Exhibit 99.2
CENTURY METALS & SUPPLIES, INC.
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Table of Contents |
| Page | |
| Independent Auditors' Review Report | 1 |
| Financial Statements for the Six Months Ended June 30, 2025 and 2024 | |
| Balance Sheets | 2 |
| Statements of Income | 3 |
| Statements of Stockholders' Equity | 4 |
| Statements of Cash Flows | 5 |
| Notes to Financial Statements | 6 |
INDEPENDENT AUDITORS' REVIEW REPORT
November 5, 2025
Stockholders
Century Metals & Supplies, Inc.
Miami, Florida
Results of Review of Interim Financial Information
We have reviewed the accompanying financial statements of Century Metals & Supplies, Inc. (the "Company"), which comprise the balance sheets as of June 30, 2025 and 2024, and the related statements of income, stockholders' equity, and cash flows for the six months then ended, and the related notes to the financial statements (the "interim financial information").
Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in accordance with accounting principles generally accepted in the United States of America.
Basis for Review Results of Interim Financial Information
We conducted our review in accordance with auditing standards generally accepted in the United States of America ("GAAS") applicable to reviews of interim financial information. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. A review of interim financial information is substantially less in scope than an audit conducted in accordance with GAAS, the objective of which is an expression of an opinion regarding the financial information as a whole, and accordingly, we do not express such an opinion. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our review. We believe that the results of the review procedures provide a reasonable basis for our conclusion.
Responsibilities of Management for the Interim Financial Information
Management is responsible for the preparation and fair presentation of the interim financial information in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of interim financial information that is free from material misstatement, whether due to fraud or error.
CENTURY METALS & SUPPLIES, INC.
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Balance Sheets |
(Unaudited)
| June 30 | ||||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
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Cash |
$ | 1,823,313 | $ | 1,775,807 | ||||
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Restricted cash |
3,045,263 | 2,811,200 | ||||||
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Accounts receivable, less allowance for credit losses of $196,598 ($262,706 in 2024) |
11,619,913 | 10,243,621 | ||||||
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Current portion of note receivable |
240,000 | - | ||||||
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Inventory |
35,881,780 | 33,066,371 | ||||||
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Prepaid expenses and other current assets |
863,967 | 2,261,932 | ||||||
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Total current assets |
53,474,236 | 50,158,931 | ||||||
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Net property and equipment |
1,636,345 | 1,643,414 | ||||||
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Net operating lease right-of-use assets |
7,238,141 | 7,307,225 | ||||||
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Note receivable, net of current portion |
2,160,000 | - | ||||||
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Deposits |
259,482 | 259,482 | ||||||
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Total assets |
$ | 64,768,204 | $ | 59,369,052 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
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Accounts payable |
$ | 9,579,934 | $ | 9,122,952 | ||||
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Short-term bank borrowings |
15,437,431 | 13,375,254 | ||||||
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Current portion of long-term debt |
206,922 | 263,605 | ||||||
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Current portion of operating lease obligations |
1,308,266 | 1,069,022 | ||||||
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Accrued expenses |
3,293,811 | 2,896,399 | ||||||
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Note payable to related party |
500,000 | 500,000 | ||||||
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Due to affiliate |
400,000 | 409,000 | ||||||
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Total current liabilities |
30,726,364 | 27,636,232 | ||||||
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Long-term debt, net of current portion |
324,086 | 472,314 | ||||||
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Operating lease obligations, net of current portion |
5,991,653 | 6,298,365 | ||||||
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Total liabilities |
37,042,103 | 34,406,911 | ||||||
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Stockholders' equity |
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| Class A voting common stock $.10 par value; 500 shares authorized, 80 shares issued and outstanding | 8 | 8 | ||||||
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Class B non-voting common stock $.10 par value; 4,500 shares authorized, 20 shares issued and outstanding |
2 | 2 | ||||||
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Additional paid-in capital |
990 | 990 | ||||||
| Retained earnings | 27,725,101 | 24,961,141 | ||||||
| Total stockholders' equity | 27,726,101 | 24,962,141 | ||||||
| Total liabilities and stockholders' equity | $ | 64,768,204 | $ | 59,369,052 | ||||
See accompanying notes, which are an integral part of these financial statements, and independent auditors' review report.
CENTURY METALS & SUPPLIES, INC.
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Statements of Income |
(Unaudited)
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Six Months Ended June 30 |
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2025 |
2024 |
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Net sales |
$ | 51,302,857 | $ | 52,746,759 | ||||
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Cost of sales |
41,622,832 | 43,387,432 | ||||||
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Gross profit |
9,680,025 | 9,359,327 | ||||||
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General and administrative expenses |
7,625,765 | 6,756,340 | ||||||
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Operating income |
2,054,260 | 2,602,987 | ||||||
| Other (expense) income | ||||||||
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Interest expense |
(602,250 | ) | (548,985 | ) | ||||
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Interest income |
248,136 | 15,689 | ||||||
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Other |
541,121 | 4,520 | ||||||
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Other income (expense), net |
187,007 | (528,776 | ) | |||||
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Net income |
$ | 2,241,267 | $ | 2,074,211 | ||||
See accompanying notes, which are an integral part of these financial statements, and independent auditors' review report.
CENTURY METALS & SUPPLIES, INC.
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Statements of Stockholders' Equity |
| Common Stock |
Additional Paid-In |
Retained |
Total Stockholders' |
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| Class A | Class B | Capital | Earnings | Equity | ||||||||||||||||
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Balances, January 1, 2024 |
$ | 8 | $ | 2 | $ | 990 | $ | 23,983,560 | $ | 23,984,560 | ||||||||||
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Net income |
- | - | - | 2,074,211 | 2,074,211 | |||||||||||||||
| Distributions | - | - | - | (1,096,630 | ) | (1,096,630 | ) | |||||||||||||
| Balances, June 30, 2024 (unaudited) | $ | 8 | $ | 2 | $ | 990 | $ | 24,961,141 | $ | 24,962,141 | ||||||||||
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Balances, January 1, 2025 |
$ | 8 | $ | 2 | $ | 990 | $ | 26,433,834 | $ | 26,434,834 | ||||||||||
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Net income |
- | - | - | 2,241,267 | 2,241,267 | |||||||||||||||
| Distributions | - | - | - | (950,000 | ) | (950,000 | ) | |||||||||||||
| Balances, June 30, 2025 (unaudited) | $ | 8 | $ | 2 | $ | 990 | $ | 27,725,101 | $ | 27,726,101 | ||||||||||
See accompanying notes, which are an integral part of these financial statements, and independent auditors' review report.
CENTURY METALS & SUPPLIES, INC.
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Statements of Cash Flows |
| Six Months Ended | ||||||||
| June 30 | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
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Net income |
$ | 2,241,267 | $ | 2,074,211 | ||||
| Adjustments to reconcile net income to net cash from operating activities | ||||||||
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Credit losses |
349,342 | 263,957 | ||||||
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Depreciation and amortization |
144,701 | 142,922 | ||||||
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Non-cash lease expense |
639,878 | 542,744 | ||||||
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Changes in operating assets and liabilities which provided (used) cash |
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Accounts receivable |
3,007,553 | (2,884,107 | ) | |||||
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Related party receivables |
- | 9,000 | ||||||
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Inventory |
(1,903,016 | ) | (3,863,778 | ) | ||||
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Prepaid expenses and other assets |
4,341,277 | 3,634,143 | ||||||
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Accounts payable |
(5,085,197 | ) | 1,516,467 | |||||
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Operating lease obligations |
(639,533 | ) | (532,907 | ) | ||||
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Accrued expenses |
728,659 | 374,914 | ||||||
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Net change in cash from operating activities |
3,824,931 | 1,277,566 | ||||||
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Cash flows from investing activities |
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Purchases of property and equipment |
(93,000 | ) | (17,228 | ) | ||||
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Issuance of note receivable |
(2,400,000 | ) | - | |||||
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Change in deposits |
- | 150,000 | ||||||
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Net change in cash from investing activities |
(2,493,000 | ) | 132,772 | |||||
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Cash flows from financing activities |
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Short-term bank borrowings |
14,874,286 | 22,019,832 | ||||||
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Short-term bank repayments |
(14,786,378 | ) | (20,770,460 | ) | ||||
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Repayments of long-term debt |
(199,278 | ) | (130,100 | ) | ||||
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Distributions |
(950,000 | ) | (1,096,630 | ) | ||||
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Net change in cash from financing activities |
(1,061,370 | ) | 22,642 | |||||
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Net change in cash and restricted cash |
270,561 | 1,432,980 | ||||||
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Cash and restricted cash, beginning of period |
4,598,015 | 3,154,027 | ||||||
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Cash and restricted cash, end of period |
$ | 4,868,576 | $ | 4,587,007 | ||||
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Cash and restricted cash is presented as follows on the accompanying balance sheets |
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Cash |
$ | 1,823,313 | $ | 1,775,807 | ||||
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Restricted cash |
3,045,263 | 2,811,200 | ||||||
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Total |
$ | 4,868,576 | $ | 4,587,007 | ||||
| Supplemental disclosures of cash flows information | ||||||||
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Interest paid during the period |
$ | 602,300 | $ | 549,000 | ||||
See accompanying notes, which are an integral part of these financial statements, and independent auditors' review report.
CENTURY METALS & SUPPLIES, INC.
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Notes to Financial Statements |
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1. |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Nature of Business
Century Metals & Supplies, Inc. (the "Company"), which is incorporated in the state of Florida, operates from its headquarters in Miami with a second location in Orlando. The Company services major original equipment manufacturers, operating in industries such as appliances, computers, electronics, construction, and others, located in the Southeastern United States and Puerto Rico.
Entities Under Common Control
Accounting principles generally accepted in the United States of America permit the Company to elect, when certain conditions exist, not to apply variable interest entity guidance to an entity operating under common control with the Company. Management has determined that these conditions were met by the Company and, as a result, the Company has elected not to apply the VIE guidance to entities affiliated through common control.
Concentration Risks
Sales to a major customer accounted for $5,832,190 of net sales (12%) for 2025, and $6,099,838 of net sales (11%) for 2024. Accounts receivable due from this customer amounted to $826,895 and $830,661 at June 30, 2025 and 2024, respectively. The loss of this customer could adversely affect short-term operating results.
Purchases from two major vendors accounted for $12,904,888 of cost of sales (31%) for 2025, and $17,292,899 of cost of sales (40%) for 2024. Accounts payable due to these vendors amounted to $1,723,515 and $1,803,388 at June 30, 2025 and 2024, respectively. The loss of these vendors could adversely affect short-term operating results.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Cash
Cash consists of demand deposits in banks. The Company maintains its deposits in amounts which, at times, may exceed federally insured limits, in several local financial institutions. Management does not believe the Company is exposed to any significant interest rate or other financial risk as a result of these deposits.
CENTURY METALS & SUPPLIES, INC.
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Notes to Financial Statements |
Restricted Cash
Restricted cash is maintained in accordance with a letter of credit guaranty with a financial institution.
Revenue from Contracts with Customers
The Company purchases coils of different metals from various domestic and international suppliers, processes them into finished sheets, and resells to customers. Revenue is measured based on the amount of consideration that the Company expects to receive. Management has determined that each order of product placed by an individual customer represents a separate performance obligation. Risk of loss and title typically pass at time of shipment to the customer; as such, revenue is recognized at the point in time when the products are shipped. The Company does not include sales and other taxes in the transaction price and thus does not report these amounts as revenue. In addition, the Company has certain programs which under specified conditions, enable customers to return defective products. Returns and allowance are not expected to be material.
Accounts Receivable
Accounts receivable are customer obligations due under normal trade terms generally requiring payment within 30 to 60 days from the invoice date. No collateral or other security is required to support accounts receivable, which are stated at the amounts billed and due from customers less an allowance for expected credit losses. None of the Company's contracts have a significant financing component. Management estimates an allowance for expected credit losses based on the amount it expects to collect from customers, based on the length of time the receivables have been outstanding, historical collection experience, current market conditions and forecasted economic and business environments. Balances that are still outstanding after management has used reasonable collection efforts are written off against the allowance for credit losses. The expense associated with the allowance for credit losses of $349,342 and $263,957 for the six months ended June 30, 2025 and 2024, respectively, is recognized in general and administrative expenses.
Accounts receivable were as follows at June 30:
| 2025 | 2024 | |||||||
| Accounts receivable, beginning of period | $ | 14,976,808 | $ | 7,623,471 | ||||
| Accounts receivable, end of period | $ | 11,619,913 | $ | 10,243,621 | ||||
Inventory
Inventory, which consists of raw materials and finished goods, is stated at the lower of cost, determined under the specific identification method, or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation.
CENTURY METALS & SUPPLIES, INC.
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Notes to Financial Statements |
Property and Equipment
Property and equipment is stated at cost. Major improvements and renewals are capitalized while ordinary maintenance and repairs are expensed. Management reviews these assets for impairment whenever events or changes in circumstances indicate the related carrying amount may not be recoverable. Depreciation, which includes amortization of leasehold improvements, is computed using the straight-line method over the estimated useful lives of the related assets, which range from 3 to 20 years.
Leases
The Company determines if an arrangement is a lease at inception and considers classification of leases as operating or finance.
Operating lease right-of-use ("ROU") assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of the Company's leases do not provide an implicit rate, the Company uses the risk-free rate based on the information available at the commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and initial direct costs incurred and excludes lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable rent payments are expensed as incurred. The Company's variable lease payments primarily consist of real estate, maintenance and usage charges.
The Company has elected to exclude short-term leases from the recognition requirements of Accounting Standards Codification ("ASC") 842, Leases. A lease is short-term if, at the commencement date, it has a term of less than or equal to one year. Lease expense related to short-term leases is recognized on a straight-line basis over the lease term.
The Company has also elected to combine lease and non-lease components when measuring lease liabilities for vehicle and equipment leases.
The Company has elected the practical expedient for private companies in the lease standard to use the written terms and conditions of related party arrangements between entities under common control to determine whether an arrangement contains a lease and how the lease is classified.
Management reviews these ROU assets for impairment whenever events or circumstances indicate that their carrying values may not be fully recoverable.
CENTURY METALS & SUPPLIES, INC.
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Notes to Financial Statements |
Note Receivable
The Company issued a note receivable in the amount of $2,400,000 to a third party for upgrades to a supplier facility in the Dominican Republic. The note receivable is collateralized by real estate in Florida, matures in January 2030, and requires monthly repayments of $40,000 beginning in January 2026.
Income Taxes
The stockholders have elected for the Company to be taxed as an "S" Corporation under the provisions of Internal Revenue Code Section 1362, whereby federal taxable income and certain tax credits are passed directly to the stockholders for inclusion in their personal income tax returns. Some states and localities assess income taxes at the entity level for "S" Corporations. Though federal income taxes are not provided for in these financial statements, applicable state and local income taxes are provided as a component of general and administrative expenses.
Management has analyzed the Company's income tax filing positions in the federal and state jurisdictions where it is required to file income tax returns, for all open tax years in these jurisdictions, to identify potential uncertain tax positions. The Company reports interest and penalties attributable to income taxes, to the extent they arise, as a component of operating expenses. As of June 30, 2025, there are no uncertain income tax positions taken or expected to be taken that would require recognition of a liability or disclosure in these financial statements. While the Company is subject to routine audits by taxing jurisdictions, there are currently no audits for any tax periods in progress.
Subsequent Events
In preparing these financial statements, management has evaluated, for potential recognition or disclosure, significant events or transactions that occurred during the period subsequent to the most recent balance sheet presented herein, through the date these financial statements were available to be issued.
CENTURY METALS & SUPPLIES, INC.
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Notes to Financial Statements |
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2. |
PROPERTY AND EQUIPMENT |
Net property and equipment consists of the following amounts at June 30:
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2025 |
2024 |
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Property and equipment |
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Warehouse equipment |
$ | 2,255,444 | $ | 2,272,099 | ||||
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Leasehold improvements |
929,388 | 929,388 | ||||||
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Transportation equipment |
907,485 | 749,730 | ||||||
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Furniture and fixtures |
133,685 | 133,685 | ||||||
| Information technology | 40,495 | 40,495 | ||||||
| Total | 4,266,497 | 4,125,397 | ||||||
| Less accumulated depreciation and amortization | 2,630,152 | 2,481,983 | ||||||
| Net property and equipment | $ | 1,636,345 | $ | 1,643,414 | ||||
Depreciation and amortization expense was $144,701 and $142,922 for the six months ended June 30, 2025 and 2024, respectively.
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3. |
DEBT |
Short-term Bank Borrowings
Short-term bank borrowings consist of outstanding draws on a $16,500,000 revolving line of credit (the "line") available to support working capital needs. Interest is charged at the one-month Secured Overnight Financing Rate ("SOFR") plus 2.50% (effective rate of 6.95% and 7.83% at June 30, 2025 and 2024, respectively). Borrowings are subject to a borrowing base calculation of the percentage of insured and uninsured accounts receivable as well as inventory, as defined. Borrowings are collateralized by all Company assets and the assets of an affiliate related by common control (see Note 5). The Company must maintain certain financial and other covenants including but not limited to a minimum debt service coverage ratio and leverage ratio, as defined in the agreement. The line matures in November 2025.
CENTURY METALS & SUPPLIES, INC.
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Notes to Financial Statements |
Long-term Debt
Long-term debt consists of the following obligations at June 30:
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2025 |
2024 |
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Note payable to investor; fixed interest of 6.00%; monthly principal and interest payments of $10,417; unsecured; maturing September 2025. |
$ | 31,248 | $ | 156,250 | ||||
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Note payable to bank; variable interest rate at the one-month SOFR plus 2.50% (effective rate of 6.95% and 7.83% at June 30, 2025 and 2024, respectively) adjusted monthly; principal monthly payments of $7,143; collateralized by Company assets; maturing February 2029. |
318,548 | 407,143 | ||||||
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Notes payable to a finance company; interest ranging from 2.50% to 8.79% per annum; payable in 48 to 72 monthly payments ranging from $2,531 to $3,375; collateralized by equipment; maturity dates ranging from March 2026 to July 2029. |
181,212 | 172,526 | ||||||
| Total long-term debt | 531,008 | 735,919 | ||||||
| Less current portion | 206,922 | 263,605 | ||||||
| Long-term debt, less current portion | $ | 324,086 | $ | 472,314 | ||||
Scheduled annual principal maturities of long-term debt for each of the four years succeeding June 30, 2025, are summarized as follows:
|
Year |
Amount |
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2026 |
$ | 206,922 | ||
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2027 |
91,759 | |||
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2028 |
92,226 | |||
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2029 |
140,101 | |||
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Total |
$ | 531,008 | ||
CENTURY METALS & SUPPLIES, INC.
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Notes to Financial Statements |
The borrowing agreements contain certain customary affirmative and restrictive covenants which require the Company to, among other stipulations, maintain certain insurance coverage and furnish a calculation of leverage ratio and actual debt service coverage for the prior 12-month period.
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4. |
LEASES |
The Company leases office and warehouse space in Miami, Orlando, and Tampa, as well as certain equipment. The office and warehouse in Miami is leased from an affiliated business entity related under common ownership and management control. The agreement commenced June 11, 2018 and expires May 31, 2038.
The Company leases office and warehouse space in Orlando from an unaffiliated party which began on November 1, 2022 and expires July 1, 2029. The Company also leases warehouse space in Tampa from an unaffiliated party, which began on December 1, 2024 and expires November 30, 2029.
The following table summarizes the composition of net lease cost during the six months ended June 30:
| Related | Unrelated | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating lease cost | $ | 353,873 | $ | 353,873 | $ | 364,426 | $ | 254,606 | ||||||||
| Short-term lease cost | 9,000 | 9,000 | 186,209 | 326,145 | ||||||||||||
| Total lease cost | $ | 362,873 | $ | 362,873 | $ | 550,635 | $ | 580,751 | ||||||||
As of June 30, 2025, leasehold improvements with an unamortized balance in relation to related party lease arrangements are immaterial.
The following table summarizes other information related to the Company's leases during the six months ended June 30:
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2025 |
2024 |
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Cash paid for amounts included in the measurement of lease obligations |
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Operating cash flows |
$ | 717,953 | $ | 598,341 | ||||
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Right-of-use assets obtained in exchange for new operating lease obligations |
$ | - | $ | 1,295,678 | ||||
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Weighted-average remaining lease term (in years) |
8.58 | 9.58 | ||||||
|
Weighted-average discount rate |
2.08 | % | 1.76 | % | ||||
CENTURY METALS & SUPPLIES, INC.
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Notes to Financial Statements |
The following table presents a maturity analysis summary of the Company's operating lease obligations recorded on the balance sheet as of June 30, 2025:
| Year | Related | Unrelated | Total | |||||||||
|
2026 |
$ | 712,457 | $ | 733,878 | $ | 1,446,335 | ||||||
|
2027 |
480,018 | 703,020 | 1,183,038 | |||||||||
|
2028 |
363,799 | 646,369 | 1,010,168 | |||||||||
|
2029 |
359,210 | 647,153 | 1,006,363 | |||||||||
|
2030 |
358,292 | 146,002 | 504,294 | |||||||||
| Thereafter | 2,805,102 | - | 2,805,102 | |||||||||
| Total lease payments | 5,078,878 | 2,876,422 | 7,955,300 | |||||||||
| Less discount to present value | 503,589 | 151,792 | 655,381 | |||||||||
| Total lease obligations | 4,575,289 | 2,724,630 | 7,299,919 | |||||||||
| Less current portion | 636,668 | 671,598 | 1,308,266 | |||||||||
| Long-term lease obligations | $ | 3,938,621 | $ | 2,053,032 | $ | 5,991,653 | ||||||
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5. |
RELATED PARTY TRANSACTIONS |
The Company is related to other business entities under common ownership and control. There are no explicit or contractual guarantees from the Company to any of these related parties to guarantee their debts or to fund working capital short-falls. The Company's maximum exposure to losses from these relationships cannot be quantified.
AKR Industries, Inc.
AKR Industries, Inc. ("AKR") is a corporation affiliated through common ownership. AKR guarantees the Company's revolving line of credit in the amount of $16,500,000. The Company does not guarantee any liabilities of AKR and as such, is not directly responsible to satisfy any liabilities of AKR. The Company's maximum exposure to losses from this relationship cannot be quantified. The assets of AKR consist primarily of cash, receivables, amounts due from affiliates and inventory. For the six months ended June 30, 2025 and 2024, the Company recognized sales to AKR of approximately $25,000 and $6,500, respectively.
CENTURY METALS & SUPPLIES, INC.
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Notes to Financial Statements |
Century Metals & Supplies, P.R.
Century Metals & Supplies, P. R. ("PR") is a corporation affiliated through common ownership and ultimate management control formed to conduct similar operations in Puerto Rico. The Company does not guarantee any liabilities of PR and as such, is not directly responsible to satisfy any liabilities of PR. The Company's maximum exposure to losses from this relationship cannot be quantified. The assets of PR consist primarily of cash, receivables, amounts due from affiliates and inventory. For the six months ended June 30, 2025 and 2024, the Company recognized sales to PR of approximately $2,900,000 and $2,500,000, respectively.
GJB Fund I
GJB Fund I ("GJBF") is a corporation affiliated through common ownership and ultimate management control formed to hold land and buildings for rental purposes. GJBF advanced funds in the amount of approximately $400,000 to the Company, which is reported on the balance sheets as due to affiliate. At June 30, 2025 and 2024, the advanced funds amount is unsecured, non-interest bearing, and has no fixed maturity date or formal plan of settlement.
Note Payable to Related Party
Note payable to related party individual consists of an advance during 2022 bearing interest at 7.00%. The note requires monthly interest-only payments of $2,917, is unsecured, and has no fixed maturity date or formal plan of settlement.
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6. |
PROFIT SHARING PLAN |
The Company sponsors a 401(k) plan covering all employees with at least three months of continuous service and contributes 3% of eligible participants' compensation. The Company contributed to the plan approximately $78,768 and $74,443, respectively, for the six months ended June 30, 2025 and 2024.
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7. |
SUBSEQUENT EVENT |
On August 29, 2025, Friedman Industries, Incorporated (the "Buyer") entered into a definitive agreement with the Company and related entities, to which the Buyer acquired the real estate, operations, equipment, inventory and certain assets and liabilities of the Company and related entities. Under the terms of the agreement, the Buyer acquired the assets for approximately $45,000,000 in cash at closing, along with a note issued by the Buyer with a principal amount of $3,500,000 with a five-year maturity date. The final purchase price is subject to adjustment based on final net working capital levels and an earn-out that allows the owners of the Company to receive up to $10,000,000 in additional consideration over a four-year period, based on certain performance metrics of the acquired business.
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