Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

Discontinued Operations

3 Months Ended

Mar. 31, 2018

Discontinued Operations and Disposal Groups [Abstract]

Note 15 – Discontinued Operations

On July 12, 2017, the Company announced plans to spin off its Advanced Molecular Services Group (“AMSG”) and in the third quarter of 2017 the Company’s Board of Directors voted unanimously to spin off the Company’s wholly-owned subsidiary, Health Technology Solutions, Inc. (“HTS”), as independent publicly traded companies by way of tax-free distributions to the Company’s stockholders. Completion of these spinoffs is expected to occur in the second half of 2018. The Board of Directors is currently considering if AMSG and HTS would be better as one combined spinoff instead off two. The spinoffs are subject to numerous conditions, including effectiveness of Registration Statements on Form 10 to be filed with the Securities and Exchange Commission, and consents, including under various funding agreements previously entered into by the Company. A record date to determine those stockholders entitled to receive shares in the spinoffs should be approximately 30 to 60 days prior to the dates of the spinoffs. The strategic goal of the spinoffs is to create three (or two) public companies, each of which can focus on its own strengths and operational plans. In addition, after the spinoffs, each company will provide a distinct and targeted investment opportunity.

The Company has reflected the amounts relating to AMSG and HTS as disposal groups classified as held for sale and included in discontinued operations in the Company’s accompanying consolidated financial statements. Prior to being classified as held for sale, AMSG had been included in the Decision Support and Informatics division, except for the Company’s subsidiary, Alethea Laboratories, Inc., which had been included in the Clinical Laboratories division and HTS had been included in the Company’s Supportive Software Solutions division. The segment disclosures included in our results of operations no longer include amounts relating to AMSG and HTS following the reclassification to discontinued operations except that the inter-company debt from HTS to the Company of $14,461,338 and from AMSG of $7,181,685 has not been separated. The Company hopes to complete the spin off(s) in a manner to permit it to recognize these amounts as investment in the divisions.

Carrying amounts of major classes of assets and liabilities classified as held for sale and included as part of discontinued operations in the condensed consolidated balance sheets consisted of the following:

AMSG Assets and Liabilities:

	March 31, 2018		December 31, 2017
	(unaudited)		(unaudited)
Cash	$	5,314	$	9,273
Accounts receivable, net		576		19,022
Prepaid expenses and other current assets		25,477		25,477
Current assets classified as held for sale	$	31,367	$	53,772

Property and equipment, net	$	-	$	-
Deposits		-		-
Non-current assets classified as held for sale	$	-	$	-

Accounts payable (includes related parties)	$	674,425	$	671,561
Accrued expenses		388,666		375,165
Current portion of notes payable		228,421		249,589
Current liabilities classified as held for sale	$	1,291,512	$	1,296,315

Non-current liabilities classified as held for sale	$	-	$	-

HTS Assets and Liabilities:

	March 31, 2018		December 31, 2017
	(unaudited)		(unaudited)
Cash	$	1,727	$	8,281
Accounts receivable, net		166,774		160,715
Prepaid expenses and other current assets		22,183		3,964
Current assets classified as held for sale	$	190,684	$	172,960

Property and equipment, net	$	15,883	$	21,078
Deposits		6,029		7,756
Non-current assets classified as held for sale	$	21,912	$	28,834

Accounts payable (includes related parties)	$	500,235	$	407,404
Accrued expenses		271,245		269,135
Current liabilities classified as held for sale	$	771,480	$	676,539

Non-current liabilities classified as held for sale	$	-	$	-

Consolidated Discontinued Operations Assets and Liabilities:

	March 31, 2018		December 31, 2017
	(unaudited)		(unaudited)
Cash	$	7,041	$	17,554
Accounts receivable, net		167,350		179,737
Prepaid expenses and other current assets		47,660		29,441
Current assets classified as held for sale	$	222,051	$	226,732

Property and equipment, net	$	15,883	$	21,078
Deposits		6,029		7,756
Non-current assets classified as held for sale	$	21,912	$	28,834

Accounts payable (includes related parties)	$	1,174,660	$	1,078,965
Accrued expenses		659,911		644,300
Current portion of notes payable		228,421		249,589
Current liabilities classified as held for sale	$	2,062,992	$	1,972,854

Non-current liabilities classified as held for sale	$	-	$	-

Major line items constituting loss from discontinued operations in the consolidated statements of operations for the three months ended March 31, 2018 and 2017 consisted of the following:

AMSG Income (Loss) from Discontinued Operations:

	Three Months Ended March 31,
	2018			2017
	(unaudited)			(unaudited)
Revenue from services	$	33,685		$	176,578
Cost of services		16,138			769
Gross profit		17,547			175,809
Operating expenses		176,202			526,533
Other income/expenses		(800,197	)		(2,978	)
Income/(Loss) from discontinued operations	$	641,542		$	(347,746	)

HTS Income (Loss) from Discontinued Operations:

	Three Months Ended March 31,
	2018			2017
	(unaudited)			(unaudited)
Revenue from services	$	355,147		$	315,270
Cost of services		34,218			46,704
Gross profit		320,929			268,566
Operating expenses		538,199			987,111
Other income/expenses		2,478			-
Income/(Loss) from discontinued operations	$	(219,748	)	$	(718,545	)

Consolidated Income/(Loss) from Discontinued Operations:

	Three Months Ended March 31,
	2018			2017
	(unaudited)			(unaudited)
Revenue from services	$	388,832		$	491,848
Cost of services		50,356			47,473
Gross profit		338,476			444,375
Operating expenses		714,402			1,513,645
Other income (expenses)		(797,719	)		(2,978	)
Income/(Loss) from discontinued operations	$	421,793		$	(1,066,292	)