| ABANDONMENT OF SUBSIDIARY |
NOTE
14 – ABANDONMENT OF SUBSIDIARY
On
September 1, 2021, the Company’s board of directors, by unanimous consent, adopted a resolution to abandon the Company’s
wholly owned subsidiary, REGS, LLC. The abandonment resulted in a gain to the Company of approximately $1.5 million for the year ended
December 31, 2021. For the years ended December 31, 2021, and 2020, all operations from REGS have been reported as discontinued operations.
Major classes of line items constituting the balance
sheet on discontinued operations:
SCHEDULE
OF CONSTITUTING BALANCE SHEET AND PRETAX INCOME (LOSS) ON DISCONTINUED OPERATIONS
| |
|
September 3, |
|
|
December 31, |
|
| |
|
2021 |
|
|
2020 |
|
| |
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
- |
|
|
|
500 |
|
| Inventory |
|
|
- |
|
|
|
88,800 |
|
| Prepaid expenses and other current assets |
|
|
- |
|
|
|
14,500 |
|
| Property and equipment, net |
|
|
- |
|
|
|
700 |
|
| Right of use assets |
|
|
- |
|
|
|
30,600 |
|
| Other assets |
|
|
18,900 |
|
|
|
9,900 |
|
| TOTAL ASSETS |
|
$ |
18,900 |
|
|
$ |
145,000 |
|
| |
|
|
|
|
|
|
|
|
| LIABILITIES |
|
|
|
|
|
|
|
|
| Accounts payable |
|
$ |
169,100 |
|
|
|
267,500 |
|
| Accrued liabilities |
|
|
220,800 |
|
|
|
227,700 |
|
| Payroll taxes payable |
|
|
1,076,800 |
|
|
|
1,085,400 |
|
| Customer deposits |
|
|
10,200 |
|
|
|
10,200 |
|
| Paycheck protection program liabilities |
|
|
- |
|
|
|
337,500 |
|
| Current portion of lease liabilities |
|
|
- |
|
|
|
31,000 |
|
| Accrued interest - related party |
|
|
- |
|
|
|
1,800 |
|
| TOTAL LIABILITIES |
|
$ |
1,476,900 |
|
|
$ |
1,961,100 |
|
Major
classes of line items constituting pretax income (loss) on discontinued operations:
| |
|
|
|
|
|
|
| |
|
For the years ended |
|
| |
|
December 31, |
|
| |
|
2021 |
|
|
2020 |
|
| |
|
|
|
|
|
|
| Services revenue |
|
$ |
177,200 |
|
|
$ |
171,400 |
|
| |
|
|
|
|
|
|
|
|
| Services costs |
|
|
(314,900 |
) |
|
|
(423,700 |
) |
| General and administrative expenses |
|
|
(40,800 |
) |
|
|
(102,300 |
) |
| Salaries and related expenses |
|
|
(150,800 |
) |
|
|
(328,600 |
) |
| Other income |
|
|
210,800 |
|
|
|
253,400 |
|
| Gain on debt extinguishment |
|
|
410,600 |
|
|
|
- |
|
| Total expenses |
|
|
114,900 |
|
|
|
(601,200 |
) |
| |
|
|
|
|
|
|
|
|
| Operating
income (loss) |
|
|
292,100 |
|
|
|
(429,800 |
) |
| Income tax benefit |
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| Total
income (loss) from discontinued operations |
|
$ |
292,100 |
|
|
$ |
(429,800 |
) |
The
net assets and liabilities disposed of, resulting in the gain on the abandonment, are summarized in the following table:
SCHEDULE
OF NET ASSETS AND LIABILITIES DISPOSED OF RESULTING IN THE GAIN ON THE ABANDONMENT
| |
|
Year Ended |
|
| |
|
December
31, 2021 |
|
| Assets, net |
|
|
(18,900 |
) |
| Liabilities - Other, net including intercompany
assets |
|
|
400,100 |
|
| IRS payroll tax liability |
|
|
1,076,800 |
|
| Gain on abandonment |
|
|
1,458,000 |
|
|