MERGER CONSIDERATION (Tables)

6 Months Ended

Jun. 30, 2016

MERGER CONSIDERATION

Schedule of total consideration allocated to the assets based on their estimated fair values as of the date of the completion of the acquisition

The following is the total preliminary estimated purchase price allocation based on information available as of June 30, 2016 (in thousands, except share and per share data):

Assets acquired and liabilities assumed:
Cash and cash equivalents	$	2,092
Factored accounts receivable		6,719
Accounts receivable		336
Inventories		11,378
Prepaid expenses and other current assets		754
Property and equipment		356
Other assets		352
Accounts payable and accrued expenses		(15,417)
Customer cash advances		(893)
Line of credit		(4,683)
Deferred income tax liability		(9,453)
Other liabilities		(81)
Buy-out payable		(1,668)
Intangible assets acquired:
Trade name		32,300
Customer relationships		14,100
Total		36,192
Excess purchase price over net assets acquired		4,238
Total net assets acquired	$	40,430
Total purchase price:
Cash paid to existing holders of convertible notes	$	8,630
Fair value of Modified Convertible Notes transferred to the existing holders of convertible notes		11,800
Equity consideration to the Company's stockholders and existing holders of convertible notes
(3,508,747 common shares at $5.70)		20,000
Total Purchase Price	$	40,430

Schedule of unaudited pro forma results

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Net sales	$	32,373	$	32,663	$	69,714	$	71,531
Net loss	$	(1,325)	$	(2,451)	$	(2,282)	$	(4,090)
Weighted average common shares outstanding		12,380		12,380		12,380		12,380
Loss per common share - basic and diluted	$	(0.11)	$	(0.20)	$	(0.18)	$	(0.33)