Quarterly report pursuant to Section 13 or 15(d)

ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS

ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2017

Assets And Liabilities Held For Sale And Discontinued Operations

ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS

NOTE 11 – ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS

During the third quarter of 2017, we 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 another $1.5 million based on the performance of the fixed railcar cleaning locations, also over the next three years. Accordingly, the carrying value of the assets and liabilities associated with the railcar cleaning locations are presented as “Assets held for sale” and “Liabilities held for sale” on our consolidated balance sheet as of December 31, 2016, and “Discontinued operations” on our consolidated statement of operations for three and nine months ending September 30, 2017 and September 30, 2016, and on our consolidated statement of cash flows for the nine months ending September 30, 2017 and September 30, 2016. The sale was completed on July 31, 2017. For the nine months ended September 30, 2017 we recorded net income from discontinued operations and a gain on the sale of rail operations equal to $693,700 and $2,663,800, respectively.

Assets and liabilities held for sale were comprised of the following:

	September, 2017		December 31, 2016

Accounts receivable, net	$	—	$	841,800
Property and equipment, net		—		156,200
Other		—		26,600
Total Assets held for sale	$	—	$	1,024,600

Accounts payable	$	—	$	513,500
Accrued expenses and other		—		89,600
Total Liabilities held for sale	$	—	$	603,100

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

	For the three months ending September 30,				For the nine months ending September 30,
	2017		2016		2017			2016

Services revenue	$	757,100	$	877,800	$	4,082,200		$	2,854,100

Services costs		489,800		714,500		3,070,200			2,144,500
General and administrative expenses		23,000		35,400		117,800			118,400
Salaries and related expenses		27,700		70,400		208,900			192,300
Other (income) expense		1,200		300		(8,400	)		1,300
Total expenses		541,700		820,600		3,388,500			2,456,500

Operating income		215,400		57,200		693,700			397,600
Income tax benefit		—		—		—			—

Total income from discontinued operations	$	215,400	$	57,200	$	693,700		$	397,600

Total gain on disposal of rail operations:

	September 30, 2017

Consideration from sale	$	2,400,000
Net present value of future consideration		961,500
Carrying value of net assets*		(574,100	)
Gross gain on disposal		2,787,400
Additional costs on disposal
Commissions		(96,000	)
Accounting		(18,500	)
		(114,500	)
Total gain on sale of rail operations	$	2,672,900

*Carrying value of net assets

Accounts receivable, net	$	1,130,500
Property and equipment, net		177,200
Other		60,200
Total Assets	$	1,367,900

Accounts payable	$	771,900
Accrued expenses and other		21,900
Total Liabilities	$	793,800
Carrying value of net assets	$	574,100