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Discontinued Operations
 6 Months Ended
Jun. 30, 2012
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 June 30, 2012, ADI owed the Company approximately $10,000 under the earn-out. The amount is included in other current assets on the balance sheet.

 

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:

 

    For the three
months ended
June 30, 2011		     For the six
months ended
June 30, 2011		  
                 
Net sales   $ 124,000     $ 194,000  
Expenses     (123,000 )     (234,000 )
Net income (loss) before income taxes     1,000       (40,000 )
Income tax benefit     0       7,000  
Net income (loss) of discontinued operations   $ 1,000     $ (33,000 )

 

 

The effect of the discontinued operation on the financial position of the Company, as of December 31, 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  
         
 Net cash paid  to ADI   $ 14,000