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DISCONTINUED OPERATIONS | 12 Months Ended
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Jan. 01, 2022
DISCONTINUED OPERATIONS |
DISCONTINUED OPERATIONS | 3. DISCONTINUED OPERATIONS We determined that the companies previously included in our former Diversified Products segment no longer fit with our long-term strategy and have initiated the process of selling the companies within the former Diversified Products segment. Selling these companies will allow management to focus on our core capabilities and offerings. The former Diversified Products segment met the criteria to be held for sale and furthermore, we determined that the assets held for sale qualified for discontinued operations. As such, the financial results of the former Diversified Products segment are reflected in our condensed consolidated statements of operations as discontinued operations for all periods presented. Additionally, current and non-current assets and liabilities of discontinued operations are reflected in the condensed consolidated balance sheets for both periods presented. On November 3, 2021, the Company sold its Greenwald Industries, Inc. division (“Greenwald”) for a sales price of $8.0 million, subject to a final working capital adjustment. Greenwald, located in Chester, CT, is an OEM manufacturer offering a range of payment solutions from coin-vending products to smart card systems and payment applications. On November 22, 2021, the Company sold its Frazer & Jones Company division (“Frazer & Jones”). Frazer & Jones is a ductile and malleable iron foundry located in Syracuse, NY. Eastern has exited the mining business to focus on our three core businesses. Summarized Financial Information of Discontinued Operations The following table represents income from discontinued operations, net of tax:
|  | Year Ended |
|  | January 1, 2022 |  |  | January 2, 2021 |
Net sales |  | $ | 44,289,411 |  |  | $ | 42,788,524 |
Cost of products sold |  |  | (24,873,717 | ) |  |  | (40,701,607 | )
Gross margin |  |  | 19,415,694 |  |  |  | 2,086,917 |
Selling and administrative expenses |  |  | (15,962,532 | ) |  |  | (8,591,915 | )
Restructuring costs |  |  | (11,807,512 | ) |  |  | - |
Operating loss |  |  | (8,354,350 | ) |  |  | (6,504,998 | )
Interest expense |  |  | (582,574 | ) |  |  | (686,200 | )
Loss from discontinued operations before income taxes |  |  | (8,936,924 | ) |  |  | (7,191,198 | )
Income tax benefit |  |  | 2,103,752 |  |  |  | 1,561,801 |
Loss from discontinued operations |  | $ | (6,833,172 | ) |  | $ | (5,629,397 | )
The following table represents the assets and liabilities from discontinued operations:
|  | January 1, 2022 |  |  | January 2, 2021 |
Cash |  | $ | 434,126 |  |  | $ | 809,809 |
Accounts receivable |  |  | 1,153,274 |  |  |  | 5,944,923 |
Inventory |  |  | 1,258,032 |  |  |  | 9,990,656 |
Prepaid expenses |  |  | 59,850 |  |  |  | 1,192,530 |
Property, plant and equipment, net |  |  | 591,920 |  |  |  | 10,927,791 |
Patents and other intangibles net of accumulated amortization |  |  | - |  |  |  | 6,935 |
Goodwill |  |  | - |  |  |  | 4,675,611 |
Right of use assets |  |  | 24,697 |  |  |  | 173,364 |
Total assets of discontinued operations |  | $ | 3,521,899 |  |  | $ | 33,721,619 |
Current assets of discontinued operations¹ |  | $ | 3,521,899 |  |  | $ | 17,937,918 |
Non-current assets of discontinued operations |  |  | - |  |  |  | 15,783,701 |
Total assets of discontinued operations |  | $ | 3,521,899 |  |  | $ | 33,721,619 |
Accounts payable |  | $ | 167,794 |  |  | $ | 2,196,101 |
Accrued compensation and other accrued expenses |  |  | 388,499 |  |  |  | 937,911 |
Note payable, current |  |  | - |  |  |  | 22,164 |
Current portion of lease liability |  |  | 24,697 |  |  |  | 96,369 |
Other long-term liabilities |  |  | - |  |  |  | 76,995 |
Total liabilities of discontinued operations |  | $ | 580,990 |  |  | $ | 3,329,540 |
Current liabilities of discontinued operations¹ |  | $ | 580,990 |  |  | $ | 3,252,545 |
Non-current liabilities of discontinued operations |  |  | - |  |  |  | 76,995 |
Total liabilities of discontinued operations |  | $ | 580,990 |  |  | $ | 3,329,540 |
¹ The total assets and liabilities of discontinued operations are presented as current in the January 1, 2022 balance sheet as we expect to sell the discontinued operations and collect proceeds within one year.

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