Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

v3.10.0.1
Discontinued Operations
9 Months Ended
Sep. 30, 2018
Discontinued Operations [Abstract]  
DISCONTINUED OPERATIONS

15. DISCONTINUED OPERATIONS 

 

On January 31, 2017, the Company sold the Highwire division of ADEX. Under the terms of the sale, the Company received $4,000 in total proceeds and an additional working capital adjustment of approximately $400 that was paid in October 2017. The results of operations of Highwire have been included on the unaudited condensed consolidated statement of operations within the line item labelled loss on discontinued operations, net of tax for the nine months ended September 30, 2017.

 

Effective April 1, 2017, the Company returned its interest in Nottingham, a former VIE of the Company. The assets and liabilities of Nottingham have been included within the consolidated balance sheets as current assets and long term assets and current liabilities of discontinued operations as of December 31, 2017. The results of operations of Nottingham have been included within the line-item labelled loss on discontinued operations, net of tax within the unaudited condensed consolidated statement of operations for the nine months ended September 30, 2017.

 

On May 15, 2017, the Company sold its SDNE subsidiary. Under the terms of the sale, the Company was to receive $1,400 in cash and a working capital adjustment of $61 to be paid within 150 days of closing. The Company received cash proceeds of $1,411. The results of operations of SDNE have been included within the line-item labelled loss on discontinued operations, net of tax within the unaudited condensed consolidated statement of operations for the nine months ended September 30, 2017.

 

On November 6, 2017, the Company consummated the disposal of certain assets and liabilities of its former wholly-owned subsidiary, IPC. The liabilities of IPC have been included within the unaudited condensed consolidated balance sheet as current liabilities of discontinued operations as of September 30, 2018. The assets and liabilities of IPC have been included within the consolidated balance sheet as current assets and long term assets and current liabilities of discontinued operations as of December 31, 2017. The results of operations of IPC have been included within the line-item labelled loss on discontinued operations, net of tax within the unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2017.

 

On February 27, 2018, the Company sold the ADEX Entities for $3,000 in cash plus a one-year convertible promissory note in the aggregate principal amount of $2,000 (refer to Note 4, Notes Receivable, for further detail). $2,500 in cash was received at closing, with $500 to be retained by the buyer for 90 days, of which $250 has been received. The assets and liabilities of the ADEX Entities have been included within the consolidated balance sheet as current assets and long term assets and current liabilities of discontinued operations as of December 31, 2017. The results of operations of the ADEX Entities have been included within the line-item labelled loss on discontinued operations, net of tax within the unaudited condensed consolidated statement of operations for the three months ended September 30, 2017 and the nine months ended September 30, 2018 and 2017.

 

The following table shows the balance sheets of the Company’s discontinued operations as of September 30, 2018 and December 31, 2017.

 

    September 30,     December 31,  
    2018     2017  
             
Current assets:            
Cash   $ -     $ 305  
Accounts receivable, net of allowances     -       5,628  
Current assets of discontinued operations   $ -     $ 5,933  
                 
Long-term Assets:                
Property and equipment, net   $ -     $ 6  
Intangible assets, net     -       1,354  
Other assets     -       8  
Long-term assets of discontinued operations   $ -     $ 1,368  
                 
Current liabilities:                
Accrued trade payables   $ 2,926     $ 3,138  
Accrued expenses     358       2,660  
Current liabilities of discontinued operations   $ 3,284     $ 5,798  

 

The following tables show the statements of operations of the Company’s discontinued operations for the three months ended September 30, 2017 and the nine months ended September 30, 2018 and 2017.

 

    For the three
months ended
September 30,
2017
 
       
Revenues   $ 6,865  
Cost of revenue     5,325  
Gross profit     1,540  
         
Operating expenses:        
Depreciation and amortization     205  
Salaries and wages     822  
Selling, general and administrative     590  
Total operating expenses     1,617  
         
Pre-tax loss from operations     (77 )
         
Pre-tax loss on discontinued operations     (77 )
         
Provision for income taxes     -  
         
Loss on discontinued operations, net of tax   $ (77 )

 

    For the nine months ended
September 30,
 
    2018     2017  
             
Revenues   $ 3,565     $ 22,773  
Cost of revenue     3,153       17,897  
Gross profit     412       4,876  
                 
Operating expenses:                
Depreciation and amortization     33       676  
Salaries and wages     261       3,506  
Selling, general and administrative     124       2,254  
Goodwill impairment charge     -       3,146  
Intangible asset impairment charge     -       797  
Total operating expenses     418       10,379  
                 
Pre-tax loss from operations     (6 )     (5,503 )
                 
Other income (expenses):                
Interest expense     -       (1 )
Gain on disposal of subsidiary     (228 )     817  
Total other income     (228 )     816  
                 
Pre-tax gain (loss) on discontinued operations     (234 )     (4,687 )
                 
Provision for income taxes     -       -  
Gain (loss) on discontinued operations, net of tax   $ (234 )   $ (4,687 )