Annual report pursuant to Section 13 and 15(d)

DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

v3.20.1
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
 12 Months Ended
Dec. 31, 2019
Notes To Financial Statements Abstract  
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

NOTE 16 – DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

 

On January 1, 2019, Reign Brands, Inc., a subsidiary of Reign Resources 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 (“CC”). 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 CC business, consisting of fixed assets and intellectual property in exchange for an aggregate of $100,000 in cash. 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  
Intangible 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 pending sale, the Company has reclassified CCI as assets and liabilities held for sale as of December 31, 2018. Discontinued operations during the year ended December 31, 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 year ended December 31, 2018:

 

    December 31, 2018
Assets    
Current assets        
Account 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 payment,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 Year Ended
   

December 31,

2018
     
Net revenue   $ 659,142  
Cost of sales     227,157  
Gross profit     431,985  
         
 Operating expenses        
Advertising and marketing expenses     317,666  
Stock based compensation related party     —     
General and administrative     429,316  
Total operating expenses     746,982  
Net loss of discontinued operations and held for sale   $ (314,997 )