DISCONTINUED OPERATION

6 Months Ended

Jun. 30, 2013

DISCONTINUED OPERATION

DISCONTINUED OPERATION

6. DISCONTINUED OPERATIONS

On September 17, 2010, the Company sold its operation in Gulfport, Mississippi to a third-party. The decision to sell the Gulfport operation was based on its historical underperformance and recurring losses and the anticipated need for continued financing from outside sources to maintain ongoing operations.

As of June 30, 2013 and December 31, 2012, total net liabilities associated with discontinued operations were $366,390 and $370,766, respectively, and consisted of balances due to various vendors of the discontinued operations. These liabilities have been segregated from continuing operations in the accompanying unaudited condensed consolidated balance sheets.

There were no gains or losses on the discontinued operations for the three-month periods ended June 30, 2013 and 2012. The gains on discontinued operations totaled $0 and $61,257, net of income tax expense, for the six-month periods ended June 30, 2013 and 2012, respectively and have been segregated from continuing operations in the accompanying unaudited condensed consolidated statements of operations. During the six months ended June 30, 2012, the gain on discontinued operations consisted of various vendor settlements.