Discontinued Operations

9 Months Ended

Sep. 30, 2019

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 3 – Discontinued Operations

On September 30, 2019, the Company entered into an Asset Purchase Agreement with Surge Holdings, Inc., a Nevada corporation (“SURG”) pursuant to which the Company agreed to sell and assign to SURG all the assets and certain specified liabilities of its ECS Prepaid, Electronic Check Services and the Central State Legal Services businesses in consideration of $5,000,000 to be paid through the issuance of 3,333,333 shares of SURG’s common stock and a convertible promissory note in favor of the Company in the principal amount of $4,000,000. The 3,333,333 shares of SURG’s common stock have been pledged to a third party for providing working capital needs of the Company (See Note 14).

The ECS Prepaid, Electronic Check Services and the Central State Legal Services businesses have been presented as discontinued operations on the accompanying financial statements.

The operating results for ECS Prepaid, Electronic Check Services and the Central State Legal Services have been presented in the accompanying consolidated statement of operations for the three and nine months ended September 30, 2019 and 2018 as discontinued operations and are summarized below:

	Three Months Ended September 30,
	2019			2018
Revenue	$	7,924,152		$	11,719,155
Cost of revenue		7,774,888			11,400,450
Gross Profit		149,264			318,705
Operating expenses		350,380			440,988
Loss from operations		(201,116	)		(122,283	)
Other income (expenses)		—			—
	$	(201,116	)	$	(122,283	)

	Nine Months Ended September 30,
	2019			2018
Revenue		23,901,278		$	27,836,706
Cost of revenue		23,336,163			27,179,686
Gross Profit		565,115			657,020
Operating expenses		1,046,390			757,226
Loss from operations		(481,275	)		(100,206	)
Other income (expenses)		(3	)		—
Net loss		(481,278	)	$	(100,206	)

The assets and liabilities of the discontinued operations at September 30, 2019 and December 31, 2018 are summarized below:

	September 30,		December 31,
	2019		2018
Current assets	$	—	$	100,050
Property and equipment		—		47,344
Intangible assets		—		3,149,740
Goodwill		—		925,877
Total assets	$	—	$	4,223,011
Current liabilities	$	—	$	906,700
Total liabilities	$	—	$	906,700

As a result of this transaction, the Company recognized a gain on the disposition of discontinued operations of $1,381,803.