# EDGAR Filing Document

**Accession Number:** 0000917470
**File Stem:** 0001437749-23-007387
**Filing Date:** 2023-3
**Character Count:** 70688
**Document Hash:** 39e39bea61956b727e9d91fa4a5da2a0
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-007387.hdr.sgml**: 20230321

**ACCESSION NUMBER**: 0001437749-23-007387

**CONFORMED SUBMISSION TYPE**: 8-K/A

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20230103

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230321

**DATE AS OF CHANGE**: 20230321

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** OLYMPIC STEEL INC
- **CENTRAL INDEX KEY:** 0000917470
- **STANDARD INDUSTRIAL CLASSIFICATION:** WHOLESALE-METALS SERVICE CENTERS & OFFICES [5051]
- **IRS NUMBER:** 341245650
- **STATE OF INCORPORATION:** OH
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-23320
- **FILM NUMBER:** 23749723

**BUSINESS ADDRESS:**
- **STREET 1:** 5096 RICHMOND RD
- **CITY:** BEDFORD HEIGHTS
- **STATE:** OH
- **ZIP:** 44146
- **BUSINESS PHONE:** 2162923800

**MAIL ADDRESS:**
- **STREET 1:** 5096 RICHMOND RD
- **CITY:** BEDFORD HEIGHTS
- **STATE:** OH
- **ZIP:** 44146

zeus20230320_8ka.htm

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

------

**FORM **8-K/A**

**(Amendment No. 1)** 

------

**Current Report** 

**Pursuant to Section 13 or 15(d) of the** 

**Securities Exchange Act of 1934** 

**Date of Report (Date of earliest event reported) **January 3, 2023**

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**OLYMPIC STEEL, INC.**

**(Exact name of registrant as specified in its charter)** 

------

---

| | | |
|:---|:---|:---|
| **Ohio** | **000-23320** | **34-1245650** |
| **(State or Other Jurisdiction**<br> **of Incorporation)** | **(Commission**<br> **File Number)** | **(IRS Employer**<br> **Identification Number)** |
| **22901 Millcreek Boulevard, Suite 650**<br> **Highland Hills**, **Ohio** | **22901 Millcreek Boulevard, Suite 650**<br> **Highland Hills**, **Ohio** | **44122** |
| **(Address of Principal Executive Offices)** | **(Address of Principal Executive Offices)** | **(Zip Code)** |

---

**Registrant**'**s telephone number, including area code:** 

**(**216**) **292-3800**

**(Former name or former address, if changed since last report)** 

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which registered** |
| Common Stock, without par value | ZEUS | The NASDAQ Stock Market LLC |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Explanatory Note**

This amendment No. 1 to the Current Report on Form 8-K, which was originally filed with the Securities and Exchange Commission on January 3, 2023 (the "Original 8-K"), amends and restates in its entirety Item 9.01 of the Original 8-K to include the financial statements and pro forma financial information required by Item 9.01 with respect to the acquisition of Metal-Fab, Inc. ("Metal-Fab") by OS Holdings, Inc. ("OS Holdings"), an Ohio corporation and a wholly-owned subsidiary of Olympic Steel, Inc., on January 3, 2023. The remainder of the information contained in the Original 8-K is not hereby amended.

**Item 9.01 Financial Statements and Exhibits**

**(a)** **Financial Statements of Business Acquired.**

The following audited financial statements of Metal-Fab are filed as Exhibit 99.1 to this Current Report and are incorporated herein by reference:

(1) Balance Sheet as of December 31, 2022;

(2) Statement of Income for the year ended December 31, 2022;

(3) Statement of Stockholders' Equity the year ended December 31, 2022;

(4) Statement of Cash Flows for the year ended December 31, 2022; and

(5) Notes to the Financial Statements.

**(b)** **Pro Forma Financial Information.**

The following pro forma financial statements are filed as Exhibit 99.2 to this Current Report and are incorporated herein by reference:

(1) Unaudited pro forma Combined Balance Sheet as of December 31, 2022;

(2) Unaudited pro forma Combined Statement of Net Income (Loss) for the year ended December 31, 2022; and

(3) Notes to the unaudited pro forma combined financial information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d) Exhibits.**

---

| | |
|:---|:---|
| **Exhibit**<br> **Number** | **Description** |
| 2.2\* | [Stock Purchase Agreement, dated as of January 3, 2023, among Olympic Steel, Inc., OS Holdings, Inc., Metal-Fab, Inc., the sellers party thereto and the representative of the sellers.](http://www.sec.gov/Archives/edgar/data/917470/000143774923000197/ex_460023.htm) |
| 4.32\* | [Joinder and Sixth Amendment to Third Amended and Restated Loan and Security Agreement, dated as of January 3, 2023, among Olympic Steel, Inc., Olympic Steel Lafayette, Inc., Olympic Steel Minneapolis, Inc., Olympic Steel Iowa, Inc., Oly Steel NC, Inc., IS Acquisition, Inc., Chicago Tube and Iron Company, B Metals, Inc., MCI, Inc., ACT Acquisition, Inc., SHAQ, Inc., OS Holdings, Inc., Metal-Fab, Inc., the lenders from time to time party thereto and Bank of America, N.A. as Agent for the Lenders.](http://www.sec.gov/Archives/edgar/data/917470/000143774923000197/ex_459989.htm) |
| 23.1 | [Consent of FORVIS, LLP](ex_490729.htm) |
| 99.1 | [Audited Financial Statements of Metal-Fab, Inc. as of and for the year ended December 31, 2022](ex_490730.htm) |
| 99.2 | [Unaudited pro forma combined Balance Sheet of Olympic Steel, Inc. and Metal-Fab, Inc. as of December 31, 2022, unaudited pro forma combined Statement of Net Income (Loss) for the year ended December 31, 2022, and the related notes to the pro forma financial information](ex_490731.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

\* Previously filed

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**SIGNATURES**

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | Olympic Steel, Inc. | Olympic Steel, Inc. |
| Date: March 21, 2023 | By: | <u>/s/ Richard A. Manson</u> |
|  |  | Chief Financial Officer |

---

## Exhibit 23.1

**Exhibit 23.1**

**Independent Auditor**'**s Consent**

We consent to the incorporation by reference in the following documents:

1. Registration Statement No. 333-265301 on Form S-3 of Olympic Steel, Inc.;

2. Registration Statement No. 333-259306 on Form S-8 pertaining to the Olympic Steel, Inc. Amended and Restated 2007 Omnibus Incentive Plan;

3. Registration Statement No. 333-211023 on Form S-8 pertaining to the Olympic Steel, Inc. Amended and Restated 2007 Omnibus Incentive Plan; and

4. Registration Statement No. 333-143900 on Form S-8 pertaining to the Olympic Steel, Inc. Olympic Steel, Inc. 2007 Omnibus Incentive Plan;

of our report dated February 10, 2023, with respect to the balance sheet of Metal-Fab, Inc. as of December 31, 2022, and the related statements of income, stockholders' equity and cash flows for the year ended December 31, 2022, appearing in Olympic Steel Inc.'s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on March 21, 2023.

/s/ FORVIS, LLP

Wichita, Kansas

March 21, 2023

## Exhibit 99.1

**Exhibit 99.1**

**Independent Auditor**'**s Report**

Board of Directors

Metal-Fab, Inc.

Wichita, Kansas

***Opinion***

We have audited the financial statements of Metal-Fab, Inc., which comprise the balance sheet as of December 31, 2022, and the related statements of income, stockholders' equity and cash flows for the year then ended, and the related notes to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Metal-Fab, Inc. as of December 31, 2022, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

***Basis for Opinion***

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of our report. We are required to be independent of Metal-Fab, Inc. and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

***Emphasis of Matter***

As discussed in Note 6 to the financial statements, in 2022, the entity adopted new accounting guidance for accounting for leases. Our opinion is not modified with respect to this matter.

***Responsibilities of Management for the Financial Statements***

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Metal-Fab, Inc.'s ability to continue as a going concern within one year after the date that these financial statements are issued.

------

***Auditor***'***s Responsibilities for the Audit of the Financial Statements***

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

● Obtain an understanding of internal control relevant to the audit 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 Metal-Fab, Inc.'s internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Metal-Fab, Inc.'s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ FORVIS, LLP

Wichita, Kansas

February 10, 2023

------

**Metal-Fab, Inc.**

**Balance Sheet**

**December 31, 2022**

---

| | |
|:---|:---|
| **Assets** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Current Assets** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash | $**199669** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable, net |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade, net of $6,509 allowance | **10532600** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other | **64974** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories | **12588584** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other | **739530** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total current assets** | **24125357** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Property and equipment, at cost** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land and land improvements | **133482** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Building and building equipment | **5607387** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Machinery and equipment | **27960888** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trucks | **57135** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Leasehold improvements | **479858** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Construction and equipment in progress | **47697** |
|  | **34286447** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less accumulated depreciation and amortization | **29095507** |
|  | **5190940** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Other Assets** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Right of use asset - operating lease | **6669134** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term assets | **200000** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total assets** | $**36185431** |
| **Liabilities and Stockholders' Equity** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Current Liabilities** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | **2143750** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current maturities of operating lease liabilities | **440260** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred compensation, current portion | **4820032** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payroll taxes and other payroll deductions | **138002** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Salaries and wages | **2648269** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retirement plan | **417752** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses | **854892** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total current liabilities** | **11462957** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Other Liabilities** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease liabilities | **6228874** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities** | **17691831** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Stockholders' Equity** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Class A voting common stock, par value $1 a share; authorized 500 shares, issued - 200 shares | **200** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Class B non-voting common stock, par value $1 a share; authorized 49,500 shares, issued - 19,800 shares | **19800** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital | **181098** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings | **18292502** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total stockholders' equity** | **18493600** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities and stockholders' equity** | $**36185431** |

---

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**Metal-Fab, Inc.**

**Statements of Income**

**Year Ended December 31, 2022**

---

| | |
|:---|:---|
| **Sales** | $**96722274** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less discounts and allowances | **1194732** |
| **Net Sales** | **95527542** |
| **Costs of Goods Sold** | **58085720** |
| **Gross Profit** | **37441822** |
| **Operating Expenses** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Engineering | **1437826** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales | **5939686** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Delivery | **7293010** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | **5833878** |
|  | **20504400** |
| **Operating income** | **16937422** |
| **Other Income (Expense)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest income | **373** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on sale and disposal of equipment | **(22097)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition costs | **(377730)** |
| &nbsp;&nbsp;&nbsp; **Net income** | $**16537968** |

---

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**Metal-Fab, Inc.**

**Statement of Stockholders' Equity**

**Year Ended December 31, 2022**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Class A**<br> **Voting** | **Class B Non-**<br> **Voting** | **Additional** | | |
|  | **Common**<br> **Stock** | **Common**<br> **Stock** | **Paid-**In**<br> **Capital** | **Retained**<br> **Earnings** | **Total** |
| **Balances, January 1, 2022** | $**200** | $**19800** | $**181098** | $**16236005** | $**16437103** |
| &nbsp;&nbsp;&nbsp; Net Income |  |  |  | 16537968 | 16537968 |
| &nbsp;&nbsp;&nbsp; Distributions to stockholders |  |  |  | (14481471) | (14481471) |
| **Balances, December 31, 2022** | $**200** | $**19800** | $**181098** | $**18292502** | $**18493600** |

---

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**Metal-Fab, Inc.**

**Statement of Cash Flows**

**Year Ended December 31, 2022**

---

| | |
|:---|:---|
| **Operating activities** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Income | $16537968 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Items not requiring (providing) cash |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation | 1628882 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Noncash operating lease expense | 418832 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued deferred compensation | 1110955 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on sale and disposal of equipment | 22097 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable | (998896) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories | (3438882) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expense and other | (180209) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | 271741 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retirement plan | 205629 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses | (351012) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payroll taxes and other payroll deductions | 30123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Salaries and wages | 1310772 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred compensation | (81488) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease liability | (418832) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net cash provided by operating activities** | **16067680** |
| **Investing activities** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchase of property and equipments | (1635097) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from sale of equipment | 1070 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchase of other assets | (200000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net cash used in investing activities** | **(1834027)** |
| **Financing activities** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Distributions to stockholders | (14481471) |
| **Decrease in cash** | (247818) |
| **Cash, Beginning of Year** | 447487 |
| **Cash, End of Year** | $**199669** |

---

------

**Metal-Fab, Inc.**

**Notes to Financial Statements**

**December 31, 2022**

---

| | |
|:---|:---|
| **Note 1:** | **Nature of Operations and Summary of Significant Accounting Policies** |

---

***Nature of Operations***

Metal-Fab, Inc. (the Company) is engaged in manufacturing vent pipe and commercial and industrial air cleaners. Approximately 79% of sales are vent pipe and 21% from other miscellaneous products and air cleaners. The manufacturing operations and administrative offices are located in two facilities in Wichita, Kansas, one of which is leased for manufacturing purposes.

***Use of Estimates***

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

***Cash***

At December 31, 2022, the Company's cash accounts exceeded federally insured limits by approximately $1,453,000.

***Accounts Receivable***

Accounts receivable are stated at the amount of consideration from customers of which the Company has an unconditional right to receive. The Company provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions.

Accounts receivable are ordinarily due 30 days after the issuance of the invoice. Accounts past due more than 60 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer.

***Inventories***

Inventories consist of raw materials, work-in-process, finished goods and supplies. Inventories are stated at the lower of cost or net realizable value. Costs are determined using the last-in, first-out (LIFO) method.

***Property and Equipment***

Property and equipment acquisitions are stated at cost less accumulated depreciation. Depreciation is charged to expense principally on the straight-line basis over the estimated useful life of each asset.

The estimated useful lives for each major depreciable classification of property and equipment are as follows:

---

| | | | |
|:---|:---|:---|:---|
| Building and building equipment (in years) | 5.0 |  | 25.0 |
| Machinery and equipment (in years) | 5.0 |  | 12.0 |
| Trucks (in years) | 3.0 |  | 5.0 |
| Leasehold improvements (in years) |  | 5 |  |

---

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***Long-lived Asset Impairment***

The Company evaluates the recoverability of the carrying value of long-lived assets whenever events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset is less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value.

No asset impairment was recognized during the year ended December 31, 2022.

***Research and Development Costs***

Research and development costs are charged against income as incurred.

***Revenue Recognition***

Revenue is recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration that it expects to be entitled to in exchange for those goods or services. The amount and timing of revenue recognition varies based on the nature of the goods or services provided and the terms and conditions of the customer contract. See *Note 10* for additional information about the Company's revenue.

***Income Taxes***

The Company's stockholders have elected to have the Company's income taxed as an "S" Corporation under provisions of the Internal Revenue Code and a similar section of the Kansas income tax law. Therefore, taxable income or loss is reported to the individual stockholders for inclusion in their respective tax returns and no provision for federal and state income taxes is included in these statements.

***Shipping and Handling Costs***

Shipping and handling costs are included in delivery expenses and shown as part of operating expenses. Freight billed to and paid by customers of approximately $2,221,000 is included in sales.

***Revision***

An immaterial revision of $410,501 has been made to beginning retained earnings to adjust for the accrued vacation, prior period effect that was previously unrecorded at December 31, 2021.

---

| | |
|:---|:---|
| **Note 2:** | **Inventories** |

---

The principal inventory classifications at December 31, 2022, are summarized as follows:

---

| | |
|:---|:---|
|  | **2022** |
| &nbsp;&nbsp;&nbsp; Raw materials and parts | $4966380 |
| &nbsp;&nbsp;&nbsp; Work in process | 1630894 |
| &nbsp;&nbsp;&nbsp; Finished products | 8429350 |
| &nbsp;&nbsp;&nbsp; Supplies | 130590 |
|  | 15157214 |
| &nbsp;&nbsp;&nbsp; Excess of current cost over LIFO | (2568630) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $12588584 |

---

Costs of all inventories are determined under the LIFO method. If all inventories had been valued under the first-in, first-out method (FIFO), inventory would have been $2,568,630 higher than reported at December 31, 2022. In addition, net income would have been approximately $108,000 lower for the year ended December 31, 2022.

------

---

| | |
|:---|:---|
| **Note 3:** | **Deferred Compensation Plan** |

---

The Company has a deferred compensation plan for key employees. The plan provides for annual payments at retirement over a period of five years. Upon death, the agreement provides for payments to continue to designated beneficiaries. Amounts accrued are determined on an established formula based on annual compensation and company profitability. The estimated present value of the future retirement payments is shown on the balance sheet as either a current or long-term liability, depending on when the payments are expected to be paid. The net change is reflected as a reduction of income. To the extent that the contracts become payable at an earlier date, the amount of the recorded liability could change materially. The expense totaled $1,072,125 for the year ended December 31, 2022. Deferred compensation of $81,488 was paid to retired participants during the year ended December 31, 2022. Due to the sale of the Company in January 2023 (see *Note 11*), the deferred compensation plan was terminated on January 3, 2023, and all amounts were paid to participants at that time.

---

| | |
|:---|:---|
| **Note 4:**  | **Revolving Line of Credit Facility** |

---

The Company has a $2,000,000 revolving line of credit expiring in April 2023. The agreement was terminated as of January 3, 2023. At December 31, 2022, there were not any borrowings against this line. The line is unsecured and bears interest on the outstanding balance at ½ percentage point under the Prime Rate as published in *The Wall Street Journal*, although the line of credit has an interest rate floor of 4.00% (6.5% at December 31, 2022).

In connection with the line of credit, the Company is required, among other things, to maintain certain financial covenants. The agreements also contain a negative covenant which restricts the Company from incurring additional borrowings, leases, loans or advances or placing liens, mortgages or other encumbrances on Company assets without written consent from the lending bank.

---

| | |
|:---|:---|
| **Note 5:** | **Employees Retirement Plan** |

---

The Company has a 401(k) Salary Deferral Plan, whereby eligible employees may voluntarily contribute a percentage of compensation. The Company matches 50% of the first 5% of employee contributions and may make a discretionary contribution for active members at plan year-end. The Plan covers all employees meeting minimum age and length of service requirements.

Total expense for the year ended December 31, 2022, was $670,627.

---

| | |
|:---|:---|
| **Note 6:** | **Related Party Transactions/Leases** |

---

***Change in Accounting Principle***

In February 2016, the FASB issued ASU 2016-02, *Leases (Topic 842)*. This ASU requires lessees to recognize a lease liability and a right-of-use (ROU) asset on a discounted basis, for substantially all leases, as well as additional disclosures regarding leasing arrangements. Disclosures are required to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. In July 2018, the FASB issued ASU 2018-11, *Leases (Topic 842): Targeted Improvements*, which provides an optional transition method of applying the new lease standard. Topic 842 can be applied using either a modified retrospective approach at the beginning of the earliest period presented or, as permitted by ASU 2018-11, at the beginning of the period in which it is adopted, *i.e*., the comparatives under ASC 840 option.

The Company adopted Topic 842 on January 1, 2022 (the effective date), using the comparatives under ASC 840 transition method, which applies Topic 842 at the beginning of the period in which it is adopted. Prior period amounts have not been adjusted in connection with the adoption of this standard. The Company elected the package of practical expedients under the new standard, which permits entities to not reassess lease classification, lease identification or initial direct costs for existing or expired leases prior to the effective date. The Company has lease agreements with nonlease components that relate to the lease components. The Company elected the practical expedient to account for nonlease components and the lease components to which they relate as a single lease component for all. Also, the Company elected to keep short-term leases with an initial term of 12 months or less off the balance sheet. The Company did not elect the hindsight practical expedient in determining the lease term for existing leases as of January 1, 2022. The standard did not significantly affect the Statements of Income or Cash Flows.

------

The most significant impact of adoption was the recognition of operating lease ROU assets and operating lease liabilities of $7,087,966 each.

The cumulative effect of the changes made to our balance sheet for the adoption of this standard was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  |  | **ASC 842** |  |
|  | **December 31,** | **Adjustment** | **January 1,** |
|  | **2021** | **January 1,** | **2022** |
|  | **As Reported** | **2022** | **As Adjusted** |
| &nbsp;&nbsp;&nbsp; **Assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Right-of-use assets - operating lease (A) | $- | $7087966 | $7087966 |
| &nbsp;&nbsp;&nbsp; **Liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current maturities of operating lease liabilities (B) |  | 440260 | 440260 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease liabilities (B) |  | 6228874 | 6228874 |
| &nbsp;&nbsp;&nbsp;&nbsp;(A) The adjustment represents the capitalization of right-of-use assets - operating leases | &nbsp;&nbsp;&nbsp;&nbsp;(A) The adjustment represents the capitalization of right-of-use assets - operating leases | &nbsp;&nbsp;&nbsp;&nbsp;(A) The adjustment represents the capitalization of right-of-use assets - operating leases | &nbsp;&nbsp;&nbsp;&nbsp;(A) The adjustment represents the capitalization of right-of-use assets - operating leases |
| &nbsp;&nbsp;&nbsp;&nbsp;(B) The adjustment represents the recognition of operating lease liabilities | &nbsp;&nbsp;&nbsp;&nbsp;(B) The adjustment represents the recognition of operating lease liabilities | &nbsp;&nbsp;&nbsp;&nbsp;(B) The adjustment represents the recognition of operating lease liabilities | &nbsp;&nbsp;&nbsp;&nbsp;(B) The adjustment represents the recognition of operating lease liabilities |

---

***Accounting Policies***

The Company determines if an arrangement is a lease or contains a lease at inception. Leases result in the recognition of right-of-use (ROU) assets and lease liabilities on the balance sheet.

ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease, measured on a discounted basis. The Company determines lease classification as operating or finance at the lease commencement date and has determined the existing lease is an operating lease. At lease inception, the lease liability is measured at the present value of the lease payments over the lease term. The ROU asset equals the lease liability. The Company uses the implicit rate when readily determinable. As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments.

The lease term may include options to extend or to terminate the lease that the Company is reasonably certain to exercise. Lease expense is generally recognized on a straight-line basis over the lease term.

The Company has elected not to record leases with an initial term of 12 months or less on the balance sheet. Lease expense on such leases is recognized on a straight-line basis over the lease term.

***Nature of Leases***

The Company leases a manufacturing facility from a related limited liability company under a 10-year operating lease expiring in 2024. There is an option to extend the term of the lease for two additional five-year periods beyond 2024. The terms of the lease require monthly payments of $63,379. Total rent paid to this company was $760,550 for the year ended December 31, 2022.

------

***Quantitative Disclosures***

The lease cost and other required information for the year ended December 31, 2022, are:

---

| | |
|:---|:---|
| Lease Cost |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease cost | $760550 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Variable lease cost | 244471 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total lease cost | $1005021 |
| Other information |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash paid for amounts included in the measurement of lease liabilities |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating cash flows from operating leases | $760550 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Weighted-average remaining lease term Operating leases (in years) | 11.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Weighted-average discount rate Operating leases | 5.0% |

---

Future minimum lease payments and reconciliation to the balance sheet at December 31, 2022, are as follows:

---

| | |
|:---|:---|
| 2023 | $760550 |
| 2024 | 760550 |
| 2025 | 760550 |
| 2026 | 760550 |
| 2027 | 760550 |
| Thereafter | 4943570 |
| Total future undiscounted lease payments | 8746320 |
| Less: Interest | (2077186) |
| &nbsp;&nbsp;&nbsp; Lease liabilitites | $6669134 |

---

---

| | |
|:---|:---|
| **Note 7:** | **Related Party Transactions** |

---

In addition to the related party lease disclosed in the previous note, the Company has a consulting agreement with another related limited liability company. For the year ended December 31, 2022, $72,500 per month was paid to the limited liability company in exchange for services. The provided services include strategic planning, customer support and service, assisting management with operational matters resolution and other services as mutually agreed upon. The agreement is renewable each year, with the amount of fees mutually determined at each renewal date. Total consulting fees paid during the year ended December 31, 2022, were $870,000. The agreement was terminated on January 3, 2023.

---

| | |
|:---|:---|
| **Note 8:** | **Significant Estimates and Concentrations** |

---

Accounting principles generally accepted in the United States of America require disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Those matters include the following:

***General Litigation***

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the financial position, results of operations and cash flows of the Company.

------

***Self-Insurance and Reinsurance Coverage***

The Company self-insures workers' compensation and employers' liability insurance coverage. The Company has reinsurance coverage (statutory with no limit) that covers claims in excess of the Company's $500,000 specific retention for both workers' compensation and employers' liability. The Company's reinsurance coverage (statutory with no limit) also covers claims in excess of a $2,000,000 maximum aggregate retention during each insurance policy period.

The Company has established an Employee Group Benefit Plan providing comprehensive medical benefits to its employees under a self-funded plan. The individual stop loss benefit is the excess of medical benefits over $175,000 for any one employee or dependent in any one contract year for the first claim and $125,000 for claims thereafter. Stop loss coverage is provided by individual stop loss insurance.

Actual claims are expensed in the period incurred. Estimated claims payable as determined by an independent third-party administrator are accrued as of the financial statement date and expensed in that period. The amount of actual losses incurred could differ materially from the estimates reflected in these financial statements.

---

| | |
|:---|:---|
| **Note 9:** | **Commitment** |

---

***Letter of Credit***

The Company has provided an unsecured letter of credit of $1,281,000 in connection with the self-insured workers' compensation plan.

---

| | |
|:---|:---|
| **Note 10:** | **Revenue from Contracts with Customers** |

---

***Performance Obligations***

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring distinct goods or providing services to customers. The Company's revenue consists substantially of product sales and is reported net of sales discounts, returns and other allowances offered to customers. The Company recognizes revenue when performance obligations under the terms of contracts with its customers are satisfied, which occurs when control passes to a customer to enable them to direct the use of and obtain benefit from a product. This typically occurs when a customer obtains legal title, obtains the risks and rewards of ownership, has received the goods according to the contractual shipping terms either at the shipping point or destination and is obligated to pay for the product. All revenues are recognized at a point in time. Customary terms require payment within 30 days, and for certain customers, deposits may be required in advance of shipment.

***Accounting Policies and Practical Expedients Elected***

For shipping and handling activities, the Company is applying an accounting policy election, which allows an entity to account for shipping and handling activities as fulfillment activities rather than a promised good or service when the activities are performed, even if those activities are performed after the control of the good has been transferred to the customer. Therefore, the Company expenses shipping and handling costs at the time revenue is recognized. The Company classifies shipping and handling expenses as delivery expenses, which is included in operating expenses in the statement of income.

The Company is also applying an accounting policy election, which allows an entity to exclude from revenue any amounts collected from customers on behalf of third parties, such as sales taxes and other similar taxes we collect concurrent with revenue-producing activities. Therefore, revenue is presented net of sales taxes and similar revenue-based taxes.

---

| | |
|:---|:---|
| **Note 11:** | **Subsequent Events** |

---

Effective January 3, 2023, all of the stock of the Company was sold to OS Holdings, Inc., a wholly-owned subsidiary of Olympic Steel, Inc. Acquisition costs are reported on the statement of income in other income (expense).

Subsequent events have been evaluated through February 10, 2023, which is the date the financial statements were available to be issued

## Exhibit 99.2

**Exhibit 99.2**

**OLYMPIC STEEL, INC.**

**UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION**

The following unaudited pro forma combined financial information ("Pro Forma Information") is based on the historical consolidated financial information of Olympic Steel, Inc. ("we" or "Olympic"), which is included in Olympic's Annual Report on Form 10-K for the year ended December 31, 2022, and the financial information of Metal-Fab, Inc. ("Metal-Fab"), which is included in Exhibit 99.1 to Olympic's Current Report on Form 8-K/A (the "Form 8-K/A"), and has been prepared to reflect the acquisition of all of the outstanding capital stock of Metal-Fab by Olympic (the "Acquisition").

The unaudited pro forma combined balance sheet combines the historical balance sheets of Olympic and Metal-Fab as of December 31, 2022, giving effect to the Acquisition as if it had been consummated on December 31, 2022. The unaudited pro forma combined statement of Net Income (Loss) combines the historical income statements for Olympic and Metal-Fab, giving effect to the acquisition as if it had been consummated on January 1, 2022. The historical financial information of Olympic and Metal-Fab for the year ended December 31, 2022, is derived from the audited financial statements of Olympic and Metal-Fab, respectively, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The unaudited pro forma combined financial information was prepared using the acquisition method of accounting. Accordingly, the historical consolidated financial information has been adjusted to give effect to the impact of the consideration issued by Olympic to Metal-Fab's stockholders in connection with the Acquisition and the effect of debt financing necessary to complete the transaction. The pro forma adjustments are based on the preliminary information available at the time of the preparation of the Form 8-K/A. For purposes of this pro forma financial information, Olympic has made a preliminary allocation of the estimated purchase price to the assets acquired and liabilities assumed based on various estimates of their fair value. These pro forma purchase price allocation adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma combined financial information and are subject to revision based on a final determination of fair value. Final determinations of fair value may differ materially from those presented herein. The unaudited pro forma combined statement of Net Income (Loss) also includes certain purchase accounting adjustments, including items expected to have a continuing impact on combined results, such as increased depreciation and amortization expense on acquired assets.

The unaudited pro forma combined financial information does not reflect the cost of any integration activities or benefits that may result from synergies that may be derived from integration activities. Therefore, the actual amounts reflected in our statement of unaudited combined operations may differ materially from the information presented in the accompanying pro forma financial statements.

The unaudited pro forma combined financial information also reflects the impact of Olympic's January 3, 2023 amendment to its Third Amended and Restated Loan and Security Agreement, which increased the availability under its revolving credit facility from $475.0 million to $625.0 million.

Certain amounts in the historical Metal-Fab financial statements have been reclassified to conform to Olympic's financial statement presentation. Management believes that there could be additional reclassifications. Based on Olympic's review of Metal-Fab's summary of significant accounting policies disclosed in Metal-Fab's financial statements, the nature and amount of any adjustments to the financial statements of Metal-Fab to conform their accounting policies to those of Olympic are not expected to be significant. Further review of Metal-Fab's accounting policies and financial statements may result in required revisions to Metal-Fab's policies to conform to those of Olympic.

The unaudited pro forma combined financial information is presented for informational purposes only. The unaudited pro forma combined financial information is not necessarily indicative of what the combined companies' financial position or results of operations actually would have been had the Acquisition been completed at the dates indicated. In addition, the unaudited pro forma combined information does not purport to project the future financial position or operating results of the combined company.

------

**Olympic Steel, Inc.**

**Unaudited Pro Forma Combined Balance Sheet**

**As of December 31, 2022**

(in thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Historical** | **Historical** | **Pro Forma** | **Pro Forma** |
|  | **OSI** | **Metal Fab** | **Adjustments** | **Combined** |
| **Assets** |  |  |  |  |
| **Cash and cash equivalents** | $12189 | $200 | $1529 (a) | $13918 |
| **Accounts receivable, net** | 219789 | 10597 |  | 230386 |
| **Inventories, net (includes LIFO reserve of $20,301 for OSI and $2,569 for Metal-Fab as of December 31, 2022 in historical columns)** | 416931 | 12589 | 2079 (b) | 434168 |
|  |  |  | 2569 (c) |  |
| **Prepaid expenses and other** | 9197 | 740 |  | 9937 |
| **Total current assets** | **658106** | **24126** | **6177** | **688409** |
| **Property and equipment, at cost** | 429810 | 34286 | (13879) (d) | 450217 |
| **Accumulated depreciation** | (281478) | (29096) | 29096 (d) | (281478) |
| **Net property and equipment** | **148332** | **5190** | **15217** | **168739** |
| **Goodwill** | 10496 |  | 31690 (e) | 42186 |
| **Intangible assets, net** | 32035 |  | 56240 (f) | 88275 |
| **Other long-term assets** | 14434 | 200 | 93 (g) | 15195 |
|  |  |  | 468 (h) |  |
| **Right of use asset, net** | 28224 | 6669 | (31) (i) | 34862 |
| **Total assets** | $**891627** | $**36185** | $**109854** | $**1037666** |
| **Liabilities** |  |  |  |  |
| **Accounts payable** | $101446 | $2144 | $1529 (a) | $105119 |
| **Accrued payroll** | 40334 | 2786 |  | 43120 |
| **Other accrued liabilities** | 16824 | 6093 | (4820) (j) | 18097 |
| **Current portion of lease liabilities** | 6098 | 440 | 1 (i) | 6539 |
| **Total current liabilities** | **164702** | **11463** | **(3290)** | **172875** |
| **Credit facility revolver** | 165658 |  | 133847 (k) | 299505 |
| **Other long-term liabilities** | 12619 |  |  | 12619 |
| **Deferred income taxes** | 10025 |  |  | 10025 |
| **Lease liabilities** | 22655 | 6229 | (32) (i) | 28852 |
| **Total liabilities** | **375659** | **17692** | **130525** | **523876** |
| **Shareholders' Equity** |  |  |  |  |
| **Preferred stock** |  |  |  |  |
| **Common stock** | 134724 | 20 | (20) (l) | 134724 |
| **Treasury stock** |  |  |  |  |
| **Accumulated other comprehensive loss** | 1311 |  |  | 1311 |
| **Additional paid-in capital** |  | 181 | (181) (l) |  |
| **Retained earnings** | 379933 | 18292 | (18292) (l) | 377755 |
|  |  |  | (2178) (m) |  |
| **Total shareholders' equity** | **515968** | **18493** | **(20671)** | **513790** |
| **Total liabilities and shareholders' equity** | $**891627** | $**36185** | $**109854** | $**1037666** |

---

*The accompanying notes are an integral part of the Pro Forma Information.*

------

**Olympic Steel, Inc.**

**Unaudited Pro Forma Combined Statement of Net Income (Loss)**

**For the Year Ended December 31, 2022**

**(in thousands, except per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Historical** | **Historical** | **Pro Forma** | **Pro Forma** |
|  | **OSI** | **Metal-Fab** | **Adjustments** | **Combined** |
| **Net sales** | $2559990 | $95528 | $736 (aa) | $2656254 |
| **Costs and expenses** |  |  |  |  |
| **Cost of materials sold (excludes items shown separately below)** | 2073930 | 58086 | (2103) (aa) | 2132100 |
|  |  |  | 2079 (bb) |  |
|  |  |  | 108 (cc) |  |
| **Warehouse and processing** | 104668 |  | 2301 (aa) | 106969 |
| **Administrative and general** | 114004 | 7671 | (188) (aa) | 123445 |
|  |  |  | (870) (dd) |  |
|  |  |  | 2178 (ee) |  |
|  |  |  | 650 (ff) |  |
| **Distribution** | 60529 | 7293 | 1 (aa) | 67823 |
| **Selling** | 40174 | 5940 |  | 46114 |
| **Occupancy** | 13200 |  | 425 (aa) | 13625 |
| **Depreciation** | 17285 |  | 273 (aa) | 18521 |
|  |  |  | 963 (gg) |  |
| **Amortization** | 2453 |  | 27 (aa) | 4583 |
|  |  |  | 2103 (hh) |  |
| **Total costs and expenses** | **2426243** | **78990** | **7947** | **2513180** |
| **Operating income (loss)** | **133747** | **16538** | **(7211)** | **143074** |
| **Other loss, net** | 45 |  |  | 45 |
| **Income (loss) before financing costs and income taxes** | **133702** | **16538** | **(7211)** | **143029** |
| **Interest and other expense on debt** | 10080 |  | 4176 (ii) | 14393 |
|  |  |  | 137 (jj) |  |
| **Income (loss) before income taxes** | **123622** | **16538** | **(11524)** | **128636** |
| **Income tax provision** | 32691 |  | 1326 (kk) | 34017 |
| **Net income (loss)** | $**90931** | $**16538** | $**(12850)** | $**94619** |
| **Earnings per share:** |  |  |  |  |
| **Net income (loss) per share - basic** | $**7.87** | $**1.43** | $**(1.11)** (ll) | $**8.19** |
| **Weighted average shares outstanding - basic** | **11551** | **11551** | **11551** | **11551** |
| **Net income (loss) per share - diluted** | $**7.87** | $**1.43** | $**(1.11)** (ll) | $**8.19** |
| **Weighted average shares outstanding - diluted** | **11559** | **11559** | **11559** | **11559** |

---

*The accompanying notes are an integral part of the Pro Forma Information.*

------

**Notes to Unaudited Pro Forma Combined Financial Information**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***1.***  ***<u>Basis of Presentation</u>:*** 

On January 3, 2023, Olympic purchased all of the outstanding shares of capital stock of Metal-Fab for a cash purchase price of $131.2 million. Metal-Fab, headquartered in Wichita, Kansas, is a manufacturer of venting, micro air and clean air products for residential, commercial and industrial applications.

The accompanying unaudited pro forma combined financial information presents the pro forma combined financial position and results of operations of the combined company based upon the historical financial statements of Olympic and Metal-Fab, after giving effect to the Acquisition adjustments described in these notes, and is intended to reflect the impact of the Acquisition on Olympic. Certain amounts in Metal-Fab's historical financial statements have been reclassified to conform to Olympic's presentation.

The allocation of the purchase price to the assets acquired and liabilities assumed in the pro forma financial information is based on management's preliminary valuation estimates and are subject to revisions, which may be material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***2.***  ***<u>Purchase Price:</u>*** 

The total purchase price of the Acquisition was $131.2 million. There was no working capital adjustment required. The determination of the excess of purchase price over the historical Metal-Fab book values of the assets acquired and liabilities assumed as of December 31, 2022 is as follows (in millions):

---

| | |
|:---|:---|
| Total estimated purchase price | $131.2 |
| Less: book value of Metal-Fab assets acquired and liabilities assumed | $23.3 |
| Excess of purchase price over book value of net assets acquired | $107.9 |

---

Liabilities assumed does not include $4.8 million of other accrued liabilities related to payments made in connection with the Acquisition by Metal-Fab, including transaction bonuses and change in control payments triggered as a result of the Acquisition.

For purposes of the Pro Forma Information presented as of December 31, 2022, the cash purchase price was funded by $131.2 million of debt borrowed under the revolving credit facility (the "ABL Credit Facility") provided by our Third Amended and Restated Loan and Security Agreement.

In connection with the Acquisition, the Company entered into a Sixth Amendment to Third Amended and Restated Loan and Security Agreement, which increased the availability under our existing ABL Credit Facility from $475 million to $625 million. In addition, the amendment allows the Company to include the eligible assets of Metal-Fab in its borrowing base.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***3.***  ***<u>Proforma Adjustments:</u>*** 

The Pro Forma Information includes the following pro forma adjustments to reflect (1) the effects of additional financing necessary to complete the Acquisition and (2) the allocation of the purchase price, including adjusting assets and liabilities to fair value, with related changes in revenues, costs and expenses.

Combined Balance Sheet Pro Forma Adjustments:

&nbsp;&nbsp;&nbsp;&nbsp;(a) *Metal-Fab Historical Presentation* – Certain reclassifications have been made to Metal-Fab's historical presentation in order to conform to Olympic's historical presentation.

&nbsp;&nbsp;&nbsp;&nbsp;(b) *Inventories* – Represents the pro forma adjustment to reflect Metal-Fab's finished goods, work in process inventory and raw materials at fair market value which requires the use of estimated selling prices less the sum of (i) costs of disposal and (ii) a reasonable profit allowance for the selling effort. The work in process inventory also includes an estimate of costs to complete the manufacturing process and a reasonable profit allowance for that process. The fair value of raw materials was determined based on third-party appraisal valuations using market prices.

------

&nbsp;&nbsp;&nbsp;&nbsp;(c) *Inventories* – Represents the elimination of Metal-Fab's historical LIFO inventory reserve. The acquired inventory will be valued at fair market value.

&nbsp;&nbsp;&nbsp;&nbsp;(d) *Property and equipment, net* – Represents the pro forma adjustment to reflect Metal-Fab's property and equipment at fair value based on preliminary appraisal valuations.

&nbsp;&nbsp;&nbsp;&nbsp;(e) *Goodwill* – Under the acquisition method of accounting, the total estimated purchase price, as shown in the table above, is allocated to Metal-Fab's net tangible and intangible assets acquired and liabilities assumed based on their estimated fair value as of January 3, 2023. The fair value of these assets and liabilities is preliminary and is subject to change pending additional information that may come to our knowledge in the future. The preliminary adjustments to the assets acquired and liabilities assumed are as follows (in millions):

---

| | |
|:---|:---|
| **Excess of purchase price over net book value of net assets acquired** | $**107.9** |
| Adjustment to goodwill related to: |  |
| Inventories | (4.6) |
| Property and equipment, net | (15.2) |
| Other intangible assets | (56.2) |
| Total adjustments | (76.1) |
| **Total goodwill** | $**31.8** |

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Pursuant to ASC 350, Intangibles – Goodwill and Other, goodwill is not amortized; rather, impairment tests are performed at least annually or more frequently if circumstances indicate an impairment may have occurred. If impairment exists, the goodwill is immediately written down to its fair value through a current charge to earnings. Accordingly, the goodwill arising from the Acquisition will be subject to an impairment test at least annually.

&nbsp;&nbsp;&nbsp;&nbsp;(f) *Other intangibles* – Represents the pro forma adjustment to record Metal-Fab's currently identified other intangible assets, which consist of indefinite-lived tradenames of $11.5 million, amortizable customer relationships of $38.0 million, amortizable technology and know-how of $5.3 million and amortizable restricted covenants of $1.4 million. The estimated fair values are based on preliminary appraisal valuations performed utilizing discounted incremental cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;(g) *Other long-term assets* – Represents the estimated impact of deferred taxes in the allocation of purchase price to acquired assets and liabilities. The estimates are based on an estimated statutory tax rate of approximately 25% and could change based on the applicable tax rates and finalization of the combined company's tax position.

&nbsp;&nbsp;&nbsp;&nbsp;(h) *Other long-term assets* – Represents the pro forma adjustment to record the deferred financing fees incurred as part of the debt refinancing.

&nbsp;&nbsp;&nbsp;&nbsp;(i) *Right of use assets and liabilities* - Represents the pro forma adjustment to the record the right of use asset and liability based on the present value of the future minimum lease payments at the acquisition date over the lease term based on Olympic's incremental borrowing rate.

&nbsp;&nbsp;&nbsp;&nbsp;(j) *Other accrued liabilities* – Represents the pro forma adjustment of $4.8 million of payments made in connection with the Acquisition by Metal-Fab, including transaction bonuses and change in control payments triggered as a result of the Acquisition. These liabilities were not acquired and have not been considered in the Pro Forma Combined Statement of Net Income (Loss).

&nbsp;&nbsp;&nbsp;&nbsp;(k) *Credit facility revolver* – Represents the pro forma adjustment to reflect debt financing necessary to complete the Acquisition. In connection with the Acquisition, the Company entered into a Sixth Amendment to Third Amended and Restated Loan and Security Agreement, which increased the availability under our existing ABL Credit Facility from $475.0 million to $625.0 million. In addition, the pro forma adjustment includes the deferred financing fees incurred as part of the amendment and certain acquisition related expenses incurred by Olympic as part of the Acquisition.

&nbsp;&nbsp;&nbsp;&nbsp;(l) *Shareholders* ' *equity* – Represents pro forma adjustments to eliminate the historical shareholders' equity of Metal-Fab.

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&nbsp;&nbsp;&nbsp;&nbsp;(m) *Shareholders* ' *equity* – Represents pro forma adjustments of certain acquisition related expenses incurred by Olympic as part of the Acquisition and which have therefore been reflected as a reduction to Retained earnings.

Combined Statement of Net Income (Loss) Pro Forma Adjustments:

&nbsp;&nbsp;&nbsp;&nbsp;(aa) *Metal-Fab Historical Presentation* – Certain reclassifications have been made to Metal-Fab's historical presentation in order to conform to Olympic's historical presentation. These reclassifications had no impact on the historical income from operations reported by Metal-Fab.

&nbsp;&nbsp;&nbsp;&nbsp;(bb) *Cost of materials sold* – Represents the pro forma adjustment required to amortize the fair value of Metal-Fab's inventory. This adjustment only impacts the year ended December 31, 2022 as the acquired inventory is estimated to be sold within twelve months.

&nbsp;&nbsp;&nbsp;&nbsp;(cc) *Cost of materials sold* – Represents the pro forma adjustment to Metal-Fab LIFO income recorded in 2022 as a result of the change in accounting principles from LIFO to standard cost inventory valuation. This adjustment is a one-time adjustment and only impacts the year ended December 31, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;(dd) *Administrative and general* – Represents the pro forma adjustment of related-party fees paid in 2022 by Metal-Fab which will not continue post acquisition.

&nbsp;&nbsp;&nbsp;&nbsp;(ee) *Administrative and general* – Represents the pro forma adjustment of Acquisition-related expenses incurred by Olympic after December 31, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;(ff) *Administrative and general* – Represents the pro forma adjustment of retention incentives for certain Metal-Fab employees.

&nbsp;&nbsp;&nbsp;&nbsp;(gg) *Depreciation* – Represents the pro forma adjustment required to reflect the depreciation expense resulting from the fair value of Metal-Fab's property and equipment. The amount of this adjustment is based on preliminary estimates of the fair values and useful lives of the related assets.

&nbsp;&nbsp;&nbsp;&nbsp;(hh) *Amortization* – Represents the pro forma adjustment required to reflect the amortization of intangible assets subject to amortization. The amount of this adjustment is based on preliminary estimates of the fair values and useful lives of the related assets.

&nbsp;&nbsp;&nbsp;&nbsp;(ii) *Interest and other expense on debt, net* – Represents the pro forma adjustment to interest expense to reflect estimated interest to be paid on the additional financing incurred by Olympic to complete the Acquisition (see note (j) to the Combined Balance Sheet pro forma adjustments). The adjustment assumes that the incremental borrowings are as of January 1, 2022, the earliest unaudited pro forma Combined Statement of Net Income (Loss) presented. The interest expense was calculated based on the actual monthly interest rates in effect during 2022, which ranged from 2.15% in January 2022 to 5.05% in December 2022. The average interest rate in 2022 was 3.40%. The actual interest rate paid will be based on the agent's base rate plus a premium ranging from 0.00% to 0.25%, or the prevailing term SOFR rates plus a premium ranging from 1.25% to 2.75%.

&nbsp;&nbsp;&nbsp;&nbsp;(jj) *Interest and other expense on debt, net* – Represents the pro forma adjustment required to reflect the net incremental deferred financing fee amortization over the remaining term of the ABL Credit Facility.

&nbsp;&nbsp;&nbsp;&nbsp;(kk) *Income tax provision* – Represents the pro forma tax effect of Metal-Fab's pretax income and the above adjustments determined based on Olympic's effective tax rate of 26.4% during 2022. The estimate could change based on changes in the applicable tax rates and finalization of the combined company's tax position.

&nbsp;&nbsp;&nbsp;&nbsp;(ll) *Earnings per share and shares outstanding* – The pro forma weighted average number of basic and diluted shares outstanding reflect Olympic's weighted average number of basic and diluted shares of common stock outstanding for the year ended December 31, 2022. As a result of the Acquisition, Metal-Fab's outstanding shares of capital stock are wholly owned by Olympic and thus have not been included in the pro forma weighted average number of basic and diluted shares outstanding.

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The table that follows provides a reconciliation of non-GAAP measures to the most directly comparable measures prepared in accordance with GAAP.

**Reconciliation of Net Income Per Diluted Share to** 

**Adjusted Net Income Per Diluted Share**

(Figures may not foot due to rounding.)

The following table reconciles adjusted net income per diluted share to the most directly comparable GAAP

financial measure:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Historical** | **Historical** | **Pro Forma** | **Pro Forma** |
|  | **OSI** | **Metal-Fab** | **Adjustments** | **Combined** |
| Net Income per diluted share | $7.87 | $1.43 | $(1.11) | $8.19 |
| Exlcuding the following items |  |  |  |  |
| LIFO (income) expense | 0.04 | (0.01) | 0.01 | 0.04 |
| Inventory fair market value adjustment |  |  | 0.13 | 0.13 |
| Gain on Sale of Milan Warehouse | (0.13) |  |  | (0.13) |
| Related-party fees |  | 0.06 | (0.06) |  |
| Acquisition related expenses |  |  | 0.16 | 0.16 |
| Adjusted net incoms per diluted share (non-GAAP) | $7.77 | $1.48 | $(0.86) | $8.39 |

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**Reconciliation of Net Income to Adjusted EBITDA**

(in thousands)

The following table reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Historical** | **Historical** | **Pro Forma** | **Pro Forma** |
|  | **OSI** | **Metal-Fab** | **Adjustments** | **Combined** |
| **Net Income (GAAP):** | $**90931** | $**16538** | $**(12850)** | $**94619** |
| Exluding the following items: |  |  |  |  |
| Foreign exchange loss included in net income | 45 |  |  | 45 |
| Interest and other expense on debt | 10080 |  | 4313 | 14393 |
| Income tax provision | 32691 |  | 1326 | 34017 |
| Depreciation and amortization | 19738 | 1629 | 1737 | 23104 |
| **Earnings before interest, taxes, depreciation and amortization (EBITDA)** | **153485** | **18167** | **(5474)** | **166178** |
| LIFO (income) expense (a) | 565 | (108) | 108 | 565 |
| Inventory fair market value adjustment |  |  | 2079 | 2079 |
| Gain on Sale of Milan Warehouse | (2083) |  |  | (2083) |
| Related-party fees |  | 870 | (870) |  |
| Acquisition related expenses (b) |  |  | 2556 | 2556 |
| **Adjusted EBITDA (non-GAAP)** | $**151967** | $**18929** | $**(1601)** | $**169295** |

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&nbsp;&nbsp;&nbsp;&nbsp;(a) LIFO (income) expense includes LIFO income recorded in Historical Metal-Fab Net Income. Post acquisition, Metal-Fab's inventory will no longer be valued at LIFO. The adjustment to eliminate LIFO is included in the Pro Forma Adjustments Net Income. Pro Forma Combined financial information will have no LIFO (income) expense related to Metal-Fab.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Acquisition related expenses includes $0.4 million of expenses incurred before the acquisition and $2.2 million of expenses incurred after the acquisition.

In addition to financial information prepared in accordance with GAAP, this document also contains adjusted earnings per diluted share and adjusted EBITDA, which are non-GAAP financial measures. Management's view of the Company's performance includes adjusted earnings per share and adjusted EBITDA, and management uses these non-GAAP financial measures internally for planning and forecasting purposes and to measure the performance of the Company. We believe these non-GAAP financial measures provide useful and meaningful information to us and investors because they enhance investors' understanding of the continuing operating performance of our business and facilitate the comparison of performance between past and future periods. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. Additionally, the presentation of these measures may be different from non-GAAP financial measures used by other companies. A reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures is provided above.