Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2018
Discontinued Operations and Disposal Groups [Abstract]  

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 March 31, 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.



For the Three Months Ended

March 31,

    2018     2017  
Revenues, net:                
Product   $     $ 653,839  
Recurring           925,837  
Total Net Revenues           1,579,676  
Cost of Sales:                
Product           424,829  
Recurring           209,179  
Total Cost of Sales           634,008  
Gross Profit           945,668  
Operating Expenses:                
Selling, general and administrative           262,034  
Depreciation and amortization           60,420  
Total Operating Expenses           322,454  
Income from Discontinued Operations before Provision for Income Taxes           623,214  
Provision for Income Taxes           51,412  
Income from Discontinued Operations (net of tax)   $     $ 571,802  


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 March 31, 2018 and 2017.