Quarterly report pursuant to Section 13 or 15(d)

DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

v3.19.2
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
 6 Months Ended
Jun. 30, 2019
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

NOTE 15 – DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

 

On January 1, 2019, Reign Brands, Inc., a subsidiary of Reign Sapphire Corporation, entered into an Asset Purchase Agreement (the “Agreement”) with Co-Op Jewelers LLC (“Co-Op”), whereby Reign Brands, Inc. sold operating assets of Reign Brands, Inc., consisting of substantially all of the assets related to Coordinates Collection (“CCI”). On January 1, 2019 (the “Closing Date”), the parties executed the Asset Purchase Agreement and the final exhibits.

 

Upon the closing of the Agreement, Reign Brands, Inc. sold substantially all of the operating assets of the CCI business, consisting of fixed assets and intellectual property in exchange for an aggregate of $100,000 in cash and recognized a gain of $238,315 on the disposal of discontinued operations. The Agreement contained customary closing conditions.

 

The following table reconciles the gain realized from the disposal of discontinued operations:

 

    January 1,  
    2019  
Cash   $ 100,000  
Intangble assets, net     481,947  
Goodwill     (481,947 )
Estimated fair value of contingent payments, net     137,007  
Other current liabilities     1,308  
Gain on disposal of discontinued operations   $ 238,315  

 

As a result of the sale, the Company had reclassified CCI as assets and liabilities held for sale as of December 31, 2018. Discontinued operations during the three and six months ended June 30, 2018 consist of the operations from CCI.

 

The following tables lists the assets of discontinued operations and held for sale and liabilities of discontinued operations and held for sale as of December 31, 2018 and the discontinued operations for CCI for the three and six months ended June 30, 2018:

 

    December 31,  
    2018  
ASSETS      
Current Assets:      
Accounts Receivable   $ 2,096  
Total Current Assets of Discontinued Operations     2,096  
Property, Plant and Equipment, net     -  
TOTAL ASSETS OF DISCONTINUED OPERATIONS AND HELD FOR SALE   $ 2,096  
         
LIABILITIES        
         
LIABILITIES        
Current Liabilities:        
Accounts Payable   $ -  
Estimated fair value of contingent payments, net     137,007  
Deferred revenue     21,977  
Other current liabilities     3,994  
Total Current Liabilities of Discontinued Operations     162,978  
TOTAL LIABILITIES OF DISCONTINUED OPERATIONS AND HELD FOR SALE   $ 162,978  

 

    For the
Six Months Ended		     For the
Three Months Ended		  
    June 30,     June 30,  
    2018     2018  
             
Net revenues   $ 421,261     $ 171,160  
Cost of sales     143,870       71,002  
Gross profit     277,391       100,158  
                 
Operating expenses                
Advertising and marketing expenses     254,561       118,042  
Stock based compensation - related party     -       -  
General and administrative     305,639       137,776  
Total operating expenses     560,200       255,818  
                 
Net loss of discontinued operations and held for sale   $ (282,809 )   $ (155,660 )