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Discontinued Operations
9 Months Ended
Sep. 30, 2011
Discontinued Operations [Abstract] 
Discontinued Operations

Note 7. Discontinued Operations

 

On September 16, 2011, the Company sold its entire interest in its AutoData Systems Division to Auto Data Inc. (ADI). The purchase price will be paid as an earn-out based on three percent of the software, hardware, and maintenance contracts that ADI sells over the next five years (four percent while ADI continues to occupy our building). As of September 30, 2011, the Company owed ADI approximately $14,000 to pay for deferred revenue and amounts due to employees, less accounts receivable, inventory, and fixed assets related to the sale of the division. This amount was paid in October 2011.

 

The division, a separate operating segment as described in Note 8, designed and marketed desktop software based systems that read hand printed characters, checkmarks and bar code information from scanned or faxed forms, in addition to collecting and reporting data from web forms.   

 

The financial results of the discontinued operation are as follows:

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

52,000

 

$

92,000

 

$

246,000

 

$

299,000

 

Expenses

 

(80,000

)

(103,000

) 

(314,000

) 

(315,000

) 

Net loss before income taxes

 

(28,000

)

(11,000

) 

(68,000

) 

(16,000

) 

Income tax benefit

 

11,000

 

4,000

 

27,000

 

6,000

 

Net loss of discontinued operations

 

$           (17,000

)

$               (7,000

)

$           (41,000

)

$            (10,000

)

 

 

 

 

 

 

 

 

 

 

 

 

The effect of the discontinued operation on the financial position of the Company, as of September 30, 2011, is as follows:

 

Property and equipment

 

$

2,000

Inventories

 

 

17,000

Accounts receivable

 

 

35,000

Net assets disposed

 

$

54,000

 

 

 

 

Accrued expenses

 

$

10,000

Deferred revenue

 

 

58,000

Net liabilities disposed

 

$

68,000