Discontinued Operations and Assets and Liabilities Held for Sale

3 Months Ended

Mar. 31, 2018

Discontinued Operations and Assets and Liabilities Held for Sale [Abstract]

Discontinued Operations and Assets and Liabilities Held for Sale

3.	Discontinued Operations and Assets and Liabilities Held for Sale

On January 29, 2018, the Company entered into a Legacy Asset Sale Agreement with Mark McLaughlin (former President and CEO) whereby the Company sells the net assets of the legacy beta glucan business for $850,000. On February 7, 2018, the Company and Mr. McLaughlin entered into an amendment to the asset purchase agreement to amend the purchase price of the assets, whereby Mr. McLaughlin agreed, through a newly formed entity, to purchase the assets and liabilities of the yeast beta glucan manufacturing business, for the following: (i) 2,000,000 shares of the Company’s common stock (valued at $0.23 per share or $460,000), payable on February 12, 2018, (the “Closing Date”), (ii) $190,000 payable on the Closing Date, (iii) $200,000 payable within 120 days following the Closing Date, and (iv) the waiver of all rights to any severance payment in the amount of $150,000. The total purchase price per the amended asset sale agreement was $1,000,000. The total net assets and liabilities transferred in the sale was $255,248, resulting in a gain on sale of $744,752.

Operating results for the three months ended March 31, 2018 and 2017 for the yeast beta glucan manufacturing business are presented as discontinued operations and the assets and liabilities classified as held for sale are presented separately in the balance sheet.

A breakdown of the discontinued operations is presented as follows:

	Three months ended
	March 31, 2018		March 31, 2017
Net Sales	$	363,613	$	256,563
Cost of Sales		56,666		115,183
Gross Profit		306,947		141,380
Operating expenses		125,960		114,573
Income from discontinued operations		180,987		26,807
Gain on sale		744,752		-
Net income from discontinued operations	$	925,738	$	26,807

Assets and liabilities of discontinued operations held for sale included the following:

	March 31, 2018		December 31, 2017
Current assets:
Trade accounts receivable, net	$	-	$	270,580
Inventory, net		-		25,903
	$	-	$	296,483

Current liabilities:
Accounts payable and accrued expenses	$	-	$	81,733
	$	-	$	81,733