Note 2 – Businesses Sold

In the first quarter of 2014, the Company sold its lead paint detection and medical instruments businesses which comprised substantially all operating assets of its Instruments segment.

On November 7, 2013, the Company sold its Lead Paint detector business to Protec Instrument Corporation (“Protec”), a wholly owned subsidiary of Laboratoires Protec S.A., a French corporation and former European distributor of the Company’s lead paint detector products. The sales price totaled approximately $1.2 million, including the assumption of certain liabilities by Protec. The transaction also resulted in payment to the Company of approximately $0.5 million in satisfaction of outstanding accounts receivable. Concurrently with the sale, the Company and Protec entered into a transition services agreement pursuant to which the Company will provide certain transitional services to Protec for up to five months after closing. The Company used $1.175 million of the proceeds from the sale to reduce its indebtedness to Santander Bank, N.A.

On December 23, 2013, the Company sold its Gamma Medical Probe business to Dilon Technologies, Inc., a Delaware corporation (“Dilon”), for $3.5 million, the assumption of certain liabilities of the Company, and a possible contingent payment. The Agreement also provided for $250,000 of the proceeds to be deposited in escrow for a year, which amount is included in accounts receivable in the Consolidated Balance Sheet. The Asset Purchase Agreement (“Agreement”) contains customary representations, warranties, covenants and indemnification provisions. Concurrently with the sale, the Company and Dilon entered into a transition services agreement pursuant to which the Company will provide certain transitional services to Dilon for up to five months after closing. The Company used $2.75 million of the proceeds from the sale to reduce its indebtedness to Santander Bank, N.A.

In connection with the sales of the businesses discussed above, the Company recorded a gain of $1.2 million which is included in Income from Operations in the three months ended December 31, 2013. The businesses sold constituted substantially all of Instruments segment but did not constitute a component of the business, and therefore did not qualify to be reported as discontinued operations. The assets held for sale at September 30, 2013 included fixed assets, inventory, and intangible customer assets totaling $2.9 million offset by customer deposits of approximately $100,000.