Discontinued Operations

9 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 3 – Discontinued Operations

On September 18, 2020, the Company entered into a Purchase and Sale Agreement with Mr. LightHouse LTD., an Israeli corporation (“MLH”) pursuant to which the Company agreed to sell and assign to MLH, effective July 1, 2020 all the shares, and certain specified liabilities, of Ugopherservices Corp. (“UGO”), a wholly owned subsidiary of the Company, in consideration of $100,000 to be paid through the delivery of a promissory note payable to the Company (the “Note”), upon the terms and subject to the limitations and conditions set forth in the Note. There is no material relationship between the Company, on one hand, and MLH, on the other hand.

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 8).

UGO, 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 UGO, ECS Prepaid, Electronic Check Services and the Central State Legal Services have been presented in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019 as discontinued operations and are summarized below:

	Three Months Ended September 30,
	2020		2019
Revenue	$	-	$	12,346,952
Cost of revenue		-		11,995,731
Gross Profit		-		351,221
Operating expenses		-		728,952
Loss from operations		-		(377,731	)
Other income (expenses)		-		-
Net loss	$	-	$	(377,731	)

	Nine Months Ended September 30,
	2020			2019
Revenue	$	8,291,842		$	38,082,039
Cost of revenue		7,900,122			36,905,872
Gross Profit		391,720			1,176,167
Operating expenses		408,644			2,133,375
Loss from operations		(16,924	)		(957,208	)
Other income (expenses)		-			(3	)
Net loss	$	(16,924	)	$	(957,211	)

The assets and liabilities of the discontinued operations at September 30, 2020 and December 31, 2019 are summarized below:

	September 30,		December 31,
	2020		2019
Current assets	$	-	$	89,123
Property and equipment		-		117,686
Total assets	$	-	$	206,809
Current liabilities	$	-	$	1,151,073
Total liabilities	$	-	$	1,151,073

As a result of these transaction, the Company recognized a gain on the disposition of discontinued operations of $1,001,711 and $1,381,803 for the nine months ended September 30, 2020 and 2019, respectively.