Disposal of Subsidiaries

9 Months Ended

Sep. 30, 2018

On June 5, 2017, the Company closed the transactions under the Share Exchange Agreement (“ Share Exchange Agreement”) by and between the Company, Eminent Healthcare Pte. Ltd., a Singaporean corporation, Multi Care Pte. Ltd., a Singaporean corporation, and Targeted Solutions Global Limited, a United Kingdom Private limited company, for the sale of all of the issued and outstanding ordinary shares of the Company’s 100% wholly-owned subsidiary, Smile More Holdings Pte. Ltd., a Singaporean corporation (the “Stock Purchase”). Prior to the closing of the Stock Purchase, Eminent Healthcare Pte. Ltd. and Multi Care Pte. Ltd. were the Company’s majority shareholders. Liew Min Hin, the Company’s former Chief Financial Officer and former member of the Board of Directors, owns 100% of Eminent Healthcare Pte. Ltd., and is the father of Dr. Daniel Liew, the Company’s former Chief Executive Officer and former member of the Board of Directors.

Pursuant to the share exchange agreement, the Company transferred all of the subsidiary shares to the purchaser and released the Subsidiary from the intra-Company loan of $965,866.

During the nine months ended September 30, 2018, the Company recorded a loss on disposal of $0. The Company has no continuing involvement in the operations of Smile More Holdings. The disposal of Smile More Holdings qualified as a discontinued operation of the Company and accordingly, the Company has excluded results of Smile More Holdings’ operations from its Statements of Operations to present this business in discontinued operations.

The following table shows the results of operations of Smile More Holdings for the three months ended September 30, 2018 and 2017 which are included in the loss from discontinued operations:

	Three Months Ended
	September 30,
	2018		2017

Dental Service Revenue, net	$	-	$	-
Cost of Services		-		-
Gross profit		-		-
General and administrative		-		-
Professional fees		-		-
Rental		-		-
Staff costs		-		-
Depreciation		-		-
Operating loss		-		-
Other income		-		-
Interest expense		-		-
Income tax benefit		-		-
Gain from discontinued operations, net of tax	$	-	$	-

The following table shows the results of operations of Smile More Holdings for the nine months ended September 30, 2018 and 2017 which are included in the loss from discontinued operations:

	Nine Months Ended
	September 30,
	2018		2017

Dental Service Revenue, net	$	-	$	3,065,719
Cost of Services		-		2,057,063
Gross profit		-		1,008,656
General and administrative		-		259,937
Professional fees		-		28,154
Rental		-		429,677
Staff costs		-		334,347
Depreciation		-		94,294
Operating loss		-		(137,753	)
Other income		-		95,164
Interest expense		-		(14,530	)
Income tax benefit		-		1,316
Loss from discontinued operations, net of tax	$	-	$	(55,803	)

The following table shows the carrying amounts of the major classes of assets and liabilities associated with Smile More Holdings as of the June 5, 2017.

	June 5,
	2017
Cash and cash equivalents	$	359,066
Accounts receivable		1,175,394
Prepaid expenses and deposits		247,086
Supplies		100,177
Property and equipment, net		887,360
Accounts payable		(1,168,613	)
Accrued and other payables		(122,958	)
Due to related parties		(597,259	)
Loans payable		(565,938	)
Capital lease obligations		(168,996	)
Net assets and liabilities		145,319
Accumulated other comprehensive loss		(67,881	)
Loss on disposal	$	77,438

Medico International Inc. 10-Q