Processa Pharmaceuticals, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Discontinued Operations, Disclosure

Discontinued Operations, Disclosure

12 Months Ended

Dec. 31, 2016

6. DISCONTINUED OPERATIONS:

In efforts to streamline operations and expenses the Company elected to discontinue the Dr. Pave and Dr. Pave Worldwide entities during 2015. The financial results of these events are represented in the discontinued operations included in the December 31, 2016 and 2015 financial statements.

The operating results of the discontinued operations of Dr. Pave and Dr. Pave Worldwide for the years ended December 31, 2016 and 2015 are summarized below:

	2016		2015
Revenue	$	--	$	28,870
Expense		(1,733)		400,177
Net Income (loss), before Other income and expense and taxes		1,733		(371,307)
Other income (expense)		(536)
Income tax benefit		--		--
Net Loss, net of tax	$	1,197	$	(371,307)

The balance sheet items for discontinued operations as of December 31, 2015 and 2014 are summarized below:

	2016		2015
Cash and cash equivalents	$	--	$	12,350
Total assets	$	--	$	12,350

Payables and accrued liabilities		--		70,358
Short-term debt		--		229,980
Total liabilities	$	--	$	300,338

The Companys borrowings included in discontinued operations as of December 31, 2016 and 2015 are as follows:

Revolving line of credit - The Company assumed revolving lines of credit through the January 8, 2014 acquisition of Dr. Pave in the amount of $229,980. In June 2016, Heatwurx, Inc. assumed the revolving lines of credit along with the accumulated accrued interest from the discontinued entity Dr. Pave, LLC (see Note 7 below).

Secured Notes Payable - The Company assumed secured notes payable through the acquisition of Dr. Pave in the amount of $160,000. The principal amount and accrued interest in the amount of $14,361 was converted into the senior secured loan agreement as described below on June 30, 2015.