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Discontinued operations | 12 Months Ended
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Dec. 31, 2024
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued operations | Discontinued operations As announced in the second quarter of 2023, the Company, management, and our board of Directors (the "Board"), had determined that divesting Global Cooling and CBS (the "Freezer Business") would allow for the Company to optimize its product portfolio by focusing on its recurring higher margin revenue streams. Additionally, in November of 2024, the Company, management, and the Board determined the sale of SciSafe would further optimize the Company's product portfolio toward its proprietary high margin cell processing and other bioproduction products. The Company completed the sale of Global Cooling during the second quarter of 2024 and completed the sales of CBS and SciSafe during the fourth quarter of 2024. Accordingly, the results of these businesses are reported in the “Loss from discontinued operations” line in the Consolidated Statements of Operations. These changes have been applied to all periods presented. Divestiture of Global Cooling, Inc. On April 17, 2024, the Company sold all of the issued and outstanding shares of common stock (the "GCI Divestiture") of Global Cooling, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("Global Cooling"), to GCI Holdings, an Ohio limited liability company ("Buyer") pursuant to a Stock Purchase Agreement, dated April 17, 2024, (the "Global Cooling Purchase Agreement"), by and between the Company and GCI Holdings. The Company analyzed the quantitative and qualitative factors relevant to the sale of Global Cooling and determined that the conditions for discontinued operations presentation were met during the second quarter of 2024. As a condition of the Global Cooling Purchase Agreement, Global Cooling was required to have $7.0 million in cash on its balance sheet, of which, $6.7 million in cash was funded by the Company, and the Company was required to repay approximately $2.6 million of outstanding indebtedness of Global Cooling, and assume certain other liabilities of Global Cooling of $2.6 million. The Company recognized a loss on disposal of Global Cooling, calculated as follows:
(In thousands) |
Selling price: $1 | $ | — |
Cash to Global Cooling funded by Company | (6,652) |
Costs to sell Global Cooling(1) | (582) |
Negative selling price | (7,234) |
Global Cooling carrying basis as of April 17, 2024, inclusive of assumed liabilities | (3,589) |
Assumed liabilities: Accounts payable(2) | 2,643 |
Assumed liabilities: Debt(3) | 2,596 |
Less: Global Cooling carrying basis as of April 17, 2024 | 1,650 |
Less: Release of Global Cooling currency translation adjustment | (13) |
Net loss on disposal | $ | (8,897) |
(1) Represents the costs incurred in connection with the divestiture of Global Cooling, including fees to be paid to the broker, attorneys, and other external parties. (2) As a closing condition, the Company assumed certain accounts payable and accrued expenses from Global Cooling, totaling $0.5 million and $2.1 million, respectively. (3) As a closing condition, the Company repaid the balance of all obligations of Global Cooling under that certain promissory note payable by Global Cooling to a lender (the "Global Cooling Term Notes"). In connection with the Company’s entry into the Global Cooling Purchase Agreement, the Company implemented a RIF related to the business of Global Cooling, which reduced the Company’s workforce by 47 employees (representing approximately 11% of its full-time employees as of the date of the RIF). The Company’s Board approved the RIF on March 29, 2024, and all affected employees of Global Cooling were informed by April 18, 2024, following the execution of the Global Cooling Purchase Agreement. Additionally, the Company accelerated the unvested shares granted to both the employees impacted by the RIF and Global Cooling employees that remained with Global Cooling upon the closing of the GCI Divestiture. The Company recognized the following charges in connection with the RIF and stock compensation expense acceleration:
(In thousands) | Severance |  | Stock Compensation |  | Total
RIF employee costs | $ | 291 |  |  | $ | 1,255 |  |  | $ | 1,546 |
Former Global Cooling employees | — |  |  | 1,925 |  |  | 1,925 |
Total employment related divestiture expenditures | $ | 291 |  |  | $ | 3,180 |  |  | $ | 3,471 |
As outlined in the Global Cooling Purchase Agreement, the Company is required to indemnify Global Cooling for preexisting legal contingencies. Prior to the GCI Divestiture, a lawsuit was filed by a previous customer related to Global Cooling's commercial freezer products seeking payment of up to $4.0 million for losses the customer claims to have incurred. As of December 31, 2024, the Company recorded a loss contingency under the discontinued operations of Global Cooing related to this product liability claim as outlined in the Global Cooling Purchase Agreement. During the fourth quarter of 2024, it became probable this loss would be settled within the next fiscal year. The product liability claim is subject to insurance recovery, which management believes is probable as enforceable under the Company's insurance policy, covering the entirety of the loss contingency aside from the Company's insurance deductibles. The Company estimates the legal expenses to be incurred will be immaterial. In addition, upon the closing of this transaction, the Company and Global Cooling entered into a transition services agreement ("GCI TSA"), pursuant to which the Company agreed to provide certain transition services to Global Cooling for up to 90 days following the date of the closing of this transaction. The GCI TSA has since expired pursuant to its terms on the stated expiration date. The Company has no other significant continuing involvement with Global Cooling. Divestiture of SciSafe, Inc. On November 12, 2024, the Company entered into a Stock Purchase Agreement (the "SciSafe Purchase Agreement"), by and among the Company, Subzero Purchaser Corp., a Delaware corporation ("SciSafe Buyer"), SciSafe, Inc., a Delaware corporation and an indirect, wholly owned subsidiary of the Company ("SciSafe Seller"), and SciSafe, Inc., a New Jersey corporation and an indirect wholly owned subsidiary of the Company ("SciSafe"), for the sale by Sci Safe Seller of all of the issued and outstanding shares of common stock of SciSafe to SciSafe Buyer ("SciSafe Divestiture"). The Company analyzed the quantitative and qualitative factors relevant to the sale of SciSafe and determined that the conditions for discontinued operations presentation were met during the fourth quarter of 2024. In connection with the closing of this transaction, the Company incurred $0.4 million in severance costs, paid the former stockholders of SciSafe $3.3 million in cash to waive all rights with respect to certain potential earn-out payments, and recognized $4.0 million in stock compensation expense for the acceleration of unvested shares of all the Company's former employees that remained with SciSafe upon the closing of this transaction. The Company recognized a gain on disposal of SciSafe, calculated as follows:
(In thousands) |
Cash proceeds received from Buyer | $ | 71,291 |
Cash proceeds from escrow | 483 |
Costs to sell(1) | (506) |
Total proceeds | 71,268 |
Less: SciSafe carrying basis as of November 12, 2024 | 42,507 |
Less: Release of SciSafe currency translation adjustment | 622 |
Net gain on disposal | $ | 28,139 |
(1) Gross costs to sell incurred by the Company amounted to $2.1 million. This was offset by additional costs to sell paid on behalf of the Company by the SciSafe Buyer, which amounted to $1.6 million. In accordance with ASC 350, upon the disposal of SciSafe, the Company assessed the goodwill to be allocated to the disposal group. The goodwill allocated to SciSafe was based on the relative fair value of SciSafe to the fair value of the Company as SciSafe was fully integrated into the Company's one reportable segment. The fair value of SciSafe was determined based on the enterprise value per the SciSafe Purchase Agreement. The fair value of the Company was determined by calculating the Company's market capitalization as of the disposal date plus any invested capital remaining of the Company, which included outstanding debt and financing lease liabilities, modified by an estimated market acquisition premium. Based on the calculation performed, the Company determined $11.3 million of goodwill was to be allocated to SciSafe upon its disposal. The allocated goodwill was included in the carrying basis of SciSafe presented in the above table. In addition, upon the closing of the transaction, the Company and SciSafe entered into a transition services agreement ("SciSafe TSA"), pursuant to which the Company will provide certain transition services to SciSafe for up to six months following the closing of the transaction. The SciSafe Purchase Agreement contains customary representations, warranties, covenants and indemnities of the parties thereto, including customary covenants that prevent the Company from competing with SciSafe, soliciting its employees or interfering with its business relationships for five years after the Closing Date. The Company has no other significant continuing involvement with SciSafe upon the expiration of its SciSafe TSA in April 2025 and other related covenants. In connection with the disposal of SciSafe, the Company remains liable and responsible for the full performance and observance of all of the provisions, covenants, and conditions in one of SciSafe's operating leases. In the case of a breach or violation of any provision of the lease by the buyer, the Company is deemed to be and shall constitute a default of the lease provisions. Simultaneously, the Company received indemnification pursuant any obligation owed by the Company under this operating lease. This indicates the Company undertakes the obligation to stand ready to perform over the term of the guarantee in the event of the specified triggering events noted above, or conditions, such as breach or default, occur. However, the non-contingent aspect of the guarantee enables the Company to recover any losses from the Buyer. As of December 31, 2024, the fair value of this guarantee is zero. The outstanding minimum lease payments equal approximately $2.3 million and the lease terminates in 2031. Divestiture of Custom Biogenics On November 14, 2024, the Company entered into a Stock Purchase Agreement (the "CBS Purchase Agreement"), by and among the Company, Standex International Corporation, a Delaware corporation, ("CBS Buyer") and Arctic Solutions, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (doing business as Custom Biogenic Systems, or ("CBS"), for the sale by the Company of all of the issued and outstanding shares of common stock of CBS. The Company analyzed the quantitative and qualitative factors relevant to the sale of CBS and determined that the conditions for discontinued operations presentation were met during the fourth quarter of 2024. The Company recognized $2.0 million in stock compensation expense for the acceleration of unvested shares of all the Company's former employees that remained with CBS upon the closing of this transaction. The Company recognized a loss on disposal of CBS, calculated as follows:
(In thousands) |
Cash proceeds received from Buyer | $ | 2,785 |
Cash proceeds from escrow | 615 |
Net price adjustment(1) | 179 |
Costs to sell(2) | (148) |
Total proceeds | 3,431 |
Less: CBS carrying basis as of November 14, 2024 | 6,796 |
Net loss on disposal | $ | (3,365) |
(1) As defined within the CBS Purchase Agreement, the final purchase price was subject to working capital adjustments upon the close of the disposal. (2) Gross costs to sell incurred by the Company amounted to $1.4 million. This was offset by additional costs to sell paid on behalf of the Company by the CBS Buyer, which amounted to $1.3 million. In accordance with ASC 350, upon the disposal of CBS, the Company assessed the goodwill to be allocated to the disposal group. The goodwill allocated to CBS was based on the relative fair value of CBS to the fair value of the Company as CBS was fully integrated into the Company's one reportable segment. The fair value of CBS was determined based on the enterprise value per the CBS Purchase Agreement. The fair value of the Company was determined by calculating the Company's market capitalization as of the disposal date plus any invested capital remaining of the Company, which included outstanding debt and financing lease liabilities, modified by an estimated market acquisition premium. Based on the calculation performed, the Company determined $1.1 million of goodwill was to be allocated to CBS upon its disposal. The allocated goodwill was included in the carrying basis of CBS presented in the above table. In addition, upon the closing of this transaction, the Company and CBS entered into a transition service agreement (the "CBS TSA"), pursuant to which the Company will provide certain transition services to CBS following the closing of the transaction. The CBS Purchase Agreement contains customary representations, warranties, covenants and indemnities of the parties thereto, including customary covenants that prevent the Company from competing with CBS, soliciting its employees or interfering with its business relationships for two years after the closing of the CBS Transaction. The Company has no other significant continuing involvement with CBS upon the expiration of its CBS TSA and related covenants. Summarized financial data of discontinued operations The tables below summarize financial data of discontinued operations as of the year ended December 31, 2023 and for the years ended December 31, 2024, 2023, and 2022. Interest expenses directly associated with the debt of a disposed entity is reported in discontinued operations below. The table below summarizes the major classes of assets and liabilities of discontinued operations, which are summarized separately in the Consolidated Balance Sheets:
| December 31, 2023
(In thousands) | Global Cooling |  | SciSafe |  | CBS |  | Total
Cash and cash equivalents | $ | 2,090 |  |  | $ | 5,102 |  |  | $ | 340 |  |  | $ | 7,532 |
Restricted cash | — |  |  | — |  |  | 10 |  |  | 10 |
Accounts receivable, net | 1,728 |  |  | 6,353 |  |  | 2,677 |  |  | 10,758 |
Inventories | 11,248 |  |  | — |  |  | 5,044 |  |  | 16,292 |
Prepaid expenses and other current assets | 303 |  |  | 895 |  |  | 901 |  |  | 2,099 |
Total current assets, discontinued operations | 15,369 |  |  | 12,350 |  |  | 8,972 |  |  | 36,691 |
Assets held for rent, net | — |  |  | 796 |  |  | — |  |  | 796 |
Property and equipment, net | 146 |  |  | 15,241 |  |  | — |  |  | 15,387 |
Operating lease right-of-use assets, net | — |  |  | 4,568 |  |  | — |  |  | 4,568 |
Financing lease right-of-use assets, net | — |  |  | 94 |  |  | — |  |  | 94 |
Long-term deposits and other assets | 4 |  |  | 199 |  |  | — |  |  | 203 |
Intangible assets, net | — |  |  | 9,153 |  |  | — |  |  | 9,153 |
Goodwill | — |  |  | 11,333 |  |  | 1,104 |  |  | 12,437 |
Total assets, discontinued operations | 15,519 |  |  | 53,734 |  |  | 10,076 |  |  | 79,329 |
Accounts payable | 3,367 |  |  | 578 |  |  | 726 |  |  | 4,671 |
Accrued expenses and other current liabilities | 1,156 |  |  | 1,300 |  |  | 573 |  |  | 3,029 |
Sales taxes payable | 481 |  |  | 44 |  |  | 518 |  |  | 1,043 |
Warranty liability | 7,507 |  |  | — |  |  | 131 |  |  | 7,638 |
Lease liabilities, operating, current portion | 263 |  |  | 1,249 |  |  | — |  |  | 1,512 |
Lease liabilities, financing, current portion | 22 |  |  | 74 |  |  | 280 |  |  | 376 |
Debt, current portion | — |  |  | 447 |  |  | 100 |  |  | 547 |
Total current liabilities, discontinued operations | 12,796 |  |  | 3,692 |  |  | 2,328 |  |  | 18,816 |
Lease liabilities, operating, long-term | 1,016 |  |  | 3,494 |  |  | — |  |  | 4,510 |
Lease liabilities, financing, long-term | 11 |  |  | 27 |  |  | 1,130 |  |  | 1,168 |
Debt, long-term | — |  |  | 679 |  |  | 72 |  |  | 751 |
Deferred tax liabilities | — |  |  | — |  |  | 74 |  |  | 74 |
Total liabilities, discontinued operations | $ | 13,823 |  |  | $ | 7,892 |  |  | $ | 3,604 |  |  | $ | 25,319 |
All divested entities had no remaining balances as of December 31, 2024. The key components of loss from discontinued operations were as follows:
| December 31, 2024
(In thousands) | Global Cooling |  | SciSafe |  | CBS |  | Total
Revenue | $ | 7,157 |  |  | $ | 18,440 |  |  | $ | 12,141 |  |  | $ | 37,738 |
Cost of revenue | (8,389) |  |  | (16,357) |  |  | (10,600) |  |  | (35,346) |
Operating expenses | (9,418) |  |  | (11,467) |  |  | (4,967) |  |  | (25,852) |
Intangible asset amortization | — |  |  | (764) |  |  | — |  |  | (764) |
Other expense, net | (25) |  |  | (183) |  |  | (110) |  |  | (318) |
(Loss) gain on disposal | (8,897) |  |  | 28,139 |  |  | (3,365) |  |  | 15,877 |
(Loss) income before income taxes | (19,572) |  |  | 17,808 |  |  | (6,901) |  |  | (8,665) |
Income tax expense | (10) |  |  | (122) |  |  | — |  |  | (132) |
(Loss) income from discontinued operations, net of income taxes | $ | (19,582) |  |  | $ | 17,686 |  |  | $ | (6,901) |  |  | $ | (8,797) |
| December 31, 2023
(In thousands) | Global Cooling |  | SciSafe |  | CBS |  | Total
Revenue | $ | 35,826 |  |  | $ | 18,014 |  |  | $ | 13,576 |  |  | $ | 67,416 |
Cost of revenue | (36,682) |  |  | (17,283) |  |  | (12,632) |  |  | (66,597) |
Operating expenses | (20,162) |  |  | (5,316) |  |  | (7,153) |  |  | (32,631) |
Intangible asset impairment charges | (7,175) |  |  | — |  |  | (8,310) |  |  | (15,485) |
Intangible asset amortization | (131) |  |  | (907) |  |  | (623) |  |  | (1,661) |
Other expense, net | (90) |  |  | (100) |  |  | (214) |  |  | (404) |
Loss before income taxes | (28,414) |  |  | (5,592) |  |  | (15,356) |  |  | (49,362) |
Income tax expense | (4) |  |  | (180) |  |  | (9) |  |  | (193) |
Loss from discontinued operations, net of income taxes | $ | (28,418) |  |  | $ | (5,772) |  |  | $ | (15,365) |  |  | $ | (49,555) |
| December 31, 2022
(In thousands) | Global Cooling |  | SciSafe |  | CBS |  | Total
Revenue | $ | 47,915 |  |  | $ | 21,462 |  |  | $ | 16,142 |  |  | $ | 85,519 |
Cost of revenue | (51,621) |  |  | (15,060) |  |  | (11,928) |  |  | (78,609) |
Operating expenses | (19,211) |  |  | (5,697) |  |  | (5,548) |  |  | (30,456) |
Intangible asset impairment charges | (110,364) |  |  | — |  |  | — |  |  | (110,364) |
Intangible asset amortization | (3,969) |  |  | (907) |  |  | (830) |  |  | (5,706) |
Other expense, net | (255) |  |  | (84) |  |  | (24) |  |  | (363) |
Loss before income taxes | (137,505) |  |  | (286) |  |  | (2,188) |  |  | (139,979) |
Income tax expense | (14) |  |  | (191) |  |  | (9) |  |  | (214) |
Loss from discontinued operations, net of income taxes | $ | (137,519) |  |  | $ | (477) |  |  | $ | (2,197) |  |  | $ | (140,193) |
Below is a summary of incurred depreciation, amortization, interest expenses, capital expenditures, and other noncash related costs for discontinued operations:
| December 31, 2024
(In thousands) | Global Cooling |  | SciSafe |  | CBS |  | Total
Depreciation | $ | — |  |  | $ | 2,402 |  |  | $ | 4 |  |  | $ | 2,406 |
Amortization | — |  |  | 764 |  |  | — |  |  | 764 |
Stock-based compensation | 4,191 |  |  | 6,410 |  |  | 3,790 |  |  | 14,391 |
Interest expense, net | 42 |  |  | 50 |  |  | 114 |  |  | 206 |
Capital expenditures | — |  |  | 2,200 |  |  | 720 |  |  | 2,920 |
| December 31, 2023
(In thousands) | Global Cooling |  | SciSafe |  | CBS |  | Total
Depreciation | $ | 397 |  |  | $ | 2,636 |  |  | $ | 471 |  |  | $ | 3,504 |
Amortization | 131 |  |  | 907 |  |  | 623 |  |  | 1,661 |
Stock-based compensation | 4,734 |  |  | 2,759 |  |  | 2,503 |  |  | 9,996 |
Interest expense, net | 131 |  |  | 13 |  |  | 219 |  |  | 363 |
Capital expenditures | — |  |  | 4,659 |  |  | 750 |  |  | 5,409 |
| December 31, 2022
(In thousands) | Global Cooling |  | SciSafe |  | CBS |  | Total
Depreciation | $ | 616 |  |  | $ | 2,081 |  |  | $ | 488 |  |  | $ | 3,185 |
Amortization | 3,969 |  |  | 907 |  |  | 830 |  |  | 5,706 |
Stock-based compensation | 3,304 |  |  | 2,465 |  |  | 1,839 |  |  | 7,608 |
Interest expense, net | 257 |  |  | 118 |  |  | 28 |  |  | 403 |
Capital expenditures | — |  |  | 6,790 |  |  | 812 |  |  | 7,602 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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