DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE 9: DISCONTINUED OPERATIONS

On December 16, 2015, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with the NRLBH and NRL Investment Group, LLC (the “NRL Group”) pursuant to which the Company sold to the NRL Group all of its shares of common stock in the NRLBH as of that date. Under the terms of the Purchase Agreement, the Company retained its ownership of the Preferred Stock of the NRLBH, which constitutes approximately 19% of the outstanding capital stock of the NRLBH, and which the Company will have the right to sell to the NRL Group on or after the fourth anniversary of the Purchase Agreement at the greater of $4,000,000 or fair market value. The Company has the right to receive earn-out payments from NRL Group starting in December 2016 up to a total of $10,000,000. The Earn-out Payments are payable to us each calendar month commencing with December 2016 and are 6% of NRLBH gross sales calculated in accordance with U.S. Generally Accepted Accounting Principles. The Company concluded that the operations of the NRLBH sold to the NRL Group were accounted for as discontinued operations as the operations and cash flows of the discontinued company were eliminated from ongoing operations of the Company and there would not be significant involvement in the NRLBH’s operations after the disposal transaction.

During the year ended December 31, 2015 the Company completed its obligations under the Purchase Agreement with the NRL and recognized a loss on disposal of assets of $670,943 within discontinued operations as detailed below:

	Year Ended December 31, 2015
Proceeds recognized pursuant to Stock Purchase Agreement	$	50,000
Investment in NRL		11,728
Less carrying value of assets sold and liabilities assumed:
Accounts receivable		(923,266)
Intangible assets		(20,949)
Property and equipment		(314,628)
Other assets		(62,854)
Liabilities assumed by buyer		589,026
Net loss on disposal of assets	$	670,943

The results of the NRLBH are disclosed as discontinued operations in the Company’s Consolidated Statements of Operations and Comprehensive Loss for all periods presented:

	For the Years Ended December 31,
	2015		2014
Revenue	$	5,523,116	$	485,816
Cost of revenue		(3,539,134)		(340,658)
Gross profit		1,983,982		145,158
Expenses:
Selling expenses		(1,303,425)		(575,775)
Research and development expenses		(1,012,392)		(1,467,136)
General and administrative expenses		(1,665,840)		(573,637)
Loss on disposal		(670,943)		-
Exit and disposal expenses		(399,399)		-
Other (income) expense, net		65,881		(15,768)
Net loss from discontinued operations	$	(3,002,136)	$	(2,487,158)

The assets and liabilities of the NRLBH are presented as held for disposal in the Consolidated Balance Sheet as of December 31, 2014. There were no assets and liabilities recorded in discontinued operations as of December 31, 2015. The carrying amount of assets and liabilities are as follows:

	December 31, 2014
Accounts receivable	$	297,958
Prepaid expenses		53,243
Inventory		30,511
Property and equipment, net		220,839
Intangible assets, net		33,688
Assets of discontinued operations	$	636,239
Accounts payable	$	81,312
Accrued expenses		190,735
Payroll liabilities		96,964
Lease obligations		125,241
Liabilities of discontinued operations	$	494,252