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<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Balance
at </b><br />
<b>December 31, 2014</b></font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Estimated
Costs</b></font></p></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Payments</b></font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Balance
at </b><br />
<b> June 30, 2015</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 20%; text-align: center; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Fremont, NC</font></td><td style="width: 2%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 2%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="width: 15%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">260</font></td><td style="width: 1%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 2%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="width: 15%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td><td style="width: 1%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 2%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="width: 15%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(14</font></td><td style="width: 1%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td><td style="width: 2%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 2%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="width: 15%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">246</font></td><td style="width: 1%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Bridgeport, CT</font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">6</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(6</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: center; padding-bottom: 2.5pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Total</font></td><td style="padding-bottom: 2.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">266</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 2.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 2.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(20</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 2.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">246</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
2000000
29000
35000
15000
19000
46000
47000
23000
29000
5000
5000
2000
2000
57000
64000
28000
18000
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"><b>Note 5— Segment Information</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">The Company reports financial information based on the organizational
structure used by management for making operating and investment decisions and for assessing performance. The Company’s reportable
business segments consist of: (1) United States; (2) Canada and (3) Europe. As described below, the activities of the Company’s
Asian operations are closely linked to those of the U.S. operations; accordingly, management reviews the financial results of both
on a consolidated basis, and the results of the Asian operations have been aggregated with the results of the United States operations
to form one reportable segment called the “United States segment” or “U.S. segment”. Each reportable segment
derives its revenue from the sales of cutting devices, measuring instruments and first aid products for school, office, home, hardware,
sporting and industrial markets.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">Domestic sales orders are filled from the Company’s distribution
center in North Carolina. The Company is responsible for the costs of shipping, insurance, customs clearance, duties, storage and
distribution related to such products. Orders filled from the Company’s inventory are generally for less than container-sized
lots.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">Direct import sales are products sold by the Company’s Asian
subsidiary, directly to major U.S. retailers, who take ownership of the products in Asia. These sales are completed by delivering
product to the customers’ common carriers at shipping points in Asia. Direct import sales are made in larger quantities than
domestic sales, typically full containers. Direct import sales represented approximately 27% and 20% of the Company’s total
net sales for the three and six months ended June 30, 2015 compared to 26% and 20% for the comparable periods in 2014.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">The chief operating decision maker evaluates the performance of
each operating segment based on segment revenues and operating income. Segment amounts are presented after converting to U.S. dollars
and consolidating eliminations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><font style="font-size: 8pt">Financial
data by segment:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><font style="font-size: 8pt">(in
thousands)</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three months ended June 30,</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</td></tr>
<tr style="vertical-align: bottom">
<td>Sales to external customers:</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 44%; text-align: left; padding-left: 10pt">United States</td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">29,649</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">27,870</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">49,782</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">43,974</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt">Canada</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,813</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,673</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,054</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,184</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 10pt">Europe</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,492</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,853</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,955</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">3,390</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; padding-left: 10pt">Consolidated</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">33,954</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">33,396</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">56,791</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">52,548</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating income (loss):</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 10pt">United States</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,552</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,239</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">4,522</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,916</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt">Canada</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">282</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">527</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">175</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">559</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 10pt">Europe</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">41</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(28</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(112</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; padding-left: 10pt">Consolidated</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">3,875</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">3,738</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">4,701</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">4,363</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 10pt">Interest expense, net</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">141</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">106</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">271</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">188</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Other (income) expense , net</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(20</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(3</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">56</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">16</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 2.5pt; padding-left: 10pt">Consolidated income before taxes</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,754</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,635</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,374</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,159</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td>Assets by segment:</td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td></tr>
<tr style="vertical-align: bottom">
<td>(in thousands)</td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center">June 30,</td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center">December 31,</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 44%; text-align: left; padding-left: 10pt">United States</td><td style="width: 30%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">79,605</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">70,526</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt">Canada</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,550</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,363</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 10pt">Europe</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,266</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,419</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; padding-left: 10pt">Consolidated</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">89,421</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">79,308</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><font style="font-size: 8pt">Financial
data by segment:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><font style="font-size: 8pt">(in
thousands)</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three months ended June 30,</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</td></tr>
<tr style="vertical-align: bottom">
<td>Sales to external customers:</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 44%; text-align: left; padding-left: 10pt">United States</td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">29,649</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">27,870</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">49,782</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">43,974</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt">Canada</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,813</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,673</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,054</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,184</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 10pt">Europe</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,492</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,853</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,955</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">3,390</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; padding-left: 10pt">Consolidated</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">33,954</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">33,396</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">56,791</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">52,548</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating income (loss):</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 10pt">United States</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,552</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,239</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">4,522</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,916</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt">Canada</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">282</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">527</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">175</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">559</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 10pt">Europe</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">41</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(28</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(112</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; padding-left: 10pt">Consolidated</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">3,875</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">3,738</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">4,701</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">4,363</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 10pt">Interest expense, net</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">141</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">106</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">271</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">188</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Other (income) expense , net</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(20</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(3</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">56</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">16</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 2.5pt; padding-left: 10pt">Consolidated income before taxes</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,754</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,635</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,374</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,159</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><i> </i></p>
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10-Q
2015-06-30
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--12-31
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<p style="font: bold 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt">Note 1 — Basis of Presentation</p>
<p style="font: bold 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">In the opinion of
management, the accompanying condensed consolidated financial statements include all adjustments necessary to present fairly the
financial position, results of operations and cash flows of Acme United Corporation (the “Company”). These adjustments
are of a normal, recurring nature. However, the financial statements do not include all of the disclosures normally required by
accounting principles generally accepted in the United States of America or those normally made in the Company's Annual Report
on Form 10-K. Please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2014 for such disclosures.
The condensed consolidated balance sheet as of December 31, 2014 was derived from the audited consolidated balance sheet as of
that date. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full
year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with Management’s Discussion
and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto, included in the Company’s
2014 Annual Report on Form 10-K.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">The Company has
evaluated events and transactions subsequent to June 30, 2015 and through the date these condensed consolidated financial statements
were included in this Form 10-Q and filed with the SEC.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">As part of the process
of preparing our financial statements on a quarterly basis, the Company estimates its income tax expense. This process involves the
estimation of the Company’s current tax exposure based on expected annual results of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: bold 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt">Note 2 — Contingencies</p>
<p style="font: bold 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">The Company is involved from time to time
in disputes and other litigation in the ordinary course of business and may encounter other contingencies, which may include environmental
and other matters. There are no pending material legal proceedings to which the registrant is a party, or, to the actual knowledge
of the Company, contemplated by any governmental authority.</p>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">In December 2008, the Company sold property it owned in Bridgeport,
Connecticut to B&E Juices, Inc. for $2.5 million, of which $2.0 million was secured by a mortgage on the property. The property
consisted of approximately four acres of land and 48,000 sq. feet of warehouse space. The property was the site of the Company’s
original scissor factory which opened in 1887 and was closed in 1996.</p>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">Under the terms of the sale agreement, and as required by the Connecticut
Transfer Act, the Company was required to remediate any environmental contamination on the property. During 2008, the Company hired
an independent environmental consulting firm to conduct environmental studies in order to identify the extent of the environmental
contamination on the property and to develop a remediation plan. As a result of those studies and the estimates prepared by the
independent environmental consulting firm, the Company recorded an undiscounted liability of approximately $1.8 million related
to the remediation of the property. This accrual included the costs of required investigation, remedial activities, and post-remediation
operating and maintenance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">Remediation work on the project began in the third quarter of 2009
and was completed during the third quarter of 2012. In addition to the completed remediation work, the Company, with the assistance
of its independent environmental consulting firm, was required to monitor contaminant levels on the property to ensure they comply
with applicable governmental standards. During the first quarter of 2015, the Company received notice from the Connecticut Department
of Energy & Environmental Protection that it had accepted and approved the Company’s filing of its Form III Verification
Report. As a result, the Company’s remediation obligations have been satisfied.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">On April 7, 2014, the Company sold its Fremont,
NC distribution facility for $850,000 in cash. The facility originally served as a manufacturing site for the Company’s scissors
and rulers. Under the terms of the sale agreement, the Company is responsible to remediate any environmental contamination on the
property. The Company hired an independent environmental consulting firm to conduct environmental studies in order to identify
the extent of the environmental contamination on the property and to develop a remediation plan. As a result of those studies and
the estimates prepared by the independent environmental consulting firm, and in conjunction with the sale of the property, the
Company recorded a liability of $300,000 in the second quarter of 2014, related to the remediation of the property. The accrual
included the total of then estimated costs of remedial activities and post-remediation monitoring costs.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">Remediation work on the project began in the
third quarter of 2014 and is expected to be completed in 2015. In addition to the remediation work, the Company, with the assistance
of its independent environmental consulting firm, must continue to monitor contaminant levels on the property to ensure they comply
with applicable North Carolina laws and regulations. The Company expects that the monitoring period will last a period of five
years after the completion of the remediation and be completed by the end of 2020.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-indent: 0.5in"> </p>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">The change in the accrual for environmental
remediation, included in other accrued liabilities and other liabilities on the condensed consolidated balance sheets for the six
months ended June 30, 2015 follows (amounts in thousands):</p>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Balance
at </b><br />
<b>December 31, 2014</b></font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Estimated
Costs</b></font></p></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Payments</b></font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Balance
at </b><br />
<b> June 30, 2015</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 20%; text-align: center; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Fremont, NC</font></td><td style="width: 2%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 2%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="width: 15%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">260</font></td><td style="width: 1%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 2%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="width: 15%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td><td style="width: 1%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 2%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="width: 15%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(14</font></td><td style="width: 1%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td><td style="width: 2%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 2%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="width: 15%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">246</font></td><td style="width: 1%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Bridgeport, CT</font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">6</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(6</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: center; padding-bottom: 2.5pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Total</font></td><td style="padding-bottom: 2.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">266</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 2.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 2.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(20</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 2.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">246</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"><b>Note
3 —</b> <b>Pension</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"><b> </b></p>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">Components of net periodic benefit cost
are as follows (in thousands):</p>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended June 30,</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Six Months Ended June 30,</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Components of net periodic benefit cost:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 44%; text-align: left">Interest cost</td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">15</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">19</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">29</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">35</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Service cost</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Expected return on plan assets</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(23</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(29</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(46</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(47</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Amortization of prior service costs</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt">Amortization of actuarial loss</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">28</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">23</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">56</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">58</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">28</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">18</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">57</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">64</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">The Company’s funding policy with
respect to its qualified plan is to contribute at least the minimum amount required by applicable laws and regulations. As of June
30, 2015 the Company had contributed approximately $30,000 to the plan.</p>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"><b> </b></p>
<p style="font: bold 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt">Note 4 —Debt and Shareholders’ Equity<br />
<br />
</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">On April 25, 2013, the Company amended its revolving loan agreement
with HSBC Bank N.A. dated April 5, 2012. The amendment increased the borrowing limit to $40 million from $30 million. The interest
rate remains the same at LIBOR plus 1.75%. All principal amounts outstanding under the agreement are required to be repaid in a
single amount on April 5, 2017, the date the agreement expires; interest is payable monthly. During the fourth quarter of 2013,
the Company and HSBC agreed to make certain technical amendments to a covenant of the amended loan agreement to accommodate the
purchase of the Rocky Mount facility. Funds borrowed under the agreement may be used for working capital, general operating expenses,
share repurchases, acquisitions and certain other purposes. Under the amended loan agreement, the Company continues to be required
to maintain specific amounts of tangible net worth, a debt/net worth ratio, and a fixed charge coverage ratio. At June 30, 2015,
the Company was in compliance with these covenants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt">As of June 30, 2015 and December 31, 2014, the Company had outstanding
borrowings of $30,179,484 and $24,146,841, respectively, under the Company’s revolving loan agreement with HSBC.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">During the three months ended June 30, 2015,
the Company issued a total of 25,595 shares of common stock and received aggregate proceeds of $354,000 upon exercise of employee
stock options. During the six months ended June 30, 2015, the Company issued a total of 47,295 shares of common stock and received
aggregate proceeds of $675,000 upon exercise of employee stock options.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><b>Note 6 – Stock Based Compensation</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">The Company
recognizes share-based compensation at the fair value of the equity instrument on the grant date. Compensation expense is
recognized over the required service period. Share-based compensation expenses were $174,763 and $174,000 for the quarters
ended June 30, 2015 and 2014, respectively. Share-based compensation expenses were $303,515 and $300,000 for the six months
ended June 30, 2015 and 2014, respectively. During the three months ended June 30, 2015, the Company issued 22,000 options
with a weighted average fair value of $3.38 per share. During the six months ended June 30, 2015, the Company issued 37,000
options with a weighted average fair value of $3.50 per share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">As of June 30, 2015, there was a total of $885,305 of unrecognized
compensation cost, adjusted for estimated forfeitures, related to non-vested share –based payments granted to the Company’s
employees. The remaining unamortized expense is expected to be recognized over a weighted average period of approximately 3 years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><b>Note 7 – Fair Value Measurements</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">The carrying value of the Company’s bank debt approximates
fair value. Fair value was determined using a discounted cash flow analysis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"></p>
13000
13000
6000
3000
2017-04-05
<p style="margin-top: 0; margin-bottom: 6pt; margin-left: 0pt; text-indent: 0pt; text-align: justify"><font style="font-size: 8pt">Under
the amended loan agreement, the Company continues to be required to maintain specific amounts of tangible net worth, a
debt/net worth ratio, and a fixed charge coverage ratio. At June 30, 2015, the Company was in compliance with these
covenants.</font></p>
Interest rate of LIBOR plus 1.75%
ACME UNITED CORP
33671000
36216000
56791000
49782000
4054000
2955000
52548000
43974000
5184000
3390000
33954000
33396000
29649000
27870000
2813000
3673000
1492000
1853000
35821000
33950000
21419000
21675000
3146000
2911000
2710000
2542000
.95
.91
.82
.79
.85
.83
.74
.72
12555000
12173000
895000
895000
-1647000
-2109000
.18
.16
.09
.08
266000
246000
0
246000
6000
260000
20000
6000
14000
304000
300000
175000
174000
37000
22000
3.50
3.38
885000
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended June 30,</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Six Months Ended June 30,</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Components of net periodic benefit cost:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 44%; text-align: left">Interest cost</td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">15</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">19</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">29</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">35</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Service cost</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Expected return on plan assets</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(23</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(29</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(46</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(47</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Amortization of prior service costs</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt">Amortization of actuarial loss</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">28</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">23</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">56</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">58</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">28</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">18</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">57</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">64</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td>Assets by segment:</td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td></tr>
<tr style="vertical-align: bottom">
<td>(in thousands)</td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center">June 30,</td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center">December 31,</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 44%; text-align: left; padding-left: 10pt">United States</td><td style="width: 30%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">79,605</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 2%; text-align: left">$</td><td style="width: 9%; text-align: right">70,526</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt">Canada</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,550</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,363</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 10pt">Europe</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,266</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,419</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; padding-left: 10pt">Consolidated</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">89,421</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">79,308</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"><b> </b></p>
.20
.20
.27
.26
675000
173000
0.0175
0.0175
0
0
0
30000
47295
25595
675000
354000
P3Y
13800000
463000
110000
15071000
1019000
252000
1271000
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"><b>Note 8 – Business Combination</b></p>
<p style="font: 10pt/12pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">On June 2, 2014, the Company purchased certain assets of First Aid
Only, Inc. (“First Aid Only”), a supplier of Smart Compliance® first aid kits, refills, and safety products that
meet regulatory requirements for a broad range of industries. The Company purchased inventory, accounts receivable, equipment,
patents, trademarks and other intellectual property for approximately $13.8 million (including assumed liabilities) using funds
borrowed under its revolving credit facility with HSBC.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">The purchase price was allocated to assets
acquired and liabilities assumed as follows (in thousands):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"></font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td><font style="font: 9pt Times New Roman, Times, Serif">Assets:</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%; text-align: left; padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Accounts
Receivable</font></td><td style="width: 4%"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 4%; text-align: left"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td><td style="width: 21%; text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">2,544</font></td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Inventory</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">1,704</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Equipment</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">463</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Prepaid expenses</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">110</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 11pt"><font style="font-size: 9pt">Customer Relationships</font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td style="text-align: left"><font style="font-size: 9pt"> </font></td><td style="text-align: right"><font style="font-size: 9pt">5,430</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 11pt"><font style="font-size: 9pt">Trade Name</font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td style="text-align: left"><font style="font-size: 9pt"> </font></td><td style="text-align: right"><font style="font-size: 9pt">3,410</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 11pt"><font style="font-size: 9pt">Covenant Not-to-Compete</font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td style="text-align: left"><font style="font-size: 9pt"> </font></td><td style="text-align: right"><font style="font-size: 9pt">70</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 11pt"><font style="font-size: 9pt">Goodwill</font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 9pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 9pt">1,340</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Total assets</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">15,071</font></td><td style="text-align: left"> </td></tr>
</table>
<p style="margin: 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 70%"><font style="font: 9pt Times New Roman, Times, Serif">Liabilities</font></td><td style="width: 4%"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; width: 4%"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; width: 21%"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left; width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Accounts Payable</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">1,019</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 11pt; padding-bottom: 1pt"><font style="font: 9pt Times New Roman, Times, Serif">Accrued Expense</font></td><td style="padding-bottom: 1pt"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 9pt Times New Roman, Times, Serif">252</font></td><td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Total liabilities</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">1,271</font></td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify">Assuming First Aid Only was acquired on January
1, 2014, unaudited proforma combined net sales for the three and six months ended June 30, 2014 for the Company would have been
approximately $36.7 million and $59.6 million, respectively. Unaudited proforma combined net income for the three and six months
ended June 30, 2014 for the Company would have been approximately $2.7 million and $3.1 million, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0pt; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"></font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td><font style="font: 9pt Times New Roman, Times, Serif">Assets:</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%; text-align: left; padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Accounts
Receivable</font></td><td style="width: 4%"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 4%; text-align: left"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td><td style="width: 21%; text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">2,544</font></td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Inventory</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">1,704</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Equipment</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">463</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Prepaid expenses</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">110</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 11pt"><font style="font-size: 9pt">Customer Relationships</font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td style="text-align: left"><font style="font-size: 9pt"> </font></td><td style="text-align: right"><font style="font-size: 9pt">5,430</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 11pt"><font style="font-size: 9pt">Trade Name</font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td style="text-align: left"><font style="font-size: 9pt"> </font></td><td style="text-align: right"><font style="font-size: 9pt">3,410</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 11pt"><font style="font-size: 9pt">Covenant Not-to-Compete</font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td style="text-align: left"><font style="font-size: 9pt"> </font></td><td style="text-align: right"><font style="font-size: 9pt">70</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 11pt"><font style="font-size: 9pt">Goodwill</font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 9pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 9pt">1,340</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Total assets</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">15,071</font></td><td style="text-align: left"> </td></tr>
</table>
<p style="margin: 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 70%"><font style="font: 9pt Times New Roman, Times, Serif">Liabilities</font></td><td style="width: 4%"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; width: 4%"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; width: 21%"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left; width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Accounts Payable</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">1,019</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 11pt; padding-bottom: 1pt"><font style="font: 9pt Times New Roman, Times, Serif">Accrued Expense</font></td><td style="padding-bottom: 1pt"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 9pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 9pt Times New Roman, Times, Serif">252</font></td><td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 11pt"><font style="font: 9pt Times New Roman, Times, Serif">Total liabilities</font></td><td><font style="font: 9pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 9pt Times New Roman, Times, Serif">1,271</font></td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
1375000
1375000
1340000
5430000
3410000
70000
P5Y
59600000
36700000
3100000
2700000
2544000
1704000
<p style="margin: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">In
December 2008, the Company sold property it owned in Bridgeport, Connecticut to B&E Juices, Inc. for $2.5 million, of which
$2.0 million was secured by a mortgage on the property. The property consisted of approximately four acres of land and 48,000
sq. feet of warehouse space. The property was the site of the Company’s original scissor factory which opened in 1887 and
was closed in 1996.</p>
2500000
850000
24147000
30179000
1800000
300000
200000
13806000
773000