Annual report pursuant to Section 13 and 15(d)

Note 2 - Discontinued Operations of GCE Mexico and Subsidiaries

v3.3.1.900
Note 2 - Discontinued Operations of GCE Mexico and Subsidiaries
 12 Months Ended
Dec. 31, 2015
Notes  
Note 2 - Discontinued Operations of GCE Mexico and Subsidiaries

Note 2 – Discontinued Operations of GCE Mexico and subsidiaries

 

In July 2015, we were presented with a non-binding offer from a Mexican agricultural operator in the region to purchase our three Jatropha Farms.

 

In November 2015, we accepted the offer and closed the transaction on December 2, 2015.  This transaction is good for the company and our shareholders because it allowed us to reduce high-cost debt incurred during the initial research and development phase of our business.  We have not sold any of our Intellectual Property (IP) rights to the buyer. As a result, our Jatropha genetics are preserved as a core Company  asset as is the amount of institutional knowledge, experience and know-how that we developed over the past several years in Mexico.  As part of the sale, we will retain access rights to the Certified Nursery and R&D areas on the farm for an extended period of time.  As such, we retained our farm workers until December 18, 2015 to ensure the proper growth and well being of the Certified Nursery and R&D areas.  The total serverance cost in December was approximately $27,000.  The final lay off of the management staff was not complete until January 15, 2016.

 

The divesting of these three farms, improved the company's balance sheet by approximately $5,100,000 by reducing the company's debt by approximately $19,400,000.

 

The Company has recorded terminating it's operations of GCE Mexico and subsidiaries ("GCE Mexico") as of December 31, 2015, in accordance with Accounting Standards Codification (ASC) No. 205-20, Discontinued Operations.  As such, the historical results of GCE Mexico have been adjusted to include discontinued-related costs and exclude corporate allocations with Global Clean Energy Holdings, Inc (GCEH) and have been classified as discontinued operations in all periods presented.  As operations were discontinued as of the fiscal year end, no stub period is presented.

 

The following financial information presents the discontinued operations for the years ended December 31, 2015 and 2014, respectively.

 

 

2015

2014

 

 

 

Major classes of line items constitution pretax profit (loss) of discontinue operations

 

 

Revenue

$34,755

$51,494

General and administrative

(338,278)

(751,543)

Gain (Loss) on disposal of Fixed Assets

(75,623)

-

Loss on Write down of long lived assets

(6,375,321)

-

Plantation operating costs

-

(125,095)

Interest expense

(821,098)

(978,400)

Gain on settlement of liabilities

200,263

24,653

Other income and expense

2,706

354

Pretax loss of discontinued operations

(7,372,597)

(1,778,536)

Pretax loss on the disposal of the discontinue operation

(72,343)

-

Total pretax loss on discontinue operations

(7,444,940

(1,778,536)

Income tax benefit

-

-

Total loss on discontinued operations

$(7,444,940

$(1,778,536)

 

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations:

 

Reconciliation of the Carrying Amounts of Major Classes of Assets and LIabilities of the Discontinue Operations that are

Disclosed in the Notes to Financial Statement to Total Assets and Liabilities of the Disposal Group classified as Property and Equipment

that are presented in the Statement of Financial Position

 

 

 

Carrying amounts of major classes of assets included as part of discontinued operations

2015

2014

  Cash and cash equivalents

217,271

$46,941

  Accounts receivable

-

2,767

  Inventory

-

7,418

  Other current assets

397

29,853

  Property and Equipment, Net

-

13,377,936

  Other noncurrent assets

-

3,118

Total Assets of the disposal group in the statement of financial position

$217,668

$13,468,033

 

 

 

Carrying amounts of major classes of liabilities included as part of discontinued operations

 

  Accounts payable and accrued expenses

$-

$269,717

  Accrued payroll and payroll taxes

-

11,652

  Accrued interest payable

-

3,912,865

  Accrued return on noncontrolling interest

-

10,101,080

  Mortgage notes payable

-

5,110,189

Total Liabilities of the disposal group in the statement of fiancial position

$-

$19,124,134