Discontinued Operations

3 Months Ended

Mar. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

3. Discontinued Operations

On October 26, 2015, the Company entered into an agreement pursuant to which it sold assets related to its 740 SELECT® vital signs monitoring product line in exchange for $220,000 in cash at closing and a one-year, interest-bearing promissory note in the principal amount of $329,967. The agreement also provides for royalty payments to the Company for sales of 740 SELECT products during the three-year period following the closing.

On March 28, 2016, the Company consummated an agreement pursuant to which it sold certain assets related to its neonatal intensive care disposable product line for $3,350,000, including $3,035,000 in cash at closing after deductions of $100,000 for funds held in escrow for 12 months following the closing and $215,000 for inventory to be purchased following a transition services agreement which was effectively concluded at December 31, 2016.  During March 2017, the funds in escrow were paid to the Company.  The Company is currently seeking payment for the final inventory and other amounts due, following the conclusion of the transition services period.

The following table presents the assets and liabilities related to the vital signs monitoring and neonatal intensive care product lines classified as assets and liabilities associated with discontinued operations in the consolidated balance sheets as of the periods below:

	March 31,		December 31,
	2017		2016
Accounts receivable	$	52,020	$	85,349
Total assets associated with
discontinued operations	$	52,020	$	85,349
Accounts payable	$	—	$	22,692
Accrued expenses		17,578		70,250
Total liabilities associated with
discontinued operations	$	17,578	$	92,942

The following table represents the financial results of the discontinued operations for the three months ended March 31^st:

	Three Months Ended
	March 31,
	2017			2016
Net sales	$	—		$	608,161
Cost of sales		—			422,550
Gross profit		—			185,611
Operating expenses		—			9,859
Income from discontinued operations
before income taxes		—			175,752
Other loss		(30,123	)		—
Gain on sale of discontinued operations		—			2,942,095
Income tax (benefit) expense		(10,543	)		1,091,246
(Loss) income from discontinued operations	$	(19,580	)	$	2,026,601