DISCONTINUED OPERATIONS

3 Months Ended

Dec. 31, 2013

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

NOTE 3    DISCONTINUED OPERATIONS

On June 21, 2012, the Company determined to exit its global Retail business and focus solely on growing its OEM business.  The decision to eliminate the Retail division was primarily driven by the longer than estimated path to bring it to profitability and the strong net sales growth and cost rationalizations in the OEM business. Accordingly, the results of operations for the Retail division have been recorded as discontinued operations in the accompanying consolidated financial statements for the fiscal periods presented. Summarized operating results of discontinued operations are presented in the following table:

	For the Three-Month Periods Ended December 31,
	2013	2012
Net sales............................................................................	$--	$384,196
Gross (loss) profit............................................................	(9,700)	152,108
Operating expenses.........................................................	(14,239)	(193,829)
Other (income) expense..................................................	(70)	221
Income (loss) from discontinued operations, net of tax expense of $0 and $920, respectively................................................	$4,609	$(42,420)

Summarized assets and liabilities of discontinued operations are presented in the following table:

	December 31,	September 30,
	2013	2013
Accounts receivable........................................................	$280,034	$280,034
Prepaid assets and other current assets.......................	56,229	59,348
Total assets of discontinued operations..............	$336,263	$339,382
Accounts payable............................................................	$3,176	$25,438
Total liabilities of discontinued operations........	$3,176	$25,438

The above asset amounts as of December 31, 2013, include approximately $280,000 relating to expected payments pursuant to a Settlement Agreement and General Release (“Settlement Agreement”) executed on July 3, 2013 between the Company and G-Form LLC (“G-Form”) in exchange for certain retail inventories, the Company’s cooperation with certain administrative matters, and a mutual general release. G-Form paid $31,000 of the settlement in July 2013 with the balance due 60 days after delivery of the retail inventory, which occurred in August 2013. The Company has substantially completed its exit of its Retail business as of March 31, 2013. The Company has not had, and does not expect to have, any continuing involvement in the Retail business after this date.