STOCK PURCHASE AGREEMENT	9 Months Ended
Dec. 31, 2023
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT	NOTE 16 – STOCK PURCHASE AGREEMENT On November 22, 2023, the Company entered into a Stock Purchase Agreement, the “Purchase Agreement” with Doerfer Corporation, an Iowa corporation, or the “Seller”, pursuant to which the Seller has agreed to sell, and the Company has agreed to purchase, all of the issued and outstanding common stock of Votaw Precision Technologies, Inc., an Iowa corporation with all of its operations in Southern California and a wholly owned subsidiary of the Seller, or “Votaw” the “Acquisition”. The Company’s board of directors unanimously approved the Purchase Agreement, the Acquisition and the other transactions contemplated by the Purchase Agreement. The total consideration payable by the Company to the Seller in connection with the Acquisition is comprised of: (i) $70,000,000, less the amount of indebtedness and transaction expenses of Votaw, plus the amount of unrestricted cash of Votaw to be paid on the date of the closing of the Acquisition, or the “Closing Date”; (ii) less $200,000 if the Closing occurs on or before December 31, 2023; (iii) plus $15,000,000 to be paid pursuant to a promissory note in six payments of $2,500,000 over the three-year period following the Closing Date, subject to certain working capital adjustments; and (iv) up to $25,000,000 to be paid following the Closing Date if Votaw’s EBITDA for its fiscal year ended October 31, 2024 exceeds $11,175,000 (with the maximum amount of $25,000,000 being payable if EBITDA meets or exceeds $14,100,000). The Purchase Agreement may be terminated by, among other things, (i) written notice from the Company to the Seller delivered on or prior to the date that is 45 days after the date of the Purchase Agreement, if the Company is dissatisfied, in its sole and absolute discretion, with the results of its ongoing financial, legal or other due diligence investigation of Votaw and (ii) by the Company or the Seller if the Closing has not occurred on or prior to March 31, 2024, or the “Outside Date Termination”, subject to the party terminating having complied with the other required closing conditions. If the Seller terminates the Purchase Agreement pursuant to the Outside Date Termination, the Company must pay to the Seller a termination fee, as the Seller’s exclusive remedy, consisting of 320,000 shares of the Company’s common stock to be issued into the name of the Seller, or the “Stock Termination Fee”; provided, however, that the Stock Termination Fee will increase by 48,000 additional shares of the Company’s common stock, if the Company fails to (i) issue the Stock Termination Fee to the Seller within 30 calendar days following the Seller’s proper termination of the Purchase Agreement pursuant to the Outside Date Termination, and (ii) file a registration statement to effect the resale of such shares of the Company’s common stock included in the Stock Termination Fee within 30 calendar days following the Seller’s proper termination of the Purchase Agreement pursuant to the Outside Date Termination and/or thereafter use commercially reasonable efforts to cause such registration to become effective as soon as practicable.

STOCK PURCHASE AGREEMENT

9 Months Ended

Dec. 31, 2023

NOTE 16 – STOCK PURCHASE AGREEMENT

On November 22, 2023, the Company entered into a Stock Purchase Agreement, the “Purchase Agreement” with Doerfer Corporation, an Iowa corporation, or the “Seller”, pursuant to which the Seller has agreed to sell, and the Company has agreed to purchase, all of the issued and outstanding common stock of Votaw Precision Technologies, Inc., an Iowa corporation with all of its operations in Southern California and a wholly owned subsidiary of the Seller, or “Votaw” the “Acquisition”.

The Company’s board of directors unanimously approved the Purchase Agreement, the Acquisition and the other transactions contemplated by the Purchase Agreement.

The total consideration payable by the Company to the Seller in connection with the Acquisition is comprised of: (i) $70,000,000, less the amount of indebtedness and transaction expenses of Votaw, plus the amount of unrestricted cash of Votaw to be paid on the date of the closing of the Acquisition, or the “Closing Date”; (ii) less $200,000 if the Closing occurs on or before December 31, 2023; (iii) plus $15,000,000 to be paid pursuant to a promissory note in six payments of $2,500,000 over the three-year period following the Closing Date, subject to certain working capital adjustments; and (iv) up to $25,000,000 to be paid following the Closing Date if Votaw’s EBITDA for its fiscal year ended October 31, 2024 exceeds $11,175,000 (with the maximum amount of $25,000,000 being payable if EBITDA meets or exceeds $14,100,000).

The Purchase Agreement may be terminated by, among other things, (i) written notice from the Company to the Seller delivered on or prior to the date that is 45 days after the date of the Purchase Agreement, if the Company is dissatisfied, in its sole and absolute discretion, with the results of its ongoing financial, legal or other due diligence investigation of Votaw and (ii) by the Company or the Seller if the Closing has not occurred on or prior to March 31, 2024, or the “Outside Date Termination”, subject to the party terminating having complied with the other required closing conditions.

If the Seller terminates the Purchase Agreement pursuant to the Outside Date Termination, the Company must pay to the Seller a termination fee, as the Seller’s exclusive remedy, consisting of 320,000 shares of the Company’s common stock to be issued into the name of the Seller, or the “Stock Termination Fee”; provided, however, that the Stock Termination Fee will increase by 48,000 additional shares of the Company’s common stock, if the Company fails to (i) issue the Stock Termination Fee to the Seller within 30 calendar days following the Seller’s proper termination of the Purchase Agreement pursuant to the Outside Date Termination, and (ii) file a registration statement to effect the resale of such shares of the Company’s common stock included in the Stock Termination Fee within 30 calendar days following the Seller’s proper termination of the Purchase Agreement pursuant to the Outside Date Termination and/or thereafter use commercially reasonable efforts to cause such registration to become effective as soon as practicable.