Sale of Andrea Anti-Noise Products Division

12 Months Ended

Dec. 31, 2015

Sale of Andrea Anti-Noise Products Division [Abstract]

Sale of Andrea Anti-Noise Products Division

14. SALE OF ANDREA ANTI-NOISE PRODUCTS DIVISION

On April 2, 2015, Andrea Electronics Corporation consummated the transactions contemplated by the Asset Purchase Agreement, by and between Andrea Electronics Corporation and Andrea Communications LLC dated March 27, 2015. Under the Asset Purchase Agreement, the Company sold its Anti-Noise Products Division (the “Division”) and certain related assets for a selling price of $900,000 which included a cash payment of $300,000 and a note receivable of $600,000 payable in 18 equal monthly installments of $34,757 including interest at a rate of 3.25% per annum beginning in October 2015. In addition, under the Asset Purchase Agreement the Company is entitled to receive an additional $100,000 in the event that the revenues derived from Andrea Communications LLC’s operation of the Division exceed certain thresholds over a specified time period, as defined in the Asset Purchase Agreement. Accordingly, the results of operations, the assets and liabilities of the Division are presented as discontinued operations for both current and prior periods.

The following table reflects the results of the discontinued operations of the Division’s business segment for the years ended December 31, 2015 and 2014 and as of December 31, 2015 and December 31, 2014, respectively:

	December 31, 2015			December 31, 2014
Operations
Net Revenues	$	662,135			1,563,014
Cost of Sales		596,565			951,530
Gross margin		65,570			611,484
Research and Development Expenses		18,746			240,382
General, administrative and selling expenses		349,960			735,655
Gain on sale of Anti-Noise Products Division		(879,612	)		-
Income (loss) from discontinued operations	$	576,476		$	(364,553	)
	December 31, 2015			December 31, 2014
Assets
Accounts Receivable, net	$	27,303		$	56,411
Inventories, net		122,443			339,232
Property and equipment, net		-			22,927
Assets from discontinued operations	$	149,746		$	418,570
Liabilities
Trade accounts payable	$	-		$	107,228
Other current liabilities		40,075			44,066
Liabilities from discontinued operations	$	40,075		$	151,294

The assets that were sold consisted of property and equipment, resulting in a gain on sale of approximately $880,000.