10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 4, 2015

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             .

Commission file number: 001-37480

UNIQUE FABRICATING, INC.

(Exact name of registrant as specified in its Charter)

Delaware	001-37480	46-1846791
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)

Unique Fabricating, Inc.

800 Standard Parkway

Auburn Hills, MI 48326

(248)-853-2333

(Address including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports; and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes o No x

As of November 16, 2015 the registrant had 9,591,861 shares of common stock outstanding.

TABLE OF CONTENTS

Item 1. Financial Statements	1
Consolidated Balance Sheets as of October 4, 2015 (unaudited) and as of January 4, 2015	1
Consolidated Statements of Operations for the fourteen and thirty-nine week periods and thirteen and thirty-nine week periods ended October 4, 2015 (unaudited) and September 28, 2014 (unaudited)	2
Consolidated Statements of Stockholders' Equity for the thirty-nine week period ended October 4, 2015 (unaudited) and the thirty-nine week period ended September 28, 2014 (unaudited)	3
Consolidated Statements of Cash Flow for the thirty-nine week period ended October 4, 2015 and thirty-nine week period ended September 28, 2014 (unaudited)	4
Notes to Consolidated Financial Statements (unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk	37
Item 4. Controls and Procedures	38
Part II Other Information	39
Signatures	41

i

ITEM 1. FINANCIAL STATEMENTS    

UNIQUE FABRICATING, INC.

Consolidated Balance Sheets

	(Unaudited)
	October 4, 2015		January 4, 2015
Assets
Current Assets
Cash and cash equivalents	$	717,721	$	756,044
Accounts receivable – net	23,941,900		18,747,468
Inventory – net	14,963,675		10,488,051
Prepaid expenses and other current assets:
Prepaid expenses and other	2,005,023		1,613,327
Deferred tax asset	996,188		1,288,704
Total current assets	42,624,507		32,893,594
Property, Plant, and Equipment – Net	20,646,791		17,920,073
Goodwill	19,213,958		15,183,417
Intangible Assets	20,881,353		16,748,466
Other assets
Investments – at cost	1,054,120		1,054,120
Deposits and other assets	116,318		61,094
Debt issuance costs	216,559		289,942
Total assets	$	104,753,606	$	84,150,706
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	13,662,037	$	10,177,820
Current maturities of long-term debt	2,393,830		2,018,133
Income taxes payable	490,704		90,169
Accrued compensation	2,462,876		2,791,260
Other accrued liabilities	1,289,624		1,498,094
Total current liabilities	20,299,071		16,575,476
Long-term debt – net of current portion	14,508,613		29,000,612
Line of credit	15,668,213		8,952,865
Other long-term liabilities
Deferred tax liability	5,775,228		6,497,330
Other liabilities	88,032		86,511
Total liabilities	56,339,157		61,112,794
Redeemable Common Stock – 0 and 2,415,399 shares issued and outstanding with a redemption value of $0 and $11,362,481 at October 4, 2015 and January 4, 2015, respectively	—		6,445,977
Stockholders’ Equity
Common stock, $0.001 par value – 15,000,000 shares authorized and 9,576,360 and 4,324,599 issued and outstanding at October 4, 2015 and January 4, 2015, respectively	9,577		4,325
Additional paid-in-capital	44,319,959		13,723,456
Retained earnings	4,084,913		2,864,154
Total stockholders’ equity	48,414,449		16,591,935
Total liabilities and stockholders’ equity	$	104,753,606	$	84,150,706

See Notes to Consolidated Financial Statements.

1

UNIQUE FABRICATING, INC.

Consolidated Statements of Operations (Unaudited)

	Fourteen Weeks Ended October 4, 2015			Thirteen Weeks Ended September 28, 2014			Thirty-Nine Weeks Ended October 4, 2015			Thirty-Nine Weeks Ended September 28, 2014
Net Sales	$	39,579,502		$	31,028,026		$	107,682,183		$	93,151,183
Cost of Sales	30,280,834			23,803,346			82,031,708			70,247,457
Gross Profit	9,298,668			7,224,680			25,650,475			22,903,726
Selling, General, and Administrative Expenses	6,934,785			5,053,088			17,267,099			15,754,868
Operating Income	2,363,883			2,171,592			8,383,376			7,148,858
Non-operating Income (Expense)
Investment income	—			6			230			22
Other income	4,468			16,962			18,789			44,775
Interest expense	(724,414		)	(874,227		)	(2,437,103		)	(2,761,845		)
Total non-operating expense	(719,946		)	(857,259		)	(2,418,084		)	(2,717,048		)
Income – Before income taxes	1,643,937			1,314,333			5,965,292			4,431,810
Income Tax Expense	504,846			467,664			1,941,564			1,423,873
Net Income	$	1,139,091		$	846,669		$	4,023,728		$	3,007,937
Net Income per share
Basic	$	0.12		$	0.13		$	0.52		$	0.45
Diluted	$	0.12		$	0.13		$	0.51		$	0.44

See Notes to Consolidated Financial Statements.

2

UNIQUE FABRICATING, INC.

Consolidated Statements of Stockholders’ Equity — (Unaudited)

	Number of Shares	Common Stock		Additional Paid-In Capital		Retained Earnings			Total
Balance - December 29, 2013	4,324,599	$	4,325	$	13,689,125	$	252,154		$	13,945,604
Net income	—	—		—		3,007,937			3,007,937
Stock option expense	—	—		27,439		—			27,439
Reduction for accretion on redeemable stock	—	—		—		$	(848,223	)	$	(848,223	)
Balance - September 28, 2014	4,324,599	$	4,325	$	13,716,564	$	2,411,868		$	16,132,757

	Number of Shares	Common Stock		Additional Paid-In Capital			Retained Earnings			Total
Balance - January 4, 2015	4,324,599	$	4,325	$	13,723,456		$	2,864,154		$	16,591,935
Net income	—	—		—			4,023,728			4,023,728
Stock option expense	—	—		160,764			—			160,764
Reduction for accretion on redeemable stock	—	—		—			(1,364,031		)	(1,364,031		)
Reclassification of redeemable common stock to common stock and additional paid-in capital	2,415,399	2,415		7,807,592			—			7,810,007
Exercise of warrants and options for common stock	133,862	134		396,936			—			397,070
Issuance of common stock pursuant to an initial public offering	2,702,500	2,703		25,671,047			—			25,673,750
Common stock initial public offering issuance costs and underwriter fees	—	—		(3,439,836		)	—			(3,439,836		)
Cash dividends paid	—	—		—			(1,438,938		)	(1,438,938		)
Balance - October 4, 2015	9,576,360	$	9,577	$	44,319,959		$	4,084,913		$	48,414,449

See Notes to Consolidated Financial Statements.

3

UNIQUE FABRICATING, INC. 

Consolidated Statements of Cash Flows (Unaudited)

	Thirty-Nine Weeks Ended October 4, 2015			Thirty-Nine Weeks Ended September 28, 2014
Cash Flows from Operating Activities
Net income	$	4,023,728		$	3,007,937
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,762,624			2,600,654
Amortization of debt issuance costs	216,930			229,164
Loss on sale of assets	39,712			27,326
Loss on extinguishment of debt	386,552			—
Bad debt expense, net of recoveries	32,893			239,487
Loss on derivative instrument	1,520			66,768
Stock option expense	160,764			27,439
Excess tax benefits from stock based compensation	(71,473		)	—
Deferred income taxes	(428,118		)	(847,047		)
Changes in operating assets and liabilities that provided (used) cash:
Accounts receivable	(4,226,320		)	(3,585,710		)
Inventory	(3,359,815		)	(1,078,806		)
Prepaid expenses and other assets	(444,421		)	494,416
Accounts payable	2,333,067			2,824,232
Accrued and other liabilities	440,365			844,528
Net cash provided by operating activities	1,868,008			4,850,388
Cash Flows from Investing Activities
Purchases of property and equipment	(2,988,278		)	(1,616,652		)
Proceeds from sale of property and equipment	51,347			11,414
Acquisition of Chardan Corporation	—			(2,316,911		)
Working capital adjustment from acquisition of PTI	—			173,740
Acquisition of Great Lakes Foam Technologies, Inc.	(11,819,991		)	—
Net cash used in investing activities	(14,756,922		)	(3,748,409		)
Cash Flows from Financing Activities
Net change in bank overdraft	273,152			136,018
Payments on debt and in-kind interest	(14,646,409		)	(1,018,208		)
(Payments on) proceeds from revolving credit facilities	6,715,347			(164,371		)
Debt issuance costs	—			(13,400		)
Expenses of in process equity offering	—			(360,737		)
Post acquisition payments for Unique Fabricating	(755,018		)	(168,633		)
Proceeds from the issuance of common stock pursuant to initial public offering	25,673,750			—
Payment of initial public offering costs	(3,439,836		)	—
Proceeds from exercise of stock options and warrants	397,070			—
Excess tax benefits from stock based compensation	71,473			—
Distribution of cash dividends	(1,438,938		)	—
Net cash provided by (used in) financing activities	12,850,591			(1,589,331		)
Net Decrease in Cash and Cash Equivalents	(38,323		)	(487,352		)
Cash and Cash Equivalents – Beginning of period	756,044			891,826
Cash and Cash Equivalents – End of period	$	717,721		$	404,474

4

Supplemental Disclosure of Cash Flow Information –  Cash paid for
Interest	$	2,260,430	$	1,461,479
Income taxes	$	1,247,143	$	1,025,947
Supplemental Disclosure of Cash Flow Information –  Non cash investing and financing activities for
Note payable incurred for Chardan acquisition	$	—	$	500,000
Accretion on redeemable common stock	$	1,364,031	$	848,223
Accounts payable on working capital for Great Lakes Foam Technologies, Inc. acquisition	$	127,401	$	—

See Notes to Consolidated Financial Statements.

5

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

Note 1 — Nature of Business and Significant Accounting Policies

Nature of Business — UFI Acquisition, Inc. (UFI or Successor), a Delaware corporation, was formed on January 14, 2013, for the purpose of acquiring Unique Fabricating, Inc. and its subsidiaries (Unique Fabricating or Predecessor) (collectively, the “Company” or “Unique”) on March 18, 2013. The Company operates as one operating and reporting segment to fabricate and broker foam and rubber products, which are primarily sold to original equipment manufacturers (OEMs) and tiered suppliers in the automotive, appliance, water heater and heating, ventilation and air conditioning (HVAC) industries. In September 2014, UFI changed its name to Unique Fabricating, Inc. which is now the parent company of the consolidated group. As a result of the name change, the subsidiary previously named Unique Fabricating, Inc. became Unique Fabricating NA, Inc.

Basis of Presentation — As a result of UFI’s acquisition of Unique Fabricating, purchase accounting and a new basis of accounting was applied beginning on March 18, 2013.

All significant intercompany transactions have been eliminated in consolidation.

On November 18, 2014, the Company amended its certificate of incorporation to increase its authorized common shares to 15,000,000 with a par value $0.001 per share. The amendment of the certificate of incorporation also effected an internal recapitalization pursuant to which the Company effected a 3-for-1 stock split on its outstanding common stock. As a result of the stock split, the Company’s stock options and warrants were affected accordingly based on the provisions of the stock option plans and warrant agreements.

Accordingly, all common share, options, warrants and per share amounts in these consolidated financial statements and the notes thereto have been adjusted to reflect the 3-for-1 stock split as if it had occurred at the beginning of the initial period presented.

Initial Public Offering—On July 7, 2015, the Company completed its initial public offering of 2,702,500 shares of common stock at a price to the public of $9.50 per share (the "IPO"), including 352,500 shares subject to an over-allotment option granted to the underwriters. After underwriting discounts, commissions, and approximate fees and expenses of the offering, as set forth in our registration statement for the IPO on Form S-1, the Company received net IPO proceeds of approximately $22.2 million. Of these proceeds the Company used a portion to pay all of the $13.1 million principal amount of our 16% senior subordinated note, together with accrued interest through the date of payment. The Company used the remaining proceeds to temporarily reduce borrowings under the revolver portion of its senior secured credit facility. The Company also issued to the underwriters warrants to purchase up to 141,000 shares of common stock, as additional compensation in the IPO. The warrants are exercisable at a per share exercise price equal to 125% of the initial public offering price of $9.50 per share, and can be exercised commencing 1 year from the date of the IPO, until the date 5 years from the date of the IPO. The warrants have an aggregate grant date fair value of $336,300 and have been classified as equity and incremental direct costs associated with the IPO. Accordingly, the warrants do not impact our consolidated financial statements.

Fiscal Years — The Company’s quarterly periods end on the Sunday closest to the end of the quarterly period. The 14 and 39-week periods ended on October 4 during 2015 and the 13 and 39-week periods ended on September 28 during 2014. Fiscal year 2014 ended on Sunday January 4, 2015.

Cash and Cash Equivalents — The Company considers all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents.

Accounts Receivable — Accounts receivable are stated at the invoiced amount and do not bear interest. The allowance for doubtful accounts is management’s best estimate of the amount of probable credit losses in the existing accounts receivable. Management determines the allowance based on historical write off experience and an understanding of individual customer payment history and financial condition. Management reviews the allowance for doubtful accounts at regular intervals. Account balances are charged off against the allowance when management determines it is probable the receivable will not be recovered. The allowance for doubtful accounts was $809,008 and $704,713 at October 4, 2015 and January 4, 2015, respectively.

Inventory — Inventory is stated at the lower of cost or market, with cost determined on the first in, first out method (FIFO). Inventory acquired as part of a business combination is recorded at its estimated fair value at the time of the business

6

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

combination. The Company periodically evaluates inventory for obsolescence, excess quantities, slow moving goods and other impairments of value and establishes reserves for any identified impairments.

Valuation of Long-Lived Assets — The carrying value of long-lived assets held for use is periodically evaluated when events or circumstances warrant such a review. The carrying value of a long-lived asset held for use is considered impaired when the anticipated separately identifiable undiscounted cash flows from the asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset.

Property, Plant, and Equipment — Property, plant, and equipment purchases are recorded at cost. Property, plant, and equipment acquired as part of a business combination are recorded at estimated fair value at the time of the business combination. Depreciation is calculated principally using the straight line method over the estimated useful life of each asset. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the period of the related leases. Upon retirement or disposal, the initial cost or valuation and accumulated depreciation are removed from the accounts, and any gain or loss is included in net income. Repair and maintenance costs are expensed as incurred.

Intangible Assets — The Company does not hold any intangible assets with indefinite lives. Acquired intangible assets subject to amortization are amortized on a straight line basis, which approximates the pattern in which the economic benefit of the respective intangible is realized, over their respective estimated useful lives. Identifiable intangible assets recognized as part of a business combination are recorded at their estimated fair value at the time of the business combination. Amortizable intangible assets are reviewed for impairment whenever events or circumstances indicate that the related carrying amount may be impaired. The remaining useful lives of intangible assets are reviewed annually to determine whether events and circumstances warrant a revision to the remaining period of amortization. The Company determined that no impairment indicators were present and all originally assigned useful lives remained appropriate during the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, respectively.

Goodwill — Goodwill represents the excess of the acquisition cost of consideration transferred over the fair value of the identifiable net assets acquired and liabilities assumed from business combinations at the date of acquisition. Goodwill is not amortized, but rather is assessed at least on an annual basis for impairment. If it is determined that it is more likely than not that the fair value is greater than the carrying value then a qualitative assessment may be used for the annual impairment test. Otherwise, a two-step process is used. The first step requires estimating the fair value of each reporting unit compared to its carrying value. The Company has determined that the only reporting unit is the Company as a whole. If the carrying value exceeds the estimated fair value, a second step is performed in order to determine the implied fair value of the goodwill. If the carrying value of the goodwill exceeds its implied fair value then goodwill is deemed impaired and is written down to its implied fair value.

There were no impairment charges recognized during the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, respectively.

Debt Issuance Costs — Debt issuance costs represent legal, consulting, and other financial costs associated with debt financing and are reported as assets upon the original issuance of the related debt. Amounts paid to or on behalf of lenders are presented as debt discount, as a reduction of the noted debt instrument. Debt issuance costs on term debt are amortized using the effective interest method while those related to revolving debt are amortized using a straight line basis over the term of the related debt.

At October 4, 2015 and January 4, 2015, debt issuance costs were $216,559 and $289,942, respectively, while amounts paid to or on behalf of lenders presented as debt discounts were $126,690 and $656,789, respectively. The subordinated note was entirely paid off with the IPO proceeds. On the date paid off, $386,552 of debt discounts remained to be amortized. The Company concluded that the debt discounts qualified for extinguishment accounting and were recognized as a loss on extinguishment immediately. The extinguishment was recognized as part of interest expense in the consolidated statements of operations. Amortization expense has been recognized as a component of interest expense which includes both debt issuance costs and debt discounts in the amounts of $61,704 and $216,930 for the 14 and 39 weeks ended October 4, 2015 and $78,927 and $229,164 for the 13 and 39 weeks ended September 28, 2014, respectively.

Investments — Investments in entities in which the Company has less than a 20 percent interest or is not able to exercise significant influence are carried at cost. Cost basis investments acquired as part of a business combination are recorded at

7

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

estimated fair value at the time of the business combination. Dividends received are included in income, except for those dividends received in excess of the Company’s proportionate share of accumulated earnings, which are applied as a reduction of the cost of the investment. Impairment losses due to a decline in the value of the investment that is other than temporary are recognized when incurred. No dividend income or impairment loss was recognized for the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, respectively.

Accounts Payable — Under the Company’s cash management system, checks issued but not yet presented to the Company’s bank frequently result in overdraft balances for accounting purposes and are classified as accounts payable on the consolidated balance sheet. Accounts payable included $2,066,423 and $1,811,757 of checks issued in excess of available cash balances at October 4, 2015 and January 4, 2015, respectively.

Stock based Compensation — The Company accounts for its stock based compensation using the fair value of the award estimated at the grant date of the award. The Company estimates the fair value of awards, consisting of stock options, using the Black Scholes option pricing model. Compensation expense is recognized in earnings using the straight line method over the vesting period, which represents the requisite service period.

Revenue Recognition — Revenue is recognized by the Company upon shipment to customers when the customer takes ownership and assumes the risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists, and the sale price is fixed and determinable. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

Shipping and Handling — Shipping and handling costs are included in costs of sales as they are incurred.

Income Taxes — A current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the period. Deferred tax liabilities or assets are recognized for the estimated future tax effects of temporary differences between financial reporting and tax accounting measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts. Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be realized. When appropriate, a valuation allowance is recorded against deferred tax assets to reserve for future tax benefits that may not be realized.

The Company recognizes the benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon settlement with the relevant tax authority. The Company assesses all tax positions for which the statute of limitations remain open. The Company had no unrecognized tax benefits as of October 4, 2015 and January 4, 2015. The Company files income tax returns in the United States and Mexico as well as various state and local jurisdictions. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 2011 in the United States and before 2007 in Mexico. The Company recognizes any penalties and interest when necessary as income tax expense. There were no penalties or interest recorded during the 14 and 39 and 13 and 39 weeks ended October 4, 2015 and September 28, 2014, respectively.

Foreign Currency Adjustments — The Company’s functional currency for all operations worldwide is the United States dollar. Nonmonetary assets and liabilities of foreign operations are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of each reporting period. Income statement accounts are translated at average exchange rates for the year. Gains and losses from translation of foreign currency financial statements into United States dollars are classified in operating income in the consolidated statements of operations.

Concentration Risks — The Company is exposed to various significant concentration risks as follows:

Customer and Credit — During the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, the Company’s sales were derived from customers principally engaged in the North American automotive industry. Company sales directly and indirectly to General Motors Company (GM), Chrysler Group, LLC (Chrysler), and Ford Motor Company (Ford) as a percentage of total net sales were: 15, 15, and 15 percent, respectively, during the 13 weeks ended October 4, 2015; 15, 16, and 15 percent, respectively, during the 39 weeks ended October 4, 2015; 16, 19, and 15 percent, respectively, during the 13 weeks ended September 28, 2014; and 18, 18, and 14 percent, respectively, during the 39 weeks

8

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

ended September 28, 2014. Company sales and accounts receivable are primarily directly to Tier 1 suppliers. No Tier 1 suppliers represented more than 10 percent of direct Company sales for any period noted above. No suppliers accounted for more than 10 percent of direct accounts receivable as of October 4, 2015 or January 4, 2015.

Labor Markets — At October 4, 2015, of the Company’s hourly plant employees working in the United States manufacturing facilities, 31 percent were covered under a collective bargaining agreement which expires in August 2016 while another 5 percent were covered under a separate agreement that expires in January 2017.

Foreign Currency Exchange — The expression of assets and liabilities in a currency other than the functional currency gives rise to exchange gains and losses when such assets and obligations are paid in another currency. Foreign currency exchange rate adjustments (i.e., differences between amounts recorded and actual amounts owed or paid) are reported in the consolidated statements of operations as the foreign currency fluctuations occur. Foreign currency exchange rate adjustments are reported in the consolidated statements of cash flows using the exchange rates in effect at the time of the cash flows. At October 4, 2015, the Company’s exposure to assets and liabilities denominated in another currency was not significant. To the extent there is a fluctuation in the exchange rates, the amount of local currency to be paid or received to satisfy foreign currency obligations in 2015 may increase or decrease.

International Operations — The Company manufactures and sells products outside of the United States primarily in Mexico. Foreign operations are subject to various political, economic and other risks and uncertainties inherent in foreign countries. Among other risks, the Company’s operations are subject to the risks of: restrictions on transfers of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; political conditions; and governmental regulations. During the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, 12, 12, 10, and 10 percent, respectively, of the Company’s production occurred in Mexico. Sales derived from customers located in Mexico, Canada, and other foreign countries were 13, 4, and 1 percent, respectively during the 14 weeks ended October 4, 2015, 13, 4, and 1 percent, respectively during the 39 weeks ended October 4, 2015, 14, 5, and 1 percent, respectively, during the 13 weeks ended September 28, 2014, and 13, 5, and 1 percent, respectively, during the 39 weeks ended September 28, 2014, of the Company’s total sales.

Derivative financial instruments — All derivative instruments are required to be reported on the consolidated balance sheets at fair value unless the transactions qualify and are designated as normal purchases or sales. Changes in fair value are reported currently through earnings unless they meet hedge accounting criteria. See Note 7 for further information regarding the Company's derivative instrument makeup.

Use of Estimates — The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (the “ASU”). Currently, such costs are required to be presented as a non current asset in an entity's balance sheet and amortized into interest expense over the term of the related debt instrument. The changes implemented by the ASU require that debt issuance costs be presented in the entity's balance sheet as a direct deduction from the carrying value of the related debt liability. The amortization of debt issuance costs remains unchanged per the ASU. The ASU allows for early adoption, however, management is currently evaluating the potential impact of these changes in the consolidated financial statements of the Company.

We do not expect that any other recently issued accounting pronouncements will have a material impact on our consolidated financial statements.

Note 2 — Business Combinations

2014

9

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

On February 6, 2014, the Company, through a newly created subsidiary, Unique-Chardan, Inc., acquired substantially all of the assets of Chardan, Corp. (“Chardan”) for total consideration of $2,816,911, after all adjustments described below. The consideration was in the form of $2,316,911 of cash and a $500,000 note payable to the former owner. The note is due in a lump sum on February 6, 2019, with interest payable monthly at an annual rate of six percent and is subordinated to both the senior credit facility and the subordinated debt. The purchase agreement included a potential purchase price adjustment provision based on the actual working capital acquired on the day of closing as compared to what was originally estimated at closing. During June 2014, the Company paid Chardan $116,911 for the working capital adjustment. This acquisition was financed through existing debt facilities without the need for further revisions to any debt or equity agreements. The Company incurred costs of $236,537 related to the acquisition of Chardan. Sales to the Company represented a significant majority of Chardan’s revenue prior to the acquisition so the acquisition allows the Company to reduce its costs through supply chain integration as well as strengthening the Company's thermo forming capabilities.

In connection with the business combination, Chardan terminated the lease it had with an affiliated entity for its operating facility and the Company entered into a new lease for the same facility. The terms of the Company’s lease provide for monthly rental payments of $11,000 for five years beginning on February 6, 2014.

The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed.

Accounts receivable	$	585,914
Inventory	250,472
Deferred tax assets	34,350
Other current assets	1,597
Property, plant, and equipment	417,305
Identifiable intangible assets	965,478
Accounts payable and accrued liabilities	(146,676		)
Deferred tax liabilities	(90,811		)
Total identifiable net assets	2,017,629
Goodwill	799,282
Total	$	2,816,911

The goodwill arising from the acquisition consists largely of the Chardan’s reputation, trained employees, and other unique features that cannot be associated with a specific identifiable asset. Of the total amount of goodwill recognized, $866,647 is expected to be deductible for tax purposes.

2015

On August 31, 2015, the Company, through a newly created subsidiary, Unique Molded Foam Technologies, Inc., acquired substantially all of the assets of Great Lakes Foam Technologies, Inc. (“Great Lakes”) for total cash consideration of $11,947,392, after all adjustments described below. The purchase agreement included a potential purchase price adjustment provision based on the actual working capital acquired on the day of closing as compared to what was originally estimated at closing. On the date of closing, the Company paid a total purchase price of $12,000,000 less the estimated working capital adjustment of $180,009 owed to the Company by Great Lakes. During November 2015, the Company paid Great Lakes $127,401 for the actual working capital adjustment true-up once the actual working capital was determined. This acquisition was financed through the Company's revolving line of credit without the need for further revisions to any debt or equity agreements. The Company incurred costs of $415,849 related to the acquisition of Great Lakes. The acquisition allows the Company to strengthen its existing product offerings and potentially enable it to access new customers and increase sales to certain of its existing customers.

In connection with the business combination, Great Lakes terminated the lease it had with an affiliated entity for its operating facility and the Company entered into a new lease for the same facility. The terms of the Company's lease provide for monthly rental payments of $7,500 for five years beginning on August 31, 2015.

The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed.

10

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

Accounts receivable	$	1,001,005
Inventory	1,115,809
Deferred tax assets	1,468
Other current assets	2,500
Property, plant, and equipment	810,001
Identifiable intangible assets	5,915,000
Accounts payable and accrued liabilities	(928,933		)
Total identifiable net assets	7,916,850
Goodwill	4,030,542
Total	$	11,947,392

The goodwill arising from the acquisition consists largely of Great Lakes reputation, trained employees, and other unique features that cannot be associated with a specific identifiable asset. Of the total amount of goodwill recognized, $4,347,457 is expected to be deductible for tax purposes. The Company also recognized intangible assets as part of the acquisition which consisted of customer contracts and non-compete agreements. For further detail of the Company's intangibles please refer to Note 5.

Great Lakes sales included in the accompanying consolidated statements of operations for both the 14 and 39 weeks ended October 4, 2015, totaled $924,926 from the date of acquisition. Great Lakes earnings included in the accompanying statement of operations for both the 14 and 39 weeks ended October 4, 2015, totaled $10,784. For both the 14 and 39 weeks ended October 4, 2015$12,308 in revenue was derived from intercompany sales to the Company which were eliminated in consolidation.

The consolidated operating results for the 14 and 39 weeks ended October 4, 2015 includes the operating results of Chardan for the whole period. Chardan’s revenue included in the accompanying consolidated statements of operations for the 13 and 39 weeks ended September 28, 2014, totaled $1,242,804 and $2,825,696, from the date of acquisition. Chardan's earnings included in the accompanying consolidated statements of operations for the 13 and 39 weeks ended September 28, 2014, totaled $136,990 and $219,532 respectively, from the date of acquisition. For the 13 and 39 weeks ended September 28, 2014, $811,707, and $1,826,479, respectively, in sales was derived from intercompany sales to the Company which were eliminated in consolidation.

The following pro forma supplementary data for the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014 gives effect to the acquisition of Great Lakes as if it had occured on December 30, 2013 (the first day of the Company’s 2014 fiscal year), and the acquisition of Chardan as if it had occurred on December 31, 2012 (the first day of the Company’s 2013 fiscal year). The pro forma supplementary data is provided for informational purposes only and should not be construed to be indicative of the Company’s results of operations had the acquisition been consummated on the date assumed and does not project the Company’s results of operations for any future date.

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014		Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
Net sales	$	41,049,431	$	31,886,916	$	114,175,224	$	100,532,958
Net income	$	1,426,733	$	1,060,130	$	4,670,117	$	3,679,485
Net income per common share – basic	$	0.15	$	0.16	$	0.61	$	0.55
Net income per common share – diluted	$	0.15	$	0.16	$	0.59	$	0.54

The majority of Chardan sales prior to its acquisition were to the Company. Therefore, the pro forma effect of the combined net income of the entities is more than the effect on net sales due to the elimination of the intercompany sales for both the 13 and 39 weeks ended September 28, 2014.

Note 3 — Inventory

11

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

Inventory consists of the following:

	October 4, 2015		January 4, 2015
Raw materials	$	8,617,589	$	6,013,045
Work in progress	735,197		499,241
Finished goods	5,610,889		3,975,765
Total inventory	$	14,963,675	$	10,488,051

Included in inventory are assets located in Mexico with a carrying amount of $1,912,474 at October 4, 2015 and $1,788,902 at January 4, 2015.

The inventory acquired in the acquisitions of Unique Fabricating and Prescotech Holdings Inc. (“PTI”) included adjustments of $1,076,902 in order to increase the historical FIFO basis to fair value while the 2014 acquisition of Chardan included a fair value adjustment of $54,975, and the 2015 acquisition of Great Lakes included a fair value adjustment of $146,191 for a total of $1,278,068 for all acquisitions. At October 4, 2015 and January 4, 2015, $56,148 of this fair value adjustment remained in inventory while $90,043 was included in cost of goods sold during the 14 and 39 weeks ended October 4, 2015, and $13,634 and $383,970 was included in cost of goods sold during the 13 and 39 weeks ended September 28, 2014, respectively.

Note 4 — Property, Plant, and Equipment

Property, plant, and equipment consists of the following:

	October 4, 2015		January 4, 2015		Depreciable Life – Years
Land	$	1,663,153	$	1,663,153
Buildings	9,641,976		5,435,026		23 – 40
Shop equipment	9,901,296		8,467,946		7 – 10
Leasehold improvements	824,869		642,762		3 – 10
Office equipment	679,290		539,098		3 – 7
Mobile equipment	142,501		105,550		3
Construction in progress	437,806		2,754,411
Total cost	23,290,891		19,607,946
Accumulated depreciation	2,644,100		1,687,873
Net property, plant, and equipment	$	20,646,791	$	17,920,073

Depreciation expense was $345,245 and $980,511 for the 14 and 39 weeks ended October 4, 2015, respectively, and $295,412 and $847,288 for the 13 and 39 weeks ended September 28, 2014, respectively.

Included in property, plant, and equipment are assets located in Mexico with a carrying amount of $681,191 and $628,570 at October 4, 2015 and January 4, 2015, respectively.

Note 5 — Intangible Assets

Intangible assets of the Company consist of the following at October 4, 2015:

	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life – Years
Customer contracts	$	20,948,881	$	4,589,965	8.30
Trade names	4,465,322		544,070		20.00
Non-compete agreements	1,161,790		560,605		1.62
Total	$	26,575,993	$	5,694,640

Intangible assets of the Company consist of the following at January 4, 2015:

12

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life – Years
Customer contracts	$	15,614,881	$	3,127,128	8.30
Trade names	4,465,322		377,079		20.00
Non-compete agreements	580,790		408,320		1.62
Total	$	20,660,993	$	3,912,527

The weighted average amortization period for all intangible assets is 10.35 years. Amortization expense for intangible assets totaled $677,838 and $1,782,113 for the 14 and 39 weeks ended October 4, 2015, respectively, and $572,954 and $1,753,366 for the 13 and 39 weeks ended September 28, 2014, respectively.

Estimated amortization expense is as follows:

2015	$	742,171
2016	2,820,002
2017	2,820,002
2018	2,768,668
2019	2,682,746
Thereafter	9,047,764
Total	$	20,881,353

Note 6 — Long-term Debt

The Company has a senior credit facility with a bank initially entered into on March 18, 2013 and subsequently amended. The facility was originally entered into in conjunction with the acquisition of Unique Fabricating and provided for a $12.5 million revolving line of credit (“Revolver”) and an $11.0 million term loan facility (“Term Loan”). On December 18, 2013, in conjunction with the acquisition of PTI, the Company entered into an amendment with its bank under the senior credit facility. The amendment increased the Revolver to $15.0 million and the Term Loan to $20.0 million. In October 2014, an additional amendment increased the Revolver to $19.5 million and the increased amount available was used to construct and equip a new facility across the street from the Company's existing facility in LaFayette, Georgia. Construction was completed in September 2015. The total construction costs were expected to be $4.5 million, however actual costs incurred were $4.4 million in costs related to the construction which was all funded by the Revolver. The total amount was capitalized, including interest costs of $0.8 million, and will be depreciated over the useful lives of the various assets.

As of October 4, 2015 and January 4, 2015, $15,668,213 and $8,952,865, respectively was outstanding under the Revolver. Borrowings under the Revolver are subject to a borrowing base, bear interest at the 30 day LIBOR plus a margin that ranges from 2.75 percent to 3.25 percent (an effective rate of 3.1958 percent and 3.1655 percent at October 4, 2015 and January 4, 2015, respectively), and are secured by substantially all of the Company’s assets. At October 4, 2015, the maximum additional available borrowings under the Revolver were $3,731,787 due to the amount outstanding and a $100,000 letter of credit related to rental payments to the landlord of one of the Company’s facilities. The Revolver matures on December 18, 2017. As noted in Note 2, the Company acquired Great Lakes on August 31, 2015. The purchase price amount described in Note 2 was funded by the Revolver.

The Company also had a subordinated note payable with a private lender effective March 18, 2013, as amended. The holder of the subordinated note payable also held equity interests of the Company, and therefore, was a related party. The subordinated note payable was originally entered into in conjunction with the acquisition of Unique Fabricating and had an original principal amount of $11.5 million. On December 18, 2013, in conjunction with the acquisition of PTI, the Company entered into an amendment with the holder which increased the note to $13.1 million and provided for warrants to purchase additional common stock which is described further in Note 8.

As noted in Note 1, the Company used the net proceeds from IPO to repay the $13.1 million principal amount of the senior subordinated note, together with accrued interest through the date of payment.

13

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

Long term debt consists of the following:

	October 4, 2015		January 4, 2015
Term Loan, payable to a bank in quarterly installments of $500,000 through December 31, 2015, $625,000 through December 31, 2016, $750,000 through September 30, 2017, with a lump sum due at maturity. Interest is paid on a quarterly basis at an annual rate of LIBOR plus a margin of 3.00 percent to 3.50 percent (an effective rate of 3.544 percent per annum and 3.495 percent per annum at October 4, 2015 and January 4, 2015, respectively). The Term Loan was originally due on March 15, 2018, but was amended to be due December 18, 2017, and is secured by substantially all of the Company’s assets. At October 4, 2015 and January 4, 2015, the balance of the Term Loan is presented net of a debt discount of $126,690 and $211,402, respectively, from costs paid to or on behalf of the lender.	$	16,373,310	$	17,788,598
Subordinated note payable to a private lender. Interest accrues monthly at an annual rate of 16 percent of which 12 percent must be paid quarterly in cash and 4 percent can be paid in kind at the Company’s discretion. The subordinated note payable is due in full on March 16, 2018, and is subordinated to the Revolver and Term Loan. At October 4, 2015 and January 4, 2015, the balance of the note payable includes accumulated paid in kind interest of $0 and $132,887, respectively, and is presented net of a debt discount of $0 and $445,387, respectively, from costs paid to or on behalf of the lender.	—		12,687,500

Note payable to the seller of Chardan which is unsecured and subordinated to the senior credit facility and the subordinated note to the private lender. Interest accrues monthly at an annual rate of 6 percent. The note payable is due in full on February 6, 2019.	500,000		500,000
Other debt	29,133		42,647
Total debt	16,902,443		31,018,745
Less current maturities	2,393,830		2,018,133
Long-term debt – Less current maturities	$	14,508,613	$	29,000,612

The senior credit facility and the senior subordinated note contain customary negative covenants and require that the Company comply with various financial covenants including a senior leverage ratio, total leverage ratio, debt service coverage ratio, interest coverage ratio, and capital expenditure covenant, as defined. Also, the senior credit facility restricts dividends being paid to the Company from its subsidiaries and the senior subordinated note precludes dividends being paid by the Company to its shareholders. As of October 4, 2015 and January 4, 2015, the Company was in compliance with these covenants. Additionally, the Term Loan contains a clause, effective December 31, 2014, that requires an excess cash flow payment to be made if the Company’s cash flow exceeds certain thresholds as defined by the senior credit facility and certain performance thresholds are not met.

Maturities on the Company’s Revolver and other long term debt obligations for the remainder of the current fiscal year and future fiscal years:

2015	$	1,504,541
2016	2,518,989
2017	28,173,816
2018	—
2019	500,000
Total	32,697,346
Discounts	(126,690		)
Total debt – Net	$	32,570,656

Note 7 — Derivative Financial Instruments

14

The Company holds a derivative financial instrument, as required by its senior credit facility, for the purpose of hedging certain identifiable transactions in order to mitigate risks relating to the variability of future earnings and cash flows caused by interest rate fluctuations. The derivative financial instrument is in the form of an interest rate swap which the Company has elected not to apply hedge accounting for financial reporting purposes. The interest rate swap is recognized in the accompanying consolidated balance sheets at its fair value. Monthly settlement payments due on the interest rate swap and changes in its fair value are recognized currently in net income as interest expense in the consolidated statements of operations.

Effective April 26, 2013, the Company entered into an interest rate swap which required the Company to pay a fixed rate of 0.83 percent while receiving a variable rate based on the one month LIBOR for a net monthly settlement based on the notional amount beginning on March 3, 2014. The notional amount began at $4,714,286 and decreased by $196,429 each quarter until its scheduled expiration on March 1, 2016.

Effective January 17, 2014, in connection with the refinancing of the senior credit facility during December 2013, the Company terminated the swap described above and entered into a new interest rate swap which requires the Company to pay a fixed rate of 1.27 percent while receiving a variable rate based on the one month LIBOR for a net monthly settlement based on the notional amount beginning immediately. The notional amount begins at $10,000,000 and decreases by $250,000 each quarter until March 31, 2016, when it begins decreasing by $312,500 per quarter until it expires on January 31, 2017. At October 4, 2015 and January 4, 2015 the fair value of this interest rate swap was ($88,032) and ($86,511), respectively which is included in other long-term liabilities in the consolidated balance sheets and the Company paid $31,862 and $78,574 in net monthly settlements in the 14 and 39 weeks ended October 4, 2015, respectively, and $17,699 and $67,955 for the 13 and 39 weeks ended September 28, 2014, respectively. Both the change in fair value and the monthly settlements are included in interest expense in the consolidated statements of operations.

Note 8 — Equity

Common Stock

As of October 4, 2015 and January 4, 2015, the Company’s common stock consists of 15,000,000 authorized shares of $0.001 par value stock with 9,576,360 and 6,739,998 shares of common stock, respectively issued and outstanding. As of October 4, 2015 there were 495,000 unissued shares reserved for the Company’s 2013 stock incentive plan and 250,000 unissued shares reserved for the Company's 2014 stock incentive plan both which are further described in Note 10.

On January 14, 2013, (the date of formation of the Company), the Company sold 999,999 shares of common stock for $0.167 per share to a group of founding shareholders. An agreement required the Company to redeem these shares at $0.167 per share if the Company is sold, liquidated or completes an initial public offering for less than $4 per share.

On March 18, 2013, in conjunction with the acquisition of Unique Fabricating, the Company issued shares of common stock to its subordinated lender and a private placement group. Additionally, all of the stockholders entered into agreements which provide for certain restrictions on the transferability of the shares and provides certain shareholders further restrictions, requirements or benefits. The subordinated lender purchased 1,050,000 shares of common stock for $3.33 per share. An agreement provides the subordinated lender the option to have its shares redeemed by the Company for their fair value on the sixth or seventh anniversary of the purchase or when the founders group, as defined, no longer owns 75 percent of the shares originally purchased. The private placement group purchased 2,949,999 shares of common stock for $3.33 per share. The Company incurred expenses for the issuance of these common shares of $745,012 for net total proceeds of $12,588,318.

On December 18, 2013, in conjunction with the acquisition of PTI, the Company issued 1,740,000 additional shares of common stock for $3.33 per share. 365,400 shares were purchased by the subordinated lender under the same provisions as described above while the remaining 1,374,600 were purchased by other investors in a private placement. The Company incurred expenses for the issuance of these common shares of $344,128 for net total proceeds of $5,455,872.

On July 7, the Company completed its initial public offering of 2,702,500 shares of common stock at a price to the public of $9.50 per share. In addition 24,000 options that were issued under the 2013 stock incentive plan were exercised in the third quarter.

Warrants

15

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

On December 18, 2013, in conjunction with the acquisition of PTI, the Company issued warrants to purchase 139,200 common shares for $3.33 per share. The warrants were valued at $50,534 upon issuance. The warrants can be exercised at any time ten years from the issuance date. 29,232 warrants are held by the subordinated lender and the remainder are held by shareholders in the founders group. The common shares received when the warrants are exercised will not contain any of the redemption features described above for any shareholders.

The fair value of each warrant award was estimated on the grant date using a Black Scholes option pricing model that uses the weighted average assumptions noted in the following table. The final valuation after using the assumptions in the table below also calculated a further weighted average to value the warrants and was based on 80% weighting given to a public sale and 20% to a private sale of the Company. Finally, that value was further discounted by 15% to account for the fact that warrants are only transferrable to institutional and accredited investors. The expected volatility was based on the historical volatility of comparable companies. The expected term of the awards was estimated based on findings from academic studies investigating the average holding period for warrants adjusted for the Company’s size and risk factors. The risk free rate for periods within the contractual life of the warrants was based on the United States Treasury yield curve in effect at the time of grant. (disclosed below for a public sale followed by a private sale of the Company).

Expected volatility	32.00%/50.00%
Dividend yield	0.00%/0.00%
Expected term (in years)	2/6
Risk-free rate	0.31%/1.91%

As noted in Note 1, upon closing of the IPO the Company issued to the underwriters warrants to purchase up to 141,000 shares of common stock, as additional compensation. The 29,232 warrants held by the subordinated lender were also exercised in the third quarter for $3.33 per share in exchange for common shares. In addition, 80,630 of the original 139,200 warrants were also exercised in the third quarter for $3.33 per share in exchange for common shares.

Note 9 — Redeemable Common Stock

As described in Note 8, the 1,415,400 shares issued to the subordinated lender include features for the shares to be redeemed at their fair value on the sixth or seventh anniversary of the purchase or when the founders group no longer owns 75 percent of the shares originally purchased. These shares are accounted for as redeemable common stock due to the redemption feature being outside of the Company’s control. These shares have been recorded initially using their net proceeds and have been adjusted to their redemption value each period using a ratable allocation based on the Company’s estimate of the redemption date and fair value of the shares. The Company has accreted the redemption value of these shares over the estimated redemption period to the earliest known redemption date with any changes in estimates being accounted for prospectively. However, reductions in the redemption value were only recorded to the extent of previously recorded increases.

As described in Note 8, the Company’s 999,999 shares issued to the founder group prior to the IPO were redeemable at $0.167 per share if the Company were sold, liquidated or completed an initial public offering for less than $4 per share. These shares were accounted for as redeemable common stock due to the redemption feature being outside of the Company’s control. These shares were recorded initially using their proceeds of $0.167 per share and there was not any accretion of these shares from this initial value because they wre already recorded at their redemption value. The redemption value of the shares was $166,667.

Effective upon the closing of the IPO, the Company’s 999,999 shares issued to the founder group at $0.167 per share are no longer redeemable as the IPO was completed at a price of more than $4 per share and the Company is no longer required to purchase these shares. Furthermore, the 1,415,400 shares issued to the subordinated lender are also no longer redeemable, effective upon the closing of the IPO, as the subordinated lender agreed to terminate its right to require the Company to repurchase its shares in exchange for the Company granting it certain registration rights. As a result, all of the shares included in redeemable common stock were reclassified to common stock and amounts attributable to redeemable common stock were allocated to common stock at par value and additional paid-in-capital.

As of the date immediately before the closing of the IPO, the redemption value of the 1,415,400 shares was estimated to be $13,446,300 which was more than the initial proceeds. As a result, $1,364,031 of accretion was recorded in the period ended immediately prior to the IPO in addition to the 2014 accretion amount noted below. The redemption value was calculated based

16

on the offering price of $9.50 per share in the IPO, as the offering closed just after the quarter ended June 28, 2015 and represented the best estimate of enterprise value of the Company as of the end of the quarter ended June 28, 2015.

As of January 4, 2015, the redemption value of the redeemable shares included the above shares issued to the founder group was estimated to be $11,362,481 which was more than the initial proceeds. As a result, $1,852,840 of accretion was recorded. The redemption value for the fiscal year ended January 4, 2015 was calculated by an outside party (the Company strategy for annual periods), using a discounted cash flow method. The discounted cash flow method used several assumptions, the most significant of which include: projections of net sales, operating expenses, profit margins, income taxes to capital expenditures, working capital requirements, interest rates, investment returns, and discount rate.

Note 10 — Stock Incentive Plans

2013 Stock Incentive Plan

The Company’s board of directors approved a stock incentive plan (the “Plan”) in 2013. The Plan permits the Company to grant 495,000 non statutory or incentive stock options to the employees, directors and consultants of the Company. 495,000 shares of unissued common stock are required to be reserved for the Plan. The board of directors has the authority to determine the participants to whom stock options shall be awarded as well as any restrictions to be placed upon the awards. The exercise price cannot be less than the fair value of the underlying shares at the time the stock options are issued and the maximum length of an award is ten years.

On July 17, 2013 and January 1, 2014, the board of directors approved the issuance of 375,000 and 120,000 non statutory stock option awards, respectively to employees of the Company with an exercise price of $3.33 with a weighted average grant date fair value of $86,450 and $42,000 respectively. These awards vest 20 percent on the grant date and an additional 20 percent on each of the first, second, third and fourth anniversaries thereafter. Vested awards can only be exercised while the participants are employed by the Company. Upon termination, the Company may repurchase the vested awards at their fair value (or their exercise price if terminated for cause) prior to their exercise.

The fair value of each option award is estimated on the grant date using a Black Scholes option pricing model that uses the weighted average assumptions noted in the following table. The expected volatility is based on the historical volatility of comparable companies. The Company estimated zero employee terminations based on the options granted being limited to a small pool of senior employees of which the Company has no historical turnover experience. The expected term of the awards was estimated based on findings from academic studies investigating the average holding period for options for adjusted for the Company’s size and risk factors. The risk free rate for periods within the contractual life of the option is based on the United States Treasury yield curve in effect at the time of grant. (disclosed below as January 1, 2014 followed by July 17, 2013).

Expected volatility	34.00	%
Dividend yield	—	%
Expected term (in years)	4
Risk-free rate	1.27%/0.96%

2014 Omnibus Performance Award Plan

In 2014 the Company adopted the Unique Fabricating, Inc. 2014 Omnibus Performance Award Plan, or the 2014 Plan. The 2014 Plan provides for the grant of cash awards, stock options, stock appreciation rights, or SARs, shares of restricted stock and restricted stock units, or RSUs, performance shares and performance units. The 2014 Plan authorizes the grant of awards relating to 250,000 shares of our common stock. In the event of any transaction that causes a change in capitalization, the Compensation Committee, such other committee administering the 2014 Plan or the board of directors will make such adjustments to the number of shares of common stock delivered, and the number and/or price of shares of common stock subject to outstanding awards granted under the 2014 Plan, as it deems appropriate and equitable to prevent dilution or enlargement of participants’ rights.

On August 17, 2015 the board of directors approved the issuance of a total of 230,000 stock option awards of which 45,000 non statutory awards were granted to the board of directors, and 185,000 incentive stock options were granted to employees of the Company. All of the awards had an exercise price of $12.50 with a weighted average grant date fair value of

17

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

$625,600. These awards vest 20 percent on the grant date and an additional 20 percent on each of the first, second, third and fourth anniversaries thereafter. Vested awards can only be exercised while the participants are employed by the Company.

The fair value of each option award is estimated on the grant date using a Black Scholes option pricing model that uses the weighted average assumptions noted in the following table. The expected volatility is based on the historical volatility of comparable companies. The Company estimated zero employee terminations based on the options granted being limited to a small pool of senior employees of which the Company has no historical turnover experience. The expected term of the awards was estimated based on findings from academic studies investigating the average holding period for options for adjusted for the Company’s size and risk factors. The risk free rate for periods within the contractual life of the option is based on the United States Treasury yield curve in effect at the time of grant.

Expected volatility	38.00	%
Dividend yield	4.80	%
Expected term (in years)	5
Risk-free rate	1.58	%

A summary of option activity under both plans is presented below:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value(1)
Outstanding at January 4, 2015	495,000	$	3.33	8.65
Granted	230,000	$	12.50	10.00
Exercised	24,000	—		0
Forfeited or expired	—	—		0
Outstanding at October 4, 2015	701,000	$	6.34	8.54	$	5,727,170
Vested and exercisable at October 4, 2015	319,000	$	4.66	8.16	$	2,606,230

(1) The aggregate intrinsic value above is obtained by subtracting the weighted average exercise price from the estimated fair value of the underlying shares as of October 4, 2015 and multiplying this result by the related number of options outstandingand exercisable at October 4, 2015. The estimated fair value of the shares is based on the closing price of the stock of $11.50 at the end of the third quarter.

The Company recorded compensation expense of $148,455 and $160,764 for the 14 and 39 weeks ended October 4, 2015, respectively, and $6,401 and $27,439 for the 13 and 39 weeks ended September 28, 2014, respectively, in its consolidated statements of operations, as a component of sales, general and administrative expenses.

As of October 4, 2015, there was $533,759 of total unrecognized compensation cost related to nonvested stock option awards under the plans. That cost is expected to be recognized over a weighted average period of 2.81 years.

Note 11 — Income Taxes

Income before income taxes for U.S. and Non-U.S. operations are as follows:

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014		Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
U.S. income	$	1,536,426	$	1,094,883	$	5,303,089	$	3,749,727
Non-U.S. income	107,511		219,450		662,203		682,083
Income before income taxes	$	1,643,937	$	1,314,333	$	5,965,292	$	4,431,810

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UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

The components of the income tax provision included in the consolidated statements of operations are all attributable to continuing operations and are detailed as follows:

	Fourteen Weeks Ended October 4, 2015			Thirteen Weeks Ended September 28, 2014			Thirty-Nine Weeks Ended October 4, 2015			Thirty-Nine Weeks Ended September 28, 2014
Current federal income taxes	$	792,116		$	541,027		$	1,907,263		$	1,890,600
Current state income taxes	106,479			71,416			234,587			215,593
Current foreign income taxes	75,943			80,957			227,832			164,727
Deferred income taxes	(469,692		)	(225,736		)	(428,118		)	(847,047		)
Total income tax expense	$	504,846		$	467,664		$	1,941,564		$	1,423,873

Significant components of current and non-current deferred taxes are as follows:

	October 4, 2015			January 4, 2015
Current deferred tax assets (liabilities):
Allowance for doubtful accounts	$	285,333		$	246,744
Inventories	126,016			121,575
Accrued payroll and benefits	579,019			907,174
Other	5,820			13,211
Net current deferred tax asset	996,188			1,288,704
Noncurrent deferred tax assets (liabilities):
Property, plant, and equipment	(3,407,134		)	(3,329,790		)
Goodwill and intangible assets	(2,477,680		)	(3,220,663		)
Other	109,586			53,123
Net noncurrent deferred tax liability	(5,775,228		)	(6,497,330		)
Net total deferred tax liability	$	(4,779,040	)	$	(5,208,626	)

The Company believes that it is more likely than not that all deferred tax assets will be realized and thus, believes that a valuation allowance is not required as of October 4, 2015 or January 4, 2015.

A reconciliation of taxes on income from continuing operations based on the statutory federal income tax rate to the provision for income taxes is as follows:

	Fourteen Weeks Ended October 4, 2015			Thirteen Weeks Ended September 28, 2014			Thirty-Nine Weeks Ended October 4, 2015			Thirty-Nine Weeks Ended September 28, 2014
Income tax expense, computed at 34% of pretax income	$	558,938		$	446,873		$	2,028,199		$	1,506,815
State income taxes, net of federal benefit	37,627			33,376			124,854			97,500
Effect of foreign income taxes	40,118			4,408			(5,050		)	(77,265		)
Effect of permanent differences	(141,653		)	(42,750		)	(216,607		)	(126,273		)
Other	9,816			25,757			10,168			23,096
Total provision for income taxes	$	504,846		$	467,664		$	1,941,564		$	1,423,873

Note 12 — Operating Leases

19

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

The Company leases office space, production facilities and equipment under operating leases with various expiration dates through the year 2020. The leases require the Company to pay taxes, insurance, utilities and maintenance costs. One of the leases provides for escalating rents over the life of the lease and rent expense is recognized over the term of the lease on a straight line basis, with the difference between lease payments and rent expense recorded as deferred rent in accrued expenses in the consolidated balance sheets. Total rent expense charged to operations was approximately $349,877 and $1,012,316 for the 14 and 39 weeks ended October 4, 2015, respectively, and $432,341 and $1,096,135 for the 13 and 39 weeks ended September 28, 2014, respectively.

Future minimum lease payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are as follows at October 4, 2015:

2015	$	357,439
2016	1,301,578
2017	1,212,745
2018	1,150,515
2019	976,138
Thereafter	541,250
Total	$	5,539,665

Note 13 — Retirement Plans

The Company maintains a defined contribution plan covering certain full time salaried employees. Employees can make elective contributions to the plan. The Company contributes 100 percent of an employee’s contribution up to the first 3 percent of each employee’s total compensation and 50 percent for the next 2 percent of each employee’s total compensation. In addition, the Company, at the discretion of the board of directors, may make additional contributions to the plan on behalf of the plan participants. The Company contributed $97,403 and $281,369 for the 14 and 39 weeks ended October 4, 2015, respectively, and $68,426 and $173,709 for the 13 and 39 weeks ended September 28, 2014, respectively.

Note 14 — Related Party Transactions

A shareholder provided subordinated debt financing which is discussed further in Note 6. Interest charges were recognized in the amounts of $472,905 and $1,514,901 for the 14 and 39 weeks ended October 4, 2015, respectively, and $529,633 and $1,571,629 for the 13 and 39 weeks ended September 28, 2014, respectively, related to the subordinated debt financing. Accrued interest of $0 and $0 was due to this subordinated lender at October 4, 2015 and January 4, 2015, respectively. Effective upon the closing of the IPO as noted in Note 1, this subordinated debt amount was paid off in full with the proceeds received from the IPO.

Effective March 18, 2013, the Company is under a five year management agreement with a firm related to several shareholders. The agreement required annual management fees of $300,000 and additional fees for assistance provided with acquisitions. The Company incurred management fees of $68,750 and $218,750 for the 14 and 39 weeks ended October 4, 2015, respectively, and $75,000 and $150,000 for the 13 and 39 weeks ended September 28, 2014, respectively. During the 14 and 39 weeks ended October 4, 2015, the Company incurred fees related to the acquisition of Great Lakes of $220,000 and $220,000, respectively. During the 13 and 39 weeks ended September 28, 2014, the Company incurred fees related to the acquisition of Chardan of $110,000 and $110,000, respectively. The Company allocates these fees to the services provided based on their relative fair values. The fees paid were all allocated to and expensed as transaction costs. Effective upon completion of the IPO, the agreement was amended to reduce the annual management fee by an amount equal to the amount, if any, of annual cash retainers and equity awards received as compensation for service on the board of directors by any person who is a related person of Taglich Private Equity, LLC or Taglich Brothers, Inc.

Note 15 — Fair Value Measurements

Financial instruments consist of cash equivalents, accounts receivable, accounts payable and debt. The carrying amount of all significant financial instruments approximates fair value due to either the short maturity or the existence of variable interest rates that approximate prevailing market rates.

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UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

Accounting standards require certain other items be reported at fair value in the financial statements and provides a framework for establishing that fair value. The framework for determining fair value is based on a hierarchy that prioritizes the valuation techniques and inputs used to measure fair value.

Fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. Level 2 inputs may include quoted prices for similar items in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related item. Level 3 fair value measurements are based primarily on management’s own estimates using inputs such as pricing models, discounted cash flow methodologies or similar techniques taking into account the characteristics of the item.

In instances whereby inputs used to measure fair value fall into different levels of the fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each item.

The Company measures its interest rate swap at fair value on a recurring basis based primarily on Level 2 inputs using an income model based on disparity between variance and fixed interest rates, the scheduled balance of principal outstanding, yield curves and other information readily available in the market.

Note 16 — Contingencies

The Company is engaged from time to time in legal matters and proceedings arising out of its normal course of business. The Company establishes a liability related to its legal proceedings and claims when it has determined that it is probable that the Company has incurred a liability and the related amount can be reasonably estimated. If the Company determines that an obligation is reasonably possible, the Company will, if material, disclose the nature of the loss contingency and the estimated range of possible loss, or include a statement that no estimate of loss can be made. While uncertainties are inherent in the final outcome of such matters, the Company believes that there are no pending proceedings in which the Company is currently involved that will have a material effect on its financial position, results of operations or cash flow.

Note 17 — Earnings Per Share

Basic earnings per share is computed by dividing the net income by the weighted-average number of shares outstanding during the period. For purposes of the calculation, shares outstanding also includes redeemable common stock. Diluted earnings per share is computed giving effect to all potentially weighted average dilutive shares including options and warrants. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method.

The following table sets forth the computation of basic and diluted earnings per share.

21

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014		Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
Basic earnings per share calculation:
Net income	$	1,139,091	$	846,669	$	4,023,728	$	3,007,937
Preferred stock dividends	—		—		—		—
Net income attributable to common stockholders	$	1,139,091	$	846,669	$	4,023,728	$	3,007,937
Weighted average shares outstanding	9,434,123		6,739,998		7,700,771		6,739,998
Net income per share-basic	$	0.12	$	0.13	$	0.52	$	0.45

Diluted earnings per share calculation:
Net income	$	1,139,091	$	846,669	$	4,023,728	$	3,007,937
Weighted average shares outstanding	9,434,123		6,739,998		7,700,771		6,739,998
Effect of dilutive securities:
Stock options(1)(2)	211,270		15,084		200,357		15,084
Warrants(1)(2)	16,725		11,961		58,820		11,961
Diluted weighted average shares outstanding	9,662,118		6,767,043		7,959,948		6,767,043
Net income per share-diluted	$	0.12	$	0.13	$	0.51	$	0.44

(1)Options to purchase 471,000 shares of common stock remaining to be exercised and warrants to purchase 24,504 shares of common stock remaining to be exercised were considered in the computation of diluted earnings per share using the treasury stock method in the 2015 calculation. Options to purchase 230,000 shares of common stock that were granted in August 2015 as noted in Note 10, as well as 141,000 shares issued to the underwriters granted in July 2015 as noted in Note 1, were not included in the computation of diluted earnings per share in the 2015 period because the effect would have been anti-dilutive as a result of the securities being “out of the money” with a strike price greater than the average fair market value during the period presented.

(2)Options to purchase 495,000 shares of common stock remaining to be exercised and warrants to purchase 139,200 shares of common stock remaining to be exercised were considered in the computation of diluted earnings per share using the treasury stock method in the 2014 calculation.

Note 18 — Subsequent Events

Plant Closure

On October 27, 2015, the Company announced the planned closure of its manufacturing facility located in Murfreesboro, Tennessee that will result in a workforce reduction of approximately 30 employees. The planned closure of the Murfreesboro facility is expected to be effective in the fourth quarter of 2015 and be completed by January 2016. The action was necessary due to the tight labor market in Murfreesboro and the struggle to staff production levels to meet the ongoing growth strategy for Murfreesboro's respective products manufactured at the plant. In order to ensure the Company's ability to service its customers at the increasing volumes projected for the future, the Company has decided to move existing Murfreesboro production including equipment to the Company's other manufacturing facilities in Evansville, Indiana and LaFayette, Georgia.

We expect to incur severance related costs as a result of this plant closure of approximately $0.2 to $0.3 million over the next two to three months. Expenses associated with the closing of the facility have yet to be determined, but as noted above the Company intends to move all of the existing equipment to the other two facilities noted. The Company intends to sell the building in Murfreesboro, which the Company owns, which has a current net book value of $2.0 million, but do not have an estimate of the intended selling price.

Declaration of Cash Dividend

22

UNIQUE FABRICATING, INC.

Notes to Consolidated Financial Statements (Unaudited)

On November 17, 2015, our board of directors declared a quarterly cash dividend of $0.15 per common share. The dividend will be payable on December 7, 2015 to shareholders of record at the close of business on November 30, 2015 for an amount of approximately $1.4 million.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

This Management's Discussion and Analysis of Financial Condition and Results of Operation is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the accompanying unaudited consolidated financial statements and the related notes to unaudited consolidated financial statements included elsewhere in this document as well as the consolidated financial statements and the related notes to consolidated financial statements for the year ended January 4, 2015 included in our final prospectus filed pursuant to Rule 424(b)(the "Prospectus") with the Securities and Exchange Commission (the "SEC") on July 1, 2015. Our actual results and the timing of events could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed below as well as in our Prospectus, particularly in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” We make no guarantees regarding outcomes, and assume no obligation to update the forward-looking statements herein, except as may be required by law.

Forward-Looking Statements

The following discussion contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. These statements are based on management's beliefs and assumptions and on information currently available to us. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these statements. When used in this document the words “anticipate,” “believe,” “continue,” “could,” “seek,” “might,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “approximately,” “project,” “should,” “will,” “would,” or the negative or plural of these words or similar expressions, as they relate to our company, business and management, are intended to identify forward-looking statements. In light of these risks and uncertainties, the future events and circumstances discussed may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements, including those discussed in our Prospectus and in particular the section entitled “Risk Factors” of the Prospectus.

Forward-looking statements speak only as of the date of this Form 10-Q filing. Except as required by law, we assume no obligation to publicly update or revise any forward-looking statement to reflect actual results, changes in assumptions based on new information, future events or otherwise. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Basis of Presentation

The Company’s policy is that quarterly periods end on the Sunday closest to the end of the quarterly period. The third quarter of 2015 ended on October 4, 2015 and the third quarter of 2014 ended on September 28, 2014. The Company’s policy is that fiscal years end annually on the Sunday closest to December 31. Fiscal 2014 ended on January 4, 2015 and the current fiscal year will end on January 3, 2016. The Company’s operations are classified in one reportable business segment. Although we recently expanded the products that we manufacture and sell to include components used in the appliance, HVAC and water heater industries, products for these industries are manufactured at facilities that also manufacture or are capable of manufacturing products for the automotive industries. All of our manufacturing locations have similar capabilities, and most plants serve multiple markets. The manufacturing operations for our automotive, appliance, HVAC and water heater products share management and labor forces and use common personnel and strategies for new product development, marketing and the sourcing of raw materials.

We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

• have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

• comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

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• submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency”; and

• disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an “emerging growth company” for up to five years, or until the earliest to occur of (1) the last day of the first fiscal year in which our total annual gross revenues exceed $1.0 billion, (2) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (3) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three year period. Even after we no longer qualify as an emerging growth company, we still may qualify as a “smaller reporting company” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with auditor attestation requirements pursuant to Section 404(b) of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation.

Overview

Unique is engaged in the engineering and manufacture of multi-material foam, rubber, and plastic components utilized in noise, vibration and harshness, acoustical management, water and air sealing, decorative and other functional applications. The Company combines a long history of organic growth with some more recent strategic acquisitions to diversify both product capabilities and markets served.

Unique’s market served is the North America automotive and heavy duty truck, appliance, water heater and HVAC markets. Sales are conducted directly with major automotive and heavy duty truck, appliance, water heater and HVAC companies, referred throughout this prospectus as original equipment manufacturers (OEMs), or indirectly through the Tier 1 suppliers of these OEMs. The Company has its principal executive offices in Auburn Hills, Michigan and has sales, engineering and production facilities in Auburn Hills, Michigan, LaFayette, Georgia, Louisville, Kentucky, Evansville, Indiana, Ft. Smith, Arkansas, Murfreesboro, Tennessee, Bryan, Ohio and Monterrey, Mexico. The Company also has an independent client sales representative who maintains offices in Baldham, Germany.

Unique derives the majority of its gross revenues from the sales of foam, rubber and plastic automotive products. These products are produced from a variety of manufacturing processes including die cutting, compression molding, thermoforming and fusion molding. We believe Unique has a broader array of processes and materials utilized than any of its direct competitors, based on our product offerings. By sealing out air noise and water intrusion, and by providing sound absorption and blocking, Unique’s products improve the interior comfort of a vehicle, increasing perceived vehicle quality and the overall experience of its passengers. Unique’s products perform similar functions for appliances, water heaters and HVAC systems, improving thermal characteristics, reducing noise and prolonging equipment life.

We primarily operate within the highly competitive and cyclical automotive parts industry. Over the past four years the industry has experienced consistent growth as it recovered from the recession of 2009. Many sectors of the supply chain are operating near capacity. Over the same period we have grown our core automotive parts business at a faster rate than the industry as a whole, indicating we are taking market share from competitors and increasing our content per vehicle on the programs we supply. We expect this trend to continue.

Recent Developments

Initial Public Offering

On July 7, 2015, we completed our initial public offering of 2,702,500 shares of common stock at a price to the public of $9.50 per share (the "IPO"), including 352,500 shares subject to an over-allotment option granted to the underwriters. After underwriting discounts, commissions, and approximate fees and expenses of the offering, as set forth in our registration

25

statement for the IPO on Form S-1, we received net IPO proceeds of approximately $22.2 million. Of these proceeds we used part of them to repay the $13.1 million principal amount of our 16% senior subordinated note together with accrued interest through the date of payment. We used the remaining proceeds to temporarily reduce borrowings under the revolver portion of our senior secured credit facility. Amounts paid under the facility will be available to be re-borrowed, subject to compliance with the terms of the facility. The Company also issued to the underwriters warrants to purchase up to 141,000 shares of common stock, as additional compensation in the IPO. The warrants are exercisable at a per share exercise price equal to 125% of the public offering price of $9.50 per share, and can start to be exercised commencing 1 year from the date of the IPO, until the date 5 years from the date of the IPO.

Acquisition

On August 31, 2015, the Company acquired (the “Acquisition”) the business and substantially all of the assets of Great Lakes Foam Technologies, Inc. (“Great Lakes”), a Michigan based polyurethane manufacturer, for total net cash consideration of $11.95 million, with a portion being held in escrow to fund the obligations of Great Lakes and its stockholders to indemnify Unique against certain claims, losses, and liabilities.

Great Lakes manufactures components for application in a wide range of end-markets including the automotive, off-road vehicles, industrial equipment, medical and office equipment industries. Great Lakes is engaged in the manufacture of components from molded polyurethane, including components for automotive applications, industrial equipment, off-road vehicles, office furniture, medical applications and packaging. The Company believes that the acquisition will augment its existing product offerings and potentially enable it to access new customers and increase sales to certain of its existing customers.

Restructuring

On October 27, 2015, the Company determined to close its manufacturing facility in Murfreesboro, Tennessee. The Company expects to cease operations at the Murfreesboro facility by January of 2016. The Company currently expects that approximately 30 positions will be eliminated as a result of the closure.

The Company's decision resulted from the tight labor market in Murfreesboro and the struggle to staff production levels to meet the ongoing growth strategy for Murfreesboro's respective products manufactured at the plant. To enable the Company to service its customers at the increasing volumes projected, the Company has decided to move existing Murfreesboro production to our other manufacturing facilities in Evansville, Indiana and LaFayette, Georgia.

The Company will provide employees severance pay, health benefits continuation and job search assistance. The Company estimates that it will incur approximately $0.2-$0.3 million in employee termination costs. At this time, the Company is unable to estimate the ranges of amounts of other costs expected to be incurred in connection with the closure.

Dividend Declaration

On November 17, 2015, our board of directors declared a quarterly cash dividend of $0.15 per common share. The dividend will be payable on December 7, 2015 to shareholders of record at the close of business on November 30, 2015.

Non-GAAP Financial Measures

Adjusted EBITDA

We present Adjusted EBITDA (defined below), a measure that is not in accordance with generally accepted accounting principles in the United States of America (non-GAAP), in this document to provide investors with a supplemental measure of our operating performance. We believe that Adjusted EBITDA is a useful performance measure and it is used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under generally accepted accounting principles in the United States of America (GAAP) can provide alone. Our board and management also use Adjusted EBITDA as one of the primary methods for planning and forecasting overall expected performance and for evaluating on a quarterly and annual basis actual results against such expectations, and as a performance evaluation metric in determining achievement of certain compensation programs and plans for company management. In addition, the financial covenants in our senior secured credit facility are based on Adjusted EBITDA, subject to dollar limitations on certain adjustments.

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We define “Adjusted EBITDA” as earnings before interest expense, income taxes, depreciation and amortization expense, non-recurring integration expense, non-cash stock awards, non-recurring step-up of inventory basis to fair market value, non-recurring IPO costs, and transaction fees related to our acquisitions. Omitting interest, taxes and the other items provides a financial measure that facilitates comparisons of our results of operations with those of companies having different capital structures. Since the levels of indebtedness and tax structures that other companies have are different from ours, we omit these amounts to facilitate investors’ ability to make these comparisons. Similarly, we omit depreciation and amortization because other companies may employ a greater or lesser amount of property and intangible assets. We believe that investors, analysts and other interested parties view our ability to generate Adjusted EBITDA as an important measure of our operating performance and that of other companies in our industry. Adjusted EBITDA should not be considered as an alternative to net income for the periods indicated as a measure of our performance. Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

The use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this performance measure in isolation from, or as an alternative to, GAAP measures such as net income. Adjusted EBITDA is not a measure of liquidity under GAAP or otherwise, and is not an alternative to cash flow from continuing operating activities. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by the expenses that are excluded from that term or by unusual or non-recurring items. The limitations of Adjusted EBITDA include that: (1) it does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; (2) it does not reflect changes in, or cash requirements for, our working capital needs; (3) it does not reflect income tax payments we may be required to make; and (4) it does not reflect the cash requirements necessary to service interest or principal payments associated with indebtedness.

To properly and prudently evaluate our business, we encourage you to review our unaudited consolidated financial statements included elsewhere in this document, our audited consolidated financial statements included in our Prospectus, and the reconciliation to Adjusted EBITDA from net income, the most directly comparable financial measure presented in accordance with GAAP, set forth in the following table. All of the items included in the reconciliation from net income to Adjusted EBITDA are either (1) non-cash items or (2) items that management does not consider in assessing our on-going operating performance. In the case of the non-cash items, management believes that investors may find it useful to assess our comparative operating performance because the measures without such items are less susceptible to variances in actual performance resulting from depreciation, amortization and other non-cash charges and more reflective of other factors that affect operating performance. In the case of the other items that management does not consider in assessing our on-going operating performance, management believes that investors may find it useful to assess our operating performance if the measures are presented without these items because their financial impact may not reflect on-going operating performance.

Fourteen and Thirty-Nine Weeks Ended October 4, 2015 and Thirteen and Thirty-Nine Weeks Ended September 28, 2014

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014		Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
	(in thousands)
Net income	$	1,139	$	847	$	4,024	$	3,008
Plus: Interest expense, net	724		874		2,437		2,762
Plus: Income tax expense	505		468		1,942		1,424
Plus: Depreciation and amortization	1,023		868		2,762		2,601
Plus: Non-cash stock award	149		6		161		27
Plus: Non-recurring integration expenses	32		19		32		90
Plus: Non-recurring step-up of inventory basis to fair market value	90		14		90		384
Plus: Non-recurring IPO costs	230		—		230		—
Plus: Transaction fees	416		—		416		237
Adjusted EBITDA	$	4,308	$	3,096	$	12,094	$	10,533

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Comparison of Results of Operations for the Fourteen and Thirty-Nine Weeks Ended September, 2015 and the Thirteen and Thirty-Nine Weeks Ended September 28, 2014

On August 31, 2015, the Company acquired (the “Acquisition”) the business and substantially all of the assets Great Lakes for a cash purchase price of $11.82 million. Following the closing, we made a payment to the seller of $0.13 million as a result of post-closing calculation of net working capital. For the 14 and 39 weeks ended October 4, 2015, our financial results include the acquisition and results of operations of the Great Lakes Business from August 31, 2015 through October 4, 2015.

On February 6, 2014, we moved to become more vertically integrated by acquiring, through a newly formed subsidiary, Unique-Chardan, Inc., substantially all of the assets, or the Chardan Business, of one of our key suppliers, Chardan, Corp., or Chardan, for a cash purchase price of $2.20 million paid at closing plus a promissory note in the amount of $0.50 million, the principal of which is payable in a lump sum on February 6, 2019. Following the closing, we made a payment to the seller of $0.12 million as a result of post-closing calculations of net working capital. For the 13 and 39 weeks ended September 28, 2014 our financial results include transaction related expenses from the Chardan Business acquisition and results of operations of the Chardan Business from February 7, 2014 through September 28, 2014.

For the 14 and 39 weeks ended October 4, 2015, the Company grew net sales compared to the 13 and 39 weeks ended September 28, 2014 as a result of the acquisition of Chardan which was included for the full 14 and 39 weeks in 2015, new product introductions and continued growth of our core markets. Our top three customers during the 14 and 39 weeks ended October 4, 2015 accounted for net sales of $7.8 million and $19.5 million, respectively, or 19.7% and 18.1%, respectively, of total net sales. In the 13 and 39 weeks ended September 28, 2014, our top three customers accounted for net sales of $5.44 million and $15.90 million, respectively, or 16.5% and 17.1%, respectively, of net sales. We financed the acquisition of Great Lakes on August 31, 2014 through a $11.82 million borrowing on our revolver. We financed the acquisition of Chardan on February 6, 2014 through a $2.2 million borrowing on our revolver and the issuance of $0.50 million principal amount of a 6% subordinated note to the seller.

Fourteen Weeks Ended October 4, 2015 and Thirteen Weeks Ended September 28, 2014

Net Sales

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014
	(in thousands)
Net sales	$	39,580	$	31,028

Net sales for the thirteen weeks ended October 4, 2015 were approximately $39.58 million compared to $31.03 million for the thirteen weeks ended September 28, 2014. The fourteen weeks ended October 4, 2015 net sales included approximately $7.00 million attributable to our increased market penetration and content per vehicle, new product introductions, an extra week of sales in the comparable periods, and five weeks of sales related to our August 31, 2015 acquisition of Great Lakes. Other increases in the fourteen weeks ended October 4, 2015 were primarily attributable to a 5.3% overall increase in North American vehicle production as compared to the thirteen weeks ended September 28, 2014.

Cost of Sales

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014
	(in thousands)
Materials	$	20,318	$	16,295
Direct labor and benefits	5,751		4,187
Manufacturing overhead	3,907		3,072
Sub-total	29,976		23,554
Depreciation	305		249
Cost of Sales	30,281		23,803
Gross Profit	$	9,299	$	7,225

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The major components of cost of sales are raw materials purchased from third parties, direct labor and benefits, and manufacturing overhead, including facility costs, utilities, supplies, repairs and maintenance, insurance, freight costs of products shipped to customers and depreciation.

Cost of Sales as a percent of Net Sales

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014
Materials	51.3	%	52.5	%
Direct labor and benefits	14.5	%	13.5	%
Manufacturing overhead	9.9	%	9.9	%
Sub-total	75.7	%	75.9	%
Depreciation	0.8	%	0.8	%
Cost of Sales	76.5	%	76.7	%
Gross Profit	23.5	%	23.3	%

Cost of sales as a percentage of net sales for the fourteen weeks ended October 4, 2015 decreased to 76.5% from 76.7% for the thirteen weeks ended September 28, 2014. The decrease in cost of sales as a percentage of net sales was attributable to a decrease in material cost as a percentage of net sales to 51.3% for the fourteen weeks ended October 4, 2015 from 52.5% for the thirteen weeks ended September 28, 2014. The decrease in material cost is as a result of favorable product mix in the fourteen weeks ended October 4, 2015 compared to the thirteen weeks ended September 28, 2014. Direct labor and benefit costs as a percentage of net sales was 14.5% for the fourteen weeks ended October 4, 2015 compared to 13.5% for the thirteen weeks ended September 28, 2014. Labor and benefit costs in the fourteen weeks ended October 4, 2015 were higher due to the increase in direct labor hours, directly related to reduced labor productivity as a result of a new product the Company launched in the second quarter of 2015. The Company expects to continue to further optimize our manufacturing process of this new product in future quarters in 2015. We expect margins related to this new product to normalize by the end of 2015. We also increased labor hours as we built up inventory of this product in anticipation of the closing of the facility that this new product is manufactured at. We will expect to continue manufacturing this new product at the plant facilities to which we are moving production. Manufacturing overhead costs as a percentage of net sales were 9.9% for both the fourteen weeks ended October 4, 2015 and the thirteen weeks ended September 28, 2014.

Gross Profit

As a result of the decrease in cost of sales as a percentage of net sales described above, gross profit as a percentage of net sales for the fourteen weeks ended October 4, 2015 increased to 23.5% from 23.3% for the thirteen weeks ended September 28, 2014.

Selling, General and Administrative Expenses (“SG&A”)

	Fourteen Weeks Ended October 4, 2015			Thirteen Weeks Ended September 28, 2014
	(in thousands, except SG&A as a % of net sales)
SG&A, exclusive of line items below	$	5,801		$	4,434
Transaction expenses	416			—
Subtotal	6,217			4,434
Depreciation and amortization	718			619
SG&A	$	6,935		$	5,053
SG&A as a % of net sales	17.5		%	16.3		%

SG&A as a percentage of net sales for the fourteen weeks ended October 4, 2015 increased to 17.5% from 16.3% from the thirteen weeks ended September 28, 2014. The increase in the fourteen weeks ended October 4, 2015 primarily relate to higher professional and consulting fees in 2015 compared to the thirteen weeks ended September 28, 2014 as well as $0.41 million of

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transaction related expenses in the fourteen weeks ended October 4, 2015 compared to no transaction related expenses included in the thirteen weeks ended September 28, 2014. The transaction expenses and a majority of the increase in professional fees in 2015 were related to the acquisition of Great Lakes.

Operating Income

As a result of the foregoing factors, operating income for the fourteen weeks ended October 4, 2015 was $2.36 million compared to operating income of $2.17 million for the thirteen weeks ended September 28, 2014.

Non-Operating Expense

Non-operating expense for the fourteen weeks ended October 4, 2015 was $0.72 million compared to $0.85 million for the thirteen weeks ended September 28, 2014. The change in non-operating expense was primarily driven by interest expense. Interest expense was approximately $0.72 million for the fourteen weeks ended October 4, 2015, compared to $0.87 million for the thirteen weeks ended September 28, 2014. The decrease in interest expense in the 2015 period was primarily due to a decrease in interest expense on our term loan primarily due to $1.5 million less remaining on the principal balance of the term loan in 2015.

Income Before Income Taxes

As a result of the foregoing factors, income before income taxes for the fourteen weeks ended October 4, 2015 was $1.64 million, compared to $1.31 million for the thirteen weeks ended September 28, 2014.

Income Tax Provision

For the fourteen weeks ended October 4, 2015, the estimated effective income tax rate of 30.7%, applied to pre-tax income, resulted in income tax expense of $0.50 million. The difference between the actual effective rate and the statutory rate was mainly a result of the domestic production activities deduction, or DPAD which provided a $0.09 million income tax benefit which reduced our effective tax rate by 5.3%. During the thirteen weeks ended September 28, 2014 the estimated effective income tax rate of 35.6%, applied to pre-tax income, resulted in income tax expense of $0.47 million. The difference between the actual effective rate and the statutory rate was mainly a result of an increase in state taxes and other tax items of $0.06 million partially offset by the domestic production activities deduction, or DPAD which provided a $0.05 million income tax benefit. The Company has deferred tax assets associated with timing differences between when an expense is recorded for book purposes versus when it is deductible for tax. The Company has considered evidence both supporting and not supporting the determination that the deferred tax assets are more likely than not to be realized, and has not recorded a tax valuation allowance as of October 4, 2015. The Company will continue to evaluate whether the deferred tax assets will be realizable, and if appropriate, will record a valuation allowance against these assets.

Net income

As a result of the increased net sales and changes in expenses discussed above, net income for the fourteen weeks ended October 4, 2015 was $1.14 million compared to $0.85 million during the thirteen weeks ended September 28, 2014.

Thirty-Nine Weeks Ended October 4, 2015 and Thirty-Nine Weeks Ended September 28, 2014

Net Sales

	Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
	(in thousands)
Net sales	$	107,682	$	93,151

Net sales for the thirty-nine weeks ended October 4, 2015 were approximately $107.68 million compared to $93.15 million for the thirty-nine weeks ended September 28, 2014. The thirty-nine weeks ended October 4, 2015 net sales included approximately $11.00 million attributable to our increased market penetration and content per vehicle, new product introductions, increased sales from approximately five more weeks of Chardan included in the results for the thirty-nine weeks ended October 4, 2015 versus the thirty-nine weeks ended September 28, 2014, and five weeks of sales from the Great Lakes

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acquisition that occurred on August 31, 2015. Other increases in net sales for the thirty-nine weeks ended October 4, 2015 were primarily attributable to a 3.4% overall increase in North American vehicle production in such period as compared to production during the thirty-nine weeks ended September 28, 2014.

Cost of Sales

	Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
	(in thousands)
Materials	$	55,579	$	48,750
Direct labor and benefits	15,444		11,973
Manufacturing overhead	10,146		8,763
Sub-total	81,169		69,486
Depreciation	863		761
Cost of Sales	82,032		70,247
Gross Profit	$	25,650	$	22,904

The major components of cost of sales are raw materials purchased from third parties, direct labor and benefits, and manufacturing overhead, including facility costs, utilities, supplies, repairs and maintenance, insurance, freight costs of products shipped to customers and depreciation.

Cost of Sales as a percent of Net Sales

	Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
Materials	51.6	%	52.3	%
Direct labor and benefits	14.4	%	12.9	%
Manufacturing overhead	9.4	%	9.4	%
Sub-total	75.4	%	74.6	%
Depreciation	0.8	%	0.8	%
Cost of Sales	76.2	%	75.4	%
Gross Profit	23.8	%	24.6	%

Cost of sales as a percentage of net sales for the thirty-nine weeks ended October 4, 2015 increased to 76.2% from 75.4% for the thirty-nine weeks ended September 28, 2014. The increase in cost of sales as a percentage of net sales was attributable to higher direct labor and benefits as a percentage of net sales, partially offset by lower material costs as a percentage of net sales. Material costs decreased to 51.6% for the thirty-nine weeks ended October 4, 2015 from 52.3% for the thirty-nine weeks ended September 28, 2014. Material costs for the thirty-nine weeks ended October 4, 2015 were lower compared to the thirty-nine weeks ended September 28, 2014 primarily due to favorable product mix and the acquisition of Chardan in February 2014 which eliminated the material markup on the products that Chardan supplies to us. These markups were present in 2014 before the acquisition, but not included in any material cost in 2015. Direct labor and benefit costs as a percentage of net sales was 14.4% for the thirty-nine weeks ended October 4, 2015 compared to 12.9% for the thirty-nine weeks ended September 28, 2014. Labor and benefit costs in the thirty-nine weeks ended October 4, 2015 were higher due to the increase in direct labor hours, directly related to reduced labor productivity due to a new product the Company launched in the second quarter of 2015. The Company expects to continue to further optimize our manufacturing process of this new product by the end of 2015. We expect margins related to this new product to normalize by the end of 2015. We also increased labor hours as we built up inventory of this product in anticipation of the closing of the facility that this new product is manufactured at. We will expect to continue manufacturing this new product at the plant facilities to which we are moving production to. Manufacturing overhead costs as a percentage of net sales were at 9.4% for both the thirty-nine weeks ended October 4, 2015 and the thirty-nine weeks ended September 28, 2014.

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Gross Profit

As a result of the increase in cost of sales as a percentage of net sales described above, gross profit as a percentage of net sales for the thirty-nine weeks ended October 4, 2015 decreased to 23.8% from 24.6% for the thirty-nine weeks ended September 28, 2014.

Selling, General and Administrative Expenses

	Thirty-Nine Weeks Ended October 4, 2015			Thirty-Nine Weeks Ended September 28, 2014
	(in thousands, except SG&A as a % of net sales)
SG&A, exclusive of line items below	$	14,951		$	13,678
Transaction expenses	416			237
Subtotal	15,367			13,915
Depreciation and amortization	1,900			1,840
SG&A	$	17,267		$	15,755
SG&A as a % of net sales	16.0		%	16.9		%

SG&A as a percentage of net sales for the thirty-nine weeks ended October 4, 2015 decreased to 16.0% from 16.9% for the thirty-nine weeks ended September 28, 2014. The decrease is primarily related to lower professional and consulting fees in the thirty-nine weeks ended October 4, 2015 compared to the thirty-nine weeks ended September 28, 2014, as well as the Company effectively leveraging its cost structure as fixed costs in SG&A represent a lower percentage of overall net sales in the twenty-five weeks ended October 4, 2015 compared to the twenty-six weeks ended September 28, 2014.

Operating Income

As a result of the foregoing factors, operating income for the thirty-nine weeks ended October 4, 2015 was $8.38 million compared to operating income of $7.15 million for the thirty-nine weeks ended September 28, 2014.

Non-Operating Expense

Non-operating expense for the thirty-nine weeks ended October 4, 2015 was $2.42 million compared to $2.72 million for the thirty-nine weeks ended September 28, 2014. The change in non-operating expense was primarily driven by interest expense. Interest expense was approximately $2.44 million for the thirty-nine weeks ended October 4, 2015, compared to $2.76 million for the thirty-nine weeks ended September 28, 2014. The decrease in interest expense in the 2015 period was primarily due to a decrease in interest expense on our term loan primarily due to $1.5 million less remaining on the principal balance of the term loan in 2015 as well as a lower average interest rate in 2015.

Income Before Income Taxes

As a result of the foregoing factors, income before income taxes for the thirty-nine weeks ended October 4, 2015 was $5.97 million, compared to $4.43 million for the thirty-nine weeks ended September 28, 2014.

Income Tax Provision

For the thirty-nine weeks ended October 4, 2015, the estimated effective income tax rate of 32.6%, applied to pre-tax income, resulted in income tax expense of $1.94 million. The difference between the actual effective rate and the statutory rate was mainly a result of the domestic production activities deduction, or DPAD, which provided a $0.17 million income tax benefit which reduced our effective tax rate by 2.9%. During the thirty-nine weeks ended September 28, 2014 the estimated effective income tax rate of 30.7%, applied to pre-tax income, resulted in income tax expense of $1.42 million. The difference between the actual effective rate and the statutory rate was mainly a result of the domestic production activities deduction, or DPAD which provided a $0.14 million income tax benefit which reduced our effective tax rate by 3.2%. The Company has deferred tax assets associated with timing differences between when an expense is recorded for book purposes versus when it is deductible for tax. The Company has considered evidence both supporting and not supporting the determination that the deferred tax assets are more likely than not to be realized, and has not recorded a tax valuation allowance as of October 4,

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2015. The Company will continue to evaluate whether the deferred tax assets will be realizable, and if appropriate, will record a valuation allowance against these assets.

Net income

As a result of the increased net sales and changes in expenses discussed above, net income for the thirty-nine weeks ended October 4, 2015 was $4.02 million compared to $3.01 million during the thirty-nine weeks ended September 28, 2014.

Liquidity and Capital Resources

Our principal sources of liquidity are cash flow from operations and borrowings under our credit facility from our senior lender. Our primary uses of cash are payment of vendors, payroll, operating costs, capital expenditures and debt service. As of October 4, 2015 and January 4, 2015, we had a cash balance of $0.72 million and $0.76 million, respectively. Our excess cash balance is swept daily and applied to reduce borrowings under our revolving line of credit, which remains available for re-borrowing, as needed, subject to compliance with the terms of the facility. As of October 4, 2015 and January 4, 2015 , we had $3.73 million and $10.45 million, respectively, available to be borrowed under our revolving credit facility. At each such date, we were in compliance with all debt covenants. We believe that our sources of liquidity, including cash flow from operations, existing cash and our revolving credit facility are sufficient to meet our projected cash requirements for at least the next fifty two weeks. Subsequent to the closing of our IPO, we used proceeds remaining after paying the 16% senior subordinated note to temporarily reduce the outstanding balance on our revolving line of credit. We then financed the acquisition of Great Lakes on August 31, 2015 with borrowing under our revolving line of credit.

While we believe we have sufficient liquidity and capital resources to meet our current operating requirement and expansion plans, we may elect to pursue additional growth opportunities that could require additional debt or equity financing. If we are unable to secure additional financing at favorable terms in order to pursue such additional growth opportunities, our ability to pursue such opportunities could be materially adversely affected.

Dividends

Our payment of dividends on our common stock in the future will be determined by our board of directors in its sole discretion and will depend on business conditions, our financial condition, earnings, liquidity and capital requirements. Our senior secured credit facility contains financial covenants which may have the effect of precluding or limiting the amounts that we can pay as dividends.

The following table presents cash flow data for the periods indicated.

	Thirty-Nine Weeks Ended October 4, 2015			Thirty-Nine Weeks Ended September 28, 2014
	(in thousands)
Cash flow data
Cash flow provided by (used in):
Operating activities	$	1,868		$	4,850
Investing activities	(14,757		)	(3,748		)
Financing activities	12,851			(1,589		)

As a public company, we will incur additional general and administrative expenses that we did not incur as a private company, such as, increased directors and officers liability insurance premiums, investor relation costs, NYSE MKT listing expenses and increased legal and accounting expenses.

Operating Activities

Cash provided by operating activities consists of net income adjusted for non-cash items, including depreciation and amortization, amortization of deferred financing charges, loss on derivative instruments, bad debt expense, stock option and warrant expense, accrued interest, extinguishment of debt, changes in deferred income taxes, and the effect of working capital changes. The primary drivers of cash inflows and outflows are accounts receivable, inventory, accounts payable and accrued interest.

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During the thirty-nine weeks ended October 4, 2015, net cash provided by operating activities was $1.87 million, compared to cash provided by operating activities of $4.85 million for the thirty-nine weeks ended September 28, 2014.

Net cash for the thirty-nine weeks ended October 4, 2015 was mainly impacted by an increase in net income to $4.02 million resulting from the expansion of our operations offset by decreases in working capital, primarily in inventory balances.

The thirty-nine weeks ended September 28, 2014 was mainly impacted by net income of $3.01 million and increases in working capital.

Investing Activities

Cash used in investing activities consists principally of business acquisitions and purchases of property, plant and equipment.

In the thirty-nine weeks ended October 4, 2015, we paid $11.82 million in cash to acquire the Great Lakes Business. We made capital expenditures of $2.99 million of which $1.84 million was related to the construction of a new facility in Georgia as described below.

In the thirty-nine weeks ended September 28, 2014, we paid $2.32 million in cash to acquire the Chardan Business. During the period, we made capital expenditures of $1.62 million mainly for increased manufacturing capacity.

We plan to spend a total of approximately $3.57 million on capital expenditures during fiscal year 2015, which includes the $2.99 million above spent to date. Construction of the Georgia facility was completed in July 2015. Our senior lender provided financing for the new facility by increasing the amount available for borrowing under the revolver.

Financing Activities

Cash flows provided by (used in) financing activities consisted primarily of borrowings and payments under our senior credit facility, payment of debt issuance costs, proceeds from the sale of stock, the repayment of debt assumed through acquisitions, proceeds received from our IPO, payment of IPO costs, and distribution of cash dividends.

In the thirty-nine weeks ended October 4, 2015, we had inflows of $12.85 million primarily due to $25.67 million of gross proceeds we received in the IPO as well as $6.72 million of proceeds from our revolving credit facility. These amounts were partially offset by $14.65 million of payments on debt, including $13.1 million paid on our subordinated debt from proceeds received from the IPO. Other outflows included $3.44 million due to expenses for the completed IPO, $0.75 million for post acquisition payments we made in regards to the 2013 Unique Fabricating acquisition, and outflows of $1.44 million on payments of cash dividends.

As of October 4, 2015, $15.67 million was outstanding under the revolving credit facility. Borrowings under the revolver are subject to a borrowing base and reduced to the extent of letters of credit issued under the senior credit facility. As of October 4, 2015, the maximum additional available borrowings under the revolver was $3.73 million based upon the borrowing base and after giving effect to a $0.10 million letter of credit related to rental payments to the landlord of one of our facilities. Amounts repaid under the revolver will be available to be re-borrowed, subject to compliance with the terms of the facility.

In the thirty-nine weeks ended September 28, 2014, we had net payments of $1.02 million on our revolving credit facility, and $0.36 million due to expenses for the expected IPO.

Senior Credit Facility

We maintain a senior credit facility with Citizens Bank, National Association (formerly RBS Citizens, N.A.) pursuant to which we currently may borrow up to $19.50 million under the revolver and up to $20.00 million under the term loan. The term loan bears interest at the LIBOR rate for a period equal to one month, plus 3.0% to 3.5%. The term loan matures in December 2017. The revolver bears interest at the LIBOR rate plus an applicable margin ranging from 2.75% to 3.25%. We are permitted to prepay in part or in full amounts due under the senior credit facility without penalty. Our obligations under the senior credit facility may be accelerated upon the occurrence of an event of default, which include customary events for a financing arrangement of this type, including, without limitation, payment defaults, defaults in the performance of affirmative or negative covenants (including financial ratio maintenance requirements), bankruptcy or related defaults, defaults on certain other indebtedness, the material inaccuracy of representations or warranties, material adverse changes, and changes related to

34

ownership. In the event of an event of default, the interest rate on the revolver and term loan will increase by 2.0% per annum plus the then applicable rate. The senior credit facility requires that we repay term loan principal annually in an amount equal to 50% of excess cash flow, as defined, for the year end 2014 and for each subsequent year until the senior loan coverage, as defined, calculated as of the end of each year is less than 2:00 to 1:00. An amendment in 2014 increased the amount available under the revolver to $19.50 million to enable us to finance the construction of a new facility across the street from our existing facility in LaFayette, Georgia, as noted above. We financed the acquisition of Great Lakes on August 31, 2015 with availability under the revolver.

Unique Fabricating NA’s obligations under the senior credit facility are guaranteed by each of its United States subsidiaries and by Unique Fabricating, Inc. and secured by a first priority security interest in all tangible and intangible assets, including capital stock of the United States subsidiaries of Unique Fabricating NA and by a mortgage on our facilities in LaFayette, Georgia, Louisville, Kentucky, Evansville, Indiana, Fort Smith, Arkansas and Murfreesboro, Tennessee.

In accordance with the requirements of our senior credit facility, we purchased a derivative financial instrument for the purpose of hedging certain identifiable transactions in order to mitigate risks related to cash flow variability caused by interest rate fluctuations. The derivative financial instrument is in the form of an interest rate swap that we have elected not to apply hedge accounting for financial reporting purposes. The interest rate swap is recognized at its fair value. Monthly settlement payments due on the interest rate swap and changes in its fair value are recognized currently as interest expense.

Effective April 26, 2013, we entered into an interest rate swap for a notional amount of $4.71 million. Effective January 14, 2014, in connection with the refinancing of the senior credit facility in December 2013, we entered into a new interest rate swap that requires us to pay 1.27% fixed interest while receiving a variable base rate of one-month LIBOR. The notional amount of the swap began at $10.00 million and decreases by $0.25 million each quarter until March 31, 2016, when it begins to decrease by $0.31 million per quarter until it expires on January 31, 2017.

16% Senior Subordinated Note

At October 4, 2015, we had outstanding $0.0 million principal amount of our 16% senior subordinated note. The senior subordinated note was expressly junior and subordinated only to the debt outstanding under the senior credit facility. Interest on the subordinated note accrued at a rate of 16.0% per annum, payable monthly. The Company elected a minimum cash interest rate of 12.0% and defer up to 4.0% interest by delivering an in-kind note. Accrued interest on the senior subordinated note is approximately $0.0 million as of October 4, 2015. The senior subordinated note was to mature on March 16, 2018. The senior subordinated note could be prepaid at any time after the second anniversary of the date of its issuance in March 2013 without a prepayment premium or penalty. The senior subordinated note was secured by a security interest, which was subordinated to the security interest securing debt outstanding under the senior credit facility, in all tangible and intangible interests, including capital stock of our United States subsidiaries. We prepaid the entire senior subordinated note with a portion of the net proceeds from the IPO on July 15, 2015.

We must comply with a minimum debt service financial covenant and a senior funded indebtedness to EBITDA covenant, as defined. As of October 4, 2015, we were in compliance with all loan covenants.

The senior credit facility also contains customary affirmative covenants, including: (1) maintenance of legal existence and compliance with laws and regulations; (2) delivery of consolidated financial statements and other information; (3) maintenance of properties in good working order; (4) payment of taxes; (5) delivery of notices of defaults, litigation, ERISA events and material adverse changes; (6) maintenance of adequate insurance; and (7) inspection of books and records.

The senior credit facility contains customary negative covenants, including restrictions on: (1) the incurrence of additional debt; (2) liens and sale-leaseback transactions; (3) loans and investments; (4) guarantees and hedging agreements; (5) the sale, transfer or disposition of assets and businesses; (6) dividends on, and redemptions of, equity interests and other restricted payments, including dividends and distributions to the issuer by its subsidiaries; (7) transactions with affiliates; (8) changes in the business conducted by us; (9) payment or amendment of subordinated debt and organizational documents; and (10) maximum capital expenditures.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, sales or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in our securities.

Indemnification Agreements

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In the normal course of business, we provide customers with indemnification provisions of varying scope against claims of intellectual property infringement by third parties arising from the use of our products. Historically, costs related to these indemnification provisions have not been significant and we are unable to estimate the maximum potential impact of these indemnification provisions on our future results of operations. In addition, we have entered into indemnification agreements with directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our consolidated balance sheets, consolidated statements of operations, consolidated statements of stockholders’ equity or consolidated cash flows.

Contractual Obligations and Commitments

The Company's contractual obligations and commitments outstanding as of October 4, 2015 have changed materially since the amounts as of January 4, 2015 as set forth in our Prospectus. These obligations and commitments related to operating leases, future debt payments, and a management services agreement. Subsequent to the closing of the IPO, we repaid with the net proceeds of the offering the $13.1 million principal amount of our 16% senior subordinated note on July 15, 2015.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect amounts reported in those statements. We have made our best estimates of certain amounts contained in our consolidated financial statements. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities. However, application of our accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ materially from these estimates. Management believes that the estimates, assumptions, and judgments involved in the accounting policies that have the most significant impact on our consolidated financial statements are discussed in the Critical Accounting Policies section of Management's Discussion and Analysis of Financial Condition and Results of Operations in the Prospectus. There have been no material changes to our critical accounting policies or uses of estimates since the date of our Prospectus.

Recently Issued Accounting Pronouncements

Refer to Note 1 to the consolidated financial statements in Part I Item 1 of this Quarterly Report on Form 10-Q.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate and foreign exchange risks.

Interest Rate Fluctuation Risk

Our borrowings under notes payable are at fixed interest rates, but our borrowings under our senior credit facility bear interest at fluctuating rates. In order to mitigate, in part, the potential effects of the fluctuating rates, effective as of January 17, 2014, in connection with the refinancing of the senior credit facility, we entered into an interest rate swap with a notional amount initially of $10.00 million, which decreases by $0.25 million each quarter until March 31, 2016 when it decreases by $0.31 million per quarter until the swap terminates on January 31, 2017. The swap requires that the Company pay a fixed rate of 1.27% per annum while receiving a variable rate based on one month LIBOR. See note 7 of notes to our consolidated financial statements for further information. We do not believe that an increase or decrease in interest rates of 100 basis points would have a material effect on our operating results or financial condition.

Foreign Currency Risk

Our functional currency is the U.S. dollar. To date, substantially all of our bookings and operating expenses have been denominated in U.S. dollars, therefore we are not currently subject to significant foreign currency risk. However, if our international operations continue to grow, our risks associated with fluctuation in currency rates may become greater. We intend to continue to assess our approach to managing this potential risk. Currency fluctuations or a weakening U.S. dollar can increase the costs of our international expansion. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our consolidated financial statements. To date, foreign currency transaction gains and losses and exchange rate fluctuations have not been material to our consolidated financial statements, and we have not engaged in any foreign currency hedging transaction.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management establishes and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) to ensure that the information we disclose under the Exchange Act is properly and timely reported. We provide this information to our Chief Executive Officer and Chief Financial Officers as appropriate to allow for timely decisions.

Our controls and procedures are based on assumptions. Additionally, even effective controls and procedures only provide reasonable assurance of achieving their objectives. Accordingly, we cannot guarantee that our controls and procedures will succeed or be adhered to in all circumstances.

We have evaluated our disclosure controls and procedures, with the participation, and under the supervision, of our management, including our Chief Executive Officer and Chief Financial Officer. Based on this evaluation, our Chief Executive and Chief Financial Officer has concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. We currently have a significant deficiency previously identified which has not yet been remediated, but we believe this significant deficiency does not change the effectiveness of our disclosure controls and procedures covered by this report. The significant deficiency was identified at one of our subsidiaries where an individual at the subsidiary had full access to network and financial applications and the ability to post transactions without additional review procedures.

We have begun to address the significant deficiency by incorporating review procedures on financial related transactions posted by this individual, but have not yet remediated this significant deficiency. More information concerning this matter can be found in the section of Risk Factors in the Prospectus.

Changes in Internal Control over Financial Reporting

Except in connection with the Great Lakes acquisition completed during the thirty-nine weeks ended October 4, 2015. there were no material changes in the Company's internal controls over financial reporting during the thirty-nine weeks ended October 4, 2015 that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting. The Company is integrating Great Lakes into the Company's operations and internal control processes. Specifically, as permitted by SEC rules and regulations, the Company has excluded management's evaluation of internal controls over financial reporting as of October 4, 2015.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Not applicable

ITEM 1A. RISK FACTORS

We may pursue acquisitions that involve inherent risks related to potential internal control weaknesses and significant deficiencies which may be costly for us to remedy and could impact managements assessment of internal control effectiveness.

We have acquired companies recently that have small accounting and finance staff increasing the potential for material weaknesses and significant deficiencies in financial reporting at the stand alone entity level. Although our independent registered public accounting firm will not be required to formally attest to our internal control effectiveness while we are an emerging growth company, management is still responsible for assessing internal control effectiveness at a consolidated level. As we integrate these smaller acquired companies into our business the process of integrating acquired operations into our existing operations with entities that potentially have material weaknesses and/or significant deficiencies may result in unforeseen operating difficulties and may require significant financial resources that would otherwise be available for the ongoing development or expansion of our existing business. These potential material weaknesses and deficiencies may be costly for us to remedy properly and properly assess internal control effectiveness.

There have been no other material changes from the risk factors set forth in our Prospectus filed with the SEC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Use of Proceeds from Initial Public Offering of Common Stock

On July 7, 2015, we completed our initial public offering of 2,702,500 shares of our common stock at a public offering price of $9.50 per share, including 352,500 shares of common stock subject to an over-allotment option granted to the underwriters, for aggregate gross proceeds of approximately $25.67 million. The offering and all of the shares in the offering were registered under the Securities Act pursuant to a Registration Statement on Form S-1 (File No. 333-200072) which was declared effective by the Securities and Exchange Commission on June 30, 2015, and a registration statement on Form S-1 (File No. 333-205394) filed pursuant to Rule 462(b) of the Securities Act. Roth Capital Partners and Taglich Brothers, Inc, acted as Joint Book-Running Managers and National Securities Corporation acted as Co-Manager of the offering. We received net proceeds of $22.23 million after deducting the underwriting discount and estimated offering expenses. Affiliates of Taglich Brothers, Inc, the Joint Book-Running Managers, owned approximately $18.6% of our common stock before the offering and certain associates of Taglich Brothers, Inc. and its affiliates are members of our board of directors.

We have used approximately $13.1 million of the net proceeds to repay the $13.1 million principal amount of our 16% senior subordinated note, together with accrued interest through the date of payment. We have used the proceeds remaining after such payment to temporarily reduce borrowings under the revolver portion of our senior secured credit facility.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION

None

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ITEM 6. EXHIBITS

Exhibit No.	Description
10.1*	Asset Purchase Agreement, dated as of August 31, 2015, by and among Unique Molded Foam Technologies, Inc., Great Lakes Foam Technologies Inc., and the Sole Stockholders of Great Lakes Foam Technologies Inc.
10.2*	ISO Award Agreement, dated as of August 17, 2015, for John Weinhardt pursuant to the Unique Fabricating, Inc. 2014 Omnibus Performance Award Plan
10.3*	ISO Award Agreement, dated as of August 17, 2015, for Thomas Tekiele pursuant to the Unique Fabricating, Inc. 2014 Omnibus Performance Award Plan
31.1*	Certification of the Chief Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Chief Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of the Chief Executive Officer and Chief Financial Officer of the Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS+	XBRL Instance Document
101.SCH+	XBRL Taxonomy Extension Schema Document
101.CAL+	XBRL Taxonomy Calculation Linkbase Document
101.DEF+	XBRL Taxonomy Definition Linkbase Document
101.LAB+	XBRL Taxonomy Label Linkbase Document
101.PRE+	XBRL Taxonomy Presentation Linkbase Document

* Filed herewith.

** Pursuant to Item 601(b)(32)(ii) of Regulation S-K(17 C.F.R 229.601(b)(32)(ii)), this certification is deemed furnished, not filed, for purposes of section 18 of the Exchange Act, nor is it otherwise subject to liability under that section. It will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except if the registrant specifically incorporates it by reference.

+ Filed electronically with the report.

# Indicates management contract or compensatory plan, contract or agreement.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UNIQUE FABRICATING, INC.
Date: November 17, 2015	By:	/s/ John Weinhardt
		Name: John Weinhardt
		Title:  President and Chief Executive Officer
Date: November 17, 2015	By:	/s/ Thomas Tekiele
		Name: Thomas Tekiele
		Title:  Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-10.1

Exhibit 10.1

EXECUTION VERSION

ASSET PURCHASE AGREEMENT

by and among

UNIQUE MOLDED FOAM TECHNOLOGIES, INC.,

GREAT LAKE FOAM TECHNOLOGIES INC.,

and

THE STOCKHOLDERS OF

GREAT LAKE FOAM TECHNOLOGIES INC.

Dated as of August 31, 2015

TABLE OF CONTENTS

ARTICLE I	DEFINITIONS	1
ARTICLE II	SALE AND PURCHASE	10
2.1	Sale and Purchase	10
2.2	Purchase Price	10
2.3	Purchase Price Adjustment	10
2.4	Allocation of Purchase Price	12
2.5	Assumption and Non-Assumption of Liabilities by Buyer	12
ARTICLE III	CLOSING AND DELIVERIES	13
3.1	Closing	13
3.2	Deliveries by the Company	13
3.3	Deliveries by Buyer	14
ARTICLE IV	REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY AND THE STOCKHOLDERS	14
4.1	Organization and Authority	15
4.2	Capitalization	15
4.3	Subsidiaries	15
4.4	No Conflict; Required Filings and Consents	15
4.5	Financial Statements	16
4.6	Absence of Certain Changes	16
4.7	Taxes	18
4.8	Title to and Sufficiency of Properties	19
4.9	Real Property	19
4.10	Compliance with Laws	20
4.11	Permits	21
4.12	Employee Benefit Plans	21
4.13	Material Contracts	23
4.14	Legal Proceedings	24
4.15	Intellectual Property	25
4.16	Insurance	27
4.17	Personnel	27
4.18	Environmental Matters	28
4.19	Customers and Suppliers	29
4.20	Accounts Receivable	29
4.21	Related-Party Transactions	30
4.22	Product Liability and Warranty	30
4.23	Undisclosed Liabilities	30
4.24	Certain Business Practices	30
4.25	No Brokers	31
4.26	Limitations on Representations and Warranties	31

ARTICLE V	REPRESENTATIONS AND WARRANTIES OF BUYER	31
5.1	Organization and Standing	31
5.2	Authorization, Validity, and Effect	31
5.3	No Conflict; Required Filings and Consents	32
ARTICLE VI	COVENANTS AND AGREEMENTS	32
6.1	Publicity	32
6.2	Tax Matters	32
6.3	Non-Assigned Contracts	32
6.4	Name Change	33
6.5	Administration of Accounts	33
ARTICLE VII	REMEDIES	34
7.1	Surival	34
7.2	Indemnification by Buyer	34
7.3	Indemnification by the Company and Stockholders	35
7.4	Limitations on Indemnification Payments to the Buyer Indemnitees	35
7.5	Limitations on Indemnification Payments to the Seller Indemnitees	36
7.6	Procedures	36
7.7	Additional Indemnification Provisions	40
ARTICLE VIII	MISCELLANEOUS AND GENERAL	41
8.1	Seller Representative	41
8.2	Expenses	42
8.3	Successors and Assigns	42
8.4	Third-Party Beneficiaries	42
8.5	Notices	42
8.6	Complete Agreement	44
8.7	Captions	44
8.8	Amendment	44
8.9	Waiver	44
8.10	Governing Law; Forum	44
8.11	Waiver of Jury Trial	45
8.12	Severability	45
8.13	Schedules	45
8.14	Exclusive Remedy	46
8.15	Joint Drafting	46
8.16	Specific Performance	46
8.17	Counterparts	47
8.18	Confidentiality	47

Exhibit A – Employment Agreement (Tim Packer)

Exhibit B – Escrow Agreement

Exhibit C – Lease

Exhibit D – Non-Competition Agreements

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of August 31, 2015, is made by and among Unique Molded Foam Technologies, Inc., a Delaware corporation (“Buyer”), Great Lake Foam Technologies Inc., a Michigan corporation (the “Company”), Bill MacCready and Tim Packer. Bill MacCready and Tim Packer are referred to herein each as a “Stockholder” and collectively as the “Stockholders”.

RECITALS

A.    The Stockholders own, collectively, one hundred percent (100%) of the outstanding capital stock of the Company.

B.     The Company desires to sell to Buyer, and Buyer desires to purchase from the Company, substantially all of the assets of the Company, upon the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE IDEFINITIONS

For purposes of this Agreement:

“2014 Balance Sheet” has the meaning set forth in Section 4.5(a).

“Accounts Receivable” means trade receivables, non‑trade receivables and accrued revenues of the Company.

“Actions” means any litigation, hearing, suit, claim, complaint, legal proceeding, administrative enforcement proceeding or arbitration proceeding, including, without limitation, any of the foregoing by or before any Governmental Authority.

“Affiliate” of any Person means any other Person which, directly or indirectly, controls or is controlled by that Person, or is under common control with that Person. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” has the meaning set forth in the preamble.

“Agreement Date” means the date of this Agreement.

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“Assumed Liabilities” has the meaning set forth in Section 2.5(a).

“Bill of Sale and Assumption Agreements” means the bills of sale, assignments and other documents (including, as applicable, patent assignments, trademark assignments and copyright assignments) conveying to Buyer all of the Purchased Assets, which documents shall be in forms and substance satisfactory to Buyer.

“Business” means the business of the Company, including, without limitation, injection mold manufacturing of polyurethane components for the automotive, RV, marine, furniture, industrial, medical and other product markets.

“Business Day” means any day other than a Saturday, Sunday or a day on which banks in New York, New York are authorized or obligated by Law or executive order to close.

“Buyer” has the meaning set forth in the preamble.

“Buyer Claim” has the meaning set forth in Section 7.6(b).

“Buyer Claims Notice” has the meaning set forth in Section 7.6(b).

“Buyer Indemnitees” has the meaning set forth in Section 7.3.

“Cap” has the meaning set forth in Section 7.4(b).

“Cash” as of any time means cash balances on hand in bank accounts at such time plus cash equivalents recorded consistent with past practice.

“CERCLA” has the meaning set forth in the definition of “Environmental Laws.”

“Claim” means a Buyer Claim or a Seller Claim, as the context requires.

“Claim Response” has the meaning set forth in Section 7.6(a).

“Cleanup” has the meaning set forth in Section 7.7(e).

“Closing” has the meaning set forth in Section 3.1.

“Closing Date” has the meaning set forth in Section 3.1.

“Closing Working Capital” has the meaning set forth in Section 2.3(a).

“COBRA” has the meaning set forth in Section 4.12(e).

“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

“Company” has the meaning set forth in the preamble.

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“Company Debt” means (a) any Liability of the Company (i) for borrowed money (including the current portion thereof), (ii) under any reimbursement obligation relating to draws under any letter of credit, bankers’ acceptance or note purchase facility, (iii) for the payment of money relating to leases which, in accordance with GAAP, are required to be classified as capitalized lease obligations, (iv) under any conditional sale or other title retention agreement with respect to acquired property, or for all or any part of the deferred purchase price of property, and/or (v) evidenced by any note, bond, debenture or other similar instrument, and (b) any Liability of others described in the preceding clause (a) that the Company has guaranteed, that is recourse to the Company or any of its assets or that is otherwise its legal liability or that is secured in whole or in part by the assets of the Company. For purposes of this Agreement, Company Debt also includes any and all accrued interest, success fees, prepayment premiums, make-whole premiums, bank overdrafts or penalties and fees or expenses (including attorneys’ fees) associated with the prepayment of any Company Debt, and for the avoidance of doubt, includes any Company Debt outstanding to any Stockholder.

“Company Employee Plan” means any plan, program, policy, practice, contract, agreement or other arrangement providing for compensation, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits or other employee benefits or remuneration of any kind, whether written, unwritten or otherwise, funded or unfunded, including each “employee benefit plan,” within the meaning of Section 3(3) of ERISA that is maintained, contributed to, or required to be contributed to, by the Company or any ERISA Affiliate for the benefit of any employee, or with respect to which the Company or any ERISA Affiliate has any liability or obligation.

“Confidential Information” has the meaning set forth in Section 8.18.

“Consent” means any consent, approval, authorization, qualification, waiver, registration or notification required to be obtained from, filed with or delivered to a Governmental Authority or any other Person in connection with the consummation of the transactions provided for herein or in any Related Document.

“Contract” means any agreement, contract, personal property lease, real property lease, capital lease, note, loan, evidence of indebtedness, guaranty, purchase order, customer order, letter of credit, franchise agreement, undertaking, obligation covenant-not-to-compete, employment agreement, license, instrument, obligation or commitment (i) to which the Company is a party, or (ii) by which the Company or the assets of the Company are bound, whether oral or written.

“Current Assets” means, as of any date, only the following categories of the Company’s current assets: (i) trade Accounts Receivable (but only to the extent such Accounts Receivable conform to the representation and warranties set forth in Section 4.20), (ii) Inventory (but only to the extent such Inventory conforms to the representations and warranties set forth in Section 4.8(b)), and (iii) prepaid expenses.

“Current Liabilities” means, as of any date, only the following categories of the Company’s current liabilities: (i) trade accounts payable, (ii) Toyota Commission, and (iii) uncleared checks outstanding.

3

“Deductible” has the meaning set forth in Section 7.4(a).

“Dispute Notice” has the meaning set forth in Section 7.6(b).

“Dispute Period” has the meaning set forth in Section 7.6(b).

“Employee” has the meaning set forth in Section 4.17(c).

“Employment Agreement” means an employment agreement with Tim Packer, substantially in the form and on the terms of Exhibit A.

“Environment” means soil, surface water, groundwater, land, stream, sediments and ambient air.

“Environmental Law” means any Law, administrative or judicial decision or order, concerning the protection of human health, safety or the Environment, including, without limitation, the use, generation, treatment, storage, disposal, Release, transportation or arrangement for transportation of any Hazardous Material. The term “Environmental Laws” includes, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), the Occupational Safety and Health Act of 1970, as amended, the Federal Water Pollution Control Act, as amended, the Federal Resource Conservation and Recovery Act, as amended, the Federal Clean Water Act, as amended, the Toxic Substances Control Act, as amended, the Federal Clean Air Act, as amended, and any and all other comparable state or local or other Laws, and all amendments thereto or regulations promulgated thereunder, relating to the Environment, health or safety.

“Environmental Liability” means any Liability or Loss relating to or alleged to relate to any environmental, health or safety matter (including those involving natural resources) or condition existing on or before the Closing Date for which the Company or any of its Predecessors has (directly, contingently or otherwise) or is alleged to have liability or responsibility, including any Liability or Loss relating to any Environmental Law, Contract, tort, implied or express warranty or strict liability.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means any Person under common control with the Company within the meaning of Section 414(b) or (c) of the Code, and the regulations issued thereunder.

“Escrow Account” means the escrow account to be held by the Escrow Agent in accordance with the terms of the Escrow Agreement.

“Escrow Agent” means Peapack-Gladstone Bank.

“Escrow Agreement” means an agreement by and among the Company, the Seller Representative, the Stockholders, the Escrow Agent and Buyer, substantially in the form attached hereto as Exhibit B.

4

“Escrow Fund” means $1,000,000.

“Estimated Working Capital” has the meaning set forth in Section 2.3(a).

“Excluded Assets” has the meaning set forth in Schedule 2.1.

“Excluded Liabilities” has the meaning set forth in Section 2.5(c).

“Excluded Representations” has the meaning set forth in Section 7.1(b).

“Final Working Capital Statement” means the Working Capital Statement reflecting the Final Working Capital.

“Financial Statements” has the meaning set forth in Section 4.5(a).

“Governmental Authority” means any government or political subdivision, whether federal, state, local, domestic or foreign, or any agency or instrumentality of any such government or political subdivision, or any federal, state, local, domestic or foreign court.

“Hazardous Material” means any toxic, hazardous or dangerous substance or waste, any pollutant or contaminant, including asbestos and asbestos-containing materials, hazardous waste, hazardous material, hazardous substance, petroleum or its products or fractions, petroleum-containing materials, radiation and radioactive materials and polychlorinated biphenyls, all as defined in any Environmental Law.

“HIPAA” has the meaning set forth in Section 4.12(e).

“I-9 Form” has the meaning set forth in Section 4.17(c).

“Indemnified Party” means Buyer Indemnitees and/or Seller Indemnitees, as the context requires.

“Indemnifying Party” has the meaning set forth in Section 7.6(d).

“Insurance Policies” has the meaning set forth in Section 4.16(a).

“Intellectual Property” means any and all patents, patents pending and patent applications; trademarks, service marks, trade names, mask works, service marks, brand names, trade dress, slogans, logos and Internet domain names, websites and browsers and their associated goodwill; inventions, invention studies, discoveries, ideas, processes, formulae, designs, computer programs, models, industrial designs, know-how, confidential information, proprietary information and trade secrets, whether or not patented or patentable; copyrights, writing and other copyrightable works and works in progress, databases, website content and software; all other intellectual property rights and foreign equivalent or counterpart rights and forms of protection of a similar or analogous nature or having similar effect in any jurisdiction throughout the word; all registrations and application for registration of any of the foregoing; and any renewals, extensions, continuations, divisionals, reexaminations or reissues or equivalent or counterpart of any of the foregoing in any

5

jurisdiction throughout the world; in each case, that is owned by the Company or used by it in the conduct of its business.

“Interim Balance Sheet” has the meaning set forth in Section 4.5(a).

“Interim Financial Statements” has the meaning set forth in Section 4.5(a).

“Inventory” means all inventory, merchandise, finished goods, work in progress and raw materials owned by the Company.

“KBD Litigation” means KBD & Associates, Inc. v. Great Lake Foam Technologies, Inc., File No. 10-0408-CK, in the Circuit Court for Jackson County, Michigan.

“Law” means any law, statute, code, ordinance, regulation or rule of any Governmental Authority.

“Lease” means the lease for the Leased Real Property, substantially in the form attached hereto as Exhibit C.

“Leased Real Property” means the real property leased or subleased by the Company and all buildings and other improvements thereon.

“Liabilities” means any debts, liabilities and other obligations of any kind or nature, whether accrued or fixed, known or unknown, absolute or contingent, matured or unmatured, determined or determinable, several or joint and several, direct or indirect, including, without limitation, those arising under any Law (including, without limitation, any Environmental Law), Action, Order and/or Contract.

“Liens” means any Mortgage, lien, security interest, pledge, attachment, charge, claim, condition or other similar encumbrance or restriction of any kind, including any restriction on use, voting, transfer (other than transfer restrictions under applicable Law), receipt of income or exercise of any other attribute of ownership.

“Losses” has the meaning set forth in Section 7.2.

“Material Adverse Effect” means, with respect to the Company or Buyer, as applicable, any change, occurrence or development that has had (or would reasonably be expected to have) a material adverse effect on the business, assets, results of operations or financial condition of such party and/or, in the case of the Company, excluding (a) any change, occurrence or development resulting from general economic conditions, so long as such conditions do not disproportionately affect the business of such party; (b) any change, occurrence or development affecting companies in the industry in which it conducts its business generally, in each case so long as such event does not disproportionately affect the business of such party; (c) any failure by the Company to meet any internal or published projections, forecasts, or revenue or earnings predictions with respect to the Business; (d) any adverse change, effect, event, occurrence, state of facts or development resulting from or relating to compliance with the terms of, or the taking of any action required or permitted by, this Agreement or any of the Related Documents; (e) any adverse change,

6

effect, event, occurrence, state of facts or development arising from or relating to any change in accounting requirements or principles or any change in any Laws, so long as such changes do not disproportionately affect the Business or the Purchased Assets; (f) any adverse change, effect, event, occurrence, state of facts or development arising in connection with natural disasters or acts of nature, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof; or (g) any change in political regimes, conditions or climate whether in the United States or any other country or jurisdiction. References in this Agreement to dollar amount thresholds shall not be deemed to be evidence of a Material Adverse Effect or materiality.

“Material Contracts” has the meaning set forth in Section 4.13(b).

“Material Customers” has the meaning set forth in Section 4.19(a).

“Material Permits” has the meaning set forth in Section 4.11.

“Material Suppliers” has the meaning set forth in Section 4.19(b).

“Mortgage” has the meaning set forth in Section 4.9(c).

“Non-Assigned Contract” has the meaning set forth in Section 6.3.

“Non-Competition Agreements” means agreements in favor of Buyer relating to, among other things, non-competition, non-solicitation and confidentiality, substantially in the form and on the terms of Exhibit D.

“Notice” has the meaning set forth in Section 7.6(b).

“Order” means any decision, order, judgment, ruling, injunction, award, decree or writ of any Governmental Authority.

“Owned Real Property” means the real property owned by the Company and all buildings and other improvements thereon.

“Pension Plan” means each Company Employee Plan that is an “employee pension benefit plan” within the meaning of Section 3(2) of ERISA.

“Permits” means any federal, state, county, local or foreign license, permit, authorization, certificate of authority, qualification or similar document or authority that has been issued or granted by any Governmental Authority to the Company.

“Permitted Liens” means (a) Liens set forth on Schedule 1.1, (b) mechanics’, workmens’, repairmen’s, warehousemen’s, carriers’ or other like Liens arising or incurred in the ordinary course of business consistent with past practice or by operation of Law if the underlying obligations are not delinquent, and (c) with respect to Intellectual Property, licenses granted in the ordinary course of business consistent with past practice and listed on Schedule 1.1; provided, however, that none of the foregoing described in clauses (a), (b) or (c), individually or in the

7

aggregate, impair in any material respect the use and operation or value of the property to which they relate in the Business.

“Person” means any individual, sole proprietorship, partnership, corporation, limited liability company, joint venture, unincorporated society or association, trust or other legal entity or Governmental Authority.

“Product Liabilities” means, with respect to any products (including without limitation the Products) previously sold and/or sold as of the Closing Date, and/or services previously provided and/or provided as of the Closing Date, by or on behalf of the Company and/or any Predecessor, all Actions and other Liabilities relating to actual or alleged injury, damage, death or other harm, including to any Person, property or business, including without limitation (i) any relating to any actual or alleged defect in the design and/or manufacture of a product, and (ii) any product recalls or withdrawals relating thereto.

“Products” means the products of the Business currently or previously sold, including, without limitation, those set forth in Schedule 1.2.

“Purchase Price” has the meaning set forth in Section 2.2(a).

“Purchased Assets” has the meaning set forth in Schedule 2.1.

“Real Property” means all of the Owned Real Property and Leased Real Property.

“Real Property Leases” means all leases of any real property (and all buildings and other improvements thereon) to which the Company is a party, whether as lessor or lessee.

“Related Documents” means the Bills of Sale and Assumption Agreements, the Lease, the Employment Agreement, the Consulting Agreement, the Escrow Agreement, the Non-Competition Agreements, and all other documents, instruments and agreements entered into in connection with this Agreement and the transactions contemplated hereby.

“Release” means any releasing, spilling, pumping, pouring, emitting, emptying, discharging, injecting, escaping, disposing or dumping of a Hazardous Material into the Environment.

“Remaining Disputed Items” has the meaning set forth in Section 2.3(b).

“Representation Termination Date” has the meaning set forth in Section 7.1(b).

“Response Period” has the meaning set forth in Section 7.6(a).

“Responsible Party” has the meaning set forth in Section 7.6(d).

“Seller Claim” has the meaning set forth in Section 7.6(a).

“Seller Claims Notice” has the meaning set forth in Section 7.6(a).

8

“Seller Indemnitees” has the meaning set forth in Section 7.2.

“Seller Representative” means Tim Packer.

“Seller’s Knowledge” means the actual or constructive knowledge, after due inquiry, of any of the Stockholders.

“Selling Expenses” means all costs, fees and expenses of the Company or any of the Stockholders, or on behalf of any of them or any of the Company’s owners, stockholders, partners, members and other equity holders, officers, directors, managers, agents or representatives, in each case incurred in connection with the consummation of the transactions contemplated hereby, including, without limitation, (a) any brokerage fees, commissions, finders’ fees, investment banking fees or financial advisory fees, including those payable to Generational Equity, and (b) the fees and expenses of attorneys, advisors and consultants, including the law firm of Warner Norcross & Judd LLP.

“Settlement Accountant” has the meaning set forth in Section 2.3(b).

“Stockholder” and “Stockholders” has the meaning set forth in the preamble.

“Subsidiary” and “Subsidiaries” means, with respect to the Company, any other Person (a) whose board of directors or similar governing body, or a majority thereof, may presently be directly or indirectly elected or appointed by the Company or a subsidiary of the Company, (b) whose management decisions and corporate actions are directly or indirectly subject to the present control of the Company or a subsidiary of the Company, or (c) whose voting securities are more than fifty percent (50%) owned, directly or indirectly, by the Company or a subsidiary of the Company. The term “Subsidiary” shall include all subsidiaries of such Subsidiary.

“Target Working Capital” means Working Capital in the amount of $1,285,000.

“Tax” means, (i) any and all taxes (whether federal, state, local or foreign) including, without limitation, income, alternative or add-on minimum tax, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, license, withholding, payroll, employment, unemployment, social security, disability, excise, severance, stamp, occupation, premium, property, registration, estimated, capital stock, environmental or windfall profit tax, custom, duty or other tax of any kind whatsoever, together with any interest penalties, additions to tax or additional amounts imposed by any Taxing Authority, and (ii) any amounts described in clause (i) that are payable by any other party for which the Company is liable pursuant to any tax sharing agreement, tax indemnification agreement or other similar agreement.

“Tax Returns” means all Tax returns, statements, reports and forms required to be filed with any Taxing Authority.

“Taxing Authority” means any Governmental Authority responsible for the administration, assessment, determination, collection or imposition of any Tax.

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“Working Capital” means (a) the Current Assets as of any particular date (excluding any assets related to Taxes) minus (b) the Current Liabilities as of such date, excluding any liabilities for Taxes, in each case calculated consistent with the Interim Balance Sheet, and in accordance with the Company’s historical practices.

“Working Capital Overage” has the meaning, set forth in Section 2.3(a).

“Working Capital Statement” has the meaning set forth in Section 2.3(a).

“Working Capital Underage” has the meaning set forth in Section 2.3(a).

ARTICLE IISALE AND PURCHASE

2.1Sale and Purchase. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing the Company shall sell, assign, convey, set over, transfer and deliver to Buyer, and Buyer shall purchase from the Company, all of the Company’s right, title and interest in and to all of the Purchased Assets, free and clear of all Liens other than Permitted Liens.

2.2Purchase Price.

(a)Subject to the adjustments set forth in Section 2.3, the full consideration for the Purchased Assets (the “Purchase Price”) shall be:

(i)$12,000,000 (such sum, as may be increased or decreased pursuant to Section 2.3, the “Purchase Price”), and

(ii)the assumption of the Assumed Liabilities.

(b)At the Closing, Buyer shall pay by wire transfer of immediately available funds (i) to an account or accounts the Seller Representative will designate in writing prior to the Closing, the Purchase Price less the amount of the Escrow Fund, and (ii) to the Escrow Agent pursuant to the Escrow Agreement, the amount of the Escrow Fund.

2.3Purchase Price Adjustment.

(a)Working Capital Statement.

(i)Prior to the Closing Date, the Seller Representative shall deliver to Buyer a good faith estimate of the Working Capital as of a point in time immediately prior to the Closing, prepared in accordance with the Company’s historical practices, together with related supporting schedules, calculations and documentation and a calculation of any resulting Working Capital Underage or Working Capital Overage (the “Estimated Working Capital. If the Estimated Working Capital is less than the Target Working Capital, the Purchase Price paid at Closing shall be reduced by the amount of such shortfall (the “Working Capital Underage”), subject to further adjustment as provided in this Section 2.3. If the Estimated Working Capital is greater than the Target Working Capital, the Purchase Price paid at Closing shall be increased by the amount of such

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excess (the “Working Capital Overage”), subject to further adjustment as provided in this Section 2.3.

(ii)Within forty-five (45) days after the Closing Date, Buyer shall cause to be prepared and delivered to the Seller Representative a statement (the “Working Capital Statement”) setting forth the calculation of the Working Capital as of the point in time immediately prior to the Closing the (“Closing Working Capital”). The Working Capital Statement shall be prepared in accordance with the Company’s historical practices.

(b)Dispute. Within thirty (30) days following receipt by the Seller Representative of the Working Capital Statement, the Seller Representative shall either inform Buyer in writing that the Working Capital Statement is acceptable or deliver written notice to Buyer of any dispute the Seller Representative has with respect to the Working Capital Statement, which written notice shall describe in reasonable detail the items contained in the Working Capital Statement that the Seller Representative disputes and the basis for any such disputes and his calculation of the Closing Working Capital. If the Seller Representative does not notify Buyer of a dispute with respect to the Working Capital Statement within such thirty (30) day period, such Working Capital Statement and the Working Capital shall be final, conclusive and binding on the parties. In the event of such notification of a dispute, Buyer and the Seller Representative shall negotiate in good faith to resolve such dispute. If Buyer and the Seller Representative, notwithstanding such good faith effort, fail to resolve such dispute within thirty (30) days after the Seller Representative advises Buyer of its objections, then the items raised in the Seller Representative’s dispute notice that remain in dispute (the “Remaining Disputed Items”) shall be submitted to BDO, or if BDO is unwilling or unable to serve in such capacity, such other accounting firm as shall be mutually agreed upon by the parties (such accountant, the “Settlement Accountant”), who, acting as an expert and not as an arbitrator, shall resolve the Remaining Disputed Items. Prior to its engagement, the Settlement Accountant shall agree in writing to resolve the Remaining Disputed Items, but no others, in accordance with the provisions of this Section 2.3 and review of the parties’ positions and thereby establish the Closing Working Capital. If the parties are unable to agree upon the selection of the Settlement Accountant within five (5) Business Days after expiration of such thirty (30) day period, the Settlement Accountant shall be appointed by the American Arbitration Association. The Settlement Accountant shall make such determination within forty-five (45) days following the submission of the matter to the Settlement Accountant for resolution, and such determination shall be final, conclusive and binding on the parties absent fraud or arithmetic error. In the event any dispute is submitted to the Settlement Accountant for resolution as provided in this Section 2.3(b), the fees, charges and expenses of the Settlement Accountant shall be paid (i) one-half by the Company and the Stockholders, jointly and severally, and (ii) one-half by Buyer.

(c)Access. For purposes of complying with the terms set forth in this Section 2.3, each party shall cooperate with and make available to the other parties and their respective representatives all information, records, data and working papers and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Working Capital Statement and the resolution of any disputes in connection therewith.

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(d)Downward Adjustment. If the Closing Working Capital (as finally determined pursuant to Section 2.3(b)) is less than the Estimated Working Capital, then the Purchase Price shall be adjusted downward by the amount of such shortfall, and the amount of such shortfall shall be conclusively deemed to be the joint and several obligation of the Company and the Stockholders, and the Company and the Stockholders shall pay to Buyer, within five (5) Business Days from the date on which the Closing Working Capital is finally determined pursuant to Section 2.3(b), the amount of such shortfall by wire transfer of immediately available funds to an account designated in writing by Buyer to the Seller Representative. Notwithstanding anything to the contrary contained herein, the amount of such shortfall shall be paid by the Company and the Stockholders directly and shall not be paid out of the Escrow Fund.

(e)Upward Adjustment. If the Closing Working Capital (as finally determined pursuant to Section 2.3(b)) is greater than the Estimated Working Capital, then the Purchase Price shall be adjusted upward by the amount of such excess and Buyer shall pay or cause to be paid an amount in cash equal to such excess to the Seller Representative, on behalf of the Company. Such amount shall be paid by Buyer within five (5) Business Days from the date on which the Closing Working Capital is finally determined pursuant to Section 2.3(b), by wire transfer of immediately available funds to an account or accounts designated in writing by the Seller Representative to Buyer.

(f)No Adjustment. If the Closing Working Capital (as finally determined pursuant to Section 2.3(b)) is equal to the Estimated Working Capital, there shall be no post-Closing adjustment to the Purchase Price under this Section 2.3.

2.4Allocation of Purchase Price. The Purchase Price shall be allocated as set forth in Schedule 2.4 hereof. The parties agree that such allocation reflects arms-length negotiations, is reasonable, shall bind the parties and shall be consistently reflected on all of their United States, state and other Tax Returns.

2.5Assumption and Non-Assumption of Liabilities by Buyer.

(a)Except as otherwise provided in this Section 2.5, Buyer shall, at the Closing, assume and agree to pay, when due and payable, and perform and discharge in accordance with the applicable relevant governing Contracts, only the following Liabilities of the Company (subject to Section 2.5(b), the “Assumed Liabilities”): (i) all Current Liabilities of a fixed amount on the Working Capital Statement, and (ii) the Company’s respective obligations incurred under Contracts identified on Schedule 2.5(a) and effectively assigned by the Company to Buyer, in each case to the extent such obligations referred to in this clause (ii) are related to the Company’s Business and are by the terms of any such Contract required to be performed or paid after the Closing Date and do not arise out of or in connection with any pre-Closing breach thereof.

(b)Notwithstanding Section 2.5(a) above, no Liability or portion thereof shall be an Assumed Liability under Section 2.5(a) to the extent that (i) it is an Environmental Liability and/or a Product Liability, (ii) it is attributable to or relates to events, conditions or circumstances existing on or with respect to or arising from Real Property, and/or (iii) except for Current Liabilities (as defined herein), such Liability relates to any sale prior to the Closing of any

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portion of the Business. For the avoidance of doubt, Assumed Liabilities mean the Liabilities that are assumed by Buyer pursuant to the terms of this Section 2.5.

(c)Notwithstanding anything contained in this Agreement or in any Related Document to the contrary, Buyer shall not assume, undertake, accept, be bound by or otherwise be responsible for any Liabilities of the Company, any Subsidiary or any Predecessor (whether or not disclosed to Buyer) other than the Assumed Liabilities. “Excluded Liabilities” means all Liabilities that are not Assumed Liabilities including but not limited to (i) the Selling Expenses, (ii) any Liability of the Company under all Company Employee Plans, (iii) except to the extent included in calculating Working Capital, any Liability of the Company with respect to pre-Closing obligations to Employees, including any accrued vacation or sick pay or paid leave or time off from work, (iv) any Liability of the Company related to Taxes, and (v) any Liability related to or arising from the KBD Litigation (including any counterclaims). The Company agrees to pay, perform and discharge when due and payable the Excluded Liabilities.

ARTICLE IIICLOSING AND DELIVERIES

3.1Closing. The closing of the transactions contemplated hereby (the “Closing”) shall take place through the electronic exchange of the required closing documents simultaneously with the execution of this Agreement (the “Closing Date”). All proceedings to be taken and all documents to be executed and delivered by all parties at the Closing shall be deemed to have been taken and executed simultaneously and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered. The Closing shall be deemed to be effective as of 12:01 a.m., Eastern time, on the day of the Closing Date.

3.2Deliveries by the Company. At the Closing, the Company shall deliver or cause to be delivered to Buyer the following items:

(g)the Lease, duly executed by the landlord thereunder;

(h)the Bill of Sale and Assumption Agreements, duly executed by the Company;

(i)a certificate of the Secretary of State or other applicable Governmental Authority of the state of incorporation of the Company as to the good standing of the Company in such jurisdiction as of the most recent practicable date;

(j)a certificate of the Secretary of the Company, certifying as of the Closing attached copies of the certificate of incorporation and by-laws of the Company, certifying and attaching all requisite resolutions or actions of the Company’s board of directors and stockholders, approving the execution and delivery of this Agreement and the Related Documents and the consummation of the transactions contemplated hereby and thereby, and certifying to the incumbency and signatures of the officers of the Company executing this Agreement and the Related Documents and any other document relating to the transactions contemplated hereby or thereby;

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(k)the Escrow Agreement, duly executed by the Company, the Stockholders, the Seller Representative and the Escrow Agent;

(l)the Non-Competition Agreements, duly executed the Company and the Stockholders;

(m)the Employment Agreement, duly executed by Tim Packer;

(n)payoff letters and UCC-3 termination statements as reasonably required by Buyer; and

(o)non-foreign person affidavits in a form reasonably satisfactory to Buyer that comply with the requirements of Section 1445 of the Code, duly executed by the Company.

3.3Deliveries by Buyer. At the Closing, Buyer shall deliver to the Seller Representative the following items:

(a)the Purchase Price, paid in accordance with Section 2.2(b);

(b)the Lease, duly executed by Buyer;

(c)the Bill of Sale and Assumption Agreements, duly executed by Buyer;

(d)a certificate of the Secretary of State of the state of incorporation of Buyer as to the good standing of Buyer in such jurisdiction as of the most recent practicable date;

(e)a certificate of the Secretary of Buyer, certifying as of the Closing attached copies of the [certificate of incorporation and by-laws of Buyer], certifying and attaching all requisite resolutions or actions of Buyer’s board of directors and stockholders approving the execution and delivery of this Agreement and the Related Documents and the consummation of the transactions contemplated hereby and thereby, and certifying to the incumbency and signatures of the officers of Buyer executing this Agreement and the Related Documents and any other document relating to the transactions contemplated hereby or thereby;

(f)the Escrow Agreement, duly executed by Buyer; and

(g)the Employment Agreement, duly executed by Buyer.

ARTICLE IVREPRESENTATIONS AND WARRANTIES
RELATING TO THE COMPANY AND THE STOCKHOLDERS

The Company and each of the Stockholders, all jointly and severally, hereby represent and warrant to Buyer as follows:

4.1Organization and Authority. The Company is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization. The Company has

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all requisite corporate power and authority to own its properties and assets and to carry on its business as currently conducted. The Company is duly qualified to do business, and is in good standing, in each jurisdiction in which the character of the properties and assets owned or leased by it or in which the conduct of its business requires it to be so qualified, except where the failure to be so qualified or to be in good standing would not have a Material Adverse Effect on Buyer and would not otherwise adversely affect the ability of Buyer to consummate the transactions contemplated herein or comply with any of the provisions hereof. Each such jurisdiction is set forth or Schedule 4.1(a). Except as set forth on Schedule 4.1(b), the Company has not obtained the right to use any fictitious name in any jurisdiction. The Company and each of the Stockholders has all requisite corporate, trust, limited liability company or individual, as the case may be, power and authority to enter into and perform its or his obligations under this Agreement and all Related Documents to which it or he is a party and to consummate the transactions contemplated hereby and thereby, and this Agreement and the Related Documents have been duly executed and delivered by the Company and each Stockholder, as applicable, pursuant to all necessary authorization and are or, when executed and delivered will be, the legally valid and binding obligations of the Company and each Stockholder, enforceable against it or him in accordance with its terms.

4.2Capitalization. All the authorized, issued and outstanding capital stock and other equity securities of any kind or nature (including, without limitation, subscriptions, options, warrants, phantom stock rights and other rights of any kind entitling any Person to acquire or otherwise receive from the Company any equity interest) of the Company are held, beneficially and of record, by those Persons whose names are set forth on Schedule 4.2. Except as set forth on Schedule 4.2, issued and outstanding shares of capital stock of the Company are fully paid and nonassessable and were sold in accordance with applicable Laws. There are no capital stock or other equity interests of the Company held in treasury. There are no voting trusts, proxies or other agreements or understandings to which the Company or any Stockholder is a party or by which the Company or any Stockholder is bound with respect to the voting of the Company’s capital stock. There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders or members of the Company may vote.

4.3Subsidiaries. The Company does not, and at no time has ever had, any Subsidiary.

4.4No Conflict; Required Filings and Consents.

(a)Except as disclosed on Schedule 4.4, neither the execution and delivery of this Agreement or any Related Document by the Company or any Stockholder nor the consummation by the Company or any Stockholder of the transactions contemplated herein or therein, nor compliance by the Company or any Stockholder with any of the provisions hereof or thereof will (i) conflict with or result in a breach of any provisions of the certificate of incorporation or by-laws or certificate of formation or operating agreement (or equivalent organizational documents) of the Company, (ii) constitute or result in the breach of any term, condition or provision of, or constitute a default under (or an event which, with or without notice, lapse of time or both would constitute a default), or require any Consent under, or give rise to any right of termination,

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cancellation, modification or acceleration with respect to, or result in the creation or imposition of a Lien upon any property or assets of the Company or any Stockholder, pursuant to any Contract to which it or he is a party or by which it or he or any of its or his properties or assets is subject, or (iii) violate any Order or Law applicable to the Company or any Stockholder or any of its or his properties or assets.

(b)Except as disclosed on Schedule 4.4, no Consent is required to be obtained by the Company or any Stockholder for the consummation by the Company or any Stockholder of the transactions contemplated by this Agreement or any Related Document.

4.5Financial Statements.

(a)The Company and the Stockholders have provided to Buyer true and complete copies of (i) the reviewed balance sheet of the Company as of December 31, 2014 (the “2014 Balance Sheet”) and the related statements of income, changes in cash flow and changes in stockholders’ equity for the year then ended; and (ii) the Company and the Stockholders have provided to Buyer true and complete copies of the unaudited internally prepared balance sheet of the Company as July 31, 2015(the “Interim Balance Sheet”), and the related statement of income for the six month period then ended (the “Interim Financial Statements” and, together with the financials described in clause (i) above, the “Financial Statements”).

(b)The Financial Statements are true, complete and accurate in all material respects, have been prepared in accordance with the accrual basis accounting method, consistent with past practice and fairly present the assets, liabilities and financial position, the results of operations and cash flows of the Company as of the dates and for the years and periods indicated.

(c)Since the date of the 2014 Balance Sheet, there has been no material change in any accounting or tax policies, principles, methods or practices of the Company.

(d)There are no unpaid commitments for capital expenditures by the Company exceeding, individually or in the aggregate, $25,000.

(e)There are no non-recurring items of income in any of the Financial Statements constituting statements of income that arise from matters other than the sale of products or the performance of services in the ordinary course of business in excess, individually or in the aggregate, of $25,000.

4.6Absence of Certain Changes. Except as set forth on Schedule 4.6, since the date of the 2014 Balance Sheet the Company has conducted its Business and its operations only in the ordinary course of business consistent with past practice and, without limiting the generality of the foregoing, there has not been, occurred or arisen, directly or indirectly, any of the following events:

(a)the commencement, settlement, notice or, to the Seller’s Knowledge, threat of any Action or, to the Seller’s Knowledge, investigation seeking damages in excess of $10,000 per occurrence or seeking injunctive relief or other equitable remedy against the Company;

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(b)any damage to or destruction or loss of any asset or property of the Company (whether or not covered by insurance) with an aggregate value in excess of $20,000 or any condemnation taking or other similar proceeding;

(c)termination or amendment (or notice of termination or amendment) of any Material Contract with any customer of the Company representing individually $10,000 or in the aggregate $20,000 or more of the revenues of the Business in any calendar year;

(d)any termination of or receipt of notice of termination of any Material Contract involving a total remaining commitment by or to the Company of at least $10,000;

(e)any acquisition, disposition or other transfer by the Company of any asset or property having a value in excess of $20,000 other than in the ordinary course of business consistent with past practice, or any mortgage, pledge or imposition of any Lien (other than Permitted Liens) on any asset or property of the Company or any merger or consolidation with or acquisition of an interest of any Person;

(f)any payment, discharge or satisfaction by the Company of any Lien or payment by the Company of any Liability, other than in the ordinary course of business consistent with past practice or as contemplated herein;

(g)any non-cash dividends or other non-cash distributions declared or paid to the stockholders or members of the Company;

(h)(i) any increase (whether in cash, stock or property) from the information set forth in Schedule 4.6(h) in the base salary or other compensation payable or to become payable by the Company to any of its officers, directors, managers, employees or consultants, (ii) any adoption of, increase in the payments to or benefits under, any savings, insurance, pension, retirement or other employee benefit plan, or (iii) declaration, payment or commitment or obligation of any kind for the payment by the Company of a severance payment, termination payment, bonus, profit sharing, deferred compensation or other additional salary or compensation to any such person, other than pursuant to the terms of any existing written agreement, Company policy or plan;

(i)any loan to any Person, or any guarantee of any obligation incurred by any Person;

(j)incurrence of any indebtedness or other material Liabilities, except to the extent reflected in the Financial Statements or incurred after the date of the 2014 Balance Sheet in the ordinary course of business consistent with past practice;

(k)cancellation of any Indebtedness owed to or held by the Company;

(l)to the Seller’s Knowledge, any labor dispute or any activity or proceeding by a labor union or labor representative to organize any employee, owner, director, officer, manager or agent of the Company, or any lockouts, strikes, slowdowns, picketing, work stoppages or, to the Seller’s Knowledge, threats thereof by or with respect to such employees;

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(m)any event that has had or could reasonably be expected to have a Material Adverse Effect; or

(n)any agreement by the Company to do any of the things described in the preceding clauses of this Section 4.6 (other than negotiations with Buyer and its representatives and the transactions contemplated by this Agreement).

4.7Taxes.

(a)All Tax Returns that are or were required to be filed through the Agreement Date by, or with respect to, the Company, either separately or as a member of an affiliated group, have been filed on a timely basis in accordance with the Laws, regulations and administrative requirements of the appropriate Taxing Authorities. All such Tax Returns that have been filed were true, correct and complete in all respects. No Taxing Authority in any jurisdiction in which the Company does not file Tax Returns has asserted that the Company is, or may be, subject to Tax in that jurisdiction.

(b)The Company has paid all Taxes due and owing by the Company (whether or not shown on any Tax Returns). All Taxes that each Company is or was required by Law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the appropriate Taxing Authority.

(c)There are no deficiencies for Taxes claimed, proposed or assessed by any Taxing Authority regarding the Company that have not yet been fully and finally resolved. There are no pending or, to the Seller’s Knowledge, threatened audits, investigations or claims for or relating to Taxes, and there are no matters under discussion with any Taxing Authority with respect to Taxes, regarding the Company. No extension of a statute of limitations relating to Taxes is currently in effect with respect to the Company.

(d)There are no Liens for Taxes upon any of the properties or assets of the Company, other than Liens for current Taxes not yet due and payable. None of the property of the Company (i) is “tax-exempt use property” within the meaning of Section 168(h) of the Code, (ii) is “tax-exempt bond financed property” within the meaning of Section 168(g) of the Code, or (iii) is subject to a tax benefit transfer lease under the provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954.

(e)The Company has not (i) applied for any tax ruling, (ii) entered into a tax closing agreement with any Governmental Authority, or (iii) been a party to any agreement or arrangement that would result in the payment of any “excess parachute payment” within the meaning of Section 280G of the Code or deferred compensation within the meaning of Section 409A of the Code.

(f)The Company (i) is not a party to any tax sharing agreement or similar arrangement; (ii) may not be held liable for, or be required to make any contribution with respect to, the Tax Liability of any Person by reason of Treasury Regulation Section 1.1502-6 or any comparable provision of state, local or foreign Law, as a transferee or successor, by contract, or

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otherwise, and (iii) has no liability under the unclaimed property or abandoned property provisions of any jurisdiction.

(g)None of the property owned or used by the Company is subject to a lease that is treated as other than an “operating lease” for federal income tax purposes.

(h)The Company has not distributed stock or equity of another Person, nor has had its stock or equity distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 of the Code or Section 361 of the Code.

(i)None of the intangible assets owned by the Company was held or used on or before August 10, 1993 by the Company or a “related person” within the meaning of Section 197(f)(9)(C) of the Code.

(j)The Company has not (i) received notice of any claim from a taxing authority in any jurisdiction (other than a jurisdiction in which the Company regularly files Tax Returns) that it is, or may be, subject to taxation in that jurisdiction; nor (ii) participated in any “reportable transaction” as defined in Section 6707A of the Code or Treas. Reg. 1.6011-4.

4.8Title to and Sufficiency of Properties.

(a)Except as disclosed on Schedule 4.8(a), the Company has good, marketable and freely transferrable title to all of the Purchased Assets, tangible or intangible, free and clear of all Liens (all of which Liens shall be terminated prior to or in connection with Closing) except for Permitted Liens. The Company has a valid and enforceable right to use all tangible items of personal property leased by or licensed to it, free and clear of all Liens other than Permitted Liens. The Company’s tangible assets are in good working order, operating condition and state of repair, ordinary wear and tear excepted. The properties and assets (including any leases of personal property included in the Contracts of the Company), tangible or intangible, of the Company are adequate for the conduct of the Business in the manner as currently conducted and in accordance with recent historical practice, are located on the Real Property of the Company, and are the only properties and assets used or held for use in the Business.

(b) The Inventory of the Company has been recorded on the Interim Balance Sheet consistently with the 2014 Balance Sheet. Except as disclosed on Schedule 4.8(b), none of the Inventory is held on consignment, or otherwise, by third parties. The Inventory included in the Final Working Capital Statement consists of a quality and quantity usable and salable in the ordinary course of business consistent with past practice, except for obsolete items and items of below-standard quality, which have been written off or written down to net realizable value on the Interim Balance Sheet. The Inventory included in the Final Working Capital Statement has been priced at the lower of cost or market on a first in, first out basis, in a manner consistent with the valuation thereof in the Financial Statements. The quantities of each item of Inventory included in the Final Working Capital Statement are reasonable in the present circumstances of the Company.

4.9Real Property.

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(a)The Company does not own any Owned Real Property.

(b)Schedule 4.9(b) sets forth each lease or other agreement under which the Company leases or has rights in any material real property (each a “Real Property Lease”). True and complete copies of each Real Property Lease have been made available to Buyer by the Company and the Stockholders. The Company has a valid and subsisting leasehold interest in all Leased Real Property free and clear of all Liens other than Permitted Liens.

(c)No material permit, license or certificate of occupancy pertaining to the leasing or operation of any Real Property, other than those which are transferable with such property, is required by any Governmental Authority. The Company has not received a written notice of any pending condemnation proceedings or eminent domain proceedings of any kind against any of the Real Properties and, to the Seller’s Knowledge, none are threatened against any of the Real Properties. All of the parcels of Real Property are occupied under a valid and current certificate of occupancy or similar permit, a complete and correct list of which is set forth on Schedule 4.9(c)(i). Each such certificate of occupancy or similar permit shall remain in full force and effect after the Closing and permit the occupancy of the Real Property by Buyer. The Company has the right to quiet enjoyment of the applicable Leased Real Properties for the full term of the Real Property Leases notwithstanding any mortgage, deed of trust or similar instruments for borrowed money (collectively, “Mortgage”) that is or in the future becomes a Lien against the underlying real property or buildings or other improvements thereon and there is a valid and enforceable nondisturbance agreement with respect to each presently existing Mortgage. Each Mortgage encumbering any Leased Real Property and the related non-disturbance agreement is listed in Schedule 4.9(c)(ii).

(d)Except for any exceptions that have not and would not reasonably be expected to have, individually and in the aggregate, a Material Adverse Effect, the roofs, walls, foundations, water, sewer, plumbing, air conditioning and electrical systems and other major structural components of or located on the Real Properties are structurally sound, in reasonably good operating condition, and free from material defects and adequate for the uses for which they are being put. Planned capital expenditures in the next twelve (12) months to repair or replace the items described in the preceding sentence are not expected to exceed in the aggregate the amount therefore set forth in Schedule 4.9(d). The Real Properties are used in a manner that is permitted under applicable Laws and are not subject to any rights of way, use restriction, easements, reservations or limitations which would restrict the Company from conducting its business after Closing or increase the costs of operation of such Real Property.

4.10Compliance with Laws.

(a)The Company is in compliance, and, at all times during the most recent five (5) year period, has been in compliance, in all material respects with all Laws and Orders applicable to it and its business, properties and assets.

(b)The Company has not received any written, or to the Seller’s Knowledge, oral notification or communication from any Governmental Authority asserting that the Company is not in compliance with any Law.

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(c)No Governmental Authority has indicated to the Company in writing an intention to conduct an investigation or review with respect to the Company, and, to the Seller’s Knowledge, no investigation or review by any Governmental Authority with respect to the Company is pending or threatened.

4.11Permits. Schedule 4.11 contains a complete list of all material Permits issued to the Company that are currently used by the Company in connection with the Business, with the expiration dates, if applicable. The Company is in compliance, and, at all times during the most recent five (5) year period, has been in compliance, in all material respects with all such Permits (the “Material Permits”), and all Material Permits are in full force and effect. The Company holds all Material Permits under any Law necessary for the conduct of the Business in substantially the manner as currently conducted. No Material Permit is subject to revocation or forfeiture by virtue of any existing circumstances. No Consent from any Governmental Authority relating to the execution, delivery or performance of this Agreement or any Related Document is required for the Company to maintain any of its Material Permits. There is with respect to each Material Permit no Action or, to the Seller’s Knowledge, investigation, pending or, to the Seller’s Knowledge, threatened to modify or revoke any Material Permit, and no Material Permit is subject to any outstanding Order or, to the Seller’s Knowledge, investigation, that would reasonably be expected to adversely affect such Permit.

4.12Employee Benefit Plans.

(a)Schedule 4.12(a) contains an accurate and complete list and summary of each Company Employee Plan. The Company has not made any plan or commitment to establish any new Company Employee Plan, to modify any Company Employee Plan or to enter into any Company Employee Plan.

(b)The Company and the Stockholders have delivered to Buyer (i) correct and complete copies of all documents embodying each Company Employee Plan, including all amendments thereto and all related trust documents, (ii) the two (2) most recent annual reports (Form Series 5500 and all schedules and financial statements attached thereto), if any, required under ERISA or the Code in connection with each Company Employee Plan, (iii) if any Company Employee Plan is funded, the most recent annual and periodic accounting of Company Employee Plan assets, (iv) the most recent summary plan description together with any summaries of material modifications thereto, if any, required under ERISA with respect to each Company Employee Plan, and (v) the most recent Internal Revenue Service determination or opinion letter issued with respect to each Company Employee Plan that is intended to be qualified under Section 401(a) of the Code.

(c)The Company has performed all obligations required to be performed by it under each Company Employee Plan, and each Company Employee Plan has been established and maintained in all material respects in accordance with its terms and in compliance in all material respects with all applicable Laws and Orders, including, but not limited to, ERISA and the Code. Each Company Employee Plan intended to be qualified under Section 401(a) of the Code has obtained a favorable determination or opinion letter as to its qualified status under the Code, or application for such letter shall be timely filed. No “prohibited transaction,” within the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt under

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Section 408 of ERISA, or other breach of fiduciary responsibility, has occurred with respect to any Company Employee Plan that could reasonably be expected to subject the Company (or any officer, director or employee thereof) to any Tax, penalty or other Liability. There are no Actions pending or, to the Seller’s Knowledge, threatened (other than routine claims for benefits) against any Company Employee Plan or against the assets of any Company Employee Plan. There are no audits, inquiries or proceedings pending or, to the Seller’s Knowledge, threatened by the Internal Revenue Service, the United States Department of Labor or any other Governmental Authority with respect to any Company Employee Plan. The Company has timely made all contributions and other payments required by and due under the terms of each Company Employee Plan.

(d)The Company nor any of its respective ERISA Affiliates (i) maintains, sponsors, participates in or contributes to (or has an obligation to contribute to), or in the preceding six (6) calendar years, has maintained or contributed to, any (x) Pension Plan subject to Title IV of ERISA or Section 412 of the Code, (y) “multiemployer plan” within the meaning of Section (3)(37) of ERISA, or (z) plan described in Section 413(c) of the Code, or (ii) has incurred any Liability or taken any action and, to the Seller’s Knowledge, no action or event has occurred, that could reasonably be expected to cause any one of them to incur any Liability under Section 412 of the Code or Title IV or ERISA with respect to any “single-employer plan” (as defined in Section 4001(a)(15) of ERISA), or on account or a partial or complete withdrawal (as defined in Sections 4203 and 4205 of ERISA, respectively) from, or unpaid contributions, with respect to any multiemployer plan.

(e)All group health plans covering the employees of the Company have been operated in compliance in all material respects with the requirements of Section 4980B of the Code (and any predecessor provisions) and Part 6 of Title I of ERISA (“COBRA”), the provisions of law enacted by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), and any applicable similar Law. No Company Employee Plan provides, or reflects or represents any liability to provide, retiree life insurance, retiree health or other retiree employee welfare benefits to any person for any reason, except as may be required by COBRA or other applicable statute.

(f)The execution of this Agreement and the Related Documents and the consummation of the transactions contemplated hereby and thereby shall not (either alone or in connection with any additional or subsequent events) constitute an event under any Company Employee Plan, trust or loan that will or could reasonably be expected to result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits to or with respect to any employee of the Company.

(g)No Company Employee Plan is subject to Section 409A of the Code. All stock options and stock appreciation rights, if any, were granted at an exercise price at least equal to the fair market value of an underlying share of common stock of the Company on the date of grant. The Company has not, at any time, maintained or contributed to an employee benefit plan outside of the United States.

(h)The amount recorded as liabilities on the books and records of the Company in respect of obligations under any Pension Plan has been determined in accordance with

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GAAP and the material underlying assumptions in determining any such liabilities are set forth in Schedule 4.12(h).

4.13Material Contracts.

(a)Set forth in Schedule 4.13(a) is a list of the following Contracts to which the Company is a party or by which it or any of its properties or assets is bound:

(i)each power of attorney from or to the Company;

(ii)each Contract, commitment or arrangement relating to the acquisition of substantially all of the assets or capital stock of any business enterprise;

(iii)each Contract under which the Company is or would reasonably be expected to become obligated to pay in excess of $20,000 in respect of deferred or conditional purchase price (other than ordinary trade terms), indemnification obligations, purchase price adjustments or otherwise;

(iv)each partnership or joint venture Contract;

(v)each Contract limiting the right of the Company to engage in or compete with any Person in any business or in any geographical area;

(vi)each management or consulting Contract that requires the Company to make payments equal to more than $20,000 per annum;

(vii)each Contract with respect to the employment, severance, retention, compensation or termination of any directors, officers, managers, employees or consultants involving the payment of more than $50,000 per annum, and each change of control agreement with any of the directors, officers, employees or consultants of the Company;

(viii)each collective bargaining agreement;

(ix)each Contract with respect to Company Debt having outstanding principal amount in excess of $50,000;

(x)each fidelity or surety bond or completion bond;

(xi)each lease of personal property having a value individually in excess of $20,000 per annum;

(xii)each Contract or commitment relating to future capital expenditures and involving future payments or receipts in excess of $20,000 per year;

(xiii)each Contract or commitment relating to the disposition of assets outside the ordinary course of business consistent with past practice;

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(xiv)each Contract providing for the distribution of product by or on behalf of the Company providing for annual payments in excess of $50,000 and which cannot be terminated on less than one hundred and twenty (120) days’ notice without penalty;

(xv)each Contract or series of Contracts (not otherwise required to be disclosed in Schedule 4.13(a)) involving payments to or from the Company equal to more than $25,000 per annum or more than $50,000 in the aggregate and which cannot be terminated on less than one hundred and twenty (120) days’ notice without penalty;

(xvi)each other material Contract pursuant to which the Company is a party or by which the Company is bound having a term longer than twelve (12) months and which cannot be terminated on less than one hundred and twenty (120) days’ notice without penalty;

(xvii)each Contract (including outstanding purchase orders) with Material Customers and Material Suppliers;

(xviii)each material Contract relating to Intellectual Property of the Company and material Intellectual Property of third parties licensed or sublicensed to or used by the Company, including each material Contract relating to the payment of royalties or other payments to or from third parties in respect thereof;

(xix)each Contract with any Governmental Authority;

(xx)any other Contract that is or could reasonably be expected to otherwise be material to the Business of the Company; and

(xxi)each amendment, supplement or modification in respect of any of the foregoing Contracts.

(b)The Contracts required to be set forth in Schedule 4.13(a), together with the Real Property Leases, are referred to herein as the “Material Contracts.” The Company and the Stockholders have delivered to Buyer a true and complete copy or, in the case of oral Contracts, a written summary, of each of the Material Contracts. Each of the Material Contracts is, and shall be upon the Closing (without requiring the Consent of any third party), in full force and effect and a legally valid and binding agreement of the Company, and, to the Seller’s Knowledge, against the other parties thereto, and there is no default or breach by the Company, or, to the Seller’s Knowledge, any other party, in the timely performance of any obligation to be performed or paid thereunder or any other material provision thereof, and no event has occurred which, with notice or lapse of time, would constitute such a default or breach. Neither the Company nor, to the Seller’s Knowledge, any other party has repudiated any provision of any Material Contract. Each Material Contract that requires the Consent of any Person in connection with this Agreement or any of the transactions contemplated hereby is appropriately identified as such on Schedule 4.13(b).

4.14Legal Proceedings. There is no, and for the previous five (5) years there has not been any, Action or Order with respect to the Company pending, or to the Seller’s Knowledge, threatened: (a) involving, against, related, to or affecting (i) the Company, the Business or its assets

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(including, without limitation, Intellectual Property), or (ii) any officers, directors or managers of the Company; (b) that, individually or in the aggregate, would be reasonably expected to have the effect of preventing, delaying, making illegal, limiting, enjoining or otherwise interfering with any of the transactions or payments contemplated hereunder; (c) involving the risk of criminal liability; or (d) involving the Company as plaintiff, including any derivative suits brought by or on behalf of the Company. To the Seller’s Knowledge, the Company is not in breach or default with respect to, or subject to, any Order of any court or other Governmental Authority, and there are no unsatisfied judgments against the Company, the Business or any assets of any Company (including, without limitation, the Purchased Assets). Schedule 4.14 contains a brief summary of all Actions involving, or related to, the Company, the Business or the assets of any of the Company in the past five (5) years, including asbestos, claims, worker’s compensation claims, wage and hour claims, or discrimination claims (including sex, age, race, national origin, handicap, or veteran status discrimination claims).

4.15Intellectual Property.

(a)Schedule 4.15(a) sets forth a list of all registered or recorded Intellectual Property used or held for use in the Business, and such schedule correctly designates such Intellectual Property as owned by, licensed to or by or sublicensed to or by the Company. The Company and the Stockholders have delivered to Buyer correct and complete copies of all registrations, licenses, agreements, and other written documentation related to, or evidencing the Company’s ownership or right to use, the Intellectual Property set forth on Schedule 4.15(a).

(b)Except as set forth on Schedule 4.15(b):

(i)the Company has good and marketable title to and possesses all right, title, and interest in and to, or a valid and enforceable license to manufacture, use, and sell, as the case may be, all of the Intellectual Property, free and clear of any Liens;

(ii)to the Seller’s Knowledge, the manufacture, use, sale, offer for sale or importation by any Company of any Intellectual Property does not infringe or otherwise violate any rights of any Person in any material respect;

(iii)to the Seller’s Knowledge, there is no unauthorized use, unauthorized disclosure, infringement, misappropriation or other violation of any Intellectual Property by any Person or any current or former officer, employee, independent contractor or consultant of the Company. The Company has not received communication of any claim, any cease and desist or equivalent letter, or any other notice of any allegation to the effect that any of the products, apparatus, methods or services made, used, sold, offered for sale, imported or otherwise provided by the Company infringes upon, copies, misappropriates or otherwise violates any Intellectual Property from any Person;

(iv)the Company has not entered into any Contract to indemnify any Person against any claim of infringement, misappropriation or other violation of Intellectual Property rights;

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(v)the Company has not been charged in any Action with, and has not charged others with, unfair competition, infringement, misappropriation, copying, wrongful use or any other violation or improper or illegal activity with respect to or affecting any Intellectual Property or with claims contesting the validity, ownership or right to make, use, sell, offer for sale, import, license or dispose of any Intellectual Property; and

(vi)on the Closing Date, the Intellectual Property will be owned or available for use by Buyer from and after the Closing on identical terms and conditions as are applicable to the Company prior to the Closing, and the consummation of this Agreement and the transactions contemplated hereby will not give rise to any Lien on the Company’s exclusive rights, title and interest in and to, or the valid and enforceable license to use, as the case may be, the Intellectual Property (or rights thereto) beneficially transferred at the Closing.

(c)To the Seller’s Knowledge, the Company has all valid and enforceable rights necessary to assert a claim of infringement against any unauthorized Persons with respect to the Intellectual Property, as well as any yet-unfiled inventions based on or claiming priority from any of the Intellectual Property and any pending claims in any United States or foreign patent application(s) included in the Intellectual Property.

(d)All rights in all inventions and discoveries related to the Intellectual Property either made, developed or conceived by current or former officers, employees, independent contractors or consultants during the course of their employment or retention by the Company which are used primarily in the Business; or made, written, developed or conceived with the use or assistance of the Company facilities or resources, and which are the subject of one or more issued patents or patent applications, have been assigned in writing to, or is subject to a duty to assign to, the Company to the extent permitted by applicable Law.

(e)The policy of the Company requires, and has required for the past ten (10) years, that each officer, employee, independent contractor or consultant, employed or retained by the Company in connection with the Business who develops or utilizes technical information within the scope of his, her or its employment or retention, including proprietary technology, inventions, and other know-how used in the Business, including the computer software, hardware and systems incorporated into the Business, has signed or is obligated to sign documents confirming that he, she or it assigns to the Company all Intellectual Property rights made, written, developed or conceived by him, her or it during the course of his, her or its employment or retention by the Company and relating to the Business or made, written, developed or conceived with the use or assistance of the Company’s facilities or resources.

(f)The Company has taken all reasonable steps to protect and preserve the confidentiality of trade secrets comprising the Intellectual Property, and to the Seller’s Knowledge, all use by the Company of trade secrets comprising the Intellectual Property not owned by the Company has been, and is, pursuant to, and in compliance with, the terms of an agreement between the Company and the owner of, or party providing, such trade secrets, or is otherwise lawful.

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4.16Insurance.

(a)Schedule 4.16(a) lists all third-party insurance policies and fidelity bonds covering the assets, business, equipment, properties, operations, employees, officers and directors (in their respective capacities as such) of the Company (the “Insurance Policies”) and sets forth, by year, for the current and preceding policy year a description of the policy by insurer, policy number, type of insurance, period of coverage, coverage limits, expiration dates, annual premiums, and a general description of the type of coverage provided.

(b)The Company and the Stockholders have delivered to Buyer copies of all Insurance Policies. Since January 1, 2014, no claims have been made by the Company under any Insurance Policies, except for worker’s compensation claims in the ordinary course of business. There is no claim pending under any Insurance Policies as to which coverage has been questioned, denied or disputed by the underwriters of such Insurance Policies. All Insurance Policies are in full force and effect. All premiums due and payable under all such policies and bonds have been paid, and the Company is otherwise in compliance in all material respects with the terms of such policies and bonds. There are no historical gaps in coverage under any Insurance Policy and coverage limits under Insurance Policy have not been exhausted or significantly diminished. No Insurance Policy will be modified or cancelled prior to the Closing. The Company has not been refused any insurance with respect to its assets or operations, nor has its coverage been limited, by any insurance carrier to which it has applied for any such insurance or with which it has carried insurance. The Insurance Policies and arrangements identified in this Section 4.16 and the corresponding Schedules hereto are sufficient for compliance with all requirements of Law and the terms of Contracts to which the Company is a party or by which it is bound.

4.17Personnel.

(a)A complete and accurate list setting forth the name, title, 2014 salary, bonus and other compensation amount, and projected 2015 salary, bonus and other compensation amount and vacation/sick days for all current employees of the Company has been delivered by the Company and the Stockholders to Buyer. (i) No work stoppage or labor strike against the Company is pending or, to the Seller’s Knowledge, threatened, (ii) the Company does not know of any activities or proceedings of any labor union to organize any employees, (iii) there are no Actions, labor disputes, or grievances pending or, to the Seller’s Knowledge, threatened relating to any labor, safety or discrimination matters involving any employee (other than worker’s compensation claims in the ordinary course), including charges of unfair labor practices or discrimination complaints, (iv) since January 1, 2010, the Company has not engaged in any unfair labor practices within the meaning of the National Labor Relations Act, (v) the Company is not currently, nor has it been at any time since January 1, 2010 (A) a party to, or bound by, any collective bargaining agreement or union Contract and no collective bargaining agreement is being negotiated by the Company, or (B) subject to any lock-out, strike, slowdown, work stoppage or, to the Seller’s Knowledge, threats thereof by any of its employees, (vi) there is no employment agreement, employee benefit or incentive compensation plan or program, severance policy or program or any other plan or program to which the Company is a party (A) that will be triggered or accelerated by reason of or in connection with the execution of this Agreement or the consummation of the transactions contemplated by this

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Agreement, or (B) which contains “change in control” provisions pursuant to which the payment, vesting or funding of compensation or benefits is triggered or accelerated by reason of or in connection with the execution of or consummation of the transactions contemplated by this Agreement, and (vii) no existing employee or consultant whose annual salary is in excess of $50,000 (exclusive of bonuses) has given notice to the Company to cancel or otherwise terminate such person’s relationship with the Company.

(b)The Company has provided Form 1027 – Business Transferor’s Notice to Transferee of Unemployment Tax Liability and Rate in accordance with applicable Legal Requirements. Other than set forth in the Form 1027, the Company is not liable for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations for employees (other than routine payments to be made in the normal course of business and consistent with past practice). Except as set forth on Schedule 4.17(b), there are no pending or, to the Seller’s Knowledge, threatened Actions against any Company under any worker’s compensation policy.

(c)The Company has obtained a completed Employment Eligibility Verification Form I-9 (“I-9 Form”) from each of its current and former employees (each, an “Employee”) and the Company has completed the employer section(s) of the I-9 Form of each Employee, in accordance with applicable Law. To the Seller’s Knowledge, each Employee is, or at the time of his or her retention by the Company, was, eligible to work in the United States under applicable Law.

(d)The Company is not restricted, directly or indirectly, by any Contract from conducting the Business anywhere in the world. Except as may be provided in this Agreement, the Company is not restricted by Contract or otherwise from terminating its employees or amending its benefits, and any such termination or amendment of benefits shall not require any severance or other payments. All vacation and sick pay has been fully accrued as a liability.

4.18Environmental Matters.

(a)The Company and the Real Property are in compliance, and, at all times during the most recent ten (10) year period have been in compliance, in all material respects with all Environmental Laws applicable to the Business and operations of the Business and the Real Property.

(b)The Company has not Released any Hazardous Material at the Real Property that could result in material Liability to the Company pursuant to any Environmental Law.

(c)The Company has not received any written notice, demand letter or complaint or claim under or relating to any Environmental Law.

(d)There currently are effective all Material Permits required under any Environmental Law that are necessary for the Company’s activities and operations at the Real

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Property; all such Permits are in good standing with no pending violations, and the Company has timely submitted any applications necessary for the renewal or extension of all such Material Permits.

(e)The Company and the Stockholders have delivered to Buyer true and accurate copies of all environmental reports, studies, assessments (including Phase I reports, Phase II reports and environmental assessments), documents and correspondence in its possession or available to it and any documents relating to any violation of or liability under Environmental Laws.

4.19Customers and Suppliers.

(a)Schedule 4.19(a) sets forth a list of the ten (10) largest customers of the Business, as measured by revenue, for each of fiscal year 2013, fiscal year 2014 and the seven months ended July 31, 2015, showing the approximate aggregate total receipts by the Company for each such customer during such period (“Material Customers”). All Material Customers continue to be customers of the Business and the Company has not received written or, to the Seller’s Knowledge, oral notice that any Material Customer intends to terminate its business relationship with the Company or to cease to purchase or adversely change in a significant manner the quantity purchased from the Company any products or services.

(b)Schedule 4.19(b) sets forth a list of the ten (10) largest suppliers of the Business, as measured by costs, for each of fiscal year 2013, fiscal year 2014 and from January 1 – July 15, 2015, showing the approximate aggregate total expenditures by each Company for each such supplier during such period (“Material Suppliers”). The Company has not received written or, to the Seller’s Knowledge, oral notice that any Material Supplier intends to terminate its business relationship with the Company or to cease to supply or adversely change in a significant manner its price or terms to the Company of any products or services.

(c)Within the last twelve (12) months (i) there has been no material adverse change in the relationships of the Company with its (A) Material Suppliers, or (B) Material Customers, and (ii) there has been no incentive or other benefits, time sensitive or otherwise, offered to any distributor or other customer by or on behalf of the Company to induce them to purchase inventory or services in excess of the amounts they would purchase in the ordinary course in the absence of any such incentives or benefits.

4.20Accounts Receivable. All Accounts Receivable of the Company reflected in the Final Working Capital Statement represent bona fide transactions made in the ordinary course of business of the Company consistent with past practice and will be fully collected at their recorded amounts net of reserves for non-collectability reflected in the Final Working Capital Statement. The aggregate amount of any counter-claims, defenses or offsetting claims that are pending or have been threatened in writing with respect to the Accounts Receivable of the Company reflected on the Final Working Capital Statement does not exceed the aggregate amount of the reserves therefor reflected thereon. All of the Accounts Receivable of the Company relate solely to sales of goods or services to the customers of the Company, none of whom are Affiliates of the Company. Schedule 4.20 contains a complete and accurate aging report of the Company’s Accounts Receivable as of a recent date. Each Account Receivable of the Company constitutes a valid claim for the full amount

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against the account debtor free and clear of all Liens. No Account Receivable is the subject of any outstanding dispute, asserted right of setoff or other claim.

4.21Related-Party Transactions. No officer, director, manager or holder of greater than ten percent (10%) of any shares of capital stock or other equity interest of the Company (nor any ancestor, sibling, descendant or spouse of any of such Persons, or any trust, partnership, corporation or other entity controlled by any such Person) has, directly or indirectly, (a) any economic interest in any Person (other than passive investments that do not involve any participation in the management or affairs of such Person) that has engaged in competition with the Company, (b) any economic interest in any Person (other than passive investments that do not involve participation in the management or affairs of such Person) that purchases from or sells or furnishes to the Company any services or products, or (c) a beneficial interest in any Contract to which the Company is a party, except in the case of clause (c) in any such Person’s capacity as an officer, director, employee or holder of the capital stock of any Company. Schedule 4.21 lists all loans currently outstanding from or to the Company to or by any Employee.

4.22Product Liability and Warranty.

(a)Other than warranties regarding Products manufactured in accordance with specifications or other warranties pursuant to applicable Law, no Product is subject to any guaranty or warranty given by the Company: (i) The Company has no material Liability arising out of any injury to any Person or property as a result of the ownership, possession or use of any Product; (ii) there are no citations or decisions by any Governmental Authority stating that any Product is defective or unsafe or fails to meet any applicable safety standards promulgated by any Governmental Authority; (iii) there is no alleged or actual defect or hazard in the manufacture, design, materials or workmanship, or alleged or actual failure to warn of any of the foregoing, in any Product; and (iv) there has not been any occurrence involving any product recall, rework or retrofit relating to any Product. The Company maintains procedures for the removal of Products from its Inventory should it be notified of those conditions described in Section 4.22(a)(iii).

(b)The Company has not been denied product liability insurance coverage for the past ten (10) years.

4.23Undisclosed Liabilities. The Company does not have any Liabilities (including without limitation any minimum purchasing obligations which have not been fulfilled), except those Liabilities: (a) reflected on the Interim Balance Sheet; (b) incurred since such date in the ordinary course of business consistent with past practice, which are of the same general nature with past practice; or (c) incurred in connection with this Agreement.

4.24Certain Business Practices. The Company, and to the Seller’s Knowledge, none of its stockholders, members, officers, directors, managers, employees representatives or agents, has not offered, promised, authorized or made, directly or indirectly, any unlawful payments to any domestic or foreign governmental official, including any official of an entity owned or controlled by a domestic or foreign government, political party or official thereof or any candidate for political office, with the intent or purpose of: (a) influencing any act or decision of such official in his or her official capacity; (b) inducing such official to do or omit to do any act in violation of

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the lawful duty of such official; (c) receiving an improper advantage; or (d) inducing such official to use his or her influence with any Governmental Authority to affect or influence any act or decision of such Governmental Authority; in any case in order to assist the Company in obtaining or retaining business for or with, or directing business to, any Person.

4.25No Brokers. Except for Generational Equity, whose fees and expenses shall be Selling Expenses, no broker, finder or similar agent has been employed by or on behalf of the Company or any Stockholder, and no Person with which the Company or any Stockholder has had any dealings or communications of any kind is entitled to any brokerage commission, finder’s fee or any similar compensation in connection with this Agreement or the transactions contemplated hereby.

4.26Limitations on Representations and Warranties. Except for the representations and warranties expressly set forth in this Article IV, none of the Company, the Seller Representative, the Stockholders, any of their respective Affiliates or Representatives, makes any representation or warranty, express or implied, at Law or in equity, with respect to the Company, the Seller Representative, the Stockholders, any of their respective Affiliates, the Business, the Purchased Assets, the Assumed Liabilities, or any of their other respective assets, liabilities, businesses or operations (including in respect of the correctness, accuracy or completeness of any Contract or certificate furnished or made available, or to be furnished or made available (including by way of information included or referred to in the electronic data room or otherwise), or statement made, by the Company, the Seller Representative, the Stockholders, any of their respective Affiliates or Representatives in connection with the transactions contemplated herein), and any such other representations or warranties are hereby expressly disclaimed.

ARTICLE VREPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to the Company and the Stockholders as follows:

5.1Organization and Standing. Buyer is a [corporation] duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization. Buyer is duly qualified to do business, and is in good standing, in each jurisdiction in which the character of the properties owned or leased by it or in which the conduct of its business requires it to be so qualified, except where the failure to be so qualified or to be in good standing would not have a Material Adverse Effect on Buyer and would not otherwise adversely affect the ability of Buyer to consummate the transactions contemplated herein or comply with any of the provisions hereof.

5.2Authorization, Validity and Effect. Buyer has all requisite corporate power and authority to enter into and perform its obligations under this Agreement and the Related Documents to which it is a party, and to consummate the transactions contemplated hereby and thereby, and this Agreement and such Related Documents and the consummation of the transactions contemplated hereby and thereby have been duly executed and delivered by Buyer pursuant to all necessary authorization and are or, when executed and delivered will be, the legally valid and binding obligations of Buyer, enforceable against Buyer in accordance with its terms.

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5.3No Conflict; Required Filings and Consents.

(c)Neither the execution and delivery of this Agreement or any Related Document by Buyer, nor the consummation by Buyer of the transactions contemplated herein or therein, nor compliance by Buyer with any of the provisions hereof or thereof, will (i) conflict with or result in a breach of any provisions of the certificate of incorporation or by-laws of Buyer, (ii) constitute or result in the breach of any term, condition or provision of, or constitute a default under, or require any Consent under, or give rise to any right of termination, cancellation or acceleration with respect to, or result in the creation or imposition of any Lien upon any property or assets of Buyer, pursuant to any contract to which it is a party or by which it or any of its properties or assets is subject, or (iii) violate any Order or Law applicable to Buyer or any of its properties or assets.

(d)No Consent is required to be obtained by Buyer for the consummation by Buyer of the transactions contemplated by this Agreement or any Related Document.

ARTICLE VICOVENANTS AND AGREEMENTS

6.1Publicity. Except as may be required to comply with the requirements of any applicable Law or the rules and regulations of any stock exchange or national market system, no party may issue any press release or other public announcement prior to the Closing Date relating to the subject matter of this Agreement or the transactions contemplated hereby without the prior approval (which approval shall not be unreasonably withheld or delayed) of the other parties hereto.

6.2Tax Matters.

(e)All transfer, documentary, sales, bulk sales, use, stamp, recording, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement shall be paid by the Company and the Stockholder when due, and the Company, the Stockholders and Buyer, as required by applicable Law, shall each at their own expense file all necessary Tax Returns and other documentation with respect to all such Taxes and fees. Each party shall cooperate with the other party in the execution and filing of such Tax Returns. This Section 6.2(a) shall survive Closing.

(f)The cost and benefits, including Tax benefits, of payments made to management of the Company with respect to the period of time prior to the Closing and any accelerated deprecation or other Tax benefits available for capital equipment purchased prior to the Closing shall inure to benefit of the Company.

6.3Non-Assigned Contracts. In the event and to the extent the Company is not able to obtain any third-party consent required to transfer and assign in full to Buyer any and all of its rights, title and interest in and to any Contract (other than a Contract that is an Excluded Asset or an Excluded Liability) (a “Non-Assigned Contract”), notwithstanding the provisions of Section 2.1, and Buyer does not exercise its right to terminate this Agreement, such non-assignment shall not constitute a breach of this Agreement (but may constitute a failure of a condition) and shall not constitute a transfer and assignment of such Non-Assigned Contract, and the Company shall

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hold such Non-Assigned Contract in trust for the benefit of Buyer pending such time as the Non-Assigned Contract can be transferred to Buyer; provided, however, that until such Non-Assigned Contract is assigned to Buyer and if the Company is otherwise in material compliance with this Section 6.3 (including by providing the benefits of such Non-Assigned Contract to Buyer in accordance with this Section 6.3), then Buyer shall be responsible for causing the performance in all material respects of all obligations of the Company under such Non-Assigned Contract, including payment obligations to the extent Buyer shall be notified reasonably in advance thereof. The Company, without further consideration therefor from Buyer, shall pay, assign and remit to Buyer immediately after receipt thereof all monies, rights and other consideration or payments received in respect of any such Non-Assigned Contract. Following the Closing, the Company shall manage such Non-Assigned Contract as reasonably directed by Buyer. The Company shall use its reasonable best efforts to obtain any required third-party consents and assign and transfer in full all of its right, title and interest in and to each Non-Assigned Contract as soon as practicable after the Closing. Upon the receipt of any such consent, the Company shall promptly assign and transfer all of its right, title and interest in and to such Non-Assigned Contract to Buyer in full, without payment of further consideration by Buyer, and Buyer shall assume such Non-Assigned Contract (to the extent required under this Agreement with respect to any Assumed Liability) and receive all such right, title and interest in and to such Non-Assigned Contract.

6.4Name Change. The Company agrees to file, and the Stockholders shall cause the Company to file, immediately after the Closing, a certificate of amendment to the certificate of incorporation or certificate of formation of the Company changing the name of the Company to a name not containing “Great Lake Foam Technologies” or any derivative thereof. Further, the Company and the Stockholders (and their respective Affiliates and immediate family members) agree not to use or cause to be used the names “Great Lake Foam Technologies” or any derivative thereof, or any corporate or other names, trade names, expressions, corporate symbols, logos, service marks or trademarks incorporating, or derived from or substantially resembling any such terms in any form or for any purpose. This Section 6.4 shall survive the Closing.

6.5Administration of Accounts. All payments and reimbursements received by the Company, any Stockholder or any of their respective Affiliates after the Closing Date from any third party in the name of the Company or otherwise, included among or related to the Purchased Assets, shall be held by such recipient in trust for the benefit of Buyer. Immediately upon receipt of such payment or reimbursement, such recipient shall pay to Buyer the amount of such payment or reimbursement without right of set-off or reduction of any kind. All payments and reimbursements received by Buyer or its Affiliates after the Closing Date from any third party included among or related to the Excluded Assets, shall be held by such recipient in trust for the benefit of the Company. Immediately upon receipt of such payment or reimbursement, such recipient shall pay to the Company the amount of such payment or reimbursement without right of set-off or reduction of any kind.

6.6Further Assurances. After the Closing, each party will take all such further actions, execute, and deliver all such further documents and do all other acts and things as another party may reasonably request for the purpose of carrying out the intent of this Agreement and the other documents referred to in this Agreement.

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ARTICLE VIIREMEDIES

7.1Survival. The representations, warranties, covenants and agreements of the Company and the Stockholders, on the one hand, and Buyer, on the other hand, contained in this Agreement (including the Schedules and Exhibits attached hereto and the certificates delivered pursuant hereto) shall survive the Closing Date to the extent specified below:

(g)All covenants and agreements contained in this Agreement and the Related Documents (including the Schedules and Exhibits attached hereto and the certificates delivered pursuant hereto) that contemplate performance thereof following the Closing Date shall survive the Closing Date in accordance with their terms.

(h)The representations and warranties contained in this Agreement and in the Related Documents (including the Schedules and Exhibits attached hereto and thereto and the certificates delivered pursuant hereto and thereto) shall survive the Closing Date until the date that is eighteen (18) months following the Closing Date (the “Representation Termination Date”), at which point such representations and warranties and any right to assert a claim for indemnification on account thereof terminate, it being understood and agreed that claims made within such period are not required to be resolved, and actions relating thereto are not required to be commenced, within such period; provided, however, that (i) the representations and warranties contained in Sections 4.1, 4.2, and the first sentence of Section 4.8(a) (the “Excluded Representations”) shall survive the Closing and shall continue in full force and effect forever, (ii) the representations and warranties contained in Section 4.7 shall survive the Closing Date until the expiration of the applicable statutes of limitations plus sixty (60) days, (iii) the representations and warranties contained in Section 4.18 shall survive the Closing Date until the sixth anniversary following the Closing Date, and (iv) to the extent any Related Document provides that the representations and warranties stated therein survive for a different period, then the survival provisions of the Related Document shall control as to such representations and warranties contained in such Related Document.

7.2Indemnification by Buyer. Buyer shall indemnify, defend and hold harmless (a) each of the Company and Stockholders and their respective successors and permitted assigns, and (b) the officers, directors, managers, members, partners, stockholders, owners, employees, agents and representatives of each of the foregoing, and their heirs and personal representatives (collectively, the “Seller Indemnitees”) from and against, and shall pay to the Seller Indemnitees the amount of, any and all loss, Liability, damage or expense (including reasonable legal fees and expenses, but excluding incidental, consequential or punitive damages or any liability for lost profits or the like or any damages or liability based on multiple of profits, multiple of cash flow or similar valuation methodology, in each case to the extent not covered by insurance) (collectively, “Losses”) of the Seller Indemnitees arising from or in connection with (a) any breach of or inaccuracy in the representations and warranties of Buyer contained in this Agreement or any Related Document (including the Schedules and Exhibits attached hereto or thereto and the certificates delivered pursuant hereto or thereto), as of the Closing Date (as though made at such time except that those representations and warranties that address matters only as of a particular

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date, other than the Closing Date, must be true and correct as of such date) (it being agreed that solely for the purposes of this Section 7.2, such representations and warranties shall be interpreted in determining the amount of Losses without giving effect to any limitations or qualifications as to “materiality” including, without limitation, the words “material”, “Material Adverse Effect” or any other materiality qualifications), (b) any breach of the covenants or agreements of Buyer contained in this Agreement or any Related Document (including the Schedules and Exhibits attached hereto or thereto and the certificates delivered pursuant hereto or thereto); and (c) any Assumed Liabilities.

7.3Indemnification by the Company and Stockholders. The Company and the Stockholders, jointly and severally, shall indemnify, defend, and hold harmless Buyer, its Affiliates and their respective successors and permitted assigns, and the officers, directors, managers, members, partners, stockholders, owners, employees, agents and representatives of each of the foregoing, and their heirs and personal representatives (collectively, the “Buyer Indemnitees”), from and against, and shall pay to the Buyer Indemnitees the amount of, any and all Losses of the Buyer Indemnitees arising from or in connection with: (a) any breach of or inaccuracy in the representations and warranties of the Company and/or any Stockholder contained in this Agreement or in any Related Document (including the Schedules and Exhibits attached hereto or thereto and the certificates delivered pursuant hereto or thereto) as of the Closing Date (as though made at such time except that those representations and warranties that address matters only as of a particular date, other than the Closing Date, must be true and correct as of such date ) (it being agreed that solely for the purposes of this Section 7.3, such representations and warranties shall be interpreted in determining the amount of Losses without giving effect to any limitations or qualifications as to “materiality” including, without limitation, the words “material”, “Material Adverse Effect” or any other materiality qualifications); (b) any breach of the covenants or agreements of the Company or any Stockholder contained in this Agreement or any Related Document (including the Schedules and Exhibits attached hereto or thereto and the certificates delivered pursuant hereto or thereto); (c) all Excluded Liabilities; and (d) non-compliance with any applicable bulk sales law.

7.4Limitations on Indemnification Payments to the Buyer Indemnitees. Notwithstanding anything herein to the contrary, the right of Buyer Indemnitees to indemnification is limited as follows:

(k)The Buyer Indemnitees shall be entitled to indemnification pursuant to Section 7.3(a) if and only if (i) with respect to any individual Loss, such individual Loss is greater than $5,000 (the “Mini-Deductible”), and (ii) the aggregate amount of all indemnifiable claims pursuant to Section 7.3(a) exceeds $200,000 (the “Deductible”) and, in such event, indemnification shall be made by the Company and Stockholders for all corresponding Losses in excess of the Deductible; provided, however, that the Mini-Deductible and Deductible shall not apply to Losses incurred by Buyer Indemnitees based upon any breach of or inaccuracy in any of the Excluded Representations, Section 4.7, Section 4.8(b), Section 4.18 or Section 4.20.

(l)The aggregate maximum liability of the Company and the Stockholders (inclusive of amounts recovered by the Buyer Indemnitees from the Escrow Account) for indemnification pursuant to Section 7.3(a) shall be $2,000,000 (the “Cap”); provided, however, that the Cap shall not apply to Losses incurred by Buyer Indemnitees based upon any breach of or

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inaccuracy in any of the Excluded Representations, Section 4.7, Section 4.8(b), Section 4.18 or Section 4.20, with respect to which the aggregate maximum liability of the Company and the Stockholders shall be equal to $12,000,000.

(m)Regardless of whether any claim could have been and/or is successfully or unsuccessfully brought under Section 7.3(a), (i) the obligations of the Company and Stockholders to indemnify, defend and hold harmless pursuant to Section 7.3 (other than Section 7.3(a)) are not limited as to time, (ii) the obligations of the Company and the Stockholders to indemnify, defend and hold harmless pursuant to Section 7.3 (other than Section 7.3(a)) are not reduced by or subject to the Deductible, and (iii) Losses for which an indemnification right exists pursuant to Section 7.3 (other than Section 7.3(a)) shall not be included when computing, and shall not be subject to, the Cap.

(n)Before seeking any recourse against the Company or the Stockholders pursuant to Section 7.2, Buyer shall (a) first seek recourse against the Escrow Fund, and (b) then seek recourse from the Company and Stockholders.

(o)The amount of any Losses for which the Company or Stockholders are required to indemnify Buyer Indemnitees pursuant to this Agreement shall be reduced by any realized Tax benefit of the Buyer Indemnitees’ Taxes arising from the claim, loss or damage for which the indemnity is being paid.

7.5Limitations on Indemnification Payments to the Seller Indemnitees. Notwithstanding anything in this Agreement to the contrary, the right of Seller Indemnitees to indemnification is limited as follows:

(c)The Seller Indemnitees shall be entitled to indemnification pursuant to Section 7.2(a) if and only if (i) with respect to any individual Loss, such individual Loss is greater than the Mini-Deductible, and (ii) the aggregate amount of all indemnifiable claims pursuant to Section 7.2(a) exceeds the Deductible and, in such event, indemnification shall be made by Buyer for all corresponding Losses in excess of the Deductible.

(d)The amount of any Losses for which Buyer is required to indemnify Seller Indemnitees pursuant to this Agreement shall be reduced by any realized Tax benefit of the Seller Indemnitees’ Taxes arising from the claim, loss or damage for which the indemnity is being paid.

(e)The aggregate maximum liability of Buyer for indemnification pursuant to Section 7.2(a) shall be an amount equal to the Cap; provided, however, that the Cap shall not apply to Losses incurred by Seller Indemnitees based upon any breach of or inaccuracy Section 5.1 and Section 5.2, with respect to which the aggregate maximum liability of the Company and the Stockholders shall be equal to $12,000,000.

7.6Procedures.

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(e)Notice of Losses by Seller Indemnitees. Subject to the limitations set forth in this Article IX, as soon as reasonably practicable after a Seller Indemnitee reasonably believes in good faith that he or it has, or based on facts or circumstances then in existence reasonably believes in good faith that he or it will have, a claim for indemnification under this Article IX (a “Seller Claim”), the Seller Representative shall give written notice thereof (a “Seller Claims Notice”) to Buyer. A Seller Claims Notice must describe a Seller Claim in reasonable detail, and indicate the amount (estimated, as necessary) of the Loss that has been or is reasonably expected to be suffered by the applicable Seller Indemnitee. No delay in or failure to give a Seller Claims Notice by the Seller Representative to Buyer pursuant to this Section 7.6(a) shall adversely affect the applicable Seller Indemnitee’s right to indemnification pursuant to this Agreement except to the extent Buyer is materially prejudiced thereby. Buyer shall respond to the Seller Representative (a “Claim Response”) within thirty (30) days (the “Response Period”) after the date that a Seller Claims Notice is received by Buyer. Any Claim Response must specify whether or not Buyer disputes a Seller Claim described in Seller Claims Notice. If Buyer fails to give a Claim Response within the Response Period, Buyer shall be deemed not to dispute a Seller Claim described in the related Seller Claims Notice. If Buyer elects not to dispute a Seller Claim described in a Seller Claims Notice, whether by failing to give a timely Claim Response or otherwise, then the amount of Losses alleged in such Seller Claims Notice shall be conclusively deemed to be an obligation of Buyer, and Buyer shall pay, in cash, to the Seller Representative within five (5) days after the last day of the applicable Response Period the amount specified in Seller Claims Notice. If Buyer delivers a Claim Response within the Response Period indicating that it disputes one or more of the matters identified in Seller Claims Notice, Buyer and the Seller Representative shall promptly meet and use their reasonable efforts to settle the dispute. If Buyer and the Seller Representative are able to reach agreement with respect to all or any portion of Losses, within thirty (30) days after the conclusion of the Response Period, the amount of Losses, if any, agreed upon shall conclusively be deemed an obligation of Buyer, and Buyer shall pay in cash to the Seller Representative within five (5) days of such agreement the amount of Losses so agreed upon. If Buyer and the Seller Representative are unable to reach agreement within thirty (30) days after the conclusion of the Response Period, then either Buyer or the Seller Representative may commence an Action to seek resolution of such Seller Claim, subject to the limitations set forth in this Article IX.

(f)Notice of Losses by Buyer Indemnitees. Subject to the limitations set forth in this Article IX, as soon as reasonably practicable after a Buyer Indemnitee reasonably believes in good faith that he, she or it has, or based on facts or circumstances then in existence reasonably believes in good faith that he, she or it will have, a claim for indemnification under this Article IX (a “Buyer Claim”), Buyer shall give written notice thereof (a “Buyer Claims Notice” and, together with a Seller Claims Notice, a “Notice”) to the Seller Representative. A Buyer Claims Notice must describe a Buyer Claim in reasonable detail and indicate the amount (estimated, as necessary) of the Loss that has been or is reasonably expected to be suffered by the applicable Buyer Indemnitee, all to the extent known. No delay in or failure to give a Buyer Claims Notice by Buyer to the Seller Representative pursuant to this Section 7.6(b) shall adversely affect the applicable Buyer Indemnitee’s right to indemnification pursuant to this Agreement except to the extent any of the Company or the Stockholders are materially prejudiced thereby. If Buyer has not received from the Seller Representative notice in writing that the Seller Representative objects to Buyer Claim (or the amount of Losses set forth in Buyer Claims Notice) asserted in such Buyer Claims Notice

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(a “Dispute Notice”) by the thirtieth (30^th) day following receipt by the Seller Representative of Buyer Claims Notice (the “Dispute Period”), then the amount of Losses alleged in such Buyer Claims Notice shall be conclusively deemed to be a joint and several obligation of the Company and the Stockholders, and Buyer and the Seller Representative shall instruct the Escrow Agent in writing to, and the Escrow Agent shall, pay to Buyer from the Escrow Account the amount of Losses specified in Buyer Claims Notice subject to the limitations contained in this Article IX. If (i) such Buyer Claims Notice is delivered to the Seller Representative after the Representation Termination Date with respect to claims which survive such date, or (ii) to the extent such Buyer Claims Notice contemplates Losses in excess of Escrow Funds then available in the Escrow Account (after giving effect to any other pending claims under this Article IX and after deduction from such amount of any pending or potential claims under Section 2.3), and if, during the Dispute Period, Buyer has not received from the Seller Representative a Dispute Notice, then the amount of Losses alleged in such Buyer Claims Notice in excess of amounts, if any, payable from Escrow Funds shall be deemed to be a joint and several obligation of the Company and the Stockholders, and Buyer may recover such amount from the Company and/or any or all Stockholders in the aggregate in cash, within five (5) days of Buyer’s request, subject to the limitations contained in this Article IX.

(g)Resolution of Buyer Claims. If the Seller Representative delivers a Dispute Notice to Buyer within the Dispute Period, Buyer and the Seller Representative shall promptly meet and use their reasonable efforts to settle the dispute. If Buyer and the Seller Representative are able to reach agreement within thirty (30) days after Buyer receives such Dispute Notice, and to the extent the amount of the Escrow Funds (after giving effect to any other pending claims under this Article IX and after deduction from such amount of any pending or potential claims under Section 2.3) equal or exceed the amount of the Losses agreed to be paid with respect to Buyer Claims Notice, then Buyer and the Seller Representative shall deliver a joint written instruction to the Escrow Agent setting forth such agreement and instructing the Escrow Agent to pay to Buyer such amount from the Escrow Account. To the extent the amount of such agreed upon Losses exceeds the amount of the Escrow Funds (after giving effect to any other pending claims under this Article IX and after deduction from such amount of any pending or potential claims under Section 2.3) then available in the Escrow Account, then such excess shall be deemed to be a joint and several obligation of the Company and each of the Stockholders, and Buyer may recover from the Company and/or any Stockholders in the aggregate such excess amount in cash, within five (5) days of Buyer’s request, subject to the limitations set forth in this Article IX. If Buyer and the Seller Representative are unable to reach agreement within thirty (30) days after Buyer receives any Dispute Notice, then either Buyer or the Seller Representative (in the names and for the benefit of the Company and the Stockholders, as applicable) may commence an Action to seek resolution of such Buyer Claim, and to be paid amounts due hereunder, as provided herein, subject to the limitations set forth in this Article IX. For all purposes of this Article IX, Buyer and the Seller Representative shall cooperate with and make available to the other party and its representatives all information, records and data, and shall permit reasonable access to its facilities and personnel, as may be reasonably required in connection with the resolution of such disputes.

(h)Opportunity to Defend Third-Party Claims. In the event of any claim by a third party against a Buyer Indemnitee or Seller Indemnitee for which indemnification is available hereunder, the Seller Representative, if indemnification of Buyer Indemnitees is available,

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or Buyer, if indemnification of Seller Indemnitees is available (each an “Indemnifying Party”), has the right, exercisable by written notice to Buyer or the Seller Representative, as applicable, within sixty (60) days of receipt of a Notice from Buyer or the Seller Representative, as applicable, to assume and conduct the defense of such claim (in the names of, and for the benefit of, the Indemnified Party) with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party; provided, that the Indemnifying Party shall not be permitted to assume or conduct the defense of any claim if the Indemnified Party is also a party to the Action, there is a conflict of interest between the positions of the Indemnifying Party and the Indemnified Party in conducting the defense of such claims such that there may be one or more legal defenses available to the Indemnified Party that are different from or additional to those available to the Indemnifying Party, and the Indemnified Party shall have determined in good faith that such different or additional defenses would make it inappropriate for the Indemnifying Party to assume or conduct the defense of such claim. Notwithstanding the foregoing, if an Indemnified Party reasonably determines in good faith that there is a reasonable probability that an Action to defend a third-party claim may adversely affect him, her or its or his, her or its Affiliates other than as a result of monetary damages for which he, she or it would be entitled to indemnification under this Agreement, the Indemnified Party may, by notice to the Indemnifying Party, assume the right to defend, compromise or settle such Action, but the Indemnifying Party shall not be bound by any determination of an Action so defended or any compromise or settlement effected without its consent (which may not be unreasonably withheld or delayed), and the Indemnifying Party shall be entitled, at the Indemnifying Party’s cost and expense, to participate in the defense of the third-party claim. If the Indemnifying Party has assumed such defense as provided in this Section 7.6(d), the Indemnifying Party shall not be liable for any legal expenses subsequently incurred by any Indemnified Party in connection with the defense of such claim; provided, that if the Indemnified Party determines in good faith that there would be a violation of applicable legal ethical principles and policies if one counsel represents both parties, the Indemnified Party shall be entitled, at the Indemnifying Party’s cost, risk and expense, to retain one firm of separate counsel of his, her or its own choosing (along with any required local counsel) to participate in the defense of the third-party claim. Any additional counsel selected by an Indemnified Party pursuant to the immediately preceding sentence shall be reasonably acceptable to the Indemnifying Party. If the Indemnifying Party elects to assume the defense of a claim, the Indemnified Party may, at its own cost and expense, participate in the investigation, trial and defense of such claim. If the Indemnifying Party does not assume the defense of any third-party claim in accordance with this Section 7.6(d) within fourteen (14) days after delivery of a Buyer Claims Notice in connection with any such claim, the Indemnified Party may defend such claim at the sole cost of the Indemnifying Party. The Indemnified Party shall not consent to a settlement of any such claim without the prior written consent of the Indemnifying Party (such consent not to be unreasonably withheld or delayed). Except with the prior written consent of the Indemnified Party (such consent not to be unreasonably withheld or delayed), no Indemnifying Party, in the defense of any such claim, shall consent to the entry of any judgment or enter into any settlement that (i) provides for injunctive or other nonmonetary relief adversely affecting the Indemnified Party, (ii) includes a finding or admission of a violation of Law or the rights of any third party or which would otherwise form the basis of liability to any third party or (iii) does not include as an unconditional term thereof the giving by each claimant or plaintiff to such Indemnified Party of a release from all liability with respect to such claim or litigation. In any such third-party claim, the party responsible for the defense of such claim (the “Responsible Party”) shall, to the

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extent reasonably requested by the other party, keep such other party informed as to the status of such claim, including, without limitation, all settlement negotiations and offers.

(i)Releases from the Escrow Account. The funds held under the Escrow Agreement shall be released in accordance with the terms and subject to the conditions set forth in the Escrow Agreement.

7.7Additional Indemnification Provisions.

(d)Each party’s obligation under this Agreement is unique. If any party should breach his or its covenants under this Agreement, the parties each acknowledge that it would be impracticable to measure the resulting damages; accordingly, the nonbreaching party or parties, in addition to any other available rights or remedies they may have under the terms of this Agreement, may sue in equity for specific performance, and each party expressly waives the defense that a remedy in damages will be adequate.

(e)All indemnification payments made pursuant to this Article IX shall be treated as an adjustment to the Purchase Price unless otherwise required by Law.

(f)The parties hereto hereby consent to the non-exclusive jurisdiction of any court in which a claim is brought against any Buyer Indemnitee for purposes of any claim that any Buyer Indemnitee may have under this Agreement with respect to such claim or the matters alleged therein, and agree that process may be served on them with respect to such a claim anywhere in the world.

(g)The provisions of this Article IX shall be enforceable regardless of the basis on which Liability is asserted, including strict liability.

(h)If any remediation or other cleanup (collectively, “Cleanup”) at any Real Property is required and the Company and the Stockholders are responsible in whole or part therefor under this Article IX, then (i) such Cleanup shall be performed so as to minimize any suspension, interference or other disruption of Buyer’s operations, and (ii) Buyer shall have the right to approve the detailed plan to effect the Cleanup, such approval not to be unreasonably withheld, including the Persons who will perform the Cleanup, and the Cleanup shall not be initiated without Buyer’s prior written consent, provided that the Company and the Stockholders shall have no obligation to effect any Cleanup beyond that required by Law except to the extent any Cleanup is also the subject of any representation or warranty hereunder.

(i)Notwithstanding anything to the contrary herein, no Buyer Indemnitees shall have any right to indemnification under this Article IX with respect to any Loss if and to the extent such Loss (i) is for an item included on, or is a liability reserved or accrued for in the Final Working Capital Statement or the Closing Working Capital (or any component thereof) (as finally agreed upon or determined pursuant to Section 2.3(b)), or (ii) is otherwise already taken into account in the calculation of any adjustment to the Purchase Price pursuant to Section 2.3.

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(j)No Indemnified Party shall have any right to assert any claim against any Indemnifying Party hereunder with respect to any Loss, cause of action or other claim to the extent such Loss, cause of action or claim is a Loss, cause of action or claim with respect to which such Indemnified Party or any of its Affiliates has taken action (or caused action to be taken) with the intent of accelerating the time period in which such matter is asserted or payable in order to cause a claim to be made prior to the survival date applicable to such Loss pursuant to Section 7.1.

(k)For all purposes of this Article IX, “Losses” shall be net of any amounts paid or payable to an Indemnified Party under any insurance policy or Contract in connection with the facts giving rise to the right of indemnification hereunder.

ARTICLE VIIIMISCELLANEOUS AND GENERAL

8.1Seller Representative.

(f)The Seller Representative is hereby constituted and appointed as agent and attorney-in-fact for and on behalf of the Company and the Stockholders. Without limiting the generality of the foregoing, the Seller Representative has full power and authority, on behalf of the Company and Stockholder and its or his successors and assigns, to (i) interpret the terms and provisions of this Agreement and the Related Documents, (ii) execute and deliver and receive deliveries of all agreements, certificates, statements, notices, approvals, extensions, waivers, undertakings, amendments and other documents required or permitted to be given in connection with the consummation of the transactions contemplated by this Agreement and the Related Documents, (iii) receive service of process in connection with any claims under this Agreement or the Escrow Agreement, (iv) agree to, negotiate, enter into settlements and compromises of such claims, assume the defense of claims, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to such claims, and to take all actions necessary or appropriate in the judgment of the Seller Representative for the accomplishment of the foregoing, (v) make any payment or pay any expenses under or in connection with this Agreement and any Related Document, (vi) give and receive notices and communications, (vii) authorize delivery to any Buyer Indemnitee of the Escrow Funds or any portion thereof, (viii) object to such deliveries, (ix) distribute the Escrow Funds and any earnings and proceeds thereon, and (x) take all actions necessary or appropriate in the judgment of the Seller Representative on behalf of the Company and the Stockholders in connection with this Agreement and the Escrow Agreement, including, without limitation, entering into amendments hereof and thereof.

(g)The Seller Representative shall not be liable to the Company or Stockholders for any act done or omitted under this Agreement as Seller Representative while acting in good faith, and any act taken or omitted to be taken pursuant to the advice of counsel shall be conclusive evidence of such good faith.

(h)From and after the Closing Date, Buyer and the Escrow Agent shall be entitled to deal exclusively with the Seller Representative on all matters pertaining to the rights and obligations of the Company and the Stockholders under this Agreement and the Escrow Agreement. A decision, act, consent or instruction of the Seller Representative constitutes a decision of the

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Company and the Stockholders. Such decision, act, consent or instruction is final, binding and conclusive upon each Stockholder and Seller and Buyer and the Escrow Agent may rely upon any such decision, act, consent or instruction of the Seller Representative for all purposes of this Agreement and the Escrow Agreement. Notices or communications to or from the Seller Representative shall constitute notice to or from the Company and the Stockholders for all purposes of this Agreement and the Escrow Agreement. If the Seller Representative shall die, become disabled or otherwise be unable to fulfill his responsibilities hereunder, then the Stockholders (including the Seller Representative) by majority vote shall promptly appoint a successor to the Seller Representative. In addition, the Company and the Stockholders (including the Seller Representative) may replace the Seller Representative from time to time pursuant to a written consent executed by both of Stockholders. Any successor to the Seller Representative shall become the “Seller Representative” for all purposes under this Agreement, effective upon written notice given to Buyer and the other parties hereto.

8.2Expenses. Except as set forth in this Agreement, all costs and expenses (including all legal, accounting, broker, finder or investment banker fees) incurred in connection with this Agreement and the transactions contemplated hereby are to be paid, in the case of the Company, the Stockholders or the Seller Representative, by the Company, and in the case of Buyer, by Buyer.

8.3Successors and Assigns. This Agreement is binding upon and inures to the benefit of the parties hereto and their respective successors and assigns, and neither this Agreement nor any rights or obligations hereunder are assignable by any party without the prior written consent of the other parties hereto; provided that (a) Buyer shall have the right to collaterally assign its rights under this Agreement as security in connection with any financing incurred in connection with the transactions contemplated by this Agreement, and (b) Buyer shall have the right to assign any or all of its rights and obligations under this Agreement to any Affiliate.

8.4Third-Party Beneficiaries. Each party hereto intends that this Agreement does not benefit or create any right or cause of action in or on behalf of any Person other than the parties hereto and, for purposes of Article IX, the Seller Indemnitees and the Buyer Indemnitees.

8.5Notices. Any notice or other communication provided for herein or given hereunder to a party hereto must be in writing and sent by facsimile transmission (electronically confirmed), delivered in person, mailed by first class registered or certified mail, postage prepaid, or sent by Federal Express or other overnight courier of national reputation, addressed as follows:

If to Buyer:

Unique Molded Foam Technologies, Inc.

800 Standard Parkway

Auburn Hills, MI 48326

Fax: (248) 853-7720

Attention: Mr. John Weinhardt

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with a copy to:

Taglich Private Equity LLC

275 Madison Avenue, Suite 1618

New York, NY 10016

Fax: (212) 661-6824

Attention: Mr. Richard L. Baum, Jr.

and with a copy to:

Sills Cummis & Gross P.C.

One Riverfront Plaza

Newark, New Jersey 07102

Fax: (973) 643-6500

Attention: Ira A. Rosenberg, Esq.

If to the Company or any Stockholder:

Great Lake Foam Technologies Inc.

c/o Tim Packer

10580 Hadley Road

Litchfield, Michigan 49252

Email: mrtpacker@gmail.com

with a copy to (which shall not constitute notice):

Warner Norcross & Judd LLP

900 Fifth Third Center

111 Lyon Street

Grand Rapids, Michigan 49503

Fax: (616) 222-2425

Attention: Greg Schmidt

If to the Seller Representative:

Tim Packer

10580 Hadley Road

Litchfield, Michigan 49252

Email: mrtpacker@gmail.com

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with a copy to (which shall not constitute notice):

Warner Norcross & Judd LLP

900 Fifth Third Center

111 Lyon Street

Grand Rapids, Michigan 49503

Fax: (616) 222-2425

Attention: Greg Schmidt

or to such other address with respect to a party as such party notifies the other in writing as above provided.

8.6Complete Agreement. This Agreement and the Schedules and Exhibits hereto and the other documents delivered by the parties in connection herewith contain the complete agreement between and among the parties hereto with respect to the transactions contemplated hereby and thereby and supersede all prior agreements and understandings between the parties hereto with respect thereto.

8.7Captions. The captions contained in this Agreement are for convenience of reference only and do not form a part of this Agreement.

8.8Amendment. This Agreement may be amended or modified only by an instrument in writing duly executed by the Seller Representative and Buyer.

8.9Waiver. The Seller Representative and Buyer may (a) extend the time for the performance of any of the obligations or other acts of the parties hereto, (b) at any time at or prior to the Closing Date, waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, or (c) waive compliance with any of the agreements or conditions contained herein, to the extent permitted by applicable Law. Any agreement to any such extension or waiver shall be valid only if set forth in a writing signed by the Seller Representative and Buyer.

8.10Governing Law; Forum.

(a)This Agreement is to be governed by, and construed and enforced in accordance with, the laws of the State of Michigan, without regard to its rules of conflict of laws.

(b)Any Action brought by any party or any of its Affiliates arising in whole or in part under or in connection with this Agreement or any Related Document may only be instituted in a federal or state court in Oakland County, Michigan, and each party waives any claim or objection that it may now or hereafter have to the laying of venue of any such proceeding, and agrees not to assert that venue should properly lie in any other location.

(c)Each party hereby (i) consents to service of process in any Action between or among the parties arising in whole or in part under or in connection with this Agreement or any Related Document in any manner permitted by Michigan law, (ii) agrees that service of

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process made in accordance with clause (i) or made by registered or certified mail, return receipt requested, at its address specified pursuant to Section 8.5 above, shall constitute good and valid service of process in any such Action, and (iii) waives and agrees not to assert (by way of motion, as a defense, or otherwise) in any such Action any claim that service of process made in accordance with clause (i) or (ii) does not constitute good and valid service of process.

8.11Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED DOCUMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY RELATED DOCUMENT AND THAT ANY SUCH PROCEEDING WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

8.12Severability. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

8.13Schedules. Notwithstanding anything to the contrary in the Schedules to this Agreement or any cover page thereto, to the extent any one or more provisions in any Schedule conflicts with the provisions of this Agreement (including this Section 8.13) the provisions of this Section 8.13 and the other provisions of this Agreement shall control (including, without limitation, that no effect shall be given to any purported materiality or knowledge qualifications in any of the Schedules). The disclosure of any matter, or reference to any Contract, in any Schedule to this Agreement shall not be deemed to constitute an admission by Buyer, the Company, the Stockholders or Seller Representative or otherwise imply that any such matter or Contract is material for the purposes of this Agreement and shall not affect the interpretation of such term for the purposes of this Agreement. In particular, (a) certain matters may be disclosed on the Schedules that may not be required to be disclosed because of certain minimum thresholds or materiality standards set forth in this Agreement, (b) the disclosure of any such matter does not mean that it meets or surpasses any such minimum thresholds or materiality standards and (c) no disclosure in the Schedules relating to any possible breach or violation of any Contract or Law shall be construed as an admission or indication that any such breach or violation exists or has actually occurred. In no event shall the listing of such matters in any Schedule be deemed or interpreted to expand the scope of the Company’s or Stockholders representations and warranties contained in this Agreement. Each

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Schedule is qualified in its entirety by reference to specific provisions of this Agreement and does not constitute, and shall not be construed as constituting, representations, warranties or covenants of Buyer, the Company, the Stockholders or the Seller Representative or their respective Affiliates, except as and to the extent provided in this Agreement. Matters reflected in a Schedule are not necessarily limited to matters or Contracts required by this Agreement to be disclosed in such Schedules. Regardless of the existence or absence of cross-references, the disclosure of any matter in any Schedule shall be deemed to be a disclosure for purposes of this Agreement and each Schedule to the extent that the relevance of such disclosure is readily apparent from its text. The section headings in the Schedules are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any information disclosed herein or any provision of this Agreement. All attachments to the Schedules are incorporated by reference into the Schedule in which they are directly or indirectly referenced. The information contained in the Schedules is in all events subject to the Confidentiality Agreement.

8.14Exclusive Remedy. Notwithstanding anything to the contrary herein, except in the case of actual and intentional fraud, the rights and remedies of Buyer, The Company, Buyer Indemnitees and Seller Indemnitees under this Agreement and the Related Agreements are exclusive and in lieu of any and all other rights and remedies which Buyer, The Company, Buyer Indemnitees and Seller Indemnitees may have under this Agreement or otherwise against each other with respect to this Agreement and with respect to the transactions contemplated hereby or thereby, and with respect to the Purchased Assets; and Buyer, The Company, Buyer Indemnitees and Seller Indemnitees each expressly waives and releases and agrees to waive and release any and all other rights or causes of action it or its Affiliates may have against the other party or its Affiliates now or in the future under any Law with respect to the preceding matters.

8.15Joint Drafting. The parties hereto have participated jointly in the negotiation and drafting of this Agreement and the other agreements and documents to be executed by the parties in connection herewith. In the event an ambiguity or question of intent or interpretation arises, this Agreement and the other agreements and documents to be executed by the parties hereto in connection herewith shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement and the other agreements and documents to be executed by the parties in connection with this Agreement.

8.16Specific Performance. Each of the parties hereto acknowledges that the rights of each party to consummate the transactions contemplated hereby are unique and recognize and affirm that in the event of a breach of this Agreement by any party, money damages may be inadequate and the non-breaching party may have no adequate remedy at law. Accordingly, the parties hereto agree that such non-breaching party shall have the right, in addition to any other rights and remedies existing in their favor at law or in equity, to enforce its rights and the breaching party’s obligations hereunder not only by an action or actions for damages but also by an action or actions for specific performance, injunctive and/or other equitable relief (without posting of bond or other security).

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8.17Counterparts. This Agreement may be executed in any number of counterparts, and counterpart signature pages may be delivered by PDF format, each of which shall be deemed an original but all of which shall constitute but one instrument.

8.18Confidentiality. From and after the Closing Date, the Company and the Stockholders shall treat and hold as confidential, and not use or disclose any of the Confidential Information to any Person, except to pursue its or his rights under this Agreement or the Related Documents and the performance of the respective duties under the Employment Agreement. In the event that the Company or any Stockholder is required by Law to disclose any Confidential Information, the Company or Stockholder shall notify Buyer promptly of the request or requirement so that Buyer may seek, at its expense, an appropriate protective order or waive compliance with the provisions of this Section 8.18. Upon the request and at the expense of Buyer, the Company and the Stockholders shall assist Buyer in obtaining such protective order. If, in the absence of a protective order or the receipt of a waiver hereunder the Company or Stockholder is compelled to disclose any Confidential Information to any Governmental Authority or else stand liable for contempt, the Company or Stockholder may disclose the Confidential Information to the Governmental Authority; provided, however, that the Company or Stockholder shall use commercially reasonable efforts to obtain, at the request, and at the expense, of Buyer, an Order or other assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be disclosed as Buyer shall designate. As used herein, “Confidential Information” shall mean any nonpublic or confidential information relating to Buyer, its Affiliates, the Products, the Business or the Purchased Assets, except to the extent that such information shall have become public knowledge other than through improper disclosure by the Company or any Stockholder.

[Signatures on Following Page]

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IN WITNESS WHEREOF, Buyer, the Company, the Stockholders and the Seller Representative have caused this Agreement to be executed as of the day and year first above written.

UNIQUE MOLDED FOAM TECHNOLOGIES, INC.

By:_________________________________

Name:

Title:

GREAT LAKE FOAM TECHNOLOGIES INC.

By:_________________________________

Name:

Title:

STOCKHOLDERS:

____________________________________

Bill MacCready

____________________________________

Tim Packer

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The undersigned hereby agrees to serve as the Seller Representative in connection with (a) the Asset Purchase Agreement (the “Agreement”) dated August 31, 2015, by and among Unique Molded Foam Technologies, Inc., a Delaware corporation (“Buyer”), Great Lake Foam Technologies, Inc., Bill MacCready and Tim Packer, and (b) the Escrow Agreement, dated as of the Closing Date (as defined in the Agreement), by and among Buyer, the undersigned, as Seller Representative, and Peapack-Gladstone Bank as escrow agent, and hereby agrees to act and perform his obligations thereunder.

______________________________

Tim Packer, as Seller Representative

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Schedule 2.1

“Purchased Assets” means all of the assets of every kind and nature, real, personal and mixed, tangible or intangible, wherever located, owned by, used by or held for use by the Company, including any and all of the following assets, except, and only except, the herein defined Excluded Assets:

(a)Accounts and Instruments. All accounts, instruments and chattel paper (as such terms are defined in the UCC), including all Accounts Receivable.

(b)Inventory. All Inventory.

(c)Intellectual Property. All rights in and to all United States and foreign patents, tradenames, trademarks, service marks, copyrights, domain names and/or applications therefor and the like, and all other intellectual property of any kind or nature, whether arising under statute, common law or otherwise, registered or unregistered, including, without limitation, the Intellectual Property.

(d)Customer and Supplier Information. All current or historical information relating to customers and suppliers, including all customer lists, mailing lists, customer price lists, customer files, customer account histories, suppliers lists, suppliers price lists and other correspondence and other recorded knowledge relating to customers or suppliers. Customers include distributors.

(e)Goodwill. All of the goodwill of the Company.

(f)Machinery, Equipment, Fixtures and Supplies. All machinery and equipment, molds, office equipment, accessories, tools, vehicles, spare parts, fixtures, furniture, supplies relating to the foregoing, other supplies, including packaging and office supplies and other similar personal property.

(g)Proprietary Technology; Other Information. All proprietary technology, including all know‑how, trade secrets, quality control standards, reports, including test reports, processes, market research and other data, computer software and programs, formulae, inventions and other ideas, current and historical information relating to products purchased or sold by the Company or contemplated to be purchased or sold, including all sales literature, sales data and other related information, including correspondence and recorded knowledge, and all other current and historical information relating to the Purchased Assets, including employee records and other information pertaining to the Business, and the media thereon.

(h)Permits; Contract Rights; Prepaid Assets; Certain Insurance Policies; Other Assets. All of the following: (i) all Permits; (ii) all of the rights under [all Contracts]; (iii)  the Company’s website(s); (iv) all prepaid or deferred expenses, including all advertising and promotional materials, catalogs and labels; (v) all warranties, guarantees and rights of indemnity, at common law, by contract or otherwise; (vi) all other rights relating to the other Purchased Assets, including all guaranties, security agreements and other collateral in respect of any such assets and

claims now existing or hereafter arising relating thereto; (vii) all rights to receive proceeds of insurance awards payable on or after the Closing Date with respect to loss of any Purchased Asset; (viii) all claims and other causes of action inuring to the Company’s benefit; and (ix) without limiting the generality of this Schedule 2.1, all other assets of the Company except to the extent same constitute Excluded Assets.

Notwithstanding the preceding provisions of this Schedule 2.1, the Purchased Assets shall not include any of the following assets existing on the Closing Date (the “Excluded Assets”):

(a)Cash. All Cash, certificates of deposit, money market accounts, marketable securities and other similar securities and/or cash equivalents of the Company.

(b)Tax Refunds. All claims made or which may be made by the Company to any Governmental Authority, to the extent same does not adversely affect Buyer, relating to refunds for Taxes with respect to any period occurring prior to the Closing Date.

(c)Certain Corporate Records. Corporate minutes, seals, stock ledgers and stock transfer books of the Company.

(d)Agreement Rights. All rights of The Company under this Agreement.

(e)Litigation. All rights under the KBDLitigation.

Terms (whether or not capitalized) defined in the Agreement to which this Schedule 2.1 is attached and not defined in this Schedule 2.1 shall have the meanings ascribed to such terms in the Agreement. Capitalized terms defined in this Schedule and not defined in the Agreement to which this Schedule 2.1 is attached shall in the Agreement have the meanings ascribed to such terms in this Schedule 2.1.

EX-10.2

Exhibit 10.2

UNIQUE FABRICATING, INC.
2014 OMNIBUS PERFORMANCE AWARD PLAN

ISO AWARD AGREEMENT

Unique Fabricating, Inc., a Delaware corporation (the “Corporation”), pursuant to the terms of its 2014 Omnibus Performance Award Plan (the “Plan”) and the Incentive Stock Option Award attached to this ISO Award Agreement, hereby grants to the individual named below the option to purchase the number of shares of the Corporation’s Common Stock, also as is set forth below. The terms of this ISO Award Agreement are subject to all of the provisions of the Plan and the attached Incentive Stock Option Award, with such provisions being incorporated herein by reference.

1.    Date of Grant:        August 17, 2015

2.    Name of Participant:    John Weinhardt

3.    Number of Shares:    45,000 of Common Stock

4.    Exercise Price:    $12.50 per Share of Common Stock.

5.    Vesting of Options:

Vesting Date	No. of Shares Vested
August 17, 2015	9,000
August 17, 2016	9,000
August 17, 2017	9,000
August 17, 2018	9,000
August 17, 2019	9,000

6.    Expiration Date:    August 17, 2025

The Participant acknowledges receipt of, and understands and agrees to be bound by all of the terms of, this ISO Award Agreement, the attached Incentive Stock Option Award and the Plan, and that the terms thereof supersede any and all other written or oral agreements between the Participant and the Corporation regarding the subject matter contained herein.

UNIQUE FABRICATING, INC.	PARTICIPANT:
BY: /s/ John Weinhardt	BY: /s/ John Weinhardt
TITLE: DATE:	TITLE: DATE:

INCENTIVE STOCK OPTION AWARD

THIS AGREEMENT made as of the grant date set forth in Section 1 of the ISO Award Agreement to which this Agreement is attached (the “Date of Grant”) between Unique Fabricating, Inc., a Delaware corporation (hereinafter referred to as the “Corporation”), and the individual identified in Section 2 of the ISO Award Agreement to which this Agreement is attached (hereinafter referred to as the “Participant”).

W I T N E S S E T H:

WHEREAS, the Corporation desires, in connection with the employment of the Participant and in accordance with its 2014 Omnibus Performance Award Plan (the “Plan”), to provide the Participant with an opportunity to acquire Common Stock of the Corporation on favorable terms and thereby increase his proprietary interest in the continued progress and success of the business of the Corporation;

NOW, THEREFORE, in consideration of the premises, the mutual covenants herein set forth and other good and valuable consideration, the Corporation and the Participant hereby agree as follows:

1.Confirmation of Grant of Option. Pursuant to a determination by the Committee, the Corporation, subject to the terms of the Plan and this Agreement, hereby grants to the Participant as a matter of separate inducement and agreement, and in addition to and not in lieu of salary or other compensation for services, the right to purchase (hereinafter referred to as the “Option”) an aggregate number of shares of Common Stock as is set forth in Section 3 of the attached ISO Award Agreement, subject to adjustment as provided in the Plan (such shares, as adjusted, hereinafter being referred to as the “Shares”). The Option is intended to qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2.Purchase Price. The purchase price of shares of Common Stock covered by the Option will be the per share amount set forth in Section 4 of the attached ISO Award Agreement, at all times being not less than 100% of the Fair Market Value of one share of Common Stock on the Date of Grant, subject to adjustment as provided in the Plan.

3.Exercise of Option. The Option shall be exercisable on the terms and conditions hereinafter set forth:

(a)The Option shall become exercisable cumulatively as to the number of Shares originally subject thereto (after giving effect to any adjustment pursuant to the Plan), and on the dates, as set forth in Section 5 of the attached ISO Award Agreement.

(b)The Option may be exercised pursuant to the provisions of this Section 3, by notice and payment to the Corporation as provided in Sections 9 and 13 hereof.

4.Term of Option. The term of the Option shall be the period of years from the Date of Grant as is set forth in Section 1 of the attached ISO Award Agreement and shall expire

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on the date set forth in Section 6 of the ISO Award Agreement, subject to earlier termination or cancellation as provided in this Agreement.

5.Non transferability of Option. The Option shall not be assigned, transferred or otherwise disposed of, or pledged or hypothecated in any way, and shall not be subject to execution, attachment or other process, except as may be provided in the Plan. Any assignment, transfer, pledge, hypothecation or other disposition of the Option attempted contrary to the provisions of the Plan, or any levy of execution, attachment or other process attempted upon the Option, will be null and void and without effect. Any attempt to make any such assignment, transfer, pledge, hypothecation or other disposition of the Option will cause the Option to terminate immediately upon the happening of any such event; provided, however, that any such termination of the Option under the foregoing provisions of this Section 5 will not prejudice any rights or remedies which the Corporation or any Affiliate may have under this Agreement or otherwise.

6.Exercise Upon Termination of Service. (A) If the Participant at any time incurs a Termination of Service (i) by reason of his discharge for Cause or (ii) due to his voluntary Termination of Service without the written consent of the Committee, the Option shall, at the time of such Termination of Service, terminate and the Participant shall forfeit all rights hereunder. If, however, the Participant for any other reason (other than Disability or death) incurs a Termination of Service, the Option may, subject to the provisions of Section 5 hereof, be exercised by the Participant to the same extent the Participant would have been entitled under Section 3 hereof to exercise the Option immediately prior to such Termination of Service, at any time within 90 days after such Termination of Service, at the end of which period the Option, to the extent not then exercised, shall terminate and the Participant shall forfeit all rights hereunder, even if the Participant subsequently returns to the Service of the Corporation or any Affiliate. In no event, however, may the Option be exercised after the expiration of the term provided in Section 4 hereof.

(a)The Option shall not be affected by any change of duties or position of the Participant so long as he continues to be in full-time Service of the Corporation or of any Affiliate thereof. If the Participant is granted a temporary leave of absence of 90 days or less, such leave of absence shall be deemed a continuation of his Service by the Corporation or of any Affiliate thereof for the purposes of this Agreement, but only if and so long as the corporation consents thereto.

7.Exercise Upon Death or Disability. (A) If the Participant dies while he is in the Service of the Corporation or of any Affiliate, and on or after the first date upon which he would have been entitled to exercise the Option under the provisions of Section 3 hereof, the Option may, subject to the provisions of Section 5 hereof, be exercised to the same extent the Participant would have been entitled under Section 3 hereof to exercise the Option immediately prior to his death, by the estate of the Participant (or by the person or persons who acquire the right to exercise the Option by written designation of the Participant) at any time within one year after the death of the Participant, at the end of which period the Option, to the extent not then exercised, shall terminate and the estate or other beneficiaries shall forfeit all rights hereunder. In no event, however, may the Option be exercised after the expiration of the term provided in Section 4 hereof.

(a)In the event that the Participant incurs a Termination of Service by reason of the Disability of the Participanton or after the first date upon which he would have been

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entitled to exercise the Option under the provisions of Section 3 hereof, the Option may, subject to the provisions of Section 5 hereof, be exercised to the same extent the Participant would have been entitled under Section 3 hereof to exercise the Option immediately prior to his employment termination due to Disability by the Participant within the period ending one year after the date of such Termination of Service, at the end of which period the Option, to the extent not then exercised, shall terminate and the Participant shall forfeit all rights hereunder even if the Participant subsequently returns to the Service of the Corporation or any Affiliate. In no event, however, may the Option be exercised after the expiration of the term provided in Section 4 hereof.

8.Registration. At the time of issuance, the shares of Common Stock subject hereto and issuable upon the exercise hereof may not be registered under the Securities Act of 1933, as amended, and, if required upon the request of counsel to the Corporation, the Participant will give a representation as to his investment intent with respect to such shares prior to their issuance. The Corporation may register or qualify the shares covered by the Option for sale pursuant to the Securities Act of 1933, as amended, at any time prior to or after the exercise in whole or in part of the Option.

9.Method of Exercise of Option. (A) Subject to the terms and conditions of this Agreement, the Option shall be exercisable by notice in the manner set forth in Exhibit “A” hereto (the “Notice”) and provision for payment to the Corporation in accordance with the procedure prescribed herein. Each such Notice shall:

(i)state the election to exercise the Option and the number of Shares with respect to which it is being exercised;

(ii)contain a representation and agreement as to investment intent, if required by counsel to the Corporation with respect to such Shares, in a form satisfactory to counsel to the Corporation;

(iii)be signed by the Participant or the person or persons entitled to exercise the Option and, if the Option is being exercised by any person or persons other than the Participant, be accompanied by proof, satisfactory to counsel to the Corporation, of the right of such other person or persons to exercise the Option;

(iv)include payment of the full purchase price for the shares of Common Stock to be purchased pursuant to such exercise of the Option; and

(v)be received by the Corporation on or before the date of the expiration of this Option. In the event the date of expiration of this Option falls on a day which is not a regular business day at the Corporation’s executive office in Auburn Hills, Michigan then such written Notice must be received at such office on or before the last regular business day prior to such date of expiration.

(b)Payment of the purchase price of any shares of Common Stock, in respect of which the Option shall be exercised, shall be made by the Participant or such person or persons at the place specified by the Corporation on the date the Notice is received by the Corporation (i) by delivering to the Corporation a certified or bank cashier’s check payable to the order of the

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Corporation, (ii) by delivering to the Corporation properly endorsed certificates of shares of Common Stock (or certificates accompanied by an appropriate stock power) with signature guaranties by a bank or trust company, or (iii) by any combination of the foregoing. For purposes of the immediately preceding sentence, an exercise effected by the tender of Common Stock (or deemed to be effected by the tender of Common Stock) may only be consummated with Common Stock held by the Participant for a period of six (6) months or acquired by the Participant other than under the Plan (or a similar plan maintained by the Corporation).

(c)The Option shall be deemed to have been exercised with respect to any particular shares of Common Stock if, and only if, the preceding provisions of this Section 9 and the provisions of Section 10 hereof shall have been complied with, in which event the Option shall be deemed to have been exercised on the date the Notice was received by the Corporation. Anything in this Agreement to the contrary notwithstanding, any Notice given pursuant to the provisions of this Section 9 shall be void and of no effect if all of the preceding provisions of this Section 9 and the provisions of Section 10 shall not have been complied with.

(d)The certificate or certificates for shares of Common Stock as to which the Option shall be exercised will be registered in the name of the Participant (or in the name of the Participant’s estate or other beneficiary if the Option is exercised after the Participant’s death), or if the Option is exercised by the Participant and if the Participant so requests in the notice exercising the Option, will be registered in the name of the Participant and another person jointly, with right of survivorship and will be delivered as soon as practical after the date the Notice is received by the Corporation (accompanied by full payment of the exercise price), but only upon compliance with all of the provisions of this Agreement.

(e)If the Participant fails to accept delivery of and pay for all or any part of the number of Shares specified in such Notice, his right to exercise the Option with respect to such undelivered Shares may be terminated in the sole discretion of the Committee. The Option may be exercised only with respect to full Shares.

(f)The Corporation shall not be required to issue or deliver any certificate or certificates for shares of its Common Stock purchased upon the exercise of any part of the Option prior to the payment to the Corporation, upon its demand, of any amount requested by the Corporation for the purpose of satisfying its minimum statutory liability, if any, to withhold federal, state or local income or earnings tax or any other applicable tax or assessment (plus interest or penalties thereon, if any, caused by a delay in making such payment) incurred by reason of the exercise of this Option or the transfer of shares thereupon. Such payment shall be made by the Participant in cash or, with the written consent of the Corporation, by tendering to the Corporation shares of Common Stock equal in value to the amount of the required withholding. In the alternative, the Corporation may, at its option, satisfy such withholding requirements by withholding from the shares of Common Stock to be delivered to the Participant pursuant to an exercise of the Option a number of shares of Common Stock equal in value to the amount of the required withholding.

10.Approval of Counsel. The exercise of the Option and the issuance and delivery of shares of Common Stock pursuant thereto shall be subject to approval by the Corporation’s counsel of all legal matters in connection therewith, including, but not limited to, compliance with the requirements of the Securities Act of 1933, as amended, and the Securities

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Exchange Act of 1934, as amended, and the rules and regulations thereunder, and the requirements of any stock exchange or automated trading medium upon which the Common Stock may then be listed or traded.

11.Reservation of Shares. The Corporation shall at all times during the term of the Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement.

12.Limitation of Action. The Participant and the Corporation each acknowledges that every right of action accruing to him or it, as the case may be, and arising out of or in connection with this Agreement against the Corporation or an Affiliate, on the one hand, or against the Participant, on the other hand, shall, irrespective of the place where an action may be brought, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises.

13.Notices. Each notice relating to this Agreement shall be in writing and delivered in person, by recognized overnight courier or by certified mail to the proper address. All notices to the Corporation or the Committee shall be addressed to them at 800 Standard Parkway, Auburn Hills, Michigan 48326, Attn: Chief Financial Officer. All notices to the Participant shall be addressed to the Participant or such other person or persons at the Participant’s address set forth in the Corporation’s records. Anyone to whom a notice may be given under this Agreement may designate a new address by notice to that effect.

14.Benefits of Agreement. This Agreement shall inure to the benefit of the Corporation, the Participant and their respective heirs, executors, administrators, personal representatives, successors and permitted assignees.

15.Severability. In the event that any one or more provisions of this Agreement shall be deemed to be illegal or unenforceable, such illegality or unenforceability shall not affect the validity and enforceability of the remaining legal and enforceable provisions hereof, which shall be construed as if such illegal or unenforceable provision or provisions had not been inserted.

16.Governing Law. This Agreement will be construed and governed in accordance with the laws of the State of Delaware without regard to its principles of conflicts of law. In the event that either party is compelled to bring a claim related to this Agreement, to interpret or enforce the provisions of the Agreement, to recover damages as a result of a breach of the Agreement, or from any other cause (a “Claim”), such Claim must be processed in the manner set forth below:

(i)THE SOLE AND EXCLUSIVE METHOD TO RESOLVE ANY CLAIM IS ARBITRATION, EACH PARTY WAIVES THE RIGHT TO A JURY TRIAL OR COURT TRIAL. Neither party shall initiate or prosecute any lawsuit in any way related to any Claim covered by this Agreement.

(ii)The arbitration shall be binding and conducted before a single arbitrator in accordance with the then-current JAMS Arbitration Rules and Procedures for Employment Disputes or the appropriate governing body, as modified by the terms and

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conditions of this paragraph. Venue for any arbitration pursuant to this Agreement will lie in Auburn Hills, Michigan. The arbitrator will be selected by mutual agreement of the parties or, if the parties cannot agree, then by striking from a list of arbitrators supplied by JAMS or the appropriate governing body. The Corporation shall pay the arbitrator’s fees and arbitration costs (recognizing that each side bears the cost of its own deposition(s), witness, expert and attorneys’ fees and other expenses as and to the same extent as if the matter were being heard in a court of law). Upon the conclusion of the arbitration hearing, the arbitrator shall issue a written opinion revealing, however briefly, the essential findings and conclusions upon which the arbitrator’s award is based. The award of the arbitrator shall be final and binding. Judgment upon any award may be entered in any court having jurisdiction thereof.

17.Disposition of Shares. By accepting this Agreement, the Participant agrees that in the event he shall dispose (whether by sale, exchange, gift or any like transfer) of any shares of Common Stock of the Corporation (to the extent such shares are deemed to have been purchased pursuant to this incentive stock option) acquired by him pursuant hereto within two years of the Date of Grant of this Option or within one year after the acquisition of such shares pursuant hereto, he will notify the Chief Financial Officer of the Corporation no later than 15 days from the date of such disposition of such date or dates and the number of shares disposed of by him and the consideration received, if any, and, upon notification from the Corporation, promptly forward to the Chief Financial Officer of the Corporation any amount requested by the Corporation for the purpose of satisfying its liability, if any, to withhold federal, state or local income or earnings tax or any other applicable tax or assessment (plus interest or penalties thereon, if any, caused by any delay in making such payment) incurred by reason of such disposition.

18.Acknowledgment of Participant. THE PARTICIPANT REPRESENTS AND WARRANTS THAT AS OF THE DATE OF GRANT OF THE OPTION, HE DOES NOT OWN (WITHIN THE MEANING OF SECTION 422(B)(6) OF THE CODE) SHARES POSSESSING MORE THAN 10% OF THE TOTAL COMBINED VOTING POWER OF ALL CLASSES OF SHARES OF THE CORPORATION OR OF ANY AFFILIATE.

19.Service. Nothing contained in this Agreement shall be construed as (a) a contract of employment between the Participant and the Corporation or any Affiliate, (b) a right of the Participant to be continued in the Service of the Corporation or of any Affiliate, or (c) a limitation of the right of the Corporation or of any Affiliate to discharge the Participant at any time, with or without cause (subject to any applicable employment agreement).

20.Definitions. Unless otherwise defined herein, all capitalized terms used in this Agreement shall have the same definitions as set forth in the Plan.

21.Incorporation of Terms of Plan. This Agreement shall be interpreted under, and subject to, all of the terms and provisions of the Plan, which are incorporated herein by reference.

22.No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall apply against any party.

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BY WAY OF THEIR EXECUTION OF THE ISO AWARD AGREEMENT TO WHICH THIS AGREEMENT IS ATTACHED, the Corporation and the Participant (and each and every one of their heirs, successors and assigns) agree to be bound by each and every one of the terms set forth in this Agreement.

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EXHIBIT A

INCENTIVE OPTION EXERCISE FORM

[DATE]

Unique Fabricating, Inc.
800 Standard Parkway
Auburn Hills, MI 48326|
Attention: Thomas P. Tekiele

Dear Sirs:

Pursuant to the provisions of the Incentive Stock Option Award and related ISO Award Agreement dated August 17, 2015 (collectively, the “Agreement”), whereby you have granted to me an Incentive Stock Option (the “Option”) to purchase up to 45,000 shares of the Common Stock of Unique Fabricating, Inc. (the “Corporation”) subject to the terms of the Agreement, I hereby notify you that I elect to exercise my option to purchase [ ] of the shares of Common Stock covered by such Option at the $12.50 per share price specified therein. In full payment of the price for the shares being purchased hereby, I am delivering to you herewith (i) certified or bank cashier’s check payable to the order of the Corporation in the amount of $____________, or (ii) a certificate or certificates for [   ] shares of Common Stock of the Corporation, and which have a fair market value as of the date hereof of $___________, [and a certified or bank cashier’s check, payable to the order of the Corporation, in the amount of $________________]. Any such stock certificate or certificates are endorsed, or accompanied by an appropriate stock power, to the order of the Corporation, with my signature guaranteed by a bank or trust company or by a member firm of the New York Stock Exchange. [I hereby acknowledge that I am purchasing these shares for investment purposes only and not for resale in violation of any federal or state securities laws.]

Very truly yours,

______________________________

[Address]

(For notices, reports, dividend checks and other communications to stockholders.)

9

EX-10.3

Exhibit 10.3

UNIQUE FABRICATING, INC.
2014 OMNIBUS PERFORMANCE AWARD PLAN

ISO AWARD AGREEMENT

Unique Fabricating, Inc., a Delaware corporation (the “Corporation”), pursuant to the terms of its 2014 Omnibus Performance Award Plan (the “Plan”) and the Incentive Stock Option Award attached to this ISO Award Agreement, hereby grants to the individual named below the option to purchase the number of shares of the Corporation’s Common Stock, also as is set forth below. The terms of this ISO Award Agreement are subject to all of the provisions of the Plan and the attached Incentive Stock Option Award, with such provisions being incorporated herein by reference.

1.    Date of Grant:        August 17, 2015

2.    Name of Participant:    Thomas Tekiele

3.    Number of Shares:    20,000 of Common Stock

4.    Exercise Price:    $12.50 per Share of Common Stock.

5.    Vesting of Options:

Vesting Date	No. of Shares Vested
August 17, 2015	4,000
August 17, 2016	4,000
August 17, 2017	4,000
August 17, 2018	4,000
August 17, 2019	4,000

6.    Expiration Date:    August 17, 2025

The Participant acknowledges receipt of, and understands and agrees to be bound by all of the terms of, this ISO Award Agreement, the attached Incentive Stock Option Award and the Plan, and that the terms thereof supersede any and all other written or oral agreements between the Participant and the Corporation regarding the subject matter contained herein.

UNIQUE FABRICATING, INC.	PARTICIPANT:
BY: /s/ John Weinhardt	BY:/s/ Thomas Tekiele
TITLE: DATE:	TITLE: DATE:

INCENTIVE STOCK OPTION AWARD

THIS AGREEMENT made as of the grant date set forth in Section 1 of the ISO Award Agreement to which this Agreement is attached (the “Date of Grant”) between Unique Fabricating, Inc., a Delaware corporation (hereinafter referred to as the “Corporation”), and the individual identified in Section 2 of the ISO Award Agreement to which this Agreement is attached (hereinafter referred to as the “Participant”).

W I T N E S S E T H:

WHEREAS, the Corporation desires, in connection with the employment of the Participant and in accordance with its 2014 Omnibus Performance Award Plan (the “Plan”), to provide the Participant with an opportunity to acquire Common Stock of the Corporation on favorable terms and thereby increase his proprietary interest in the continued progress and success of the business of the Corporation;

NOW, THEREFORE, in consideration of the premises, the mutual covenants herein set forth and other good and valuable consideration, the Corporation and the Participant hereby agree as follows:

1.Confirmation of Grant of Option. Pursuant to a determination by the Committee, the Corporation, subject to the terms of the Plan and this Agreement, hereby grants to the Participant as a matter of separate inducement and agreement, and in addition to and not in lieu of salary or other compensation for services, the right to purchase (hereinafter referred to as the “Option”) an aggregate number of shares of Common Stock as is set forth in Section 3 of the attached ISO Award Agreement, subject to adjustment as provided in the Plan (such shares, as adjusted, hereinafter being referred to as the “Shares”). The Option is intended to qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2.Purchase Price. The purchase price of shares of Common Stock covered by the Option will be the per share amount set forth in Section 4 of the attached ISO Award Agreement, at all times being not less than 100% of the Fair Market Value of one share of Common Stock on the Date of Grant, subject to adjustment as provided in the Plan.

3.Exercise of Option. The Option shall be exercisable on the terms and conditions hereinafter set forth:

(a)The Option shall become exercisable cumulatively as to the number of Shares originally subject thereto (after giving effect to any adjustment pursuant to the Plan), and on the dates, as set forth in Section 5 of the attached ISO Award Agreement.

(b)The Option may be exercised pursuant to the provisions of this Section 3, by notice and payment to the Corporation as provided in Sections 9 and 13 hereof.

4.Term of Option. The term of the Option shall be the period of years from the Date of Grant as is set forth in Section 1 of the attached ISO Award Agreement and shall expire

2

on the date set forth in Section 6 of the ISO Award Agreement, subject to earlier termination or cancellation as provided in this Agreement.

5.Non transferability of Option. The Option shall not be assigned, transferred or otherwise disposed of, or pledged or hypothecated in any way, and shall not be subject to execution, attachment or other process, except as may be provided in the Plan. Any assignment, transfer, pledge, hypothecation or other disposition of the Option attempted contrary to the provisions of the Plan, or any levy of execution, attachment or other process attempted upon the Option, will be null and void and without effect. Any attempt to make any such assignment, transfer, pledge, hypothecation or other disposition of the Option will cause the Option to terminate immediately upon the happening of any such event; provided, however, that any such termination of the Option under the foregoing provisions of this Section 5 will not prejudice any rights or remedies which the Corporation or any Affiliate may have under this Agreement or otherwise.

6.Exercise Upon Termination of Service. (A) If the Participant at any time incurs a Termination of Service (i) by reason of his discharge for Cause or (ii) due to his voluntary Termination of Service without the written consent of the Committee, the Option shall, at the time of such Termination of Service, terminate and the Participant shall forfeit all rights hereunder. If, however, the Participant for any other reason (other than Disability or death) incurs a Termination of Service, the Option may, subject to the provisions of Section 5 hereof, be exercised by the Participant to the same extent the Participant would have been entitled under Section 3 hereof to exercise the Option immediately prior to such Termination of Service, at any time within 90 days after such Termination of Service, at the end of which period the Option, to the extent not then exercised, shall terminate and the Participant shall forfeit all rights hereunder, even if the Participant subsequently returns to the Service of the Corporation or any Affiliate. In no event, however, may the Option be exercised after the expiration of the term provided in Section 4 hereof.

(a)The Option shall not be affected by any change of duties or position of the Participant so long as he continues to be in full-time Service of the Corporation or of any Affiliate thereof. If the Participant is granted a temporary leave of absence of 90 days or less, such leave of absence shall be deemed a continuation of his Service by the Corporation or of any Affiliate thereof for the purposes of this Agreement, but only if and so long as the corporation consents thereto.

7.Exercise Upon Death or Disability. (A) If the Participant dies while he is in the Service of the Corporation or of any Affiliate, and on or after the first date upon which he would have been entitled to exercise the Option under the provisions of Section 3 hereof, the Option may, subject to the provisions of Section 5 hereof, be exercised to the same extent the Participant would have been entitled under Section 3 hereof to exercise the Option immediately prior to his death, by the estate of the Participant (or by the person or persons who acquire the right to exercise the Option by written designation of the Participant) at any time within one year after the death of the Participant, at the end of which period the Option, to the extent not then exercised, shall terminate and the estate or other beneficiaries shall forfeit all rights hereunder. In no event, however, may the Option be exercised after the expiration of the term provided in Section 4 hereof.

(a)In the event that the Participant incurs a Termination of Service by reason of the Disability of the Participanton or after the first date upon which he would have been

3

entitled to exercise the Option under the provisions of Section 3 hereof, the Option may, subject to the provisions of Section 5 hereof, be exercised to the same extent the Participant would have been entitled under Section 3 hereof to exercise the Option immediately prior to his employment termination due to Disability by the Participant within the period ending one year after the date of such Termination of Service, at the end of which period the Option, to the extent not then exercised, shall terminate and the Participant shall forfeit all rights hereunder even if the Participant subsequently returns to the Service of the Corporation or any Affiliate. In no event, however, may the Option be exercised after the expiration of the term provided in Section 4 hereof.

8.Registration. At the time of issuance, the shares of Common Stock subject hereto and issuable upon the exercise hereof may not be registered under the Securities Act of 1933, as amended, and, if required upon the request of counsel to the Corporation, the Participant will give a representation as to his investment intent with respect to such shares prior to their issuance. The Corporation may register or qualify the shares covered by the Option for sale pursuant to the Securities Act of 1933, as amended, at any time prior to or after the exercise in whole or in part of the Option.

9.Method of Exercise of Option. (A) Subject to the terms and conditions of this Agreement, the Option shall be exercisable by notice in the manner set forth in Exhibit “A” hereto (the “Notice”) and provision for payment to the Corporation in accordance with the procedure prescribed herein. Each such Notice shall:

(i)state the election to exercise the Option and the number of Shares with respect to which it is being exercised;

(ii)contain a representation and agreement as to investment intent, if required by counsel to the Corporation with respect to such Shares, in a form satisfactory to counsel to the Corporation;

(iii)be signed by the Participant or the person or persons entitled to exercise the Option and, if the Option is being exercised by any person or persons other than the Participant, be accompanied by proof, satisfactory to counsel to the Corporation, of the right of such other person or persons to exercise the Option;

(iv)include payment of the full purchase price for the shares of Common Stock to be purchased pursuant to such exercise of the Option; and

(v)be received by the Corporation on or before the date of the expiration of this Option. In the event the date of expiration of this Option falls on a day which is not a regular business day at the Corporation’s executive office in Auburn Hills, Michigan then such written Notice must be received at such office on or before the last regular business day prior to such date of expiration.

(b)Payment of the purchase price of any shares of Common Stock, in respect of which the Option shall be exercised, shall be made by the Participant or such person or persons at the place specified by the Corporation on the date the Notice is received by the Corporation (i) by delivering to the Corporation a certified or bank cashier’s check payable to the order of the

4

Corporation, (ii) by delivering to the Corporation properly endorsed certificates of shares of Common Stock (or certificates accompanied by an appropriate stock power) with signature guaranties by a bank or trust company, or (iii) by any combination of the foregoing. For purposes of the immediately preceding sentence, an exercise effected by the tender of Common Stock (or deemed to be effected by the tender of Common Stock) may only be consummated with Common Stock held by the Participant for a period of six (6) months or acquired by the Participant other than under the Plan (or a similar plan maintained by the Corporation).

(c)The Option shall be deemed to have been exercised with respect to any particular shares of Common Stock if, and only if, the preceding provisions of this Section 9 and the provisions of Section 10 hereof shall have been complied with, in which event the Option shall be deemed to have been exercised on the date the Notice was received by the Corporation. Anything in this Agreement to the contrary notwithstanding, any Notice given pursuant to the provisions of this Section 9 shall be void and of no effect if all of the preceding provisions of this Section 9 and the provisions of Section 10 shall not have been complied with.

(d)The certificate or certificates for shares of Common Stock as to which the Option shall be exercised will be registered in the name of the Participant (or in the name of the Participant’s estate or other beneficiary if the Option is exercised after the Participant’s death), or if the Option is exercised by the Participant and if the Participant so requests in the notice exercising the Option, will be registered in the name of the Participant and another person jointly, with right of survivorship and will be delivered as soon as practical after the date the Notice is received by the Corporation (accompanied by full payment of the exercise price), but only upon compliance with all of the provisions of this Agreement.

(e)If the Participant fails to accept delivery of and pay for all or any part of the number of Shares specified in such Notice, his right to exercise the Option with respect to such undelivered Shares may be terminated in the sole discretion of the Committee. The Option may be exercised only with respect to full Shares.

(f)The Corporation shall not be required to issue or deliver any certificate or certificates for shares of its Common Stock purchased upon the exercise of any part of the Option prior to the payment to the Corporation, upon its demand, of any amount requested by the Corporation for the purpose of satisfying its minimum statutory liability, if any, to withhold federal, state or local income or earnings tax or any other applicable tax or assessment (plus interest or penalties thereon, if any, caused by a delay in making such payment) incurred by reason of the exercise of this Option or the transfer of shares thereupon. Such payment shall be made by the Participant in cash or, with the written consent of the Corporation, by tendering to the Corporation shares of Common Stock equal in value to the amount of the required withholding. In the alternative, the Corporation may, at its option, satisfy such withholding requirements by withholding from the shares of Common Stock to be delivered to the Participant pursuant to an exercise of the Option a number of shares of Common Stock equal in value to the amount of the required withholding.

10.Approval of Counsel. The exercise of the Option and the issuance and delivery of shares of Common Stock pursuant thereto shall be subject to approval by the Corporation’s counsel of all legal matters in connection therewith, including, but not limited to, compliance with the requirements of the Securities Act of 1933, as amended, and the Securities

5

Exchange Act of 1934, as amended, and the rules and regulations thereunder, and the requirements of any stock exchange or automated trading medium upon which the Common Stock may then be listed or traded.

11.Reservation of Shares. The Corporation shall at all times during the term of the Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement.

12.Limitation of Action. The Participant and the Corporation each acknowledges that every right of action accruing to him or it, as the case may be, and arising out of or in connection with this Agreement against the Corporation or an Affiliate, on the one hand, or against the Participant, on the other hand, shall, irrespective of the place where an action may be brought, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises.

13.Notices. Each notice relating to this Agreement shall be in writing and delivered in person, by recognized overnight courier or by certified mail to the proper address. All notices to the Corporation or the Committee shall be addressed to them at 800 Standard Parkway, Auburn Hills, Michigan 48326, Attn: Chief Financial Officer. All notices to the Participant shall be addressed to the Participant or such other person or persons at the Participant’s address set forth in the Corporation’s records. Anyone to whom a notice may be given under this Agreement may designate a new address by notice to that effect.

14.Benefits of Agreement. This Agreement shall inure to the benefit of the Corporation, the Participant and their respective heirs, executors, administrators, personal representatives, successors and permitted assignees.

15.Severability. In the event that any one or more provisions of this Agreement shall be deemed to be illegal or unenforceable, such illegality or unenforceability shall not affect the validity and enforceability of the remaining legal and enforceable provisions hereof, which shall be construed as if such illegal or unenforceable provision or provisions had not been inserted.

16.Governing Law. This Agreement will be construed and governed in accordance with the laws of the State of Delaware without regard to its principles of conflicts of law. In the event that either party is compelled to bring a claim related to this Agreement, to interpret or enforce the provisions of the Agreement, to recover damages as a result of a breach of the Agreement, or from any other cause (a “Claim”), such Claim must be processed in the manner set forth below:

(i)THE SOLE AND EXCLUSIVE METHOD TO RESOLVE ANY CLAIM IS ARBITRATION, EACH PARTY WAIVES THE RIGHT TO A JURY TRIAL OR COURT TRIAL. Neither party shall initiate or prosecute any lawsuit in any way related to any Claim covered by this Agreement.

(ii)The arbitration shall be binding and conducted before a single arbitrator in accordance with the then-current JAMS Arbitration Rules and Procedures for Employment Disputes or the appropriate governing body, as modified by the terms and

6

conditions of this paragraph. Venue for any arbitration pursuant to this Agreement will lie in Auburn Hills, Michigan. The arbitrator will be selected by mutual agreement of the parties or, if the parties cannot agree, then by striking from a list of arbitrators supplied by JAMS or the appropriate governing body. The Corporation shall pay the arbitrator’s fees and arbitration costs (recognizing that each side bears the cost of its own deposition(s), witness, expert and attorneys’ fees and other expenses as and to the same extent as if the matter were being heard in a court of law). Upon the conclusion of the arbitration hearing, the arbitrator shall issue a written opinion revealing, however briefly, the essential findings and conclusions upon which the arbitrator’s award is based. The award of the arbitrator shall be final and binding. Judgment upon any award may be entered in any court having jurisdiction thereof.

17.Disposition of Shares. By accepting this Agreement, the Participant agrees that in the event he shall dispose (whether by sale, exchange, gift or any like transfer) of any shares of Common Stock of the Corporation (to the extent such shares are deemed to have been purchased pursuant to this incentive stock option) acquired by him pursuant hereto within two years of the Date of Grant of this Option or within one year after the acquisition of such shares pursuant hereto, he will notify the Chief Financial Officer of the Corporation no later than 15 days from the date of such disposition of such date or dates and the number of shares disposed of by him and the consideration received, if any, and, upon notification from the Corporation, promptly forward to the Chief Financial Officer of the Corporation any amount requested by the Corporation for the purpose of satisfying its liability, if any, to withhold federal, state or local income or earnings tax or any other applicable tax or assessment (plus interest or penalties thereon, if any, caused by any delay in making such payment) incurred by reason of such disposition.

18.Acknowledgment of Participant. THE PARTICIPANT REPRESENTS AND WARRANTS THAT AS OF THE DATE OF GRANT OF THE OPTION, HE DOES NOT OWN (WITHIN THE MEANING OF SECTION 422(B)(6) OF THE CODE) SHARES POSSESSING MORE THAN 10% OF THE TOTAL COMBINED VOTING POWER OF ALL CLASSES OF SHARES OF THE CORPORATION OR OF ANY AFFILIATE.

19.Service. Nothing contained in this Agreement shall be construed as (a) a contract of employment between the Participant and the Corporation or any Affiliate, (b) a right of the Participant to be continued in the Service of the Corporation or of any Affiliate, or (c) a limitation of the right of the Corporation or of any Affiliate to discharge the Participant at any time, with or without cause (subject to any applicable employment agreement).

20.Definitions. Unless otherwise defined herein, all capitalized terms used in this Agreement shall have the same definitions as set forth in the Plan.

21.Incorporation of Terms of Plan. This Agreement shall be interpreted under, and subject to, all of the terms and provisions of the Plan, which are incorporated herein by reference.

22.No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall apply against any party.

7

BY WAY OF THEIR EXECUTION OF THE ISO AWARD AGREEMENT TO WHICH THIS AGREEMENT IS ATTACHED, the Corporation and the Participant (and each and every one of their heirs, successors and assigns) agree to be bound by each and every one of the terms set forth in this Agreement.

8

EXHIBIT A

INCENTIVE OPTION EXERCISE FORM

[DATE]

Unique Fabricating, Inc.
800 Standard Parkway
Auburn Hills, MI 48326|
Attention: Thomas P. Tekiele

Dear Sirs:

Pursuant to the provisions of the Incentive Stock Option Award and related ISO Award Agreement dated August 17, 2015 (collectively, the “Agreement”), whereby you have granted to me an Incentive Stock Option (the “Option”) to purchase up to 20,000 shares of the Common Stock of Unique Fabricating, Inc. (the “Corporation”) subject to the terms of the Agreement, I hereby notify you that I elect to exercise my option to purchase [ ] of the shares of Common Stock covered by such Option at the $12.50 per share price specified therein. In full payment of the price for the shares being purchased hereby, I am delivering to you herewith (i) certified or bank cashier’s check payable to the order of the Corporation in the amount of $____________, or (ii) a certificate or certificates for [   ] shares of Common Stock of the Corporation, and which have a fair market value as of the date hereof of $___________, [and a certified or bank cashier’s check, payable to the order of the Corporation, in the amount of $________________]. Any such stock certificate or certificates are endorsed, or accompanied by an appropriate stock power, to the order of the Corporation, with my signature guaranteed by a bank or trust company or by a member firm of the New York Stock Exchange. [I hereby acknowledge that I am purchasing these shares for investment purposes only and not for resale in violation of any federal or state securities laws.]

Very truly yours,

______________________________

[Address]

(For notices, reports, dividend checks and other communications to stockholders.)

9

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350.

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Weinhardt, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Unique Fabricating, Inc..;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and [reserved] for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 17, 2015	By:	/s/ John Weinhardt
		Name: John Weinhardt
		Title:  President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350.

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas Tekiele, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Unique Fabricating, Inc..;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and [reserved] for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 17, 2015	By:	/s/ Thomas Tekiele
		Name: Thomas Tekiele
		Title:  Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350.

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Under 18 U.S.C. section 1350, adopted by section 906 of the Sarbanes-Oxley Act of 2002, in connection with the attached periodic report, the undersigned each certify that (i) the periodic report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer.

Date: November 17, 2015	By:	/s/ John Weinhardt
		Name: John Weinhardt
		Title:  President and Chief Executive Officer
Date: November 17, 2015	By:	/s/ Thomas Tekiele
		Name: Thomas Tekiele
		Title:  Chief Financial Officer (Principal Financial and Accounting Officer)

The foregoing certification is being furnished as an exhibit to the Form 10-Q pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-Q for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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Business Combination - Schedule of Pro Forma Information (Details) - Chardan and Great Lakes Foam Technologies, Inc. - USD ($)	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014
Business Acquisition [Line Items]
Net sales	$ 41,049,431	$ 31,886,916	$ 114,175,224	$ 100,532,958
Net income	$ 1,426,733	$ 1,060,130	$ 4,670,117	$ 3,679,485
Net income per common share – basic (in USD per share)	$ 0.15	$ 0.16	$ 0.61	$ 0.55
Net income per common share – diluted (in USD per share)	$ 0.15	$ 0.16	$ 0.59	$ 0.54

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Redeemable Common Stock (Details) - USD ($)			3 Months Ended	9 Months Ended		12 Months Ended
	Mar. 18, 2013	Jan. 14, 2013	Oct. 04, 2015	Oct. 04, 2015	Sep. 28, 2014	Jan. 04, 2015	Jul. 07, 2015	Jul. 06, 2015
Temporary Equity [Line Items]
Redeemable Common Stock, shares issued			0	0		2,415,399
Redeemable common stock redemption value			$ 0	$ 0		$ 11,352,481
Temporary equity, accretion to redemption value				$ 1,364,031	$ 848,223
Private Placement
Temporary Equity [Line Items]
Temporary equity, redemption price per share (in USD)		$ 0.167
Temporary equity, redemption, minimum public offering (in USD per share)		4
Temporary equity shares issued, price per share (in USD)		$ 0.167
Redeemable common stock redemption value		$ 166,667
Common Stock | IPO
Temporary Equity [Line Items]
Share price (in USD per share)							$ 9.50
Common Stock | Private Placement
Temporary Equity [Line Items]
Redeemable Common Stock, shares issued		999,999
Investor
Temporary Equity [Line Items]
Redeemable Common Stock, shares issued	1,415,400
Temporary equity, threshold for change in ownership, percentage	75.00%
Redeemable common stock redemption value						11,362,481		$ 13,446,300
Temporary equity, accretion to redemption value			$ 1,364,031			$ 1,852,840
Minimum | Investor
Temporary Equity [Line Items]
Temporary Equity, Redemption Period	6 years
Maximum | Investor
Temporary Equity [Line Items]
Temporary Equity, Redemption Period	7 years

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Long-term Debt - Schedule of long-term debt (Details) - USD ($)	9 Months Ended
	Oct. 04, 2015	Jul. 07, 2015	Jan. 04, 2015
Debt Instrument [Line Items]
Notes payable	$ 16,902,443		$ 31,018,745
Current maturities of long-term debt	2,393,830		2,018,133
Long-term debt – Less current maturities	14,508,613		29,000,612
Unamortized discount	$ 126,690		656,789
Subordinated debt
Debt Instrument [Line Items]
Stated interest rate	16.00%	16.00%
Interest rate, stated percentage, due quarterly	12.00%
Interest rate, stated percentage, paid In kind	4.00%
Paid-in-kind interest	$ 0		132,887
Unamortized discount	0		445,387
Notes payable, other payables
Debt Instrument [Line Items]
Notes payable	$ 500,000		500,000
Stated interest rate	6.00%
Notes Payable, Other Payables
Debt Instrument [Line Items]
Notes payable	$ 29,133		42,647
Term loan | Line of credit
Debt Instrument [Line Items]
Notes payable	16,373,310		17,788,598
Unamortized discount	$ 126,690		$ 211,402
Term loan | Minimum | Line of credit
Debt Instrument [Line Items]
Effective interest rate	3.544%
Term loan | Maximum | Line of credit
Debt Instrument [Line Items]
Effective interest rate			3.495%
Quarterly installments through December 31, 2015 | Term loan | Line of credit
Debt Instrument [Line Items]
Periodic principal amount	$ 500,000
Quarterly installments through December 31, 2016 | Term loan | Line of credit
Debt Instrument [Line Items]
Periodic principal amount	625,000
Quarterly installments through September 30, 2017 | Term loan | Line of credit
Debt Instrument [Line Items]
Periodic principal amount	$ 750,000
London Interbank Offered Rate (LIBOR) | Term loan | Minimum | Line of credit
Debt Instrument [Line Items]
Basis spread on variable rate	3.00%
London Interbank Offered Rate (LIBOR) | Term loan | Maximum | Line of credit
Debt Instrument [Line Items]
Basis spread on variable rate	3.50%
Investor | Subordinated debt
Debt Instrument [Line Items]
Notes payable	$ 0		$ 12,687,500

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Stock Incentive Plans (Details)					3 Months Ended		9 Months Ended
	Aug. 17, 2015 USD ($) $ / shares shares	Jan. 04, 2015 $ / shares shares	Jan. 01, 2014 USD ($) shares	Jul. 17, 2013 USD ($) $ / shares shares	Oct. 04, 2015 USD ($) shares	Sep. 28, 2014 USD ($)	Oct. 04, 2015 USD ($) employee shares	Sep. 28, 2014 USD ($)	Dec. 29, 2013 shares
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Common stock, reserved for future issuance		495,000
The 2014 Plan
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Common stock, reserved for future issuance					250,000		250,000
Shares granted	230,000
Granted (USD per share) | $ / shares	$ 12.50
Weighted average grant date fair value | $	$ 625,600
Number of shares authorized		250,000
The 2014 Plan | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Employee Terminations | employee							0
The 2014 Plan | Employee Stock Option | Award vesting on grant date
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Award vesting rights, percentage	20.00%
The 2014 Plan | Employee Stock Option | Award vesting, first anniversary
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Award vesting rights, percentage	20.00%
The 2014 Plan | Employee Stock Option | Award vesting, second anniversary
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Award vesting rights, percentage							20.00%
The 2014 Plan | Employee Stock Option | Award vesting, third anniversary
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Award vesting rights, percentage							20.00%
The 2014 Plan | Employee Stock Option | Award vesting, fourth anniversary
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Award vesting rights, percentage							20.00%
The Plan
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Common stock, reserved for future issuance					495,000		495,000		495,000
Shares granted			120,000	375,000
Granted (USD per share) | $ / shares		$ 0.0333		$ 3.33
Weighted average grant date fair value | $			$ 42,000	$ 86,450
The Plan | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Number of shares available for grant									495,000
Expiration period							10 years
Employee Terminations | employee							0
Unrecognized compensation cost | $					$ 533,759		$ 533,759
Compensation cost, weighted average period (in years)							2 years 9 months 23 days
The Plan | Employee Stock Option | Award vesting on grant date
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Award vesting rights, percentage							20.00%
The Plan | Employee Stock Option | Award vesting, first anniversary
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Award vesting rights, percentage							20.00%
The Plan | Employee Stock Option | Award vesting, second anniversary
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Award vesting rights, percentage							20.00%
The Plan | Employee Stock Option | Award vesting, third anniversary
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Award vesting rights, percentage							20.00%
The Plan | Employee Stock Option | Award vesting, fourth anniversary
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Award vesting rights, percentage							20.00%
Selling, General and Administrative Expenses
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated share-based compensation expense | $					$ 148,455	$ 6,401	$ 160,764	$ 27,439
Director | The 2014 Plan
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Shares granted	45,000
Employee | The 2014 Plan
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Shares granted	185,000

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Intangible Assets - Finite-lived intangible assets, future amortization expense schedule (Details) - USD ($)	Oct. 04, 2015	Jan. 04, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
2015	$ 742,171
2016	2,820,002
2017	2,820,002
2018	2,768,668
2019	2,682,746
Thereafter	9,047,764
Total	$ 20,881,353	$ 16,748,466

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Income Taxes (Tables)

9 Months Ended

Oct. 04, 2015

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

Income before income taxes for U.S. and Non-U.S. operations are as follows:

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014		Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
U.S. income	$	1,536,426	$	1,094,883	$	5,303,089	$	3,749,727
Non-U.S. income	107,511		219,450		662,203		682,083
Income before income taxes	$	1,643,937	$	1,314,333	$	5,965,292	$	4,431,810

Schedule of Components of Income Tax Expense (Benefit)

The components of the income tax provision included in the consolidated statements of operations are all attributable to continuing operations and are detailed as follows:

	Fourteen Weeks Ended October 4, 2015			Thirteen Weeks Ended September 28, 2014			Thirty-Nine Weeks Ended October 4, 2015			Thirty-Nine Weeks Ended September 28, 2014
Current federal income taxes	$	792,116		$	541,027		$	1,907,263		$	1,890,600
Current state income taxes	106,479			71,416			234,587			215,593
Current foreign income taxes	75,943			80,957			227,832			164,727
Deferred income taxes	(469,692		)	(225,736		)	(428,118		)	(847,047		)
Total income tax expense	$	504,846		$	467,664		$	1,941,564		$	1,423,873

Schedule of Current and Noncurrent deferred taxes

Significant components of current and non-current deferred taxes are as follows:

	October 4, 2015			January 4, 2015
Current deferred tax assets (liabilities):
Allowance for doubtful accounts	$	285,333		$	246,744
Inventories	126,016			121,575
Accrued payroll and benefits	579,019			907,174
Other	5,820			13,211
Net current deferred tax asset	996,188			1,288,704
Noncurrent deferred tax assets (liabilities):
Property, plant, and equipment	(3,407,134		)	(3,329,790		)
Goodwill and intangible assets	(2,477,680		)	(3,220,663		)
Other	109,586			53,123
Net noncurrent deferred tax liability	(5,775,228		)	(6,497,330		)
Net total deferred tax liability	$	(4,779,040	)	$	(5,208,626	)

Schedule of income taxes based on federal tax rate

A reconciliation of taxes on income from continuing operations based on the statutory federal income tax rate to the provision for income taxes is as follows:

	Fourteen Weeks Ended October 4, 2015			Thirteen Weeks Ended September 28, 2014			Thirty-Nine Weeks Ended October 4, 2015			Thirty-Nine Weeks Ended September 28, 2014
Income tax expense, computed at 34% of pretax income	$	558,938		$	446,873		$	2,028,199		$	1,506,815
State income taxes, net of federal benefit	37,627			33,376			124,854			97,500
Effect of foreign income taxes	40,118			4,408			(5,050		)	(77,265		)
Effect of permanent differences	(141,653		)	(42,750		)	(216,607		)	(126,273		)
Other	9,816			25,757			10,168			23,096
Total provision for income taxes	$	504,846		$	467,664		$	1,941,564		$	1,423,873

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Stock Incentive Plans - Schedule of stock options and stock awards (Details)	9 Months Ended	12 Months Ended
	Oct. 04, 2015 USD ($) $ / shares shares	Jan. 04, 2015 $ / shares shares
Aggregate Intrinsic Value
Share price (in USD per share)	$ 11.50
The Plan and the 2014 Plan
Number of Shares
Outstanding at January 4, 2015 | shares	495,000
Granted | shares	230,000
Exercised | shares	24,000
Forfeited | shares	0
Outstanding at October 4, 2015 | shares	701,000	495,000
Vested and exercisable | shares	319,000
Weighted Average Exercise Price
Outstanding at January 4, 2015 (USD per share)	$ 3.33
Granted (USD per share)	12.50
Exercised (USD per share)	0.00
Forfeited (USD per share)	0.00
Outstanding at October 4, 2015 (USD per share)	6.34	$ 3.33
Vested and exercisable (USD per share)	$ 4.66
Weighted Average Remaining Contractual Term (in years)
Weighted average remaining contractual term outstanding	8 years 6 months 13 days	8 years 7 months 24 days
Weighted average remaining contractual term of shares granted	10 years
Vested and exercisable	8 years 1 month 27 days
Aggregate Intrinsic Value
Outstanding at October 4, 2015, aggregate intrinsic value | $	$ 5,727,170
Vested and exercisable | $	$ 2,606,230

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Nature of Business and Significant Accounting Policies (Policies)

9 Months Ended

Oct. 04, 2015

Accounting Policies [Abstract]

Basis of Presentation

As a result of UFI’s acquisition of Unique Fabricating, purchase accounting and a new basis of accounting was applied beginning on March 18, 2013.

Fiscal Years

The Company’s quarterly periods end on the Sunday closest to the end of the quarterly period. The 14 and 39-week periods ended on October 4 during 2015 and the 13 and 39-week periods ended on September 28 during 2014. Fiscal year 2014 ended on Sunday January 4, 2015.

Cash and Cash Equivalents and Overdrafts

Under the Company’s cash management system, checks issued but not yet presented to the Company’s bank frequently result in overdraft balances for accounting purposes and are classified as accounts payable on the consolidated balance sheet.

The Company considers all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents.

Accounts Receivable

Accounts receivable are stated at the invoiced amount and do not bear interest. The allowance for doubtful accounts is management’s best estimate of the amount of probable credit losses in the existing accounts receivable. Management determines the allowance based on historical write off experience and an understanding of individual customer payment history and financial condition. Management reviews the allowance for doubtful accounts at regular intervals. Account balances are charged off against the allowance when management determines it is probable the receivable will not be recovered.

Inventory

Inventory is stated at the lower of cost or market, with cost determined on the first in, first out method (FIFO). Inventory acquired as part of a business combination is recorded at its estimated fair value at the time of the business combination. The Company periodically evaluates inventory for obsolescence, excess quantities, slow moving goods and other impairments of value and establishes reserves for any identified impairments.

Valuation of Long-Lived Assets

The carrying value of long-lived assets held for use is periodically evaluated when events or circumstances warrant such a review. The carrying value of a long-lived asset held for use is considered impaired when the anticipated separately identifiable undiscounted cash flows from the asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset.

Property, Plant, and Equipment

Property, plant, and equipment purchases are recorded at cost. Property, plant, and equipment acquired as part of a business combination are recorded at estimated fair value at the time of the business combination. Depreciation is calculated principally using the straight line method over the estimated useful life of each asset. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the period of the related leases. Upon retirement or disposal, the initial cost or valuation and accumulated depreciation are removed from the accounts, and any gain or loss is included in net income. Repair and maintenance costs are expensed as incurred.

Intangible Assets

The Company does not hold any intangible assets with indefinite lives. Acquired intangible assets subject to amortization are amortized on a straight line basis, which approximates the pattern in which the economic benefit of the respective intangible is realized, over their respective estimated useful lives. Identifiable intangible assets recognized as part of a business combination are recorded at their estimated fair value at the time of the business combination. Amortizable intangible assets are reviewed for impairment whenever events or circumstances indicate that the related carrying amount may be impaired. The remaining useful lives of intangible assets are reviewed annually to determine whether events and circumstances warrant a revision to the remaining period of amortization. The Company determined that no impairment indicators were present and all originally assigned useful lives remained appropriate during the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, respectively.

Goodwill

Goodwill represents the excess of the acquisition cost of consideration transferred over the fair value of the identifiable net assets acquired and liabilities assumed from business combinations at the date of acquisition. Goodwill is not amortized, but rather is assessed at least on an annual basis for impairment. If it is determined that it is more likely than not that the fair value is greater than the carrying value then a qualitative assessment may be used for the annual impairment test. Otherwise, a two-step process is used. The first step requires estimating the fair value of each reporting unit compared to its carrying value. The Company has determined that the only reporting unit is the Company as a whole. If the carrying value exceeds the estimated fair value, a second step is performed in order to determine the implied fair value of the goodwill. If the carrying value of the goodwill exceeds its implied fair value then goodwill is deemed impaired and is written down to its implied fair value.

Debt Issuance Costs

Debt issuance costs represent legal, consulting, and other financial costs associated with debt financing and are reported as assets upon the original issuance of the related debt. Amounts paid to or on behalf of lenders are presented as debt discount, as a reduction of the noted debt instrument. Debt issuance costs on term debt are amortized using the effective interest method while those related to revolving debt are amortized using a straight line basis over the term of the related debt.

Investments

Investments in entities in which the Company has less than a 20 percent interest or is not able to exercise significant influence are carried at cost. Cost basis investments acquired as part of a business combination are recorded at estimated fair value at the time of the business combination. Dividends received are included in income, except for those dividends received in excess of the Company’s proportionate share of accumulated earnings, which are applied as a reduction of the cost of the investment. Impairment losses due to a decline in the value of the investment that is other than temporary are recognized when incurred. No dividend income or impairment loss was recognized for the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, respectively.

Stock based Compensation

The Company accounts for its stock based compensation using the fair value of the award estimated at the grant date of the award. The Company estimates the fair value of awards, consisting of stock options, using the Black Scholes option pricing model. Compensation expense is recognized in earnings using the straight line method over the vesting period, which represents the requisite service period.

Revenue Recognition

Revenue is recognized by the Company upon shipment to customers when the customer takes ownership and assumes the risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists, and the sale price is fixed and determinable. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

Shipping and Handling

Shipping and handling costs are included in costs of sales as they are incurred.

Income Taxes

A current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the period. Deferred tax liabilities or assets are recognized for the estimated future tax effects of temporary differences between financial reporting and tax accounting measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts. Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be realized. When appropriate, a valuation allowance is recorded against deferred tax assets to reserve for future tax benefits that may not be realized.

The Company recognizes the benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon settlement with the relevant tax authority. The Company assesses all tax positions for which the statute of limitations remain open. The Company had no unrecognized tax benefits as of October 4, 2015 and January 4, 2015. The Company files income tax returns in the United States and Mexico as well as various state and local jurisdictions. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 2011 in the United States and before 2007 in Mexico. The Company recognizes any penalties and interest when necessary as income tax expense.

Foreign Currency Adjustments

The Company’s functional currency for all operations worldwide is the United States dollar. Nonmonetary assets and liabilities of foreign operations are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of each reporting period. Income statement accounts are translated at average exchange rates for the year. Gains and losses from translation of foreign currency financial statements into United States dollars are classified in operating income in the consolidated statements of operations.

Derivative financial instruments

All derivative instruments are required to be reported on the consolidated balance sheets at fair value unless the transactions qualify and are designated as normal purchases or sales. Changes in fair value are reported currently through earnings unless they meet hedge accounting criteria.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (the “ASU”). Currently, such costs are required to be presented as a non current asset in an entity's balance sheet and amortized into interest expense over the term of the related debt instrument. The changes implemented by the ASU require that debt issuance costs be presented in the entity's balance sheet as a direct deduction from the carrying value of the related debt liability. The amortization of debt issuance costs remains unchanged per the ASU. The ASU allows for early adoption, however, management is currently evaluating the potential impact of these changes in the consolidated financial statements of the Company.

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Derivative Financial Instruments (Details) - Interest rate swap - Not designated as hedging instrument - USD ($)				3 Months Ended		9 Months Ended
	Mar. 31, 2016	Jan. 17, 2014	Apr. 26, 2013	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014	Jan. 04, 2015
Derivatives, Fair Value [Line Items]
Fixed interest rate		1.27%	0.83%
Notional amount		$ 10,000,000	$ 4,714,286
Quarterly decrease in notional amount		$ 250,000	$ 196,429
Other noncurrent liabilities
Derivatives, Fair Value [Line Items]
Derivative fair value liability				$ 88,032		$ 88,032		$ 86,511
Notional decrease, two
Derivatives, Fair Value [Line Items]
Quarterly decrease in notional amount	$ 312,500
Interest expense
Derivatives, Fair Value [Line Items]
Monthly settlements				$ 31,862	$ 17,699	$ 78,574	$ 67,955

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Property, Plant, and Equipment - Schedule of Property, Plant, and Equipment (Details) - USD ($)	9 Months Ended
	Oct. 04, 2015	Jan. 04, 2015
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 23,290,891	$ 19,607,946
Accumulated depreciation	2,644,100	1,687,873
Net property, plant, and equipment	20,646,791	17,920,073
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment	1,663,153	1,663,153
Buildings
Property, Plant and Equipment [Line Items]
Property, plant and equipment	9,641,976	5,435,026
Shop equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment	9,901,296	8,467,946
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment	824,869	642,762
Office equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment	679,290	539,098
Mobile equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment	142,501	105,550
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 437,806	$ 2,754,411
Minimum | Buildings
Property, Plant and Equipment [Line Items]
Depreciable life, years	23 years
Minimum | Shop equipment
Property, Plant and Equipment [Line Items]
Depreciable life, years	7 years
Minimum | Leasehold improvements
Property, Plant and Equipment [Line Items]
Depreciable life, years	3 years
Minimum | Office equipment
Property, Plant and Equipment [Line Items]
Depreciable life, years	3 years
Minimum | Mobile equipment
Property, Plant and Equipment [Line Items]
Depreciable life, years	3 years
Maximum | Buildings
Property, Plant and Equipment [Line Items]
Depreciable life, years	40 years
Maximum | Shop equipment
Property, Plant and Equipment [Line Items]
Depreciable life, years	10 years
Maximum | Leasehold improvements
Property, Plant and Equipment [Line Items]
Depreciable life, years	10 years
Maximum | Office equipment
Property, Plant and Equipment [Line Items]
Depreciable life, years	7 years

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Business Combinations - Schedule of Business Acquisitions by Acquisition (Details) - USD ($)	Oct. 04, 2015	Aug. 31, 2015	Jan. 04, 2015	Feb. 06, 2014
Business Acquisition [Line Items]
Goodwill	$ 19,213,958		$ 15,183,417
Chardan
Business Acquisition [Line Items]
Accounts receivable				$ 585,914
Inventory				250,472
Deferred tax assets				34,350
Other current assets				1,597
Property, plant, and equipment				417,305
Identifiable intangible assets				965,478
Accounts payable and accrued liabilities				(146,676)
Deferred tax liabilities				(90,811)
Total identifiable net assets				2,017,629
Goodwill				799,282
Total				$ 2,816,911
Great Lakes Foam Technologies, Inc.
Business Acquisition [Line Items]
Accounts receivable		$ 1,001,005
Inventory		1,115,809
Deferred tax assets		1,468
Other current assets		2,500
Property, plant, and equipment		810,001
Identifiable intangible assets		5,915,000
Accounts payable and accrued liabilities		(928,933)
Total identifiable net assets		7,916,850
Goodwill		4,030,542
Total		$ 11,947,392

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Equity - Warrants (Details) - USD ($)		9 Months Ended
	Dec. 18, 2013	Oct. 04, 2015	Jul. 07, 2015
Warrant
Class of Warrant or Right [Line Items]
Warrants, public weight, percent		80.00%
Number of warrants purchased	139,200
Warrants issued during the period	$ 50,534
Warrant term	10 years
Private weight percent		20.00%
Additional discount on warrants		15.00%
Warrants exercised	80,630
Investor | Warrant
Class of Warrant or Right [Line Items]
Shares issued, price per share (in USD)	$ 3.33
Warrants outstanding	29,232
Warrants for Underwriters
Class of Warrant or Right [Line Items]
Number of warrants purchased			141,000

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Earnings Per Share (Details) - shares		9 Months Ended
	Aug. 31, 2015	Oct. 04, 2015	Sep. 28, 2014
Warrants for Underwriters
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of EPS, amount	141,000
Employee Stock Option
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of EPS, amount	230,000		495,000
Warrant
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of EPS, amount			139,200
Employee Stock Option
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Securities Considered in the Computation of Earnings Per Share, Amount		471,000
Warrant
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Securities Considered in the Computation of Earnings Per Share, Amount		24,504

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Income Taxes - Schedule of income taxes based on federal rax rate (Details) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014
Income Tax Disclosure [Abstract]
Income tax expense, computed at 34% of pretax income	$ 558,938	$ 446,873	$ 2,028,199	$ 1,506,815
State income taxes, net of federal benefit	37,627	33,376	124,854	97,500
Effect of foreign income taxes	40,118	4,408	(5,050)	(77,265)
Effect of permanent differences	(141,653)	(42,750)	(216,607)	(126,273)
Other	9,816	25,757	10,168	23,096
Total income tax expense (benefit)	$ 504,846	$ 467,664	$ 1,941,564	$ 1,423,873
Federal statutory income tax rate	34.00%	34.00%	34.00%	34.00%

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Long-term Debt (Details) - USD ($)		9 Months Ended
	Jul. 07, 2015	Oct. 04, 2015	Jan. 04, 2015	Oct. 31, 2014	Dec. 18, 2013	Mar. 18, 2013
Debt Instrument [Line Items]
Construction expected costs		$ 4,500,000
Construction costs		4,400,000
Interest costs incurred		800,000
Subordinated debt
Debt Instrument [Line Items]
Extinguishment of debt	$ 13,100,000
Revolving credit facility | Line of credit | Senior credit facility
Debt Instrument [Line Items]
Maximum borrowing capacity						$ 12,500,000.0
Revolving credit facility | Line of credit | Senior credit facility, first amendment
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 15,000,000.0
Revolving credit facility | Line of credit | Senior credit facility, second amendment
Debt Instrument [Line Items]
Senior notes		3,731,787
Letters of credit outstanding, amount		100,000
Maximum borrowing capacity				$ 19,500,000
Line of credit		$ 15,668,213	$ 8,952,865
Revolver term loan | Line of credit | Senior credit facility
Debt Instrument [Line Items]
Debt instrument, face amount						11,000,000.0
Revolver term loan | Line of credit | Senior credit facility, first amendment
Debt Instrument [Line Items]
Debt instrument, face amount					20,000,000.0
Minimum | Revolving credit facility | Line of credit | Senior credit facility, second amendment
Debt Instrument [Line Items]
Effective interest rate		3.1958%
Minimum | Revolver term loan | Line of credit
Debt Instrument [Line Items]
Effective interest rate		3.544%
Maximum | Revolving credit facility | Line of credit | Senior credit facility, second amendment
Debt Instrument [Line Items]
Effective interest rate			3.1655%
Maximum | Revolver term loan | Line of credit
Debt Instrument [Line Items]
Effective interest rate			3.495%
30 Day London Interbank Offered Rate (LIBOR) | Minimum | Revolving credit facility | Line of credit | Senior credit facility, second amendment
Debt Instrument [Line Items]
Basis spread on variable rate		2.75%
30 Day London Interbank Offered Rate (LIBOR) | Maximum | Revolving credit facility | Line of credit | Senior credit facility, second amendment
Debt Instrument [Line Items]
Basis spread on variable rate		3.25%
Investor | Subordinated debt | Subordinated notes payable
Debt Instrument [Line Items]
Debt instrument, face amount						$ 11,500,000.0
Investor | Subordinated debt | Subordinated Notes Payable to Private Lender, First Amendment
Debt Instrument [Line Items]
Debt instrument, face amount					$ 13,100,000.0

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Inventory

9 Months Ended

Oct. 04, 2015

Inventory Disclosure [Abstract]

Inventory

Inventory

Inventory consists of the following:

	October 4, 2015		January 4, 2015
Raw materials	$	8,617,589	$	6,013,045
Work in progress	735,197		499,241
Finished goods	5,610,889		3,975,765
Total inventory	$	14,963,675	$	10,488,051

Included in inventory are assets located in Mexico with a carrying amount of $1,912,474 at October 4, 2015 and $1,788,902 at January 4, 2015.

The inventory acquired in the acquisitions of Unique Fabricating and Prescotech Holdings Inc. (“PTI”) included adjustments of $1,076,902 in order to increase the historical FIFO basis to fair value while the 2014 acquisition of Chardan included a fair value adjustment of $54,975, and the 2015 acquisition of Great Lakes included a fair value adjustment of $146,191 for a total of $1,278,068 for all acquisitions. At October 4, 2015 and January 4, 2015, $56,148 of this fair value adjustment remained in inventory while $90,043 was included in cost of goods sold during the 14 and 39 weeks ended October 4, 2015, and $13,634 and $383,970 was included in cost of goods sold during the 13 and 39 weeks ended September 28, 2014, respectively.

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Operating Leases (Details) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014
Leases, Operating [Abstract]
Operating lease, total rent expense	$ 349,877	$ 432,341	$ 1,012,316	$ 1,096,135

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Property, Plant, and Equipment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014	Jan. 04, 2015
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 345,245	$ 295,412	$ 980,511	$ 847,288
Property, Plant, and Equipment – Net	20,646,791		20,646,791		$ 17,920,073
Mexico
Property, Plant and Equipment [Line Items]
Property, Plant, and Equipment – Net	$ 681,191		$ 681,191		$ 628,570

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Intangible Assets (Tables)

9 Months Ended

Oct. 04, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of finite-lived intangible assets

Intangible assets of the Company consist of the following at October 4, 2015:

	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life – Years
Customer contracts	$	20,948,881	$	4,589,965	8.30
Trade names	4,465,322		544,070		20.00
Non-compete agreements	1,161,790		560,605		1.62
Total	$	26,575,993	$	5,694,640

Intangible assets of the Company consist of the following at January 4, 2015:

	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life – Years
Customer contracts	$	15,614,881	$	3,127,128	8.30
Trade names	4,465,322		377,079		20.00
Non-compete agreements	580,790		408,320		1.62
Total	$	20,660,993	$	3,912,527

Schedule of finite-lived Intangible assets, future amortization expense

Estimated amortization expense is as follows:

2015	$	742,171
2016	2,820,002
2017	2,820,002
2018	2,768,668
2019	2,682,746
Thereafter	9,047,764
Total	$	20,881,353

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Property, Plant, and Equipment (Tables)

9 Months Ended

Oct. 04, 2015

Property, Plant and Equipment [Abstract]

Schedule of property, plant and equipment

Property, plant, and equipment consists of the following:

	October 4, 2015		January 4, 2015		Depreciable Life – Years
Land	$	1,663,153	$	1,663,153
Buildings	9,641,976		5,435,026		23 – 40
Shop equipment	9,901,296		8,467,946		7 – 10
Leasehold improvements	824,869		642,762		3 – 10
Office equipment	679,290		539,098		3 – 7
Mobile equipment	142,501		105,550		3
Construction in progress	437,806		2,754,411
Total cost	23,290,891		19,607,946
Accumulated depreciation	2,644,100		1,687,873
Net property, plant, and equipment	$	20,646,791	$	17,920,073

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Stock Incentive Plans - Valuation Assumptions (Details) - Employee Stock Option	Aug. 17, 2015	Jan. 01, 2014	Jul. 17, 2013
The Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility		34.00%	34.00%
Dividend yield		0.00%	0.00%
Expected term (in years)		4 years	4 years
Risk-free rate		1.27%	0.96%
The 2014 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	38.00%
Dividend yield	5.00%
Expected term (in years)	5 years
Risk-free rate	1.58%

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Intangible Assets - Schedule of intangible assets by major class (Details) - USD ($)	9 Months Ended	12 Months Ended
	Oct. 04, 2015	Jan. 04, 2015
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 26,575,993	$ 20,660,993
Accumulated Amortization	5,694,640	3,912,527
Customer contracts
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	20,948,881	15,614,881
Accumulated Amortization	4,589,965	3,127,128
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	4,465,322	4,465,322
Accumulated Amortization	544,070	377,079
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,161,790	580,790
Accumulated Amortization	$ 560,605	$ 408,320
Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life – Years	10 years 4 months 7 days
Weighted Average | Customer contracts
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life – Years	8 years 3 months 18 days	8 years 3 months 18 days
Weighted Average | Trade names
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life – Years	20 years	20 years
Weighted Average | Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life – Years	1 year 7 months 13 days	1 year 7 months 13 days

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Long-term Debt (Tables)

9 Months Ended

Oct. 04, 2015

Debt Disclosure [Abstract]

Schedule of long-term debt

Long term debt consists of the following:

	October 4, 2015		January 4, 2015
Term Loan, payable to a bank in quarterly installments of $500,000 through December 31, 2015, $625,000 through December 31, 2016, $750,000 through September 30, 2017, with a lump sum due at maturity. Interest is paid on a quarterly basis at an annual rate of LIBOR plus a margin of 3.00 percent to 3.50 percent (an effective rate of 3.544 percent per annum and 3.495 percent per annum at October 4, 2015 and January 4, 2015, respectively). The Term Loan was originally due on March 15, 2018, but was amended to be due December 18, 2017, and is secured by substantially all of the Company’s assets. At October 4, 2015 and January 4, 2015, the balance of the Term Loan is presented net of a debt discount of $126,690 and $211,402, respectively, from costs paid to or on behalf of the lender.	$	16,373,310	$	17,788,598
Subordinated note payable to a private lender. Interest accrues monthly at an annual rate of 16 percent of which 12 percent must be paid quarterly in cash and 4 percent can be paid in kind at the Company’s discretion. The subordinated note payable is due in full on March 16, 2018, and is subordinated to the Revolver and Term Loan. At October 4, 2015 and January 4, 2015, the balance of the note payable includes accumulated paid in kind interest of $0 and $132,887, respectively, and is presented net of a debt discount of $0 and $445,387, respectively, from costs paid to or on behalf of the lender.	—		12,687,500

Note payable to the seller of Chardan which is unsecured and subordinated to the senior credit facility and the subordinated note to the private lender. Interest accrues monthly at an annual rate of 6 percent. The note payable is due in full on February 6, 2019.	500,000		500,000
Other debt	29,133		42,647
Total debt	16,902,443		31,018,745
Less current maturities	2,393,830		2,018,133
Long-term debt – Less current maturities	$	14,508,613	$	29,000,612

Schedule of maturities of long-term debt

Maturities on the Company’s Revolver and other long term debt obligations for the remainder of the current fiscal year and future fiscal years:

2015	$	1,504,541
2016	2,518,989
2017	28,173,816
2018	—
2019	500,000
Total	32,697,346
Discounts	(126,690		)
Total debt – Net	$	32,570,656

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Equity (Tables)

9 Months Ended

Oct. 04, 2015

Equity [Abstract]

Schedule of warrant awards

The risk free rate for periods within the contractual life of the warrants was based on the United States Treasury yield curve in effect at the time of grant. (disclosed below for a public sale followed by a private sale of the Company).

Expected volatility	32.00%/50.00%
Dividend yield	0.00%/0.00%
Expected term (in years)	2/6
Risk-free rate	0.31%/1.91%

Expected volatility	38.00	%
Dividend yield	4.80	%
Expected term (in years)	5
Risk-free rate	1.58	%

The risk free rate for periods within the contractual life of the option is based on the United States Treasury yield curve in effect at the time of grant. (disclosed below as January 1, 2014 followed by July 17, 2013).

Expected volatility	34.00	%
Dividend yield	—	%
Expected term (in years)	4
Risk-free rate	1.27%/0.96%

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Business Combinations

9 Months Ended

Oct. 04, 2015

Business Combinations [Abstract]

Business Combinations

Business Combinations

2014

On February 6, 2014, the Company, through a newly created subsidiary, Unique-Chardan, Inc., acquired substantially all of the assets of Chardan, Corp. (“Chardan”) for total consideration of $2,816,911, after all adjustments described below. The consideration was in the form of $2,316,911 of cash and a $500,000 note payable to the former owner. The note is due in a lump sum on February 6, 2019, with interest payable monthly at an annual rate of six percent and is subordinated to both the senior credit facility and the subordinated debt. The purchase agreement included a potential purchase price adjustment provision based on the actual working capital acquired on the day of closing as compared to what was originally estimated at closing. During June 2014, the Company paid Chardan $116,911 for the working capital adjustment. This acquisition was financed through existing debt facilities without the need for further revisions to any debt or equity agreements. The Company incurred costs of $236,537 related to the acquisition of Chardan. Sales to the Company represented a significant majority of Chardan’s revenue prior to the acquisition so the acquisition allows the Company to reduce its costs through supply chain integration as well as strengthening the Company's thermo forming capabilities.

In connection with the business combination, Chardan terminated the lease it had with an affiliated entity for its operating facility and the Company entered into a new lease for the same facility. The terms of the Company’s lease provide for monthly rental payments of $11,000 for five years beginning on February 6, 2014.

The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed.

Accounts receivable	$	585,914
Inventory	250,472
Deferred tax assets	34,350
Other current assets	1,597
Property, plant, and equipment	417,305
Identifiable intangible assets	965,478
Accounts payable and accrued liabilities	(146,676		)
Deferred tax liabilities	(90,811		)
Total identifiable net assets	2,017,629
Goodwill	799,282
Total	$	2,816,911

The goodwill arising from the acquisition consists largely of the Chardan’s reputation, trained employees, and other unique features that cannot be associated with a specific identifiable asset. Of the total amount of goodwill recognized, $866,647 is expected to be deductible for tax purposes.

2015

On August 31, 2015, the Company, through a newly created subsidiary, Unique Molded Foam Technologies, Inc., acquired substantially all of the assets of Great Lakes Foam Technologies, Inc. (“Great Lakes”) for total cash consideration of $11,947,392, after all adjustments described below. The purchase agreement included a potential purchase price adjustment provision based on the actual working capital acquired on the day of closing as compared to what was originally estimated at closing. On the date of closing, the Company paid a total purchase price of $12,000,000 less the estimated working capital adjustment of $180,009 owed to the Company by Great Lakes. During November 2015, the Company paid Great Lakes $127,401 for the actual working capital adjustment true-up once the actual working capital was determined. This acquisition was financed through the Company's revolving line of credit without the need for further revisions to any debt or equity agreements. The Company incurred costs of $415,849 related to the acquisition of Great Lakes. The acquisition allows the Company to strengthen its existing product offerings and potentially enable it to access new customers and increase sales to certain of its existing customers.

In connection with the business combination, Great Lakes terminated the lease it had with an affiliated entity for its operating facility and the Company entered into a new lease for the same facility. The terms of the Company's lease provide for monthly rental payments of $7,500 for five years beginning on August 31, 2015.

The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed.

Accounts receivable	$	1,001,005
Inventory	1,115,809
Deferred tax assets	1,468
Other current assets	2,500
Property, plant, and equipment	810,001
Identifiable intangible assets	5,915,000
Accounts payable and accrued liabilities	(928,933		)
Total identifiable net assets	7,916,850
Goodwill	4,030,542
Total	$	11,947,392

The goodwill arising from the acquisition consists largely of Great Lakes reputation, trained employees, and other unique features that cannot be associated with a specific identifiable asset. Of the total amount of goodwill recognized, $4,347,457 is expected to be deductible for tax purposes. The Company also recognized intangible assets as part of the acquisition which consisted of customer contracts and non-compete agreements. For further detail of the Company's intangibles please refer to Note 5.

Great Lakes sales included in the accompanying consolidated statements of operations for both the 14 and 39 weeks ended October 4, 2015, totaled $924,926 from the date of acquisition. Great Lakes earnings included in the accompanying statement of operations for both the 14 and 39 weeks ended October 4, 2015, totaled $10,784. For both the 14 and 39 weeks ended October 4, 2015$12,308 in revenue was derived from intercompany sales to the Company which were eliminated in consolidation.

The consolidated operating results for the 14 and 39 weeks ended October 4, 2015 includes the operating results of Chardan for the whole period. Chardan’s revenue included in the accompanying consolidated statements of operations for the 13 and 39 weeks ended September 28, 2014, totaled $1,242,804 and $2,825,696, from the date of acquisition. Chardan's earnings included in the accompanying consolidated statements of operations for the 13 and 39 weeks ended September 28, 2014, totaled $136,990 and $219,532 respectively, from the date of acquisition. For the 13 and 39 weeks ended September 28, 2014, $811,707, and $1,826,479, respectively, in sales was derived from intercompany sales to the Company which were eliminated in consolidation.

The following pro forma supplementary data for the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014 gives effect to the acquisition of Great Lakes as if it had occured on December 30, 2013 (the first day of the Company’s 2014 fiscal year), and the acquisition of Chardan as if it had occurred on December 31, 2012 (the first day of the Company’s 2013 fiscal year). The pro forma supplementary data is provided for informational purposes only and should not be construed to be indicative of the Company’s results of operations had the acquisition been consummated on the date assumed and does not project the Company’s results of operations for any future date.

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014		Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
Net sales	$	41,049,431	$	31,886,916	$	114,175,224	$	100,532,958
Net income	$	1,426,733	$	1,060,130	$	4,670,117	$	3,679,485
Net income per common share – basic	$	0.15	$	0.16	$	0.61	$	0.55
Net income per common share – diluted	$	0.15	$	0.16	$	0.59	$	0.54

The majority of Chardan sales prior to its acquisition were to the Company. Therefore, the pro forma effect of the combined net income of the entities is more than the effect on net sales due to the elimination of the intercompany sales for both the 13 and 39 weeks ended September 28, 2014.

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Stock Incentive Plans (Tables)

9 Months Ended

Oct. 04, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The risk free rate for periods within the contractual life of the warrants was based on the United States Treasury yield curve in effect at the time of grant. (disclosed below for a public sale followed by a private sale of the Company).

Expected volatility	32.00%/50.00%
Dividend yield	0.00%/0.00%
Expected term (in years)	2/6
Risk-free rate	0.31%/1.91%

Expected volatility	38.00	%
Dividend yield	4.80	%
Expected term (in years)	5
Risk-free rate	1.58	%

The risk free rate for periods within the contractual life of the option is based on the United States Treasury yield curve in effect at the time of grant. (disclosed below as January 1, 2014 followed by July 17, 2013).

Expected volatility	34.00	%
Dividend yield	—	%
Expected term (in years)	4
Risk-free rate	1.27%/0.96%

Schedule of Share-based Compensation, Stock Options and Stock Appreciation Rights Award Activity

A summary of option activity under both plans is presented below:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value(1)
Outstanding at January 4, 2015	495,000	$	3.33	8.65
Granted	230,000	$	12.50	10.00
Exercised	24,000	—		0
Forfeited or expired	—	—		0
Outstanding at October 4, 2015	701,000	$	6.34	8.54	$	5,727,170
Vested and exercisable at October 4, 2015	319,000	$	4.66	8.16	$	2,606,230

(1) The aggregate intrinsic value above is obtained by subtracting the weighted average exercise price from the estimated fair value of the underlying shares as of October 4, 2015 and multiplying this result by the related number of options outstandingand exercisable at October 4, 2015. The estimated fair value of the shares is based on the closing price of the stock of $11.50 at the end of the third quarter.

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Inventory - Schedule of Inventory (Details) - USD ($)	Oct. 04, 2015	Jan. 04, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 8,617,589	$ 6,013,045
Work in progress	735,197	499,241
Finished goods	5,610,889	3,975,765
Total inventory	$ 14,963,675	$ 10,488,051

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Equity - Warrant Fair Value Assumptions (Details)	9 Months Ended
	Oct. 04, 2015
IPO
Class of Warrant or Right [Line Items]
Expected volatility	32.00%
Dividend yield	0.00%
Expected term (in years)	2 years
Risk-free rate	31.00%
Private Placement
Class of Warrant or Right [Line Items]
Expected volatility	50.00%
Dividend yield	0.00%
Expected term (in years)	6 years
Risk-free rate	1.91%

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Consolidated Balance Sheet (Unaudited) - USD ($)	Oct. 04, 2015	Jan. 04, 2015
Current Assets
Cash and cash equivalents	$ 717,721	$ 756,044
Accounts receivable – net	23,941,900	18,747,468
Inventory – net	14,963,675	10,488,051
Prepaid expenses and other current assets:
Prepaid expenses and other	2,005,023	1,613,327
Deferred tax asset	996,188	1,288,704
Total current assets	42,624,507	32,893,594
Property, Plant, and Equipment – Net	20,646,791	17,920,073
Goodwill	19,213,958	15,183,417
Intangible Assets	20,881,353	16,748,466
Other assets
Investments – at cost	1,054,120	1,054,120
Deposits and other assets	116,318	61,094
Debt issuance costs	216,559	289,942
Total assets	104,753,606	84,150,706
Current Liabilities
Accounts payable	13,662,037	10,177,820
Current maturities of long-term debt	2,393,830	2,018,133
Income taxes payable	490,704	90,169
Accrued compensation	2,462,876	2,791,260
Other accrued liabilities	1,289,624	1,498,094
Total current liabilities	20,299,071	16,575,476
Long-term debt – net of current portion	14,508,613	29,000,612
Line of credit	15,668,213	8,952,865
Other long-term liabilities
Deferred tax liability	5,775,228	6,497,330
Other liabilities	88,032	86,511
Total liabilities	56,339,157	61,112,794
Redeemable Common Stock – 0 and 2,415,399 shares issued and outstanding with a redemption value of $0 and $11,362,481 at October 4, 2015 and January 4, 2015, respectively	0	6,445,977
Stockholders’ Equity
Common stock, $0.001 par value – 15,000,000 shares authorized and 9,576,360 and 4,324,599 issued and outstanding at October 4, 2015 and January 4, 2015, respectively	9,577	4,325
Additional paid-in-capital	44,319,959	13,723,456
Retained earnings	4,084,913	2,864,154
Total stockholders’ equity	48,414,449	16,591,935
Total liabilities and stockholders’ equity	$ 104,753,606	$ 84,150,706

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Intangible Assets (Details) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 677,838		$ 1,782,113
Weighted Average
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted average amortization period			10 years 4 months 7 days
Amortization expense		$ 572,954		$ 1,753,366

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Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Oct. 04, 2015	Sep. 28, 2014
Cash Flows from Operating Activities
Net income	$ 4,023,728	$ 3,007,937
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,762,624	2,600,654
Amortization of debt issuance costs	216,930	229,164
Loss on sale of assets	39,712	27,326
Loss on extinguishment of debt	386,552	0
Bad debt expense, net of recoveries	32,893	239,487
Loss on derivative instrument	1,520	66,768
Stock option expense	160,764	27,439
Excess tax benefits from stock based compensation	(71,473)	0
Deferred income taxes	(428,118)	(847,047)
Changes in operating assets and liabilities that provided (used) cash:
Accounts receivable	(4,226,320)	(3,585,710)
Inventory	(3,359,815)	(1,078,806)
Prepaid expenses and other assets	(444,421)	494,416
Accounts payable	2,333,067	2,824,232
Accrued and other liabilities	440,365	844,528
Net cash provided by operating activities	1,868,008	4,850,388
Cash Flows from Investing Activities
Purchases of property and equipment	(2,988,278)	(1,616,652)
Proceeds from sale of property and equipment	51,347	11,414
Working capital adjustment from acquisition of PTI	0	173,740
Net cash used in investing activities	(14,756,922)	(3,748,409)
Cash Flows from Financing Activities
Net change in bank overdraft	273,152	136,018
Payments on debt and in-kind interest	(14,646,409)	(1,018,208)
(Payments on) proceeds from revolving credit facilities	6,715,347	(164,371)
Debt issuance costs	0	(13,400)
Expenses of in process equity offering	0	(360,737)
Post acquisition payments for Unique Fabricating	(755,018)	(168,633)
Proceeds from the issuance of common stock pursuant to initial public offering	25,673,750	0
Payment of initial public offering costs	(3,439,836)	0
Proceeds from exercise of stock options and warrants	397,070	0
Excess tax benefits from stock based compensation	71,473	0
Distribution of cash dividends	(1,438,938)	0
Net cash provided by (used in) financing activities	12,850,591	(1,589,331)
Net Decrease in Cash and Cash Equivalents	(38,323)	(487,352)
Cash and Cash Equivalents – Beginning of period	756,044	891,826
Cash and Cash Equivalents – End of period	717,721	404,474
Supplemental Disclosure of Cash Flow Information – Cash paid for
Interest	2,260,430	1,461,479
Income taxes	1,247,143	1,025,947
Supplemental Disclosure of Cash Flow Information – Non cash investing and financing activities for
Note payable incurred for Chardan acquisition	0	500,000
Accretion on redeemable common stock	1,364,031	848,223
Accounts payable on working capital for Great Lakes Foam Technologies, Inc. acquisition	127,401	0
Chardan
Cash Flows from Investing Activities
Acquisition of Chardan Corporation and Great Lakes Foam Technologies, Inc.	0	(2,316,911)
Great Lakes Foam Technologies, Inc.
Cash Flows from Investing Activities
Acquisition of Chardan Corporation and Great Lakes Foam Technologies, Inc.	$ (11,819,991)	$ 0

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Income Taxes - Schedule of components of income tax expense (benefit) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014
Income Tax Disclosure [Abstract]
Current federal income taxes	$ 792,116	$ 541,027	$ 1,907,263	$ 1,890,600
Current state income taxes	106,479	71,416	234,587	215,593
Current foreign income taxes	75,943	80,957	227,832	164,727
Deferred income taxes	(469,692)	(225,736)	(428,118)	(847,047)
Total income tax expense (benefit)	$ 504,846	$ 467,664	$ 1,941,564	$ 1,423,873

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Earnings Per Share (Tables)

9 Months Ended

Oct. 04, 2015

Earnings Per Share [Abstract]

Schedule of earnings per share, basic and diluted

The following table sets forth the computation of basic and diluted earnings per share.

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014		Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
Basic earnings per share calculation:
Net income	$	1,139,091	$	846,669	$	4,023,728	$	3,007,937
Preferred stock dividends	—		—		—		—
Net income attributable to common stockholders	$	1,139,091	$	846,669	$	4,023,728	$	3,007,937
Weighted average shares outstanding	9,434,123		6,739,998		7,700,771		6,739,998
Net income per share-basic	$	0.12	$	0.13	$	0.52	$	0.45

Diluted earnings per share calculation:
Net income	$	1,139,091	$	846,669	$	4,023,728	$	3,007,937
Weighted average shares outstanding	9,434,123		6,739,998		7,700,771		6,739,998
Effect of dilutive securities:
Stock options(1)(2)	211,270		15,084		200,357		15,084
Warrants(1)(2)	16,725		11,961		58,820		11,961
Diluted weighted average shares outstanding	9,662,118		6,767,043		7,959,948		6,767,043
Net income per share-diluted	$	0.12	$	0.13	$	0.51	$	0.44

(1)Options to purchase 471,000 shares of common stock remaining to be exercised and warrants to purchase 24,504 shares of common stock remaining to be exercised were considered in the computation of diluted earnings per share using the treasury stock method in the 2015 calculation. Options to purchase 230,000 shares of common stock that were granted in August 2015 as noted in Note 10, as well as 141,000 shares issued to the underwriters granted in July 2015 as noted in Note 1, were not included in the computation of diluted earnings per share in the 2015 period because the effect would have been anti-dilutive as a result of the securities being “out of the money” with a strike price greater than the average fair market value during the period presented.

(2)Options to purchase 495,000 shares of common stock remaining to be exercised and warrants to purchase 139,200 shares of common stock remaining to be exercised were considered in the computation of diluted earnings per share using the treasury stock method in the 2014 calculation.

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Related Party Transactions (Details) - USD ($)		3 Months Ended		9 Months Ended
	Mar. 18, 2013	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014	Jan. 04, 2015
Accrued Interest | Subordinated debt
Related Party Transaction [Line Items]
Accrued interest, subordinated debt, related party		$ 0		$ 0		$ 0
Investor | Accrued Interest | Subordinated debt
Related Party Transaction [Line Items]
Interest expense, related party		472,905	$ 529,633	1,514,901	$ 1,571,629
Affiliated Entity | Management Agreement
Related Party Transaction [Line Items]
Management agreement, term	5 years
Annual management fees	$ 300,000
Expenses from management contract		68,750	75,000	218,750	150,000
Great Lakes Foam Technologies, Inc. | Management Fees
Related Party Transaction [Line Items]
Expenses from management contract		$ 220,000		$ 220,000
Chardan | Management Fees
Related Party Transaction [Line Items]
Expenses from management contract			$ 110,000
Chardan | Affiliated Entity | Management Fees
Related Party Transaction [Line Items]
Expenses from management contract					$ 110,000

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Contingencies

9 Months Ended

Oct. 04, 2015

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

The Company is engaged from time to time in legal matters and proceedings arising out of its normal course of business. The Company establishes a liability related to its legal proceedings and claims when it has determined that it is probable that the Company has incurred a liability and the related amount can be reasonably estimated. If the Company determines that an obligation is reasonably possible, the Company will, if material, disclose the nature of the loss contingency and the estimated range of possible loss, or include a statement that no estimate of loss can be made. While uncertainties are inherent in the final outcome of such matters, the Company believes that there are no pending proceedings in which the Company is currently involved that will have a material effect on its financial position, results of operations or cash flow.

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Nature of Business and Significant Accounting Policies (Details)							3 Months Ended		9 Months Ended
	Oct. 04, 2015 USD ($) $ / shares shares	Jul. 07, 2015 USD ($) $ / shares shares	Jan. 04, 2015 USD ($) $ / shares shares	Nov. 18, 2014 $ / shares shares	Dec. 18, 2013 USD ($)	Mar. 18, 2013 USD ($)	Oct. 04, 2015 USD ($) $ / shares shares	Sep. 28, 2014 USD ($)	Oct. 04, 2015 USD ($) segment $ / shares shares	Sep. 28, 2014 USD ($)
Accounting Policies [Abstract]
Number of operating segments | segment									1
Number of reportable segments | segment									1
Common stock, shares authorized | shares	15,000,000		15,000,000	15,000,000			15,000,000		15,000,000
Common stock, par value (in USD per share) | $ / shares	$ 0.001		$ 0.001	$ 0.001			$ 0.001		$ 0.001
Class of Stock [Line Items]
Shares issued | shares									2,702,500
Proceeds from issuance of common stock					$ 5,455,872	$ 12,588,318
Allowance for doubtful accounts receivable	$ 809,008		$ 704,713				$ 809,008		$ 809,008
Impairment charge							0	$ 0	0	$ 0
Debt issuance cost	216,559		289,942
Unamortized discount	126,690		656,789				126,690		126,690
Loss on extinguishment of debt									386,552	0
Amortization of debt issuance costs							61,704	78,927	216,930	229,164
Concentration Risk [Line Items]
Dividend income							0	0	0	0
Unrecognized tax benefits	$ 0		0				0		0
Income tax penalties and interest							$ 0	$ 0	$ 0	$ 0
Common Stock
Class of Stock [Line Items]
Stock split, conversion ratio				3
Subordinated debt
Class of Stock [Line Items]
Extinguishment of debt		$ 13,100,000
Stated interest rate	16.00%	16.00%					16.00%		16.00%
Unamortized discount	$ 0		445,387				$ 0		$ 0
General Motors Company | Customer concentration risk | Sales revenue, net
Concentration Risk [Line Items]
Concentration risk (percentage)							15.00%	16.00%	15.00%	18.00%
Chrysler Group, LLC | Customer concentration risk | Sales revenue, net
Concentration Risk [Line Items]
Concentration risk (percentage)							15.00%	19.00%	16.00%	18.00%
Ford Motor Company | Customer concentration risk | Sales revenue, net
Concentration Risk [Line Items]
Concentration risk (percentage)							15.00%	15.00%	15.00%	14.00%
IPO
Class of Stock [Line Items]
Proceeds from issuance of common stock		$ 22,200,000
IPO | Common Stock
Class of Stock [Line Items]
Shares issued | shares		2,702,500
Share price (in USD per share) | $ / shares		$ 9.50
Over-Allotment Option | Common Stock
Class of Stock [Line Items]
Shares issued | shares		352,500
Canada | Geographic concentration risk | Sales revenue, net
Concentration Risk [Line Items]
Concentration risk (percentage)							4.00%	5.00%	4.00%	5.00%
Other foreign countries | Geographic concentration risk | Sales revenue, net
Concentration Risk [Line Items]
Concentration risk (percentage)							1.00%	1.00%	1.00%	1.00%
Mexico | Geographic concentration risk | Sales revenue, net
Concentration Risk [Line Items]
Concentration risk (percentage)							13.00%	14.00%	13.00%	13.00%
Mexico | Geographic concentration risk | Production risk
Concentration Risk [Line Items]
Concentration risk (percentage)							12.00%	10.00%	12.00%	10.00%
Accounts payable
Concentration Risk [Line Items]
Checks issued in excess of available cash	$ 2,066,423		$ 1,811,757				$ 2,066,423		$ 2,066,423
Collective Bargaining Arrangements Expiring January 2017 | Labor force concentration risk | Workforce Subject to Collective Bargaining Arrangements
Concentration Risk [Line Items]
Concentration risk (percentage)									5.00%
Collective Bargaining Arrangements Expiring August 2016 | Labor force concentration risk | Workforce Subject to Collective Bargaining Arrangements
Concentration Risk [Line Items]
Concentration risk (percentage)									31.00%
Warrants for Underwriters
Class of Stock [Line Items]
Percentage of offering price per share		125.00%
Number of warrants purchased | shares		141,000
Grant date fair value		$ 336,300
Warrants for Underwriters | Minimum
Class of Stock [Line Items]
Warrant term		1 year
Warrants for Underwriters | Maximum
Class of Stock [Line Items]
Warrant term		5 years

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Subsequent Event

9 Months Ended

Oct. 04, 2015

Subsequent Events [Abstract]

Subsequent Event

Subsequent Events

Plant Closure

On October 27, 2015, the Company announced the planned closure of its manufacturing facility located in Murfreesboro, Tennessee that will result in a workforce reduction of approximately 30 employees. The planned closure of the Murfreesboro facility is expected to be effective in the fourth quarter of 2015 and be completed by January 2016. The action was necessary due to the tight labor market in Murfreesboro and the struggle to staff production levels to meet the ongoing growth strategy for Murfreesboro's respective products manufactured at the plant. In order to ensure the Company's ability to service its customers at the increasing volumes projected for the future, the Company has decided to move existing Murfreesboro production including equipment to the Company's other manufacturing facilities in Evansville, Indiana and LaFayette, Georgia.

We expect to incur severance related costs as a result of this plant closure of approximately $0.2 to $0.3 million over the next two to three months. Expenses associated with the closing of the facility have yet to be determined, but as noted above the Company intends to move all of the existing equipment to the other two facilities noted. The Company intends to sell the building in Murfreesboro, which the Company owns, which has a current net book value of $2.0 million, but do not have an estimate of the intended selling price.

Declaration of Cash Dividend

On November 17, 2015, our board of directors declared a quarterly cash dividend of $0.15 per common share. The dividend will be payable on December 7, 2015 to shareholders of record at the close of business on November 30, 2015 for an amount of approximately $1.4 million.

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Subsequent Event (Narrative) (Details)				3 Months Ended
	Dec. 07, 2015 USD ($)	Nov. 17, 2015 $ / shares	Oct. 27, 2015 USD ($) employee	Jan. 03, 2016 USD ($)	Oct. 04, 2015 USD ($)	Jan. 04, 2015 USD ($)
Subsequent Event [Line Items]
Property, plant, and equipment					$ 20,646,791	$ 17,920,073
Subsequent Event
Subsequent Event [Line Items]
Plant Closure, workforce reduction | employee			30
Dividends declared (in USD per share) | $ / shares		$ 0.15
Scenario, Forecast | Subsequent Event
Subsequent Event [Line Items]
Dividends	$ 1,400,000
Minimum | Scenario, Forecast
Subsequent Event [Line Items]
Severance costs				$ 200,000
Maximum | Scenario, Forecast
Subsequent Event [Line Items]
Severance costs				$ 300,000
Buildings | Subsequent Event
Subsequent Event [Line Items]
Property, plant, and equipment			$ 2,000,000

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Nature of Business and Significant Accounting Policies

9 Months Ended

Oct. 04, 2015

Accounting Policies [Abstract]

Nature of Business and Significant Accounting Policies

Nature of Business and Significant Accounting Policies

Nature of Business — UFI Acquisition, Inc. (UFI or Successor), a Delaware corporation, was formed on January 14, 2013, for the purpose of acquiring Unique Fabricating, Inc. and its subsidiaries (Unique Fabricating or Predecessor) (collectively, the “Company” or “Unique”) on March 18, 2013. The Company operates as one operating and reporting segment to fabricate and broker foam and rubber products, which are primarily sold to original equipment manufacturers (OEMs) and tiered suppliers in the automotive, appliance, water heater and heating, ventilation and air conditioning (HVAC) industries. In September 2014, UFI changed its name to Unique Fabricating, Inc. which is now the parent company of the consolidated group. As a result of the name change, the subsidiary previously named Unique Fabricating, Inc. became Unique Fabricating NA, Inc.

Basis of Presentation — As a result of UFI’s acquisition of Unique Fabricating, purchase accounting and a new basis of accounting was applied beginning on March 18, 2013.

All significant intercompany transactions have been eliminated in consolidation.

On November 18, 2014, the Company amended its certificate of incorporation to increase its authorized common shares to 15,000,000 with a par value $0.001 per share. The amendment of the certificate of incorporation also effected an internal recapitalization pursuant to which the Company effected a 3-for-1 stock split on its outstanding common stock. As a result of the stock split, the Company’s stock options and warrants were affected accordingly based on the provisions of the stock option plans and warrant agreements.

Accordingly, all common share, options, warrants and per share amounts in these consolidated financial statements and the notes thereto have been adjusted to reflect the 3-for-1 stock split as if it had occurred at the beginning of the initial period presented.

Initial Public Offering—On July 7, 2015, the Company completed its initial public offering of 2,702,500 shares of common stock at a price to the public of $9.50 per share (the "IPO"), including 352,500 shares subject to an over-allotment option granted to the underwriters. After underwriting discounts, commissions, and approximate fees and expenses of the offering, as set forth in our registration statement for the IPO on Form S-1, the Company received net IPO proceeds of approximately $22.2 million. Of these proceeds the Company used a portion to pay all of the $13.1 million principal amount of our 16% senior subordinated note, together with accrued interest through the date of payment. The Company used the remaining proceeds to temporarily reduce borrowings under the revolver portion of its senior secured credit facility. The Company also issued to the underwriters warrants to purchase up to 141,000 shares of common stock, as additional compensation in the IPO. The warrants are exercisable at a per share exercise price equal to 125% of the initial public offering price of $9.50 per share, and can be exercised commencing 1 year from the date of the IPO, until the date 5 years from the date of the IPO. The warrants have an aggregate grant date fair value of $336,300 and have been classified as equity and incremental direct costs associated with the IPO. Accordingly, the warrants do not impact our consolidated financial statements.

Fiscal Years — The Company’s quarterly periods end on the Sunday closest to the end of the quarterly period. The 14 and 39-week periods ended on October 4 during 2015 and the 13 and 39-week periods ended on September 28 during 2014. Fiscal year 2014 ended on Sunday January 4, 2015.

Cash and Cash Equivalents — The Company considers all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents.

Accounts Receivable — Accounts receivable are stated at the invoiced amount and do not bear interest. The allowance for doubtful accounts is management’s best estimate of the amount of probable credit losses in the existing accounts receivable. Management determines the allowance based on historical write off experience and an understanding of individual customer payment history and financial condition. Management reviews the allowance for doubtful accounts at regular intervals. Account balances are charged off against the allowance when management determines it is probable the receivable will not be recovered. The allowance for doubtful accounts was $809,008 and $704,713 at October 4, 2015 and January 4, 2015, respectively.

Inventory — Inventory is stated at the lower of cost or market, with cost determined on the first in, first out method (FIFO). Inventory acquired as part of a business combination is recorded at its estimated fair value at the time of the business combination. The Company periodically evaluates inventory for obsolescence, excess quantities, slow moving goods and other impairments of value and establishes reserves for any identified impairments.

Valuation of Long-Lived Assets — The carrying value of long-lived assets held for use is periodically evaluated when events or circumstances warrant such a review. The carrying value of a long-lived asset held for use is considered impaired when the anticipated separately identifiable undiscounted cash flows from the asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset.

Property, Plant, and Equipment — Property, plant, and equipment purchases are recorded at cost. Property, plant, and equipment acquired as part of a business combination are recorded at estimated fair value at the time of the business combination. Depreciation is calculated principally using the straight line method over the estimated useful life of each asset. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the period of the related leases. Upon retirement or disposal, the initial cost or valuation and accumulated depreciation are removed from the accounts, and any gain or loss is included in net income. Repair and maintenance costs are expensed as incurred.

Intangible Assets — The Company does not hold any intangible assets with indefinite lives. Acquired intangible assets subject to amortization are amortized on a straight line basis, which approximates the pattern in which the economic benefit of the respective intangible is realized, over their respective estimated useful lives. Identifiable intangible assets recognized as part of a business combination are recorded at their estimated fair value at the time of the business combination. Amortizable intangible assets are reviewed for impairment whenever events or circumstances indicate that the related carrying amount may be impaired. The remaining useful lives of intangible assets are reviewed annually to determine whether events and circumstances warrant a revision to the remaining period of amortization. The Company determined that no impairment indicators were present and all originally assigned useful lives remained appropriate during the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, respectively.

Goodwill — Goodwill represents the excess of the acquisition cost of consideration transferred over the fair value of the identifiable net assets acquired and liabilities assumed from business combinations at the date of acquisition. Goodwill is not amortized, but rather is assessed at least on an annual basis for impairment. If it is determined that it is more likely than not that the fair value is greater than the carrying value then a qualitative assessment may be used for the annual impairment test. Otherwise, a two-step process is used. The first step requires estimating the fair value of each reporting unit compared to its carrying value. The Company has determined that the only reporting unit is the Company as a whole. If the carrying value exceeds the estimated fair value, a second step is performed in order to determine the implied fair value of the goodwill. If the carrying value of the goodwill exceeds its implied fair value then goodwill is deemed impaired and is written down to its implied fair value.

There were no impairment charges recognized during the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, respectively.

Debt Issuance Costs — Debt issuance costs represent legal, consulting, and other financial costs associated with debt financing and are reported as assets upon the original issuance of the related debt. Amounts paid to or on behalf of lenders are presented as debt discount, as a reduction of the noted debt instrument. Debt issuance costs on term debt are amortized using the effective interest method while those related to revolving debt are amortized using a straight line basis over the term of the related debt.

At October 4, 2015 and January 4, 2015, debt issuance costs were $216,559 and $289,942, respectively, while amounts paid to or on behalf of lenders presented as debt discounts were $126,690 and $656,789, respectively. The subordinated note was entirely paid off with the IPO proceeds. On the date paid off, $386,552 of debt discounts remained to be amortized. The Company concluded that the debt discounts qualified for extinguishment accounting and were recognized as a loss on extinguishment immediately. The extinguishment was recognized as part of interest expense in the consolidated statements of operations. Amortization expense has been recognized as a component of interest expense which includes both debt issuance costs and debt discounts in the amounts of $61,704 and $216,930 for the 14 and 39 weeks ended October 4, 2015 and $78,927 and $229,164 for the 13 and 39 weeks ended September 28, 2014, respectively.

Investments — Investments in entities in which the Company has less than a 20 percent interest or is not able to exercise significant influence are carried at cost. Cost basis investments acquired as part of a business combination are recorded at estimated fair value at the time of the business combination. Dividends received are included in income, except for those dividends received in excess of the Company’s proportionate share of accumulated earnings, which are applied as a reduction of the cost of the investment. Impairment losses due to a decline in the value of the investment that is other than temporary are recognized when incurred. No dividend income or impairment loss was recognized for the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, respectively.

Accounts Payable — Under the Company’s cash management system, checks issued but not yet presented to the Company’s bank frequently result in overdraft balances for accounting purposes and are classified as accounts payable on the consolidated balance sheet. Accounts payable included $2,066,423 and $1,811,757 of checks issued in excess of available cash balances at October 4, 2015 and January 4, 2015, respectively.

Stock based Compensation — The Company accounts for its stock based compensation using the fair value of the award estimated at the grant date of the award. The Company estimates the fair value of awards, consisting of stock options, using the Black Scholes option pricing model. Compensation expense is recognized in earnings using the straight line method over the vesting period, which represents the requisite service period.

Revenue Recognition — Revenue is recognized by the Company upon shipment to customers when the customer takes ownership and assumes the risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists, and the sale price is fixed and determinable. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

Shipping and Handling — Shipping and handling costs are included in costs of sales as they are incurred.

Income Taxes — A current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the period. Deferred tax liabilities or assets are recognized for the estimated future tax effects of temporary differences between financial reporting and tax accounting measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts. Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be realized. When appropriate, a valuation allowance is recorded against deferred tax assets to reserve for future tax benefits that may not be realized.

The Company recognizes the benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon settlement with the relevant tax authority. The Company assesses all tax positions for which the statute of limitations remain open. The Company had no unrecognized tax benefits as of October 4, 2015 and January 4, 2015. The Company files income tax returns in the United States and Mexico as well as various state and local jurisdictions. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 2011 in the United States and before 2007 in Mexico. The Company recognizes any penalties and interest when necessary as income tax expense. There were no penalties or interest recorded during the 14 and 39 and 13 and 39 weeks ended October 4, 2015 and September 28, 2014, respectively.

Foreign Currency Adjustments — The Company’s functional currency for all operations worldwide is the United States dollar. Nonmonetary assets and liabilities of foreign operations are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of each reporting period. Income statement accounts are translated at average exchange rates for the year. Gains and losses from translation of foreign currency financial statements into United States dollars are classified in operating income in the consolidated statements of operations.

Concentration Risks — The Company is exposed to various significant concentration risks as follows:

Customer and Credit — During the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, the Company’s sales were derived from customers principally engaged in the North American automotive industry. Company sales directly and indirectly to General Motors Company (GM), Chrysler Group, LLC (Chrysler), and Ford Motor Company (Ford) as a percentage of total net sales were: 15, 15, and 15 percent, respectively, during the 13 weeks ended October 4, 2015; 15, 16, and 15 percent, respectively, during the 39 weeks ended October 4, 2015; 16, 19, and 15 percent, respectively, during the 13 weeks ended September 28, 2014; and 18, 18, and 14 percent, respectively, during the 39 weeks ended September 28, 2014. Company sales and accounts receivable are primarily directly to Tier 1 suppliers. No Tier 1 suppliers represented more than 10 percent of direct Company sales for any period noted above. No suppliers accounted for more than 10 percent of direct accounts receivable as of October 4, 2015 or January 4, 2015.

Labor Markets — At October 4, 2015, of the Company’s hourly plant employees working in the United States manufacturing facilities, 31 percent were covered under a collective bargaining agreement which expires in August 2016 while another 5 percent were covered under a separate agreement that expires in January 2017.

Foreign Currency Exchange — The expression of assets and liabilities in a currency other than the functional currency gives rise to exchange gains and losses when such assets and obligations are paid in another currency. Foreign currency exchange rate adjustments (i.e., differences between amounts recorded and actual amounts owed or paid) are reported in the consolidated statements of operations as the foreign currency fluctuations occur. Foreign currency exchange rate adjustments are reported in the consolidated statements of cash flows using the exchange rates in effect at the time of the cash flows. At October 4, 2015, the Company’s exposure to assets and liabilities denominated in another currency was not significant. To the extent there is a fluctuation in the exchange rates, the amount of local currency to be paid or received to satisfy foreign currency obligations in 2015 may increase or decrease.

International Operations — The Company manufactures and sells products outside of the United States primarily in Mexico. Foreign operations are subject to various political, economic and other risks and uncertainties inherent in foreign countries. Among other risks, the Company’s operations are subject to the risks of: restrictions on transfers of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; political conditions; and governmental regulations. During the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014, 12, 12, 10, and 10 percent, respectively, of the Company’s production occurred in Mexico. Sales derived from customers located in Mexico, Canada, and other foreign countries were 13, 4, and 1 percent, respectively during the 14 weeks ended October 4, 2015, 13, 4, and 1 percent, respectively during the 39 weeks ended October 4, 2015, 14, 5, and 1 percent, respectively, during the 13 weeks ended September 28, 2014, and 13, 5, and 1 percent, respectively, during the 39 weeks ended September 28, 2014, of the Company’s total sales.

Derivative financial instruments — All derivative instruments are required to be reported on the consolidated balance sheets at fair value unless the transactions qualify and are designated as normal purchases or sales. Changes in fair value are reported currently through earnings unless they meet hedge accounting criteria. See Note 7 for further information regarding the Company's derivative instrument makeup.

Use of Estimates — The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (the “ASU”). Currently, such costs are required to be presented as a non current asset in an entity's balance sheet and amortized into interest expense over the term of the related debt instrument. The changes implemented by the ASU require that debt issuance costs be presented in the entity's balance sheet as a direct deduction from the carrying value of the related debt liability. The amortization of debt issuance costs remains unchanged per the ASU. The ASU allows for early adoption, however, management is currently evaluating the potential impact of these changes in the consolidated financial statements of the Company.

We do not expect that any other recently issued accounting pronouncements will have a material impact on our consolidated financial statements.

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Consolidated Balance Sheet (Unaudited) Consolidated Balance Sheet (Parenthetical) Details - USD ($)	Oct. 04, 2015	Jan. 04, 2015
Statement of Financial Position [Abstract]
Redeemable Common Stock, shares issued	0	2,415,399
Redeemable common stock, shares outstanding	0	2,415,399
Redeemable common stock redemption value	$ 0	$ 11,352,481
Common stock, par value (in USD per share)	$ 0.001	$ 0.001
Common stock, shares authorized	15,000,000	15,000,000
Common stock, shares issued	9,576,360	4,324,599
Common stock, shares outstanding	9,576,360	4,324,599

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Income Taxes

9 Months Ended

Oct. 04, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income before income taxes for U.S. and Non-U.S. operations are as follows:

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014		Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
U.S. income	$	1,536,426	$	1,094,883	$	5,303,089	$	3,749,727
Non-U.S. income	107,511		219,450		662,203		682,083
Income before income taxes	$	1,643,937	$	1,314,333	$	5,965,292	$	4,431,810

The components of the income tax provision included in the consolidated statements of operations are all attributable to continuing operations and are detailed as follows:

	Fourteen Weeks Ended October 4, 2015			Thirteen Weeks Ended September 28, 2014			Thirty-Nine Weeks Ended October 4, 2015			Thirty-Nine Weeks Ended September 28, 2014
Current federal income taxes	$	792,116		$	541,027		$	1,907,263		$	1,890,600
Current state income taxes	106,479			71,416			234,587			215,593
Current foreign income taxes	75,943			80,957			227,832			164,727
Deferred income taxes	(469,692		)	(225,736		)	(428,118		)	(847,047		)
Total income tax expense	$	504,846		$	467,664		$	1,941,564		$	1,423,873

Significant components of current and non-current deferred taxes are as follows:

	October 4, 2015			January 4, 2015
Current deferred tax assets (liabilities):
Allowance for doubtful accounts	$	285,333		$	246,744
Inventories	126,016			121,575
Accrued payroll and benefits	579,019			907,174
Other	5,820			13,211
Net current deferred tax asset	996,188			1,288,704
Noncurrent deferred tax assets (liabilities):
Property, plant, and equipment	(3,407,134		)	(3,329,790		)
Goodwill and intangible assets	(2,477,680		)	(3,220,663		)
Other	109,586			53,123
Net noncurrent deferred tax liability	(5,775,228		)	(6,497,330		)
Net total deferred tax liability	$	(4,779,040	)	$	(5,208,626	)

The Company believes that it is more likely than not that all deferred tax assets will be realized and thus, believes that a valuation allowance is not required as of October 4, 2015 or January 4, 2015.

A reconciliation of taxes on income from continuing operations based on the statutory federal income tax rate to the provision for income taxes is as follows:

	Fourteen Weeks Ended October 4, 2015			Thirteen Weeks Ended September 28, 2014			Thirty-Nine Weeks Ended October 4, 2015			Thirty-Nine Weeks Ended September 28, 2014
Income tax expense, computed at 34% of pretax income	$	558,938		$	446,873		$	2,028,199		$	1,506,815
State income taxes, net of federal benefit	37,627			33,376			124,854			97,500
Effect of foreign income taxes	40,118			4,408			(5,050		)	(77,265		)
Effect of permanent differences	(141,653		)	(42,750		)	(216,607		)	(126,273		)
Other	9,816			25,757			10,168			23,096
Total provision for income taxes	$	504,846		$	467,664		$	1,941,564		$	1,423,873

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Document and Entity Information Document - shares	9 Months Ended
	Oct. 04, 2015	Nov. 16, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	Unique Fabricating, Inc.
Entity Central Index Key	0001617669
Document Type	10-Q
Document Period End Date	Oct. 04, 2015
Amendment Flag	false
Current Fiscal Year End Date	--01-03
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		9,591,861
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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Operating Leases

9 Months Ended

Oct. 04, 2015

Leases, Operating [Abstract]

Operating Leases

Operating Leases

The Company leases office space, production facilities and equipment under operating leases with various expiration dates through the year 2020. The leases require the Company to pay taxes, insurance, utilities and maintenance costs. One of the leases provides for escalating rents over the life of the lease and rent expense is recognized over the term of the lease on a straight line basis, with the difference between lease payments and rent expense recorded as deferred rent in accrued expenses in the consolidated balance sheets. Total rent expense charged to operations was approximately $349,877 and $1,012,316 for the 14 and 39 weeks ended October 4, 2015, respectively, and $432,341 and $1,096,135 for the 13 and 39 weeks ended September 28, 2014, respectively.

Future minimum lease payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are as follows at October 4, 2015:

2015	$	357,439
2016	1,301,578
2017	1,212,745
2018	1,150,515
2019	976,138
Thereafter	541,250
Total	$	5,539,665

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Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014
Income Statement [Abstract]
Net Sales	$ 39,579,502	$ 31,028,026	$ 107,682,183	$ 93,151,183
Cost of Sales	30,280,834	23,803,346	82,031,708	70,247,457
Gross Profit	9,298,668	7,224,680	25,650,475	22,903,726
Selling, General, and Administrative Expenses	6,934,785	5,053,088	17,267,099	15,754,868
Operating Income	2,363,883	2,171,592	8,383,376	7,148,858
Non-operating Income (Expense)
Investment income	0	6	230	22
Other income	4,468	16,962	18,789	44,775
Interest expense	(724,414)	(874,227)	(2,437,103)	(2,761,845)
Total non-operating expense	(719,946)	(857,259)	(2,418,084)	(2,717,048)
Income – Before income taxes	1,643,937	1,314,333	5,965,292	4,431,810
Income Tax Expense	504,846	467,664	1,941,564	1,423,873
Net Income	$ 1,139,091	$ 846,669	$ 4,023,728	$ 3,007,937
Net Income per share
Basic earnings per share (In USD per share)	$ 0.12	$ 0.13	$ 0.52	$ 0.45
Diluted earnings per share (in USD per share)	$ 0.12	$ 0.13	$ 0.51	$ 0.44

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Long-term Debt

9 Months Ended

Oct. 04, 2015

Debt Disclosure [Abstract]

Long-term Debt

Long-term Debt

The Company has a senior credit facility with a bank initially entered into on March 18, 2013 and subsequently amended. The facility was originally entered into in conjunction with the acquisition of Unique Fabricating and provided for a $12.5 million revolving line of credit (“Revolver”) and an $11.0 million term loan facility (“Term Loan”). On December 18, 2013, in conjunction with the acquisition of PTI, the Company entered into an amendment with its bank under the senior credit facility. The amendment increased the Revolver to $15.0 million and the Term Loan to $20.0 million. In October 2014, an additional amendment increased the Revolver to $19.5 million and the increased amount available was used to construct and equip a new facility across the street from the Company's existing facility in LaFayette, Georgia. Construction was completed in September 2015. The total construction costs were expected to be $4.5 million, however actual costs incurred were $4.4 million in costs related to the construction which was all funded by the Revolver. The total amount was capitalized, including interest costs of $0.8 million, and will be depreciated over the useful lives of the various assets.

As of October 4, 2015 and January 4, 2015, $15,668,213 and $8,952,865, respectively was outstanding under the Revolver. Borrowings under the Revolver are subject to a borrowing base, bear interest at the 30 day LIBOR plus a margin that ranges from 2.75 percent to 3.25 percent (an effective rate of 3.1958 percent and 3.1655 percent at October 4, 2015 and January 4, 2015, respectively), and are secured by substantially all of the Company’s assets. At October 4, 2015, the maximum additional available borrowings under the Revolver were $3,731,787 due to the amount outstanding and a $100,000 letter of credit related to rental payments to the landlord of one of the Company’s facilities. The Revolver matures on December 18, 2017. As noted in Note 2, the Company acquired Great Lakes on August 31, 2015. The purchase price amount described in Note 2 was funded by the Revolver.

The Company also had a subordinated note payable with a private lender effective March 18, 2013, as amended. The holder of the subordinated note payable also held equity interests of the Company, and therefore, was a related party. The subordinated note payable was originally entered into in conjunction with the acquisition of Unique Fabricating and had an original principal amount of $11.5 million. On December 18, 2013, in conjunction with the acquisition of PTI, the Company entered into an amendment with the holder which increased the note to $13.1 million and provided for warrants to purchase additional common stock which is described further in Note 8.

As noted in Note 1, the Company used the net proceeds from IPO to repay the $13.1 million principal amount of the senior subordinated note, together with accrued interest through the date of payment.

Long term debt consists of the following:

	October 4, 2015		January 4, 2015
Term Loan, payable to a bank in quarterly installments of $500,000 through December 31, 2015, $625,000 through December 31, 2016, $750,000 through September 30, 2017, with a lump sum due at maturity. Interest is paid on a quarterly basis at an annual rate of LIBOR plus a margin of 3.00 percent to 3.50 percent (an effective rate of 3.544 percent per annum and 3.495 percent per annum at October 4, 2015 and January 4, 2015, respectively). The Term Loan was originally due on March 15, 2018, but was amended to be due December 18, 2017, and is secured by substantially all of the Company’s assets. At October 4, 2015 and January 4, 2015, the balance of the Term Loan is presented net of a debt discount of $126,690 and $211,402, respectively, from costs paid to or on behalf of the lender.	$	16,373,310	$	17,788,598
Subordinated note payable to a private lender. Interest accrues monthly at an annual rate of 16 percent of which 12 percent must be paid quarterly in cash and 4 percent can be paid in kind at the Company’s discretion. The subordinated note payable is due in full on March 16, 2018, and is subordinated to the Revolver and Term Loan. At October 4, 2015 and January 4, 2015, the balance of the note payable includes accumulated paid in kind interest of $0 and $132,887, respectively, and is presented net of a debt discount of $0 and $445,387, respectively, from costs paid to or on behalf of the lender.	—		12,687,500

Note payable to the seller of Chardan which is unsecured and subordinated to the senior credit facility and the subordinated note to the private lender. Interest accrues monthly at an annual rate of 6 percent. The note payable is due in full on February 6, 2019.	500,000		500,000
Other debt	29,133		42,647
Total debt	16,902,443		31,018,745
Less current maturities	2,393,830		2,018,133
Long-term debt – Less current maturities	$	14,508,613	$	29,000,612

The senior credit facility and the senior subordinated note contain customary negative covenants and require that the Company comply with various financial covenants including a senior leverage ratio, total leverage ratio, debt service coverage ratio, interest coverage ratio, and capital expenditure covenant, as defined. Also, the senior credit facility restricts dividends being paid to the Company from its subsidiaries and the senior subordinated note precludes dividends being paid by the Company to its shareholders. As of October 4, 2015 and January 4, 2015, the Company was in compliance with these covenants. Additionally, the Term Loan contains a clause, effective December 31, 2014, that requires an excess cash flow payment to be made if the Company’s cash flow exceeds certain thresholds as defined by the senior credit facility and certain performance thresholds are not met.

Maturities on the Company’s Revolver and other long term debt obligations for the remainder of the current fiscal year and future fiscal years:

2015	$	1,504,541
2016	2,518,989
2017	28,173,816
2018	—
2019	500,000
Total	32,697,346
Discounts	(126,690		)
Total debt – Net	$	32,570,656

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Intangible Assets

9 Months Ended

Oct. 04, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

Intangible assets of the Company consist of the following at October 4, 2015:

	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life – Years
Customer contracts	$	20,948,881	$	4,589,965	8.30
Trade names	4,465,322		544,070		20.00
Non-compete agreements	1,161,790		560,605		1.62
Total	$	26,575,993	$	5,694,640

Intangible assets of the Company consist of the following at January 4, 2015:

	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life – Years
Customer contracts	$	15,614,881	$	3,127,128	8.30
Trade names	4,465,322		377,079		20.00
Non-compete agreements	580,790		408,320		1.62
Total	$	20,660,993	$	3,912,527

The weighted average amortization period for all intangible assets is 10.35 years. Amortization expense for intangible assets totaled $677,838 and $1,782,113 for the 14 and 39 weeks ended October 4, 2015, respectively, and $572,954 and $1,753,366 for the 13 and 39 weeks ended September 28, 2014, respectively.

Estimated amortization expense is as follows:

2015	$	742,171
2016	2,820,002
2017	2,820,002
2018	2,768,668
2019	2,682,746
Thereafter	9,047,764
Total	$	20,881,353

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Earnings Per Share

9 Months Ended

Oct. 04, 2015

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share is computed by dividing the net income by the weighted-average number of shares outstanding during the period. For purposes of the calculation, shares outstanding also includes redeemable common stock. Diluted earnings per share is computed giving effect to all potentially weighted average dilutive shares including options and warrants. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method.

The following table sets forth the computation of basic and diluted earnings per share.

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014		Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
Basic earnings per share calculation:
Net income	$	1,139,091	$	846,669	$	4,023,728	$	3,007,937
Preferred stock dividends	—		—		—		—
Net income attributable to common stockholders	$	1,139,091	$	846,669	$	4,023,728	$	3,007,937
Weighted average shares outstanding	9,434,123		6,739,998		7,700,771		6,739,998
Net income per share-basic	$	0.12	$	0.13	$	0.52	$	0.45

Diluted earnings per share calculation:
Net income	$	1,139,091	$	846,669	$	4,023,728	$	3,007,937
Weighted average shares outstanding	9,434,123		6,739,998		7,700,771		6,739,998
Effect of dilutive securities:
Stock options(1)(2)	211,270		15,084		200,357		15,084
Warrants(1)(2)	16,725		11,961		58,820		11,961
Diluted weighted average shares outstanding	9,662,118		6,767,043		7,959,948		6,767,043
Net income per share-diluted	$	0.12	$	0.13	$	0.51	$	0.44

(1)Options to purchase 471,000 shares of common stock remaining to be exercised and warrants to purchase 24,504 shares of common stock remaining to be exercised were considered in the computation of diluted earnings per share using the treasury stock method in the 2015 calculation. Options to purchase 230,000 shares of common stock that were granted in August 2015 as noted in Note 10, as well as 141,000 shares issued to the underwriters granted in July 2015 as noted in Note 1, were not included in the computation of diluted earnings per share in the 2015 period because the effect would have been anti-dilutive as a result of the securities being “out of the money” with a strike price greater than the average fair market value during the period presented.

(2)Options to purchase 495,000 shares of common stock remaining to be exercised and warrants to purchase 139,200 shares of common stock remaining to be exercised were considered in the computation of diluted earnings per share using the treasury stock method in the 2014 calculation.

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Retirement Plans

9 Months Ended

Oct. 04, 2015

Compensation and Retirement Disclosure [Abstract]

Retirement Plans

Retirement Plans

The Company maintains a defined contribution plan covering certain full time salaried employees. Employees can make elective contributions to the plan. The Company contributes 100 percent of an employee’s contribution up to the first 3 percent of each employee’s total compensation and 50 percent for the next 2 percent of each employee’s total compensation. In addition, the Company, at the discretion of the board of directors, may make additional contributions to the plan on behalf of the plan participants. The Company contributed $97,403 and $281,369 for the 14 and 39 weeks ended October 4, 2015, respectively, and $68,426 and $173,709 for the 13 and 39 weeks ended September 28, 2014, respectively.

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Redeemable Common Stock

9 Months Ended

Oct. 04, 2015

Temporary Equity [Abstract]

Redeemable Common Stock

Redeemable Common Stock

As described in Note 8, the 1,415,400 shares issued to the subordinated lender include features for the shares to be redeemed at their fair value on the sixth or seventh anniversary of the purchase or when the founders group no longer owns 75 percent of the shares originally purchased. These shares are accounted for as redeemable common stock due to the redemption feature being outside of the Company’s control. These shares have been recorded initially using their net proceeds and have been adjusted to their redemption value each period using a ratable allocation based on the Company’s estimate of the redemption date and fair value of the shares. The Company has accreted the redemption value of these shares over the estimated redemption period to the earliest known redemption date with any changes in estimates being accounted for prospectively. However, reductions in the redemption value were only recorded to the extent of previously recorded increases.

As described in Note 8, the Company’s 999,999 shares issued to the founder group prior to the IPO were redeemable at $0.167 per share if the Company were sold, liquidated or completed an initial public offering for less than $4 per share. These shares were accounted for as redeemable common stock due to the redemption feature being outside of the Company’s control. These shares were recorded initially using their proceeds of $0.167 per share and there was not any accretion of these shares from this initial value because they wre already recorded at their redemption value. The redemption value of the shares was $166,667.

Effective upon the closing of the IPO, the Company’s 999,999 shares issued to the founder group at $0.167 per share are no longer redeemable as the IPO was completed at a price of more than $4 per share and the Company is no longer required to purchase these shares. Furthermore, the 1,415,400 shares issued to the subordinated lender are also no longer redeemable, effective upon the closing of the IPO, as the subordinated lender agreed to terminate its right to require the Company to repurchase its shares in exchange for the Company granting it certain registration rights. As a result, all of the shares included in redeemable common stock were reclassified to common stock and amounts attributable to redeemable common stock were allocated to common stock at par value and additional paid-in-capital.

As of the date immediately before the closing of the IPO, the redemption value of the 1,415,400 shares was estimated to be $13,446,300 which was more than the initial proceeds. As a result, $1,364,031 of accretion was recorded in the period ended immediately prior to the IPO in addition to the 2014 accretion amount noted below. The redemption value was calculated based on the offering price of $9.50 per share in the IPO, as the offering closed just after the quarter ended June 28, 2015 and represented the best estimate of enterprise value of the Company as of the end of the quarter ended June 28, 2015.

As of January 4, 2015, the redemption value of the redeemable shares included the above shares issued to the founder group was estimated to be $11,362,481 which was more than the initial proceeds. As a result, $1,852,840 of accretion was recorded. The redemption value for the fiscal year ended January 4, 2015 was calculated by an outside party (the Company strategy for annual periods), using a discounted cash flow method. The discounted cash flow method used several assumptions, the most significant of which include: projections of net sales, operating expenses, profit margins, income taxes to capital expenditures, working capital requirements, interest rates, investment returns, and discount rate.

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Income Taxes - Schedule of current and noncurrent deferred taxes (Details) - USD ($)	Oct. 04, 2015	Jan. 04, 2015
Current deferred tax assets (liabilities):
Allowance for doubtful accounts	$ 285,333	$ 246,744
Inventories	126,016	121,575
Accrued payroll and benefits	579,019	907,174
Other	5,820	13,211
Net current deferred tax asset	996,188	1,288,704
Noncurrent deferred tax assets (liabilities):
Property, plant, and equipment	(3,407,134)	(3,329,790)
Goodwill and intangible assets	(2,477,680)	(3,220,663)
Other	109,586	53,123
Net noncurrent deferred tax liability	(5,775,228)	(6,497,330)
Net total deferred tax liability	$ (4,779,040)	$ (5,208,626)

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Derivative Financial Instruments

9 Months Ended

Oct. 04, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

The Company holds a derivative financial instrument, as required by its senior credit facility, for the purpose of hedging certain identifiable transactions in order to mitigate risks relating to the variability of future earnings and cash flows caused by interest rate fluctuations. The derivative financial instrument is in the form of an interest rate swap which the Company has elected not to apply hedge accounting for financial reporting purposes. The interest rate swap is recognized in the accompanying consolidated balance sheets at its fair value. Monthly settlement payments due on the interest rate swap and changes in its fair value are recognized currently in net income as interest expense in the consolidated statements of operations.

Effective April 26, 2013, the Company entered into an interest rate swap which required the Company to pay a fixed rate of 0.83 percent while receiving a variable rate based on the one month LIBOR for a net monthly settlement based on the notional amount beginning on March 3, 2014. The notional amount began at $4,714,286 and decreased by $196,429 each quarter until its scheduled expiration on March 1, 2016.

Effective January 17, 2014, in connection with the refinancing of the senior credit facility during December 2013, the Company terminated the swap described above and entered into a new interest rate swap which requires the Company to pay a fixed rate of 1.27 percent while receiving a variable rate based on the one month LIBOR for a net monthly settlement based on the notional amount beginning immediately. The notional amount begins at $10,000,000 and decreases by $250,000 each quarter until March 31, 2016, when it begins decreasing by $312,500 per quarter until it expires on January 31, 2017. At October 4, 2015 and January 4, 2015 the fair value of this interest rate swap was ($88,032) and ($86,511), respectively which is included in other long-term liabilities in the consolidated balance sheets and the Company paid $31,862 and $78,574 in net monthly settlements in the 14 and 39 weeks ended October 4, 2015, respectively, and $17,699 and $67,955 for the 13 and 39 weeks ended September 28, 2014, respectively. Both the change in fair value and the monthly settlements are included in interest expense in the consolidated statements of operations.

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Equity

9 Months Ended

Oct. 04, 2015

Equity [Abstract]

Equity

Equity

Common Stock

As of October 4, 2015 and January 4, 2015, the Company’s common stock consists of 15,000,000 authorized shares of $0.001 par value stock with 9,576,360 and 6,739,998 shares of common stock, respectively issued and outstanding. As of October 4, 2015 there were 495,000 unissued shares reserved for the Company’s 2013 stock incentive plan and 250,000 unissued shares reserved for the Company's 2014 stock incentive plan both which are further described in Note 10.

On January 14, 2013, (the date of formation of the Company), the Company sold 999,999 shares of common stock for $0.167 per share to a group of founding shareholders. An agreement required the Company to redeem these shares at $0.167 per share if the Company is sold, liquidated or completes an initial public offering for less than $4 per share.

On March 18, 2013, in conjunction with the acquisition of Unique Fabricating, the Company issued shares of common stock to its subordinated lender and a private placement group. Additionally, all of the stockholders entered into agreements which provide for certain restrictions on the transferability of the shares and provides certain shareholders further restrictions, requirements or benefits. The subordinated lender purchased 1,050,000 shares of common stock for $3.33 per share. An agreement provides the subordinated lender the option to have its shares redeemed by the Company for their fair value on the sixth or seventh anniversary of the purchase or when the founders group, as defined, no longer owns 75 percent of the shares originally purchased. The private placement group purchased 2,949,999 shares of common stock for $3.33 per share. The Company incurred expenses for the issuance of these common shares of $745,012 for net total proceeds of $12,588,318.

On December 18, 2013, in conjunction with the acquisition of PTI, the Company issued 1,740,000 additional shares of common stock for $3.33 per share. 365,400 shares were purchased by the subordinated lender under the same provisions as described above while the remaining 1,374,600 were purchased by other investors in a private placement. The Company incurred expenses for the issuance of these common shares of $344,128 for net total proceeds of $5,455,872.

On July 7, the Company completed its initial public offering of 2,702,500 shares of common stock at a price to the public of $9.50 per share. In addition 24,000 options that were issued under the 2013 stock incentive plan were exercised in the third quarter.

Warrants

On December 18, 2013, in conjunction with the acquisition of PTI, the Company issued warrants to purchase 139,200 common shares for $3.33 per share. The warrants were valued at $50,534 upon issuance. The warrants can be exercised at any time ten years from the issuance date. 29,232 warrants are held by the subordinated lender and the remainder are held by shareholders in the founders group. The common shares received when the warrants are exercised will not contain any of the redemption features described above for any shareholders.

The fair value of each warrant award was estimated on the grant date using a Black Scholes option pricing model that uses the weighted average assumptions noted in the following table. The final valuation after using the assumptions in the table below also calculated a further weighted average to value the warrants and was based on 80% weighting given to a public sale and 20% to a private sale of the Company. Finally, that value was further discounted by 15% to account for the fact that warrants are only transferrable to institutional and accredited investors. The expected volatility was based on the historical volatility of comparable companies. The expected term of the awards was estimated based on findings from academic studies investigating the average holding period for warrants adjusted for the Company’s size and risk factors. The risk free rate for periods within the contractual life of the warrants was based on the United States Treasury yield curve in effect at the time of grant. (disclosed below for a public sale followed by a private sale of the Company).

Expected volatility	32.00%/50.00%
Dividend yield	0.00%/0.00%
Expected term (in years)	2/6
Risk-free rate	0.31%/1.91%

As noted in Note 1, upon closing of the IPO the Company issued to the underwriters warrants to purchase up to 141,000 shares of common stock, as additional compensation. The 29,232 warrants held by the subordinated lender were also exercised in the third quarter for $3.33 per share in exchange for common shares. In addition, 80,630 of the original 139,200 warrants were also exercised in the third quarter for $3.33 per share in exchange for common shares.

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Stock Incentive Plans

9 Months Ended

Oct. 04, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Incentive Plans

Stock Incentive Plans

2013 Stock Incentive Plan

The Company’s board of directors approved a stock incentive plan (the “Plan”) in 2013. The Plan permits the Company to grant 495,000 non statutory or incentive stock options to the employees, directors and consultants of the Company. 495,000 shares of unissued common stock are required to be reserved for the Plan. The board of directors has the authority to determine the participants to whom stock options shall be awarded as well as any restrictions to be placed upon the awards. The exercise price cannot be less than the fair value of the underlying shares at the time the stock options are issued and the maximum length of an award is ten years.

On July 17, 2013 and January 1, 2014, the board of directors approved the issuance of 375,000 and 120,000 non statutory stock option awards, respectively to employees of the Company with an exercise price of $3.33 with a weighted average grant date fair value of $86,450 and $42,000 respectively. These awards vest 20 percent on the grant date and an additional 20 percent on each of the first, second, third and fourth anniversaries thereafter. Vested awards can only be exercised while the participants are employed by the Company. Upon termination, the Company may repurchase the vested awards at their fair value (or their exercise price if terminated for cause) prior to their exercise.

The fair value of each option award is estimated on the grant date using a Black Scholes option pricing model that uses the weighted average assumptions noted in the following table. The expected volatility is based on the historical volatility of comparable companies. The Company estimated zero employee terminations based on the options granted being limited to a small pool of senior employees of which the Company has no historical turnover experience. The expected term of the awards was estimated based on findings from academic studies investigating the average holding period for options for adjusted for the Company’s size and risk factors. The risk free rate for periods within the contractual life of the option is based on the United States Treasury yield curve in effect at the time of grant. (disclosed below as January 1, 2014 followed by July 17, 2013).

Expected volatility	34.00	%
Dividend yield	—	%
Expected term (in years)	4
Risk-free rate	1.27%/0.96%

2014 Omnibus Performance Award Plan

In 2014 the Company adopted the Unique Fabricating, Inc. 2014 Omnibus Performance Award Plan, or the 2014 Plan. The 2014 Plan provides for the grant of cash awards, stock options, stock appreciation rights, or SARs, shares of restricted stock and restricted stock units, or RSUs, performance shares and performance units. The 2014 Plan authorizes the grant of awards relating to 250,000 shares of our common stock. In the event of any transaction that causes a change in capitalization, the Compensation Committee, such other committee administering the 2014 Plan or the board of directors will make such adjustments to the number of shares of common stock delivered, and the number and/or price of shares of common stock subject to outstanding awards granted under the 2014 Plan, as it deems appropriate and equitable to prevent dilution or enlargement of participants’ rights.

On August 17, 2015 the board of directors approved the issuance of a total of 230,000 stock option awards of which 45,000 non statutory awards were granted to the board of directors, and 185,000 incentive stock options were granted to employees of the Company. All of the awards had an exercise price of $12.50 with a weighted average grant date fair value of $625,600. These awards vest 20 percent on the grant date and an additional 20 percent on each of the first, second, third and fourth anniversaries thereafter. Vested awards can only be exercised while the participants are employed by the Company.

The fair value of each option award is estimated on the grant date using a Black Scholes option pricing model that uses the weighted average assumptions noted in the following table. The expected volatility is based on the historical volatility of comparable companies. The Company estimated zero employee terminations based on the options granted being limited to a small pool of senior employees of which the Company has no historical turnover experience. The expected term of the awards was estimated based on findings from academic studies investigating the average holding period for options for adjusted for the Company’s size and risk factors. The risk free rate for periods within the contractual life of the option is based on the United States Treasury yield curve in effect at the time of grant.

Expected volatility	38.00	%
Dividend yield	4.80	%
Expected term (in years)	5
Risk-free rate	1.58	%

A summary of option activity under both plans is presented below:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value(1)
Outstanding at January 4, 2015	495,000	$	3.33	8.65
Granted	230,000	$	12.50	10.00
Exercised	24,000	—		0
Forfeited or expired	—	—		0
Outstanding at October 4, 2015	701,000	$	6.34	8.54	$	5,727,170
Vested and exercisable at October 4, 2015	319,000	$	4.66	8.16	$	2,606,230

(1) The aggregate intrinsic value above is obtained by subtracting the weighted average exercise price from the estimated fair value of the underlying shares as of October 4, 2015 and multiplying this result by the related number of options outstandingand exercisable at October 4, 2015. The estimated fair value of the shares is based on the closing price of the stock of $11.50 at the end of the third quarter.

The Company recorded compensation expense of $148,455 and $160,764 for the 14 and 39 weeks ended October 4, 2015, respectively, and $6,401 and $27,439 for the 13 and 39 weeks ended September 28, 2014, respectively, in its consolidated statements of operations, as a component of sales, general and administrative expenses.

As of October 4, 2015, there was $533,759 of total unrecognized compensation cost related to nonvested stock option awards under the plans. That cost is expected to be recognized over a weighted average period of 2.81 years.

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Retirement Plans (Details) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014
Defined Benefit Plan Disclosure [Line Items]
Employer contribution amount	$ 97,403	$ 68,426	$ 281,369	$ 173,709
Defined contribution plan, initial contribution
Defined Benefit Plan Disclosure [Line Items]
Employer matching contribution, percent			100.00%
Employer matching contribution, percent of employees gross pay			3.00%
Defined contribution plan, additional contribution
Defined Benefit Plan Disclosure [Line Items]
Employer matching contribution, percent			50.00%
Employer matching contribution, percent of employees gross pay			2.00%

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Earnings Per Share - Schedule of earnings per share, basic and diluted (Details) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014
Basic earnings per share calculation:
Net income	$ 1,139,091	$ 846,669	$ 4,023,728	$ 3,007,937
Preferred stock dividends	0	0	0	0
Net income attributable to common stockholders	$ 1,139,091	$ 846,669	$ 4,023,728	$ 3,007,937
Weighted average shares outstanding	9,434,123	6,739,998	7,700,771	6,739,998
Net income (loss) per share-basic (in USD per share)	$ 0.12	$ 0.13	$ 0.52	$ 0.45
Diluted earnings per share calculation:
Weighted average shares outstanding	9,434,123	6,739,998	7,700,771	6,739,998
Effect of dilutive securities:
Stock options	211,270	15,084	200,357	15,084
Warrants	16,725	11,961	58,820	11,961
Diluted weighted average shares outstanding	9,662,118	6,767,043	7,959,948	6,767,043
Net income (loss) per share-diluted (in USD per share)	$ 0.12	$ 0.13	$ 0.51	$ 0.44

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Operating Leases - Schedule of future minimum lease payments (Details)	Oct. 04, 2015 USD ($)
Leases, Operating [Abstract]
2015	$ 357,439
2016	1,301,578
2017	1,212,745
2018	1,150,515
2019	976,138
Thereafter	541,250
Total	$ 5,539,665

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Operating Leases (Tables)

9 Months Ended

Oct. 04, 2015

Leases, Operating [Abstract]

Schedule of future minimum lease payments

Future minimum lease payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are as follows at October 4, 2015:

2015	$	357,439
2016	1,301,578
2017	1,212,745
2018	1,150,515
2019	976,138
Thereafter	541,250
Total	$	5,539,665

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Equity - Common Stock (Details) - USD ($)					3 Months Ended	9 Months Ended
	Jul. 07, 2015	Dec. 18, 2013	Mar. 18, 2013	Jan. 14, 2013	Oct. 04, 2015	Oct. 04, 2015	Sep. 28, 2014	Jan. 04, 2015	Nov. 18, 2014	Dec. 29, 2013
Class of Stock [Line Items]
Common stock, shares authorized					15,000,000	15,000,000		15,000,000	15,000,000
Common stock, par value (in USD per share)					$ 0.001	$ 0.001		$ 0.001	$ 0.001
Shares Issued, Including Temporary Equity					9,576,360	9,576,360		6,739,998
Shares outstanding, including temporary equity					9,576,360	9,576,360		6,739,998
Common stock, reserved for future issuance								495,000
Redeemable Common Stock, shares issued					0	0		2,415,399
Shares issued						2,702,500
Payments of stock issuance costs		$ 344,128	$ 745,012			$ 3,439,836	$ 0
Proceeds from issuance of common stock		$ 5,455,872	$ 12,588,318
Equity and temporary equity, stock issued during period, new shares		1,740,000
Equity and temporary equity, stock issued during period, shares, price per share (in USD per share)		$ 3.33
Private Placement
Class of Stock [Line Items]
Temporary equity shares issued, price per share (in USD)				$ 0.167
Temporary equity, redemption price per share (in USD)				0.167
Temporary equity, redemption, minimum public offering (in USD per share)				$ 4
IPO
Class of Stock [Line Items]
Proceeds from issuance of common stock	$ 22,200,000
Investor
Class of Stock [Line Items]
Temporary equity, threshold for change in ownership, percentage			75.00%
Common Stock | Private Placement
Class of Stock [Line Items]
Redeemable Common Stock, shares issued				999,999
Shares issued		1,374,600	2,949,999
Shares issued, price per share (in USD)			$ 3.33
Common Stock | IPO
Class of Stock [Line Items]
Shares issued	2,702,500
Sale of Stock, Price Per Share	$ 9.50
Common Stock | Investor
Class of Stock [Line Items]
Redeemable Common Stock, shares issued		365,400	1,050,000
Temporary equity shares issued, price per share (in USD)			$ 3.33
The Plan
Class of Stock [Line Items]
Common stock, reserved for future issuance					495,000	495,000				495,000
Exercised					24,000
The 2014 Plan
Class of Stock [Line Items]
Common stock, reserved for future issuance					250,000	250,000

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Fair Value Measurements

9 Months Ended

Oct. 04, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Financial instruments consist of cash equivalents, accounts receivable, accounts payable and debt. The carrying amount of all significant financial instruments approximates fair value due to either the short maturity or the existence of variable interest rates that approximate prevailing market rates.

Accounting standards require certain other items be reported at fair value in the financial statements and provides a framework for establishing that fair value. The framework for determining fair value is based on a hierarchy that prioritizes the valuation techniques and inputs used to measure fair value.

Fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. Level 2 inputs may include quoted prices for similar items in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related item. Level 3 fair value measurements are based primarily on management’s own estimates using inputs such as pricing models, discounted cash flow methodologies or similar techniques taking into account the characteristics of the item.

In instances whereby inputs used to measure fair value fall into different levels of the fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each item.

The Company measures its interest rate swap at fair value on a recurring basis based primarily on Level 2 inputs using an income model based on disparity between variance and fixed interest rates, the scheduled balance of principal outstanding, yield curves and other information readily available in the market.

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Business Combinations (Tables)

9 Months Ended

Oct. 04, 2015

Business Combinations [Abstract]

Schedule of Business Acquisitions by Acquisition

The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed.

Accounts receivable	$	585,914
Inventory	250,472
Deferred tax assets	34,350
Other current assets	1,597
Property, plant, and equipment	417,305
Identifiable intangible assets	965,478
Accounts payable and accrued liabilities	(146,676		)
Deferred tax liabilities	(90,811		)
Total identifiable net assets	2,017,629
Goodwill	799,282
Total	$	2,816,911

The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed.

Accounts receivable	$	1,001,005
Inventory	1,115,809
Deferred tax assets	1,468
Other current assets	2,500
Property, plant, and equipment	810,001
Identifiable intangible assets	5,915,000
Accounts payable and accrued liabilities	(928,933		)
Total identifiable net assets	7,916,850
Goodwill	4,030,542
Total	$	11,947,392

Schedule of Pro Forma Information

The following pro forma supplementary data for the 14 and 39 weeks ended October 4, 2015 and 13 and 39 weeks ended September 28, 2014 gives effect to the acquisition of Great Lakes as if it had occured on December 30, 2013 (the first day of the Company’s 2014 fiscal year), and the acquisition of Chardan as if it had occurred on December 31, 2012 (the first day of the Company’s 2013 fiscal year). The pro forma supplementary data is provided for informational purposes only and should not be construed to be indicative of the Company’s results of operations had the acquisition been consummated on the date assumed and does not project the Company’s results of operations for any future date.

	Fourteen Weeks Ended October 4, 2015		Thirteen Weeks Ended September 28, 2014		Thirty-Nine Weeks Ended October 4, 2015		Thirty-Nine Weeks Ended September 28, 2014
Net sales	$	41,049,431	$	31,886,916	$	114,175,224	$	100,532,958
Net income	$	1,426,733	$	1,060,130	$	4,670,117	$	3,679,485
Net income per common share – basic	$	0.15	$	0.16	$	0.61	$	0.55
Net income per common share – diluted	$	0.15	$	0.16	$	0.59	$	0.54

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Long-term Debt - Schedule of repayment of maturities (Details) - USD ($)	Oct. 04, 2015	Jan. 04, 2015
Debt Disclosure [Abstract]
2015	$ 1,504,541
2016	2,518,989
2017	28,173,816
2018	0
2019	500,000
Total	32,697,346
Discounts	(126,690)	$ (656,789)
Total debt - Net	$ 32,570,656

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Inventory (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014	Jan. 04, 2015
Inventory [Line Items]
Inventory – net	$ 14,963,675		$ 14,963,675		$ 10,488,051
Mexico
Inventory [Line Items]
Inventory – net	1,912,474		1,912,474		1,788,902
Fair value adjustment to inventory
Inventory [Line Items]
Provisional information, adjustment, inventory			1,278,068
Unique Fabricating and PTI | Fair value adjustment to inventory
Inventory [Line Items]
Provisional information, adjustment, inventory			1,076,902
Chardan | Fair value adjustment to inventory
Inventory [Line Items]
Provisional information, adjustment, inventory			54,975
Great Lakes Foam Technologies, Inc. | Fair value adjustment to inventory
Inventory [Line Items]
Provisional information, adjustment, inventory			146,191
Inventory | Fair value adjustment to inventory
Inventory [Line Items]
Provisional information, adjustment, inventory			56,148		$ 56,148
Cost of Sales | Fair value adjustment to inventory
Inventory [Line Items]
Provisional information, adjustment, inventory	$ 90,043	$ 13,634	$ 90,043	$ 383,970

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Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-In Capital	Retained Earnings
Stockholders' Equity, beginning balance (shares) at Dec. 29, 2013	4,324,599
Stockholders' Equity, beginning balance at Dec. 29, 2013	$ 13,945,604	$ 4,325	$ 13,689,125	$ 252,154
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	3,007,937			3,007,937
Stock option expense	27,439		27,439
Reduction for accretion on redeemable stock	(848,223)			(848,223)
Stockholders' Equity, ending balance at Sep. 28, 2014	$ 16,132,757	4,325	13,716,564	2,411,868
Stockholders' Equity, ending balance (shares) at Sep. 28, 2014	4,324,599
Stockholders' Equity, beginning balance (shares) at Jan. 04, 2015	4,324,599
Stockholders' Equity, beginning balance at Jan. 04, 2015	$ 16,591,935	4,325	13,723,456	2,864,154
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	4,023,728			4,023,728
Stock option expense	160,764		160,764
Reduction for accretion on redeemable stock	$ (1,364,031)			(1,364,031)
Reclassification of redeemable common stock to common stock and additional paid-in capital, shares	2,415,399
Reclassification of redeemable common stock to common stock and additional paid-in capital	$ 7,810,007	2,415	7,807,592
Exercise of warrants and options for common stock	133,862
Exercise of warrants and options for common stock	$ 397,070	134	396,936
Issuance of common stock pursuant to an initial public offering	2,702,500
Issuance of common stock pursuant to an initial public offering	$ 25,673,750	2,703	25,671,047
Common stock initial public offering issuance costs and underwriter fees	(3,439,836)		(3,439,836)
Cash dividends paid	(1,438,938)			(1,438,938)
Stockholders' Equity, ending balance at Oct. 04, 2015	$ 48,414,449	$ 9,577	$ 44,319,959	$ 4,084,913
Stockholders' Equity, ending balance (shares) at Oct. 04, 2015	9,576,360

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Property, Plant, and Equipment

9 Months Ended

Oct. 04, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant, and Equipment

Property, plant, and equipment consists of the following:

	October 4, 2015		January 4, 2015		Depreciable Life – Years
Land	$	1,663,153	$	1,663,153
Buildings	9,641,976		5,435,026		23 – 40
Shop equipment	9,901,296		8,467,946		7 – 10
Leasehold improvements	824,869		642,762		3 – 10
Office equipment	679,290		539,098		3 – 7
Mobile equipment	142,501		105,550		3
Construction in progress	437,806		2,754,411
Total cost	23,290,891		19,607,946
Accumulated depreciation	2,644,100		1,687,873
Net property, plant, and equipment	$	20,646,791	$	17,920,073

Depreciation expense was $345,245 and $980,511 for the 14 and 39 weeks ended October 4, 2015, respectively, and $295,412 and $847,288 for the 13 and 39 weeks ended September 28, 2014, respectively.

Included in property, plant, and equipment are assets located in Mexico with a carrying amount of $681,191 and $628,570 at October 4, 2015 and January 4, 2015, respectively.

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Income Taxes - Schedule of income before income taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014
Income Tax Disclosure [Abstract]
U.S. income	$ 1,536,426	$ 1,094,883	$ 5,303,089	$ 3,749,727
Non-U.S. income	107,511	219,450	662,203	682,083
Income before income taxes	$ 1,643,937	$ 1,314,333	$ 5,965,292	$ 4,431,810

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Inventory (Tables)

9 Months Ended

Oct. 04, 2015

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consists of the following:

	October 4, 2015		January 4, 2015
Raw materials	$	8,617,589	$	6,013,045
Work in progress	735,197		499,241
Finished goods	5,610,889		3,975,765
Total inventory	$	14,963,675	$	10,488,051

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Business Combinations (Narrative) (Details) - USD ($)			1 Months Ended		3 Months Ended		9 Months Ended
	Aug. 31, 2015	Feb. 06, 2014	Nov. 17, 2015	Jun. 29, 2014	Oct. 04, 2015	Sep. 28, 2014	Oct. 04, 2015	Sep. 28, 2014
Unsecured Debt
Business Acquisition [Line Items]
Stated interest rate					6.00%		6.00%
Chardan
Business Acquisition [Line Items]
Total Consideration		$ 2,816,911
Acquisition of Chardan Corporation		2,316,911					$ 0	$ 2,316,911
Working capital adjustment				$ 116,911
Acquisition transaction costs		236,537
Operating lease, rent expense		$ 11,000
Operating lease, rent expense, term of lease		5 years
Goodwill, expected tax deductible amount		$ 866,647
Pro forma information, revenue						$ 1,242,804		2,825,696
Pro forma information, earnings						136,990		219,532
Chardan | Consolidation, Eliminations
Business Acquisition [Line Items]
Pro forma information, revenue						$ 811,707		1,826,479
Chardan | Unsecured Debt
Business Acquisition [Line Items]
Note payable incurred for Chardan acquisition		$ 500,000
Stated interest rate		6.00%
Great Lakes Foam Technologies, Inc.
Business Acquisition [Line Items]
Total Consideration	$ 12,000,000
Acquisition of Chardan Corporation	11,947,392						11,819,991	$ 0
Working capital adjustment	180,009
Acquisition transaction costs	415,849
Operating lease, rent expense	$ 7,500
Operating lease, rent expense, term of lease	5 years
Goodwill, expected tax deductible amount	$ 4,347,457
Pro forma information, revenue					$ 924,926		924,926
Pro forma information, earnings					10,784		10,784
Great Lakes Foam Technologies, Inc. | Consolidation, Eliminations
Business Acquisition [Line Items]
Pro forma information, revenue					$ 12,308		$ 12,308
Great Lakes Foam Technologies, Inc. | Subsequent Event
Business Acquisition [Line Items]
Working capital adjustment			$ 127,401

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Related Party Transactions

9 Months Ended

Oct. 04, 2015

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

A shareholder provided subordinated debt financing which is discussed further in Note 6. Interest charges were recognized in the amounts of $472,905 and $1,514,901 for the 14 and 39 weeks ended October 4, 2015, respectively, and $529,633 and $1,571,629 for the 13 and 39 weeks ended September 28, 2014, respectively, related to the subordinated debt financing. Accrued interest of $0 and $0 was due to this subordinated lender at October 4, 2015 and January 4, 2015, respectively. Effective upon the closing of the IPO as noted in Note 1, this subordinated debt amount was paid off in full with the proceeds received from the IPO.

Effective March 18, 2013, the Company is under a five year management agreement with a firm related to several shareholders. The agreement required annual management fees of $300,000 and additional fees for assistance provided with acquisitions. The Company incurred management fees of $68,750 and $218,750 for the 14 and 39 weeks ended October 4, 2015, respectively, and $75,000 and $150,000 for the 13 and 39 weeks ended September 28, 2014, respectively. During the 14 and 39 weeks ended October 4, 2015, the Company incurred fees related to the acquisition of Great Lakes of $220,000 and $220,000, respectively. During the 13 and 39 weeks ended September 28, 2014, the Company incurred fees related to the acquisition of Chardan of $110,000 and $110,000, respectively. The Company allocates these fees to the services provided based on their relative fair values. The fees paid were all allocated to and expensed as transaction costs. Effective upon completion of the IPO, the agreement was amended to reduce the annual management fee by an amount equal to the amount, if any, of annual cash retainers and equity awards received as compensation for service on the board of directors by any person who is a related person of Taglich Private Equity, LLC or Taglich Brothers, Inc.