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Discontinued Operations

12 Months Ended

Dec. 31, 2018

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

Note 2. DISCONTINUED OPERATIONS

As discussed in Note 1, the Company sold WMI in December 2018. As such, this business is reported as discontinued operations for the years ended December 31, 2018 and 2017. As required, the Company has retrospectively recast its consolidated statements of operations and balance sheets for all periods presented. The Company has not segregated the cash flows of this business in the consolidated statements of cash flows. Management was also required to make certain assumptions and apply judgment to determine historical expenses related to the discontinued operations presented in prior periods. Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements refers to the Company’s continuing operations.

The following table presents a reconciliation of the major financial lines constituting the results of operations for discontinued operations to the net income (loss) from discontinued operations presented separately in the consolidated statement of operations:

		December 31,
		2018				2017
Net revenue		$	13,852,000			$	13,129,000
Cost of goods sold			13,596,000				11,245,000
Gross profit			256,000				1,884,000
Operating expenses:
Selling, general and administrative			1,306,000				2,488,000
Loss on assets held for sale			-				2,648,000
Impairment of Goodwill			-				3,417,000
Total operating expenses			1,306,000				8,553,000
Interest expense			1,000				(12,000	)
Other income			7,000				3,000
Loss from discontinued operations before income taxes			(1,042,000	)			(6,678,000	)

Provision for income taxes			-				-
Net loss from discontinued operations		$	(1,042,000	)		$	(6,678,000	)

The following table presents a reconciliation of WMI net cash flow from operating, investing and financing activities for the periods indicated below:

		2018				2017
Net cash used in operating activities - discontinued operation		$	( 439,000	)		$	(2,765,000	)
Net cash used in investing activities - discontinued operation		$	49,000			$	(33,000	)
Net cash provided by financing activities - discontinued operations		$	475,000			$	2,665,000

Depreciation and amortization		$	156,000			$	375,000
Capital expenditures		$	-			$	(33,000	)

See Note 8 for a reconciliation of the carrying amounts of major classes of assets and liabilities of the discontinued operations to the total assets and liabilities of the disposal group classified as held for sale that are presented separately in the consolidated balance sheets.