NOTE 7 - DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2020

Notes

NOTE 7 - DISCONTINUED OPERATIONS

NOTE 7 – DISCONTINUED OPERATIONS

On July 1, 2019, Performance Food Group Company (“PFG”) announced that it entered into a definitive agreement to acquire Reinhart Foodservice, LLC (“Reinhart”) from Reyes Holdings, LLC. Reinhart was a principal purchaser of our fresh produce distribution business. On December 20, 2019, PFG received approval from the Federal Trade Commission to acquire Reinhart and closed the transaction on December 30, 2019. Most of our business through our License Agreement with Markon Cooperative was purchased by Reinhart. Although our Markon License Agreement had not been terminated, PFG notified us that it would use its existing suppliers, which did not include us. Since this agreement that generated over half of our existing business was effectively terminated, we decided to discontinue our fresh produce distribution business, and we notified all of our vendors and suppliers that we would not conduct new business with them after December 27, 2019.

In accordance with the provisions of ASC 205-20, Presentation of Financial Statements, we have separately reported the assets and liabilities of the discontinued operations in the consolidated balance sheets. The assets and liabilities have been reflected as discontinued operations in the consolidated balance sheets as of September 30, 2020 and December 31, 2019, and consist of the following:

	September 30, 2020		December 31, 2019
Current assets of discontinued operations:
Cash	$	384,807	$	500,000
Accounts receivable		-		446,715
Total current assets of discontinued operations:	$	384,807	$	946,715
Current liabilities of discontinued operations:
Accounts payable	$	-	$	489,863
Accrual		-		17,400
Total current liabilities of discontinued operations:	$	-	$	507,263

In accordance with the provisions of ASC 205-20, we have not included the results of operations from discontinued operations in the results of continuing operations in the consolidated statements of operations. The results of operations from discontinued operations for the three and nine months ended September 30, 2020 and 2019, have been reflected as discontinued operations in the consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019, and consist of the following:

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2020		2019		2020		2019
Revenues of discontinued operations	$	-	$	3,556,333	$	(1,417)	$	10,411,460
Cost of revenues of discontinued operations		-		3,399,083		(243)		9,922,771
Gross profit of discontinued operations		-		157,250		(1,174)		488,689
Operating expenses of discontinued operations:
General and administration expenses		7,449		-		9,896		79,528
Business development		-		200		-		41,726
Salaries and wages		22,875		58,160		70,056		163,015
Sales/marketing expense		-		7,952		-		25,639
Total operating expense of discontinued operations		30,324		66,312		79,952		309,908
Operating (loss) income from discontinued operations		(30,324)		90,938		(81,126)		178,781
Other Income of Discontinued Operations:
Other income (expense)		-		3,652		(3,844)		28,279
Net (loss) income from discontinued operations before provision for income tax		(30,324)		94,590		(84,970)		207,060
Provision for income tax expense from discontinued operations		-		-		-		-
Net (loss) income from discontinued operations	$	(30,324)	$	94,590	$	(84,970)	$	207,060

In accordance with the provisions of ASC 205-20, we have included the net cash provided by discontinued operations in the consolidated statements of cash flows. The net cash provided by discontinued operations in the consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, consists of the following:

	For the Nine Months
	Ended September 30,
	2020		2019
Net (loss) income from discontinued operations, net of tax	$	(84,970)	$	207,060
Changes in assets and liabilities:
Accounts receivable		446,715		145,971
Inventory		-		3,200
Accounts payable and accrued liabilities		(507,263)		(61,295)
Net cash (used in) provided by discontinued operations	$	(145,518)	$	294,936