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Acquisition of Assets
3 Months Ended
Sep. 30, 2011
Acquisition of Assets  
Acquisition of Assets

Note 11.  Acquisition of Assets

 

HDI Plastics, Inc.

 

                On September 22, 2011, the Company’s HDI Plastics, Inc. subsidiary entered into a five-year lease agreement with Flemtex Properties Corp., a Delaware corporation, for space totaling 104,291 square feet at Suite 100, 5330 Fleming Court, Austin, Texas (the “Lease”). The space includes 89,452 square feet of warehouse/manufacturing space and 14,839 square feet of office space. Under the terms of the Lease, HDIP shall pay rent of approximately $26,000 per month. The rental payments over the 64 months of the initial term of the Lease total $1,626,940. The lease payments are guaranteed by HDI.

 

                On September 26, 2011, HDI entered into a definitive Tri-Party Sales Agreement (“Agreement”) providing for the purchase of selected manufacturing assets from Compass Bank (the “Bank”), and Cycled Plastics, LTD, a limited partnership (“CP”). In connection with the purchase of the assets, HDI agreed to pay the Bank a cash payment of $250,000. Additionally, HDI agreed to pay $25,000 at closing to CP and to make future payments of $130,000 to CP for equipment. The Company paid a total of $405,000 for selected assets. The agreement was finalized in October 2011. In September 2011, the Company paid CP approximately $29,000 for initial inventory. The $250,000 was paid to Compass Bank on October 7, 2011.