NOTE

– Acquisition of Businesses:

CID Resources

May 2, 2018,

the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with CID Resources, Inc., a Delaware corporation (“CID”), CID Resources Holdings LLC, a Delaware limited liability company (the “Seller”), and certain of the equityholders of the Seller (such signatories, the “Equityholders”). Pursuant to the Purchase Agreement, the Company acquired all of the issued and outstanding common stock and Series A preferred stock of CID effective as of

May 2, 2018.

CID, headquartered in Coppell, Texas, manufactures medical uniforms, lab coats, and layers, and sells its products to specialty uniform retailers, ecommerce medical uniform retailers, and other retailers.

The purchase price in the acquisition consists of the following, subject to adjustment in accordance with the terms of the Purchase Agreement: (a) approximately

$84.4

million in cash, subject to adjustment for cash on hand, indebtedness, unpaid Seller expenses and working capital (excluding cash), in each case as of the closing date, and (b) the issuance of

150,094

shares of the Company’s common stock to an Equityholder (the “Buyer Shares”). Any working capital adjustment will be based on the difference between working capital as of the closing date and a target amount of approximately

$39.5

million.

Fair Value of Consideration Transferred

A summary of the purchase price is as follows (in thousands):

Cash consideration at closing	$	84,430

Superior common stock issued		3,763

Cash and working capital adjustment		2,496

Total Consideration	$	90,689

Assets Acquired and Liabilities Assumed

The total purchase price was allocated to the tangible and intangible assets and liabilities of CID based on their estimated fair values as of

May 2, 2018.

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was allocated to goodwill.

The following table presents the allocation of the total fair value of consideration transferred, as shown above, to the acquired tangible and intangible assets and liabilities of CID based on their estimated fair values as of the effective date of the transaction.

The assets and liabilities of CID shown below are based on our preliminary estimates of their acquisition date fair values. Our final fair value determination

may

be significantly different than those shown below.

The following is our preliminary assignment of the aggregate consideration (in thousands):

Cash	$	1,329

Accounts receivable		9,656

Prepaid expenses and other current assets		1,262

Inventories		30,691

Property, plant and equipment		1,134

Contract assets		2,535

Identifiable intangible assets		39,087

Goodwill		19,414

Total assets	$	105,108

Accounts payable		4,472

Deferred tax liability		8,999

Other current liabilities		948

Total liabilities	$	14,419

The Company recorded

$39.1

million in identifiable intangibles at fair value, consisting of

$24.8

million in acquired customer relationships,

$0.8

million in non-compete agreements and

$13.5

million for the brand name.

Goodwill was calculated as the difference between the fair value of the consideration and the values assigned to the assets acquired and liabilities assumed. This goodwill will

not

be deductible for tax purposes.

The intangible assets associated with the customer relationships are being amortized for

fifteen

years beginning on

May 2, 2018

and the non-compete agreement is being amortized for

five

years. The trade name is considered an indefinite-life asset and as such is

not

being amortized.

The Company recognized amortization expense on these acquired intangible assets of

$0.3

million for the

three

-month period ended

June 30, 2018.

On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the

three

months ended

June 30, 2018

net sales would have increased approximately

$5.1

million. Net income would have increased

$1.3

million in

2018,

$.08

per share.

On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the

six

months ended

June 30, 2018

net sales would have increased approximately

$22.3

million. Net income would have increased

$2.6

million in

2018,

$.17

per share.

On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the

three

months ended

June 30, 2017

net sales would have increased approximately

$14.1

million. Net income would have increased

$0.3

million in

2017,

$0.02

per share.

On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the

six

months ended

June 30, 2017

net sales would have increased approximately

$30.8

million. Net income would have decreased

$0.1

million in

2017,

$0.01

per share.

BAMKO

March 8, 2016,

the Company closed on the acquisition of substantially all of the assets of BAMKO, Inc. The transaction had an effective date of

March 1, 2016.

The purchase price for the asset acquisition consisted of approximately

$15.2

million in cash, net of cash acquired, the issuance of approximately

324,000

restricted shares of Superior’s common stock that vests over a

five

-year period, potential future payment of approximately

$5.5

million in additional contingent consideration through

2021,

and the assumption of certain liabilities of BAMKO, Inc. The transaction also included the acquisition of BAMKO, Inc.’s subsidiaries in Hong Kong, China, Brazil and England as well as an affiliate in India.

Fair Value of Consideration Transferred

A summary of the purchase price is as follows (in thousands):

Cash consideration at closing, net of cash acquired	$	15,161

Restricted shares of Superior common stock issued		4,558

Contingent consideration		5,205

Total Consideration	$	24,924

Assets Acquired and Liabilities Assumed

The total purchase price was allocated to the acquired tangible and intangible assets and assumed liabilities of BAMKO, Inc. based on their estimated fair values as of

March 1, 2016.

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was allocated to goodwill.

The following table presents the allocation of the total fair value of consideration transferred, as shown above, to the acquired tangible and intangible assets and assumed liabilities of BAMKO, Inc. based on their fair values as of the effective date of the transaction.

The following is our assignment of the aggregate consideration (in thousands):

Accounts receivable	$	4,885

Prepaid expenses and other current assets		3,200

Inventories		236

Property, plant and equipment		199

Other assets		100

Identifiable intangible assets		11,360

Goodwill		6,994

Total assets	$	26,974

Accounts payable		1,314

Other current liabilities		736

Total liabilities	$	2,050

The Company recorded

$11.4

million in identifiable intangibles at fair value, consisting of

$2.1

million in acquired customer relationships,

$0.4

million in non-compete agreements from the former owners of BAMKO, Inc., and

$8.9

million for the acquired trade name.

The estimated fair value for acquisition-related contingent consideration payable was

$3.6

million as of

June 30, 2018.

The current portion of

$0.8

million is expected to be paid in the

second

quarter of

2019.

The Company will continue to evaluate this liability for remeasurement at the end of each reporting period and any change will be recorded in the Company’s consolidated statement of comprehensive income. The carrying amount of the liability

may

fluctuate significantly and actual amounts paid

may

be materially different from the estimated value of the liability.

Goodwill was calculated as the difference between the fair value of the consideration and the values assigned to the assets acquired and liabilities assumed.

The intangible assets associated with the customer relationships are being amortized for

seven

years beginning on

March 1, 2016

and the non-compete agreement is being amortized for

five

years and

ten

months. The trade name is considered an indefinite-life asset and as such is

not

being amortized.

The Company recognized amortization expense on these acquired intangible assets of

$0.1

million for the each of

three

-month periods ended

June 30, 2018

and

2017

and

$0.2

million for each of the

six

-month periods ended

June 30, 2018

and

2017.

Public Identity

August 21, 2017,

BAMKO acquired substantially all of the assets and assumed certain liabilities of PublicIdentity, Inc. (“Public Identity”) of Los Angeles, CA. Public Identity is a promotional products and branded merchandise agency that provides innovative, high quality merchandise and promotional products to corporate clients and universities across the country.

The purchase price for the acquisition consisted of

$0.8

million in cash, the issuance of approximately

54,000

restricted shares of Superior’s common stock and future payments of approximately

$0.4

million in additional consideration through

2020.

The majority of the shares issued vest over a

three

-year period. The preliminary estimated fair value of the consideration transferred is approximately

$2.3

million. Based upon our estimates of their acquisition date fair values, we have assigned approximately

$1.7

million to identifiable intangible assets and approximately

$0.6

million to goodwill.

Tangerine Promotions

November 30, 2017,

BAMKO closed on the acquisition of substantially all of the assets of Tangerine Promotions, Ltd and Tangerine Promotions West, Inc (collectively “Tangerine”). The transaction had an effective date of

December 1, 2017.

Tangerine is a promotional products and branded merchandise agency that serves many well-known brands. The company is

one

of the leading providers of Point-of-Purchase (POP) and Point-of-Sale (POS) merchandise in the country. The purchase price for the asset acquisition consisted of approximately

$7.2

million in cash, subject to adjustment, the issuance of approximately

83,000

restricted shares of Superior’s common stock that vests over a

four

-year period, the potential future payments of approximately

$5.5

million in additional contingent consideration through

2021,

and the assumption of certain liabilities.

Fair Value of Consideration Transferred

A Summary of the purchase price is as follows (in thousands):

Cash consideration at closing	$	7,222

Restricted shares of Superior common stock issued		1,657

Contingent consideration		3,209

Total Consideration	$	12,088

Assets Acquired and Liabilities Assumed

The total purchase price was allocated to the acquired tangible and intangible assets and assumed liabilities of Tangerine based on their estimated fair values as of

December 1, 2017.

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was allocated to goodwill.

The following table presents the allocation of the total fair value of consideration transferred, as shown above, to the acquired tangible and intangible assets and assumed liabilities of Tangerine based on their estimated fair values as of the effective date of the transaction.

The assets and liabilities of Tangerine shown below are based on our preliminary estimates of their acquisition date fair values. Our final fair value determinations

may

be significantly different than those shown below.

The following is our preliminary assignment of the aggregate consideration (in thousands):

Accounts receivable	$	5,051

Prepaid expenses and other current assets		969

Property, plant and equipment		131

Identifiable intangible assets		6,495

Goodwill		4,169

Total assets	$	16,815

Accounts payables		3,374

Other current liabilities		1,353

Total liabilities	$	4,727

The Company recorded

$6.5

million in identifiable intangibles at fair value, consisting of

$3.1

million in acquired customer relationships,

$0.2

million in non-compete agreements from the former owners of Tangerine, and

$3.2

million for the acquired trade name.

The estimated fair value for acquisition-related contingent consideration payable is

$2.9

million as of

June 30, 2018.

The current portion of

$0.6

million is expected to be paid in the

second

quarter of

2019.

may

fluctuate significantly and actual amounts paid

may

be materially different from the estimated value of the liability.

Goodwill was calculated as the difference between the fair value of the consideration and the values assigned to the assets acquired and liabilities assumed.

The intangible assets associated with the customer relationships will be amortized for

seven

years beginning on

December 1, 2017

and the non-compete agreement will be amortized for

seven

years. The trade name is considered an indefinite-life asset and as such will

not

be amortized.

The Company recognized amortization expense on these acquired intangible assets of

$0.1

million for the

three

-month period ended

June 30, 2018,

and

$0.3

million for the

six

-month period ended

June 30, 2018.

On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the

three

months ended

June 30, 2017

net sales would have increased approximately

$11.3

million. Net income would have increased

$0.3

million in

2017,

$.02

per share.

On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the

six

months ended

June 30, 2017

net sales would have increased approximately

$19.1

million. Net income would have increased

$0.4

million in

2017,

$.03

per share.