BUSINESS ACQUISITIONS

3 Months Ended

Mar. 31, 2016

ACQUISITIONS

BUSINESS ACQUISITION

NOTE 6.  ACQUISITIONS

On July 1, 2015, we completed the acquisition of substantially all of the assets of Devicix, LLC upon the terms and conditions contained in an Asset Purchase Agreement entered into on June 17, 2015.  The asset purchase agreement includes earnout consideration payable within 90 days of the completion of each of the first four 12-month periods after July 1, 2015.  The earnout will be equal to 15% of eligible engineering revenue over a $6,000,000 threshold and 3% of eligibleproduction revenue generated from Devicix customers.  The maximum dollar amount of earnout payments under the Asset Purchase Agreement is $2,500,000.  We estimated the fair value of the contingentconsideration to be $851,000 using a probability weighted discounted cash flow model.  This fair value measurement is based on significant inputs not observable in the market and thus represents a level 3 measurement as defined in ASC 820.

The table below reflects our unaudited pro forma combined results of operations as if the acquisition had taken place as of January 1, 2015:

	Pro Forma
	Three Months Ended
	March 31, 2015
	(unaudited)
Net Sales	$	27,648,986
Income (Loss) from Operations	$	(153,871	)
Net Income (Loss)	$	(146,096	)
Basic & Diluted
Income (Loss) per Common Share	$	(0.05	)

The pro forma unaudited results do not purport to be indicative of the results which would have been obtained had the acquisition been completed as of the beginning of the earliest period presented.  In addition they do not include any benefits that may result from the acquisition due to synergies that may be derived from the elimination of any duplicative costs.

Pro forma results presented above reflect: (1) amortization adjustments relating to fair value estimates of intangible assets and (2) incremental interest expense on assumed Pro forma adjustments described above have been tax effected using the effective rate during the respective periods.