Quarterly report pursuant to Section 13 or 15(d)

DISCONTINUED OPERATIONS

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DISCONTINUED OPERATIONS
 3 Months Ended
Dec. 31, 2012
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
3. DISCONTINUED OPERATIONS

 

On September 30, 2012 the Company discontinued its Clinical Services Operation at its wholly-owned subsidiary Neuro Therapy Clinic, Inc. (“NTC”), because the operation had persistent losses which could no longer be supported by the Company. Furthermore, the Company chose to focus its limited cash resources to conduct its clinical trial at Walter Reed National Military Medical Center.

 

As of September 30, 2012 the staff of NTC had departed and the premises were vacated. Prior to the clinic’s closure all patients were sent letters informing them where they could continue their treatment with their usual provider. Two of NTC’s providers joined a nearby psychiatric clinic operated by Compass Health Systems (“Compass”). NTC executed a business associate agreement with Compass to allow the confidential sharing of patient information and to enable the providers to continue to treat their patients. We are in discussion with Compass to manage NTC as part of Compass’ operations with an option to acquire NTC. All revenues and operating expenses under this management agreement would belong to Compass. Furthermore, if Compass exercises their option to acquire NTC, it would be for a nominal sum. All NTC assets and liabilities incurred prior to October 1, 2012 would remain with CNS Response.

 

Summary Financial Data of Discontinued Operations:

 

Revenues, income before income taxes and net loss of NTC which are included in discontinued operations are as follows:

 

    Three Months ended
December 31, 		 
    2012     2011  
Neuro-Therapy Clinic                
Revenues   $ -     $ 152,300  
Expenses     12,200       296,400  
Operating Loss before taxes   $ (12,200 )   $ (144,100 )
Taxes     -       -  
Net Loss   $ (12,200 )   $ (144,100 )

 

The assets and liabilities of NTC are as follows:

 

    As at December 31,  
    2012     2011  
ASSETS:                
Cash   $ 15,100     $ 14,700  
Account Receivable     -       29,100  
Prepaid Expenses     -       6,300  
Security Deposit     -       5,800  
Assets of Discontinued Operations   $ 15,100     $ 55,900  
                 
LIABILITIES:                
Accounts Payable   $ 159,600     $ 121,900  
Accrued Payroll Liabilities     138,500       12,300  
Liabilities of Discontinued Operations   $ 298,100     $ 134,200