Quarterly report pursuant to Section 13 or 15(d)

M. DISCONTINUED OPERATIONS

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M. DISCONTINUED OPERATIONS
 6 Months Ended
Jun. 30, 2018
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS

NOTE M – DISCONTINUED OPERATIONS

 

During the year ended December 31, 2017, the Company, and EthoStream, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with DCI-Design Communications LLC (“DCI”), a Delaware limited liability company, whereby DCI acquired substantially all of the assets and certain liabilities of EthoStream for a base purchase price of $12,750,000. The Purchase Agreement provided that $900,000 of the $12,750,000 base purchase price was placed into an escrow account to support potential indemnification obligations of up to $800,000 and net working capital adjustments of up to $100,000. On April 06, 2018, the Company received the $800,000 disbursement from the funds held in escrow. The Company reclassified the balance from restricted cash to cash at March 31, 2018.

 

On March 29, 2017, pursuant to the terms and the conditions of the Purchase Agreement, the Company closed on the sale.

 

As of June 30, 2018 and December 31, 2017 there were no assets or liabilities of discontinued operations.

 

The following table summarizes the statements of operations information for discontinued operations.

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
    2018     2017     2018     2017  
Revenues, net:                                
Product   $ –     $ –     $ –     $ 653,839  
Recurring     –       –       –       925,837  
Total Net Revenue     –       –       –       1,579,676  
                                 
Cost of Sales:                                
Product     –       (10,225 )     –       414,604  
Recurring     –       689       –       209,868  
Total Cost of Sales     –       (9,536 )     –       624,472  
                                 
Gross Profit     –       9,536       –       955,204  
                                 
Operating Expenses:                                
Selling, general and administrative     –       (9,924 )     –       252,110  
Depreciation and amortization     –       –       –       60,420  
Total Operating Expenses     –       (9,924 )     –       312,530  
                                 
Income from Discontinued Operations before Provision for Income Taxes     –       19,460       –       642,674  
                                 
Provision for Income Taxes     –       605       –       52,017  
Income from Discontinued Operations (net of tax)   $ –     $ 18,855     $ –     $ 590,657  

 

The consolidated statements of cash flows do not present the cash flows from discontinued operations for investing activities or financing activities because there were no investing or financing activities associated with the discontinued operations in the periods ended June 30, 2018 and 2017.