Discontinued operation (Tables)
|
12 Months Ended |
Dec. 31, 2023 |
Schedule of property, plant and equipment |
Property
and equipment are comprised of the following at December 31, 2023 and 2022:
Schedule
of property, plant and equipment
|
|
2023 |
|
|
2022 |
|
Computers |
|
$ |
33,626 |
|
|
$ |
31,335 |
|
Furniture and fixtures |
|
|
14,613 |
|
|
|
14,613 |
|
Machinery and vehicles |
|
|
- |
|
|
|
- |
|
Gross Property and equipment |
|
|
48,239 |
|
|
|
45,948 |
|
Accumulated depreciation
and amortization |
|
|
(46,648 |
) |
|
|
(44,942 |
) |
Property and equipment of discontinued operations |
|
|
- |
|
|
|
309,777 |
|
Accumulated depreciation of discontinued operations |
|
|
- |
|
|
|
(163,905 |
) |
|
|
|
|
|
|
|
|
|
Net Property and equipment |
|
$ |
1,591 |
|
|
$ |
146,878 |
|
|
Discontinued Operations [Member] |
|
Schedule of Equity Interest at the Acquisition Date Fair Value |
Schedule
of Equity Interest at the Acquisition Date Fair Value
|
|
|
|
|
Cash to acquire an additional
1% equity interest in WCI |
|
$ |
25,000 |
|
Fair value of 50% interest (a) |
|
|
1,250,000 |
|
Investment under
the equity method |
|
|
- |
|
Total purchase price
to be allocated |
|
$ |
1,275,000 |
|
(a) |
The estimated fair
value of Mentor’s previously held equity interest in WCI is valued at 1.25 times WCI’s projected 2014 revenue. |
|
Schedule of Purchase Price Allocation |
Purchase
price allocation at 51% of WCI assets and liabilities:
Schedule
of Purchase Price Allocation
|
|
|
|
WCI assets and liabilities: |
|
|
|
Current
assets |
|
$ |
327,238 |
|
Property and equipment |
|
|
51,239 |
|
Other assets |
|
|
816,952 |
|
Current liabilities |
|
|
(112,810 |
) |
Long-term
debt |
|
|
(1,178,977 |
) |
Net deficit |
|
|
(96,358 |
) |
Mentor equity rate |
|
|
51 |
% |
Mentor portion of liabilities in excess
of assets |
|
|
(49,143 |
) |
Goodwill |
|
|
1,324,143 |
|
Net assets acquired |
|
$ |
1,275,000 |
|
|
Schedule of gain on sale of WCI |
Schedule of gain on sale of WCI
Cost basis of
WCI |
|
|
|
Purchase
price allocation at 51% WCI assets and liabilities |
|
|
1,275,000 |
|
Net investment in 51%
earnings |
|
|
326,735 |
|
Net investment in distributions |
|
|
(407,124 |
) |
Total
WCI Cost Basis |
|
$ |
1,194,611 |
|
|
|
|
|
|
Sale
price of WCI |
|
|
|
|
Payment at Closing |
|
|
5,000,000 |
|
Promissory Note Receivable |
|
|
1,000,000 |
|
Total WCI Sale Price |
|
$ |
6,000,000 |
|
|
|
|
|
|
Gain on sale of WCI |
|
|
|
|
WCI sale price |
|
|
6,000,000 |
|
Less WCI cost basis |
|
|
(1,194,611 |
) |
Total gain on sale
of WCI |
|
$ |
4,805,389 |
|
|
Schedule of balance sheet |
The
following is a summary of the assets and liabilities that were sold effective October 4, 2023, and a reconciliation of the assets and
liabilities disclosed in the notes to financial statements that are presented as a discontinued operation on the consolidated balance
sheet as of December 31, 2022:
Schedule of balance sheet
|
|
October 4, |
|
|
December 31, |
|
|
|
2023(1) |
|
|
2022 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
369,387 |
|
|
$ |
506,499 |
|
Accounts receivable |
|
|
786,617 |
|
|
|
686,870 |
|
Other
current assets |
|
|
19,027 |
|
|
|
233,255 |
|
Total
current assets sold - discontinued operation |
|
|
1,169,030 |
|
|
|
1,426,625 |
|
Property and equipment |
|
|
179,673 |
|
|
|
145,872 |
|
Goodwill(2) |
|
|
102,040 |
|
|
|
102,040 |
|
Prepaid Admin Fee –
Mentor |
|
|
- |
|
|
|
337,333 |
|
Security deposit |
|
|
22,477 |
|
|
|
25,575 |
|
Right
of use asset |
|
|
1,884,632 |
|
|
|
1,265,486 |
|
Total
noncurrent assets sold - discontinued operation |
|
|
2,009,149 |
|
|
|
1,730,434 |
|
Total
assets |
|
$ |
3,357,852 |
|
|
$ |
3,302,931 |
|
LIABILITIES AND NET ASSETS |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts -payable trade |
|
$ |
38,530 |
|
|
$ |
24,557 |
|
Finance lease liability
- current |
|
|
419,073 |
|
|
|
232,058 |
|
Accrued
expenses |
|
|
597,217 |
|
|
|
639,373 |
|
Total
current liabilities sold - discontinued operation |
|
|
1,054,820 |
|
|
|
895,988 |
|
EIDL loan payable |
|
|
51,797 |
|
|
|
161,060 |
|
Note payable - Mentor |
|
|
- |
|
|
|
1,081,323 |
|
Long term debt |
|
|
- |
|
|
|
83,876 |
|
Finance lease liability
– long-term |
|
|
1,069,810 |
|
|
|
575,852 |
|
Operating
lease liability - long-term |
|
|
256,071 |
|
|
|
370,164 |
|
Total
noncurrent liabilities sold - discontinued operation |
|
|
1,377,677 |
|
|
|
2,272,274 |
|
Total
liabilities |
|
|
2,432,497 |
|
|
|
3,168,262 |
|
Total
net assets of discontinued operation |
|
$ |
925,355 |
|
|
$ |
134,669 |
|
(1) |
|
Effective on the
date of sale, October 4, 2023, we reported our discontinued operations financials as of September 30, 2023. |
(2) |
|
Effective upon
the date of sale, October 4, 2023, we deconsolidated our discontinued operation and goodwill of $102,040 previously reported on our consolidated
financials. |
|
Schedule of disposal groups, including discontinued operations |
The
following is a reconciliation of the major classes of financial statement line items constituting net income (loss) from discontinued
operations before tax from WCI, our discontinued operation, that is disclosed in the notes to the financial statements and presented
in the consolidated statements of net (loss) income for fiscal years December 31, 2023 and 2022:
Schedule of disposal groups, including discontinued operations
|
|
December
31, 2023
|
|
|
December
31, 2022 |
|
Revenue |
|
$ |
- |
|
|
$ |
35,074 |
|
Cost of sales |
|
|
- |
|
|
|
- |
|
Gross
profit |
|
|
- |
|
|
|
35,074 |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
1,775,210 |
|
|
|
495,400 |
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
(1,775,210 |
) |
|
|
(460,326 |
) |
|
|
|
|
|
|
|
|
|
Total
other income and (expense)(1) |
|
|
4,863,129 |
|
|
|
(145,016 |
) |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
(8,160 |
) |
|
|
(6,768 |
) |
Net income (loss) from continued operations |
|
|
3,079,759 |
|
|
|
(612,110 |
) |
|
|
|
|
|
|
|
|
|
Net income (loss) from discontinued operations |
|
|
77,899 |
|
|
|
245,185 |
|
Net income (loss) |
|
|
3,157,658 |
|
|
|
(366,925 |
) |
|
|
|
|
|
|
|
|
|
Gain (loss) attributable to non-controlling interest |
|
|
- |
|
|
|
(104,461 |
) |
Net income (loss) attributable to Mentor |
|
|
3,157,658 |
|
|
|
(471,386 |
) |
(1) |
During fiscal year
2023, we recognized a $4,805,389 gain on the sale of our discontinued operations. |
|
Schedule of lease liability |
Schedule
of lease liability
Maturity
of lease liabilities October
4, 2023(1)
|
|
Finance
leases |
|
|
Operating
leases |
|
2024 |
|
|
419,073 |
|
|
|
67,804 |
|
2025 |
|
|
424,735 |
|
|
|
74,860 |
|
2026 |
|
|
388,723 |
|
|
|
82,475 |
|
2027 |
|
|
|
|
|
90,670 |
|
2028 |
|
|
4,781 |
|
|
|
8,066 |
|
Total |
|
|
1,488,883 |
|
|
|
323,875 |
|
|
|
|
|
|
|
|
|
|
Less: Present value
discount |
|
|
(419,073 |
) |
|
|
(67,804 |
) |
Total lease liabilities |
|
$ |
1,069,810 |
|
|
$ |
256,071 |
|
(1) |
|
Effective on the
date of sale, October 4, 2023, we reported our discontinued operations financials as of September 30, 2023. |
|
Schedule of other receivable |
Other
receivable consisted of the following:
Schedule
of other receivable
|
|
October
4,
2023
|
|
|
December
31,
2022 |
|
Employee retention tax credits |
|
$ |
- |
|
|
$ |
- |
|
Accrued sales tax receivable from
customers* |
|
|
20,374 |
|
|
|
237,243 |
|
Other |
|
|
- |
|
|
|
(6,921 |
) |
|
|
|
|
|
|
|
|
|
Total other receivable |
|
$ |
20,374 |
|
|
$ |
230,322 |
|
* |
|
At December 31, 2022, we
estimated that our discontinued operation’s accrued sales tax receivable was $237,243 out of the remaining $285,128 that our
discontinued operation was entitled to collect at year-end. As of September 30, 2023, our discontinued operation received $206,671
from its customers, and management estimated that an additional $20,374 in accrued sales tax would be received from our discontinued
operation’s clients. Effective on the date of sale, October 4, 2023, we reported our discontinued operations financials as of
September 30, 2023. |
|
Schedule of property, plant and equipment |
Property
and equipment for our discontinued operation were comprised of the following on October 4, 2023, and December 31, 2022:
Schedule
of property, plant and equipment
|
|
October
4, 2023
(1)
|
|
|
December
31,
2022 |
|
Computers |
|
$ |
- |
|
|
$ |
- |
|
Furniture and fixtures |
|
|
12,761 |
|
|
|
12,761 |
|
Machinery and vehicles |
|
|
380,077 |
|
|
|
297,016 |
|
Gross
Property and equipment |
|
|
392,838 |
|
|
|
309,777 |
|
Accumulated depreciation
and amortization |
|
|
(213,165 |
) |
|
|
(163,905 |
) |
Property and equipment of discontinued operations |
|
|
|
|
|
|
|
|
Accumulated depreciation of discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Property and equipment |
|
$ |
179,673 |
|
|
$ |
145,872 |
|
(1) |
|
Effective on the
date of sale, October 4, 2023, we reported our discontinued operations financials as of September 30, 2023. |
|
Schedule of lease costs recognized in consolidated statements of operations |
Our
discontinued operation’s lease costs no longer recognized in our consolidated income statements were as follows:
Schedule
of lease costs recognized in consolidated statements of operations
|
|
October
4,
2023 (1) |
|
|
December
31,
2022 |
|
Operating lease cost included in
cost of goods |
|
$ |
- |
|
|
$ |
13,054 |
|
Operating lease cost
included in operating costs |
|
|
60,256 |
|
|
|
54,571 |
|
Total
operating lease cost (1) |
|
|
60,256 |
|
|
|
67,625 |
|
Finance lease cost, included in cost of goods: |
|
|
|
|
|
|
|
|
Amortization of lease assets |
|
|
269,470 |
|
|
|
278,006 |
|
Interest on lease liabilities |
|
|
56,450 |
|
|
|
39,931 |
|
Total finance lease
cost |
|
|
325,920 |
|
|
|
317,937 |
|
Short-term lease cost |
|
|
- |
|
|
|
- |
|
Total lease cost |
|
$ |
386,176 |
|
|
$ |
385,562 |
|
(1) |
|
Effective on the
date of sale, October 4, 2023, we reported our discontinued operations financials as of September 30, 2023. |
|
Schedule of lease amounts of discontinued operations |
Lease
amounts of our discontinued operations at October 4, 2023 were as follows:
Schedule
of lease amounts of discontinued operations
|
|
October
4,
2023 (1) |
|
|
December
31,
2022 |
|
Weighted-average remaining lease term –
operating leases |
|
|
4.01
years |
|
|
|
4.75
years |
|
Weighted-average remaining lease term –
finance leases |
|
|
3.49
years |
|
|
|
4.63
years |
|
Weighted-average discount rate
– operating leases |
|
|
6.0 |
% |
|
|
6.0 |
% |
Weighted-average discount rate – finance
leases |
|
|
7.5 |
% |
|
|
5.5 |
% |
(1) |
|
Effective on the
date of sale, October 4, 2023, we reported our discontinued operations financials as of September 30, 2023. |
|
Schedule of finance lease liabilities |
Finance
lease liabilities were as follows:
Schedule
of finance lease liabilities
|
|
October
4,
2023
(1)
|
|
|
December
31,
2022 |
|
Gross finance lease liabilities |
|
$ |
1,696,301 |
|
|
$ |
897,849 |
|
Less: imputed interest |
|
|
(207,418 |
) |
|
|
(89,939 |
) |
Present value of finance lease liabilities |
|
|
1,488,883 |
|
|
|
807,910 |
|
Less: current portion |
|
|
(419,073 |
) |
|
|
(232,058 |
) |
Long-term finance lease
liabilities |
|
$ |
1,069,810 |
|
|
$ |
575,852 |
|
(1) |
|
Effective on the
date of sale, October 4, 2023, we reported our discontinued operations financials as of September 30, 2023. |
|
Schedule of operating lease liabilities |
Operating
lease liabilities were as follows:
Schedule
of operating lease liabilities
|
|
October
4,
2023
(1)
|
|
|
December
31,
2022 |
|
Gross operating lease liabilities |
|
$ |
366,918 |
|
|
$ |
428,946 |
|
Less: imputed interest |
|
|
(43,043 |
) |
|
|
(58,782 |
) |
Present value of operating lease liabilities |
|
|
323,875 |
|
|
|
370,164 |
|
Less: current portion |
|
|
(67,804 |
) |
|
|
(62,861 |
) |
Long-term operating
lease liabilities |
|
$ |
256,071 |
|
|
$ |
307,303 |
|
(1) |
|
Effective on the
date of sale, October 4, 2023, we reported our discontinued operations financials as of September 30, 2023. |
|
Schedule of lease maturities |
Maturity
of lease liabilities
Schedule of lease maturities
12 months
ending October 4, 2023 (1) |
|
Finance
leases |
|
|
Operating
leases |
|
2024 |
|
$ |
419,073 |
|
|
$ |
67,804 |
|
2025 |
|
|
424,735 |
|
|
|
74,860 |
|
2026 |
|
|
388,723 |
|
|
|
82,475 |
|
2027 |
|
|
251,571 |
|
|
|
90,670 |
|
2028 |
|
|
4,781 |
|
|
|
8,066 |
|
Total |
|
|
1,488,883 |
|
|
|
323,875 |
|
Less: Current maturities |
|
|
(419,073 |
) |
|
|
(67,804 |
) |
Long-term liability |
|
$ |
1,069,810 |
|
|
$ |
256,071 |
|
(1) |
|
Effective on the
date of sale, October 4, 2023, we reported our discontinued operations financials as of September 30, 2023. |
|
Schedule of segment information |
Schedule of segment information
|
Discontinued Operation |
|
October 4, 2023 (1) |
|
|
|
Net sales |
$ |
6,432,907 |
|
Operating income (loss) |
|
178,854 |
|
Interest income |
|
1 |
|
Interest expense |
|
62,770 |
|
Property additions |
|
83,062 |
|
Fixed asset depreciation and amortization |
|
49,260 |
|
Total Assets |
|
3,357,852 |
|
|
|
|
|
December 31, 2022 |
|
|
|
Net sales |
$ |
7,670,641 |
|
Operating income (loss) |
|
(830,098 |
) |
Interest income |
|
5 |
|
Interest expense |
|
46,321 |
|
Property additions |
|
63,089 |
|
Fixed asset depreciation and amortization |
|
69,176 |
|
Total Assets |
|
3,302,931 |
|
|
Schedule of reconciliation of revenue from segments to consolidated |
Schedule
of reconciliation of revenue from segments to consolidated
|
|
October
4, 2023
(1)
|
|
|
December
31, 2022
|
|
Operating loss |
|
$ |
178,854 |
|
|
$ |
(830,098 |
) |
Realized gain (loss) on investments in securities |
|
|
|
|
|
|
|
|
Employee retention tax credit (WCI) |
|
|
6,921 |
|
|
|
1,350,161 |
|
Interest income |
|
|
1 |
|
|
|
5 |
|
Interest expense |
|
|
(62,770 |
) |
|
|
(46,321 |
) |
Gain (loss) on equipment disposals |
|
|
- |
|
|
|
56,455 |
|
Other income |
|
|
13,139 |
|
|
|
57,473 |
|
(1) |
|
Effective on the
date of sale, October 4, 2023, we reported our discontinued operations financials as of September 30, 2023. |
|