Annual report pursuant to Section 13 and 15(d)

Discontinued Operations

v3.23.1
Discontinued Operations
 12 Months Ended
Dec. 31, 2022
Discontinued Operations [Abstract]  
Discontinued Operations NOTE 7– DISCONTINUED OPERATIONS

Pursuant to the merger agreement, the Company is working to divest its legacy operations and operating assets. The Company is actively pursuing the sale of its JDL and Ecessa businesses and has met the criteria to report the operations of these businesses as discontinued operations beginning in the fourth quarter of 2022.

The assets and liabilities of the discontinued operations that are classified as held for sale are as follows:

December 31, 2022

December 31, 2021

Trade accounts receivable, net

$

752,420

$

—

Inventories, net

145,808

—

Other current assets

255,871

—

Total current assets

$

1,154,099

$

—

Property, plant, and equipment, net

$

69,270

$

—

Right of use asset

46,025

—

Intangible assets

2,110,550

—

Goodwill

45,688

—

Total noncurrent assets

$

2,271,533

$

—

Total assets held for sale

$

3,425,632

$

—

Accounts payable

$

381,992

$

—

Accrued compensation and benefits

184,585

—

Operating lease liability

50,170

—

Other accrued liabilities

10,727

—

Deferred revenue

533,685

—

Total current liabilities

$

1,161,159

$

—

Deferred revenue

$

250,875

$

—

Total noncurrent liabilities

$

250,875

$

—

Total liabilities held for sale

$

1,412,034

$

—

The financial results of the discontinued operations are as follows:

Year Ended December 31

2022

2021

Sales

$

5,291,492

$

—

Cost of sales

3,798,807

—

Selling, general and administrative expenses

1,295,120

—

Amortization expense

496,450

—

Transaction costs

53,361

—

Goodwill impairment loss

6,718,612

—

Operating loss before income taxes

(7,070,858)

—

Income tax expense

3,326

—

Net loss from discontinued operations

$

(7,074,184)

$

—

Due to CVR Representative’s approval of the planned sale of JDL and Ecessa and its discontinued operations assessment in the fourth quarter of 2022, the Company determined there was a triggering event that warranted an interim impairment assessment. Based on the quantitative assessment, the Company recorded an impairment loss of $6,718,612.