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Note 14 - Subsequent Events
9 Months Ended
Sep. 30, 2021
Notes to Financial Statements  
Subsequent Events [Text Block]

Note 14 - Subsequent Events

 

On July 30, 2021, the Company entered into a preliminary agreement (the “Agreement”) whereby it agreed to the redemption of all of its equity interests in Flexo Universal S. de R.L. de C.V., a Mexican corporation (“Flexo”), in a transaction whereby Kingman Distributions, S.A. DE C.V, a Mexican corporation (the “Buyer”), will become the majority owner of Flexo (the “Transaction”).

 

In connection with the Transaction, Flexo will purchase and redeem all of the Company’s equity interests in Flexo in return for a purchase price of Five Hundred Thousand Dollars ($500,000), of which One Hundred Thousand Dollars ($100,000) is to be paid at the closing of the Transaction, and the remainder is to be paid in installments over twelve months following the closing date (the “Installment Obligations”). The Installment Obligations are to be secured by a pledge of the assets of Flexo, as well as by guaranties provided by the Buyer and Pablo Gortazar, an individual with an ownership interest in Flexo, pursuant to a Guaranty and Security Agreement to be entered into among the Company, the Buyer, Flexo and Mr. Gortazar at the closing.

 

The closing was conditioned on, among other things, (i) the Company being released from all obligations in connection with its guaranty of the real property lease for Flexo’s operating location in Guadalajara, Mexico, and (ii) the Company repaying its obligations in full to PNC pursuant to the terms of the Revolving Credit, Term Loan and Security Agreement, dated as of December 14, 2017, as amended between the Company and PNC. In October, the last of these conditions was satisfied and the Transaction closed on October 28, 2021. As the conditions for the closing of the sale were not customary and probable as of September 30, 2021, Flexo was not considered held for sale until the conditions were resolved. As the conditions were met subsequent to September 30, 2021, in accordance with ASC 360-10-45-13, Flexo was not treated as Held for Sale (or Discontinued Operations) as of and for the periods ending September 30, 2021.