NOTE 7 - DISCONTINUED OPERATIONS | NOTE 9 – DISCONTINUED OPERATIONS On July 1, 2019, Performance Food Group Company (“PFG”) announced that it entered into a definitive agreement to acquire Reinhart Foodservice, LLC (“Reinhart”) from Reyes Holdings, LLC. Reinhart is a principal purchaser of our fresh produce distribution business. On December 20, 2019, PFG received approval from the Federal Trade Commission to acquire Reinhart and closed the transaction on December 30, 2019. Most of our business through our License Agreement with Markon Cooperative is purchased by Reinhart. Although our Markon License Agreement has not been terminated, PFG notified us that it will use its existing suppliers, which do not include us. Since this agreement that generates over half of our existing business is effectively terminated, we decided to discontinue our fresh produce distribution business, and we have notified all of our vendors and suppliers that we will not conduct new business with them after December 27, 2019. In accordance with the provisions of ASC 205-20, Presentation of Financial Statements December 31, 2020 2019 Current Assets of Discontinued Operations: Cash $ 34,806 $ 500,000 Accounts receivable - 446,715 Inventory - - Total Current Assets of Discontinued Operations: $ 34,806 $ 946,715 Current Liabilities of Discontinued Operations: Accounts payable $ - $ 489,863 Accrual - 17,400 Total Current Liabilities of Discontinued Operations: $ - $ 507,263 In accordance with the provisions of ASC 205-20, we have not included the results of operations from discontinued operations in the results of continuing operations in the consolidated statements of operations. The results of operations from discontinued operations for the years ended December 31, 2020 and 2019, have been reflected as discontinued operations in the consolidated statements of operations for the years ended December 31, 2020 and 2019, and consist of the following. For the Year Ended December 31, 2020 2019 Revenue of discontinued operations $ - $ 12,283,783 Cost of revenues of discontinued operations - 11,612,910 Gross profit of discontinued operations - 670,873 Operating Expenses of Discontinued Operations: General and administration expenses 27,204 113,698 Business development - 42,080 Salaries and wages 57,766 212,500 Sales/marketing expense - 27,967 Taxes - payroll - 16,478 Total operating expense of discontinued operations 84,970 412,723 Operating (loss) income from discontinued operations (84,970) 258,150 Other Income of Discontinued Operations: Other income - 17,275 Net (loss) income from discontinued operations before provision for income tax (84,970) 275,425 Provision for income tax expense from discontinued operations - (17,400) Net (loss) income from discontinued operations $ (84,970) $ 258,025 In accordance with the provisions of ASC 205-20, we have included the net cash provided by discontinued operations in the consolidated statements of cash flows. The net cash provided by discontinued operations in the consolidated statements of cash flows for the years ended December 31, 2019 and 2018, consist of the following. For the Years Ended December 31, 2020 2019 Net (loss) income from discontinued operations, net of tax $ (84,970) $ 258,025 Changes in assets and liabilities: Accounts receivable 446,715 365,046 Inventory - 16,593 Accounts payable and accrued liabilities (507,263) (342,374) Net cash (used in) provided by discontinued operations $ (145,518) $ 297,290 |