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Item 8.01 Other Events

On December 21, 2016, Brekford Corporation (the Company) entered
into a letter of intent with LBB Associates Inc. (LBB)(the LOI).
to the LOI, Brekford would sell substantially all of the assets
and certain specified liabilities of its vehicle service business
to a new entity to be formed by LBB (Acquisition Co.). In
consideration for the sale, LBB would pay Brekford either
$4,000,000 in cash and $2,000,000 in a promissory note, or
$6,000,000 in cash, of which $1,200,000 would be held in escrow
for 18 months to cover any indemnification claims. In addition,
Brekford would receive a 19.9% equity interest in Acquisition Co.
The LOI is non-binding except for the exclusivity provision
described below and any agreement is subject to the negotiation
and execution of a definitive transaction agreement, which may
vary from the terms set forth in the LOI. A final transaction
also is anticipated to be subject to material conditions,
including, but not limited to: (i) the approval of the respective
boards of directors of LBB and the Company; (ii) receipt of
required consents; (iii) entering into agreements for the use of
related intellectual property, transition rights and services,
employment agreements with certain employees and customary
non-competition and solicitation agreements, and (iv) other
customary conditions for a transaction of this nature.
Accordingly, there can be no assurance that a definitive
agreement will be reached by the companies, or that any agreement
will result in the completion of a combination.
The LOI contains an exclusivity provision through January 20,
2017, during which time the Company has agreed it will not
solicit, negotiate, entertain or accept any third-party proposals
regarding the acquisition of the subject assets.
The foregoing information is a summary of the agreements involved
in the transaction described above, is not complete, and is
qualified in its entirety by reference to the full text of such
agreements, copies of which are attached as exhibits to this
Current Report on Form 8-K.Readers should review such agreements
for a complete understanding of the terms and conditions
associated with this transaction.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed with this report:
Exhibit No.
Description of Exhibit
Letter of Intent between Brekford Corporation and LBB
Associates, Inc., dated December 21, 2016
Press release, dated December 23, 2016


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