On August 12, 2018 the Company sold substantially all of the U.S. business assets and operations of M&I Electric (“M&I) to a newly formed subsidiary of Myers Power Products, Inc. (“Buyer”). The newly formed subsidiary was established by the Buyer to acquire the assets of M&I pursuant to the Asset Purchase Agreement (the “Transaction”) between the Company and the Buyer. The Transaction included a total purchase price of approximately $18.5 million based on $10.1 million of cash consideration plus debt assumed by the buyer of $8.4 million. Under the terms of the Transaction, the Company transferred $740,000 into an escrow account to provide security for certain of the Company’s indemnification obligations for a six-month period following closing. A portion of the funds provided by the Transaction were required to be used to repay the Note and related accrued interest totaling approximately $6.5 million.

The contractual terms of the Transaction include a provision for true-up of the net working capital, estimated as of the date of closing, to actual working capital as calculated by the Buyer and agreed to by the Seller. Any difference in the actual (conclusive) net working capital in relation to the estimated working capital at closing results in an adjustment to the purchase price. In October 2018, the Company received notification from the Buyer of their actual working capital calculation. In the notification, the Buyer has communicated a decrease of approximately $4.3 million in net working capital, in comparison to the estimated working capital used at contract closing. The contractual terms of the Transaction provide that in the event the Buyer and Seller cannot agree to a conclusive net working capital adjustment, then all items remaining in dispute shall be submitted by either one of the parties within thirty (30) calendar days after the expiration of the resolution period to a national or regional independent accounting firm mutually acceptable to Buyer and Seller (the "Neutral Arbitrator"). The Neutral Arbitrator shall act as an arbitrator to determine the conclusive net working capital. The conclusive net working capital, once determined, may result in a purchase price adjustment due to the Buyer or to the Company as Seller.

The Company and the Buyer of M&I electric currently have a significant disagreement with regard to the working capital adjustment calculation and the Company has not received documentation sufficient to support the Buyer’s position. As such, no adjustments have been considered in determining the gain on the sale of assets reported as of December 31, 2018. Any purchase price adjustment related to the conclusive determination of the net working capital adjustment, if any, will be reflected at the date of such determination. Any legal fees incurred related to this disagreement will be expensed as incurred.

At December 31, 2017, the assets and liabilities sold in the Transaction have been reclassified and reflected as held for sale in the Company’s Consolidated Balance Sheets. The operating results and cash flows of the business sold have also been reclassified and reflected as discontinued operations in the Company’s Consolidated Statements of Operations and Consolidated Statements of Cash Flows for all periods presented.

Following is an analysis of assets and liabilities of M&I reclassified as held for sale at December 31, 2017:

Assets
Current assets:
Accounts receivable-trade, net	$	5,266
Inventories, net		1,325
Contract assets		5,841
Prepaid expenses and other current assets		434
Total current portion of assets held for sale		12,866
Property, plant and equipment, net		6,323
Intangibles		458
Retainage receivables		785
Total non-current assets held for sale		7,566
Total assets held for sale	$	20,432
Liabilities
Current liabilities:
Accounts payable and accrued liabilities	$	11,616
Short-term note payable		150
Contract liabilities		1,792
Total liabilities held for sale	$	13,558

The following is an analysis of the results of operations of the discontinued business of M&I for the years ended December 31, 2018 and 2017:

	Year ended December 31,
	2018			2017
Net sales	$	17,899		$	41,414
Cost of sales		20,358			40,136
Selling, general and administrative expenses		1,660			2,255
Interest expense		1,298			1,054
Loss from discontinued operations		(5,417	)		(2,031	)
Gain on sale of discontinued operations		4,521			-
Loss from discontinued operations	$	(896	)	$	(2,031	)
Earnings (loss) per share information:
Basic and diluted	$	(0.10	)	$	(0.24	)

The following is an analysis of assets sold and liabilities assumed by the Buyer and the related gain on the sale from the Transaction:

Assets sold:
Current assets:
Accounts receivable-trade, net	$	3,360
Inventories, net		1,145
Contract assets		2,957
Prepaid expenses and other current assets		117
Total current portion of assets held for sale		7,579
Property, plant and equipment, net		5,937
Intangibles		497
Total non-current assets held for sale		6,506
Total assets held for sale	$	14,013
Liabilities assumed:
Current liabilities:
Accounts payable and accrued liabilities	$	5,664
Contract liabilities		2,752
Total current liabilities		8,416
Net assets sold		5,597
Proceeds received after payment of transaction costs of $2,180		10,118
Gain on disposition	$	4,521

Following is an analysis of supplemental cashflow information of the discontinued business of M&I for the years ended December 31, 2018 and 2017:

		2018			2017
	(in thousands)
Depreciation	$		238	$		644
Capital expenditures			85			738