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Sale of Property

9 Months Ended

Sep. 30, 2014

Note 9 – Sale of Property

On April 7, 2014, the Company sold its Fremont, NC plant for $850,000. Under the terms of the sale agreement, the Company is responsible to remediate any environmental contamination on the property. The Company hired an independent environmental consulting firm to conduct environmental studies in order to identify the extent of the environmental contamination on the property and to develop a remediation plan. As a result of those studies and the estimates prepared by the independent environmental consulting firm, and in conjunction with the sale of the property, the Company recorded a liability of $300,000 in the second quarter of 2014, related to the remediation of the property. The accrual includes the costs of remedial activities and post-remediation operating and maintenance.

Remediation work on the project began in the third quarter of 2014 and is expected to be completed in the first half of 2015. In addition to the remediation work, the Company, with the assistance of its independent environmental consulting firm, must continue to monitor contaminant levels on the property to ensure they comply with set governmental standards. The Company expects that the monitoring period will last a period of five years and be complete by the end of 2020.

The gain on the sale is calculated as follows:

(in thousands)

Sales Price		$	850

Less:
Transaction costs			75
Land			140
Building and Equipment (gross book value)	1,715
Building and Equipment - accum. Depreciation	1,580
Building and Equipment (net book value)			135
Environmental Remediation Liability			300

Gain on Sale		$	200

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

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