ACQUISITION

3 Months Ended

Mar. 31, 2022

ACQUISITION

ACQUISITION

NOTE 2 - ACQUISITION

Effective January 15, 2022, through a wholly-owned subsidiary of Hy-Tech, the Company acquired (the "Acquisition") substantially all the non-real estate assets comprising the business of Jackson Gear Company ("JGC"), a Pennsylvania-based corporation that manufactures and distributes custom gears and power transmission gear products. The purchase price consisted of an aggregate of approximately $2.3 million in cash, which was funded by Revolver (as defined in Note 8) borrowings, and the assumption of certain payables. The Company has incorporated this business into its PTG business and believes that the Acquisition will provide added market exposure into the market for larger gears.

In connection with the Acquisition, the Company entered into the Consent, Joinder and Amendment No. 9 ("Amendment No. 9") to the Second Amended and Restated Loan and Security Agreement (the "Credit Agreement"), with Capital One, National Association. Amendment No. 9, among other things, provided consent to the Acquisition.

	Total
Total purchase price	$	2,300,000

The following table presents preliminary purchase price allocation:

Accounts receivable	$	490,000
Inventories		369,000
Machinery and equipment		823,000
Goodwill		833,000
Liabilities assumed		(215,000)
Total estimated purchase price	$	2,300,000

The excess of the total purchase price over the fair value of the net assets acquired is currently being presented as goodwill. The Company has not yet determined the fair value of the identifiable intangible assets. When finalized, any goodwill will be amortized over 15 years for tax purposes, but not deductible for financial reporting purposes. Any identifiable intangible assets subject to amortization will be amortized over 15 years for tax purposes.

The following unaudited pro-forma combined financial information gives effect to the Acquisition as if the transaction was consummated on January 1, 2021. This unaudited pro-forma financial information is presented for information purposes only and is not intended to present actual results that would have been attained had the Acquisition been completed as of January 1, 2021 (the beginning of the earliest period presented) or to project potential operating results as of any future date or for any future periods.

	For the
	Three-Month
	Period Ended
	March 31, 2021
Revenue	$	14,455,000
Net loss	$	(363,000)
Loss per share – basic and diluted	$	(0.11)