Sale Of Custom Pool

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Sale Of Custom Pool

NOTE 3 – SALE OF CUSTOM POOL

On April 30, 2018, pursuant to a Share Exchange Agreement dated April 16, 2018, the Company sold all of the issued and outstanding common shares of Custom Pool & Spa Mechanics, Inc. and Custom Pool Plastering, its wholly owned subsidiaries, for 13,668,900 common shares of the Company held by the Lawrence & Loreen Calarco Family Trust, an entity controlled by Lawrence Calarco and Loreen Calarco, former officers and directors of the Company. The Board of Directors subsequently authorized the cancellation of those common shares. After said cancellation, the total issued and outstanding common shares was 69,270,060. The Share Exchange Agreement was approved by the Board of Directors and written consent of shareholders holding 62.35% of the voting securities of the Company as of April 16, 2018.

The Company determined that there would be no gain or loss on the sale in accordance with Accounting Standards Codification 505-30-10, “Equity – Nonreciprocal Transfers with Owners”. Essentially the transaction is similar to a spin-off or reorganization since the Company acquired shares of its own common stock for the common shares of Custom Pool & Spa Mechanics, Inc. and Custom Pool Plastering, its wholly owned subsidiaries. As such, the transaction is accounted for at the recorded (book value) amount. The book value of the net assets was $876,440.

Custom Pool is presented as a discontinued operation in the consolidated financial statements. The following is a reconciliation of the major line items constituting income of discontinued operations, net that are presented in the accompanying Consolidated Statements of Operations:

	Years Ended
	December 31,
	2019		2018
Major Classes of Line Items Constituting Pre-Tax Income on Discontinued Operations:
Revenue	$	—	$	1,786,911
Cost of Services		—		1,208,619
General and Administrative		—		338,877
Other Operating Expenses		—		51,370
Total Operating Expenses		—		1,598,866
Operating Income		—		188,045
Other Expense		—		9,745
Total Pre-Tax Income from Discontinued Operations		—		178,300
Income Tax Expense		—		(37,367	)
Income from Discontinued Operations	$	—	$	140,933