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Discontinued Operations | 9 Months Ended
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Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | 10. Discontinued Operations As a result of the insufficient cash flows from the operations of Plastic Printing Professionals, Inc. as well as the disruption of our business from the COVID-19 pandemic, on April 20, 2020, the Company executed a nonbinding letter of intent with a perspective buyer for substantially all the assets of this business line. As a result of insufficient cash flows, the disruption of our business from the Covid-19 pandemic, and with the intent to exit this business line, the Company terminated its production and office personnel and maintained only a few employees to assist in and facilitate the sale of its assets. The financial results for these subsidiaries have been presented as discontinued operations in the accompanying consolidated financial statements. The consideration paid to the Company for the sale of the assets included a one-time cash payment of $683,000 and a potential additional earn-out payment of an aggregate amount of up to $517,000 based on future quarterly gross revenue of the business to be conducted by the buyer with the sold assets. Consistent with the Company’s policy for accounting for gain contingencies, the earn out will be recorded when determined realizable which did not occur during the nine months ended September 30, 2020. The net effect of all assets disposed of with this transaction is a net loss $111,000 and is included in Loss from Discontinued Operations. The following tables show the major classes of assets and liabilities held for sale and results of operations of the discontinued operation. DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES Consolidated Balance Sheets– Assets and Liabilities Held For Sale
|  | September 30, |  |  | December 31, |
|  | 2020 |  |  | 2019 |
|  | unaudited |  |  |  |
ASSETS |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |
Inventory |  | $ | - |  |  | $ | 342,000 |
Total current assets |  |  | - |  |  |  | 342,000 |
Property, plant and equipment, net |  |  | - |  |  |  | 732,000 |
Right-of-use assets |  |  | 886,000 |  |  |  | 1,081,000 |
LIABILITIES |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Current portion of lease liability |  |  | 274,000 |  |  |  | 274,000 |
Total current liabilities |  |  | 274,000 |  |  |  | 274,000 |
Long term lease liability |  |  | 612,000 |  |  |  | 807,000 |
DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES Consolidated Statements of Operations - Discontinued Operations (unaudited)
|  | For the Three Months Ended |  |  | For the Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |
Printed products |  | $ | 243,000 |  |  | $ | 916,000 |  |  | $ | 1,626,000 |  |  | $ | 2,591,000 |
Total revenue |  |  | 243,000 |  |  |  | 916,000 |  |  |  | 1,626,000 |  |  |  | 2,591,000 |
Costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of revenue, exclusive of depreciation and amortization |  |  | 382,000 |  |  |  | 503,000 |  |  |  | 1,644,000 |  |  |  | 1,795,000 |
Selling, general and administrative (including stock based compensation) |  |  | 130,000 |  |  |  | 310,000 |  |  |  | 715,000 |  |  |  | 910,000 |
Depreciation and amortization |  |  | 37,000 |  |  |  | 122,000 |  |  |  | 152,000 |  |  |  | 207,000 |
Impairment of goodwill |  |  | - |  |  |  | - |  |  |  | 685,000 |  |  |  | - |
Total costs and expenses |  |  | 549,000 |  |  |  | 935,000 |  |  |  | 3,196,000 |  |  |  | 2,912,000 |
Operating loss |  |  | (306,000 | ) |  |  | (19,000 | ) |  |  | (1,570,000 | ) |  |  | (321,000 | )
Other income (expense): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | (7,000 | ) |  |  | (9,000 | ) |  |  | (21,000 | ) |  |  | (24,000 | )
Loss on sale of assets held for sale |  |  | (111,000 | ) |  |  | - |  |  |  | (111,000 | ) |  |  | - |
Income (loss) before income taxes |  |  | (424,000 | ) |  |  | (28,000 | ) |  |  | (1,702,000 | ) |  |  | (345,000 | )
Income tax expense (benefit) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Income (loss) from discontinued operations |  |  | (424,000 | ) |  |  | (28,000 | ) |  |  | (1,702,000 | ) |  |  | (345,000 | )

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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