NOTE 4. DISCONTINUED OPERATIONS

Security Segment

On December 26, 2019, the board of directors and management made the strategic decision to investigate a possible buyer for the security segment and if no buyer could be found, cease operations of the security segment. We transferred all our Colorado security contracts and employees to a company on January 16, 2020. We will receive $1.00 per man hour worked on existing contracts for a period of one year. On February 6, 2020 we cancelled all our security contracts in California. The assets and liabilities classified as held for sale for the security segment are presented separately in the balance sheet and the operating results for the years ended December 31, 2019 and 2018 are presented as discontinued operations.

Assets and liabilities of discontinued operations held for sale included the following:


	December 31,
	2019		2018
Cash and cash equivalents	$	77,380	$	352,607
Accounts receivable, net		280,058		277,857
Prepaid expenses and other current assets		17,780		19,311
Current assets held for sale	$	375,218	$	649,775

Property and equipment, net	$	15,584	$	24,008
Intangibles		—		42,247
Noncurrent assets held for sale	$	15,584	$	66,255

Accounts payable and accrued expenses	$	88,309	$	78,065
Customer deposits		60,940		81,879
Current liabilities held for sale	$	149,249	$	159,944

A breakdown of the discontinued operations is presented as follows:


	Year ended December 31,
	2019		2018
Service revenues	$	2,118,732	$	2,602,365

Cost of service revenues		1,650,823		2,033,544
Cost of goods sold		—		4,373
Selling, general and administrative		877,795		795,381
Professional fees		4,219		104,730
Depreciation and amortization		51,654		87,061
Total costs and expenses		2,584,491		3,025,089

OPERATING LOSS		(465,759)		(422,724)

Interest expense, net		3,422		2,421

NET LOSS FROM DISCONTINUED OPERATIONS	$	(469,181)	$	(425,145)

The cash flows related to discontinued operations have not been segregated, and are included in the consolidated statements of cash flows. The following table provides selected information on cash flows related to discontinued operations for 2019 and 2018.


	Year ended December 31,
	2019	2018
Receivables	(2,201)	(86,373)
Prepaids and other	10,951	(7,715)
Depreciation and amortization	51,654	87,061
Capital expenditures	(2,556)	(11,139)
Accounts payable and accrued expenses	10,244	2,479
Customer deposits	(20,939)	60,878

Consumer Goods Segment

On December 26, 2019, the board of directors and management made the strategic move to cease operations of Chiefton. On December 26, 2019, the board of directors committed to a plan to cease operations of STOA Wellness. We transferred all assets of STOA Wellness to an individual on January 10, 2020, in exchange for the release on the outstanding lease. The assets and liabilities classified as discontinued operations for the consumer goods segment are presented separately in the balance sheet and the operating results for the years ended December 31, 2019 and 2018 are presented as discontinued operations.

Assets and liabilities of discontinued operations included the following:


	December 31,
	2019		2018
Cash and cash equivalents	$	25,223	$	—
Accounts receivable, net		7,836		21,102
Prepaid expenses and other current assets		14,394		—
Inventory		—		123,263
Current assets discontinued operations	$	47,453	$	144,365

Right to use asset	$	83,525	$	—
Noncurrent assets discontinued operations	$	83,525	$	—

Accounts payable and accrued expenses	$	124,468	$	4,920
Customer deposits		—		1,300
Operating lease liability – current portion		83,525		—
Current liabilities discontinued operations	$	207,993	$	6,220

A breakdown of the discontinued operations is presented as follows:


	Year ended December 31,
	2019		2018
Service	$	—	$	145,079
Product		222,220		134,012
Total Revenues		222,220		279,091

Cost of service revenues		—		59,227
Cost of goods sold		223,354		186,120
Selling, general and administrative		833,742		410,529
Professional fees		110,064		36,518
Depreciation and amortization		28,897		—
Impairment of assets		232,521		—
Total costs and expenses		1,428,578		692,394

OPERATING LOSS		(1,206,358)		(413,303)

NET LOSS FROM DISCONTINUED OPERATIONS	$	(1,206,358)	$	(413,303)


	Year ended December 31,
	2019	2018
Receivables	13,266	1,962
Prepaids and other	(14,394)	—
Inventory	—	(88,494)
Depreciation and amortization	28,897	—
Capital expenditures	(114,384)	—
Accounts payable and accrued expenses	119,548	4,920
Customer deposits	(1,300)	1,300
Loss on disposal of segment	232,521	—