4. Gain on Sale of Assets

Effective July 21, 2016, EnergyTek Corp. entered into an agreement with the joint venture formed in 2015, Wagley-EnergyTEK J.V. LLC (the “Wagley J.V.”). Pursuant to the agreement, the Wagley J.V. was dissolved, and the 2,000,000 shares EnergyTek Corp. contributed to the Wagley J.V. were cancelled.

An EnergyTek Corp subsidiary assumed $180,248 of its debt, which consisted of approximately $174,000 in notes payable and $6,000 in accounts payable. Additionally, that subsidiary would become a wholly-owned subsidiary of another entity, Litigation Capital, Inc. once certain requirements had been met, and the debt would be assumed by that entity. In December 2016, the requirements were met, and the subsidiary and related debt were transferred to Litigation Capital, Inc. This transaction was recorded as a gain on sale of asset.