Annual report pursuant to Section 13 and 15(d)

Discontinued Operations

Discontinued Operations

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

NOTE 15 –DISCONTINUED OPERATIONS

2017 REGS Railcar cleaning division

During the third quarter of 2017, the Company sold our fixed railcar cleaning division which includes substantially all assets and liabilities of Tactical (except for cash) as well as three locations in REGS including Illinois, Maryland and Pennsylvania for a sales price of $2.4 million of proceeds received at the close on July 31, 2017, subject to an adjustment for working capital changes, and guaranteed payments of $1.1 million over the next three years. In addition, the Company is entitled to receive up to $1.5 million based on the performance of the fixed railcar cleaning locations, also over the next three years. Accordingly, the revenue and expenses associated with the railcar cleaning locations are presented as “Discontinued operations” on our consolidated statement of operations and on our consolidated statement of cash flows for the years ended December 31, 2018. The sale was completed on July 31, 2017. For the years ended December 31, 2019 and 2018 we recorded net income from discontinued operations equal to $0 and $41,000, respectively.

Major classes of line items constituting pretax loss on discontinued operations:

	For the year ending
	December 31,
	2019		2018

Services revenue	$	-	$	-

Services costs		-		-
General and administrative expenses		-		-
Salaries and related expenses		-		-
Other income (expense)		-		41,000
Total expenses		-		41,000

Operating income		-		41,000
Income tax benefit		-		-

Total income from discontinued operations	$	-	$	41,000

2019 REGS services division

During the fourth quarter of 2019, the Company ceased bidding on, and accepting contracts for the services division of its REGS subsidiary. No contracts have been uncompleted; therefore, the division does not have any performance obligations at December 31, 2019. Fifteen employees in the division were terminated at December 31, 2019. The Company is investigating the sale of REGS services division assets as of December 31, 2019. Accordingly, the revenue and expenses associated with the services division are presented as “Discontinued operations” on our consolidated statement of operations and on our consolidated statement of cash flows for the years ended December 31, 2019, and corresponding 2018 results were reclassified from the reporting classification in fiscal year 2018 for comparative purposes. For the years ended December 31, 2019 and 2018 we recorded net income from discontinued operations equal to $0 and $41,000, respectively.

Major classes of line items constituting pretax loss on discontinued operations:

	For the year ending
	December 31,
	2019			2018

Services revenue	$	1,661,500		$	2,946,800

Services costs		(2,481,400	)		(3,126,900	)
General and administrative expenses		(502,400	)		(412,000	)
Salaries and related expenses		(512,400	)		(502,100	)
Other income (expense)		49,300			(40,600	)
Total expenses		(3,446,900	)		(4,081,600	)

Operating income		(1,785,400	)		(1,134,800	)
Income tax benefit		-			-

Total income from discontinued operations	$	(1,785,400	)	$	(1,134,800	)