Discontinued Operations (Tables)

12 Months Ended

Dec. 30, 2017

Discontinued Operations Tables

Discontinued operations

(A) Consideration received			(C) Carrying value of the Lab Business
	Amount			Assets disposed	Carrying value
Cash payment	$	6,750,000		Leasehold improvements and equipment, net	$	1,427,000
Cash payment held in escrow (1)		750,000		Prepaid expenses		11,000
Additional earnout payment		-		Deposits		20,000
	$	7,500,000
				Liabilities disposed
(B) Selling costs				Deferred revenue		(7,000	)
	Amount			Deferred rent		(215,000	)
Legal	$	428,000
Financial consulting		250,000
Other		118,000
	$	796,000		Net assets	$	1,236,000
Gain from disposal (A) - (B) - (C)	$	5,468,000
(1) $750,000 is expected to be held in escrow until March 2019 to satisfy any indemnification claims.

The sale of the Lab Business qualifies as a discontinued operation as the sale represents a strategic shift that has (or will have) a major effect on operations and financial results.

The results of operations from the discontinued operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016 are as follows:

Statements of Operations - Discontinued operations
Years Ended December 30, 2017, December 31, 2016 and January 2, 2016
	2017			2016			2015
Sales	$	2,820,631		$	5,146,438		$	4,129,254
Cost of sales		2,478,827			3,615,840			3,182,851
Gross profit		341,804			1,530,598			946,403
Operating expenses:
Sales and marketing		482,134			692,376			818,920
General and administrative		150,171			178,446			215,220
Operating expenses		632,305			870,822			1,034,140
Operating income (loss)		(290,501	)		659,776			(87,737	)
Nonoperating income (expense):
Interest expense, net		(24,639	)		(36,366	)		(45,791	)
Nonoperating expenses		(24,639	)		(36,366	)		(45,791	)
Income (loss) from discontinued operations	$	(315,140	)	$	623,410		$	(133,528	)

The assets and liabilities that are classified as held for sale as of December 31, 2016 are as follows:

	Dec. 31, 2016
Current assets held for sale
Prepaid expenses	$	18,315
Leasehold Improvements and Equipment, net		1,333,203
Deposits		19,675
Total assets held for sale		1,371,193
Deferred rent		184,766
Total liabilities held for sale	$	184,766

Depreciation, capital expenditures and significant noncash investing activities of the discontinued operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016 are as follows:

	2017			2016			2015
Depreciation	$	169,250		$	254,755		$	234,010
Purchase of leasehod improvements and equipment	$	111,232		$	313,842		$	190,632
Noncash investing activity
Capital lease obligation incurred for the purchase of equipment	$	-		$	156,655		$	303,933
Retirement of fully depreciated equipment - cost	$	55,947		$	76,050		$	119,888
Retirement of fully depreciated equipment - accumulated depreciation	$	(55,947	)	$	(76,050	)	$	(119,888	)