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DISCONTINUED OPERATION:
 12 Months Ended
Sep. 30, 2011
DISCONTINUED OPERATION:  
DISCONTINUED OPERATION:

(4) DISCONTINUED OPERATION:

Non-Recurring Gain

        A non-recurring gain from discontinued operations for fiscal year ended September 30, 2011 was $270,000. During this fiscal year, the State of Florida determined that approximately $270,000 of escheated funds it was holding was the property of the Company and ordered that such funds be paid to the Company. The Company's right to the funds arose in connection with the Company's former PEO operations that were accounted for as a discontinued operation in fiscal 2003 and, accordingly, the Company has recognized the amounts as income from discontinued operation in the current period after concluding that the amount involved was not material to the results of operations in the year of discontinuance.

Sale of TeamStaff Rx

        Based on an analysis of historical and forecasted results and the Company's strategic initiative to focus on core business, in the fourth quarter of fiscal 2009, the Company approved and committed to a formal plan to divest the operations of TeamStaff Rx, our wholly-owned subsidiary, based at its Clearwater, Florida location. In evaluating the facets of TeamStaff Rx's operations, management concluded that this business component meets the definition of a discontinued operation. Accordingly, the results of operations, cash flows and related assets and liabilities of TeamStaff Rx for all periods presented have been reclassified in the accompanying consolidated financial statements from those of our continuing business.

        Effective December 28, 2009, TeamStaff and TeamStaff Rx entered into a definitive Asset Purchase Agreement with Advantage RN, providing for the sale of substantially all of the operating assets of TeamStaff Rx related to TeamStaff Rx's business of providing travel nurse and allied healthcare professionals for temporary assignments to Advantage RN. The closing of this transaction occurred on January 4, 2010. The Asset Purchase Agreement provided that the purchased assets were acquired by Advantage RN for a purchase price of up to $425,000, of which: (i) $350,000 in cash was paid at the closing, and (ii) $75,000 was subject to an escrowed holdback as described in the Asset Purchase Agreement. On March 25, 2010, the Company and Advantage RN completed the analysis related to escrow release conditions and reached an agreement as to the final purchase price. Of the $75,000 held in escrow, $25,000 was returned to the Company and $50,000 was released to Advantage RN, resulting in a final purchase price of $375,000. Additionally, Advantage RN was obligated to make rent subsidy payments to TeamStaff Rx totaling $125,000, consisting of: (i) $25,000 paid at closing, and (ii) an additional $100,000 payable in 10 equal monthly installments beginning on March 1, 2010. The last rent payment received from Advantage RN was in July 2010. They have since vacated the premises and ceased making installment payments. The Company is pursuing a claim against Advantage RN for all amounts owed. The Company has provided an allowance for their estimate of uncollectible sub-lease funding of $50,000. Under the terms of the Asset Purchase Agreement, Advantage RN did not assume any debts, obligations or liabilities of TeamStaff Rx nor did it purchase any accounts receivable outstanding as of the closing date.

Condensed Financial Information

        Condensed financial statement information and results of the discontinued operation are as follows:

 
   Year Ended  
(amounts in thousands)
   September 30,
2011 		  September 30,
2011 		 

Revenues

   $ —   $ 1,418  

Direct expenses

     —     (1,254 )

Selling, general and administrative expenses

     —     (1,022 )

Other expense, net

     —     (2 )
           

Loss from operations

     —     (860 )

Loss from disposal

     —     (349 )
 

Other income

     270     —  
           

Net gain (loss)

   $ 270   $ (1,209 )
           

        There were no tax benefits associated with the gains or losses from this discontinued operation. Included in fiscal 2010's selling, general and administrative expense from discontinued operations is a charge of $0.1 million for severance to certain TeamStaff Rx employees and $0.3 million in various accrued expenses related to the sale and shut down of the business. The loss on the disposal of TeamStaff Rx approximating $0.3 million principally relates from recognition of the remaining unfunded operating lease payments as the facility was abandoned.

        The following chart details liabilities from the discontinued operation (amounts in thousands):

Liabilities
  September 30,
2011 		  September 30,
2010 		 

Accrued expenses and other current liabilities

   $ 235   $ 289  
           

Total liabilities

   $ 235   $ 289  
           

        The fiscal 2011 decrease in the liability arises from lease payments.