, 2017 and $1,400,000 and any other outstanding amounts being due on October 17, 2018. UEP pays an accommodation fee for the deferral of two percent (2%) of the amount of the deferred payment on October 17 of each year until the notes have been repaid in full. The notes are secured by a security agreement providing a lien on all of the assets of UEP but subordinated to the lien of UEP’s senior lender. 

10

The Chief Executive Officer of UEP also holds a secured promissory note dated December 31, 2013, of EPAL in the amount of approximately $1,348,000 with an interest rate of 6.25% per annum. The maturity date of the note is December 21, 2023. The note is secured by a security agreement granting a lien against all assets of EPAL. He also holds the 50 outstanding shares of EPAL’s preferred shares, having a stated value of approximately $20 million.

UEP is a party to an agreement with its managers, Howard R. Curd and Howard F. Curd, and its former shareholders, who are officers of UEP, whereby the managers and shareholders granted consents and waivers in connection with certain organizational documents of UEP to permit the acquisition by Invisa’s subsidiary, UEP Holdings, LLC. The agreement also provides for the indemnification of the former shareholders by UEP for any proceedings in connection with tax claims arising prior to the closing of the acquisition by Invisa. 

UEP has a Split-Dollar Life Insurance Plan, whereby UEP pays premiums for insurance on the lives of Howard R. Curd, Howard F. Curd and George L. Sanchez, Executive Vice President- Global Operations of UEP. Under the plan, UEP has purchased two life insurance policies on the life of Howard R. Curd. Each of the policies has a face amount of $5,000,000. UEP has also purchased life insurance policies under the plan on the lives of Howard F. Curd and George L. Sanchez. 

The consideration received by former owners and executives of UEP and EPAL in connection with certain transactions relating to such companies and Invisa is disclosed in the transaction documents filed with the November 10 8-K, which documents are incorporated into this description by reference. 

Item 2.03 Creation of a Direct Financial Obligation

In connection with our acquisition of EPAL, Lloyds Bank Commercial Finance Limited (“Lloyds”), EPAL’s senior lender, has required that Invisa, as the ultimate parent of EPAL, guaranty EPAL’s debt to Lloyds under three borrowing instruments. We have entered into the Guaranty required by Lloyds. A copy of the Guaranty is attached as Exhibit 2.1 to this Form 8-K/A and incorporated by reference into this Form 8-K/A. The balance due under the loan agreements that we have guaranteed was approximately $7,896,000 as of January 14, 2015.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

The audited financial statements of UEP for the years ended December 29, 2013 and December 30, 2012, the related statements of comprehensive income (loss), statements of members’ equity and statements of cash flows for the years then ended, the related notes to the financial statements and the related auditor’s report of Baker Tilly Virchow Krause, LLP are attached as Exhibit 99.1 to this Form 8-K/A and are incorporated by reference into this Form 8-K/A. The audited consolidated balance sheet of EPAL for the year ended December 31, 2013, the related consolidated profit and loss account, consolidated reconciliation of movements in shareholders’ funds and consolidated statement of cash flows for the year, the related notes to the consolidated financial statements and the related auditor’s report of KPMG, LLP are attached as Exhibit 99.2 to this Form 8-K/A and incorporated by reference into this Form 8-K/A.

(b) Unaudited Financial Statements of Business Acquired.

The following unaudited financial information related to the acquisition of UEP and EPAL is attached as Exhibits 99.3, 99.4 and 99.5 to this Form 8-K/A and are incorporated by reference into this Form 8-K/A: 

(i)	Unaudited supplemental financial information for EPAL for the year ended December 31, 2013 translated from British Pounds to United States Dollars and presented in the financial format consistent with UEP’s financial statements.
(ii)	Unaudited condensed financial statements of UEP as of June 29, 2014 and June 30, 2013 and the six months ended June 29, 2014 and June 30, 2013.
(iii)	Unaudited condensed financial statements of EPAL as of June 29, 2014 and June 30, 2013 and the six months ended June 29, 2014 and June 30, 2013.

11

(c) Pro Forma Financial Information.

The following unaudited pro forma condensed combined financial information related to the acquisition of UEP and EPAL is attached as Exhibit 99.6 to this Form 8-K/A and is incorporated by reference into this Form 8-K/A:

(i)	Unaudited pro forma condensed combined balance sheet as of June 30, 2014.
(ii)	Unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2014.
(iii)	Unaudited pro forma condensed combined statement of operations for the year ended December 31, 2013.
(iv)	Notes to the pro forma condensed combined financial statements.

(d) Exhibits.

The following exhibits are being filed as part of this Current Report on Form 8-K/A:

Exhibit No.	Description
2.1	Guaranty in favor of Lloyds Bank Commercial Finance Limited.
99.1	Audited Financial Statements of UEP for the Years Ended December 29, 2013 and December 30, 2012.
99.2	Audited Consolidated Financial Statements of EPAL for the Year Ended December 31, 2013.
99.3	Unaudited Supplemental Financial Information of EPAL for the Year Ended December 31, 2013 (US Presentation).
99.4	Unaudited Condensed Financial Statements of UEP for the Six Months Ended June 29, 2014 and June 30, 2013.
99.5	Unaudited Condensed Financial Statements of EPAL for the Six Months Ended June 29, 2014 and June 30, 2013.
99.6	Unaudited Pro Forma Condensed Combined Financial Information.

12

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INVISA, INC.
	By:	/s/ Edmund C. King
Date:   January 20, 2015		Edmund C. King
		Chief Executive Officer

13

EX-2.1

Exhibit 2.1

GUARANTY

THIS GUARANTY (this “Guaranty”), dated as of January 19, 2015, is made by Invisa, Inc., a Nevada corporation (the “Guarantor”), in favor of Lloyds Bank Commercial Finance Limited (the “Lender”).

Wardle Storeys (Earby) Limited, a company incorporated under the laws of England and Wales with company number 04710820 (the “Obligor”), and the Lender are parties to (i) a Receivables Finance Agreement dated October 6, 2009 (as amended, modified, renewed or extended from time to time, the “Finance Agreement”), (ii) a Loan Agreement dated March 4, 2013 (as amended, modified, renewed or extended from time to time, the “Initial Loan Agreement”), and (iii) a Loan Agreement dated February 13, 2014 (as amended, modified, renewed or extended from time to time, the “Additional Loan Agreement”). The Guarantor has agreed to guarantee the indebtedness and other obligations of the Obligor to the Lender under or in connection with the Finance Agreement, the Initial Loan Agreement and the Additional Loan Agreement (the “Facilities Agreements”) as set forth herein. The Guarantor, as indirect parent company of the Obligor, will derive substantial direct and indirect benefits from the extension of credit to the Obligor pursuant to the Facilities Agreements (which benefits are hereby acknowledged by the Guarantor).

Accordingly, to induce the Lender to extend credit to the Obligor, and in consideration thereof, the Guarantor hereby agrees as follows:

SECTION 1     Definitions; Interpretation.

(a)     Certain Defined Terms. As used in this Guaranty, the following terms shall have the following meanings:

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy.”

“Collateral” means any property and interests and proceeds thereof now or hereafter acquired by the Obligor or any other Person in which a Lien shall exist in favor of the Lender to secure the Guaranteed Obligations.

“Collateral Documents” means any agreement pursuant to which the Obligor or any other Person provides a Lien on any Collateral and all filings, documents and agreements made or delivered pursuant thereto.

“Commitment” means any obligation of the Lender to extend credit to the Obligor under or in connection with the Facilities Agreements.

1

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Parties” means the Obligor, the Guarantor and any other Subsidiary of the Guarantor party to any Finance Document.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States of America or other applicable jurisdictions from time to time in effect.

“Event of Default” means an event of default under the Facilities Agreements.

“Finance Documents” means the Facilities Agreements, this Guaranty and all other documents, agreements and instruments delivered by the Obligor, the Guarantor or other Credit Party to the Lender under or in connection with Facilities Agreements, this Guaranty and all such other documents, agreements and instruments.

“Governmental Authority” means any federal, state, local or other governmental department, commission, board, bureau, agency, court, tribunal or other instrumentality or authority exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“Guaranteed Obligations” has the meaning set forth in Section 2.

“Guarantor Documents” means this Guaranty and all other certificates, documents, agreements and instruments delivered by the Guarantor to the Lender under or in connection with this Guaranty.

“Insolvency Proceeding” means, with respect to any Person, (a) any case, action or proceeding with respect to such Person before any court or other governmental agency or authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in either case undertaken under Debtor Relief Laws.

“Lien” means any mortgage, deed of trust, pledge, security interest, assignment, deposit arrangement, charge or encumbrance, lien, or other type of preferential arrangement.

“Material Adverse Effect” means any event, matter, condition or circumstance which has or would reasonably be expected to have a material adverse effect on the business, properties, results of operations or condition (financial or otherwise) of any the Guarantor and its Subsidiaries taken as a whole.

2

“Organization Documents” means, relative to any Person, its articles or certificate of incorporation, or certificate of limited partnership or formation, its bylaws, partnership or operating agreement or other organizational documents.

“Person” means an individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization, Governmental Authority, or any other entity of whatever nature.

“Related Party” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

“Solvent” means, as to any Person at any time, that (a) the fair value of the property of such Person is greater than the amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of §101(32) of the Bankruptcy Code and, in the alternative, for purposes of applicable state law; (b) the present fair saleable value of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital.

“Subsidiary” means any corporation, association, partnership, joint venture or other business entity of which more than 50% of the voting stock or other equity interest is owned directly or indirectly by any Person or one or more of the other Subsidiaries of such Person or a combination thereof.

(b)     Interpretation. In this Guaranty, except to the extent the context otherwise requires: (i) any reference to an Article, a Section, a Schedule or an Exhibit is a reference to an article or section thereof, or a schedule or an exhibit thereto, respectively, and to a subsection or a clause is, unless otherwise stated, a reference to a subsection or a clause of the Section or subsection in which the reference appears; (ii) the words “hereof,” “herein,” “hereto,” “hereunder” and the like mean and refer to this Guaranty as a whole and not merely to the specific Article, Section, subsection, paragraph or clause in which the respective word appears; (iii) the meaning of defined terms shall be equally applicable to both the singular and plural forms of the terms defined; (iv) the words “including,” “includes” and “include” shall be deemed to be followed by the words “without limitation;” (v) references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto; (vi) references to statutes or regulations are to be construed as including all statutory and regulatory provisions consolidating, amending, supplementing, interpreting or replacing the statute or regulation referred to; and (vii) any table of contents, captions and headings are for convenience of reference only and shall not affect the construction of this Guaranty.

3

SECTION 2     Guaranty.

(a)     Guaranty. The Guarantor hereby unconditionally and irrevocably guarantees to the Lender, and its successors, endorsees, transferees and assigns, the full and prompt payment when due (whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) and performance of the indebtedness, liabilities and other obligations of the Obligor to the Lender, whether created under, arising out of or in connection with the Facilities Agreements or otherwise, including all unpaid principal under the Facilities Agreements, all interest accrued thereon, all fees due under the Facilities Agreements and all other amounts payable by the Obligor to the Lender thereunder or in connection therewith. The terms “indebtedness,” “liabilities” and “obligations” are used herein in their most comprehensive sense and include any and all advances, debts, obligations and liabilities, now existing or hereafter arising, whether voluntary or involuntary and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether recovery upon such indebtedness, liabilities and obligations may be or hereafter become unenforceable or shall be an allowed or disallowed claim in any Insolvency Proceeding, and including interest that accrues after the commencement by or against any Credit Party of any Insolvency Proceeding naming such Person as the debtor in such Insolvency Proceeding. The foregoing indebtedness, liabilities and other obligations of the Obligor, and all other indebtedness, liabilities and obligations to be paid or performed by the Guarantor in connection with this Guaranty (including any and all amounts due under Section 14), shall hereinafter be collectively referred to as the “Guaranteed Obligations.”

(b)     Limitation of Guaranty. To the extent that any court of competent jurisdiction shall impose by final judgment under applicable law (including applicable state law and §§544 and 548 of the Bankruptcy Code) any limitations on the amount of the Guarantor’s liability with respect to the Guaranteed Obligations which the Lender can enforce under this Guaranty, the Lender accepts such limitation on the amount of the Guarantor’s liability hereunder to the extent needed to make this Guaranty and the Guarantor Documents fully enforceable and nonavoidable.

SECTION 3     Liability of Guarantor. The liability of the Guarantor under this Guaranty shall be irrevocable, absolute, independent and unconditional, and shall not be affected by any circumstance which might constitute a discharge of a surety or guarantor other than the indefeasible payment and performance in full of all Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, the Guarantor agrees as follows:

(i)     the Guarantor’s liability hereunder shall be the immediate, direct, and primary obligation of the Guarantor and shall not be contingent upon the Lender’s exercise or enforcement of any remedy it may have against the Obligor, any other Credit Party or any other Person, or against any Collateral;

(ii)    this Guaranty is a guaranty of payment when due and not merely of collectability;

4

(iii)   the Lender may enforce this Guaranty upon the occurrence and during the continuance of an Event of Default notwithstanding the existence of any dispute between the Lender and the Obligor with respect to the existence of such Event of Default;

(iv)   the Guarantor’s payment of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge the Guarantor’s liability for any portion of the Guaranteed Obligations remaining unsatisfied; and

(v)    the Guarantor’s liability with respect to the Guaranteed Obligations shall remain in full force and effect without regard to, and shall not be impaired or affected by, nor shall the Guarantor be exonerated or discharged by, any of the following events: (A) any Insolvency Proceeding with respect to the Obligor, the Guarantor, any other Credit Party or any other Person; (B) any limitation, discharge, or cessation of the liability of the Obligor, the Guarantor, any other Credit Party or any other Person for any Guaranteed Obligations due to any statute, regulation or rule of law, or any invalidity or unenforceability in whole or in part of any of the Guaranteed Obligations or the Finance Documents; (C) any merger, acquisition, consolidation or change in structure of the Obligor, the Guarantor or any other Credit Party or Person, or any sale, lease, transfer or other disposition of any or all of the assets or shares of the Obligor, the Guarantor, any other Credit Party or other Person; (D) any assignment or other transfer, in whole or in part, of the Lender’s interests in and rights under this Guaranty or the other Finance Documents, including the Lender’s right to receive payment of the Guaranteed Obligations, or any assignment or other transfer, in whole or in part, of the Lender’s interests in and to any of the Collateral; (E) any claim, defense, counterclaim or setoff, other than that of prior performance, that the Obligor, the Guarantor, any other Credit Party or other Person may have or assert, including any defense of incapacity or lack of corporate or other authority to execute any of the Finance Documents; (F) the Lender’s amendment, modification, renewal, extension, cancellation or surrender of any Finance Document, any Guaranteed Obligations, any Collateral, or the Lender’s exchange, release, or waiver of any Collateral; (G) the Lender’s exercise or nonexercise of any power, right or remedy with respect to any of the Collateral, including the Lender’s compromise, release, settlement or waiver with or of the Obligor, the Guarantor, any other Credit Party or any other Person; (H) the Lender’s vote, claim, distribution, election, acceptance, action or inaction in any Insolvency Proceeding related to the Guaranteed Obligations; (I) any impairment or invalidity of any of the Collateral or any failure to perfect any of the Lender’s Liens thereon or therein; and (J) any other guaranty, whether by the Guarantor or any other Person, of all or any part of the Guaranteed Obligations or any other indebtedness, obligations or liabilities of the Obligor to the Lender.

SECTION 4     Consents of Guarantor. The Guarantor hereby unconditionally consents and agrees that, without notice to or further assent from the Guarantor:

(i)     the principal amount of the Guaranteed Obligations may be increased or decreased and additional indebtedness or obligations of any Credit Party under the Finance Documents may be incurred, by one or more amendments, modifications, renewals or extensions of any Finance Document or otherwise;

(ii)    the time, manner, place or terms of any payment under any Finance Document may be extended or changed, including by an increase or decrease in the interest rate on any Guaranteed Obligation or any fee or other amount payable under such Finance Document, by an amendment, modification or renewal of any Finance Document or otherwise;

5

(iii)   the time for the Obligor’s (or any other Person’s) performance of or compliance with any term, covenant or agreement on its part to be performed or observed under any Finance Document may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon such terms as the Lender may deem proper;

(iv)    the Lender may discharge or release, in whole or in part, any other Credit Party or any other Person liable for the payment and performance of all or any part of the Guaranteed Obligations, and may permit or consent to any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any of the Collateral, nor shall the Lender be liable to the Guarantor for any failure to collect or enforce payment or performance of the Guaranteed Obligations from any Person or to realize upon the Collateral;

(v)     in addition to the Collateral, the Lender may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the Guaranteed Obligations, and may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any such action, and may apply such security and direct the order or manner of sale thereof;

(vi)     the Lender may request and accept other guaranties of the Guaranteed Obligations and any other indebtedness, obligations or liabilities of the Obligor to the Lender and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any such action or the result of any such action; and

(vii)     the Lender may exercise, or waive or otherwise refrain from exercising, any other right, remedy, power or privilege (including the right to accelerate the maturity of any indebtedness and any power of sale) granted by any Finance Document or other security document or agreement, or otherwise available to the Lender, with respect to the Guaranteed Obligations or any of the Collateral, even if the exercise of such right, remedy, power or privilege affects or eliminates any right of subrogation or any other right of the Guarantor against the Obligor;

all as the Lender may deem advisable, and all without impairing, abridging, releasing or affecting this Guaranty.

SECTION 5     Guarantor’s Waivers.

(a)     Certain Waivers. The Guarantor waives and agrees not to assert: (i) any right to require the Lender to marshal assets in favor of the Obligor, the Guarantor, any other Credit Party or any other Person, to proceed against the Obligor, any other Credit Party or any other Person, to proceed against or exhaust any of the Collateral, to give notice of the terms, time and place of any public or private sale of personal property security constituting the Collateral or to pursue any other right, remedy, power or privilege of the Lender whatsoever; (ii) the defense of the statute of limitations in any action hereunder or for the collection or performance of the Guaranteed Obligations; (iii) any defense arising by reason of any lack of corporate or other authority or any other defense of the Obligor, the Guarantor or any other Person; (iv) any defense based upon the Lender’s errors or omissions in the administration of the Guaranteed Obligations; (v) any rights to set-offs and counterclaims; (vi) any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of the Guarantor or the right of the Guarantor to proceed against the Obligor or any other obligor of the Guaranteed Obligations for reimbursement; and (vii) without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties, or which may conflict with the terms of this Guaranty.

6

(b)     Additional Waivers. The Guarantor waives any and all notice of the acceptance of this Guaranty, and any and all notice of the creation, renewal, modification, extension or accrual of the Guaranteed Obligations, or the reliance by the Lender upon this Guaranty, or the exercise of any right, power or privilege hereunder. The Guaranteed Obligations shall conclusively be deemed to have been created, contracted, incurred and permitted to exist in reliance upon this Guaranty. The Guarantor waives promptness, diligence, presentment, protest, demand for payment, notice of default, dishonor or nonpayment and all other notices to or upon the Obligor, the Guarantor or any other Person with respect to the Guaranteed Obligations.

(c)     Independent Obligations. The obligations of the Guarantor hereunder are independent of and separate from the obligations of the Obligor and any other Credit Party and upon the occurrence and during the continuance of any Event of Default, a separate action or actions may be brought against the Guarantor, whether or not the Obligor or any other Credit Party is joined therein or a separate action or actions are brought against the Obligor or any other Credit Party.

(d)     Financial Condition of Obligor. The Guarantor shall not have any right to require the Lender to obtain or disclose any information with respect to: (i) the financial condition or character of any Credit Party or the ability of any Credit Party to pay and perform the Guaranteed Obligations; (ii) the Guaranteed Obligations; (iii) the Collateral; (iv) the existence or nonexistence of any other guarantees of all or any part of the Guaranteed Obligations; (v) any action or inaction on the part of the Lender or any other Person; or (vi) any other matter, fact or occurrence whatsoever.

SECTION 6     Subrogation. Until the Guaranteed Obligations shall be satisfied in full and any Commitments shall be terminated, the Guarantor shall not have, and shall not directly or indirectly exercise, (i) any rights that it may acquire by way of subrogation under this Guaranty, by any payment hereunder or otherwise, (ii) any rights of contribution, indemnification, reimbursement or similar suretyship claims arising out of this Guaranty, or (iii) any other right which it might otherwise have or acquire (in any way whatsoever) which could entitle it at any time to share or participate in any right, remedy or security of the Lender as against the Obligor or other Credit Parties, whether in connection with this Guaranty, any of the other Finance Documents or otherwise. If any amount shall be paid to the Guarantor on account of the foregoing rights at any time when all the Guaranteed Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of the Lender and shall forthwith be paid to the Lender to be credited and applied to the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Finance Documents.

7

SECTION 7     Continuing Guaranty; Reinstatement.

(a)     Continuing Guaranty. This Guaranty is a continuing guaranty and agreement of subordination relating to any Guaranteed Obligations, including Guaranteed Obligations which may exist continuously or which may arise from time to time under successive transactions, and the Guarantor expressly acknowledges that this Guaranty shall remain in full force and effect notwithstanding that there may be periods in which no Guaranteed Obligations exist. This Guaranty shall continue in effect and be binding upon the Guarantor until termination of any Commitments and payment and performance in full of the Guaranteed Obligations.

(b)     Reinstatement. This Guaranty shall continue to be effective or shall be reinstated and revived, as the case may be, if, for any reason, any payment of the Guaranteed Obligations by or on behalf of any Credit Party (or receipt of any proceeds of Collateral) shall be rescinded, invalidated, declared to be fraudulent or preferential, set aside, voided or otherwise required to be repaid to any Credit Party, its estate, trustee, receiver or any other Person (including under the Bankruptcy Code or other state or federal law), or must otherwise be restored by the Lender, whether as a result of Insolvency Proceedings or otherwise. To the extent any payment is so rescinded, set aside, voided or otherwise repaid or restored, the Guaranteed Obligations shall be revived in full force and effect without reduction or discharge for such payment. All losses, damages, costs and expenses that the Lender may suffer or incur as a result of any voided or otherwise set aside payments shall be specifically covered by the indemnity in favor of the Lender contained in Section 14.

SECTION 8     Payments. The Guarantor hereby agrees, in furtherance of the foregoing provisions of this Guaranty and not in limitation of any other right which the Lender or any other Person may have against the Guarantor by virtue hereof, upon the failure of the Obligor to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under §362(a) of the Bankruptcy Code), the Guarantor shall forthwith pay, or cause to be paid, in cash, to the Lender an amount equal to the amount of the Guaranteed Obligations then due as aforesaid (including interest which, but for the filing of a petition in any Insolvency Proceeding with respect to the Obligor, would have accrued on such Guaranteed Obligations, whether or not a claim is allowed against the Obligor for such interest in any such Insolvency Proceeding). The Guarantor shall make each payment hereunder, unconditionally in full, free and clear of any and all taxes, without set-off, counterclaim or other defense, on the day when due in U.S. dollars or other applicable currency in which the Guaranteed Obligations are denominated, and in same day or immediately available funds, to the Lender at such office of the Lender and to such account as the Lender shall notify to the Obligor in writing. All such payments shall be promptly applied from time to time by the Lender to the payment of the Guaranteed Obligations in such order of application as the Lender in its sole discretion may choose.

8

SECTION 9     Representations and Warranties. The Guarantor represents and warrants to the Lender that:

(a)     Organization and Powers. The Guarantor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, is qualified to do business and is in good standing in each jurisdiction in which the failure so to qualify or be in good standing would have a Material Adverse Effect and has all requisite power and authority to own its assets and carry on its business and to execute, deliver and perform its obligations under the Guarantor Documents.

(b)     Authorization; No Conflict. The execution, delivery and performance by the Guarantor of this Guaranty and any other Guarantor Documents have been duly authorized by all necessary action of the Guarantor, and do not and will not: (i) contravene the terms of the Organization Documents of the Guarantor or result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which the Guarantor is a party or by which it or its properties may be bound or affected; or (ii) violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree or the like binding on or affecting the Guarantor.

(c)     Binding Obligation. This Guaranty constitutes the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms.

(d)     Governmental Consents. No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, is required for the due execution, delivery or performance by the Guarantor of the Guarantor Documents.

(e)     Solvency. Immediately prior to and after and giving effect to the incurrence of the Guarantor’s obligations under this Guaranty the Guarantor is and will be Solvent.

(f)     Consideration. The Guarantor has received at least “reasonably equivalent value” (as such phrase is used in §548 of the Bankruptcy Code and in comparable provisions of other applicable law) and more than sufficient consideration to support its obligations hereunder in respect of the Guaranteed Obligations and under any of the Collateral Documents to which it is a party.

(g)     Independent Investigation. The Guarantor hereby acknowledges that it has undertaken its own independent investigation of the financial condition of the Obligor and all other matters pertaining to this Guaranty and further acknowledges that it is not relying in any manner upon any representation or statement of the Lender with respect thereto. The Guarantor represents and warrants that it has received and reviewed copies of the Finance Documents and that it is in a position to obtain, and it hereby assumes full responsibility for obtaining, any additional information concerning the financial condition of the Obligor and any other matters pertinent hereto that the Guarantor may desire. The Guarantor is not relying upon or expecting the Lender to furnish to the Guarantor any information now or hereafter in the Lender’s possession concerning the financial condition of the Obligor or any other matter.

9

SECTION 10.    Reporting Covenants. So long as any Guaranteed Obligations (other than contingent indemnification obligations) shall remain unsatisfied or the Lender shall have any Commitment, the Guarantor agrees that:

(a)     Financial Statements and Other Reports. The Guarantor shall furnish to the Lender:

(i)     Financial Statements. The Guarantor shall furnish to Lender from time to time such information respecting Guarantor’s financial condition as Lender may from time to time reasonably request. Without limiting the foregoing, the Guarantor shall furnish to the Lender promptly upon the issuance thereof, copies of all reports, if any, to or other documents filed by it with the Securities and Exchange Commission under the Securities Act of 1933 or the Securities Exchange Act of 1934.

(ii)     Additional Information. The Guarantor shall furnish to the Lender: (i) prompt written notice of any condition or event which has resulted, or that could reasonably be expected to result, in a Material Adverse Effect; and (ii) such other information respecting the operations, properties, business or condition (financial or otherwise) of the Guarantor or its Subsidiaries as the Lender may from time to time reasonably request.

SECTION 11    Additional Covenants. So long as any Guaranteed Obligations (other than contingent indemnification obligations) shall remain unsatisfied or the Lender shall have any Commitment, the Guarantor agrees that:

(a)     Preservation of Existence, Etc. The Guarantor shall, and shall cause each of its Subsidiaries to, maintain and preserve its legal existence, its rights to transact business and all other rights, franchises and privileges necessary or desirable in the normal course of its business and operations and the ownership of its properties.

(b)     Governmental Consents. The Guarantor shall maintain all authorizations, consents, approvals, licenses, exemptions of, or filings or registrations with, any Governmental Authority, or approvals or consents of any other Person, required in connection with this Guaranty or any other Guarantor Documents.

(c)     Ownership of the Obligor. The Guarantor shall maintain at all times, directly or indirectly, ownership of all of the issued and outstanding capital stock of the Obligor and possess, directly or indirectly, capital stock or other equity interests representing voting control of the Obligor.

(d)     Restrictions on Fundamental Changes. The Guarantor shall not merge with or consolidate into any Person, or sell, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets.

(e)     Further Assurances and Additional Acts. The Guarantor shall execute, acknowledge, deliver, file, notarize and register at its own expense all such further agreements, instruments, certificates, documents and assurances and perform such acts as the Lender shall deem necessary or appropriate to effectuate the purposes of this Guaranty and the other Guarantor Documents, and promptly provide the Lender with evidence of the foregoing satisfactory in form and substance to it.

10

SECTION 12    Notices. All notices and other communications provided for hereunder and under the other Guarantor Documents shall, unless otherwise stated herein, be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or by email (i) if to the Lender, at or to its address, email address or facsimile number set forth in the Facilities Agreements, and (ii) if to the Guarantor, at or to its address, email address or facsimile number set forth below its name on the signature page hereof, or at or to such other address, email address or facsimile number as such party shall have designated in a written notice to the other party. Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received. Notices and other communications (A) sent by facsimile or by email shall be deemed to have been given when sent, and (B) posted to an internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its email address as described herein, of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (A) and (B) above, if a notice or other communication is not given during normal business hours for the recipient, it shall be deemed to have been given at the opening of business on the next business day for the recipient.

SECTION 13    No Waiver; Cumulative Remedies. No failure on the part of the Lender to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder or under any other Guarantor Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Guaranty and the other Guarantor Documents are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Lender.

SECTION 14    Costs and Expenses; Indemnification.

(a)     Costs and Expenses. The Guarantor agrees to pay all out-of-pocket expenses incurred by the Lender (including the fees, charges and disbursements of any counsel for the Lender) in connection with the enforcement or protection of its rights (i) in connection with this Guaranty and the other Guarantor Documents, including its rights under this Section, and (ii) in connection with the Guaranteed Obligations, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Guaranteed Obligations, and including in or in connection with any Insolvency Proceeding.

(b)     Indemnification. The Guarantor shall indemnify the Lender (and any agent thereof) and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Guarantor, the Obligor or any other Credit Party), other than such Indemnitee and its Related Parties, arising out of, in connection with, or as a result of (i) the execution or delivery of this Guaranty, any other Guarantor Document or other Finance Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) the Guaranteed Obligations or the use or proposed use of the proceeds therefrom, or any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Guarantor, the Obligor or any other Credit Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Guarantor, the Obligor or any other Credit Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Finance Document, if the Obligor, the Guarantor or such Credit Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

11

(c)     Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, the Guarantor shall not assert, and hereby waives, and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Guaranty, any other Guarantor Document or Finance Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby, the Guaranteed Obligations or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Guaranty or the other Guarantor Documents or Finance Documents or the transactions contemplated hereby or thereby.

(d)     Payment. All amounts due under this Section 14 shall be payable upon demand.

SECTION 15    Right of Set-Off. Upon the occurrence and during the continuance of any Event of Default each of the Lender and its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by the Lender or any such Affiliate to or for the credit or the account of the Guarantor or any other Credit Party against any and all of the obligations of the Guarantor or such other Credit Party now or hereafter existing under this Guaranty or any other Guarantor Document to the Lender or its Affiliates, irrespective of whether or not the Lender or its Affiliate shall have made any demand under this Guaranty or any other Guarantor Document and although such obligations of the Guarantor or such other Credit Party may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or obligations or are owed to a branch, office or Affiliate of the Lender different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness. The rights of the Lender and its Affiliates under this Section 15 are in addition to other rights and remedies (including other rights of set-off) which the Lender or its Affiliates may have. By its acceptance hereof, the Lender shall promptly notify the Guarantor after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application.

12

SECTION 16    Survival. All covenants, agreements, representations and warranties made in this Guaranty and in any other Guarantor Document shall survive the execution and delivery of this Guaranty, and shall continue in full force and effect so long as the Lender has any Commitment or any Guaranteed Obligations remain unsatisfied. Without limiting the generality of the foregoing, the obligations of the Guarantor under Section 14 shall survive the satisfaction of the Guaranteed Obligations and the termination of any Commitments.

SECTION 17    Benefits of Guaranty. This Guaranty is entered into for the sole protection and benefit of the Lender and its successors and assigns, and no other Person (other than any Related Party specified herein) shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action or claim in connection with, this Guaranty. The Lender, by its acceptance of this Guaranty, shall not have any obligations under this Guaranty to any Person other than the Guarantor, and such obligations shall be limited to those expressly stated herein.

SECTION 18    Binding Effect; Assignment.

(a)     Binding Effect. This Guaranty shall be binding upon the Guarantor and its successors and assigns, and inure to the benefit of and be enforceable by the Lender and its successors, endorsees, transferees and assigns. Delivery by the Guarantor of an executed counterpart of a signature page of this Guaranty by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Guaranty.

(b)     Assignment. The Guarantor shall not have the right to assign or transfer its rights and obligations hereunder or under any other Guarantor Documents without the prior written consent of the Lender. The Lender may, without notice to or consent by the Guarantor, sell, assign, transfer or grant participations in all or any portion of the Lender’s rights and obligations hereunder and under the other Guarantor Documents in connection with any sale, assignment, transfer or grant of a participation by the Lender under the Facilities Agreements of its rights and obligations thereunder and under the other Finance Documents. The Guarantor agrees that in connection with any such sale, assignment, transfer or grant by the Lender, the Lender may deliver to the prospective participant or assignee financial statements and other relevant information relating to the Guarantor and its Subsidiaries. In the event of any grant of a participation, the participant (i) shall be deemed to have a right of setoff under Section 15 in respect of its participation to the same extent as if it were the “Lender,” provided that such participant shall have agreed to share any amount so realized with the Lender on terms and conditions satisfactory to the Lender; and (ii) shall also be entitled to the benefits of Section 14.

SECTION 19    Governing Law. This Guaranty and the other Guarantor Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Guaranty or any other Guarantor Document (except, as to any other Guarantor Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York.

13

SECTION 20    Submission to Jurisdiction.

(a)     Submission to Jurisdiction. The Guarantor irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Lender or any Related Party of the Lender in any way relating to this Guaranty or any other Guarantor Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the Guarantor and the Lender (by its acceptance hereof) irrevocably and unconditionally submits to the jurisdiction of such  courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such federal court.  Each of the Guarantor and the Lender (by its acceptance hereof) agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Guaranty or in any other Guarantor Document shall affect any right that the Lender may otherwise have to bring any action or proceeding relating to this Guaranty or any other Finance Document against the Guarantor or any other Credit Party or its properties in the courts of any jurisdiction.

(b)     Waiver of Venue. The Guarantor irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Guaranty or any other Guarantor Document in any court referred to in subsection (a) of this Section. Each of the Guarantor and the Lender (by its acceptance hereof) hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(c)     Service of Process. Each of the Guarantor and the Lender (by its acceptance hereof) irrevocably consents to service of process in the manner provided for notices in Section 12. Nothing in this Guaranty will affect the right of any party hereto to serve process in any other manner permitted by applicable law.

SECTION 21    Waiver of Jury Trial. THE GUARANTOR AND THE LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHTS THEY MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED ON OR ARISING FROM ANY GUARANTOR DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY THE GUARANTOR DOCUMENTS.

SECTION 22    Entire Agreement; Amendments and Waivers.

(a)     Entire Agreement. This Guaranty and the other Guarantor Documents constitute the entire agreement of the Guarantor with respect to the matters set forth herein and supersede any prior agreements, commitments, drafts, communications, discussions and understandings, oral or written, with respect thereto. There are no conditions to the full effectiveness of this Guaranty.

14

(b)     Amendments and Waivers. This Guaranty and the other Guarantor Documents may not be amended except by a writing signed by the Guarantor and the Lender. No waiver of any rights of the Lender under any provision of this Guaranty or consent to any departure by the Guarantor therefrom shall be effective unless in writing and signed by the Lender. Any such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

SECTION 23    Lender Not a Fiduciary to Guarantor. The relationship between the Guarantor and its Affiliates, on the one hand, and the Lender and its Affiliates, on the other hand, is solely that of debtor and creditor, and neither the Lender not any Affiliate thereof shall have any fiduciary or other special relationship with the Guarantor or any of its Affiliates, and no term or provision of any Finance Document, no course of dealing, no written or oral communication, or other action, shall be construed so as to deem such relationship to be other than that of debtor and creditor.

SECTION 24    Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Lender could purchase the first currency with such other currency on the business day preceding that on which final judgment is given. The obligation of the Guarantor in respect of any such sum due from it to the Lender shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of the Finance Documents (the “Agreement Currency”), be discharged only to the extent that on the business day following receipt by the Lender of any sum adjudged to be so due in the Judgment Currency, the Lender may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to the Lender from such Guarantor in the Agreement Currency, the Guarantor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Lender or the Person to whom such obligation was owing against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Lender in such currency, the Lender (by its acceptance hereof) agrees to return the amount of any excess to the Guarantor (or to any other Person who may be entitled thereto under applicable law). The agreements in this Section 24 shall survive the termination of any Commitments and the repayment of all Guaranteed Obligations.

SECTION 25    Severability. Whenever possible, each provision of this Guaranty and the other Guarantor Documents shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Guaranty or any other Guarantor Document shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Guaranty or such Guarantor Document, as the case may be, or the validity or effectiveness of such provision in any other jurisdiction

15

SECTION 26    USA PATRIOT Act Notice. The Guarantor acknowledges notice from the Lender that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), the Lender is required to obtain, verify and record information that identifies the Guarantor, which information includes the name and address of the Guarantor and other information that will allow the Lender to identify the Guarantor in accordance with the Act. The Guarantor shall, promptly following a request by the Lender, provide all documentation and other information that the Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

[Remainder of page intentionally left blank; signature page(s) follow]

16

IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of the date first above written.

INVISA, INC.
By:	/s/ Edmund C. King
	Edmund C. King
	Title: Chief Executive Officer
Address:
1800 2nd Street, Suite 695
Sarasota, Florida 34236, U.S.A.
Attn: Oliver J. Janney
Fax No.   941-906-8582
Email:  ojanney@nauga.com

Consented to and Agreed:

WARDLE STOREYS (EARBY) LIMITED
By:	/s/ Howard R. Curd
	Title:  Director

As of January 19, 2015

17

EX-99.1

Exhibit 99.1

UNIROYAL ENGINEERED PRODUCTS, LLC

Stoughton, Wisconsin

FINANCIAL STATEMENTS

Including Independent Auditors' Report

As of and for the Years Ended December 29, 2013 and

December 30, 2012

UNIROYAL ENGINEERED PRODUCTS, LLC

TABLE OF CONTENTS

Independent Auditors' Report	1-2
Financial Statements
Balance Sheets	3-4
Statements of Comprehensive Income (Loss)	5
Statements of Members' Equity	6
Statements of Cash Flows	7
Notes to Financial Statements	8-26

-i-

INDEPENDENT AUDITORS’ REPORT

Members and Board of Managers

Uniroyal Engineered Products, LLC

Stoughton, Wisconsin

Report on the Financial Statements

We have audited the accompanying financial statements of Uniroyal Engineered Products, LLC, which comprise the balance sheets as of December 29, 2013 and December 30, 2012, and the related statements of comprehensive income (loss), members' equity, and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

1

Members and Board of Managers

Uniroyal Engineered Products, LLC

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Uniroyal Engineered Products, LLC as of December 29, 2013 and December 30, 2012 and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ BAKER TILLY VIRCHOW KRAUSE, LLP

Madison, Wisconsin

April 30, 2014

2

UNIROYAL ENGINEERED PRODUCTS, LLC

BALANCE SHEETS

As of December 29, 2013 and December 30, 2012

ASSETS

	December 29, 2013		December 30, 2012
CURRENT ASSETS
Cash and cash equivalents	$	19,321	$	63,759
Marketable securities		109,208		—
Accounts receivable, net		6,680,732		6,275,842
Inventories, net		10,487,303		10,438,537
Other current assets		173,018		144,070
Related party receivable		42,475		175,000
Total Current Assets		17,512,057		17,097,208
PROPERTY AND EQUIPMENT		6,718,011		6,841,732
OTHER ASSETS
Intangible assets		1,266,266		1,323,684
Goodwill		1,079,175		1,079,175
Other long-term assets		571,824		628,637
Total Other Assets		2,917,265		3,031,496
TOTAL ASSETS	$	27,147,333	$	26,970,436

LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES
Checks issued in excess of bank balance	$	622,590	$	881,976
Line of credit		8,236,921		9,461,876
Current maturities of long-term debt		545,026		979,041
Current maturities of capital lease obligations		51,016		91,037
Accounts payable		4,234,954		4,105,317
Accrued expenses		1,103,058		1,252,328
Current portion of postretirement benefit liability - health and life		131,714		128,291
Total Current Liabilities		14,925,279		16,899,866
LONG-TERM LIABILITIES
Long-term debt		2,967,113		3,926,226
Capital lease obligations		—		51,016
Related party lease financing obligation		2,014,440		—
Postretirement benefit liability - health and life		2,358,896		2,676,661
Postemployment benefit liability - severance		98,470		112,795
Other long-term liabilities		61,567		124,094
Total Long-Term Liabilities		7,500,486		6,890,792
Total Liabilities		22,425,765		23,790,658

See accompanying notes to financial statements.

3

UNIROYAL ENGINEERED PRODUCTS, LLC

BALANCE SHEETS

As of December 29, 2013 and December 30, 2012

(Continued)

		December 29, 2013		December 30, 2012
MEMBERS' EQUITY
Voting Class A common units, $1 unit value; 500,000 units authorized, issued and outstanding, liquidation preference of $500,000		500,000		500,000
Nonvoting Class B common units, $1 unit value; 120,000 units authorized, 81,200 and 75,000 issued and outstanding as of December 29, 2013 and December 30, 2012, respectively		52,750		45,000
Additional members' equity - Class A common unit warrants		528,000		528,000
Retained earnings		2,091,347		430,740
Accumulated other comprehensive income		1,549,471		1,676,038
Total Members' Equity		4,721,568		3,179,778
TOTAL LIABILITIES AND MEMBERS' EQUITY	$	27,147,333	$	26,970,436

See accompanying notes to financial statements.

4

UNIROYAL ENGINEERED PRODUCTS, LLC

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 29, 2013 and December 30, 2012

	December 29, 2013			December 30, 2012
NET SALES	$	53,942,233		$	60,302,913
COST OF GOODS SOLD		43,071,833			51,118,002
Gross Profit		10,870,400			9,184,911
OPERATING EXPENSES		6,396,009			6,060,510
Operating Income		4,474,391			3,124,401
OTHER INCOME (EXPENSE)
Interest and other debt related expense		(920,021	)		(948,363	)
Other income		34,073			36,503
Net Other Income (Expense)		(885,948	)		(911,860	)
NET INCOME		3,588,443			2,212,541
OTHER COMPREHENSIVE INCOME (LOSS)
Minimum benefit liability adjustment		(183,380	)		(727,961	)
Unrealized gain (loss) on effective hedge
Reclassification of amounts to earnings		64,108			61,501
Unrealized loss for the year		(7,295	)		(53,883	)
COMPREHENSIVE INCOME	$	3,461,876		$	1,492,198

See accompanying notes to financial statements.

5

UNIROYAL ENGINEERED PRODUCTS, LLC

STATEMENTS OF MEMBERS' EQUITY

For the Years Ended December 29, 2013 and December 30, 2012

	Class A Voting Common Units		Class B Nonvoting Common Units			Class A Common Unit Warrants		Retained Earnings (Deficit)			Accumulated Other Comprehensive Income			Total Members' Equity
											(Notes 9 and 10)
BALANCES, January 1, 2012	$	500,000	$	90,000		$	528,000	$	(577,335	)	$	2,396,381		$	2,937,046
2012 net income		—		—			—		2,212,541			—			2,212,541
Other comprehensive loss		—		—			—		—			(720,343	)		(720,343	)
Redemption of Class B Common Units		—		(45,000	)		—		(11,250	)		—			(56,250	)
Distributions		—		—			—		(1,193,216	)		—			(1,193,216	)
BALANCES, December 30, 2012		500,000		45,000			528,000		430,740			1,676,038			3,179,778
2013 net income		—		—			—		3,588,443			—			3,588,443
Other comprehensive loss		—		—			—		—			(126,567	)		(126,567	)
Issuance of Class B Common Units		—		7,750			—		—			—			7,750
Distributions		—		—			—		(1,927,836	)		—			(1,927,836	)
BALANCES, December 29, 2013	$	500,000	$	52,750		$	528,000	$	2,091,347		$	1,549,471		$	4,721,568

See accompanying notes to financial statements.

6

UNIROYAL ENGINEERED PRODUCTS, LLC

STATEMENTS OF CASH FLOWS

For the Years Ended December 29, 2013 and December 30, 2012

	December 29, 2013			December 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	3,588,443		$	2,212,541
Adjustments to reconcile net income to net cash flows from operating activities
Depreciation		1,060,078			1,170,130
Amortization of intangible assets		57,418			65,172
Loss on disposal of property and equipment		267,730			7,114
Noncash postemployment health and life benefit		(183,380	)		(727,961	)
Noncash change in derivative liability		—			(47,447	)
Amortization of original issue note discount		42,680			52,800
Changes in assets and liabilities
Accounts receivable		(404,890	)		1,525,246
Inventories		(48,766	)		1,157,011
Other current assets		(28,948	)		388,500
Other long-term assets		22,228			(96,069	)
Related party receivable		132,525			(433,275	)
Accounts payable		129,637			235,932
Accrued expenses		(149,270	)		(155,599	)
Postretirement benefit liability - health and life		(314,342	)		171,819
Postemployment benefit liability - severance		(14,325	)		(8,387	)
Other long-term liabilities		(5,714	)		(5,369	)
Net Cash Flows from Operating Activities		4,151,104			5,512,158
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(587,749	)		(1,014,000	)
Purchase of marketable securities		(109,208	)		—
Cash paid for lease deposit		(250,000	)		—
Net Cash Flows from Investing Activities		(946,957	)		(1,014,000	)
CASH FLOWS FROM FINANCING ACTIVITIES
Checks issued in excess of bank balance		(259,386	)		(230,490	)
Net payments on line of credit		(83,695	)		(2,649,988	)
Payments on long-term debt		(459,970	)		(724,842	)
Proceeds from issuance of long-term debt		—			108,843
Payments on capital lease obligations		(91,037	)		(83,660	)
Net payments on life insurance policies		(423,986	)		(299,657	)
Payments on related party lease financing obligation		(10,425	)		—
Proceeds from issuance of Class B units		7,750			—
Distributions to members		(1,927,836	)		(565,151	)
Net Cash Flows from Financing Activities		(3,248,585	)		(4,444,945	)
Net Change in Cash and Cash Equivalents		(44,438	)		53,213
CASH AND CASH EQUIVALENTS - Beginning of Year		63,759			10,546
CASH AND CASH EQUIVALENTS - END OF YEAR	$	19,321		$	63,759

For noncash transactions and supplemental disclosure of cash flow information see Note 2.

See accompanying notes to financial statements. 

7

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 1 - Summary of Significant Accounting Policies

Nature of Operations

Uniroyal Engineered Products, LLC is engaged in the development, manufacturing and distribution of vinyl coated fabrics primarily for use in transportation, residential, hospitality, health care, office furniture and automotive applications. The company's customers are primarily located throughout North America.

The company's fiscal year is a 52/53 week year depending on the nearest Sunday to December 31. The years ended December 29, 2013 and December 30, 2012 were 52 week years.

Cash and Cash Equivalents

The company defines cash and cash equivalents as highly liquid, short-term investments with a maturity at the date of acquisition of three months or less.

The company maintains cash in bank accounts which, at times, exceeds federally insured limits. The company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risks.

Marketable Securities

The company’s marketable securities consists of an available-for-sale investment in common stock that is a related party as the majority owner of the company holds a majority voting interest. Available-for-sale securities generally are stated at fair value based on quoted market prices in an active U.S. exchange, with unrealized holding gains and losses reported as a separate component of members' equity. Realized gains and losses are included in income. Management has determined that it is appropriate to value its investment in common stock at cost due to the thinly traded nature of the security and the related party nature of the investment.

Accounts Receivable

Accounts receivable have been adjusted for all known uncollectible accounts, returns and discounts; and are recorded net of an allowance for doubtful accounts, returns and discounts of $225,000 and $185,242 as of December 29, 2013 and December 30, 2012.

On an ongoing basis, the company evaluates its accounts receivable based on individual customer circumstances, historical write-offs and collections, and current industry and customer credit conditions, and adjusts its allowance for doubtful accounts accordingly. The company's policy regarding write-offs and collection efforts varies based on individual customer circumstances. Past due accounts receivable are determined based on individual customer credit terms. The company does not accrue interest on past due accounts receivable.

Customer Rebates

The company records customer rebates as a reduction of net sales and accounts receivable. Accounts receivable are recorded net of an allowance for customer rebates of $95,472 and $72,451 as of December 29, 2013 and December 30, 2012. 

8

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 1 - Summary of Significant Accounting Policies (cont.)

Inventories

Inventories are valued at lower of cost, using the first-in, first-out (FIFO) method, or market.

Property and Equipment

Property and equipment are stated at cost. Major expenditures for property and equipment are capitalized. Maintenance, repairs, and minor renewals are expensed as incurred. When assets are retired or otherwise disposed of, their costs and related accumulated depreciation are removed from the accounts and resulting gains or losses are included in income.

Property and equipment are depreciated using the straight-line method over their estimated useful lives. For income tax reporting purposes, depreciation is calculated using both applicable straight-line methods and accelerated methods.

Cash Surrender Value of Insurance Policies

Cash surrender value of insurance policies are valued at the cash surrender value of the contract as determined by the life insurance company. The gross cash value of the insurance policies totaled $219,341 and $828,046 as of December 29, 2013 and December 30, 2012. The cash value of the insurance policies are recorded net of loans of $23,689 and $387,320 as of December 29, 2013 and December 30, 2012, respectively, and are included in other long-term assets on the accompanying 2013 and 2012 balance sheets. During 2013, certain policies were sold to a related party (see Notes 2 and 8).

Impairment of Long-Lived Assets

The company reviews long-lived assets, including property, equipment, and intangible assets, for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. To date, there have been no such losses.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of identifiable net assets acquired. Goodwill is reduced based upon an impairment analysis of the amount recorded on the company's balance sheets. To the extent it has been determined that the carrying value of goodwill is not recoverable and is in excess of its fair value, an impairment loss is recognized. Impairment is reviewed annually. No impairment loss adjustment was deemed necessary for the years ended December 29, 2013 or December 30, 2012.

Income Taxes

The company is treated as a limited liability company (LLC) for federal and state income tax purposes. As such, the company's income, losses, and credits are included in the income tax returns of its members.

9

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 1 - Summary of Significant Accounting Policies (cont.)

Income Taxes (cont.)

The tax effects from an uncertain tax position are recognized in the financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized, upon ultimate settlement with the relevant tax authority. The company does not believe there is any uncertainty with respect to its tax positions which would result in a material change to the financial statements.

The company files income tax returns in the United States and in several state jurisdictions. The company's federal and state tax returns for tax years 2010 and thereafter are subject to examination by taxing authorities. The company records interest and penalties associated with uncertain tax positions related to these tax filings as interest expense. For the years ended December 29, 2013 and December 30, 2012, the company has recorded no expense for interest or penalties.

Derivatives

The company recognizes all of its derivative instruments, which consist of interest rate swaps, as either assets or liabilities in the balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, whether the hedge is a cash flow hedge or a fair value hedge.

The company uses interest rate swaps to manage interest rate risk on its variable interest rate long-term debt instruments. The gain or loss on the effective portion of interest rate swaps treated as cash flow hedges is initially included as a component of other comprehensive income and is subsequently reclassified into earnings when interest on the related debt is paid. The gain or loss on the portion of interest rate swaps that are "not" effective is treated as trading financial instruments and are included as a component of interest expense on the accompanying statements of operations.

Fair Value of Financial Instruments

The company’s short-term financial instruments consist of the following: cash and cash equivalents, accounts receivable and accounts payable. The company believes that the carrying values of these short-term financial instruments approximate their estimated fair values.

The fair value of the company’s long-term debt is estimated based on current rates for similar instruments with the same remaining maturities. In determining the current interest rates for similar instruments the company takes into account its risk of nonperformance. The company believes that the carrying value of its long-term debt approximates its estimated fair value.

The fair value of the company’s interest rate swaps are the estimated amounts that the company would receive, or pay, to sell, or transfer the swaps to a third party, taking into account current and future interest rates and the nonperformance risk of the company and the counterparty. The company's interest rate swaps are recorded at their estimated fair values in the accompanying balance sheets.

The fair value of the company's marketable securities approximates its cost basis due to the thinly traded nature of the security and the related party nature of the investment.

10

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 1 - Summary of Significant Accounting Policies (cont.)

Fair Value of Financial Instruments (cont.)

For the fiscal year ended December 29, 2013, there have been no changes in the application of valuation methods applied to similar assets and liabilities.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

The company recognizes revenue based upon the passage of inventory title to its customers, which typically occurs upon shipment.

Shipping and Handling Costs

Shipping and handling costs charged to customers are included in net sales. Shipping and handling costs incurred by the company are included in cost of goods sold.

Warranties

The company warrants that the materials and workmanship of its products will meet customer specifications. The company estimates its accrued warranty expenses based upon prior warranty claims experience. Accrued warranty expenses were not material as of December 29, 2013 and December 30, 2012.

Advertising

Advertising costs, other than promotional materials, are charged to expense as incurred. Advertising expense was $100,929 and $67,230 for the years ended December 29, 2013 and December 30, 2012, respectively. Promotional materials are expensed as they are distributed. As of December 29, 2013 and December 30, 2012, $124,882 and $148,620 of promotional materials were included in other long-term assets on the accompanying financial statements.

Research and Development

Research and development costs are charged to expense as incurred. Research and development expense was $764,952 and $764,988 for the years ended December 29, 2013 and December 30, 2012, respectively.

11

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 1 - Summary of Significant Accounting Policies (cont.)

Common Control Leasing Arrangements

The company has elected not to consolidate a lessor entity with a common control leasing arrangement as allowed Accounting Standards Update 2014-07, Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements. While the lessor entity is a variable interest entity, the arrangement has met the following criteria, which allows the lessor entity to not be consolidated: 1) substantially all activities between the company and the lessor entities are related to the leasing activities between the two entities (including supporting leasing activities) and 2) the principal amount of any lessor entity obligations is not explicitly guaranteed or collateralized by the company. When common control leasing arrangements cease to meet the criteria above, the company will evaluate the lessor entities to determine whether they are variable interest entities required to be consolidated by the company. See Note 8.

Subsequent Events

The company has evaluated subsequent events occurring through April 30, 2014, the date that the financial statements were available to be issued, for events requiring recording or disclosure in the December 29, 2013 financial statements.

NOTE 2 - Noncash Transactions and Supplemental Disclosure of Cash Flow Information

During 2013 and 2012, the company had reduced borrowings on its line of credit by converting dollars to additional borrowings on its term loans with Wells Fargo Capital Finance, LLC of $200,000 and $783,067, respectively. During 2013 and 2012, the company paid down its term loans using available borrowings on its line of credit of $382,428 and $422,886, respectively.

During 2013, the company sold real estate and certain insurance policies for $2,117,098 to a related party owned by the company's majority owners (see Note 8). The proceeds were used to reduce the company's term debt and line of credit obligations by same amount. Additionally, as part of the transaction with the related party, the company leased real estate and entered into a lease financing obligation with the related party for $2,024,865. (see Note 8).

During 2012, the company distributed $628,065 of related party receivables as distributions to a member. In addition, 45,000 units of Class B shares were redeemed by the company for $56,250 (see Note 11).

During 2012, the company's prepaid deposit of $175,000 with another company owned by the CEO was transferred to a related party receivable as acquisition services were performed during 2012 and was reimbursed by the CEO and CEO's company during 2013. This amount is included in related party receivables on the accompanying 2012 balance sheets (see Note 16).

	December 29, 2013		December 30, 2012
Supplemental disclosure of approximate cash paid for:
Interest	$	835,205	$	794,500

12

 UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 3 - Inventories

Inventories consist of the following as of December 29, 2013 and December 30, 2012:

	December 29, 2013			December 30, 2012
Raw materials	$	3,011,765		$	2,892,343
Work-in-process		1,528,415			1,808,431
Finished goods		6,678,407			6,362,708
		11,218,587			11,063,482
Less:  Allowance for inventory obsolescence		(731,284	)		(624,945	)
Total Inventories	$	10,487,303		$	10,438,537

NOTE 4 - Property and Equipment

The major categories of property and equipment as of December 29, 2013 and December 30, 2012 are summarized as follows:

	Depreciable Lives		December 29, 2013			December 30, 2012
Land		—	$	—		$	355,600
Land improvements		8 - 13 yrs.		—			29,851
Building and building improvements		8 - 25 yrs.		36,101			1,895,508
Machinery and equipment		8 - 10 yrs.		12,169,476			11,734,935
Computer equipment		3 - 10 yrs.		911,690			891,715
Furniture and fixtures		7 - 10 yrs.		54,600			47,384
Real estate under lease		20 yrs.		2,024,865
Construction-in-progress		—		18,125			416,818
Total Property and Equipment				15,214,857			15,371,811
Less: Accumulated depreciation				(8,496,846	)		(8,530,079	)
Net Property and Equipment			$	6,718,011		$	6,841,732

13

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 5 - Intangible Assets

Intangible assets as of December 29, 2013 and December 30, 2012 are summarized as follows:

	Amortizable Lives	December 29, 2013		December 30, 2012
Debt issuance costs, net	3 - 10 yrs.	$	36,266	$	93,684
Trademarks and tradenames	Indefinite		1,230,000		1,230,000
Intangible Assets		$	1,266,266	$	1,323,684

Debt issuance costs are amortized on a straight-line basis over the terms of the related long-term debt. During 2011, the company paid $157,067 to amend its Wells Fargo Capital Finance, LLC term loans. The fees are being amortized over the remaining life of the term debt. Trademarks and tradenames are not amortized as management believes that their useful lives are indefinite. Amortization expense is estimated to be $36,266 during 2014.

NOTE 6 - Line of Credit

The company has available a $30,000,000 line of credit financing agreement with Wells Fargo Capital Finance, LLC, which matures on October 17, 2019. Interest is payable monthly at the Eurodollar rate plus 2.50% or Wells Fargo Capital Finance, LLC's prime rate plus 0.25% at the company's election. The line of credit weighted average interest rate was approximately 3.29% as of December 29, 2013. Borrowings on the line of credit are subject to the underlying borrowing base specified in the agreement, which was amended in 2013 to exclude real estate, which was sold, from the base calculation. The underlying borrowing base is currently determined based upon eligible accounts receivable, inventories and equipment. The line of credit is secured by substantially all of the company's assets and includes certain financial and restrictive covenants.

The outstanding balance on the line of credit was $8,236,921 and $9,461,876 as of December 29, 2013 and December 30, 2012, respectively. The company has classified the outstanding balance on its line of credit within current liabilities in the accompanying balance sheets.

14

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 7 - Long-Term Debt

Long-term debt consists of the following as of December 29, 2013 and December 30, 2012:

	December 29, 2013		December 30, 2012
Senior subordinated promissory notes issued to the company CEO and Chairman; original issue note discount of $528,000 ($0 and $42,680 as of December 29, 2013 and December 30, 2012, respectively); monthly interest only payments at 9.25%; principal payment of $600,000 due on October 17, 2017 and the remaining unpaid principal due on October 17, 2018. The original issue note discount resulted from the value allocated to the Class A common unit warrants attached to the note. The note discount was amortized to interest expense over the initial term of the notes. The senior subordinated promissory notes are secured by substantially all assets of the company subject to the notes' subordination to the line of credit and term loans with Wells Fargo Capital Finance, LLC.	$	2,000,000	$	1,957,320
Term loans with Wells Fargo Capital Finance, LLC, monthly interest only payments at the Eurodollar rate plus 2.50% or Wells Fargo Bank, National Association's prime rate plus 0.25%. The term loans' weighted average interest rate was approximately 2.71% as of December 29, 2013. Monthly principal balances are reduced by $26,832 each month, resulting in a conversion, or increase, of the same amount in the line of credit each month (see Note 2). Term loans mature in October 2019 and are secured by substantially all of the company's assets and include certain financial and restrictive covenants.		1,060,667		1,977,381
Note payable to McFarland State Bank; was payable in monthly installments of $1,589 including interest and principal at a rate of 7.875%. The note was paid in full during 2013.		—		164,582
Note payable to McFarland State Bank; was payable in monthly installments of $1,021 including interest and principal at a rate of 7.875%. The note was paid in full during 2013.		—		113,812
Capital expenditure term loans with Wells Fargo Capital Finance, LLC, monthly principal payments of $3,333 plus interest at 3.50%. The loans mature in October 2019 and are secured by certain equipment.		170,000		—
Note payable to Balboa Capital Corporation; was payable in monthly installments of $7,138 including interest and principal at a rate of 8.50%. The note was paid in full during 2013.		—		37,236

15

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 7 - Long-Term Debt (cont.)

	December 29, 2013	December 30, 2012
Note payable to Balboa Capital Corporation; assigned to Wells Fargo, payable in quarterly installments of $10,291 including interest and principal at a rate of 7.53% with the remaining principal due on October 1, 2014. The note is secured by certain equipment.	43,840		79,960
Note payable to Balboa Capital Corporation; assigned to Wells Fargo, payable in quarterly installments of $18,570 including interest and principal at a rate of 7.82% with the remaining principal due on January 1, 2015. The note is secured by certain equipment.	95,639		159,227
Note payable to Balboa Capital Corporation; assigned to Wells Fargo, payable in quarterly installments of $9,054 including interest and principal at a rate of 11.43% with the remaining principal due on October 1, 2015. The note is secured by certain equipment.	59,462		86,816
Note payable to Balboa Capital Corporation; assigned to Wells Fargo, payable in monthly installments of $567 including interest and principal at a rate of 7.89% with the remaining principal due December 2015. The note is secured by certain equipment.	12,548		18,124
Note payable to Balboa Capital Corporation; assigned to Wells Fargo, was payable in monthly installments of $628 including interest and principal at a rate of 5.80%. The note was paid in full during 2013.	—		7,301
Note payable to Alliant Energy; was payable in monthly installments of $12,557 including interest and principal at a rate of 2.069%. The note was paid in full during 2013.	—		50,012
Note payable to Alliant Energy; was payable in monthly installments of $11,765 including interest and principal at a rate of 1.034%. The note was paid in full during 2013.	—		128,748

16

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 7 - Long-Term Debt (cont.)

	December 29, 2013			December 30, 2012
Note payable to Balboa Capital Corporation; assigned to Wells Fargo, payable in quarterly installments of $8,620 including interest and principal at a rate of 12.70% with the remaining principal due November 2015. The note is secured by certain equipment.		59,983			84,748
Note payable to a former member; non-interest bearing note payable in quarterly installments, with the final payment expected during 2014 (see Note 11).		10,000			40,000
Totals		3,512,139			4,905,267
Less: Current portion		(545,026	)		(979,041	)
Long-Term Portion	$	2,967,113		$	3,926,226

Principal requirements on long-term debt for years ending after December 29, 2013 are as follows:

		Totals
2014	$	545,026
2015		456,103
2016		361,994
2017		739,016
2018		1,410,000
Totals	$	3,512,139

NOTE 8 - Related Party Lease Financing Obligation

During 2013, the company changed its method of accounting for common control leasing arrangements through the election of a new accounting alternative recently issued by the Financial Accounting Standards Board (FASB), and as a result, the company is no longer evaluating whether lessor entities in common control leasing arrangements meeting the following criteria are variable interest entities: 1) substantially all activities between the company and the lessor entities are related to leasing activities between the two entities (including supporting leasing activities) and 2) the principal amount of any lessor entity obligations related to the leased assets explicitly guaranteed or collateralized by the company did not exceed the value of the leased assets at the inception of the guarantee or collateralization. The company believes that electing this accounting alternative will reduce the complexity of its accounting for common control leasing arrangements without resulting in a loss of decision-useful information.

17

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 8 - Related Party Lease Financing Obligation (cont.)

During 2013, the company sold real estate and certain insurance policies for $2,117,098 to a related party owned by the company's majority owners, resulting in a related loss of $249,578. The proceeds were used to reduce the company's term debt and line of credit obligations by same amount. Additionally, as part of the transaction with the related party, the company leased real estate it sold, plus additional land, which resulted in a lease financing obligation with the related party for $2,024,865. The lease financing obligation, under which the company leases its main manufacturing facility and certain other property from the related party lessor entity, accrues interest at 18.20% and requires monthly principal and interest payments of $30,000, which are adjusted annually based on the consumer price index. The lease financing obligation matures during October 2033. The company made a security deposit of $250,000 with the lessor entity at the inception of the lease financing arrangement.

The new accounting alternative considers that when common control of the two entities exists and the fact that the company does not have alternative manufacturing facilities readily available, the company has some exposure that the related party relationship could cause it to provide financial support to the lessor entity, thus, requiring disclosure of the lessor's obligations. The lessor's obligations consist of a note payable to a bank of approximately $2,600,000 as of December 29, 2013, which is payable in monthly installments of $29,355 including interest at a rate of 5.95% and is due on November 19, 2023. The note is collateralized by the manufacturing facility leased to the company by the lessor entity. The company’s majority owner and the majority owner of the lessor entity guarantees the note payable. Although the company has a financial interest in the continuity of the note payable, it is not a party to the bank note and does not guarantee its payment.

Principal requirements on the related party lease financing obligation for years ending after December 29, 2013, including years 2014 through 2016 where the amount of interest owed exceeds the amount of payments made, resulting in a net increase to the outstanding principal balance of the lease financing obligation, are as follows:

		Totals
2014	$	(7,000	)
2015		(4,467	)
2016		(1,394	)
2017		2,328
2018		6,827
Thereafter		2,018,146
Totals	$	2,014,440

NOTE 9 - Derivatives

The company holds derivative instruments, which consist of interest rate swaps. Accounting standards require that an entity recognize all derivative instruments as either assets or liabilities at fair value in the balance sheet. Certain swaps do not meet the criteria of cash flow hedges under generally accepted accounting standards; these swaps are accounted for as derivatives not designated as hedging instruments with changes in the fair value of the interest rate swaps included in interest expense in the accompanying statements of operations. For derivative instruments that are designated and qualify as a cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative instrument representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

18

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 9 - Derivatives (cont.)

The company has an interest rate swap with a notional amount of $6,000,000 accounted for as effective cash flow hedge. The interest rate swap fixes the company's one month LIBOR interest rate on the notional amounts at a rate of 1.25%. The interest rate swap expires on July 30, 2014. The full amount of the interest rate swap liability as of December 29, 2013 is expected to be reclassified into earnings within the next twelve months.

Derivative instruments are reported in the balance sheets at fair value as of December 29, 2013 and December 30, 2012 are as follows:

Liability Derivative	Balance Sheet Location	Fair Value
		December 29, 2013		December 30, 2012
Interest rate swaps designated as hedging instruments	Other long-term liabilities	$	40,917	$	97,730

The effect of interest rate swaps designated as hedging instruments is reported in the statements of net income (loss) and comprehensive income (loss) and members' equity as follows:

Unrealized Loss Recognized in OCI on Derivative (Effective Portion)						Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount Reclassified from Accumulated OCI into Income (Effective Portion)
December 29, 2013			December 30, 2012				December 29, 2013		December 30, 2012
$	(7,295	)	$	(53,883	)	Interest expense	$	64,108	$	61,501

The company follows accounting principles generally accepted in the United States of America for measuring, reporting, and disclosing fair value. These standards apply to all assets and liabilities that are measured, reported, and/or disclosed on a fair value basis.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Assets and liabilities measured, reported and/or disclosed at fair value will be classified and disclosed in one of the following three categories:

19

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 9 - Derivatives (cont.)

Level 1	–	Inputs to the valuation methodology are unadjusted quoted market prices for identical assets in active markets that the company has the ability to access.
Level 2	–	Observable market based inputs or unobservable inputs that are corroborated by market data. Inputs to the valuation methodology include:
		>	quoted prices for similar assets or liabilities in active markets;
		>	quoted prices for identical or similar assets or liabilities in inactive markets;
		>	inputs other than quoted prices that are observable for the asset or liability;
		>	inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3	–	Unobservable inputs that are unobservable and not corroborated by market data.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The LIBOR swap rates are observable at commonly quoted intervals for the full terms of the interest rate swaps and therefore are considered level 2 items. As such, the company's interest rate swap is considered a level 2 item. The company's marketable security investment in common stock of $109,208 has been valued at cost (see Note 1). As such, the marketable security investment is considered a level 3 item.

The preceding method described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the company believes its valuation method is appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value could result in a different fair value measurement at the reporting date.

NOTE 10 - Postretirement and Postemployment Benefit Liabilities

Postretirement Benefit Liability - Health and Life

The company provides certain health care and life insurance benefits for substantially all employees (active or retired) who were employed prior to February 20, 1987. Accounting standards for postretirement benefits require an employer to: (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year (with limited exceptions); and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. Those changes will be reported in comprehensive income of a business entity.

During 2007, there was a change in the provisions of the plan which fixed the amount of benefit per participant for future and current retirees and their spouses. This had resulted in a $2,346,014 reduction in the liability and increase in the prior service credit. The actuarial gain is being amortized over approximately 7 years.

20

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 10 - Postretirement and Postemployment Benefit Liabilities (cont’d)

Postretirement Benefit Liability - Health and Life (cont.)

The accumulated postretirement benefit obligation, plan assets and accrued postretirement liability as of the plan's measurement date of December 29, 2013 and December 30, 2012 are as follows:

	December 29, 2013			December 30, 2012
Postretirement Benefit Liability - Health and Life	$	4,080,998		$	4,578,720
Less: Plan assets		—			—
Accrued postretirement benefit cost		4,080,998			4,578,720
Less: Unrecognized net gain		(1,590,388	)		(1,773,768	)
Accumulated postretirement benefit obligation		2,490,610			2,804,952
Less: Current portion		(131,714	)		(128,291	)
Long-Term Portion	$	2,358,896		$	2,676,661

Net pension benefit for the plan for the years ended December 29, 2013 and December 30, 2012 was $395,877 and $464,656, respectively, which is comprised of the following:

	December 29, 2013			December 30, 2012
Service cost	$	4,872		$	4,854
Interest cost on projected benefit obligation		111,003			113,180
Amortization of prior service cost		(324,483	)		(324,483	)
Amortization of net gain		(187,269	)		(258,207	)
Net pension benefit	$	(395,877	)	$	(464,656	)

Reconciliation of losses in other comprehensive income (loss) is as follows:

	December 29, 2013			December 30, 2012
Net actuarial gain (loss)	$	328,372		$	(145,271	)
Amortization of prior service credit and actuarial gain		(511,752	)		(582,690	)
Pension adjustment in other comprehensive income (loss)	$	(183,380	)	$	(727,961	)

21

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 10 - Postretirement and Postemployment Benefit Liabilities (cont’d)

Postretirement Benefit Liability - Health and Life (cont.)

The amount in accumulated other comprehensive income at December 29, 2013 that has not yet been recognized as a component of net periodic benefit costs is $1,590,388, which consists of unrecognized net actuarial gains of $1,191,274 and unrecognized prior service credits of $399,114. The amount in accumulated other comprehensive income at December 29, 2013 that is expected to be recognized as a component of net periodic pension benefit during 2013 is $589,895, which consists of net actuarial gains of $265,412 and prior service credits of $324,483.

The significant assumptions used in determining the accumulated postretirement benefit obligation and net periodic benefit cost are as follows:

	December 29, 2013			December 30, 2012
Health Care Cost Trend Rates:
2013/2012		4.00	%		4.00	%
Thereafter		4.00	%		4.00	%
Discount rate		4.95	%		4.05	%
Measurement Date	December 29, 2013			December 30, 2012

In addition to the significant assumptions listed above, other assumptions used in determining the accumulated postretirement benefit obligation and net periodic benefit cost are retirement and termination probabilities and mortality estimates. The company assumes that employees participating in the plan will continue to participate during retirement. The company also assumes that employees not participating in the plan will not participate in the plan prior to or during retirement.

Employer and employee contributions to the plan were $164,907 and $10,162 during the year ended December 29, 2013 and $145,123 and $12,489 during the year ended December 30, 2012, respectively. Contributions to the plan are made each year based on estimated benefit payments to be paid out of the plan. Estimated benefit payments from the plan for each of the next five years, and in the aggregate for the five years thereafter, are as follows:

2014	$	134,935
2015		147,335
2016		163,716
2017		182,744
2018		187,355
2019 - 2023		914,908
Total	$	1,730,993

22

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 10 - Postretirement and Postemployment Benefit Liabilities (cont’d)

Postemployment Benefit Liability - Severance

The company provides certain severance benefits for substantially all union employees who began their employment prior to 1986. Accounting standards for postemployment benefits require the company to accrue the estimated cost of future severance payments during the years the employees provide services.

The accrued postemployment benefit liability as of December 29, 2013 and December 30, 2012 was $98,470 and $112,795, respectively. The accrued postemployment benefit liability was determined using discount rates of 4.95% and 4.05% as of December 29, 2013 and December 30, 2012, respectively.

Postemployment Benefit Liability - Other

Under the terms of the union contract, the company provides monthly payments of $300 to the spouses of employees who died prior to retirement from the company. The payments cease upon the earlier of the spouse remarrying, the spouse's death or the spouse attaining age 62. The spouses of two former employees are currently receiving benefit payments under this provision of the union contract as of December 29, 2013 and December 30, 2012. The company has recorded a long-term liability of $20,650 and $26,364 as of December 29, 2013 and December 30, 2012, respectively, which is included in other long-term liabilities in the accompany balance sheets, related to the estimated future benefit payments to the two former employees' spouses.

NOTE 11 - Members' Equity

In the event of liquidation or dissolution of the company, the Class A common unit holders are entitled to a liquidation preference of $1 per Class A common unit. Any remaining proceeds will be divided between the Class A and Class B common unit holders on a pro rata basis.

There were 165,000 Class B common units issued to management on October 16, 2003. The units issued to management contain a call feature, which gives the company the right, but not the obligation, to repurchase the units upon termination of employment based on the terms specified in the Class B common unit grant agreements. During 2008, the company redeemed 75,000 Class B common units.

The company has an equity incentive agreement with an employee in which the company granted 30,000 nonvoting, 100% vested Class B common units to the employee. These units had no value assigned to them at the date of issuance and as such, no compensation expense was recorded.

During 2012, 45,000 Class B common units were redeemed by the company for $56,250 from a former member. Related to the redemption, $16,250 and $40,000 are included in accounts payable and long-term debt, respectively, on the accompanying 2012 balance sheet (see Notes 2 and 7). As of December 29, 2013, $10,000 remains payable and is included in current maturities of long-term debt on the accompanying 2013 balance sheet (see Note 7). During 2013, 6,200 Class B common units were issued for $7,750.

In connection with the issuance of the senior subordinated promissory notes (discussed in Note 7) the company issued detachable unit warrants for the purchase of 1,600,000 Class A common units at $1.25 per unit. The warrants are not puttable, therefore, the value allocated to the unit warrants has been recorded as additional members' equity in the accompanying December 29, 2013 and December 30, 2012 balance sheets. The warrants are exercisable through October 17, 2019.

23

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 12 - Capital Lease

The company has entered into an equipment capital lease which expires in January 2014 with monthly lease payments of approximately $8,300 per month. The capital lease obligation is secured by the related equipment. As of December 29, 2013 and December 30, 2012, approximately $433,000 of assets recorded under capital leases are included in property and equipment in the accompanying balance sheets. Accumulated amortization on these capital leases as of December 29, 2013 and December 30, 2012 was approximately $101,000 and $80,000, respectively. Amortization of items under capital lease obligations has been included with depreciation expense on owned property and equipment in the accompanying statements of operations. The entire outstanding principal balance of the capital lease obligation of $51,016 will be paid during 2014.

NOTE 13 - Operating Leases

The company leases office facilities and equipment under various lease agreements which expire from March 2014 through May 2018. The agreements include payments ranging from approximately $100 to $14,500 per month. Total operating lease expense was approximately $221,600 and $197,500 for the years ended December 29, 2013 and December 30, 2012, respectively.

Aggregate minimum rental expense under operating lease obligations for years ending after are as follows:

2014	$	176,861
2015		175,481
2016		173,895
2017		173,895
2018		72,456
Total	$	772,588

NOTE 14 - Retirement Plan

Effective February 3, 2004, the company established a 401(k) plan which covers substantially all non-union employees. The company did not make any contributions to the plan during the years ended December 29, 2013 and December 30, 2012.

NOTE 15 - Concentrations

Labor Union

The company relies on P.A.C.E International Union Local No. 7-1207 for its manufacturing employees. The current union contract expires on March 12, 2018. The contract will continue from year-to-year thereafter, unless notice terminating the agreement is given, by either party, sixty days prior to March 12th in any year after March 12, 2018. 

24

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 15 - Concentrations (cont.)

Major Customers

Sales to four automotive industry suppliers accounted for 36% and 40% of total company sales during 2013 and 2012. Accounts receivables from these customers totaled 43% and 48% of total receivables as of December 29, 2013 and December 30, 2012.

Major Suppliers

The company purchases a significant quantity of its raw materials from certain major suppliers. Management believes this concentration does not pose a significant risk to the company's operations as other suppliers are readily available.

NOTE 16 - Related Party Transactions

The company has entered into an agreement with a company owned by the CEO which provides for the CEO's company to provide management and administrative services to the company. The agreement is in effect until October 31, 2015 and provides for an additional two year extension. Under the terms of the agreement, the CEO's company is to be paid management and administrative fees equal to 2% of the company's annual sales payable monthly based on the company's sales for the immediately preceding calendar month. The fees shall provide or arrange for the provision of ordinary course legal, financial, information systems, treasury, human resources, risk management, environmental and other support systems necessary for the administrative support of UEP. The CEO's company is also entitled to annual reimbursement of up to $100,000 of costs and expenses incurred while providing management and administrative services to the company.

The company incurred fees and expenses of $1,078,957 and $1,201,090 related to this agreement for the years ended December 29, 2013 and December 30, 2012, respectively. Also as a result of the contract, the CEO's company paid for $57,600 and $96,679 of the company's legal, collection and other administrative expenses during 2013 and 2012, respectively.

As of December 30, 2012, the company had an outstanding deposit with another company owned by the CEO for investment and acquisition services totaling $175,000. During 2012, acquisition services were performed and the $175,000 was reimbursed by the CEO and CEO's company during 2013. This amount is included in related party receivables on the accompanying 2012 balance sheets. There were no such receivables outstanding as of December 29, 2013.

During 2013, the company entered into a lease arrangement and obtained a lease financing obligation with a related party lessor entity (see Note 8).

NOTE 17 - Employment Agreements

The company has employment agreements with three management employees as of December 29, 2013. The initial term of the employment agreements is three years. The term can be renewed or extended as provided for in the employment agreements. The agreements include various benefits to be provided to the employees including salary, bonus, life insurance and severance benefits.

25

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS

As of and for the Years Ended December 29, 2013 and December 30, 2012

NOTE 18 - Subsequent Event

On March 14, 2014, the company entered into a non-binding letter of intent with a public entity that would acquire all of the outstanding membership units of the company. This entity is a related party as the majority owner of the company holds a majority voting interest. 

NOTE 19 - Future Accounting Pronouncements

During January 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-02, “Intangibles - Goodwill and Other (Topic 350): Accounting for Goodwill.” The amendments in ASU No. 2014-02 allow for an accounting alternative, if elected, for the subsequent measurement of goodwill. An entity within the scope of the amendments that elects the accounting alternative in the update would amortize goodwill on a straight-line basis over 10 years, or less than 10 years if the entity demonstrates that another useful life is more appropriate. If this update is elected, an entity is further required to make an accounting policy election to test goodwill for impairment at either the entity level or the reporting unit level. Goodwill would be tested for impairment when a triggering event occurs that indicates that the fair value of an entity (or a reporting unit) may be below its carrying amount. ASU No. 2014-02, if elected, is applied prospectively to goodwill existing as of the beginning of the period of adoption and new goodwill recognized in annual periods beginning after December 15, 2014. The company is currently assessing the effect that ASU No. 2014-02, if elected, will have on its results of operations, financial position and cash flows.

26

EX-99.2

Exhibit 99.2

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

OF

ENGINEERED PRODUCTS ACQUISITION LIMITED

for the Year Ended December 31, 2013

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013

Contents

Independent Auditor’s Report	1
Consolidated profit and loss account	3
Consolidated balance sheet	4
Consolidated cash flow statement	5
Reconciliation of movements in shareholders’ funds	6
Notes	7

-i-

Independent Auditors’ Report

The Board of Directors
Engineered Products Acquisition Limited

Report on the Financial Statements

We have audited the accompanying consolidated financial statements of Engineered Products Acquisition Limited and its subsidiaries (the “Company”), which comprise the consolidated balance sheet as of December 31, 2013, and the related consolidated profit and loss account, cash flow statement and reconciliation of movements in shareholders’ funds for the year then ended, and the related notes to the consolidated financial statements, which, as described in Note 1 to the consolidated financial statements, have been prepared on the basis of generally accepted accounting practice in the United Kingdom.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with generally accepted accounting practice in the United Kingdom; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

1

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Engineered Products Acquisition Limited and its subsidiaries as of December 31, 2013, and the results of their operations and their cash flows for the year then ended in conformity with generally accepted accounting practice in the United Kingdom.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, the Company prepared its consolidated financial statements in accordance with generally accepted accounting practice in the United Kingdom which differs from U.S. generally accepted accounting principles. Our opinion is not modified with respect to this matter.

Report on Comparative Information

The accompanying consolidated balance sheet of the Company as of December 31, 2012, and the related consolidated profit and loss account, cash flow statement and reconciliation of movements in shareholders’ funds for the year then ended were not audited, reviewed, or compiled by us and, accordingly, we do not express an opinion or any other form of assurance on them.

/s/KPMG LLP

Manchester, UK

19 January 2015

2

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013

Consolidated profit and loss account

for the year ended 31 December 2013

				26 weeks
		Year ended		ended
		31 December		31 December
		2013		2012
	Note	£000		£000
Group turnover	2	26,831		—
Change in inventory of finished goods and work in progress		(295	)	—
Other operating income		35		—
Raw materials and consumables		(13,811	)	—
Other external charges		(5,013	)	—
Staff costs	5	(6,489	)	—
Depreciation and other amounts written off tangible and intangible fixed assets		1,134		—
Group operating profit	3	2,392		—
Interest payable and similar charges	6	(162	)	—
Profit on ordinary activities before taxation		2,230		—
Tax on profit on ordinary activities	7	(117	)	—
Profit for the financial year	17	2,113		—

There were no recognised gains and losses other than those shown above.

All amounts relate to continuing activities.

3

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Consolidated balance sheet

At 31 December 2013

		31 December		31 December		31 December		31 December
		2013		2013		2012		2012
	Note	£000		£000		£000		£000
Fixed assets
Intangible assets	8			(438	)			—
Tangible assets	9			2,074				—
				1,636				—
Current assets
Inventory	11	4,094				—
Debtors (including £142,000 (31 December 2012: £nil) due after more than one year	12	5,671				127
Cash at bank and in hand		417				12
		10,182				139
Creditors: amounts falling due within one year	13	(9,705	)			(139	)
Net current assets				477				—
Total assets less current liabilities and Net Assets				2,113				—
Capital and reserves
Called up share capital	16			—				—
Profit and loss account	17			2,113				—
Shareholders’ funds				2,113				—

These financial statements were approved by the board of directors on 19 January 2015.

4

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Consolidated cash flow statement

for the year ended 31 December 2013

				26 weeks
		Year ended		ended
		31 December		31 December
		2013		2012
Cash flow statement	Note	£000		£000
Cash flow from operating activities	20	2,598		—
Returns on investments and servicing of finance	21	(162	)	—
Taxation		—		—
Capital expenditure and financial investment	21	(578	)	—
Acquisitions	21	(2,998	)	—
Cash (outflow) before financing		(1,140	)	—
Financing	21	1,545		—
Increase in cash in the period		405		—
Reconciliation of net cash flow to movement in net debt	22
Increase in cash in the period		405		—
Cash (inflow) from increase in debt financing		(1,545	)
Change in net debt resulting from cash flows		(1,140	)	—
Debt acquired with subsidiary		(3,251	)
Movement in net debt in the period		(4,391	)	—
Net debt at start of period		12		—
Net debt at the end of the period		(4,379	)	—

5

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Reconciliation of movements in shareholders’ funds

for the year ended 31 December 2013

	Year ended	ended
	31 December	31 December
	2013	2012
	£000	£000
Profit / (loss) for the period	2,113	—
Group dividends received / capital reduction	—	—
Net increase in shareholders’ funds	2,113	—
Opening shareholders’ funds	—	—
Closing shareholders’ funds	2,113	—

6

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes

(forming part of the financial statements)

1     Accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements:

Basis of preparation

The financial statements have been prepared in accordance with applicable UK GAAP (“UK Generally Accepted Accounting Practice”) accounting standards, and under the historical cost accounting rules.

The group meets its day to day working capital requirements through an invoice discounting facility and inventory facility which is subject to six months notice from either party. At the date of this report management expect that the facility will remain in place.

The group’s forecasts and projections, taking account of reasonably possible changes in trading performance, show the group should be able to operate within the level of its current facilities. The directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the directors’ report and financial statements.

Basis of consolidation

The consolidated financial statements include the financial statements of the Engineered Products Acquisition Limited (the “Company”) and its subsidiary undertakings made up to 31 December 2013. The acquisition method of accounting has been adopted. Under this method, the results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit and loss account from the date of acquisition or up to the date of disposal.

Negative goodwill

Negative goodwill arising on consolidation in respect of acquisitions since 1 January 1998 is included within fixed assets and released to the profit and loss account in the periods in which the fair values of the non-monetary assets purchased on the same acquisition are recovered, whether through depreciation or sale.

On the subsequent disposal or termination of a business acquired since 1 January 1998, the profit or loss on disposal or termination is calculated after crediting the unamortised amount of any related negative goodwill.

Tangible fixed assets and depreciation

Depreciation is provided to write off the cost less the estimated residual value of tangible fixed assets by equal instalments over their estimated useful economic lives as follows:

Plant and machinery                    –                    5% to 50% per annum

7

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

1     Accounting policies (continued)

Foreign currencies

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction or, if hedged forward, at the rate of exchange under the related forward currency contract. Monetary assets and liabilities denominated in foreign currencies are translated using the contracted rate or the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the profit and loss account.

Leases

Operating lease rentals are charged to the profit and loss account on a straight line basis over the period of the lease.

Post retirement benefits

The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The amount charged to the profit and loss account represents the contributions payable to the scheme in respect of the accounting period.

Design and development expenditure

Expenditure on design and development is written off to the profit and loss account in the year in which it is incurred.

Inventory

Inventory is stated at the lower of cost and net realisable value. Cost includes an appropriate proportion of overheads incurred in the normal course of business in bringing products to their locations and condition at the balance sheet date.

Taxation

The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.

Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19.

Cash and liquid resources

Cash, for the purpose of the cash flow statement, comprises cash in hand and deposits repayable on demand.

Turnover

Turnover represents total sales by the group to third parties, excluding sales-related taxes.

8

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

2     Turnover

The analysis of turnover by geographical area is as follows:

		26 weeks
	Year ended	ended
	31 December	31 December
	2013	2012
	£000	£000
United Kingdom	7,099	—
Rest of European Union	16,009	—
Rest of World	3,723	—
	26,831	—

3     Group operating profit 

			26 weeks
	Year ended		ended
	31 December		31 December
	2013		2012
	£000		£000
Group operating profit is stated after charging/(crediting)
Depreciation	345		—
Amortisation	(1,479	)	—
Hire of plant and machinery - rentals payable under operating leases	77		—
Hire of other assets – rentals payable under operating leases	265		—
Design and development expenditure	640		—

Auditor’s remuneration:

		26 weeks
	Year ended	ended
	31 December	31 December
	2013	2010
	£000	£000
Audit of these financial statements	6	—
Amounts receivable by the auditors and their associates in respect of
- audit of subsidiaries pursuant to legislation	32	—
- other services relating to taxation	—	—

9

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

4     Remuneration of directors 

The remuneration of directors is borne by Uniroyal LLC, a related party to the group (see Note 23).

5     Staff numbers and costs 

The average number of persons employed by the Group (including directors) during the period, analysed by category, was as follows:

		26 weeks
	Year ended	ended
	31 December	31 December
	2013	2012
Management and administration	50	—
Production and sales	200	—
	250	—

The aggregate payroll costs of these persons were as follows:

		26 weeks
	Year ended	ended
	31 December	31 December
	2013	2012
	£000	£000
Wages and salaries	5,702	—
Social security costs	543	—
Other pension costs	244	—
	6,489	—

6     Interest payable and similar charges

		26 weeks
	Year ended	ended
	31 December	31 December
	2013	2012
	£000	£000
Bank interest	162	—
	162	—

10

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

7     Taxation

Analysis of charge in period 

		26 weeks
	Year ended	ended
	31 December	31 December
	2013	2012
	£000	£000
UK corporation tax
Current tax on income for the period	—	—
Adjustments in respect of prior periods	—	—
Total current tax	—	—
Deferred tax (see note 13)
Origination and reversal of timing differences	85	—
Effect of tax rate change on opening balance	32	—
Total deferred tax	117	—
Tax on profit on ordinary activities	117	—

Factors affecting the tax charge for the period

The current tax charge for the period is lower (year ended 31 December 2012: lower) than the standard rate of corporation tax in the UK 23.25% (year ended 31 December 2012: 24.5%). The differences are explained below.

			26 weeks
	Year ended		ended
	31 December		31 December
	2013		2012
	£000		£000
Current tax reconciliation
Profit on ordinary activities before tax	2,230		—
Current tax at 23.25% (year ended 31 December 2012: 24.5%)	519		—
Effects of:
Income not taxable	(344	)	—
Expenses not deductible for tax purposes	4		—
Difference between capital allowances for period and depreciation	(31	)	—
Short term timing differences	(10	)	—
Tax losses utilised	(115	)	—
Fixed asset differences	(23	)
Total current tax charge (see above)	—		—

11

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

Factors that may affect future current and total tax charges

Reductions in the UK corporation tax rate from 26% to 24% (effective from 1 April 2012) and to 23% (effective 1 April 2013) were substantively enacted on 26 March 2012 and 3 July 2012 respectively.  Further reductions to 21% (effective from 1 April 2014) and 20% (effective from 1 April 2015) were substantively enacted on 2 July 2013. On 17^th July 2014 the Finance Bill received Royal assent upon which date the tax rates became enacted. This will reduce the company's future current tax charge accordingly and reduce the deferred tax assets / liabilities at 31 December 2013 which has been calculated based on the rate of 20% substantively enacted at the balance sheet date.

8     Intangible fixed assets

	Negative
	goodwill
	£000
Cost
At beginning of year	—
Acquired in business combination	1,917
At end of year	1,917
Amortisation
At beginning of year	—
Credited in year	1,479
At end of year	1,479
Net book value
At 31 December 2013	438
At 31 December 2012	—

Negative goodwill is being released to the profit and loss account commensurately with the recovery of the non-monetary assets acquired, whether through depreciation or sale.

12

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

9     Tangible fixed assets

	Plant and machinery
	£000
Cost or valuation
At beginning of period	—
Acquired in business combination	1,841
Additions	578
At end of period	2,419
Depreciation
At beginning of period	—
Charge for period	345
At end of period	345
Net book value
At 31 December 2013	2,074
At 31 December 2012	—

The net book value of fixed assets includes £97,000 (31 December 2012: £nil) in respect of assets in the course of construction or installation which have not been depreciated.

13

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

10     Inventory

	31 December	31 December
	2013	2012
	£000	£000
Raw materials and consumables	1,253	—
Work in progress	1,514	—
Finished goods and goods for resale	1,327	—
	4,094	—

11    Debtors

	31 December	31 December
	2013	2012
	£000	£000
Trade debtors	5,051	—
Deferred tax assets (see note 13)	142	—
Other debtors	101	—
Prepayments and accrued income	377	127
	5,671	127

11    Creditors: amounts falling due within one year

	31 December	31 December
	2013	2012
	£000	£000
Invoice discounting facility	3,786	—
Inventory facility	1,010	—
Trade creditors	2,953	—
Other taxation and social security	178	—
Other creditors	419	—
Amounts owed to related party	816	139
Accruals and deferred income	543	—
	9,705	139

The invoice discounting facility bears interest at 2.65% above base rate and is subject to six months notice by either party. The facility is secured against the trade debtors of the group.

The Inventory facility bears interest at 3.15% above base rate and is subject to six months notice by either party. The facility is secured against the inventory of the group.

14

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

13    Deferred taxation

	£000
At beginning of period	—
Acquired in business combinations	259
Transfer to profit and loss	(117	)
At end of period	142

The elements of deferred taxation are as follows:

	31 December		31 December
	2013		2012
	£000		£000
Accelerated capital allowances	(8	)	—
Short term timing differences	12		—
Tax losses carried forward and other deductions	308		—
Capital gains held over	(170	)	—
Deferred tax asset	142		—

15

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

14    Acquisitions

On 4 March 2013 the Company acquired all of the ordinary shares of Gweco 478 Limited. The resulting negative goodwill of £1,917,000 was capitalised and will be released to the profit and loss account commensurately with the recovery of the non-monetary assets acquired, whether through depreciation or sale.

	Fair value
	£000
Fixed assets
Tangible	1,841
Current assets
Inventory	4,654
Debtors	6,140
Deferred tax	259
Cash	230
Total assets	13,124
Creditors (including invoice discounting facility of £3,251,000)	(7,979	)
Net assets	5,145
Negative goodwill arising on acquisitions	(1,917	)
Purchase consideration and costs of acquisition	3,228

The fair values contain provisional amounts which will be finalised in the 2014 statutory financial statements when the detailed acquisition investigation has been completed.

The post acquisition operating profit of the group that was acquired was £864,000.

Fair value at the date of acquisition was deemed to be the book value of the assets and liabilities at acquisition.

15    Called up share capital

	2013
	£
Authorised
100 Ordinary share of 1 pound each	100
Allotted and called up
1 Ordinary shares of 1 pound each	1

During the year the Company issued one ordinary shares for a consideration of £1

16

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

16    Profit and loss account

	Profit and loss account
	£000
At beginning of year	—
Profit for the year	2,113
At end of year	2,113

17    Commitments

(a) Capital commitments at the end of the financial period, for which no provision has been made, are as follows:

	31 December	31 December
	2013	2012
	£000	£000
Contracted	111	—

(b) Annual commitments under non-cancellable operating leases are as follows:

	31 December	31 December	31 December	31 December
	2013	2013	2012	2012
	Land and buildings	Other	Land and buildings	Other
	£000	£000	£000	£000
Operating leases which expire:
Within one year	20	136	—	—
In the second to fifth years inclusive	—	165	—	—
Over five years	315	—	—	—
	335	301	—	—

18    Pension scheme

The Group operates a defined contribution pension scheme. The pension charge for the year represents contributions payable by the Group to the scheme and amounted to £244,000 (year ended 31 December 2012: £nil). Contributions amounting to £42,000 (year ended 31 December 2012: £nil) were payable to the scheme and are included in creditors.

17

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

19    Loans and borrowings

Amounts repayable under the terms of the loans at the balance sheet date were:

	31 December	31 December
	2013	2012
	£000	£000
Bank loans
Invoice discounting facility	3,786	—
Inventory facility	1,010	—
	4,796	—

Repayment of loans is as follows:

	31 December	31 December
	2013	2012
	£000	£000
Repayable within one year	4,796	—

The invoice discounting facility bears interest at 2.65% above base rate and is subject to six months notice by either party. The facility is secured against the trade debtors of the group.

The Inventory facility bears interest at 3.15% above base rate and is secured against the inventory of the group.

20    Reconciliation of operating profit to operating cash flows

			26 weeks
	Year ended		ended
	31 December		31 December
	2013		2012
	£000		£000
Operating profit	2,392		—
Depreciation and amortisation	(1,134	)	—
Decrease in inventory	560		—
Decrease in debtors	738		—
Decrease in creditors	42		—
Net cash inflow from operating activities	2,598		—

18

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

21    Analysis of cash flows

			26 weeks
	Year ended		ended
	31 December		31 December
	2013		2012
	£000		£000
Returns on investment and servicing of finance
Interest paid	(162	)	—
	(162	)	—
Capital expenditure
Purchase of tangible fixed assets	(578	)	—
	(578	)	—
Financing
Debt due within one year:
Increase in short-term borrowing	1,545
	1,545		—
Acquisitions
Purchase of subsidiary undertakings	(3,228	)	—
Cash acquired with subsidiary	230
	(2,998	)	—

22    Analysis of net debt

	At beginning of period	Acquisitions		Cash flow		At end of period
	£000	£000		£000		£000
Cash in hand and at bank	12	230		175		417
Invoice discounting facility	—	(3,251	)	(1,545	)	(4,796	)
Total	12	(3,021	)	(1,370	)	(4,379	)

19

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

23    Related Party Transactions

The Company is owned 100% by Howard R Curd who also owns 94% of a related party Uniroyal LLC. The Company owes Howard R Curd £816,000 which was loaned to the Company to undertake the acquisition of Gweco 478 Limited. During the year there were no related party transactions between the Companies owned by Howard R Curd. 

24    Principal Subsidiary Undertakings

The undertakings in which the Company’s interests at the period end were 100% are as follows:

	Country of incorporation	Principal activity	Class and percentage of shares Company
Subsidiary undertakings
Wardle Storeys (Holdings) Limited *	Great Britain	Investment	Ordinary 100%
Gweco 478 Limited	Great Britain	Group holding Company	Ordinary 100%
Wardle Storeys (Group) Limited *	Great Britain	Group holding Company	Ordinary 100%
Wardle Storeys (Earby) Limited  *	Great Britain	Specialised PVC/textile foils	Ordinary 100%
Wardle Storeys Components Limited  *	Great Britain	Dormant	Ordinary 100%
Wardle Storeys (Services) Limited  *	Great Britain	Management services	Ordinary 100%
Wardle Storeys (Property) Limited  *	Great Britain	Dormant	Ordinary 100%
Tectrim Limited  *	Great Britain	Investment	Ordinary 100%

______________

* Indirect subsidiary companies

With the exception of Wardle Storeys (Group) Limited, Wardle Storeys (Earby) Limited and Wardle Storeys (Services) Limited all the other remaining companies had applications to be struck off presented to companies house before 31 December 2013.

20

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

25    UK to US GAAP Reconciliation

These financial statements have been prepared for the purpose of meeting the requirements of U.S. Securities and Exchange Commission (“SEC”) Rule 8-04 of Regulation S-X following the acquisition of Engineered Products Acquisition Limited and its subsidiaries (“the Group”) by Invisa, Inc. on 10 November 2014. The Group prepares its financial statements in accordance with generally accepted accounting practice in the United Kingdom (‘UK GAAP’), which differ in certain respects from accounting principles generally accepted in the United States of America (‘US GAAP’). Reconciliations of profit for the financial year (or net income) and shareholders’ funds (or shareholders’ equity) as reported in the consolidated financial statements under UK GAAP and those under US GAAP are set out below:

			2013					2012
				Profit &		Shareholders’			Profit &		Shareholders’
				Loss		Funds			Loss		Funds
		Notes		£000		£000			£000		£000
Results Under UK GAAP
Profit for the year				2,113		—			—		—
Shareholders’ Funds				—		2,113			—		—
US GAAP Reporting Adjustments
Transaction costs		(a)		(83	)	(269	)		(186	)	(186	)
Acquisition adjustments to certain assets and liabilities credited to income for the period		(b)		131		131
Change in fair value of exchange rate contracts		(c)		65		65
Change in exchange rate translation adjustment		(d)		(47	)	(47	)
Reverse amortisation of UK negative goodwill		(e)		(1,479	)	(1,479	)
Recognize US GAAP gain on bargain purchase		(f)		3,086		3,086
Tax effect of US GAAP changes		(g)		5		5
Results under US GAAP	`			3,791		3,605			(186	)	(186	)

Explanation of Notes:

(a)     Transaction costs 

Under UK GAAP transaction costs must be capitalised in Goodwill whereas under US GAAP these are recognised in earnings in the year incurred.

21

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

(b)     Acquisition Adjustments to Certain Assets and Liabilities Credited to Income for the Period 

Adjustments to the carrying amount of certain acquired assets and liabilities have been made under US GAAP for differences in purchase accounting which resulted in an increase in net assets by £1,107,035. The detail of these adjustments as of the date of the acquisition are as follows:

	Balance Sheet			Profit & Loss
	Adjustments			Adjustments
	£’s			£’s
Trademarks		1,512,297			—
Inventory		(106,321	)		106,321
Debtors		35,873			(35,873	)
Other assets		(23,321	)		23,321
Tangible assets		(156,468	)		13,039
Creditors		(155,025	)		23,787
Total		1,107,035			130,595

These adjustments resulted in a decrease of £130,595 to expenses for the year ended December 31, 2013. There is no profit and loss effect from the trademark adjustment since it has an indefinite life and is not subject to amortization but will be reviewed annually for impairment.

Contained within this figure are a fixed asset write down of (£156,468) and a holiday pay accrual (£50,000) which relate to the purchase accounting being finalised in these financial statements. When the provisional fair values are finalised in the 2014 UK GAAP statutory financial statements the comparative 2013 financial information presented within those 2014 statutory financial statements will not be retrospectively adjusted.

(c) Change in Fair Value of Exchange Rate Contracts

Since the fair value of exchange rate contracts are not recognised under UK GAAP, adjustments were made to recognize them at the date of the acquisition in accordance with US GAAP. The fair value of the contracts at the date of the acquisition resulted in a liability of £49,497. The fair value of the contracts at December 31, 2013 resulted in an asset of £15,017. These adjustments had the effect of increasing the profit and loss for the year by £64,514.

(d) Change in Exchange Rate Translation Adjustment

In accordance with UK GAAP the Group reports the fair value of financial assets and liabilities using the average rate of outstanding exchange rate contracts. For US GAAP purposes the fair value is based on the period end spot rate. As a result of this difference an adjustment was made at the acquisition date to increase net assets by £47,264 and an adjustment to reduce net assets by £233 was made at December 31, 2013. These adjustments had the effect of decreasing profit and loss for the year by £47,497.

22

Engineered Products Acquisition Limited

Consolidated Financial Statements

31 December 2013 

Notes (continued)

(e) Reverse Amortisation of UK Negative Goodwill

Under UK GAAP, negative goodwill arising on acquisitions is capitalised and amortised commensurately with the recovery of nonmonetary assets acquired, whether through depreciation or sale. The negative goodwill under UK GAAP at the date of the acquisition was calculated to be £1,917,072. During the year £1,478,828 of this amount was amortised and credited to Group operating profit. The adjustment is to remove the UK GAAP negative goodwill amortisation to prepare for the recording of the US GAAP gain on bargain purchase.

(f) Recognize US GAAP Gain on Bargain Purchase

Under US GAAP, the gains on the bargain purchases are not capitalised and amortised but are rather recognised in earnings at the acquisition date. The adjustment is to record the US GAAP gain on bargain purchase in the amount of £3,086,171. Before the company recognized the gain on bargain purchase it determined that it correctly identified all of the assets acquired and all of the liabilities assumed and that their recorded amounts were appropriately measured. In addition, in determining the gain on bargain purchase, the consideration transferred for the acquisition which was cash in the amount of £2,910,000 was complete and without any contingent consideration arrangement, therefore no additional assets or liabilities were recorded.The acquisition resulted in a gain on bargain purchase because the sellers were motivated to monetise their investment in the Company which had originally been made in 2010.

(g) Tax Effect of US GAAP Changes

At the date of the acquisition an additional net deferred tax liability in the amount of £254,105 was recorded for the net effect of all the US GAAP adjustments.

The adjustment of £5,368 above reflects the net tax effect to increase the provision for the period by £33,981 for all the profit and loss adjustments recorded in accordance with US GAAP and includes an adjustment to recognize the change in the enacted tax rates which reduced the provision by £39,319.

Combined with the previously recorded deferred tax amounts, the components of deferred taxes at December 31, 2013 were a current deferred tax asset of £344,108 and a deferred tax liability of £451,774. A valuation allowance for the deferred tax asset was determined to be unnecessary since it is not more likely than not that some portion or all of the deferred tax asset will not be realized.

Classification differences between UK and US GAAP

In addition to the differences between UK and US GAAP related to the recognition and measurement of transactions by the Group, there are also a number of differences in the manner in which items are classified in the consolidated profit and loss account (consolidated statement of operations) and consolidated balance sheet. These classification differences have no impact on net income or shareholders’ equity and only affect the disclosure.

Statement of Cash flows 

There are no material differences between cash or funds flow reporting reported in the primary financial statements and cash flows under UK GAAP that would be reported in a statement of cash flows prepared in accordance with US GAAP.

23

EX-99.3

EXHIBIT 99.3

Unaudited Supplemental Information

for

Engineered Products Acquisition Limited

as of December 31, 2013

(US Presentation)

Unaudited Supplemental Information

for

Engineered Products Acquisition Limited

as of December 31, 2013

(US Presentation)

The audited financial statements of Engineered Products Acquisition Limited (“EPAL”) included as Exhibit 99.2 as of and for the year ended December 31, 2013 are prepared in accordance with UK GAAP with the amounts in British Pounds. The unaudited financial statement for EPAL for the six months ended June 30, 2014 and June 29, 2013 and pro forma financial information included as Exhibits 99.4 and Exhibit 99.5, respectively are presented in accordance with US GAAP with the amounts in US Dollars. The following unaudited tables are selected EPAL financial information as of and for the year ended December 31, 2013 prepared in accordance with US GAAP with the amounts in US Dollars. Together with Note 25 UK to US GAAP Reconciliation in the EPAL audited financial statements, these tables provide supplemental information for the purpose of converting the financial information to the US presentation. 

Engineered Products Acquisition Limited
Supplemental Financial Information
As of  December 31, 2013
(Unaudited)
Balance Sheet		As of December 31, 2013 (As Adjusted for US GAAP)		Currency Translation Adjustment (1)		As of December 31, 2013
		£000				$000
Current Assets	£	10,336		6,762	$	17,098
Property and Equipment		1,931		1,262		3,193
Other Assets		1,512		990		2,502
Total Assets	£	13,779		9,014	$	22,793
Current Liabilities	£	8,907		5,825	$	14,732
Long-term Liabilities		1,267		829		2,096
Stockholders' Equity		3,605	(3)	2,360		5,965	(2)
Total Liabilities and Stockholders' Equity	£	13,779		9,014	$	22,793

____________

(1)	The balance sheet items were translated into USD at the spot rate as of December 31, 2013 or for the applicable transaction date.
(2)	In order to convert the company's financial statements from GBP to USD, Stockholders' Equity includes a positive cumulative translation adjustment of $514,795.
(3)	Amount agrees to Note 25 UK to US GAAP Reconciliation in the EPAL audited financial statements.

1

Engineered Products Acquisition Limited
Supplemental Financial Information
For the Year Ended December 31, 2013
(Unaudited)
Income Statement		For the Year Ended December 31, 2013 (As Adjusted for US GAAP) (1)		Currency Translation Adjustment (2)		For the Year Ended December 31, 2013
		£000				$000
Net Sales	£	26,101		14,697	$	40,798
Gross Profit		4,044		2,277		6,321
Operating Income		959		540		1,499
Income Before Tax Provision		3,903		2,021		5,924
Net Income	£	3,791	(3)	1,958	$	5,749

____________ 

(1)	As explained in Footnote 15 Acquisitions in the audited financial statements, EPAL acquired all the ordinary shares of Gweco 478 Limited, the holding company for Wardle Storeys (Group), on March 4, 2013. Accordingly, these amounts only include the operating results of Wardle Storeys (Group) for the ten months ended December 2013.
(2)	The income statement items were translated into USD at the average rate for the reporting period.
(3)	Amount agrees to Note 25 UK to US GAAP Reconciliation in the EPAL audited financial statements.

As indicated in the tables, EPAL acquired all the ordinary shares of Gweco 478 Limited the holding company for Wardle Storeys (Group) on March 4, 2013. Accordingly the operating results for Wardle Storeys (Group) for the period from January 1, 2013 to March 3, 2013 are not included in the results of EPAL since it is prior to the acquisition. The following table summarize the operating results for this period: 

For information purposes only:

	For the Period January 1, 2013 to March 3, 2013		Currency Translation Adjustment (1)		For the Period January 1, 2013 to March 3, 2013
		£000				$000
Net Sales	£	5,709		3,261	$	8,970
Gross Profit		782		427		1,175
Operating Income		114		65		179
Income Before Tax Provision		87		50		137
Net Income	£	73		42	$	115

____________

(1) The items were translated into USD at the average rate for the reporting period.

2

EX-99.4

EXHIBIT 99.4

UNIROYAL ENGINEERED PRODUCTS, LLC

UNAUDITED CONDENSED FINANCIAL STATEMENTS

For the Six Months Ended June 29, 2014 and June 30, 2013

UNIROYAL ENGINEERED PRODUCTS, LLC

BALANCE SHEETS

As of June 29, 2014 and June 30, 2013

(Unaudited)

	June 29, 2014		June 30, 2013
CURRENT ASSETS
Cash and cash equivalents	$	9,415	$	37,064
Marketable Securities		247,922		27,131
Accounts receivable, net		7,415,458		7,346,739
Inventories, net		10,142,625		11,012,108
Other current assets		180,720		172,302
Related party receivable		102,934		1,332,616
Total Current Assets		18,099,074		19,927,960
PROPERTY AND EQUIPMENT		6,813,850		6,324,078
OTHER ASSETS
Intangible assets		1,336,033		1,293,834
Goodwill		1,079,175		1,079,175
Other long-term assets		727,063		749,495
Total Other Assets		3,142,271		3,122,504
TOTAL ASSETS	$	28,055,195	$	29,374,542
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Checks issued in excess of bank balance	$	355,319	$	717,426
Line of credit		8,187,123		10,014,368
Current maturities of long-term debt		453,379		808,508
Current maturities of capital lease obligations		—		97,496
Accounts payable		4,211,122		4,770,246
Accrued expenses		1,291,072		1,253,764
Current portion of postretirement benefit liability - health and life		131,714		128,291
Total Current Liabilities		14,629,729		17,790,099
LONG-TERM LIABILITIES
Long-term debt		1,238,942		1,673,847
Related party lease financing obligations		2,017,901		—
Long-term debt to related parties		2,000,000		2,000,000
Postretirement benefit liability - health and life		2,345,748		2,656,202
Postemployment benefit liability - severance		74,549		112,795
Other long-term liabilities		26,992		91,446
Total Long-Term Liabilities		7,704,132		6,534,290
Total Liabilities		22,333,861		24,324,389

(Continued)

See accompanying notes to financial statements

1

UNIROYAL ENGINEERED PRODUCTS, LLC

BALANCE SHEETS

As of June 29, 2014 and June 30, 2013

(Unaudited)

	June 29, 2014			June 30, 2013
STOCKHOLDERS' EQUITY
Common Stock		552,750		548,875
Additional Paid In Capital		528,000		528,000
Retained Earnings		3,354,479		2,523,279
Accumulated Other Comprehensive Income		1,286,105		1,449,998
Total Stockholders' Equity		5,721,334		5,050,152
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	28,055,195	$	29,374,541

See accompanying notes to financial statements

2

UNIROYAL ENGINEERED PRODUCTS, LLC

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Six Months Ended June 29, 2014 and June 30, 2013

(Unaudited)

	June 29, 2014			June 30, 2013
NET SALES	$	26,240,735		$	27,957,088
COST OF GOODS SOLD		20,611,178			22,216,143
Gross Profit		5,629,557			5,740,945
OPERATING EXPENSES		3,672,464			2,988,277
Operating Income		1,957,093			2,752,668
OTHER INCOME (EXPENSE)
Interest and other debt related expense		(511,012	)		(413,278	)
Other income		30,053			9,920
Net Other Expense		(480,959	)		(403,358	)
NET INCOME		1,476,134			2,349,310
OTHER COMPREHENSIVE INCOME (LOSS)
Minimum benefit liability adjustment		(294,948	)		(255,876	)
Unrealized gain (loss) on effective hedge
Reclassification of amounts to earnings		33,143			31,739
Unrealized loss for the year		(1,561	)		(1,903	)
COMPREHENSIVE INCOME	$	1,212,768		$	2,123,270

See accompanying notes to financial statements

3

UNIROYAL ENGINEERED PRODUCTS, LLC

STATEMENTS OF CASH FLOWS

For the Six Months Ended June 29, 2014 and June 30, 2013

(Unaudited)

	June 29, 2014			June 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,476,134		$	2,349,310
Adjustments to reconcile net income to net cash flows from operating activities
Depreciation		322,944			596,170
Amortization of intangible assets		30,233			29,850
Loss on disposal of property and equipment		—			1,532
Noncash postemployment health and life benefit		(294,948	)		(255,876	)
Amortization of original issue note discount		—			26,400
Changes in assets and liabilities
Accounts receivable		(734,725	)		(1,070,897	)
Inventories		344,679			(573,571	)
Other current assets		(7,701	)		(28,232	)
Other long-term assets		(249	)		—
Related party receivable		(60,459	)		(1,157,616	)
Accounts payable		(23,835	)		664,930
Accrued expenses		188,012			1,437
Postretirement benefit liability - health and life		(13,148	)		(20,459	)
Postemployment benefit liability - severance		(23,921	)		—
Other long-term liabilities		(2,993	)		(2,813	)
Net Cash Flows from Operating Activities		1,200,023			560,165
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(418,783	)		(80,048	)
Purchase of marketable securities		(138,714	)		(27,131	)
Net Cash Flows from Investing Activities		(557,497	)		(107,179	)
CASH FLOWS FROM FINANCING ACTIVITIES
Checks issued in excess of bank balance		(267,271	)		(164,550	)
Net payments on line of credit		222,176			357,348
Payments on long-term debt		(91,790	)		(254,169	)
Proceeds from issuance of long-term debt		(100,000	)		—
Payments on capital lease obligations		(47,555	)		(44,557	)
Net payments on life insurance policies		(154,990	)		(120,858	)
Proceeds from issuance of Class B units		—			3,875
Distributions to members		(213,002	)		(256,770	)
Net Cash Flows from Financing Activities		(652,432	)		(479,681	)
Net Change in Cash and Cash Equivalents		(9,906	)		(26,695	)
CASH AND CASH EQUIVALENTS - Beginning of Year		19,321			63,759
CASH AND CASH EQUIVALENTS - END OF YEAR	$	9,415		$	37,064

For noncash transactions and supplemental disclosure of cash flow information see Note 2.

See accompanying notes to financial statements

4

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS
As of and for the Six Months Ended June 29, 2014 and June 30, 2013

NOTE 1 – Basis of Presentation

The interim Condensed Financial Statements of Uniroyal Engineered Products, LLC (the “Company”) are unaudited and should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 29, 2013 and December 30, 2012.

The company's fiscal year is a 52/53 week year depending on the nearest Sunday to December 31. The years ended December 29, 2013 and December 30, 2012 were 52 week years.

In the opinion of the Company, all adjustments necessary for a fair presentation of such Condensed Financial Statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results for a full year. The interim Condensed Financial Statements and notes thereto do not contain certain information included in the Company’s annual Financial Statements and notes thereto.

NOTE 2 – Noncash Transaction and Supplemental Disclosure of Cash Flow Information

During 2013, the company advanced a member $1,157,616 for 2013 tax distributions during the six month period ending June 30, 2013. This amount is included in related party receivables on the accompanying 2013 balance sheets. This receivable was settled in full prior to December 31, 2013.

	June 29, 2014		June 30, 2013
Supplemental disclosure of approximate cash paid for:
Interest	$	467,916	$	358,821

NOTE 3 – Inventories

Inventories consist of the following as of June 29, 2014 and June 30, 2013:

	June 29, 2014			June 30, 2013
Raw Materials	$	2,777,244		$	3,047,338
Work-in Process		1,818,808			1,633,436
Finished Goods		6,300,280			6,990,792
		10,896,332			11,671,566
Less: Allowance for inventory obsolescence		(753,707	)		(659,458	)
Total Inventories	$	10,142,625		$	11,012,108

NOTE 4 – Subsequent Event

On November 10, 2014, the Company was acquired by Invisa, Inc. (“Invisa”) in a stock transaction that included the acquisition of Engineered Products Acquisition Limited (”EPAL”) the holding company for Wardle Storeys (Group) Limited (“Wardle Storeys”), a European manufacturer of textured coatings and polymer films.

5

UNIROYAL ENGINEERED PRODUCTS, LLC

NOTES TO FINANCIAL STATEMENTS
As of and for the Six Months Ended June 29, 2014 and June 30, 2013

Invisa made the acquisitions of the Company through its newly formed subsidiary, UEP Holdings, LLC (“UEPH”). The aggregate purchase consideration paid for 100% of the outstanding equity of Uniroyal was preferred ownership interests issued by UEPH having an aggregate face value of $35 million. Invisa purchased EPAL for 100 shares of Invisa’s common stock and Invisa’s guaranty of outstanding EPAL preferred stock retained by the seller having a liquidation preference of £12,518,240 (approximately $20 million). Management of the acquired entities was not altered in the acquisition.

As explained in the Initial 8-K Mr. Howard R. Curd beneficially owned all of Invisa’s outstanding shares of Series A preferred stock and Series B preferred stock; a substantial portion of Invisa’s outstanding Series C Preferred; and approximately 6.8 million shares of Invisa common stock. As a result of this beneficial ownership, Mr. Curd controls in excess of 80% of Invisa voting rights in all matters to come before the Invisa shareholders. Mr. Curd also owned all of the issued and outstanding capital stock of EPAL and a majority of the limited liability company interests of the Company and was a controlling person of the Company and Wardle Storeys before the acquisitions. As a result of this common ownership and as required by current accounting pronouncements, the transaction is treated as a combination between entities under common control and is accounted for in a manner similar to the pooling-of-interest method. The recognized assets and liabilities are transferred at their carrying amounts at the date of the transaction. Further, the companies will be combined retrospectively for prior year comparative information to the extent permitted.

6

EX-99.5

EXHIBIT 99.5

ENGINEERED PRODUCTS ACQUISITION LIMITED

UNAUDITED CONDENSED FINANCIAL STATEMENTS

For the Six Months Ended June 29, 2014 and June 30, 2013

ENGINEERED PRODUCTS ACQUISITION LIMITED

BALANCE SHEETS

As of June 29, 2014 and June 30, 2013

(Unaudited)

	June 29, 2014		June 30, 2013
CURRENT ASSETS
Cash and cash equivalents	$	676,210	$	1,092,226
Accounts receivable, net		10,043,586		10,898,041
Inventories, net		6,956,945		6,326,147
Other current assets		1,621,024		1,382,047
Total Current Assets		19,297,765		19,698,461
PROPERTY AND EQUIPMENT		4,201,437		2,782,339
OTHER ASSETS
Intangible assets		2,575,812		2,307,611
Total Other Assets		2,575,812		2,307,611
TOTAL ASSETS	$	26,075,014	$	24,788,411
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit	$	8,484,897	$	9,658,794
Current maturities of long-term debt		115,821		—
Current maturities of capital lease obligations		86,443		—
Accounts payable		5,550,988		6,078,683
Accrued expenses		2,631,634		1,993,238
Due to related parties		—		419,622
Total Current Liabilities		16,869,783		18,150,337
LONG-TERM LIABILITIES
Long-term debt		424,675		—
Capital lease obligations		291,745		—
Long-term debt to related parties		1,388,473		1,243,901
Other long-term liabilities		773,467		722,574
Total Long-Term Liabilities		2,878,360		1,966,475
Total Liabilities		19,748,143		20,116,812
STOCKHOLDERS' EQUITY
Common Stock		151		151
Retained Earnings		5,631,319		4,593,693
Accumulated Other Comprehensive Income		695,401		77,755
Total Stockholders'  Equity		6,326,871		4,671,599
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	26,075,014	$	24,788,411

See accompanying notes to financial statements

1

ENGINEERED PRODUCTS ACQUISITION LIMITED

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Six Months Ended June 29, 2014 and June 30, 2013

(Unaudited)

	June 29, 2014			June 30, 2013
					(see Note 1)
NET SALES	$	23,503,795		$	17,630,876
COST OF GOODS SOLD		19,801,084			15,219,517
Gross Profit		3,702,711			2,411,359
OPERATING EXPENSES		3,259,790			1,870,515
Operating Income		442,921			540,844
OTHER INCOME (EXPENSE)
Interest and other debt related expense		(292,549	)		(123,434	)
Gain on bargain purchase		—			4,646,045
Other income		79,594			(50,984	)
Net Other Expense		(212,955	)		4,471,627
INCOME BEFORE TAX PROVISION		229,966			5,012,471
TAX PROVISION		48,728			120,309
NET INCOME	$	181,238		$	4,892,162

See accompanying notes to financial statements

2

ENGINEERED PRODUCTS ACQUISITION LIMITED

STATEMENTS OF CASH FLOWS

For the Six Months Ended June 29, 2014 and June 30, 2013

(Unaudited)

	June 29, 2014			June 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	181,238		$	4,892,162
Adjustments to reconcile net income to net cash flows from operating activities
Depreciation		364,825			206,491
Gain on bargain purchase		—			(4,646,045	)
Changes in assets and liabilities
Accounts receivable		(1,447,802	)		(1,716,260	)
Inventories		15,745			614,622
Other current assets		(192,034	)		(104,091	)
Accounts payable		667,488			521,317
Accrued expenses		445,350			(136,197	)
Other long-term liabilities		3,905			19,683
Net Cash Flows from Operating Activities		38,715			(348,318	)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(875,107	)		(418,526	)
Purchase of Wardle Storeys less cash acquired		—			(255,716	)
Net Cash Flows from Investing Activities		(875,107	)		(674,242	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net payments on line of credit		317,881			1,158,675
Proceeds from issuance of long-term debt		567,450			—
Payments on capital lease obligations		(14,394	)		—
Note payable to related party		—			931,371
Net Cash Flows from Financing Activities		870,937			2,090,046
Net Change in Cash and Cash Equivalents		34,545			1,067,486
CASH AND CASH EQUIVALENTS - Beginning of Year		622,496			19,715
Effects of currency translation on cash and cash equivalents		19,169			5,025
CASH AND CASH EQUIVALENTS - END OF YEAR	$	676,210		$	1,092,226

For noncash transactions and supplemental disclosure of cash flow information see Note 2.

See accompanying notes to financial statements

3

ENGINEERED PRODUCTS ACQUISITION LIMITED

NOTES TO FINANCIAL STATEMENTS
As of and for the Six Months Ended June 29, 2014 and June 30, 2013

NOTE 1 – Basis of Presentation

The interim Condensed Financial Statements of Engineered Products Acquisition Limited (the “Company”) are unaudited and should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2013. The Company is incorporated in the United Kingdom and uses the British Pound as its functional currency. The amounts reflected in the financial statements have been translated into United States Dollars as of the reporting date. The financial statements have been prepared in accordance with US GAAP.

In the opinion of the Company, all adjustments necessary for a fair presentation of such Condensed Financial Statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results for a full year. The interim Condensed Financial Statements and notes thereto do not contain certain information included in the Company’s annual Financial Statements and notes thereto.

Engineered Products Acquisition Limited acquired 100% of the common stock Wardle Storeys (Group) Limited on March 4, 2013 using acquisition accounting. The purchase price was £2,910,000 or approximately $4,381,000. Included in the statement of operations for the six months ended June 30, 2013 is the operating results of Wardle Storeys (Group) Limited for the period March 4, 2013 to June 30, 2013 or approximately four months of Wardle Storeys (Group)’s operating results. Whereas, in the results for the six months ended June 29, 2014 there is a full six month of their operating results. As required by acquisition accounting, the assets acquired and the liabilities assumed were adjusted to their fair value. Since the fair value of the net assets were greater than the purchase price, current accounting standards required the Company to record the difference of $4,646,045 as a gain which is shown as gain on bargain purchase in the Statement of Comprehensive Income for the six months ended June 30, 2013.

NOTE 2 – Inventories

Inventories consist of the following as of June 29, 2014 and June 30, 2013:

	June 29, 2014			June 30, 2013
Raw Materials	$	2,345,596		$	2,428,183
Work-in Process		2,485,711			2,455,180
Finished Goods		2,787,205			1,864,083
		7,618,512			6,747,446
Less: Allowance for inventory obsolescence		(661,567	)		(421,299	)
Total Inventories	$	6,956,945		$	6,326,147

NOTE 3 – Operating Expenses

Subsequent to the acquisition by EPAL, Wardle Storeys (Group) initiated a study of its manufacturing staffing requirements. As a result of this study, Wardle Storeys reduced its staffing and recorded a one time charge for the redundancy and other associated costs as statutorily required in the United Kingdom. This charge, in the amount of $459 ,809, is included in operating expenses for the six months ended as of June 29, 2014 . The annualized compensation and other payroll costs associated with these employees were approximately $750,000.

4

ENGINEERED PRODUCTS ACQUISITION LIMITED

NOTES TO FINANCIAL STATEMENTS
As of and for the Six Months Ended June 29, 2014 and June 30, 2013

NOTE 4 – Subsequent Event

On November 10, 2014, the Company was acquired by Invisa, Inc. (“Invisa”) in a stock transaction that included the acquisition of Uniroyal Engineered Products, LLC (”UEP”) United States manufacturer of textured coatings and polymer films.

Invisa purchased the Company for 100 shares of Invisa’s common stock and Invisa’s guaranty of outstanding EPAL preferred stock retained by the seller having a liquidation preference of £12,518,240 (approximately $20 million). Management of the acquired entities was not altered in the acquisition. Invisa made the acquisitions of UEP through its newly formed subsidiary, UEP Holdings, LLC (“UEPH”). The aggregate purchase consideration paid for 100% of the outstanding equity of Uniroyal was preferred ownership interests issued by UEPH having an aggregate face value of $35 million.

As explained in the Initial 8-K Mr. Howard R. Curd beneficially owned all of Invisa’s outstanding shares of Series A preferred stock and Series B preferred stock; a substantial portion of Invisa’s outstanding Series C Preferred; and approximately 6.8 million shares of Invisa common stock. As a result of this beneficial ownership, Mr. Curd controls in excess of 80% of Invisa voting rights in all matters to come before the Invisa shareholders. Mr. Curd also owned all of the issued and outstanding capital stock of EPAL and a majority of the limited liability company interests of the Company and was a controlling person of the Company and Wardle Storeys before the acquisitions. As a result of this common ownership and as required by current accounting pronouncements, the transaction is treated as a combination between entities under common control and is accounted for in a manner similar to the pooling-of-interest method. The recognized assets and liabilities are transferred at their carrying amounts at the date of the transaction. Further, the companies will be combined retrospectively for prior year comparative information to the extent permitted.

5

EX-99.6

EXHIBIT 99.6

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On November 10th, 2014 Invisa, Inc. (“Invisa” or the “Company”) filed with the Securities and Exchange Commission a Current Report on Form 8-K (the “Initial 8-K”) to report that it acquired all of the ownership interests in Uniroyal Engineered Products, LLC (“Uniroyal”), a U.S. manufacturer of textured coatings, and all of the ordinary common stock of Engineered Products Acquisition Limited (“EPAL”), the holding company for Wardle Storeys (Group) Limited (“Wardle Storeys”), a European manufacturer of textured coatings and polymer films.

Invisa made the acquisition of Uniroyal through its newly formed subsidiary, UEP Holdings, LLC (“UEPH”), to which it contributed certain of its assets and liabilities as part of the organization of that subsidiary. The aggregate purchase consideration paid for 100% of the outstanding equity of Uniroyal was preferred ownership interests issued by UEPH having an aggregate face value of $35 million. In a separate transaction, Invisa also purchased EPAL for 100 shares of Invisa’s Common Stock and Invisa’s guaranty of outstanding EPAL preferred stock retained by the seller having a liquidation preference of £12,518,240 (approximately $20 million).

The foregoing description of the transaction is not complete and is subject to and qualified in its entirety by reference to the full text of the transaction agreements which were attached to the Initial 8-K as exhibits and are incorporated herein by reference.

The following unaudited pro forma condensed combined balance sheet is based on the historical balance sheets of Invisa, Uniroyal and EPAL, giving effect to Invisa’s acquisition of Uniroyal and EPAL as if the transaction had occurred on June 30, 2014. The following unaudited pro forma condensed combined statements of operations for the year ended December 31, 2013 and the six months ended June 30, 2014 are based on the historical statements of operations of Invisa, Uniroyal and EPAL, giving effect Invisa’s acquisition of Uniroyal and EPAL as if the transaction had occurred on January 1, 2013. The historical information is derived from the audited financial statements of Invisa, Uniroyal and EPAL for the year ended December 31, 2013 and the unaudited financial statements for the six months ended June 30, 2014. In the case of EPAL, the historical financial information for the year ended December 31, 2013 was also translated into USD (see Exhibit 99.3).

The unaudited pro forma condensed combined financial statements are provided for information purposes only and are based on estimates and assumptions as set forth in the notes to such statements. Pursuant to Regulation S-X, Article 11, of the Securities and Exchange Commission, pro forma adjustments include the effects of events that are directly attributable to the acquisition and are factually supportable. As actual adjustments may differ from pro forma adjustments, the unaudited pro forma combined financial information has been prepared for informational purposes only. The unaudited pro forma condensed combined financial statements are not necessarily indicative of the combined results of operations to be expected in any future period or the results that actually would have been realized had the transaction been completed on January 1, 2013. This information should be read in conjunction with the historical financial statements and related notes of Invisa, Uniroyal and EPAL and in conjunction with the accompanying notes to these unaudited pro forma condensed combined financial statements.

1

Invisa, Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of June 30, 2014

		Historical
		Invisa, Inc.		Uniroyal Engineered Products LLC		Engineered Products Acquisition Limited		Pro Forma Adjustments			Pro Forma Combined
CURRENT ASSETS
Cash and cash equivalents	$	253	$	9,415	$	676,210				$	685,878
Marketable securities		—		247,922		—		(247,922	)		—
Accounts receivable, net		9,840		7,415,458		10,043,586					17,468,884
Inventories, net		4,007		10,142,625		6,956,945					17,103,577
Other current assets		22,154		180,720		1,621,024					1,823,898
Related party receivable		—		102,934		—					102,934
Total Current Assets		36,254		18,099,074		19,297,765		(247,922	)		37,185,171
PROPERTY AND EQUIPMENT		—		6,813,850		4,201,437		—			11,015,287
OTHER ASSETS
Intangible assets		—		1,336,033		2,575,812					3,911,845
Goodwill		—		1,079,175		—					1,079,175
Other long-term assets		—		727,063		—					727,063
Total Other Assets		—		3,142,271		2,575,812		—			5,718,083
TOTAL ASSETS	$	36,254	$	28,055,195	$	26,075,014	$	(247,922	)	$	53,918,541
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Checks issued in excess of bank balance	$	—	$	355,319	$	—				$	355,319
Line of credit		—		8,187,123		8,484,897					16,672,020
Current maturities of long-term debt		—		453,379		115,821					569,200
Current maturities of capital lease obligations		—		—		86,443					86,443
Accounts payable		17,265		4,211,122		5,550,988					9,779,375
Accrued expenses		54,753		1,291,072		2,631,634					3,977,459
Due to related parties		20,260		—		—					20,260
Current portion of postretirement benefit liability - health and life		—		131,714		—					131,714
Total Current Liabilities		92,278		14,629,729		16,869,783		—			31,591,790

(Continued)

See notes to unaudited pro forma condensed combined financial statements

2

Invisa, Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of June 30, 2014

		Historical
		Invisa, Inc.			Uniroyal Engineered Products LLC		Engineered Products Acquisition Limited		Pro Forma Adjustments			Pro Forma Combined
LONG-TERM LIABILITIES
Long-term debt		—			1,238,942		424,675					1,663,617
Related party lease financing obligations		—			2,017,901		—					2,017,901
Capital lease obligations		—			—		291,745					291,745
Long-term debt to related parties		1,345,640			2,000,000		1,388,473					4,734,113
Postretirement benefit liability - health and life		—			2,345,748		—					2,345,748
Postemployment benefit liability - severance		—			74,549		—					74,549
Other long-term liabilities		—			26,992		773,467					800,459
Total Long-Term Liabilities		1,345,640			7,704,132		2,878,360		—			11,928,132
Total Liabilities		1,437,918			22,333,861		19,748,143		—			43,519,922
STOCKHOLDERS' EQUITY
Convertible Preferred Stock: 5,000,000 shares authorized ($100 value):
Series A, 9,715 shares issued and outstanding		798,500			—		—					798,500
Series B, 2,702  shares issued and outstanding		270,160			—		—					270,160
Series C, 16,124 shares issued and outstanding		1,600,467			—		—					1,600,467
Preferred Units UEP Holdings, Inc.: 350,000 units authorized
Series A, 200,000 units issued and outstanding		—			—		—		393,055	(a)		393,055
Series B, 150,000 units issued and outstanding		—			—		—		294,791	(a)		294,791
Preferred Stock Engineered Products Acquisition Limited, 50 shares issued and outstanding		—			—		—		76	(a)		76
Additional Paid In Capital from preferred stock		—			—		—		392,979	(a)		392,979
Common Stock		14,524			552,750		151		(552,901	) (a)
									(419	) (b)		14,105
Additional Paid In Capital from common stock		32,697,407			528,000		—		(528,000	) (a)
									(247,503	) (b)		32,449,904
Retained Earnings		(36,782,722	)		3,354,479		5,631,319		—			(27,796,924	)
Accumulated Other Comprehensive Income		—			1,286,105		695,401		—			1,981,506
Total Stockholders'  Equity		(1,401,664	)		5,721,334		6,326,871		(247,922	)		10,398,619
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	36,254		$	28,055,195	$	26,075,014	$	(247,922	)	$	53,918,541

See notes to unaudited pro forma condensed combined financial statements

3

Invisa, Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2013

	Historical
	Invisa, Inc.			Uniroyal Engineered Products LLC			Engineered Products Acquisition Limited			Pro Forma Adjustments			Pro Forma Combined
								(see Note 5)
NET SALES	$	26,819		$	53,942,233		$	40,797,599					$	94,766,651
COST OF GOODS SOLD		11,311			43,071,833			34,476,900						77,560,044
Gross Profit		15,508			10,870,400			6,320,699			—			17,206,607
OPERATING EXPENSES		307,317			6,396,009			4,821,602			(1,078,957	) (a)		10,445,971
Operating Income (Loss)		(291,809	)		4,474,391			1,499,097			1,078,957			6,760,636
OTHER INCOME (EXPENSE)
Interest and other debt related expense		(111,090	)		(920,021	)		(251,421	)					(1,282,532	)
Gain on bargain purchase		—			—			4,646,046						4,646,046
Other income		45,044			34,073			30,321						109,438
Net Other Income (Expense)		(66,046	)		(885,948	)		4,424,946			—			3,472,952
INCOME (LOSS) BEFORE TAX PROVISION		(357,855	)		3,588,443			5,924,043			1,078,957			10,233,588
TAX PROVISION		—			—			175,491						175,491
NET INCOME (LOSS)		(357,855	)		3,588,443			5,748,552			1,078,957			10,058,097
Preferred stock dividend		—			—			—			(2,825,000	) (b)		(2,825,000	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	(357,855	)	$	3,588,443		$	5,748,552		$	(1,746,043	)	$	7,233,097
EARNINGS (LOSS) PER COMMON SHARE:
Basic	$	(0.03	)										$	0.52
Diluted	$	(0.02	)										$	0.39
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		14,214,398												14,013,275
Diluted		18,971,231												18,770,108

See notes to unaudited pro forma condensed combined financial statements

4

Invisa, Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Six Months Ended June 30, 2014

	Historical
	Invisa, Inc.			Uniroyal Engineered Products LLC			Engineered Products Acquisition Limited			Pro Forma Adjustments			Pro Forma Combined
NET SALES	$	25,716		$	26,240,735		$	23,503,795					$	49,770,246
COST OF GOODS SOLD		19,184			20,611,178			19,801,084						40,431,446
Gross Profit		6,532			5,629,557			3,702,711			—			9,338,800
OPERATING EXPENSES		130,179			3,672,464			3,259,790			(525,047	) (a)		6,537,386
Operating Income (Loss)		(123,647	)		1,957,093			442,921			525,047			2,801,414
OTHER INCOME (EXPENSE)
Interest and other debt related expense		(54,749	)		(511,012	)		(292,549	)					(858,310	)
Gain on bargain purchase					—			—						—
Other income		—			30,053			79,594						109,647
Net Other Expense		(54,749	)		(480,959	)		(212,955	)		—			(748,663	)
INCOME (LOSS) BEFORE TAX PROVISION		(178,396	)		1,476,134			229,966			525,047			2,052,751
TAX PROVISION		—			—			48,728						48,728
NET INCOME (LOSS)		(178,396	)		1,476,134			181,238			525,047			2,004,023
Preferred stock dividend		—			—			—			(1,412,500	) (b)		(1,412,500	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	(178,396	)	$	1,476,134		$	181,238		$	(887,453	)	$	591,523
EARNINGS (LOSS) PER COMMON SHARE:
Basic	$	(0.01	)										$	0.04
Diluted	$	(0.01	)										$	0.03
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		14,524,398												14,163,069
Diluted		19,281,231												18,919,902

See notes to unaudited pro forma condensed combined financial statements

5

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. DESCRIPTION OF TRANSACTION

On November 10th, 2014 Invisa, Inc. (“Invisa” or the “Company”) filed with the Securities and Exchange Commission a Current Report on Form 8-K (the “Initial 8-K”) to report that it acquired Uniroyal Engineered Products, LLC (“Uniroyal”), a U.S. manufacturer of textured coatings, and Engineered Products Acquisition Limited (“EPAL”), the holding company for Wardle Storeys (Group) Limited (“Wardle Storeys”), a European manufacturer of textured coatings and polymer films.

Invisa made the acquisition of Uniroyal through its newly formed subsidiary, UEP Holdings, LLC (“UEPH”), to which it contributed certain of its assets and liabilities as part of the organization of that subsidiary. The aggregate purchase consideration paid for 100% of the outstanding equity of Uniroyal was preferred ownership interests issued by UEPH having an aggregate face value of $35 million. In a separate transaction, Invisa also purchased 100% of the common stock of EPAL for 100 shares of Invisa’s Common Stock and Invisa’s guaranty of outstanding EPAL preferred stock retained by the seller having a liquidation preference of £12,518,240 (approximately $20 million).

2. BASIS OF PRO FORMA PRESENTATION

The following unaudited pro forma condensed combined balance sheet is based on the historical balance sheets of Invisa, Uniroyal and EPAL, giving effect to Invisa’s acquisition of Uniroyal and EPAL as if the transaction had occurred on June 30, 2014. The following unaudited pro forma condensed combined statements of operations for the year ended December 31, 2013 and the six months ended June 30, 2014 are based on the historical statements of operations of Invisa, Uniroyal and EPAL, giving effect Invisa’s acquisition of Uniroyal and EPAL as if the transaction had occurred on January 1, 2013. The historical information is derived from the audited financial statements of Invisa, Uniroyal and EPAL for the year ended December 31, 2013 and the unaudited financial statements for the six months ended June 30, 2014. In the case of EPAL, the historical financial information for the year ended December 31, 2013 was also translated into USD (see Exhibit 99.3). The historical financial information is adjusted in the unaudited pro forma condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) with respect to the condensed combined statements of income, expected to have a continuing impact on the combined results.

As explained in the Initial 8-K Mr. Howard R. Curd beneficially owned all of Invisa’s outstanding shares of Series A preferred stock and Series B preferred stock; a substantial portion of Invisa’s outstanding Series C Preferred; and approximately 6.8 million shares of Invisa common stock. As a result of this beneficial ownership, Mr. Curd controls in excess of 80% of Invisa voting rights in all matters to come before the Invisa shareholders. Mr. Curd also owned all of the issued and outstanding capital stock of EPAL and a majority of the limited liability company interests of Uniroyal and was a controlling person of Uniroyal and Wardle Storeys before the acquisitions. As a result of this common ownership and as required by current accounting pronouncements, the transaction is being treated as a combination between entities under common control and is accounted for in a manner similar to the pooling-of-interest method. The recognized assets and liabilities were transferred at their carrying amounts at the date of the transaction. Further, the companies will be combined retrospectively for prior year comparative information to the extent permitted.

The unaudited pro forma condensed combined financial statements are provided for information purposes only, are based on estimates and assumptions as set forth in the notes to such statements and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of the combined company would have been had the acquisition occurred on the dates assumed. The unaudited pro forma condensed combined financial statements are also not necessarily indicative of the combined results of operations to be expected in any future period.

The unaudited pro forma condensed combined financial information does not reflect any integration activities or cost savings from operating efficiencies, synergies, asset dispositions or other restructurings that could result from the acquisition.

6

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

3. PRO FORMA ADJUSTMENTS TO THE CONDENSED COMBINED BALANCE SHEET

(a) To record the issuance of preferred stock or units to the members of Uniroyal or stockholder of EPAL

(b) To reclassify the Invisa, Inc. stock held by Uniroyal at June 30, 2014.

4. PRO FORMA ADJUSTMENTS TO THE CONDENSED COMBINED STATEMENT OF OPERATIONS

(a) To eliminate the payments by Uniroyal for corporate management fees to a company owned by Mr. Curd. This management agreement was assumed by Invisa and accordingly the fees paid by Uniroyal and received by Invisa subsequent to the transaction will be eliminated in consolidation.

(b) To record the assumed preference dividends paid for the period

5. OTHER INFORMATION

(a) EPAL acquired all the ordinary shares of Gweco 478 Limited, the holding company for Wardle Storeys (Group), on March 4, 2013. Accordingly, these amounts only include the operating results of Wardle Storeys (Group) for the ten months ended December 2013.

(b) The Series A and Series B preferred units issued by UEPH for the acquisition of Uniroyal have an issue price $100 per unit or a total of $20,000,000 and $10,000,000, respectively. The Series A preferred units are entitled to a preferred return of an amount per annum equal to five percent (5.00%) of the issue price of such Series A preferred unit. The Series B preferred units are entitled to a preferred return of an amount per annum equal to five and one half percent (5.50%) of the issue price of such Series B preferred unit, increasing by one half percent (0.50%) on the first anniversary of the effective date and by an additional one half percent (0.50%) on each successive anniversary of the effective date thereafter, up to a maximum of eight percent (8.00%) on the fifth anniversary of the effective date.

(c)	As part of the transaction, the 50 shares of the EPAL common stock held by Howard R. Curd were converted and reclassified as preferred shares. These preferred shares have a liquidation preference of £12,518,240 or approximately $20,000,000 in the aggregate. These preferred shares are entitled to a fixed cumulative preferential dividends of £625,912 per annum payable quarterly or approximately $1,000,000.
(d)	The tax provision for EPAL includes its tax provision based on its effective UK tax rates. The pro forma statements of operations do not show a historical tax provision for Uniroyal since it was an LLC. lnvisa did not have a tax provision since it had net losses for the periods reported and had accumulated net operating losses of approximately $17.7 million as of December 31, 2013. No tax provision is shown in the pro forma as the Company continues to analyze the tax attributes of the combined companies.
(e)	As explained in the footnotes to the EPAL unaudited financial statements included in Exhibit 99.5, Wardle Storeys (Group) implemented a staff reduction initiative and recorded a one-time charge in the amount of $459,809 to the operating results for June 29, 2014 for redundancy and other associated costs as statutorily required in the United Kingdom. The annualized compensation and other payroll costs associated with these employees were approximately $750,000.

7