SUBSEQUENT EVENT

9 Months Ended

Sep. 30, 2019

SUBSEQUENT EVENT

SUBSEQUENT EVENT

NOTE 10 – SUBSEQUENT EVENT

Effective October 25, 2019, the Company, through a wholly owned subsidiary of Hy-Tech, acquired substantially all the assets comprising the businesses of Blaz-Man Gear, Inc. and Gear Products & Manufacturing, Inc., each an Illinois-based corporation that manufactures and distributes custom gears. The Company believes that the acquisition of these two businesses will provide added expertise and market exposure into the customized/specialty gears market. The purchase price consisted of an aggregate of approximately $3.5 million in cash, which was funded by Revolver borrowings and the assumption of certain payables and contractual obligations. In addition, the sellers may be entitled to additional contingent consideration based upon sale of certain categories of acquired inventory during the two -year period following the closing date. The Company is unable to present pro-forma information as required per ASC 805-10-50, due to among other things, the limited time available to determine accurate purchase price allocation, which is necessary in order to compute the fair value of intangible assets and amortization thereof.

In connection with the acquisition, the Company entered into Consent, Joinder and Amendment No. 8 to Second Amended and Restated Loan and Security Agreement (“Amendment No. 8”), with Capital One, National Association. Amendment No. 8, among other things, provided consent to the acquisitions. The Amendment also modified the Credit Agreement to suspend the requirement pertaining to compliance with the covenant relating to a Fixed Charge Coverage Ratio, unless a Default or Event of Default occurs, or availability is less than 17.5% of the aggregate amount of the Revolver Commitments, as defined, at any time. Further, it granted permission to the Company to continue its issuance of dividends and allow the Company to repurchase shares of its own common stock, provided that no Default or Event of Default has occurred, subject to Revolver availability limitations, among other things.