Discontinued Operations |
Note 17 – Discontinued Operations
On July 12, 2017, the Company announced plans
to spin off AMSG and in the third quarter of 2017, the Company’s Board of Directors voted unanimously to spin off HTS as
independent publicly traded companies by way of tax-free distributions to the Company’s stockholders. While the spin offs
have taken longer than anticipated, completion of these spin offs is now expected to occur in the first quarter of 2020. The spin
offs 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 spin offs should be approximately 30 to 60 days prior to
the dates of the spin offs. The strategic goal of the spin offs is to create three public companies, each of which can focus on
its own strengths and operational plans.
In accordance with ASC 205-20 and having met
the criteria for “held for sale”, as the Company reached this decision prior to December 31, 2017, the Company has
reflected amounts relating to AMSG and HTS as disposal groups classified as held for sale and included as part of discontinued
operations. Prior to being classified as “held for sale,” AMSG had been the Company’s Decision Support and Informatics
segment, except for the Company’s subsidiary, Alethea Laboratories, Inc., which had been included in the Clinical Laboratory
Operations segment and now is part of AMSG, and HTS had been the Company’s Supportive Software Solutions segment. Segment
disclosures in Note 16 no longer include amounts relating to AMSG and HTS following the reclassification to discontinued operations.
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, 2019 |
|
|
December 31, 2018 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Cash |
|
$ |
3,419 |
|
|
$ |
4,471 |
|
Accounts receivable, net |
|
|
9,921 |
|
|
|
6,838 |
|
Prepaid expenses and other current assets |
|
|
- |
|
|
|
25,477 |
|
Current assets classified as held for sale |
|
$ |
13,340 |
|
|
$ |
36,786 |
|
|
|
|
|
|
|
|
|
|
Accounts payable (includes related parties) |
|
$ |
540,991 |
|
|
$ |
532,858 |
|
Accrued expenses |
|
|
460,720 |
|
|
|
418,932 |
|
Current portion of notes payable |
|
|
274,536 |
|
|
|
278,836 |
|
Current liabilities classified as held for sale |
|
$ |
1,276,247 |
|
|
$ |
1,230,626 |
|
HTS Assets and Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2019 |
|
|
December 31, 2018 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Cash |
|
$ |
8,629 |
|
|
$ |
2,523 |
|
Accounts receivable, net |
|
|
128,397 |
|
|
|
90,743 |
|
Prepaid expenses and other current assets |
|
|
7,725 |
|
|
|
10,300 |
|
Current assets classified as held for sale |
|
$ |
144,751 |
|
|
$ |
103,566 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
$ |
8,419 |
|
|
$ |
5,790 |
|
Deposits |
|
|
6,029 |
|
|
|
6,029 |
|
Non-current assets classified as held for sale |
|
$ |
14,448 |
|
|
$ |
11,819 |
|
|
|
|
|
|
|
|
|
|
Accounts payable (includes related parties) |
|
$ |
659,562 |
|
|
$ |
546,969 |
|
Accrued expenses |
|
|
568,347 |
|
|
|
520,251 |
|
Current liabilities classified as held for sale |
|
$ |
1,227,909 |
|
|
$ |
1,067,220 |
|
Total Discontinued Assets and Liabilities: |
|
|
|
|
|
|
|
|
March 31, 2019 |
|
|
December 31, 2018 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Cash |
|
$ |
12,048 |
|
|
$ |
6,994 |
|
Accounts receivable, net |
|
|
138,318 |
|
|
|
97,581 |
|
Prepaid expenses and other current assets |
|
|
7,725 |
|
|
|
35,777 |
|
Current assets classified as held for sale |
|
$ |
158,091 |
|
|
$ |
140,352 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
$ |
8,419 |
|
|
$ |
5,790 |
|
Deposits |
|
|
6,029 |
|
|
|
6,029 |
|
Non-current assets classified as held for sale |
|
$ |
14,448 |
|
|
$ |
11,819 |
|
|
|
|
|
|
|
|
|
|
Accounts payable (includes related parties) |
|
$ |
1,200,553 |
|
|
$ |
1,079,827 |
|
Accrued expenses |
|
|
1,029,067 |
|
|
|
939,183 |
|
Current portion of notes payable |
|
|
274,536 |
|
|
|
278,836 |
|
Current liabilities classified as held for sale |
|
$ |
2,504,156 |
|
|
$ |
2,297,846 |
|
Major line items constituting loss from discontinued
operations in the condensed consolidated statements of operations for the three months ended March 31, 2019 and 2018 consisted
of the following:
AMSG (Loss) Income from Discontinued Operations: |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, 2019 |
|
|
March 31, 2018 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Revenue from services |
|
$ |
22,982 |
|
|
$ |
33,685 |
|
Cost of services |
|
|
16,655 |
|
|
|
16,138 |
|
Gross profit |
|
|
6,327 |
|
|
|
17,547 |
|
Operating expenses |
|
|
102,610 |
|
|
|
176,202 |
|
Other (income) expense |
|
|
25,960 |
|
|
|
(800,196 |
) |
Provision for income taxes |
|
|
- |
|
|
|
- |
|
(Loss) income from discontinued operations |
|
$ |
(122,243 |
) |
|
$ |
641,541 |
|
HTS Loss from Discontinued Operations: |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, 2019 |
|
|
March 31, 2018 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Revenue from services |
|
$ |
120,089 |
|
|
$ |
355,147 |
|
Cost of services |
|
|
32,190 |
|
|
|
34,218 |
|
Gross profit |
|
|
87,899 |
|
|
|
320,929 |
|
Operating expenses |
|
|
474,265 |
|
|
|
538,199 |
|
Other (income) expense |
|
|
- |
|
|
|
2,478 |
|
Provision for income taxes |
|
|
- |
|
|
|
- |
|
Loss from discontinued operations |
|
$ |
(386,366 |
) |
|
$ |
(219,748 |
) |
Consolidated (Loss) Income from Discontinued Operations: |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, 2019 |
|
|
March 31, 2018 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Revenue from services |
|
$ |
143,071 |
|
|
$ |
388,832 |
|
Cost of services |
|
|
48,845 |
|
|
|
50,356 |
|
Gross profit |
|
|
94,226 |
|
|
|
338,476 |
|
Operating expenses |
|
|
576,875 |
|
|
|
714,401 |
|
Other (income) expense |
|
|
25,960 |
|
|
|
(797,718 |
) |
Provision for income taxes |
|
|
- |
|
|
|
- |
|
(Loss) income from discontinued operations |
|
$ |
(508,609 |
) |
|
$ |
421,793 |
|
|