BUSINESS ACQUISITIONS

12 Months Ended

Jan. 03, 2015

BUSINESS ACQUISITIONS [Abstract]

BUSINESS ACQUISITIONS

3. BusinessAcquisitions

Effective December 15, 2014 the Company acquired certain assets of Argo Transdata Corporation (“Argo”) including accounts receivable, inventories, furniture, fixtures and equipment, intellectual property rights and rights existing under all sales and purchase agreements.  Argo is a contract manufacturer of printed circuit board assemblies and has the ability to manufacture surface mount (SMT), through hole and wire bond assemblies or any combination of the three technologies.  Its products are sold to numerous OEM’s in industries such as measurement systems, industrial controls, medical and military.  The Argo acquisition further diversified our markets and provides a source for printed circuit boards which are used in several of our current products.  Argo is included in the Security Products segment of the Company from the date of the acquisition.  The cost of the acquisition of Argo was approximately $5,034,000, inclusive of transaction costs, plus a contingent earn-out of $282,914 based on revenue levels in each of the first two fiscal years following the closing and the assumption of $63,000 in current liabilities.

The above acquisition was accounted for under ASC 805.  The acquired business is included in the consolidated operating results of the Company from the date of acquisition.  The excess of the cost of Argo over the fair market value of the net assets acquired of $1,225,226 has been recorded as goodwill.

In connection with the above acquisition, the Company recorded the following intangible assets:

Asset Class/Description	Amount	Weighted-average Amortization Period in Years
Patents, technology, and licenses
Customer relationships	$    449,706	5.0
Intellectual property	307,370	5.0
Non-compete agreements	407,000	5.0
	$  1,164,076	5.0

There is no anticipated residual value relating to these intangible assets.

Neither the actual results nor the pro forma effects of the acquisition of Argo are material to the Company's financial statements.