3. Discontinued Operations

On June 25, 2019, the Company’s officers, pursuant to delegated authority from the board, approved plans to discontinue the operations of its UK subsidiary within the body worn device segment. As of September 30, 2019, we continue to settle the remaining assets and liabilities of the subsidiary. The final closing of the UK subsidiary is expected to occur during the fourth quarter of 2019.

At June 30, 2019, the net realizable value of certain assets was less than their carrying value resulting in a loss on disposal of $1.0M. There were no further adjustments made to the net realizable value of assets during the period ended September 30, 2019.

As the disposal meets the definition of a strategic shift in accordance with ASC 205, the results of the UK operations have been classified as loss on discontinued operations, net of income taxes, in the accompanying Consolidated Condensed Statements of Operations, Comprehensive Income (Loss) and Cash Flows. Current assets, noncurrent assets, and liabilities of the discontinued operations have been reclassified and reflected on the accompanying Consolidated Condensed Balance Sheets as “Current assets of discontinued operations,” “Noncurrent assets of discontinued operations,” and “Liabilities of discontinued operations”, respectively. Prior periods relating to our discontinued operations have also been reclassified to reflect consistency within our condensed consolidated financial statements.

The total assets and liabilities of the UK subsidiary at September 30, 2019 and December 31, 2018 were as follows:


		September 30,		December 31,
		2019		2018
Accounts receivable, net	$	1	$	213
Inventories		21		818
Other current assets		217		174
Current assets of discontinued operations		239		1,205

Machinery and equipment		-		436
Less: Accumulated depreciation		-		126
Net machinery and equipment		-		310

Other assets, net		-		61
Total assets	$	239	$	1,576

Accounts payable		-		320
Other accrued liabilities		393		16
Current liabilities of discontinued operations		393		336
Net assets (liabilities)	$	(154)	$	1,240

The loss on disposal of discontinued operations, as a result of the plan to discontinue the operations of the UK, for the nine months ended September 30, 2019 was computed as follows:


Cash and cash equivalents	$	5
Accounts receivable, net		72
Write-down of inventory to net realizable value		278
Write-down of property, plant and equipment to salvage value		298
Other assets and liabilities, net		71
Realized loss on foreign currency		280
Net assets disposed		1,004
Additional disposal costs, net		112
Loss on disposal of discontinued operations	$	1,116

The following table shows the results of the UK subsidiary’s discontinued operations:


		Three Months Ended				Nine Months Ended
		September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenue, net	$	-	$	568	$	1,068	$	2,067
Cost of goods sold		-		373		667		1,296
Gross profit		-		195		401		771
Sales and marketing		-		225		314		706
General and administrative		-		311		684		1,005
Total operating expenses		-		536		998		1,711
Other income, net		-		42		-		70
Loss from discontinued operations, net of taxes	$	-	$	(299)	$	(597)	$	(870)