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DISCONTINUED OPERATION:
 9 Months Ended
Jun. 30, 2012
DISCONTINUED OPERATION:  
DISCONTINUED OPERATION:

(3) DISCONTINUED OPERATION:

 

Sale of TeamStaff Rx

 

Based on an analysis of historical and forecasted results and the Company’s strategic initiative to focus on core government 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, the Company 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.  After giving effect to the purchase price adjustment mechanism in the agreement, the final purchase price was $375,000. As previously reported, Advantage RN was obligated to make rent subsidy payments to TeamStaff Rx totaling $125,000, with which it has not complied. The Company is pursuing a claim against Advantage RN for all amounts owed and has provided an allowance of $50,000 representing its estimate of uncollectible amounts.

 

Condensed Financial Information

 

There was no income statement activity in respect of the discontinued operation during the three or nine months ended June 30, 2012 and 2011. The following chart details liabilities from the discontinued operation (amounts in thousands):

 

Liabilities

 

June 30,
2012

 

September 30,
2011

 

Accrued expenses and other current liabilities

 

$

193

 

$

235

 

Total liabilities

 

$

193

 

$

235