Note B – Acquisition

On June 1, 2026, we completed the acquisition of Sinecera LLC (doing business as Crown Precision) and Sungear LLC ,  both of which manufacture and supply aerospace and defense components within the United States.  Sinecera LLC  and Sungear LLC became wholly-owned consolidated subsidiaries of Eastern Precision Holdings, Inc., a newly-formed wholly owned direct subsidiary of the Company. The purchase price of the acquired net assets was $7,850,000, of which $7,065,000 was paid at closing and $785,000 was financed through a note due on September 27, 2027 The aggregate fair value of the identifiable net assets acquired exceeded the fair value of the consideration transferred which resulted in a bargain purchase. Before recording this gain, we reassessed whether we had correctly identified all of the assets acquired and all of the liabilities assumed and recognized any additional assets or liabilities that were identified in that review.  The resulting gain of $6.5 million was recognized as a "bargain purchase gain" in the consolidated statement of operations for the quarter ended July 4, 2026. This bargain purchase gain arose primarily due to the seller’s need for immediate liquidity which provided the Company with an opportunity to enter the aerospace and defense market for engineered components at a favorable purchase price. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date: