Exhibit 99.2
FORTRESS RESOURCES, LLC
Condensed Financial Statements
Condensed Balance Sheets as of June 30, 2019 and December 31, 2018
Condensed Statements of Operations for the Three and Six Months
Ended June 30, 2019 and 2018
Condensed Statements of Members’ Equity and Cash Flows for the Six Months
Ended June 30, 2019 and 2018
Table of Contents | Page No. |
Condensed Balance Sheets – June 30, 2019 and December 31, 2018 (Unaudited) | 1 - 2 |
Condensed Statements of Operations – Three and Six Months Ended June 30, 2019 and 2018 (Unaudited) | 3 |
Condensed Statements of Members’ Equity – Six Months Ended June 30, 2019 and 2018 (Unaudited) | 4 |
Condensed Statements of Cash Flows – Six Months Ended June 30, 2019 and 2018 (Unaudited) | 5 - 6 |
Notes to Condensed Financial Statements - December 31, 2018 and 2017 (Unaudited) | 7 - 15 |
FORTRESS RESOURCES, LLC
Condensed Balance Sheets
June 30, 2019 and December 31, 2018 (Unaudited)
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 114,149 | $ | 569,157 | ||||
Accounts receivable | 4,298,564 | 3,754,788 | ||||||
Other receivables | 119,593 | 181,632 | ||||||
Member advances | 151,977 | - | ||||||
Inventory (Note 2) | 7,436,187 | 5,911,113 | ||||||
Prepaid expenses | 11,053 | 39,401 | ||||||
Total current assets | 12,131,523 | 10,456,091 | ||||||
Property and equipment | 6,129,671 | 5,967,213 | ||||||
Less: accumulated depreciation | (1,701,224 | ) | (1,524,332 | ) | ||||
Net property and equipment | 4,428,447 | 4,442,881 | ||||||
Other assets: | ||||||||
Deposits | 83,852 | 70,118 | ||||||
Intangible assets (net of accumulated amortization of $212,793 and $201,593, respectively) | 112,004 | 123,204 | ||||||
Total assets | $ | 16,755,826 | $ | 15,092,294 |
(Condensed balance sheets continued on the following page)
FORTRESS RESOURCES, LLC
Condensed Balance Sheets
(Continued)
June 30, 2019 and December 31, 2018 (Unaudited)
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
LIABILITIES AND MEMBERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,701,556 | $ | 1,530,788 | ||||
Accrued liabilities | 556,318 | 411,438 | ||||||
Credit facility (Note 3) | 600,000 | - | ||||||
Current portion of forward purchase contract | 150,000 | 150,000 | ||||||
Current portion of capital lease obligations (Note 4) | 43,923 | 25,377 | ||||||
Current portion of long-term debt (Note 5) | 401,712 | 407,051 | ||||||
Customer deposits | 264,216 | 167,456 | ||||||
Total current liabilities | 3,717,725 | 2,692,110 | ||||||
Assets floored through financial institution | 5,920,258 | 9,091,430 | ||||||
Flooring liability through financial institution | (5,920,258 | ) | (9,091,430 | ) | ||||
- | - | |||||||
Long term liabilities: | ||||||||
Forward purchase contract | 831,908 | 901,861 | ||||||
Capital lease obligations (Note 4) | 109,369 | 75,613 | ||||||
Long-term debt (Note 5) | 642,911 | 842,664 | ||||||
Total long-term liabilities | 1,584,188 | 1,820,138 | ||||||
Total liabilities | 5,301,913 | 4,512,248 | ||||||
Commitments and contingencies (Note 6) | ||||||||
Members' equity | 11,453,913 | 10,580,046 | ||||||
$ | 16,755,826 | $ | 15,092,294 |
See accompanying notes to condensed financial statements
FORTRESS RESOURCES, LLC
Condensed Statements of Operations
Three and Six Months Ended June 30, 2019 and 2018 (Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Sales | $ | 12,534,629 | $ | 10,010,506 | $ | 23,967,479 | $ | 19,656,258 | ||||||||
Cost of sales: | ||||||||||||||||
Purchases | 5,341,400 | 4,258,418 | 10,193,706 | 8,353,045 | ||||||||||||
Direct labor | 1,229,871 | 1,073,581 | 2,464,654 | 2,132,627 | ||||||||||||
Sub-contract labor | 100,062 | 88,866 | 171,371 | 183,074 | ||||||||||||
Manufacturing expenses | 1,819,765 | 1,776,195 | 3,609,117 | 3,563,406 | ||||||||||||
8,491,098 | 7,197,060 | 16,438,848 | 14,232,152 | |||||||||||||
Gross profit | 4,043,531 | 2,813,446 | 7,528,631 | 5,424,106 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling expenses | 553,599 | 475,647 | 1,858,015 | 1,695,646 | ||||||||||||
General and administrative expenses | 946,461 | 785,373 | 1,072,318 | 986,867 | ||||||||||||
1,500,060 | 1,261,020 | 2,930,333 | 2,682,513 | |||||||||||||
Operating income | 2,543,471 | 1,552,426 | 4,598,298 | 2,741,593 | ||||||||||||
Other income (expenses): | ||||||||||||||||
Interest income | - | - | 9,596 | - | ||||||||||||
Interest (expense) | (24,750 | ) | (19,241 | ) | (38,234 | ) | (77,817 | ) | ||||||||
Other (expense) | (85,981 | ) | (25,734 | ) | (74,341 | ) | (32,041 | ) | ||||||||
(Loss) on sale of assets | (462 | ) | - | (462 | ) | - | ||||||||||
Total other (expenses) | (111,193 | ) | (44,975 | ) | (103,441 | ) | (109,858 | ) | ||||||||
Income before income taxes | 2,432,278 | 1,507,451 | 4,494,857 | 2,631,735 | ||||||||||||
Provision for income taxes | 11,790 | 20,000 | 12,590 | 20,000 | ||||||||||||
Net income | $ | 2,420,488 | $ | 1,487,451 | $ | 4,482,267 | $ | 2,611,735 |
See accompanying notes to condensed financial statements
FORTRESS RESOURCES, LLC
Condensed Statements of Members’ Equity
Six Months Ended June 30, 2019 and 2018 (Unaudited)
Members' | ||||
Equity | ||||
Balance at December 31, 2017 | $ | 3,916,340 | ||
Distributions to members | (270,000 | ) | ||
Contributions from members | 100,000 | |||
Net income for the 6 months ended June 30, 2018 | 2,611,735 | |||
Balance at June 30, 2018 | $ | 6,358,075 | ||
Balance at December 31, 2018 | $ | 10,580,046 | ||
Distributions to members | (4,535,000 | ) | ||
Contributions from members | 926,600 | |||
Net income for the 6 months ended June 30, 2019 | 4,482,267 | |||
Balance at June 30, 2019 | $ | 11,453,913 |
See accompanying notes to condensed financial statements
FORTRESS RESOURCES, LLC
Condensed Statements of Cash Flows
Six Months Ended June 30, 2019 and 2018 (Unaudited)
Six Months Ended | ||||||||
June 30, | ||||||||
2019 | 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 4,482,267 | $ | 2,611,735 | ||||
Adjustments to reconcile net income to net cash provided by (applied to) operating activities: | ||||||||
Depreciation | 202,364 | 211,817 | ||||||
Amortization | 11,200 | 11,200 | ||||||
Loss on disposal of property and equipment | 462 | - | ||||||
Reduction in forward purchase contract obligation | (69,953 | ) | (57,000 | ) | ||||
(Increase) decrease in: | ||||||||
Accounts receivable | (543,776 | ) | 258,541 | |||||
Other receivables | 62,039 | (76,589 | ) | |||||
Member advances | (151,977 | ) | (72,649 | ) | ||||
Inventory | (1,525,074 | ) | 170,646 | |||||
Prepaid expenses | 28,348 | (31,265 | ) | |||||
Deposits | (13,734 | ) | 23,395 | |||||
Increase (decrease) in: | ||||||||
Accounts payable | 170,768 | (892,823 | ) | |||||
Accrued liabilities | 144,880 | (226,573 | ) | |||||
Customer deposits | 96,760 | 95,137 | ||||||
Net cash provided by operating activities | 2,894,574 | 2,025,572 | ||||||
Cash flows from investing activities: | ||||||||
Acquisition of property and equipment | (114,741 | ) | (59,432 | ) | ||||
Proceeds from sale of property and equipment | 600 | - | ||||||
Net cash (applied to) investing activities | (114,141 | ) | (59,432 | ) |
(Condensed statements of cash flows continued on the following page)
FORTRESS RESOURCES, LLC
Condensed Statements of Cash Flows
(Continued)
Six Months Ended June 30, 2019 and 2018 (Unaudited)
Six Months Ended | ||||||||
June 30, | ||||||||
2019 | 2018 | |||||||
Cash flows from financing activities: | ||||||||
Net activity on line of credit | 600,000 | (1,400,000 | ) | |||||
Proceeds from issuance of long-term debt | - | 25,335 | ||||||
Principal repayments of long-term debt | (205,092 | ) | (204,373 | ) | ||||
Principal repayments on capital leases | (21,949 | ) | (20,510 | ) | ||||
Contributions from members | 926,600 | 100,000 | ||||||
Distributions to members | (4,535,000 | ) | (270,000 | ) | ||||
Net cash (applied to) financing activities | (3,235,441 | ) | (1,769,548 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (455,008 | ) | 196,592 | |||||
Cash and cash equivalents at beginning of period | 569,157 | 135,283 | ||||||
Cash and cash equivalents at end of period | $ | 114,149 | $ | 331,875 |
Supplemental disclosure of non-cash financing activities:
During the six months ended June 30, 2019 and 2018, the Company acquired property and equipment totaling $74,251 and $24,668 respectively, by entering into capital lease obligations.
See accompanying notes to condensed financial statements
FORTRESS RESOURCES, LLC
Notes to Condensed Financial Statements
NOTE 1 – GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For a description of key accounting policies followed, refer to the notes to the Fortress Resources, LLC (the “Company”, “we”, “our” or “us”) financial statements for the year ended December 31, 2018. Refer to the Revenue Recognition and Adoption of New Accounting Policy section below for the adoption of a new revenue recognition accounting standard in the first quarter of 2019.
The Company was organized under the laws of the State of California as a limited liability company on June 28, 2009, is a leading California-based designer, manufacturer and installer of service truck bodies and accessories. The Company manufactures and assembles truck body options for various trades, service truck bodies, stake body trucks, contractor trucks, and dump bed trucks. The Company is the largest service body company in the western United States with their principal facility in Carson, California. The Company has additional manufacturing, assembly, and service space in branch locations in Union City and Roseville, California; Mesa, Arizona; and Dallas and Weatherford, Texas.
The accompanying unaudited interim condensed financial statements reflect all normal and recurring adjustments that are necessary for the fair presentation of our financial position as of June 30, 2019 and December 31, 2018, the results of operations, members’ equity, and cash flows for the three and six-month periods ended June 30, 2019. These condensed financial statements should be read in conjunction with the audited financial statements and footnotes for the year ended December 31, 2018.
The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results expected for the full year.
The Company is required to disclose the fair value of its financial instruments in accordance with Financial Accounting Standards Board (“FASB”) Codification relating to “Disclosures about Fair Values of Financial Instruments.” The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, forward purchase contract and variable rate debt instruments approximate their fair value at June 30, 2019 and December 31, 2018.
(Note 1 continued on the following page)
FORTRESS RESOURCES, LLC
Notes to Condensed Financial Statements
(Continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers: Topic 606. Under Topic 606, an entity is required to recognize revenue upon transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The company has adopted the provisions of Topic 606 as of and for the period ended June 30, 2019. However, management has determined that the impact of adopting the provisions of Topic 606 is immaterial for the periods reported.
In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 is intended to introduce a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on expected losses rather than incurred losses. The provisions of this standard are effective for the Company’s fiscal year ended December 31, 2022 and early adoption is permitted. Management believes that the adoption of the provisions of ASU 2016-13 will not have a material impact on The Company’s financial position, results of operations or cash flows.
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases: Topic 842. Under Topic 842, lessees will be required to recognize the following for substantially all leases:
● | A lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and |
● | A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. |
Management is currently assessing the impact of Topic 842 on the financial statements. The date of adoption of Topic 842 was amended to be effective for the Company’s fiscal year ended December 31, 2021.
Revenue Recognition and Adoption of New Accounting Policy – Per agreements with the certain automotive manufacturers and dealers, the Company recognizes a sale and corresponding cost of goods sold only on the improvement or addition it makes to its General Motors and Chrysler Group inventory and not on the sale and cost of goods sold on the actual vehicles. The General Motors and Chrysler Group agreements began August 1, 2013 and June 24, 2010, respectively, each expiring five years from their commencement. The Chrysler Group agreement contains an automatic annual renewal clause that takes effect if neither party terminates the agreement. The General Motors agreement was renewed in July 2018, expiring five years from commencement.
(Note 1 continued on the following page)
FORTRESS RESOURCES, LLC
Notes to Condensed Financial Statements
(Continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue Recognition and Adoption of New Accounting Policy (Continued) – With regards to Ford Motor Company, the Company has a signed bailment agreement which does not pass title of Ford inventory to the Company. Instead, the Company takes possession of Ford inventories, makes improvements and additions, then transfers the title to dealerships within the Ford Motor Company network. The Company recognizes sales and corresponding cost of goods sold on only the improvements and additions it makes to the Ford Motor Company inventory; but not on the sale and cost of goods sold on the actual vehicles. The Ford agreement began on August 12, 2009 and ends when either party elects to terminate it.
Essentially all of the Company’s revenue is generated through contracts with our customers. The Company may recognize revenue over time or at a point in time when or as obligations under the terms of a contract with its customer are satisfied, depending on the terms and features of the contract and the products supplied. The contracts generally do not have any significant variable consideration. The collectability of consideration on the contract is reasonably assured before revenue is recognized. On certain vehicles, payment may be received in advance of us satisfying our performance obligations. Such payments are recorded in Customer deposits on the Condensed Balance Sheets. The corresponding performance obligations are generally satisfied within one year of the contract inception. In such cases, we have elected to apply the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component. The financing impact on contracts that contain performance obligations that are not expected to be satisfied within one year are expected to be immaterial to our condensed financial statements.
The Company adopted Topic 606 with a date of initial application of January 1, 2019. As a result, the Company changed its adopted policies for revenue recognition as detailed above. Prior to the adoption of Topic 606, the Company recognized revenue in accordance with prevailing GAAP. Accordingly, revenue was recognized when title to the product and risk of ownership passed to the buyer. In certain instances, risk of ownership and title passed when the product had been completed in accordance with purchase order specifications and had been tendered for delivery to the customer. All sales were shown net of returns, discounts and sales incentive programs, which historically have not been significant. The collectability of any related receivable was reasonably assured before revenue was recognized.
The Company applied Topic 606 using the cumulative effect method to all contracts not completed at the date of initial application by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of members’ equity at January 1, 2019. Therefore, the comparative information has not been adjusted and continues to be reported under prior revenue recognition guidance.
FORTRESS RESOURCES, LLC
Notes to Condensed Financial Statements
(Continued)
NOTE 2 - INVENTORY
Inventory consists of the following at June 30, 2019 and December 31, 2018:
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Raw materials | $ | 4,080,766 | $ | 2,962,147 | ||||
Work-in-process | 305,192 | 345,799 | ||||||
Finished goods | 3,050,229 | 2,603,167 | ||||||
$ | 7,436,187 | $ | 5,911,113 |
NOTE 3 – CREDIT FACILITY
In July 2018, the Company amended its credit facility with a major banking institution. With the exception of assets financed or owned by General Motors Company, Ford Motor Company, and Chrysler Group, LLC (through a subordination agreement), substantially all assets are secured by this agreement (except for those cross-collateralized under flooring arrangements). Under the terms of the revolving line of credit portion of the agreement, the Company can borrow up to a maximum of $5,000,000 (limited to 85%, of eligible accounts receivable plus 50% of inventory, or $2,250,000, whichever is less). As of June 30, 2019, the Company had borrowings on the line of credit totaling $600,000. The Company had no outstanding borrowings on the revolving line of credit as of December 31, 2018. Interest is charged at a rate of the Bank’s prime rate minus .25% (the effective rate charged at June 30, 2019 and December 31, 2018 was 5.25%) or the applicable LIBOR plus 2.25%. In July 2018, the credit facility was renewed and amended to increase the minimum borrowing base, update the covenants, and to extend the expiration date to August 2020.
Under the terms of the credit facility, the Company is subject to certain financial covenants. These covenants include a minimum level of tangible net worth, a maximum leverage ratio, and a minimum quick ratio.
FORTRESS RESOURCES, LLC
Notes to Condensed Financial Statements
(Continued)
NOTE 4 - CAPITAL LEASE OBLIGATIONS
Capital lease obligations at June 30, 2019 and December 31, 2018 consist of the following:
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Four capital leases with financing institutions secured by the underlying machinery and equipment with interest rates ranging from 3.42% to 6.15%, payable in monthly installments ranging from $568 to $1,089 per month, including interest, with maturities through March 2023. | $ | 153,292 | $ | 100,990 | ||||
Less: current portion | (43,923 | ) | (25,377 | ) | ||||
$ | 109,369 | $ | 75,613 |
The following is an analysis of the leased equipment under capital leases at June 30, 2019 and December 31, 2018, which is included in property and equipment:
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Equipment | $ | 195,167 | $ | 120,916 | ||||
Less: accumulated depreciation | (19,152 | ) | (10,732 | ) | ||||
$ | 176,015 | $ | 110,184 |
Depreciation expense on equipment under capital leases for the three months ended June 30, 2019 and 2018 was $4,210 and $3,020, respectively, and for the six months ended June 30, 2019 and 2018 was $6,045 and $8,420, respectively.
FORTRESS RESOURCES, LLC
Notes to Condensed Financial Statements
(Continued)
NOTE 5 - LONG-TERM DEBT
Long-term debt is summarized as follows as of June 30, 2019 and December 31, 2018:
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Note payable to bank secured by equipment and inventory, payable in monthly installments of $30,057 plus interest at a rate of 4.75%. This note is scheduled to mature in March 2022 and is not guaranteed by the Company's principal member or a trust controlled by the Company's principal member. | $ | 985,236 | $ | 1,165,578 | ||||
Note payable to a financing institution secured by the underlying auto, payable in monthly installments of $1,049 including interest at 4.97%. The note is scheduled to mature in April 2020. | 10,254 | 16,205 | ||||||
Note payable to a financing institution secured by the underlying auto, payable in monthly installments of $677 including interest at 0.10%. The note is scheduled to mature in April 2020. | 6,768 | 10,826 | ||||||
Note payable to a financing institution secured by the underlying auto, payable in monthly installments of $816 including interest at 1.90%. The note is scheduled to mature in January 2020. | 5,681 | 10,501 | ||||||
Note payable to a financing institution secured by the underlying auto, payable in monthly installments of $689 including interest at 2.99%. The note is scheduled to mature in July 2019. | 687 | 4,774 | ||||||
Note payable to a financing institution secured by the underlying auto, payable in monthly installments of $528. No interest is charged on the balance. The note is scheduled to mature in March 2022. | 17,418 | 20,584 | ||||||
Note payable to a financing institution secured by the underlying auto, payable in monthly installments of $531 including interest at 5.14%. The note is scheduled to mature in August 2022. | 18,579 | 21,247 | ||||||
1,044,623 | 1,249,715 | |||||||
Less: current portion | (401,712 | ) | (407,051 | ) | ||||
$ | 642,911 | $ | 842,664 |
FORTRESS RESOURCES, LLC
Notes to Condensed Financial Statements
(Continued)
NOTE 6 - COMMITMENTS AND CONTINGENCIES WITH RELATED AND UNRELATED PARTIES
Operating Leases – During 2017, the Company entered into a lease agreement for its manufacturing headquarters in Carson, California with an affiliate through common ownership. In January 2018, the lease agreement was amended to increase the monthly rent from $88,750 to $135,000. The agreement is set to expire in September 2026, with four long-term options to extend for periods of at least 10 years. In October 2018, the Company signed an amended lease agreement to exercise the first option term for an additional 10 years. The amended agreement includes a cancellation option for the Company to terminate the lease in September 2026, or during the extension period, at the time the debt on the property is paid in full by the affiliate through common ownership. Total rent expense related to the aforementioned lease for the three months ended June 30, 2019 and 2018 was $405,000, and for the six months ended June 30, 2019 and 2018 was $810,000.
The Company also has non-cancelable operating lease agreements on other facilities located in various cities throughout California, Arizona, and Texas. Under these agreements, the Company is obligated to pay expenses incidental to leasing. Two of these agreements operate on a month-to-month basis, with monthly payments ranging from $338 to $6,000. The remaining leases have monthly base rents ranging from $7,000 to $22,275 and are set to expire on various dates through July 2027.
The Company has a non-cancelable operating lease agreement on a vehicle. The agreement is set to expire in September 2019. The lease agreement provides for monthly payments of $1,497.
The Company recorded rent expense on the aforementioned lease agreements with unrelated parties of $154,300 and $160,650 for the three months ended June 30, 2019 and 2018, respectively, and $308,590 and $321,295, respectively, for the six months ended June 30, 2019 and 2018.
(Note 6 continued on the following page)
FORTRESS RESOURCES, LLC
Notes to Condensed Financial Statements
(Continued)
NOTE 6 - COMMITMENTS AND CONTINGENCIES WITH RELATED AND UNRELATED PARTIES (Continued)
The following is a schedule of future minimum rental payments under all leases:
Building | Vehicle | |||||||||||
Leases | Leases | Total | ||||||||||
Years ending December 31: | ||||||||||||
2019 | $ | 1,092,353 | $ | 4,491 | $ | 1,096,844 | ||||||
2020 | 1,920,308 | - | 1,920,308 | |||||||||
2021 | 1,920,518 | - | 1,920,518 | |||||||||
2022 | 2,018,920 | - | 2,018,920 | |||||||||
2023 | 1,955,720 | - | 1,955,720 | |||||||||
Thereafter | 5,466,725 | - | 5,466,725 | |||||||||
$ | 14,374,544 | $ | 4,491 | $ | 14,379,035 |
(a) Excluding the six months ended June 30, 2019.
Warranties - The Company records a reserve for warranties for expected warranty expense to be incurred during the warranty period, which is based on historical cost compared to sales volume. The warranty reserve is included in accrued liabilities and the related expense incurred for warranties is included in cost of sales.
The following is a reconciliation of the changes in the Company’s reserve for warranties for the six months ended June 30, 2019 and the year ended December 31, 2018:
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Reserve for warranties at beginning of period | $ | 97,908 | $ | 32,880 | ||||
Payments made | (170,000 | ) | (115,652 | ) | ||||
Additions to warranty reserve | 170,000 | 180,680 | ||||||
Reserve for warranties at end of period | $ | 97,908 | $ | 97,908 |
FORTRESS RESOURCES, LLC
Notes to Condensed Financial Statements
(Continued)
NOTE 7 – SUBSEQUENT EVENTS
The Company evaluated subsequent events through November 21, 2019, the date these condensed financial statements were available to be issued. Other than the event discussed below, there were no material subsequent events that required recognition or additional disclosure in these condensed financial statements.
On September 9, 2019, the Company was acquired by Spartan Motors, Inc., a niche market leader in specialty manufacturing and assembly for the commercial vehicle (including last-mile delivery, specialty service and vocation-specific up-fit segments), emergency response and recreational vehicle industries.
15