Annual report pursuant to Section 13 and 15(d)

Discontinued Operations

v3.21.1
Discontinued Operations
12 Months Ended
Dec. 31, 2020
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

Note 18 — Discontinued Operations

 

Discontinued operations are accounted for in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Section 360-10-35 Property, Plant and Equipment. In accordance with FASB ASC Section 360-10-35, the net assets of discontinued operations are recorded on our consolidated balance sheets at carrying value. The results of operations of discontinued operations are segregated from continuing operations and reported separately as discontinued operations in our consolidated statements of loss and comprehensive loss.

 

On November 30, 2020, the Company (the “Seller”) and its wholly owned subsidiary, SRM Entertainment, LTD (“SRM”) entered into a Stock Exchange Agreement (the “Exchange Agreement”) with Jupiter Wellness, Inc. (“Jupiter”)(the “Buyer”). Under the terms of the Exchange Agreement, the Buyer agreed to purchase all outstanding shares of common stock (the “Exchange Shares”) issued by SRM from the Seller. As consideration for the purchase of the Exchange Shares, the Buyer agreed to exchange 200,000 shares of its restricted common stock (the “Consideration Shares”), symbol JUPW as listed on NASDAQ Capital Markets. The Company made the decision to divest the amusement park business due to the slow re-openings of amusement parks around the world and the investment that would have been needed to remain open and the investment required to relaunch as the amusement parks begin to get back to full capacity.

 

The following table presents the carrying values of the assets and liabilities of our discontinued operations at December 31, 2020 and 2019, respectively:

 

   

For the Twelve Months

Ended December 31,

 
    2020     2019  
             
Assets                
Current assets:                
Cash and cash equivalents   $ 43,405     $ 178,485  
Accounts receivable, net     237,093       803,316  
Inventory     77,710       126,739  
Prepaid expenses and other current assets     42,104       31,667  
Income tax receivable     120,211       147,889  
Total current assets     520,523       1,288,096  
Property and equipment, net     28,504       56,049  
Total assets   $ 549,027     $ 1,344,145  
                 
Liabilities and stockholders’ equity                
Current liabilities:                
Accounts payable   $ 677,326     $ 1,382,055  
Accrued expenses and other current liabilities     73,615       109,607  
Line of credit     -       -  
Notes payable, current     -       -  
Due to related party     -       -  
Total current liabilities   $ 750,941     $ 1,491,662  

 

The following table presents the summary results of operations of our discontinued operations for the years ended December 31, 2020 and 2019, respectively:

 

   

For the Twelve Months

Ended December 31,

 
    2020     2019  
Revenues, net   $ 2,727,346     $ 7,105,630  
Cost of revenues     2,145,989       5,289,781  
Gross profit     581,357       1,815,849  
                 
Operating expenses:                
Selling, general and administrative     1,211,050       1,824,645  
Operating income     (629,693 )     (8,796 )
                 
Other (expense) income:                
Interest income     1       985  
Total other (expense) income     1       985  
Loss before income taxes     (629,692 )     (7,811 )
Income tax expense     (12,940 )     (2,826 )
Net (loss) income   $ (642,632 )   $ (10,637 )