NOTE 2. DISCONTINUED OPERATIONS

Security Segment

On December 26, 2019, our 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, in exchange for which 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 as of March 31, 2020 and December 31, 2019 and as discontinued operations as of March 31, 2020 and the operating results for the three months ended March 31, 2020 and 2019, respectively, are presented as discontinued operations.

Assets and liabilities of discontinued operations for the security segment included the following:


		March 31,		December 31,
		2020		2019
Cash and cash equivalents	$	176,854	$	77,380
Accounts receivable, net		51,093		280,058
Prepaid expenses and other current assets		–		17,780
Current assets discontinued operations	$	227,947	$	375,218

Property and equipment, net	$	–	$	15,584
Noncurrent assets discontinued operations	$	–	$	15,584

Accounts payable and accrued expenses	$	19,097	$	88,309
Customer deposits		–		60,940
Current liabilities discontinued operations	$	19,097	$	149,249

A breakdown of the discontinued operations is presented as follows:


		Three months ended March 31,
		2020		2019
Service revenues	$	119,891	$	564,592

Cost of service revenues		88,599		449,937
Selling, general and administrative		147,761		206,967
Depreciation and amortization		2,174		21,632
Total costs and expenses		238,534		678,536

OPERATING LOSS		(118,643)		(113,944)

Interest expense, net		984		470

NET LOSS FROM DISCONTINUED OPERATIONS	$	(119,627)	$	(114,414)

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 the three months ended March 31, 2020 and 2019, respectively.


	Three months ended March 31,
	2020	2019
Receivables	228,965	46,418
Prepaids and other	17,780	(11,471)
Depreciation and amortization	2,174	21,632
Capital expenditures	–	(1,331)
Accounts payable and accrued expenses	(69,212)	(50,323)
Customer deposits	(60,940)	14,816

Consumer Goods Segment

On December 26, 2019, our board of directors and management made the strategic move to cease operations of Chiefton. On December 26, 2019, our 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 of the STOA retail front. The assets and liabilities classified as discontinued operations for the consumer goods segment are presented separately in the balance sheet as of March 31, 2020 and December 31, 2019 and the operating results for the three months ended March 31, 2020 and 2019, respectively, are presented as discontinued operations.

Assets and liabilities of discontinued operations included the following:


		March 31,		December 31,
		2020		2019
Cash and cash equivalents	$	3,955	$	25,223
Accounts receivable, net		–		7,836
Prepaid expenses and other current assets		–		14,394
Current assets discontinued operations		3,955		47,453

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

Accounts payable and accrued expenses	$	104,120	$	124,468
Operating lease liability – current portion		–		83,525
Current liabilities discontinued operations	$	104,120	$	207,993

A breakdown of the discontinued operations is presented as follows:


		Three months ended March 31,
		2020		2019
Product Revenues	$	33	$	29,775
Cost of service revenues		–		24,022
Cost of goods sold		–		23,909
Selling, general and administrative		33,264		176,118
Professional fees		–		35,106
Depreciation and amortization		–		1,899
Total costs and expenses		33,264		261,054

OPERATING LOSS		(33,231)		(231,279)

NET LOSS FROM DISCONTINUED OPERATIONS	$	(33,231)	$	(231,279)


	Three months ended March 31,
	2020	2019
Receivables	7,836	10,944
Prepaids and other	14,394	(23,425)
Inventory	–	20,227
Depreciation and amortization	–	1,899
Capital expenditures	–	(42,703)
Accounts payable and accrued expenses	(20,348)	(31,236)
Customer deposits	–	(17,539)