SigmaTron International (SGMA) 8-K/A Completion of Acquisition or Disposition of Assets

Exhibit 99.1

SPITFIRE CONTROL, INC.

FINANCIAL STATEMENTS

DECEMBER 31, 2011 AND 2010

Independent Auditors’ Report

Board of Directors

Spitfire Control, Inc.

Crystal Lake, Illinois

We have audited the accompanying consolidated balance sheets of Spitfire Control, Inc. as of December 31, 2011 and 2010 and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. 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 of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Spitfire Control, Inc. at December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ BDO USA, LLP

Chicago, Illinois

August 13, 2012

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SPITFIRE CONTROL, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2011 and 2010

	2011			2010
ASSETS
Current Assets
Cash	$	580,710		$	924,621
Marketable securities		16,460			17,270
Accounts receivable, net		4,675,404			5,774,586
Inventories		4,931,789			3,767,142
Other current assets		202,766			178,880
Total current assets		10,407,129			10,662,499
Property and equipment, net		1,012,752			1,157,293
Other non-current assets
Patent, net		800,012			933,344
Other non-current assets		165,523			222,085
Total other non-current assets		965,535			1,155,429
Total assets	$	12,385,416		$	12,975,221
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Line of credit	$	—		$	1,500,000
Accounts payable		15,319,766			10,706,512
Accrued expenses		457,110			278,841
Total current liabilities		15,776,876			12,485,353
Non-current liabilities
Other non-current liabilities		431,161			371,235
Total liabilities		16,208,037			12,856,588
Stockholders’ Equity (Deficit)
Total Spitfire Control, Inc. Equity		(258,214	)		1,615,340
Noncontrolling interests in variable interest entities		(3,564,407	)		(1,496,707	)
Total stockholders’ equity (deficit)		(3,822,621	)		118,633
Total liabilities and stockholders’ equity	$	12,385,416		$	12,975,221

See accompanying notes to consolidated financial statements.

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SPITFIRE CONTROL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2011 and 2010

	2011			2010
Revenue	$	47,060,668		$	54,902,495
Cost of goods sold		43,139,045			45,934,436
Gross profit		3,921,623			8,968,059
Operating expenses		7,515,579			8,395,712
Operating (loss) income		(3,593,956	)		572,347
Other income (expense)
Interest income		4,568			14,887
Interest expense		(61,613	)		(40,879	)
Other income		80,929			12,747
Total other income (expense)		23,884			(13,245	)
(Loss) income before income taxes		(3,570,072	)		559,102
Income taxes		49,538			60,367
Net (loss) income		(3,619,610	)		498,735
Net loss attributable to noncontrolling interests		(2,067,700	)		(1,170,919	)
Net (loss) income attributable to Spitfire Control, Inc.	$	(1,551,910	)	$	1,669,654
Comprehensive Income (Loss)
Net (loss) income	$	(3,619,610	)	$	498,735
Unrealized loss on available for sale securities		(14,061	)		(13,251	)
Foreign currency translation adjustment		(38,747	)		12,220
Comprehensive (loss) income		(3,672,418	)		497,704
Comprehensive loss attributable to noncontrolling interests		(2,067,700	)		(1,170,919	)
Comprehensive (loss) income attributable to Spitfire Control, Inc.	$	(1,604,718	)	$	1,668,623

See accompanying notes to consolidated financial statements.

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SPITFIRE CONTROL, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Common Stock		Retained Earnings			Accumulated Other Comprehensive Loss			Loan to Shareholder			Noncontrolling Interest			Total Equity
Balances, January 1, 2010	$	1,000	$	744,642		$	(19,961	)	$	(351,464	)	$	(325,788	)	$	48,429
2010 net income (loss)		—		1,669,654			—			—			(1,170,919	)		498,735
Unrealized gains on marketable securities		—		—			(13,251	)		—			—			(13,251	)
Foreign currency translation adjustment		—		—			12,220			—			—			12,220
Distributions		—		(427,500	)		—			—			—			(427,500	)
Balances, December 31, 2010		1,000		1,986,796			(20,992	)		(351,464	)		(1,496,707	)		118,633
2011 net income (loss)		—		(1,551,910	)		—			—			(2,067,700	)		(3,619,610	)
Unrealized gains on marketable securities		—		—			(14,061	)		—			—			(14,061	)
Foreign currency translation adjustment		—		—			(38,747	)		—			—			(38,747	)
Repayments of shareholder loan		—		—			—			351,464			—			351,464
Distributions		—		(620,300	)		—			—			—			(620,300	)
Balances, December 31, 2011	$	1,000	$	(185,414	)	$	(73,800	)	$	—		$	(3,564,407	)	$	(3,822,621	)

See accompanying notes to consolidated financial statements.

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SPITFIRE CONTROL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2011 and 2010

	2011			2010
Cash flow from operating activities
Net (loss) income	$	(3,619,610	)	$	498,735
Adjustments to reconcile net (loss) income to net cash flows from operating activities
Depreciation and amortization		489,358			361,845
Gain on disposal of property and equipment		—			(164	)
Changes in assets and liabilities
Accounts receivable		1,099,182			(367,090	)
Inventories		(1,164,647	)		1,389,051
Other current assets		9,787			(36,186	)
Accounts payable		4,613,254			421,218
Accrued expenses		178,269			(109,765	)
Other non-current liabilities		59,926			132,313
Net cash flows from operating activities		1,665,519			2,289,957
Cash flows from investing activities
Capital expenditures		(235,041	)		(1,887,084	)
Proceeds from the sale of equipment		—			54,789
Net cash flows from investing activities		(235,041	)		(1,832,295	)
Cash flows from financing activities
Net (repayments) advances from line of credit		(1,500,000	)		500,000
Payments received on loan to shareholder		351,464			—
Distributions to stockholders		(620,300	)		(427,500	)
Net cash flows from financing activities		(1,768,836	)		72,500
Effect of exchange rate changes on cash		(5,553	)		(1,015	)
Net changes in cash and cash equivalents		(343,911	)		529,147
Cash and cash equivalents - beginning of year		924,621			395,474
Cash and cash equivalents - end of year	$	580,710		$	924,621
Supplemental cash flow information:
Cash paid for interest	$	61,613		$	40,879
Cash paid for income taxes		49,538			60,367

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

Note A

Summary of Significant Accounting Policies

Nature of Operations

Spitfire Control, Inc. (“Spitfire”) is an Illinois corporation that designs and engineers controls for appliances used by its customers in the manufacturing process. Customers are primarily located in the US and Canada.

The principal shareholder of Spitfire Control, Inc. also owns a majority share of High Point, LLC (“High Point”). High Point, doing business as Spitfire International, is an Illinois limited liability holding company that owns 92% of Sherbet Investments, Limited, which owns 100% of Spitfire Control (Cayman) Co Ltd. High Point also owns 99.99% of DAC (as hereafter defined).

Digital Appliance Controls de Mexico, S.A. de C.V. (“DAC”) is a Mexican corporation that provides manufacturing services to Spitfire Consolidated (as hereafter defined) under a maquilladora agreement. All materials, finished goods, and equipment used and produced by DAC are provided by Spitfire Consolidated and remain property of Spitfire Consolidated at all times.

Sherbet Investments, Limited. (“Sherbet”) is a holding company and is owned 92% by High Point and 8% by an individual.

Spitfire Control (Cayman) Co Ltd. (“Cayman”) is a holding company that owns 100% of the stock in Spitfire Control (Vietnam) Co Ltd.

Spitfire Control (Vietnam) Co Ltd. (“SPV”) is a Vietnamese corporation that manufactures goods to be sold and distributed by Spitfire.

Principles of Consolidation

The consolidated financial statements include the accounts of High Point, DAC, Cayman, and SPV (collectively “Spitfire International”) and Spitfire (Spitfire and Spitfire International are referred to collectively as “Spitfire Consolidated”). The accounts of Sherbet are not material to Spitfire Consolidated.

Spitfire Consolidated follows accounting principles generally accepted in the United States of America (“US GAAP”) for consolidation of related companies, which provides a framework for identifying variable interest entities (“VIEs”) and determining when a reporting company should include the assets, liabilities, noncontrolling interests and results of activities of a VIE in its consolidated financial statements.

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A VIE must be consolidated if the reporting enterprise has both (a) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Spitfire has identified High Point, DAC, SPV and Cayman to be VIEs of which Spitfire is the primary beneficiary and therefore their accounts have been included in these consolidated financial statements.

The following VIE disclosures aggregate all of the Spitfire Consolidated’s VIEs because separate reporting would not provide more useful information regarding the risk and reward characteristics and significance of each VIE to Spitfire Consolidated.

The classification and carrying amounts of the variable interest entities’ assets and liabilities that have been consolidated in Spitfire International’s financial statements are as follows:

	2011		2010
Assets
Cash and cash equivalents	$	74,768	$	287,525
Accounts receivable		7,962		22,932
Intercompany receivables (a)		1,213,200		933,208
Inventories		3,008,016		3,921,342
Other current assets		115,451		60,634
Property and equipment, net		998,169		1,130,286
Other non-current assets		79,685		—
Intercompany notes receivable (a)		5,445,364		6,070,686
Total assets	$	10,942,615	$	12,426,613
Liabilities
Accounts payable	$	2,665,583	$	836,346
Intercompany payables (a)		9,654,976		8,094,472
Accrued expenses		230,820		211,013
Investment in subsidiary (a)		124,667		1,336,997
Intercompany notes payable (a)		5,445,364		5,445,364
Other non-current liabilities		431,161		371,235
Total liabilities	$	18,552,571	$	16,295,427

(a) - These amounts eliminate in the consolidation process.

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Foreign Currency Translation

The U.S. dollar is the functional currency for Spitfire, High Point, Cayman, and SPV. The functional currency of DAC in Mexico is its local currency. Substantially all intercompany transactions are conducted in U.S. dollars.

Fair Value of Financial Instruments

The accounting standards regarding fair value of financial instruments and related fair value measurements define financial instruments, define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurements, and require enhanced disclosures regarding fair value measures.

The fair value hierarchy levels which prioritize observable and unobservable inputs are:

Level 1:	Quoted prices in active markets that are accessible at the measurement date for assets or liabilities
Level 2:	Observable prices that are based on inputs not quoted on active markets, but corroborated by market data
Level 3:	Unobservable inputs that are used when little or no market data is available

Spitfire Consolidated’s short-term financial instruments consist of the following: cash and cash equivalents, accounts receivable, accounts payable and accrued expenses. The carrying values of these short-term financial instruments approximate their estimated fair values based on the instruments’ short-term nature.

Marketable securities are carried at fair value based on quoted market prices. Marketable securities consist of publicly traded equity securities with readily determinable fair values and have therefore been valued at fair values using Level 1 input. These securities are classified as available-for-sale securities, and therefore adjustments to market value are recorded as a separate component of equity. Realized gains and losses upon disposition are determined using the specific identification method.

For the fiscal years ended December 31, 2011 and 2010, there have been no changes in the application of valuation methods applied to similar assets and liabilities.

Revenue Recognition

Spitfire Consolidated recognizes revenue when the customer takes ownership, generally upon product shipment, and assumes risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable.

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Cash and Cash Equivalents

Spitfire Consolidated defines cash equivalents as highly liquid, short-term investments with a maturity at the date of acquisition of three months or less. Cash equivalents consist of depository accounts with financial institutions at December 31, 2011 and 2010.

Spitfire Consolidated maintains cash balances primarily with one bank. Cash balances in the United States are in non-interest bearing accounts and therefore are 100% insured by the Federal Deposit Insurance Corporation (“FDIC”). Additionally, Spitfire Consolidated has cash accounts for its various foreign sales offices located in countries outside the US which are not insured. These deposits, valued in US dollars, are approximately $70,000 and $238,000 at December 31, 2011 and 2010, respectively. Management does not believe a risk of loss exists related to these concentrations.

Accounts Receivable

Spitfire Consolidated reviews customers’ credit history before extending unsecured credit and believes credit risk on accounts receivable is minimized as a result of the nature of Spitfire Consolidated’s customer base. Invoices are due 30 to 60 days after presentation. Spitfire Consolidated does not accrue interest on past due accounts receivable. Accounts receivable over 90 days are considered past due. Receivables are written off only after all collection attempts have failed and are based on individual credit evaluation and specific circumstances of the customer. Accounts receivable are shown net of an allowance for doubtful accounts of approximately $9,790 and $154,036 at December 31, 2011 and 2010, respectively.

Shipping and Handling Costs

Shipping and handling costs charged to customers have been included in revenues. Shipping and handling costs incurred by Spitfire Consolidated of approximately $197,000 in 2011, compared to $152,000 in 2010, have been included in cost of goods sold.

Inventories

Spitfire Consolidated’s inventories consist of raw materials and finished goods. Inventories are stated at the lower of cost or market value; cost is determined by the first-in, first-out method. Cost includes materials, labor, and manufacturing overhead related to the production of inventories. Inventory reserves are calculated based on future usage and/or management’s best estimate.

Property and Equipment

Property and equipment are stated at cost. Provisions for depreciation and amortization of property and equipment are computed using straight-line methods over the estimated useful lives of the assets. The lives of the assets range from 3 to 7 years, depending on asset type. When assets are retired or otherwise disposed of, their costs and related accumulated depreciation are removed from the accounts and resulting gains or losses are included in income. For income tax reporting purposes, depreciation is calculated using applicable accelerated methods.

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Expenditures for maintenance, repairs and minor renewals are charged to expense when incurred.

Patent

The patent is amortized on a straight-line basis over a period of fifteen years.

Impairment of Long-Lived Assets

Spitfire Consolidated reviews long-lived assets, including property and equipment and, the patent, for impairment whenever events or changes in business circumstances indicate that the carrying amount of these assets may not be fully recoverable. An impairment loss would be recognized when the estimated future undiscounted cash flows from the use of the asset are less than the carrying amount of that asset.

Research and Development Costs

Research and development costs are charged to operations when incurred.

Income Taxes

In 2010, Spitfire, with the consent of its stockholder, elected under the Internal Revenue Code to be an S Corporation effective January 1, 2009. Approval for this status was granted by the IRS in 2010. Spitfire has therefore been treated as an S corporation in the consolidated financial statements.

In lieu of corporate income taxes, the stockholders of an S Corporation are taxed on their proportionate share of corporation’s taxable income. Therefore, no provision or liability for federal income taxes has been included in these consolidated financial statements related to Spitfire’s activity. Spitfire is subject to certain state income taxes and federal income taxes for 2008, which is an open audit year, when Spitfire was structured as a C Corporation. Spitfire believes it has recorded the appropriate provisions for these taxes.

High Point has not provided U.S. deferred taxes for a significant portion of undistributed earnings of the Spitfire Consolidated’s foreign subsidiaries. Spitfire Consolidated’s intent is to keep unrepatriated funds indefinitely reinvested outside of the United States and current plans do not demonstrate a need to repatriate to fund U.S. operations. It is not practicable to estimate the amount of additional taxes that may be payable upon distribution.

Accounting for Uncertainty in Income Taxes

The tax effects from an uncertain tax position can be recognized in the financial statements if the position is more likely than not to be sustained on audit based on the technical merits of the position. Spitfire Consolidated recognizes the financial statement benefit of a tax position only

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after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized, upon ultimate settlement with the relevant tax authority. When applicable, interest and penalties are calculated based on guidance from the relevant tax authority and recorded in the consolidated financial statements. At December 31, 2011 and 2010, there were no uncertain tax positions recorded in the consolidated financial statements.

Foreign Currency Translation

Spitfire Consolidated’s consolidated entities are located in Mexico, Cayman Islands, and Vietnam. The functional currency of DAC in Mexico is the local currency. Accordingly, assets and liabilities of DAC are translated from the foreign currency into U.S. dollars at the exchange rates in effect at the balance sheet date while income and expenses are translated at the weighted-average exchange rates for the year. Adjustments resulting from the translation of DAC’s financial statements are classified as a separate component of equity. The functional currency of SPV in Vietnam and Cayman in the Cayman Islands is the U.S. Dollar.

Gains and losses for all transactions denominated in a currency other than the functional currency are recognized in the period incurred and included in operating expenses on the accompanying consolidated statements of operations. Foreign currency gains and losses for 2011 and 2010 were not significant.

Estimates

The preparation of consolidated financial statements in conformity with US GAAP 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 combined and consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Concentrations

One customer accounted for approximately 75% and 76% of net sales during 2011 and 2010, respectively. Amounts due from this customer represented approximately 79% and 70% of accounts receivable as of December 31, 2011 and 2010, respectively. Another customer accounted for approximately 20% and 23% of revenues during 2011 and 2010, respectively. Amounts due from this customer represented approximately 11% and 12% of accounts receivable as of December 31, 2011 and 2010, respectively.

One vendor accounted for approximately 79% and 84% of purchases during 2011 and 2010, respectively. No other single vendor comprised greater than 10% of purchases. Amounts due to this vendor represented approximately 93% and 97% of accounts payable as of December 31, 2011 and 2010, respectively.

Subsequent Events

Subsequent events were evaluated through August 13, 2012, the date the consolidated financial statements were available to be issued.

Note B

Inventories

Inventories consisted of the following at December 31:

	2011			2010
Raw materials	$	3,124,310		$	1,911,995
Finished goods		2,854,783			2,700,508
		5,979,093			4,612,503
Less reserves		(1,047,304	)		(845,361	)
Total inventories, net	$	4,931,789		$	3,767,142

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Note C

Property and Equipment

The major categories of property and equipment are summarized as follows at December 31:

	2011		2010
Machinery and equipment	$	2,524,491	$	2,380,253
Furniture and fixtures		158,789		225,919
Leasehold improvements		100,846		113,855
Total property and equipment		2,784,126		2,720,027
Less accumulated depreciation and amortization		1,771,374		1,562,734
Net property and equipment	$	1,012,752	$	1,157,293

Depreciation and amortization expense was $489,360 and $361,845 for the years ended December 31, 2011 and 2010, respectively.

Note D

Patent

The patent consisted of the following at December 31:

	2011		2010
Patent	$	2,000,000	$	2,000,000
Less accumulated amortization		1,199,988		1,066,656
Patent, net	$	800,012	$	933,344

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For the years ended December 31, 2011 and 2010, amortization of the patent amounted to $133,332 each year. Estimated amortization expense of the patent for each of the next five years and thereafter are:

Year	Amortization
2012	$	133,332
2013		133,332
2014		133,332
2015		133,332
2016		133,332
Thereafter		133,352
Total	$	800,012

Note E

Income taxes

Income tax expense (benefit) was as follows for the years ended December 31, 2011 and 2010:

	2011			2010
U.S federal	$	—		$	8,629
U.S state		(12,114	)		34,000
Foreign		61,652			17,738
	$	49,538		$	60,367

For the years ended December 31, 2011 and 2010, income taxes included state income taxes due in states for which Spitfire maintained a C-Corporation status and taxes relating to Spitfire Consolidated’s foreign operations.

The effective rate differs from the statutory rate due to Spitfire’s S-Corporation status and income taxes on foreign operations. The deferred tax assets for the foreign operations mainly related to depreciation.

Note F

Line-of-Credit

Spitfire Consolidated has a $2,000,000 operating line-of-credit with a bank, collateralized by substantially all assets of Spitfire Consolidated. The bank, in its sole discretion, has the right to disallow additional advances on the line-of-credit at any time. In the event the bank disallows future advances, the outstanding line-of-credit balance must be paid by Spitfire Consolidated in 48 consecutive monthly principal payments, plus interest and fees. Interest is payable monthly at the Wall Street Journal Prime Rate (3.25% at December 31, 2011 and 2010, respectively). Outstanding borrowings on the line-of-credit were $0 and $1,500,000 at December 31, 2011 and 2010, respectively. The line-of-credit was terminated December 31, 2011.

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Note G

Employee Benefit Plan, Seniority Premiums and Termination Benefits

Spitfire Consolidated has a 401(k) profit sharing plan that covers substantially all nonunion employees who meet certain eligibility requirements. Participants may contribute amounts in accordance with Internal Revenue Code regulations. Spitfire Consolidated contributes 3% of employee salary regardless of employee participation after the employee has one year of service. Participants are immediately 100% vested in the 3% contribution. Spitfire Consolidated may, at its discretion, make additional profit sharing contributions to the plan. Participants vest in Company profit sharing contributions over a six-year vesting schedule. Spitfire Consolidated made contributions of approximately $83,700 and $78,600 for the years ended December 31, 2011 and 2010, respectively.

DAC is required to accrue for seniority premiums and termination benefits. The cost obligations and other elements of seniority premiums and termination benefits for reasons other than restructuring have been determined based on computations prepared by independent actuaries at December 31, 2011 and 2010, and are included in other non-current liabilities in the consolidated balance sheets. DAC’s liability for these benefits was $363,869 and $325,194 as of December 31, 2011 and 2011, respectively. The related expense was approximately $38,600 and $19,600 for the years then ended.

Note H

Operating Leases

Spitfire conducts its operations from facilities in Carpentersville, Illinois, Crystal Lake, Illinois, Springfield, Tennessee and Austin, Texas, which are leased from both nonrelated and related parties. Spitfire’s Carpentersville facility lease with a related party expires in October 2014, but contains two five-year renewal options. Spitfire has two leases for properties in Crystal Lake with one expiring in April 2013 and the other in May 2013. The Springfield facility lease is currently on a month-to month arrangement and the Austin facility lease expired in May 2012. Spitfire did not renew the Austin facility lease.

DAC leases facilities in Mexico for administrative and assembly operations under a lease agreement, settled in US dollars, expiring August 2012. Spitfire Consolidated anticipates renewing the lease under a two year renewal option.

SPV leases a facility in Vietnam for its operations under a lease expiring July 2015.

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Total future minimum rental payments for each of the next four years and in the aggregate are:

Year	Total		Related Party		Non-related Parties
2012	$	269,297	$	84,263	$	185,034
2013		231,898		86,791		145,107
2014		196,338		74,125		122,213
2015		122,213		—		122,213
Total	$	819,746	$	245,179	$	574,567

Non-related party rent expense, including real estate taxes, was approximately $571,755 and $600,666 for the years ended December 31, 2011 and 2010, respectively. Related party rent expense, including real estate taxes, was approximately $94,298 and $91,281 for the years ended December 31, 2011 and 2010, respectively.

Note I

Related Party Transactions

Spitfire Consolidated leases its main office and plant from a building partnership that is jointly owned by five employees of Spitfire Consolidated. These employees are not members of Spitfire Consolidated’s board of directors or executive officers. Total rent expense paid on these leases was $94,298 and $91,281 for the years ended December 31, 2011 and 2010, respectively.

Loans to employees are included in other current assets and are due on demand with interest at short-term applicable federal rates. The balance of these loans outstanding was $87,316 and $78,306 at December 31, 2011 and 2010, respectively. Total advances on these loans were $11,849 and $51,290 for the years ended December 31, 2011 and 2010, respectively. Total repayments by employees on these loans were $2,839 and $8,938 for the years ended December 31, 2011 and 2010, respectively.

Loan to shareholder is a component of equity and is due on demand with interest at short-term applicable federal rates. Total repayments by the shareholder on the loan were $351,464 and $0 for the years ended December 31, 2011 and 2010, respectively.

Note J

Subsequent Event

On May 31, 2012, pursuant to a purchase agreement, SigmaTron International, Inc. (“SigmaTron”) purchased substantially all of the assets of Spitfire Consolidated for a purchase price of: (i) the satisfaction and release of the account payable of approximately $16 million owed by Spitfire Consolidated to SigmaTron; (ii) future payments, which are based upon the annual post-closing performance of the business during each of SigmaTron’s fiscal years 2013 through 2019; and (iii) at Spitfire Consolidated’s direction, the issuance to Gregory Jay Ramsey, President, of Spitfire Consolidated of 50,000 shares of restricted common stock of the SigmaTron, 12,500 of which vest upon the closing of the transaction and 12,500 of which will vest on each of the first, second and third anniversaries of the closing of the transaction.

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