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Discontinued Operations

6 Months Ended

Jun. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

4. Discontinued Operations

On March 16, 2020, to try and mitigate the spread of the novel coronavirus (“COVID-19”), San Diego County health officials issued orders mandating that all restaurants must end dine-in services. As a result of these temporary closures and the deteriorating business conditions at both the Company’s cryptocurrency mining and restaurant businesses, the Company concluded that discontinuing the operations of Digital Farms and I. AM was ultimately in its best interest.

Digital Farms was established to pursue a variety of digital currencies and mined the top three cryptocurrencies for its own account. Although the Company has ceased operations at Digital Farms, since the assets and operations have not yet been abandoned, sold or distributed, these assets do not yet meet the requirement for presentation as discontinued operations. In the first quarter of 2020, management determined that the permanent closing of the restaurant operations met the criteria for presentation as discontinued operations. Accordingly, the results of the restaurant operations are presented as discontinued operations in our condensed consolidated statements of operations and comprehensive loss and are excluded from continuing operations for all periods presented. In addition, the assets and liabilities of the restaurant operations are classified as held for sale in our condensed consolidated balance sheets for all periods presented.

The following tables summarize the major classes of assets and liabilities included as part of discontinued operations:

	June 30,		December 31,
	2020		2019
	(Unaudited)
Current assets
Cash and cash equivalents	$ —		$ 5,170
Accounts receivable	—		83,885
Inventories, net	—		60,341
Prepaid expenses and other current assets	—		131,956
Total current assets classified as held for sale	—		281,352

Property and equipment, net	—		504,802
Right-of-use assets	—		1,098,466
Total assets classified as held for sale	$ —		$ 1,884,620

Current liabilities
Accounts payable and accrued expenses	$ 788,314		$ 881,601
Operating lease liability, current	265,920		229,574
Other current liabilities	461,738		482,375
Total current liabilities classified as held for sale	1,515,972		1,593,550

Long term liabilities
Operating lease liability, non-current	843,020		951,072
Total liabilities classified as held for sale	$ 2,358,992		$ 2,544,622

The restaurant operations are included in our results as discontinued operations through March 16, 2020, the date of closing of the restaurants. The following tables summarize the major classes of line items included in loss from discontinued operations:

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenue	$ —		$ 1,161,132		$ 543,327		$ 2,334,631
Cost of revenue	—		(322,008)		(160,310)		(614,491)
Selling and marketing	—		(43,929)		—		(100,650)
General and administrative	—		(1,123,312)		(555,445)		(2,052,749)
Impairment of property and equipment	—		—		(1,525,316)		—
Loss from discontinued operations	$ —		$ (328,117)		$ (1,697,744)		$ (433,259)