12. DISCONTINUED OPERATIONS

12 Months Ended

Aug. 31, 2013

Discontinued Operations and Disposal Groups [Abstract]

Note 12. DISCONTINUED OPERATIONS

On November 30, 2011, we sold our interest in Words+for $1,973,096 in cash. Words+ operations are now presented as discontinued operations in accordance with accounting rules related to the disposal of long-lived assets.

We recognized a gain of $465,820, net of tax, from this sale, which is included in income from discontinued operations in our statement of operations for the fiscal quarter ended November 30, 2011. The revenue and expenses of discontinued operations for the first fiscal quarter of 2012 are as follows:

(in thousands)	Period from 09/01/11 to 11/30/11
Net sales	$	479
Cost of sales		265
Gross profit		214
Selling, general and administrative		563
Research and development		55
Total operating expenses		618
Income (Loss) from discontinued operations		(404	)
Other income		–
Income (Loss) from discontinued operations before income taxes		(404	)
(Provision for) income taxes		154
Results from discontinued operations, net of tax	$	(250	)

The carrying amount of the assets and liabilities of discontinued operations just prior to the date of the sale on November 30, 2011 were as follows:

(in thousands)	11/30/11
Cash and cash equivalents	$	6
Receivables, net		357
Inventory		392
Prepaid and other current assets		33
Capitalized software development costs, net		212
Property and equipment, net		91
Total Assets		1,091
Accounts payable		72
Accrued payroll and other expenses		109
Accrued warranty and service costs		37
Total Liabilities		218
Net Assets of discontinued operations	$	873