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Note 5 - Sale of Business Component | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Sale of Business Component [Text Block] | Note 5 – Sale of Business Component On January 31, 2017, we completed the sale of certain identified assets and liabilities associated with a specific customer contract from our project management business for $350,000 pursuant to an Asset Purchase Agreement (“APA”) dated December 12, 2016 with Tech Site Services, LLC, a privately held Maryland company. The sale price was subject to certain post-closing adjustments relating to working capital and obtaining the consent of the customer as a condition of closing. Tech Site Services, LLC also must pay us an earn-out payment equal to 10% of all revenue generated under the customer contract in excess of $2.5 million in each 12 -month period during the two -year period after the closing of this transaction. The managing member of Tech Site Services, LLC is Thomas P. Rosato and the Company leased our Maryland office until December 2016 from an entity that is fifty percent owned by Mr. Rosato. Rents paid under this lease were $253,000 in the year ended December 31, 2016. The transaction closed on January 31, 2017. The APA contains representations, warranties, covenants and indemnification provisions customary for a transaction of this type. Many of the representations made by us are subject to, and qualified by materiality or similar concepts. Both parties have agreed to indemnify the other party for certain losses arising from the breach of the APA and for certain other liabilities, subject to specified limitations. In connection with the transaction both parties will provide transition services with respect to the business activities that were sold. The customer contract and intellectual property sold had a net book value of $0. As a result of the sale, Tech Site Services, LLC assumed liabilities of $ 7,000, resulting in $343,000 of cash proceeds that was paid to us upon closing. Additionally, we incurred approximately $29,000 in legal, escrow and other expenses that would not have been incurred otherwise. As a result, we recorded a net gain of approximately $321,000 in our consolidated statement of operations during the year ended December 31, 2017. On September 28, 2016, we sold certain identified assets and liabilities connected with our Maryland-based facilities maintenance business component for $950,000 pursuant to an Asset Purchase Agreement dated September 28, 2016 with Tech Site Services, LLC. The sale price was subject to certain post-closing adjustments relating to working capital and certain customer contracts of the business. The customer contracts and intellectual property sold in September 2016 had a net book value of $0. As a result of the sale, Tech Site Services, LLC assumed liabilities of $308,000, resulting in $642,000 of cash proceeds. Additionally, we incurred approximately $40,000 in legal, escrow and other expenses that would not have been incurred otherwise. As a result, we recorded a net gain of approximately $910,000 in our consolidated statement of operations for the year ended December 31, 2016. As noted above, on July 1, 2016 we adopted ASU 2014 - 08 regarding discontinued operations. As a result, we evaluated both the sale of the specific customer contract and the sale of a portion of our facilities maintenance business component in light of this new standard. We concluded that neither of these transactions were a “material shift” (as defined in ASU 2014 - 08 ) for us and therefore, were not considered a discontinued operation. In accordance with ASU 2014 - 08, the following information is being provided:
|  | Years Ended December 31, |
|  | 201 7 |  |  | 201 6 |
Pre-tax profit related to facilities maintenance business |  | $ | - |  |  | $ | 812 |
Pre-tax profit related to specific customer contract |  | $ | 93 |  |  | $ | 478 |
Pro forma impact of disposition of facilities maintenance business The following unaudited pro forma combined results of operations are provided for the years ended December 31, 2017 and 2016 as though both of these disposition occurred on January 1, 2016. The unaudited pro forma consolidated statement of operations for the years ended December 31, 2017 and 2016 reflect the following adjustments:
| ( 1 ) | Eliminates the revenues and cost of goods sold as if the transaction occurred on January 1, 201 6
| ( 2 ) | Eliminates operating expenses including salary and related costs for employees who transferred as if this transaction occurred on January 1, 201 6.
The unaudited pro forma consolidated financial information is provided for illustrative purposes only and does not purport to represent what the actual results of operations would have been had the transaction occurred on the respective date assumed, nor is it necessarily indicative of the Company ’s future operating results. However, the pro forma adjustments reflected in the accompanying unaudited pro forma financial information reflect estimates and assumptions that the Company’s management believes to be reasonable. Pro forma adjustments related to the unaudited pro forma consolidated statement of operations for the years ended December 31, 2017 and 2016 were computed assuming the transactions were consummated on January 1, 2016 and include adjustments which give effect to events that are (i) directly attributable to the transaction, (ii) expected to have a continuing effect on the Company, and (iii) factually supportable.
|  | Years ended December 31, |
(unaudited, in thousands) |  | 2017 |  |  | 2016 |
|  | (Pro forma) |  |  | (Pro forma) |
Revenue |  | $ | 18,311 |  |  | $ | 22,845 |
Net income (loss) |  | $ | 358 |  |  | $ | (2,655 | )
Basic and diluted net income (loss) per share |  | $ | 0.02 |  |  | $ | (0.17 | )

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- Definition The entire disclosure related to the reporting entity's sale of a component of one or more of its businesses. + References No definition available. + Details
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