Quarterly report pursuant to Section 13 or 15(d)


9 Months Ended
Sep. 30, 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 September 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

September 30,


Nine Months Ended

September 30,

    2018     2017     2018     2017  
Revenues, net:                                
Product   $     $     $     $ 653,839  
Recurring                       925,837  
Total Net Revenue                       1,579,676  
Cost of Sales:                                
Product           (11,600 )           403,004  
Recurring                       209,868  
Total Cost of Sales           (11,600 )           612,872  
Gross Profit           11,600             966,804  
Operating Expenses:                                
Selling, general and administrative           197             252,307  
Depreciation and amortization                       60,420  
Total Operating Expenses           197             312,727  
Income from Discontinued Operations before Provision for Income Taxes           11,403             654,077  
Provision for Income Taxes                       52,017  
Income from Discontinued Operations (net of tax)   $     $ 11,403     $     $ 602,060  


The consolidated statements of cash flows do not present the cash flows from discontinued operations for investing activities or financing activities because there was no investing or financing activities associated with the discontinued operations in three and nine months ended September 30, 2018 and 2017.