Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v3.5.0.2
Subsequent Events
3 Months Ended
Sep. 30, 2016
Subsequent Events [Abstract]  
Subsequent Events

Note (10) – Subsequent Events: On October 10, 2016, the Company completed its acquisition, indirectly through Western State Design, Inc., a wholly-owned subsidiary of the Company (“Western State Design”), of substantially all of the assets of Western State Design, LLC (“WSD”), a California-based distributor of commercial and industrial laundry equipment and related parts for new laundry facilities and to the replacement laundry market. In connection with the acquisition, which was completed pursuant to the Asset Purchase Agreement, dated September 7, 2016, between the Company, Western State Design, WSD and Dennis Mack and Tom Marks, the two members of WSD (collectively with WSD, the “Selling Group”), Western State Design also assumed certain of the liabilities of WSD. The Asset Purchase Agreement provided for a total purchase price for the acquisition of $28,000,000 (subject to certain working capital and other adjustments). The purchase price consisted of (i) $18,000,000 in cash (subject to certain working capital and other adjustments) (the “Cash Consideration”) and (ii) 2,044,990 shares of the Company’s Common Stock (the “Stock Consideration”). Based on working capital adjustments made at the closing of the acquisition, the Cash Consideration was increased to approximately $18,500,000. At the closing of the transaction, the Company paid a total of $18,500,000 of Cash Consideration, of which $2,800,000 was deposited in an escrow account for no less than 18 months after the date of the closing (subject to extension in certain circumstances). The Company used approximately $12,500,000 of borrowings under the 2016 Credit Facility described below and the $6,000,000 of cash paid to the Company in connection with the Private Placement Transaction described below to fund the Cash Consideration. In addition, at the closing, the Company issued to the Selling Group a total of 1,656,486 shares of the Company’s Common Stock. Under the rules of the NYSE MKT, the issuance of the remaining 388,504 shares of the Stock Consideration requires stockholder approval. Such shares are expected to be issued following stockholder approval but, in accordance with the terms of the Asset Purchase Agreement, not earlier than January 1, 2017. This transaction will be accounted for under the acquisition method of accounting in accordance with ASC Topic 805, “Business Combinations.” As the acquirer, the Company will recognize the assets acquired and liabilities assumed at fair value. The excess of consideration transferred over the net assets acquired will be allocated to intangible assets and goodwill.