5. Sale of Assets of Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Discontinued operations results of operations

On April 2, 2013 Company entered into an Asset Purchase agreement With Blackwatch International, Inc as follows:

Consideration received from sale of Government assets:
Cash	$	200,000
Seller notes assumed by buyer		282,456
Note receivable from buyer**		700,000
total consideration	$	1,182,456
Other Contingences considerations:
3% of gross revenues on Phase II of an SBIR contract for 24 months if awarded.		—
Pay up to $100,000 for each of the next two years in the event that certain contract are  rebid and funded		—
Total consideration received on sale of assets		1,182,456
Carrying value of Lattice Government assets sold (see below)		661,013
gain (loss) on sale of Government segment assets	$	521,443
Carrying value of assets disposed of:
Goodwill and intangibles		842,933
Non-controlling interest		(120,133	)
Deferred tax liability		(61,787	)
		661,013

The following table shows the results of operations of Lattice Government Services segment for the six months ended June 30, 2013 and 2012 which are included in the net income (loss) from discontinued operations:

	Three Months Ended  June 30,						Six Months Ended  June 30,
	2013			2012			2013			2012
Revenue	$	–		$	648,970		$	603,616		$	1,961,019
Cost of Revenue	$	–			346,589			300,033			1,144,707
Gross Profit		–			302,381			303,583			816,312
					46.6%			50.3%			41.6%
Selling, general and administrative expenses	$	117,015			209,022			405,470			645,984
Amortization expense	$	–			80,448			80,448			160,896
Income (loss) from operations		(117,015	)		12,911			(182,334	)		9,432
Interest expense	$	(6,345	)		(40,669	)		(9,163	)		(64,132	)
Income (Loss) before taxes		(123,360	)		(27,758	)		(191,498	)		(54,700	)
Income taxes (benefit)	$	–			(32,397	)		(32,397	)		(64,786	)
Net income (loss) from Discontinued operations		(123,360	)		4,639			(159,101	)		10,086

Assets and liabilities to be disposed

As a result of the decision to exit the Government services business, the assets and liabilities to be disposed of are comprised of the following:

	June 30,		December 31,
	2013		2012
	(unaudited)
Goodwill		—		690,871
Intangible assets, net		—		232,510
Note payable		—		282,456
Deferred tax liability		—		61,787
Non-controlling interest		—		120,133