15. DISCONTINUED OPERATIONS

3 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

Effective September 30, 2019, the Company ceased operations of four business subsidiaries: EE1, IM1, BPU and Level H&W. These subsidiaries accounted for our licensing, entertainment, and products segments prior to fiscal 2019 and the Company has determined that these business units are not able to provide support or value to the CBD business, which the Company is now strategically focused on.

Therefore, the Company has classified the operating results of these subsidiaries as discontinued operations, net of tax in the Consolidated Statements of Operations.

The following table shows the summary operating results of the discontinued operations for the three months ended December 31, 2018:

	Three months ended December 31,			Three months ended December 31,
	2019			2018
Gross Sales	$	-		$	783,734
Allowances		-			(392	)
Total Net Sales		-			783,342
Costs of sales		-			325,697
Gross profit		-			457,645
Operating expenses		41,202			153,128
Income (loss) from operations		(41,202	)		304,517
Other income
Realized and Unrealized gain (loss) on marketable securities		-			(1,578,976	)
Interest income (expense)		-			6,348
Income (loss) before provision for income taxes		(41,202	)		(1,268,111	)
Provision for income taxes		-			-
Net Income (loss)		(41,202	)		(1,268,111	)
Net Income (loss) attributable to non-controlling interest	$	-		$	(79,149	)

The following table shows the summary assets and liabilities of the discontinued operations as of December 31, 2019 and September 30, 2019.

	December 31,		September 30,
	2019		2019
Assets
Current assets:
Cash and cash equivalents	$	-	$	-
Accounts receivable		875,331		1,080,000
Total current assets included as part of discontinued operations		875,331		1,080,000
Other assets:
Total other assets included as part of discontinued operations		-		-
Total assets included as part of discontinued operations	$	875,331	$	1,080,000

Liabilities
Current liabilities:
Accounts payable	$	-	$	-
Total current assets included as part of discontinued operations		-		-
Long term liabilities:
Total long term liabilities as part of discontinued operations		-		-
Total liabilities included as part of discontinued operations	$	-	$	-

The following table shows the significant cash flow items from discontinued operations for the three months ended December 31,:

	2019			2018
Depreciation/ amortization	$	-		$	64,414
Realized/unrealized (gain) loss on securities expenditures	$	-		$	80,173
Impairment on discontinued operations assets	$	(38,002	)	$	-
Non cash consideration received for services	$	-		$	(407,500	)

At September 30, 2019, EE1 had an accounts receivable for prior services delivered to two customers in aggregate of $1,080,000 of which $1,000,000 was from a related party at the time. At December 31, 2019 the balance on the accounts receivable is $875,331, which reflects payments made and an impairment of $38,002.

As two of the subsidiaries, EE1 and IM1, had minority interests (non-controlling interests) and all parties agreed to transfer the non- controlling interest to the Company, we have reclassified the non-controlling interest balance of $(482,648) to additional paid in capital as of September 30, 2019.