HEMACARE CORP /CA/

CIK:0000801748|SEC Filings

Note 4 - Discontinued Operations

12 Months Ended

Dec. 31, 2011

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note 4 – Discontinued Operations

On July 11, 2011, the Company completed the sale of its red blood cell collection operation assets in California and Maine to The American National Red Cross. The financial results related to the red blood cell collection operations are shown as discontinued operations on the statement of operations for the periods ended December 31, 2011 and 2010.

On November 5, 2007, HemaCare Corporation’s wholly owned subsidiary, HemaCare BioScience, Inc. (“HemaBio”), ceased operations. On December 4, 2007, HemaBio executed an Assignment for Benefit of Creditors, under Florida Statutes Section 727.101 et seq. (“Assignment”), assigning all of its assets to an assignee, who was responsible for taking possession of, protecting, preserving, and liquidating such assets and ultimately distributing the proceeds to creditors of HemaBio according to their priorities as established by Florida law.

On January 9, 2012, the Seventeenth Judicial Circuit Court in Broward County, Florida, issued an Order Granting Petition to Approve Final Report, Discharge Assignee, and Close Case, discharging the assignee from duties, liabilities and responsibilities pursuant to the Assignment and Section 727 of the Florida Statutes, and closing the Assignment. At December 31, 2011, the assets remaining in the assignment are shown on the Company’s balance sheet as assets held for sale, and the liabilities as liabilities related to assets held for sale.

The following indicates the assets held for sale and related liabilities as of December 31, 2011 and 2010:

Discontinued Operations

	December 31,		December 31,
	2011		2010

Assets held for sale
Cash and cash equivalents	$	229,000	$	210,000
Inventory		-		40,000
Fixed assets (net of accumulated depreciation of $1,134,000 on December 31, 2010)		-		213,000
	$	229,000	$	463,000

Liabilities related to assets held for sale
Accounts payable	$	792,000	$	774,000
Accrued payroll and payroll taxes		603,000		603,000
Accrued interest		267,000		217,000
Notes payable		500,000		500,000
Total liabilities related to assets held for sale	$	2,162,000	$	2,094,000

The following are the components of income from discontinued operations:

	For the Year Ended December 31,
	2011			2010

Revenue	$	6,152,000		$	15,017,000

Operating expenses		6,120,000			12,939,000

Gross (loss) profit		32,000			2,078,000

General and administrative expenses		1,472,000			302,000

(Loss) income from operations		(1,440,000	)		1,776,000

Gain on sale of assets		2,802,000			-

Income from discontinued operations, net of tax	$	1,362,000		$	1,776,000

Consolidated Statements Of Cash Flows (USD $)	12 Months Ended
Consolidated Statements Of Cash Flows (USD $)	Dec. 31, 2011	Dec. 31, 2010
Cash flows from operating activities:
Net loss	$ (805,000)	$ (796,000)
Adjustments to reconcile net loss to net cash provided by operating activities:
(Income) from discontinued operations	(1,362,000)	(1,776,000)
Provision for bad debts	17,000	12,000
Depreciation and amortization	676,000	1,134,000
Gain on insurance settlement	(192,000)
Loss on disposal of assets	184,000	7,000
Share-based compensation	82,000	140,000
Provision for inventory reserve	23,000
Impairment of capitalized asset in progress		126,000
Changes in operating assets and liabilities:
Decrease in accounts receivable	750,000	877,000
Decrease in inventories, supplies and prepaid expenses	326,000	289,000
(Increase) in other receivables	(199,000)	(112,000)
Decrease in other assets	23,000	17,000
Decrease in accounts payable, accrued payroll, accrued expenses and deferred rent	(635,000)	(27,000)
Net cash used in operating activities	(1,112,000)	(109,000)
Cash flows from investing activities:
Proceeds from the sale of plant and equipment	223,000	6,000
Purchases of plant and equipment	(353,000)	(240,000)
Net cash used in investing activities	(130,000)	(234,000)
Cash flows from financing activities:
Decrease (increase) in restricted cash	66,000	(660,000)
Proceeds from the exercise of stock options		11,000
Proceeds from sale of stock	172,000	83,000
Repurchases of common stock		(281,000)
Principal payments on capital leases	(19,000)	(5,000)
Net cash provided by (used in) financing activities	219,000	(852,000)
Net cash used in continuing operations	(1,023,000)	(1,195,000)
Cash Flows - Discontinued Operations
Cash (used in) provided by operating activities	(1,331,000)	1,821,000
Cash provided by investing activities	3,001,000
Net cash provided by discontinued operations	1,670,000	1,821,000
Increase in cash and cash equivalents	647,000	626,000
Cash and cash equivalents at beginning of period	1,848,000	1,222,000
Cash and cash equivalents at end of period	2,495,000	1,848,000
Cash, cash equivalents - Continuing operations	2,266,000	1,638,000
Cash and cash equivalents - Assets held for sale	229,000	210,000
Total cash and cash equivalents	2,495,000	1,848,000
Supplemental disclosure:
Interest paid	10,000	3,000
Income taxes paid (refunded)	18,000	(18,000)
Capital lease addition for capital equipment		$ 98,000

Consolidated Balance Sheets (USD $)	Dec. 31, 2011	Dec. 31, 2010
Assets
Cash and cash equivalents	$ 2,266,000	$ 1,638,000
Accounts receivable, net of allowance for doubtful accounts of $108,000 in 2011 and $91,000 in 2010	2,013,000	2,780,000
Product inventories and supplies, net	406,000	577,000
Prepaid expenses	344,000	522,000
Assets held for sale	229,000	463,000
Current portion of restricted cash	59,000	66,000
Other receivables	367,000	168,000
Total current assets	5,684,000	6,214,000
Plant and equipment, net of accumulated depreciation and amortization of $6,214,000 in 2011 and $6,570,000 in 2010	2,363,000	2,887,000
Restricted Cash	535,000	594,000
Other assets	125,000	148,000
Total assets	8,707,000	9,843,000
Liabilities and Shareholders' Equity
Accounts payable	1,171,000	1,486,000
Accrued payroll and payroll taxes	545,000	636,000
Other accrued expenses	158,000	319,000
Current portion of capital lease	18,000	16,000
Liabilities related to assets held for sale	2,162,000	2,094,000
Total current liabilities	4,054,000	4,551,000
Deferred rent	464,000	533,000
Long term portion of capital lease	57,000	77,000
Shareholders' equity:
Common stock, no par value - 20,000,000 shares authorized, 10,331,519 issued and outstanding in 2011 and 9,712,948 in 2010	16,544,000	16,289,000
Accumulated deficit	(12,412,000)	(11,607,000)
Total shareholders' equity	4,132,000	4,682,000
Total liabilities and shareholders' equity	$ 8,707,000	$ 9,843,000