2 .	Acquisition of O Olive

March 1, 2017,

the Company

purchased substantially all of the assets of O Olive for

$2.5

million in cash plus contingent consideration of up to

$7.5

million over the next

three

years based upon O Olive achieving certain earnings before interest, taxes, depreciation and amortization (“EBITDA”) targets. All accounting for this acquisition is final.

The potential earn out payment up to

$7.5

million is based on O Olive

’s cumulative EBITDA over the Company’s fiscal years

2018

through

2020.

At the end of each fiscal year

, beginning in fiscal year

2018,

the former owners of O Olive will earn the equivalent of the EBITDA achieved by O Olive for that fiscal year up to

$4.6

million over the

three

year period. The former owners can also earn an additional

$2.9

million on a dollar for dollar basis for exceeding

$6.0

million of cumulative EBITDA over the

three

year period. During the

fourth

quarter of fiscal year

2017,

the Company performed, with the assistance of a

third

party appraiser, an analysis of O Olive’s projected EBITDA over the next

three

years. Based on this analysis the Company has recorded a contingent consideration liability of

$5.9

million as of both

August 27, 2017

and

May 28, 2017,

representing the present value of the expected earn out payments. For this analysis, the Company assumed that the maximum earn out of

$7.5

million would be paid over the

three

year period with over half being earned in fiscal year

2020.

e operating results of O Olive are included in the Company’s financial statements beginning

March 1, 2017

, in the Other segment.

Intangible Assets

The Com

pany identified

two

intangible assets in connection with the O Olive acquisition: trade names and trademarks valued at

$1.6

million, which are considered to be indefinite life assets and therefore, will

not

be amortized; and customer relationoships valued at

$700,000

with an

eleven

year useful life. The Company recorded

$16,000

of amortization expense from the amortization of the customer relationships intangible during the

three

months ended

August 27, 2017.

The trade name/trademark intangible asset was valued using the relief from royalty valuation method and the customer relationship intangible asset was valued using the excess earnings method.