Innovaro, Inc. Reports Financial Results For The Three And Nine Months Ended September 30, 2012
Strategic Services operating division
During the third quarter of 2012, as part of the Company’s strategy to maximize cash flow the Company’s Board of Directors approved the disposal of the strategic services division, Strategos. The sale of this division was subsequently completed on October 2, 2012.
The Company has determined that each of these divisions meet the criteria for classification as discontinued operations as of September 30, 2012. The Company has reflected the operations of these divisions as discontinued operations in the consolidated statements of comprehensive income for all periods presented. In addition, the Company has classified the assets and liabilities of the discontinued divisions as current and noncurrent assets and liabilities held for sale in the consolidated balance sheets for all periods presented.
Financial ConditionOur total assets were $12.5 million and $20.8 million as of September 30, 2012 and December 31, 2011, respectively. As of September 30, 2012, our assets and liabilities from continuing operations included $314,000 in cash, $117,000 in accounts receivable, $1.2 million in accounts payable and accrued expenses, and $5.3 million in total debt outstanding. As of December 31, 2011, our assets and liabilities from continuing operations included $268,000 in cash, $102,000 in accounts receivable, $878,000 in accounts payable and accrued expenses, and $5.6 million in total debt outstanding. Recent Developments On September 12, 2012, we sold our Pharmalicensing, Global Licensing, Pharma Transfer and Knowledge Express operating divisions to IP Technology Exchange, Inc. effective as of August 31, 2012. Under the Asset Purchase Agreement, IP Technology Exchange, Inc. will pay the Company $2,000,000 consisting of (i) a lump-sum payment of $600,000 at the time of the sale, (ii) assumption of approximately $70,000 of debt relating to the Divisions, (iii) quarterly payments of $100,000 through August 2014, and (iv) the remaining balance of the purchase price on September 1, 2014. On November 30, 2012, any outstanding balance of the purchase price will begin accruing interest at 5% per annum. IP Technology Exchange, Inc. is entitled to a $125,000 reduction in the purchase price if all amounts are paid to us by May 1, 2013. Two of our current executive officers collectively own 14% equity interest in IP Technology Exchange, Inc.
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