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Subsequent Events

There are many uncertainties regarding the current COVID-

pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of our business, including how it will impact our customers, employees, suppliers, vendors, business partners and distribution channels. While the pandemic did

not

materially adversely affect the Company’s financial results and business operations in the Company’s

first

fiscal quarter ended

April 5, 2020,

we are unable to predict the impact that COVID-

will have on our financial position and operating results due to numerous uncertainties. The Company expects to continue to assess the evolving impact of the COVID-

pandemic and intends to make adjustments to its responses accordingly.

Subsequent to

April

2020,

the Company reduced production at our operations in response to COVID-

related government mandates, reduced demand conditions and other operational drivers, primarily in our Sypris Technologies segment. This resulted in temporarily suspending operations on certain production lines with corresponding reductions in headcount or work hours for our employees, primarily at our facility in Toluca, Mexico. The extent of the impact of the COVID-

outbreak on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, its impact on our customers and suppliers and the range of governmental and community reactions to the pandemic, which are uncertain and cannot be fully predicted at this time.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on

March 27, 2020

in the United States. On

April 27, 2020,

the Company received approval from the U.S. Small Business Administration (the “SBA”) to fund its request for a loan under the SBA’s Paycheck Protection Program created as part of the CARES Act. In connection with the approval, on

May 1, 2020,

the Company entered into a promissory note in favor of BMO Harris Bank National Association (“BMO”), as lender, with a principal amount of

$3,558,000

pursuant to the Paycheck Protection Program (the “PPP Note”). The PPP Note bears interest at a fixed rate of

1.0%

per annum, with the

first

six

months of principal and interest deferred. Beginning in

October 2020,

the Company expects to make

equal payments of principal and interest with the final payment due in

April 2022.

The PPP Note

may

be accelerated upon the occurrence of an event of default.

The PPP Note is unsecured and guaranteed by the SBA. The Company

may

apply for forgiveness of the PPP Note, with the amount which

may

be forgiven equal to the sum of payroll costs, covered rent and mortgage obligations, and covered utility payments incurred by the Company during the

eight

-week period beginning upon receipt of PPP Note funds, subject to limitations and calculated in accordance with the terms of the CARES Act. Any forgiveness of the PPP Note shall be subject to approval of the SBA and will require the Company and BMO to apply to the SBA for such treatment in the future. We intend to comply with the necessary requirements to seek forgiveness of all or a portion of the PPP Note, but

assurance can be provided that we will obtain forgiveness of the PPP Note in whole or in part.

April 13, 2020,

the Company completed the sale of the Broadway Plant real estate for

$1,700,000

and recognized a gain of

$807,000.