13D Filing: Harbert Discovery Fund, LP and Key Technology Inc (KTEC)

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Item 3. Source and Amount of Funds or Other Consideration.
The funds for the purchase of the Shares by the Fund came from the working capital of the Fund, over which HFA, HMC, the Fund GP, Jack Bryant, Kenan Lucas and Raymond Harbert, through their roles described above in Item 2(c), exercise investment discretion.  No borrowed funds were used to purchase the Shares, other than borrowed funds used for working capital purposes in the ordinary course of business.  The total costs of the Shares directly owned by Harbert Discovery Fund, LP is approximately $0.  
Item 4. Purpose of Transaction.
No changes from the Schedule 13D filed with the Securities and Exchange Commission on April 7, 2017.
Item 5. Interest in Securities of the Issuer.
(a) – (e)

As of the date hereof, (i) HFA, HMC, the Fund
GP, the Fund, Jack Bryant, Kenan Lucas and Raymond Harbert may be deemed to be the beneficial owners of 0 Shares, constituting
0% of the Shares, based upon *6,479,166 Shares outstanding.

HFA has the sole power to vote or direct the
vote of 0 Shares; has the shared power to vote or direct the vote of 0 Shares; has the sole power to dispose or direct the disposition
of 0 Shares; and has the shared power to dispose or direct the disposition of 0 Shares.

HMC has the sole power to vote or direct the
vote of 0 Shares; has the shared power to vote or direct the vote of 0 Shares; has the sole power to dispose or direct the disposition
of 0 Shares; and has the shared power to dispose or direct the disposition of 0 Shares.

The Fund GP has the sole power to vote or direct
the vote of 0 Shares; has the shared power to vote or direct the vote of 0 Shares; has the sole power to dispose or direct the
disposition of 0 Shares; and has the shared power to dispose or direct the disposition of 0 Shares.

The Fund has the sole power to vote or direct
the vote of 0 Shares; has the shared power to vote or direct the vote of 0 Shares; has the sole power to dispose or direct the
disposition of 0 Shares; and has the shared power to dispose or direct the disposition of 0 Shares.

Jack Bryant has the sole power to vote or direct
the vote of 0 Shares; has the shared power to vote or direct the vote of 0 Shares; has the sole power to dispose or direct the
disposition of 0 Shares; and has the shared power to dispose or direct the disposition of 0 Shares.

Kenan Lucas has the sole power to vote or direct
the vote of 0 Shares; has the shared power to vote or direct the vote of 0 Shares; has the sole power to dispose or direct the
disposition of 0 Shares; and has the shared power to dispose or direct the disposition of 0 Shares.

Raymond Harbert has the sole power to vote
or direct the vote of 0 Shares; has the shared power to vote or direct the vote of 0 Shares; has the sole power to dispose or direct
the disposition of 0 Shares; and has the shared power to dispose or direct the disposition of 0 Shares.

The transactions by the Reporting Persons in
the securities of the Issuer during the past sixty days are set forth in Exhibit B. All such transactions were carried out in open
market transactions.

*This outstanding Shares figure reflects the
number of outstanding Shares at December 1, 2017, as reported in the Issuer’s Form 10-K, filed on December 12, 2017.

On January 25, 2018 each of the Reporting Persons
ceased to beneficially own any Shares. The filing of this Amendment No. 1 constitutes an exit filing for the Reporting Persons.

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