Annual report pursuant to Section 13 and 15(d)

Discontinued Operations (Tables)

v3.8.0.1
Discontinued Operations (Tables)
 12 Months Ended
Dec. 31, 2017
Discontinued Operations and Disposal Groups [Abstract]  
Schedule of Discontinued Operation of Balance Sheet and Operation Statement

Carrying amounts of major classes of assets and liabilities classified as held for sale and included as part of discontinued operations in the consolidated balance sheets as of December 31, 2017 and 2016 consisted of the following:

 

AMSG Assets and Liabilities:

 

    December 31, 2017     December 31, 2016  
             
Cash   $ 9,273     $ 2,962  
Accounts receivable, net     19,022       267,681  
Prepaid expenses and other current assets     25,477       67,257  
Current assets classified as held for sale   $ 53,772     $ 337,900  
                 
Property and equipment, net   $ -     $ 53,012  
Deposits     -       23,750  
Non-current assets classified as held for sale   $ -     $ 76,762  
                 
Accounts payable (includes related parties)   $ 671,561     $ 422,864  
Accrued expenses     375,165       274,636  
Current portion of notes payable     249,589       -  
Current liabilities classified as held for sale   $ 1,296,315     $ 697,500  
                 
Non-current liabilities classified as held for sale   $ -     $ 26,598  

 

HTS Assets and Liabilities:

 

    December 31, 2017     December 31, 2016  
             
Cash   $ 8,281     $ 4,844  
Accounts receivable, net     160,715       148,554  
Prepaid expenses and other current assets     3,964       2,592  
Current assets classified as held for sale   $ 172,960     $ 155,990  
                 
Property and equipment, net   $ 21,078     $ 244,541  
Deposits     7,756       6,256  
Non-current assets classified as held for sale   $ 28,834     $ 250,797  
                 
Accounts payable (includes related parties)   $ 407,404     $ 414,813  
Accrued expenses     269,135       184,664  
Current liabilities classified as held for sale   $ 676,539     $ 599,477  

 

Consolidated Discontinued Operations Assets and Liabilities:

 

    December 31, 2017     December 31, 2016  
             
Cash   $ 17,554     $ 7,806  
Accounts receivable, net     179,737       416,235  
Prepaid expenses and other current assets     29,441       69,849  
Current assets classified as held for sale   $ 226,732     $ 493,890  
                 
Property and equipment, net   $ 21,078     $ 297,553  
Deposits     7,756       30,006  
Non-current assets classified as held for sale   $ 28,834     $ 327,559  
                 
Accounts payable (includes related parties)   $ 1,078,965     $ 837,677  
Accrued expenses     644,300       459,300  
Current portion of notes payable     249,589       -  
Current liabilities classified as held for sale   $ 1,972,854     $ 1,296,977  
                 
Non-current liabilities classified as held for sale   $ -     $ 26,598  

 

Major line items constituting loss from discontinued operations in the consolidated statements of operations for the years ended December 31, 2017 and 2016 consisted of the following:

 

AMSG Loss from Discontinued Operations:

 

    Year Ended December 31,  
    2017     2016  
             
Revenue from services   $ 283,460     $ 1,072,528  
Cost of services     12,575       156,795  
Gross profit     270,885       915,733  
Operating expenses     2,525,110       6,464,758  
Other expense     46,859       13,220  
Loss from Discontinued Operations:   $ (2,301,084 )   $ (5,562,245 )

 

HTS Loss from Discontinued Operations:

 

    Year Ended December 31,  
    2017     2016  
             
Revenue from services (**)   $ 1,650,109     $ 2,088,496  
Cost of services     168,274       293,134  
Gross profit     1,481,835       1,795,362  
Operating expenses     3,402,860       6,219,784  
Other expense     54,809       2,371  
Loss from Discontinued Operations:   $ (1,975,834 )   $ (4,426,793 )

 

**Revenue from services, includes related party revenue of $0.7 million and $1.3 million, respectively

 

Consolidated Loss from Discontinued Operations:

 

    Year Ended December 31,  
    2017     2016  
             
Revenue from services   $ 1,933,569     $ 3,161,024  
Cost of services     180,849       449,929  
Gross profit     1,752,720       2,711,095  
Operating expenses     5,927,970       12,612,076  
Other expense     101,668       88,058  
Loss from Discontinued Operations:   $ (4,276,918 )   $ (9,989,039 )

Schedule of Fair Value of Acquired Assets and Liabilities Assumed

The Company has one year to revalue goodwill and other intangible assets in accordance with U.S. GAAP per ASC 850-10-25-14. See the discussion below regarding the impairment of the goodwill acquired.

 

Cash   $ 7,990  
Accounts receivable, net     6,503  
Accounts payable and accrued expenses     (458,736 )
Deferred revenue     (20,000 )
Loans payable short-term     (142,514 )
Note payable long-term     (134,118 )
Total identifiable net liabilities     (740,875 )
Goodwill     914,972  
Total consideration   $ 174,097  

Schedule of Pro Forma Information

These unaudited pro forma statements have been prepared for comparative purposes only and are not intended to be indicative of what our results would have been had the acquisition occurred at the beginning of the periods presented or the results which may occur in the future.

 

    Year Ended December 31,  
    2017     2016  
Net revenue   $ 5,572,637     $ 3,728,997  
Loss from discontinued operations     (4,294,067 )     (9,017,890 )
Net loss     (52,397,725 )     (31,642,538 )
Deemed dividend from trigger of                
Down round provision feature     (53,341,619 )     -  
Net loss to common shareholders   $ (105,739,344 )   $ (31,642,538 )
Loss per share basic and diluted:                
Loss per share – discontinued operations   $ (6.28 )   $ (172.13 )
Net loss per common share   $ (154.72 )   $ (604.00 )