MEDIA RECOVERY, INC.         dba SPOTSEE HOLDINGS   CONSOLIDATED FINANCIAL STATEMENTS    As of September 30, 2018 and 2017, and for the  Years ended September 30, 2018, 2017, and 2016       with Report of Independent Auditors
 MEDIA RECOVERY, INC.                          dba SPOTSEE HOLDINGS                                                           CONSOLIDATED FINANCIAL STATEMENTS                                                            As of September 30, 2018 and 2017, and for the                   Years ended September 30, 2018, 2017, and 2016                                                                                                                                                        Table of Contents            Report of Independent Auditors ..................................................................................................  1      Consolidated Financial Statements:        Consolidated Balance Sheets ................................................................................................  3       Consolidated Statements of Operations and Comprehensive Income ..................................  4       Consolidated Statements of Stockholders’ Equity ................................................................  5       Consolidated Statements of Cash Flows ...............................................................................  6    Notes to Consolidated Financial Statements ...............................................................................  7
 Dallas Office                                                                   8343 Douglas Avenue                                                                  Suite 400                                                                  Dallas, Texas 75225                                                                  214.393.9300 Main                                                                                                                                    whitleypenn.com                                                                                                     REPORT OF INDEPENDENT AUDITORS         To the Board of Directors and Stockholders of   Media Recovery, Inc., dba SpotSee Holdings      We have audited the accompanying consolidated financial statements of Media Recovery, Inc., dba                  SpotSee Holdings (the “Company”) which comprise the consolidated balance sheets as of    September 30, 2018 and 2017, and the related consolidated statements of operations and comprehensive  income, stockholders’ equity, and cash flows for the years ended September 30, 2018, 2017, and 2016,   and the related notes to the financial statements.      Management’s Responsibility for the Financial Statements      Management is responsible for the preparation and fair presentation of these consolidated financial   statements in accordance with accounting principles generally accepted in the United States of America                  (“GAAP”); this includes the design, implementation, and maintenance of internal control relevant to   the preparation and fair presentation of financial statements that are free from material misstatement,   whether due to fraud or error.      Auditor’s Responsibility      Our responsibility is to express an opinion on these financial statements based on our audits.  We                  conducted our audits in accordance with auditing standards generally accepted in the United States of   America.  Those standards require that we plan and perform the audit to obtain reasonable assurance   about whether the financial statements are free from material misstatement.      An audit involves performing procedures to obtain audit evidence about the amounts and disclosures   in the financial statements.  The procedures selected depend on the auditor’s judgment, including the   assessment of the risks of material misstatement of the financial statements, whether due to fraud or   error.  In making those risk assessments, the auditor considers internal control relevant to the entity’s   preparation and fair presentation of the financial statements in order to design audit procedures that are                appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness   of the entity’s internal control.  Accordingly, we express no such opinion.  An audit also includes   evaluating the appropriateness of accounting policies used and the reasonableness of significant   accounting estimates made by management, as well as evaluating the overall presentation of the   financial statements.      We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for   our audit opinion.
 Opinion    In our opinion, the consolidated financial statements referred to above present fairly, in all material  respects, the financial position of the Company as of September 30, 2018 and 2017, and the results of  their operations and their cash flows for the years ended September 30, 2018, 2017, and 2016, in  conformity with GAAP.                                   Dallas, Texas  December 11, 2018
 MEDIA RECOVERY, INC.                                          dba SPOTSEE HOLDINGS                                     CONSOLIDATED BALANCE SHEETS                                                                                       September 30,                                                                                 2018              2017 Assets Current assets:   Cash and cash equivalents                                                 $     1,524,905   $     1,787,490   Accounts receivable - trade, net of allowance for doubtful accounts     of $13,841 in 2018 and $24,980 in 2017                                         3,910,655         4,500,902   Accounts receivable, other                                                     588,758                227,598   Note receivable, current                                                        28,000                            -   Inventories, net of allowance of $70,506 in 2018 and $200,731 in 2017            2,427,136         2,682,719   Prepaid expenses and other                                                          121,035           153,787   Income tax receivable                                                               120,104                       - Total current assets                                                               8,720,593         9,352,496  Property and equipment, net                                                        3,026,280         4,671,439 Note receivable, net of current portion                                          802,168                            - Other assets, net                                                                       46,043             45,753 Intangible asset, net                                                            416,392                691,592 Goodwill                                                                      19,403,349           19,403,349  Total assets                                                                $   32,414,825    $  34,164,629   Liabilities and Stockholders' Equity Current liabilities:   Accounts payable                                                          $     2,042,612   $     1,359,509   Accrued liabilities                                                            894,607             1,452,301   Note payable, current                                                           68,750                            -   Income taxes payable                                                                            -           613,195 Total current liabilities                                                          3,005,969       3,425,005    Long-term liabilities:   Note payable, net of current portion and deferred financing costs              431,103                            -   Deferred income taxes                                                        1,077,045         2,520,144   Long-term accrued liabilities                                                         44,262             70,798 Total liabilities                                                                  4,558,379         6,015,947  Commitments and contingencies  Mandatorily redeemable preferred stock, $0.001 par value, $1 liquidating    preference, 10,000,000 shares authorized, 5,850,000 shares  issued    and 800,000 shares outstanding                                                 800,000           800,000  Stockholders' equity:   Common stock, $0.001 par value, 20,000,000 shares authorized,      5,539,002 shares issued and 4,102,002 shares outstanding                       5,539             5,539   Treasury common stock, 1,437,000 shares in 2018 and 2017, at cost           (13,712,275)     (13,712,275)   Additional paid-in capital                                                   6,219,847         6,057,411   Other comprehensive income (loss)                                                   (28,810)               7,063   Retained earnings                                                              34,572,145        34,990,944 Total stockholders' equity                                                       27,056,446        27,348,682  Total liabilities and stockholders' equity                                  $   32,414,825    $  34,164,629       See accompanying notes to consolidated financial statements.                                                        3
 MEDIA RECOVERY, INC.                               dba SPOTSEE HOLDINGS      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME                                                    Year Ended September 30,                                             2018            2017           2016  Net sales                                $   22,139,095 $   20,988,000 $   20,423,432 Cost of sales                                 10,706,596        9,522,146        9,811,630 Gross profit                                  11,432,499      11,465,854      10,611,802  General and administrative expenses             8,592,253        8,083,782        7,883,368 (Gain) loss on disposal of property and equipment        1,004,006                 (838)                       - Income from operations                          1,836,240        3,382,910        2,728,434  Other income (expense)                            (118,115)              (3,937)             17,530 Income before income taxes                      1,718,125        3,378,973        2,745,964  Income tax expense (benefit)                   (1,149,035)        1,608,783        1,344,602  Net income                               $     2,867,160 $     1,770,190 $     1,401,362  Other comprehensive income (loss)   Gain (loss) on cumulative translation adjustment            (35,873)               6,097              (1,104)  Comprehensive income                     $     2,831,287 $     1,776,287 $     1,400,258          See accompanying notes to consolidated financial statements.                                              4
 MEDIA RECOVERY, INC.                                                                      dba SPOTSEE HOLDINGS                                                     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                                                              Years Ended September 30, 2018, 2017, and 2016                                                                                                      Additional                         Other                                                                    Common           Treasury         Paid-in         Retained      Comprehensive                                                                      Stock           Stock           Capital         Earnings      Income (Loss)        Total  Balance at September 30, 2015                                    $              5,539 $   (13,712,275) $      5,795,457 $    38,101,616 $             2,070 $    30,192,407     Cumulative translation adjustment                                                     -                        -                        -                        -               (1,104)               (1,104)     Stock compensation expense                                                            -                        -            112,932                        -                        -             112,932    Dividends                                                                             -                        -                        -        (3,316,010)                        -        (3,316,010)     Net income                                                                            -                        -                        -         1,401,362                        -         1,401,362   Balance at September 30, 2016                                                    5,539      (13,712,275)         5,908,389       36,186,968                   966       28,389,587     Cumulative translation adjustment                                                     -                        -                        -                        -                6,097                6,097     Stock compensation expense                                                            -                        -            149,022                        -                        -             149,022    Dividends                                                                             -                        -                        -        (2,966,214)                        -        (2,966,214)     Net income                                                                            -                        -                        -         1,770,190                        -         1,770,190   Balance at September 30, 2017                                                    5,539      (13,712,275)         6,057,411       34,990,944                7,063       27,348,682     Cumulative translation adjustment                                                     -                        -                        -                        -             (35,873)             (35,873)     Stock compensation expense                                                            -                        -            162,436                        -                        -             162,436    Dividends                                                                             -                        -                        -        (3,285,959)                        -        (3,285,959)     Net income                                                                            -                        -                        -         2,867,160                        -         2,867,160   Balance at September 30, 2018                                    $              5,539 $   (13,712,275) $       6,219,847 $     34,572,145 $           (28,810) $     27,056,446 See accompanying notes to consolidated financial statements.                                                                                   5
 MEDIA RECOVERY, INC.                                    dba SPOTSEE HOLDINGS                          CONSOLIDATED STATEMENTS OF CASH FLOWS                                                              Year Ended September 30,                                                       2018           2017           2016 Operating Activities   Net income                                      $     2,867,160 $     1,770,190 $     1,401,362   Adjustments to reconcile net income to net cash    provided by operating activities:    Depreciation                                             613,153           590,182           621,080    Amortization                                             156,606             91,342                       -    Deferred income taxes                                (1,443,099)           425,389           465,192    Reserve for inventory obsolescence                                   -               7,104                       -    Stock based compensation                                 162,436           149,022           112,932    (Gain) loss on sales or disposals of property and equipment        1,004,006                 (838)                       -    Changes in operating assets and liabilities:      Accounts receivable, trade                             590,247       (1,640,236)          (100,546)      Accounts receivable, other                            (361,160)            (86,056)        1,529,541      Inventories                                            255,583           454,233          (658,717)      Prepaid expenses and other                               32,752            (26,874)            (52,115)      Prepaid income taxes and income taxes payable          (733,299)             99,703        1,391,747      Other assets                                                 (290)              (2,551)             12,250      Accounts payable                                       683,103           359,335           155,655      Accrued liabilities                                   (584,230)           381,792          (621,316) Net cash provided by operating activities                3,242,968        2,571,737        4,257,065  Investing Activities   Purchase of intangible asset                                          -          (765,859)                       -   Refund of purchase price of intangible asset              128,560                       -                       -   Proceeds from note receivable                                 4,500                       -                       -   Proceeds from sales of property and equipment                         -             40,126                       -   Purchases of property and equipment                      (806,668)       (1,224,251)          (455,238) Net cash used in investing activities                      (673,608)       (1,949,984)          (455,238)  Financing Activities   Payment of dividends                                  (3,285,959)       (2,966,214)       (3,316,010)   Proceeds from note payable                                550,000                       -                       -   Capitalized financing costs related to note payable            (60,113)                       -                       - Net cash used in financing activities                   (2,796,072)       (2,966,214)       (3,316,010)  Effect of exchange rate changes on cash                      (35,873)               6,097              (1,104) Net (decrease) increase in cash and cash equivalents          (262,585)       (2,338,364)           484,713 Cash and cash equivalents at beginning of year           1,787,490        4,125,854        3,641,141  Cash and cash equivalents at end of year          $     1,524,905 $    1,787,490 $    4,125,854   Supplemental Disclosure of Cash Flow Information   Cash paid during the year for interest          $          24,210 $                    - $                   -     Cash paid during the year for income taxes      $        250,026 $       483,773 $       113,080   Non-cash Transactions   Note receivable from sale of property           $        834,668 $                    - $                   -         See accompanying notes to consolidated financial statements.                                                  6
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                                  As of September 30, 2018 and 2017                 and for the Years ended September 30, 2018, 2017 and 2016                                                                                                                           A. Nature of Business      Media Recovery, Inc., dba SpotSee Holdings, (the “Company”) is a manufacturing and distribution   company that manufactures shipping and handling monitors and recorders, which measure impact,  temperature, and tilt of products during shipment and equipment monitors, used primarily to measure  impact and other safety factors.  The Company has two manufacturing facilities located in    Graham, Texas and Chihuahua, Mexico.  A sales and distribution office is located in Loenen,   Netherlands and sales offices are located in Shanghai, China and São Paulo, Brazil.  The Company’s  corporate offices are located in Dallas, Texas.         B. Summary of Significant Accounting Policies      A summary of the Company’s significant accounting policies consistently applied in the preparation of   the accompanying consolidated financial statements follows:      Basis of Accounting      The accounts are maintained and the consolidated financial statements have been prepared using the   accrual basis of accounting in accordance with accounting principles generally accepted in the United   States of America (“GAAP”).      Principles of Consolidation      The consolidated financial statements include the accounts of the Company and its wholly owned   subsidiaries ShockWatch, Inc. dba SpotSee; Shocklog Holdings Limited; ShockWatch Europe, B.V.;   Mexico SW Production, S.A. DE C.V.; ShockWatch, Inc. Shanghai Representative Office; ShockLog,   Ltd; Diffrenet Ltd.; and SpotSee Brasil Ltda.  All significant intercompany accounts and transactions  have been eliminated in consolidation.        Use of Estimates      The preparation of consolidated financial statements in conformity with GAAP requires management   to make estimates and assumptions that affect certain reported amounts in the consolidated financial   statements and accompanying notes.  Actual results could differ from these estimates and assumptions.      Foreign Currency Translation      All assets and liabilities in the balance sheets of foreign subsidiaries whose functional currency is other   than the U.S. dollar are translated at year-end exchange rates.  All revenues and expenses in the   statements of operations, of these foreign subsidiaries, are translated at average exchange rates for the   year.  Translation gains and losses are not included in determining net income but are shown in other   comprehensive income (loss) on the consolidated balance sheets.  Foreign currency transaction gains   and losses are included in determining net income.                                         7
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                   B. Summary of Significant Accounting Policies – continued     Cash and Cash Equivalents    The Company considers all highly liquid investments with a maturity of three months or less when  purchased to be cash equivalents.  At September 30, 2018 and 2017, the Company had no such  investments.  The Company maintains deposits primarily in two financial institutions, which may at  times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance  Corporation (“FDIC”).  The Company has not experienced any losses related to amounts in excess of  FDIC limits.    Accounts Receivable    Accounts receivable are stated at amounts management expects to collect from outstanding balances.   Management provides for probable uncollectible amounts through a charge to earnings and a credit to  a valuation allowance based on its assessment of the current status of individual accounts.  Balances  still outstanding after management has used reasonable collection efforts are written off through a  charge to the valuation allowance and a credit to accounts receivable.  Changes in the valuation  allowance have not been material to the consolidated financial statements.  Concentrations of credit  risk with respect to trade receivables are limited due to the large number of customers comprising the  Company’s customer base, and their dispersion across many different industries and geographies.  No  customer’s accounts receivable balance consisted of more than 10% of the accounts receivable balance  as of September 30, 2018.  One customer’s accounts receivable balance consisted of approximately  12% of the accounts receivable balance as of September 30, 2017.    Inventories    Inventories are stated at the lower of cost or net realizable value.  Cost is principally determined by the  weighted-average cost method, which approximates the first-in, first-out method.  Inventories include  factory overhead that is applied on the basis of labor costs and manufacturing expenses incurred, less  allowances for obsolete items.  The Company determines that items are slow moving or obsolete based  on whether they have been sold or used in production between 180 and 365 days, or greater than 365  days, respectively, during the fiscal year.  Such items are then specifically reviewed for obsolescence  based on other criteria which include the frequency that these items are purchased, manufactured, and  sold.  The amount of the inventory reserve for each year presented is disclosed in Note D.    Note Receivable    Note receivable represents a loan that is recorded at the unpaid principal balance plus any accrued but  unpaid interest.  Interest income on the note receivable is recorded when it is earned.  If a note holder  ceases to make loan repayments and the Company deems the amount to be uncollectible, the loan  balance is reduced and a loss is recorded.  No allowance for losses has been recorded as of   September 30, 2018 or 2017.                                          8
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                   B. Summary of Significant Accounting Policies – continued       Property and Equipment      Property and equipment is stated at cost less accumulated depreciation.  Depreciation is provided on  the straight-line method over the assets’ estimated service lives.  For major renewals and betterments  that extend the useful lives are capitalized.  Expenditures for maintenance and repairs are charged to  expense in the period in which they are incurred, and betterments are capitalized.  The cost of assets  sold or abandoned and the related accumulated depreciation are eliminated from the accounts and any  gains or losses are reflected in the accompanying consolidated statements of operations and  comprehensive loss of the respective period.  The estimated useful lives for buildings and  improvements range from 10 to 25 years, are 5 years for software, and for machinery and equipment  range from 3 to 7 years.    Intangible Asset    In January 2017 the Financial Accounting Standards Board issued Accounting Standards Update  (“ASU”) 2017-01.  ASU 2017-01 changes the definition of a business when determining whether a  transaction is a business combination or an asset acquisition.  The Company early adopted this guidance  for the year ended September 30, 2017.  In March 2017 the Company completed an acquisition of  Diffrenet Limited, which was considered an asset acquisition under ASU 2017-01 as substantially all  of the fair value of the gross assets acquired was concentrated in a single identifiable asset.  The asset  acquisition resulted in the recognition of an intangible asset comprised of purchased software   (see Note K) which is being amortized over a period of five years.    Concentrations of Credit Risk    Financial instruments that potentially subject the Company to significant concentrations of credit risk  consist principally of trade accounts receivable.  The Company continually evaluates its customers’  financial condition and generally does not require collateral.  Concentrations of credit risk with respect  to trade accounts receivable are generally limited due to the large number of entities comprising the  Company’s customer base.  Additionally, credit losses have historically been within management’s  expectations.    Revenue Recognition    The Company recognizes revenue on product sales upon the passage of title, which generally occurs  upon shipment, or the rendering of services, and when collectability is deemed probable.    Presentation of Sales Tax    The states in which the Company operates and the counties within those states impose a sales tax on all  of the Company’s sales to nonexempt customers.  The Company collects that sales tax from customers  and remits the entire amount to the applicable state.  The Company’s accounting policy is to exclude  the tax collected and remitted to the states from revenue and cost of sales.                                                                   9
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                   B. Summary of Significant Accounting Policies – continued       Shipping and Handling Costs      Shipping and handling costs are included in cost of sales on the consolidated statements of operations   and comprehensive income.      Advertising      The Company expenses advertising costs as incurred.  Total advertising costs for the years ended   September 30, 2018, 2017, and 2016, were approximately $328,000, $154,000, and $100, respectively.    Goodwill    The Company records goodwill when consideration paid in an acquisition exceeds the fair value of the  assets acquired.  Goodwill is not amortized, but rather is tested for impairment annually or more  frequently if events or changes in circumstances indicate that the carrying value may not be recoverable.   The Company conducted their annual impairment test of goodwill as of September 30, 2018 and 2017.   They have elected to first assess the qualitative factors to determine whether it is more likely than not  that the fair value of the single reporting unit is less than its carrying amount as a basis for determining  whether it is necessary to perform the two-step goodwill impairment under GAAP.    If the Company determines that it is more likely than not that its fair value is less than its carrying  amount, then the two-step goodwill impairment test is performed.  The first step, identifying a potential  impairment, compares the fair value of the reporting unit with its carrying amount.  If the carrying  amount exceeds its fair value, the second step would need to be performed; otherwise, no further step  is required.  The second step, measuring the impairment loss, compares the implied fair value of the  goodwill with the carrying amount of the goodwill.  Any excess of the goodwill carrying amount over  the applied fair value is recognized as an impairment loss, and the carrying value of goodwill is written  down to fair value.  No impairment of goodwill was required for the years ended September 30, 2018,  2017, and 2016.    Stock Awards    The Company may, with the approval of its Board of Directors, grant stock awards for a fixed number  of shares to employees with an exercise price equal to the fair value of the shares at the date of grant.   The Company uses the Black-Scholes option valuation model for use in estimating the fair value of  stock awards.    Long-lived Assets    The Company evaluates its long-lived assets including goodwill, property and equipment, and  intangible assets for impairment whenever events or changes in circumstances indicate that the carrying  amount of an asset may not be recoverable.  Recoverability of these assets is measured by comparison  of their carrying amounts to future undiscounted cash flows that the assets are expected to generate.                                                                  10
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                   B. Summary of Significant Accounting Policies – continued       Long-lived Assets – continued       If long-lived assets are considered to be impaired, the impairment to be recognized equals the amount   by which the carrying value of the asset exceeds its fair market value and is recorded in the period the   determination was made.  Based upon management’s assessment, there was no impairment of    long-lived assets during the years ended September 30, 2018, 2017, or 2016.      Income Taxes      Deferred income taxes are determined using the asset and liability method of accounting for income   taxes.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to  differences between the financial statement carrying amounts of existing assets and liabilities and their  respective tax bases.  Deferred income taxes are measured using enacted tax rates expected to apply to  taxable income in years in which such temporary differences are expected to be recovered or settled.   The effect on deferred income taxes of a change in tax rates is recognized in the consolidated statement  of operations of the period that includes the enactment date.  In addition, a valuation allowance is   established to reduce any deferred tax asset for which it is determined that it is more likely than not that   some portion of the deferred tax asset will not be realized.      The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various states,   and foreign jurisdictions.  The Company has not taken a tax position that, if challenged, would have a   material effect on the financial statements or the effective tax rate for the year ended September 30,  2018, or during the prior three years.  The Company and its subsidiaries are currently subject to a three- year statute of limitations by major tax jurisdictions.    The Company did not incur any penalties or interest related to its federal tax returns during the years  ended September 30, 2018, 2017, or 2016.    Fair Value of Financial Instruments    The Company calculates the fair value of its assets and liabilities which qualify as financial instruments  and includes this additional information in the notes to consolidated financial statements when the fair  value is different than the carrying value of those financial instruments.  The estimated fair value of  accounts receivable (trade and other), accounts payable, and accrued liabilities approximate the  carrying amounts due to the relatively short maturity of these instruments.  The carrying values of the  note receivable and line of credit also approximate fair value since the instruments bear market rates of  interest.  None of these instruments are held for trading purposes.                                                                   11
 MEDIA RECOVERY, INC.                            dba SPOTSEE HOLDINGS                                                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                B. Summary of Significant Accounting Policies – continued     New Accounting Pronouncements    In July 2015 the FASB issued ASU 2015-11— Inventory (Topic 330):  Simplifying the Measurement  of Inventory.  The update is effective for fiscal years beginning after December 15, 2016, including  interim periods within those fiscal years.  The amendments in this update should be applied  prospectively with earlier application permitted as of the beginning of an interim or annual reporting  period.  As such, the Company adopted these provisions beginning on October 1, 2017.  Pursuant to  the update, an entity should measure inventory at the lower of cost and net realizable value.  Adoption  of the new guidance did not have an impact on the Company’s consolidated financial statements.      C. Fair Value Measurements    GAAP defines fair value, establishes a framework for measuring fair value, and expands disclosures  about assets and liabilities measured at fair value.  GAAP defines fair value as the price that would be  received to sell an asset or paid to transfer a liability in an orderly transaction between market  participants at the measurement date and establishes a three-tier hierarchy that is used to identify assets  and liabilities measured at fair value.  The hierarchy focuses on the inputs used to measure fair value  and requires that the lowest level input be used.  The three levels defined are as follows:       •  Level 1 — observable inputs that are based upon quoted market prices for identical assets        or liabilities within active markets.             •  Level 2 — observable inputs other than Level 1 that are based upon quoted market prices        for similar assets or liabilities, based upon quoted prices within inactive markets, or inputs        other than quoted market prices that are observable through market data for substantially        the full term of the asset or liability.             •  Level 3 — inputs that are unobservable for the particular asset or liability due to little or        no market activity and are significant to the fair value of the asset or liability.  These inputs        reflect assumptions that market participants would use when valuing the particular asset or        liability.    The Company holds no instruments which have fair value measured at Level 1 or Level 2.  The  Company’s goodwill was valued using Level 3 inputs of the fair value hierarchy contained in  Accounting Standards Codification (“ASC”) 820-10, in accordance with policies disclosed in Note B,  and are reflected in the accompanying consolidated balance sheets at fair value.  There were no changes  to fair value for the Company’s Goodwill using Level 3 inputs during the fiscal years ended   September 30, 2018, 2017, and 2016.                                                                  12
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                   C. Fair Value Measurements – continued       The following table summarizes the fair value of the Company’s Level 3 financial assets and liabilities   as of September 30, 2018 and 2017.                                                       September 30,                                                 2018          2017          Assets:                                                               Goodwill                            $19,403,349    $19,403,349         D. Inventories    Inventories consist of the following as of September 30:                                                   2018          2017                                                                                Raw materials                       $     942,861  $     771,676          Work-in-progress                       448,623        441,508          Finished goods                        1,106,158     1,670,266          Allowance for obsolescence              (70,506)     (200,731)                                                                                                                    $  2,427,136   $  2,682,719         E. Property and Equipment      Property and equipment consisted of the following at September 30:                                                    2018          2017                                                                                Land                                $                 -  $       63,332          Buildings & improvements                18,284      2,865,116          Machinery & equipment                 8,312,337     7,507,757          Projects in progress                   669,604        667,480                                                9,000,225    11,103,685          Less:  accumulated depreciation      (5,973,945)    (6,432,246)                                                                                                                    $  3,026,280   $  4,671,439                                                                   13
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                   F. Note Receivable      On June 28, 2018, the Company sold its land and building located in Graham, Texas, for a price of  $838,668.  The purchaser paid a down payment of $4,000 and entered into a 20 year note receivable  for $834,668.  The note receivable requires monthly payments of $5,058, including 4% interest.   Simultaneously with the sale of the land and building, the Company executed a five year leaseback of   the property from the purchaser.  The lease has been accounted for by the Company as an operating  lease.  A loss on the sale of $1,004,006 and associated disposal costs of approximately $67,000 have  been recognized in the accompany statements of operations and comprehensive income.  Future  maturities of principle on the note receivable are as follows at September 30, 2018:                   2019                                $       28,000                 2020                                    29,141                 2021                                    30,328                 2022                                    31,564                 2023                                    32,850                 Thereafter                              678,285                                                                                Total                               $     830,168         G. Mandatorily Redeemable Preferred Stock      In fiscal year 1998 the Company issued 5,850,000 shares of Series A preferred stock which are   convertible into shares of voting common stock at the option of the holder at any time at the initial   conversion price of $1.00 per share, resulting in an initial conversion rate of one fully paid and    non-assessable share of voting common stock for each share of Series A preferred stock, subject to   adjustment.  During the year ended September 30, 2006, 5,050,000 preferred shares were converted to   common shares.  No preferred shares were converted to common shares during the years ended   September 30, 2018, 2017, and 2016.  Dividends are paid to holders of preferred stock concurrently   with dividends paid to holders of common stock and such dividends do not accumulate.      In addition, at any time on or after December 31, 2004, holders of preferred stock representing in the   aggregate at least 10% of the then outstanding shares of Series A preferred stock may require the   Company to redeem such stock for $1.00 per share.  The Company has classified the Series A Preferred   Stock as temporary equity in accordance with ASC Topic No. 480, Distinguishing Liabilities from   Equity, which states that certain mandatorily redeemable financial instruments should be classified as   temporary equity.      The Series A preferred stock has a $0.01 par value and a $1 liquidation preference.  The Series A   preferred stock could be redeemed through a cash payment if requested by the stockholders.  Holders   of preferred stock are not allowed to vote on matters submitted to a vote of the stockholders of the   Company.  However, certain corporate matters including dividend payments, issuances of certain stock   awards, disposal of shares of capital stock, and a merger of the Company, require the consent of the   holders of at least 85% of the then outstanding shares of Series A preferred stock.                                         14
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                   H. Stockholders’ Equity      The Company has reserved 800,000 shares of common stock for the potential conversion of preferred   stock.  When the Company did not meet the definition of a public business entity it was eligible for   certain nonpublic company exceptions under ASC 480, Distinguishing Liabilities from Equity, and   classified these redeemable preferred shares as equity.      Stock Option Grants      During 2018 and 2017, certain officers of the Company were granted options to purchase common  shares of the Company. Option transactions for the years ended September 30, 2018 and 2017, are as   follows:                                                                     Weighted                                                   Weighted       Average                                     Number         Average      Remaining                                        of          Exercise     Contractual                                     Options         Price       Life (Years)                                                                                Balance at October 1, 2016       350,744    $           5.22     8.76      Granted                          105,244    $           5.70                                                                                        Balance at September 30, 2017    455,988    $           5.33     7.89      Granted                            6,000    $           8.36                                                                                        Balance at September 30, 2018    461,998    $           5.37     6.91                                                                                Exercisable at September 30, 2018 231,495   $           5.26     6.79      As of September 30, 2018, the range of exercise prices for outstanding options was $5.15 to $8.36.      All stock-based compensation must be recognized as an expense in the consolidated financial   statements and such cost should be measured at the fair value of the award.  The Black-Scholes option   valuation model was developed for use in estimating the fair value of traded options, which have no   vesting restrictions and are fully transferable.  In addition, option valuation models require the input of   highly subjective assumptions including the expected stock price volatility.  The expected life of awards   granted represents the period of time that they are expected to be outstanding.  The Company   determined the initial expected life based on a simplified method, giving consideration to the   contractual terms, vesting schedules, and pre-vesting and post-vesting forfeitures.                                                                    15
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                   H. Stockholders’ Equity – continued       The fair value of options granted for the years ended September 30, 2018 and 2017, was estimated to  be $6,524 and $195,625, respectively, at the date of grant using a Black-Scholes option-pricing model   using the following weighted average assumptions at the date of grant:                                                    2018          2017                                                                               Risk-free interest rate                   1.91%         1.78%         Expected option life                    6.5 years      6.5 years         Expected stock volatility                25.93%        17.34%         Expected dividend yields                  5.31%         0.66%      The expected stock volatility was calculated by averaging the historical volatility of a comparable   public entity.  As of September 30, 2018, all options were outstanding.      During the years ended September 30, 2018, 2017, and 2016, respectively, the Company recorded   $162,436, $149,022, and $112,932 of stock-based compensation related to the awards, which is   included in general and administrative expense in the accompanying consolidated statements of   operations and comprehensive income.  Total unamortized stock-based compensation expense at   September 30, 2018, was $328,733 and will be expensed ratably through 2023.      I. Line of Credit    The Company maintains financing arrangements with certain banks.  These arrangements require  compliance with certain financial covenants and are secured by substantially all of the assets of the  Company.    The Company previously entered into a line of credit, which bore interest at the prime or the LIBOR   rate plus an applicable margin (2.25% at September 30, 2017).  The line of credit had no balance   outstanding as of September 30, 2017, and matured on March 19, 2018.      On March 21, 2018, the Company entered into a revolving promissory note with a bank for an aggregate   commitment of $2,000,000.  The note matures on March 21, 2021.  Subject to the terms of individual   advances, outstanding amounts carry interest at either the prime rate or at the LIBOR rate plus 2.0%.    There was no balance outstanding on the revolving promissory note as of September 30, 2018.                                                                    16
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                   J. Note Payable      On March 21, 2018, the Company entered into a capital expenditures promissory note with a bank for   an aggregate commitment of $1,000,000.  The note matures on March 21, 2023.  Subject to the terms   of individual advances, outstanding amounts carry interest at either the prime rate plus 0.5%, or at the   LIBOR rate plus 2.5%.  Advances totaling $550,000 carry interest at 4.1% at September 30, 2018.    Costs of obtaining the note totaling $60,113 have been deferred and are being amortized over the life   of the note.  The unamortized cost totaling $50,147 is presented net with the note payable on the balance   sheet.  Future maturities of principle on the note are as follows at September 30, 2018:                    2019                                $       68,750                 2020                                    137,500                 2021                                    137,500                 2022                                    137,500                 2023                                    68,750                 Thereafter                                   -                 Note payable                            550,000                 Deferred financing costs                (50,147)                                                                                Note payable, net of deferred financing costs $     499,853         K. Income Taxes    Significant components of the provision for income taxes are as follows:                                            2018          2017           2016                                                                                Current                             $     294,064  $  1,183,394  $     879,410   Deferred                             (1,443,099)      425,389       465,192                                                                                Total income tax expense (benefit)  $(1,149,035)  $  1,608,783   $  1,344,602      On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the “Act”) was signed into law.  Among other   provisions, the Act reduced the highest corporate tax rate from 35% to 21%.  With the passage of the   Act, the Company’s deferred tax assets and liabilities were re-measured as of the effective date of the   law to reflect the new applicable rate.  The reduction to the net deferred tax asset was charged to tax   expense in the period of the change.      The difference between income tax expense and tax expense computed by applying the federal statutory   income tax rate to income before taxes is due primarily to the effect of nondeductible goodwill   impairment, applicable state income taxes, foreign tax credits, and nondeductible meals and   entertainment expense.                                                                   17
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                   K. Income Taxes – continued       Deferred tax assets and liabilities for the years ended September 30, consisted of the following:                                                    2018          2017          Deferred tax assets (liabilities):                                     Allowance for doubtful accounts    $          3,569  $        9,492           Inventory reserves                     18,182         76,278           Other accruals                         57,560        241,287           Deferred compensation                     516           760           State NOL                             132,693        110,458           Foreign tax credit                          -      1,088,913           Depreciation                          (593,777)     (616,102)           Goodwill                              (695,788)    (1,025,287)           Un-repatriated foreign earnings             -      (1,317,030)           Valuation allowance for deferred tax assets -      (1,088,913)                                                                                Net deferred tax liability          $ (1,077,045)  $ (2,520,144)         L. Employee Benefit Plan      The Company has a 401(k) deferred compensation plan for all eligible employees.  Active participants   may contribute up to 90% of their annual compensation, subject to annual limit established by the   government.  The Company matches 50% of the employees’ contributions up to 6% of the employees’   salaries.  Effective November 30, 2015, the plan merged into the Capital Southwest Management   Corporation Employee Savings Plan.  For the years ended September 30, 2018, 2017, and 2016, the   Company recognized approximately $120,000, $145,000, and $111,000, respectively, of expense  related to this plan.         M. Asset Acquisition      On March 10, 2017, the Company acquired the assets and liabilities of Diffrenet Limited, a company   incorporated in England and Wales, for a purchase price of $765,859.  The following table summarizes   the assets acquired and liabilities assumed in the asset acquisition:                    Accounts receivable                 $       74,603                 Other assets                               411                 Intangible asset, acquired software     782,934                 Accounts payable and accrued liabilities (92,089)                                                                                Net purchase price                  $     765,859      During 2018, a refund of the purchase price of $128,560 was received which reduced the value of the  intangible asset to $654,374.                                                         18
 MEDIA RECOVERY, INC.                             dba SPOTSEE HOLDINGS                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                   M. Asset Acquisition – continued       The acquired intangible asset is being amortized over five years from its acquisition date.  Expected   future amortization expense at September 30, 2018, is as follows:                    2019                                $     124,447                 2020                                    124,447                 2021                                    124,447                 2022                                    43,051                 Thereafter                                   -                                                                                Total amortization                  $     416,392      As part of the acquisition, the Company is contingently liable for earn-out consideration.  The    earn-out consideration is based on certain annual, cumulative earnings targets of the Diffrenet   subsidiary.  The Company’s maximum exposure for this consideration is $1,473,969, from the date of   acquisition through January 1, 2021.  The Company has not incurred any payments related to this earn-  out consideration as of September 30, 2018.         N. Commitments and Contingencies      Operating Leases      The Company leases operating facilities and equipment under non-cancelable operating leases.  Lease   agreements expire at various dates through 2022.  Associated rent expense for the years ended   September 30, 2018, 2017, and 2016, was approximately $144,000, $150,000, and $128,000,  respectively.  As a result of escalating lease payments, the Company has recorded deferred rent of   approximately $71,000 and $97,000 as of September 30, 2018 and 2017, respectively, included in  accrued liabilities and long-term accrued liabilities in the accompanying consolidated balance sheets.    Future minimum payments under non-cancelable operating leases with initial terms of one year or more  consisted of the following at September 30, 2018:                   2019                                $     270,000                 2020                                    262,000                 2021                                    211,000                 2022                                    67,000                 2023                                    36,000                                                                                Total minimum lease payments        $     846,000                                                                   19
 MEDIA RECOVERY, INC.                            dba SPOTSEE HOLDINGS                                                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                N. Commitments and Contingencies – continued     Litigation    The Company is subject to legal proceedings and claims that arise in the ordinary course of operations.  As of September 30, 2018 and 2017, the Company has no known material legal contingencies.      O. Subsequent Events    Management has evaluated and considered disclosure of subsequent events up to and including  December 11, 2018, which is the date the consolidated financial statements were available for issuance.                                        20