| Discontinued Operations |
Note 18 – Discontinued Operations
On July 12, 2017, the Company announced plans
to spinoff its Advanced Molecular Services Group (“AMSG”) and in the third quarter of 2017 the Company’s Board
of Directors voted unanimously to spinoff 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 now expected to occur in the fourth quarter of 2018. 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 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 as of September 30, 2018 from HTS to the Company of $15,396,149 and from AMSG of
$7,429,387 will remain with the separated entities. The Company hopes to complete the spinoffs in a manner to permit it to recognize
these amounts on its balance sheet as investments 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:
| |
|
September 30, 2018 |
|
|
December 31, 2017 |
|
| |
|
(unaudited) |
|
|
(unaudited) |
|
| Cash |
|
$ |
8,575 |
|
|
$ |
9,273 |
|
| Accounts receivable, net |
|
|
1,837 |
|
|
|
19,022 |
|
| Prepaid expenses and other current assets |
|
|
25,477 |
|
|
|
25,477 |
|
| Current assets classified as held for sale |
|
$ |
35,889 |
|
|
$ |
53,772 |
|
| |
|
|
|
|
|
|
|
|
| Accounts payable (includes related parties) |
|
$ |
492,898 |
|
|
$ |
671,561 |
|
| Accrued expenses |
|
|
405,616 |
|
|
|
375,165 |
|
| Current portion of notes payable |
|
|
281,728 |
|
|
|
249,589 |
|
| Current liabilities classified as held for sale |
|
$ |
1,180,242 |
|
|
$ |
1,296,315 |
|
HTS Assets and Liabilities:
| |
|
September 30, 2018 |
|
|
December 31, 2017 |
|
| |
|
(unaudited) |
|
|
(unaudited) |
|
| Cash |
|
$ |
1,424 |
|
|
$ |
8,281 |
|
| Accounts receivable, net |
|
|
178,027 |
|
|
|
160,715 |
|
| Prepaid expenses and other current assets |
|
|
10,300 |
|
|
|
3,964 |
|
| Current assets classified as held for sale |
|
$ |
189,751 |
|
|
$ |
172,960 |
|
| |
|
|
|
|
|
|
|
|
| Property and equipment, net |
|
$ |
8,619 |
|
|
$ |
21,078 |
|
| Deposits |
|
|
6,029 |
|
|
|
7,756 |
|
| Non-current assets classified as held for sale |
|
$ |
14,648 |
|
|
$ |
28,834 |
|
| |
|
|
|
|
|
|
|
|
| Accounts payable (includes related parties) |
|
$ |
493,535 |
|
|
$ |
407,404 |
|
| Accrued expenses |
|
|
455,645 |
|
|
|
269,135 |
|
| Current liabilities classified as held for sale |
|
$ |
949,180 |
|
|
$ |
676,539 |
|
Consolidated Discontinued Operations Assets and Liabilities:
Total Discontinued Assets and Liabilities:
| |
|
September 30, 2018 |
|
|
December 31, 2017 |
|
| |
|
(unaudited) |
|
|
(unaudited) |
|
| Cash |
|
$ |
9,999 |
|
|
$ |
17,554 |
|
| Accounts receivable, net |
|
|
179,864 |
|
|
|
179,737 |
|
| Prepaid expenses and other current assets |
|
|
35,777 |
|
|
|
29,441 |
|
| Current assets classified as held for sale |
|
$ |
225,640 |
|
|
$ |
226,732 |
|
| |
|
|
|
|
|
|
|
|
| Property and equipment, net |
|
$ |
8,619 |
|
|
$ |
21,078 |
|
| Deposits |
|
|
6,029 |
|
|
|
7,756 |
|
| Non-current assets classified as held for sale |
|
$ |
14,648 |
|
|
$ |
28,834 |
|
| |
|
|
|
|
|
|
|
|
| Accounts payable (includes related parties) |
|
$ |
986,433 |
|
|
$ |
1,078,965 |
|
| Accrued expenses |
|
|
861,261 |
|
|
|
644,300 |
|
| Current portion of notes payable |
|
|
281,728 |
|
|
|
249,589 |
|
| Current liabilities classified as held for sale |
|
$ |
2,129,422 |
|
|
$ |
1,972,854 |
|
Major line items constituting income (loss)
from discontinued operations in the consolidated statements of operations for the three and nine months ended September 30, 2018
and 2017 consisted of the following:
AMSG Loss from Discontinued Operations:
| |
|
Three Months Ended September 30, |
|
| |
|
2018 |
|
|
2017 |
|
| |
|
(unaudited) |
|
|
(unaudited) |
|
| Revenue from services |
|
$ |
13,249 |
|
|
$ |
1,120 |
|
| Cost of services |
|
|
15,559 |
|
|
|
8,513 |
|
| Gross profit |
|
|
(2,310 |
) |
|
|
(7,393 |
) |
| Operating expenses |
|
|
93,059 |
|
|
|
328,233 |
|
| Other (income) expenses |
|
|
(5,748 |
) |
|
|
34,523 |
|
| Loss from discontinued operations |
|
$ |
(89,621 |
) |
|
$ |
(370,149 |
) |
HTS Loss from Discontinued Operations:
| |
|
Three Months Ended September 30, |
|
| |
|
2018 |
|
|
2017 |
|
| |
|
(unaudited) |
|
|
(unaudited) |
|
| Revenue from services |
|
$ |
499,317 |
|
|
$ |
344,304 |
|
| Cost of services |
|
|
30,082 |
|
|
|
47,347 |
|
| Gross profit |
|
|
469,235 |
|
|
|
296,957 |
|
| Operating expenses |
|
|
532,892 |
|
|
|
957,757 |
|
| Other (income) expenses |
|
|
6,152 |
|
|
|
(22,992 |
) |
| Loss from discontinued operations |
|
$ |
(69,808 |
) |
|
$ |
(637,808 |
) |
AMSG Income (loss) from Discontinued Operations:
| |
|
Nine Months Ended September 30, |
|
| |
|
2018 |
|
|
2017 |
|
| |
|
(unaudited) |
|
|
(unaudited) |
|
| Revenue from services |
|
$ |
92,090 |
|
|
$ |
224,224 |
|
| Cost of services |
|
|
37,773 |
|
|
|
9282 |
|
| Gross profit |
|
|
54,317 |
|
|
|
214,942 |
|
| Operating expenses |
|
|
363,944 |
|
|
|
1,225,639 |
|
| Other (income) expenses |
|
|
(819,258 |
) |
|
|
42,767 |
|
| Income (loss) from discontinued operations |
|
$ |
509,631 |
|
|
$ |
(1,053,464 |
) |
HTS Loss from Discontinued Operations:
| |
|
Nine Months Ended September 30, |
|
| |
|
2018 |
|
|
2017 |
|
| |
|
(unaudited) |
|
|
(unaudited) |
|
| Revenue from services |
|
$ |
1,291,288 |
|
|
$ |
1,112,653 |
|
| Cost of services |
|
|
95,965 |
|
|
|
122,728 |
|
| Gross profit |
|
|
1,195,323 |
|
|
|
989,925 |
|
| Operating expenses |
|
|
1,577,046 |
|
|
|
2,711,619 |
|
| Other (income) expenses |
|
|
12,121 |
|
|
|
(22,992 |
) |
| Loss from discontinued operations |
|
$ |
(393,844 |
) |
|
$ |
(1,698,702 |
) |
Consolidated Loss from Discontinued Operations:
| |
|
Three Months Ended September 30, |
|
| |
|
2018 |
|
|
2017 |
|
| |
|
(unaudited) |
|
|
(unaudited) |
|
| Revenue from services |
|
$ |
512,566 |
|
|
$ |
345,424 |
|
| Cost of services |
|
|
45,641 |
|
|
|
55,860 |
|
| Gross profit |
|
|
466,925 |
|
|
|
289,564 |
|
| Operating expenses |
|
|
625,950 |
|
|
|
1,285,990 |
|
| Other (income) expenses |
|
|
404 |
|
|
|
11,532 |
|
| Loss from discontinued operations |
|
$ |
(159,430 |
) |
|
$ |
(1,007,957 |
) |
Consolidated Income (loss) from Discontinued Operations:
| |
|
Nine Months Ended September 30, |
|
| |
|
2018 |
|
|
2017 |
|
| |
|
(unaudited) |
|
|
(unaudited) |
|
| Revenue from services |
|
$ |
1,383,378 |
|
|
$ |
1,336,877 |
|
| Cost of services |
|
|
133,738 |
|
|
|
132,010 |
|
| Gross profit |
|
|
1,249,640 |
|
|
|
1,204,867 |
|
| Operating expenses |
|
|
1,940,990 |
|
|
|
3,937,258 |
|
| Other (income) expenses |
|
|
(807,137 |
) |
|
|
19,776 |
|
| Income (loss) from discontinued operations |
|
$ |
115,787 |
|
|
$ |
(2,752,166 |
) |
|