MEDIA RECOVERY, INC.         dba SPOTSEE HOLDINGS                         CONSOLIDATED FINANCIAL STATEMENTS                          As of September 30, 2019 and 2018, and for the    Years Ended September 2019, 2018, and 2017       with Report of Independent Auditors
 MEDIA RECOVERY, INC.                            dba SPOTSEE HOLDINGS                                                                CONSOLIDATED FINANCIAL STATEMENTS                                                                 As of September 30, 2019 and 2018, and for the                      Years Ended September 2019, 2018, and 2017                                                                                                                                                                       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
 Houston Office                                                                        3737 Buffalo Speedway                                                                        Suite 1600                                                                        Houston, Texas 77098                                                                        713.621.1515  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, 2019 and 2018, and the related consolidated statements of operations and comprehensive  income, stockholders’ equity, and cash flows for the years ended September 30, 2019, 2018, and 2017,  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 consolidated 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, 2019 and 2018, and the results of  their operations and their cash flows for the years ended September 30, 2019, 2018, and 2017, in  conformity with GAAP.                                  Houston, Texas  December 20, 2019
 MEDIA RECOVERY, INC.                                           dba SPOTSEE HOLDINGS                                      CONSOLIDATED BALANCE SHEETS                                                                                        September 30,                                                                                  2019             2018 Assets Current assets:   Cash and cash equivalents$                                                      180,406     $      1,524,905   Accounts receivable - trade, net of allowance for doubtful accounts     of $36,438 at 2019 and $13,841 at 2018                                       4,085,099            3,910,655   Accounts receivable, other                                                      450,876           588,758   Note receivable, current                                                         29,141             28,000   Inventories, net of allowance of $162,894 at 2019 and $70,506 at 2018          3,135,103            2,427,136   Prepaid expenses and other assets                                               118,825                121,035   Income tax receivable                                                                            -            120,104 Total current assets                                                                7,999,450         8,720,593  Property and equipment, net                                                      2,966,888            3,026,280 Note receivable, net of current portion                                           772,731           802,168 Other assets, net                                                                        24,897              46,043 Intangible asset, net                                                             259,805           416,392 Goodwill                                                                        19,403,349       19,403,349  Total assets                                                                 $   31,427,120   $    32,414,825  Liabilities and Stockholders' Equity Current liabilities:   Accounts payable                                                           $        850,430 $      2,042,612   Accrued liabilities                                                             994,795           894,607   Note payable, current                                                           162,500             68,750   Income taxes payable                                                           1,133,617                           - Total current liabilities                                                        3,141,342            3,005,969  Long-term liabilities:   Line of credit                                                                       900,000                        -   Note payable, net of current portion and deferred financing costs               403,415           431,103   Deferred income taxes                                                           875,764         1,077,045   Long-term accrued liabilities                                                    17,726                  44,262 Total liabilities                                                                   5,338,247         4,558,379  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, $0.001 par value, 20,000,000 shares authorized,      5,539,002 shares issued and 4,102,002 shares outstanding                        5,539            5,539   Treasury common stock, 1,437,000 shares at 2019 and 2018, at cost            (13,712,275)     (13,712,275)   Additional paid-in capital                                                     6,392,875        6,219,847   Other comprehensive loss           (14,144)                                                             (28,810)   Retained earnings                                                               32,616,878        34,572,145 Total stockholders' equity                                                      25,288,873          27,056,446  Total liabilities and stockholders' equity$                                     31,427,120    $    32,414,825      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,                                             2019           2018           2017  Net sales$                                23,196,281   $    22,139,095 $    20,988,000 Cost of sales                             10,939,301         10,706,596         9,522,146 Gross profit                              12,256,980         11,432,499       11,465,854  General and administrative expenses        8,699,365           8,592,253         8,083,782 (Gain) loss on disposal of property and equipment                       -         1,004,006                  (838) Income from operations                     3,557,615           1,836,240         3,382,910  Other expense                                (46,473)            (118,115)               (3,937) Income before income taxes                 3,511,142           1,718,125         3,378,973  Income tax expense (benefit)               1,678,804          (1,149,035)         1,608,783  Net income                                 1,832,338           2,867,160         1,770,190  Other comprehensive income (loss)  Gain (loss) on cumulative translation adjustment             14,666             (35,873)                6,097  Comprehensive income$                      1,847,004   $      2,831,287 $      1,776,287         See accompanying notes to consolidated financial statements.                                             4
 MEDIA RECOVERY, INC.                                                                                  dba SPOTSEE HOLDINGS                                                                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                                                                         Years Ended September 30, 2019, 2018, and 2017                                                                                                                         Additional                             Other                                                                                   Common             Treasury           Paid-in           Retained        Comprehensive                                                                                     Stock              Stock            Capital           Earnings         Income (Loss)         Total   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     Cumulative translation adjustment                                                        -                              -                          -                          -                14,666                14,666     Stock compensation expense                                                               -                              -             173,028                          -                          -              173,028     Dividends                                                                                            -                          -                          -         (3,787,605)                          -         (3,787,605)     Net income                                                                                           -                          -                          - 1,832,338                         -           1,832,338   Balance at September 30, 2019$                                                         5,539      $    (13,712,275) $       6,392,875  $     32,616,878   $           (14,144) $     25,288,873  See accompanying notes to consolidated financial statements.                                                                                                 5
 MEDIA RECOVERY, INC.                                           dba SPOTSEE HOLDINGS                                CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                            Year Ended September 30,                                                                    2019            2018            2017 Operating Activities   Net income$     1,832,338                                                    $      2,867,160 $      1,770,190   Adjustments to reconcile net income to net cash     provided by operating activities:     Depreciation          475,058                                                         613,153            590,182     Amortization          176,816                                                         156,606              91,342     Deferred income taxes         (201,281)                                          (1,443,099)            425,389     Reserve for inventory obsolescence             92,388                               (129,865)                7,104     Bad debt expense            10,000                                                               -                       -     Stock based compensation                                        173,028               162,436            149,022     (Gain) loss on sales or disposals of property and equipment                      -         1,004,006                 (838)     Changes in operating assets and liabilities:      Accounts receivable, trade         (184,444)                                         590,247       (1,640,236)      Accounts receivable, other          137,882                                        (361,160)            (86,056)      Inventories         (800,355)                                                        385,448            454,233      Prepaid expenses and other                                       2,210                 32,752            (26,874)      Income taxes receivable and payable                           1,253,721            (733,299)              99,703      Other assets            21,146                                                            (290)              (2,551)      Accounts payable      (1,192,182)                                                    683,103            359,335      Accrued liabilities            73,652                                              (584,230)            381,792 Net cash provided by operating activities       1,869,977                              3,242,968         2,571,737  Investing Activities   Purchase of intangible asset                      -                                                -          (765,859)   Refund of purchase price of intangible asset                      -                     128,560                       -   Proceeds from note receivable                                      28,296                   4,500                       -   Proceeds from sales of property and equipment                      -                               -              40,126   Purchases of property and equipment         (415,666)                                 (806,668)       (1,224,251) Net cash used in investing activities         (387,370)                                 (673,608)       (1,949,984)  Financing Activities   Payment of dividends      (3,787,605)                                              (3,285,959)       (2,966,214)   Proceeds from line of credit                                     3,850,000                         -                       -   Proceeds from note payable                                        100,000               550,000                       -   Payments on line of credit      (2,950,000)                                                        -                       -   Payments on note payable           (54,167)                                                        -                       -   Capitalized financing costs related to note payable                      -              (60,113)                       - Net cash used in financing activities      (2,841,772)                               (2,796,072)       (2,966,214)  Effect of exchange rate changes on cash            14,666                                 (35,873)                6,097 Net decrease in cash and cash equivalents      (1,344,499)                              (262,585)       (2,338,364) Cash and cash equivalents at beginning of year       1,524,905                         1,787,490         4,125,854  Cash and cash equivalents at end of year                        $        180,406 $      1,524,905 $      1,787,490  Supplemental Disclosure of Cash Flow Information   Cash paid during the year for interest                        $          39,956 $           24,210 $                    -    Cash paid during the year for income taxes                    $        619,496 $         250,026 $         483,773  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, 2019 and 2018                  and for the Years Ended September 30, 2019, 2018 and 2017                                                                                                                                      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, 2019 and 2018, 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.  One  customer’s accounts receivable balance consisted of approximately 10% of the accounts receivable  balance as of September 30, 2019.  No customer’s accounts receivable balance consisted of more than  10% of the accounts receivable balance as of September 30, 2018.      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, 2019 and 2018.                                             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 M) 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, 2019 and 2018, and 2017, were approximately $335,000, $328,000, and $154,000,  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, 2019 and 2018.   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, 2019  and 2018, and 2017.    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, 2019, 2018, or 2017.    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, 2019, 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, 2019, 2018, or 2017.    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, note payable, 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)                                                                                          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, 2019, 2018, and 2017.    The following table summarizes the fair value of the Company’s Level 3 financial assets and liabilities  as of September 30, 2019 and 2018.             September 30,           2019  2018          Assets:                                                        Goodwill $19,403,349  $19,403,349                                                                              12
 MEDIA RECOVERY, INC.                                dba SPOTSEE HOLDINGS                                                        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                          D. Inventories    Inventories consist of the following as of September 30:                                                        2019            2018                                                                         Raw materials                            $   1,209,312   $     942,861          Work-in-progress                             509,096        448,623          Finished goods                             1,579,589       1,106,158          Allowance for obsolescence                  (162,894)        (70,506)                                                                                                                  $   3,135,103   $  2,427,136      E.  Property and Equipment    Property and equipment consisted of the following at September 30:                                                        2019            2018                                                                         Buildings and improvements               $       27,594  $       18,284          Machinery and equipment                    8,318,080       8,312,337          Projects in progress                       1,070,217        669,604                                                     9,415,891       9,000,225          Less:  accumulated depreciation           (6,449,003)     (5,973,945)                                                                                                                   $  2,966,888    $  3,026,280      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 statement of operations and comprehensive income for the year  ended September 30, 2018.                                                13
 MEDIA RECOVERY, INC.                                dba SPOTSEE HOLDINGS                                                        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                                                                          F.  Note Receivable – continued     Future maturities of principal on the note receivable are as follows at September 30, 2019:                    2020                                     $       29,141                  2021 30,328                  2022 31,564                  2023 32,850                  2024 34,188                  Thereafter 643,801                                     Total                                    $     801,872      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, 2019, 2018, and 2017.  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 2019 and 2018, certain officers of the Company were granted options to purchase common  shares of the Company. Option transactions for the years ended September 30, 2019 and 2018, are as  follows:                                                         Weighted        Weighted                                                         Average                                         Number          Average        Remaining                                            of           Exercise      Contractual                                         Options          Price        Life (Years)                                                                          Balance at October 1, 2017            455,988     $           5.33       7.89     Granted                                 6,000     $           8.36                                                                           Balance at September 30, 2018         461,988     $           5.37       6.91                                                                          Forfeited                             (12,500)           7.83               -     Granted                                25,000            9.34            9.33     Vested                                  6,000            9.34            8.41     Balance at September 30, 2019         480,488     $           5.44       5.27                                                                          Exercisable at September 30, 2019     289,001     $           5.29       5.76    As of September 30, 2019, the range of exercise prices for outstanding options was $5.15 to $9.34.    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, 2019 and 2018, was estimated to  be $19,380 and $6,524, respectively, at the date of grant using a Black-Scholes option-pricing model  using the following weighted average assumptions at the date of grant:                                                       2019            2018                                                                                       Risk-free interest rate                       2.33%           1.91%          Expected option life                        6.5 years       6.5 years          Expected stock volatility                    33.18%          25.93%          Expected dividend yields                     11.48%           5.31%    The expected stock volatility was calculated by averaging the historical volatility of a comparable  public entity.  As of September 30, 2019, all options were outstanding.    During the years ended September 30, 2019, 2018, and 2017, respectively, the Company recorded  $173,028, $162,436, and $149,022 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, 2019, was $165,705 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.    On March 21, 2018, the Company entered into a revolving promissory note with a bank for an aggregate  commitment of $1,000,000.  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%  (5.00% at September 30, 2019).  There was $900,000 and $0 outstanding on the revolving promissory  note as of September 30, 2019 and 2018, respectively.                                                               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 and is collateralized.   Subject to the terms of individual advances, debt covenants, outstanding amounts carry interest at either  the prime rate plus 0.5%, or at the LIBOR rate plus 2.5%.  Advances totaling $595,833 carry interest  at 4.5% at September 30, 2019.  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 $29,896 is presented net  with the note payable on the consolidated balance sheets.  Future maturities of principal on the note are  as follows at September 30, 2019:                    2020                                     $     162,500                  2021 162,500                  2022 162,500                  2023 108,333                  Thereafter -                  Note payable                                595,833                  Deferred financing costs                     (29,918)                                     Note payable, net of deferred financing costs  $     565,915      K. Income Taxes    Significant components of the provision for income taxes are as follows:                                               2019             2018            2017                                                                           Current                                $      1,900,565  $      294,064  $  1,183,394  Deferred                                    (221,761)     (1,443,099)       425,389                                                                           Total income tax expense (benefit)     $      1,678,804  $(1,149,035)    $  1,608,783    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 which was the year ended September 30, 2018.    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:                                                        2019            2018          Deferred tax assets (liabilities):                                             Allowance for doubtful accounts       $          9,397  $          3,569           Inventory reserves                          42,007          18,182           Other accruals                              38,354          57,560              Prepaids                                 (90,565)             -           Deferred compensation                            -             516           State NOL                                  182,661         132,693           Depreciation                               (361,830)       (593,777)           Goodwill                                   (695,788)       (695,788)                       Net deferred tax liability              $    (875,764)   $ (1,077,045)      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, 2019, 2018, and 2017, the  Company recognized approximately $131,000, $120,000, and $145,000, 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. There was no such refund in 2019.                                              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, 2019, is as follows:                    2020                                     $     124,447                  2021 124,447                  2022 43,051                  Thereafter -                                     Total amortization                       $     291,945    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, 2019.      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 2023.  Associated rent expense for the years ended  September 30, 2019, 2018, and 2017, was approximately $222,000, $144,000, and $150,000,  respectively.  As a result of escalating lease payments, the Company has recorded deferred rent of  approximately $44,000 and $71,000 as of September 30, 2019 and 2018, 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, 2019:                    2020                                     $     233,000                  2021 181,000                  2022 82,000                  2023 -                  2024 -                                     Total minimum lease payments             $     496,000                                                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, 2019 and 2018, the Company has no known material legal contingencies.      O. Subsequent Events    Effective November 25, 2019, the Company was sold to Insite Enterprises, Inc.    Management has evaluated and considered disclosure of subsequent events up to and including  December 20, 2019, which is the date the consolidated financial statements were available for issuance.                                             20