Discontinued Operations and Disposition of Operating Segment

12 Months Ended

Dec. 31, 2018

Discontinued Operations And Disposition Of Operating Segment

Discontinued Operations and Disposition of Operating Segment

On December 10, 2018, the Company signed a definitive agreement with a private corporation and completed the sale on December 24, 2018, of 100% of the corporate capital of Suisun City Operations, a wholly owned subsidiary of Dropcar, Inc, for a total cash consideration of $3.5 million. The Company recognized the following loss on sale of component on the date of sale:

Sales price	$	3,500,000
Commissions and various transaction costs		(332,220	)
Net sales proceeds		3,167,780
Carrying amounts of assets, net of liabilities		7,337,498	*
Loss on sale of Suisun City Operations	$	(4,169,718	)

* The carrying amounts of assets included cash of $1,504,366; accounts receivable and contract asset of $4,177,568; prepaid expenses and other current assets of $57,486; property and equipment of $295,206; intangibles and goodwill of $5,048,247; carrying amounts of liabilities included accounts payable and accrued liabilities of $3,688,831 and loans of $56,544.

The operations and cash flows of the Suisun City Operations were eliminated from ongoing operations following its sale. The operating results of the Suisun City Operations for the year ended December 31, 2018 were as follows:

Revenues	$	13,730,252
Cost of revenues		10,836,754
Gross profit		2,893,498
Selling, general and administrative expenses		2,285,661
Depreciation and amortization		287,830
Total Operating Expenses		2,573,491
Interest expense, net		4,888
Net income from discontinued operations	$	315,119