Recent Acquisition
On May 19, 2010, we acquired all of the assets, exclusive of cash, and assumed certain operating liabilities, primarily accounts payable and accrued expenses, of the Copper Products Division of Porta Systems Corp. (the "Copper Products Division" or "CPD") for cash of $8,150,000, subject to potential purchase price adjustments, as defined in the Asset Purchase Agreement. The Copper Products Division is comprised of two wholly owned subsidiaries, one in the United Kingdom and the other in Mexico, as well as domestic assets and liabilities exclusively related to copper telecommunications products.
Concurrent with this acquisition, we sold the acquired Mexican subsidiary, exclusive of customer contracts and certain machinery and equipment which we retained, to our principal contract manufacturer, which is now operating this manufacturing facility. In consideration for this sale, we received $1,000,000 from the contract manufacturer, subject to purchase price adjustments, as well as an option to reacquire up to approximately 9% of a newly formed entity that now owns the Mexican subsidiary, for a total exercise price of $100,000. We believe that the value of this option, which expires on May 18, 2011, is not material and we did not allocate a portion of the net Copper Products Division purchase price to it.
We paid the net purchase price of $7,150,000 predominately from the proceeds of the redemption of our $7,000,000 certificate of deposit.
Additionally, we sold to the contract manufacturer certain raw material and component inventories, which were acquired as part of the Copper Products Division transaction, for approximately $1,230,000, subject to subsequent finalization of valuation, which will be paid as these materials are used in production.
Our financial statements for the three and nine months ended September 30, 2010 includes, and the following discussion and analysis of operations reflects, the activity of the Copper Products Division since May 20, 2010.
This company is about to explode,and or get taken over for $6.00 a share.
I would investigate the bullish signals attached to this company.
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AI
