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Note 4 - Held for Sale and Discontinued Operation | 9 Months Ended
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Sep. 30, 2023
Notes to Financial Statements |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] |
NOTE 4: | HELD FOR SALE AND DISCONTINUED OPERATION
Under ASC 205-20, "Discontinued Operations" when a component of an entity, as defined in ASC 205-20, has been disposed of or is classified as held for sale, the results of its operations, including the gain or loss on its component are classified as discontinued operations and the assets and liabilities of such component are classified as assets and liabilities attributed to discontinued operations; that is, provided that the operations, assets and liabilities and cash flows of the component have been eliminated from the Company’s consolidated operations and the Company will have no significant continuing involvement in the operations of the component. As a result of the Transaction, for the three-month period ended September 30, 2023, Intrinsix's results of operations and balances are disclosed as discontinued operation, with the resulting gain or loss from the sale to be accounted during which the reporting period in which the Transaction closed, at which time the Transaction will be finalized as discontinued operation as well. All prior periods comparable results of operation have been retroactively included in discontinued operation, and all prior period comparable assets and liabilities have been retroactively classified as assets and liabilities of a discontinued operation. The Company concluded that the held for sale criteria are met from July 15, 2023. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED) The following assets and liabilities allocated to the discontinued operation are reflected as discontinued operation assets and liabilities in the Company’s Condensed Consolidated Balance Sheet for the periods presented. Since the Company operates as one reporting unit, the Company allocated goodwill to the discontinued operation using relative fair value. The major classes of assets and liabilities included as part of the discontinued operation as of September 30, 2023 and December 31, 2022, are presented in the following table (unaudited):
|  | September 30, 2023 |  |  | December 31, 2022 |
|  | Unaudited |  |  | Unaudited |
Assets of discontinued operation |  |  |  |  |  |  |  |
Current assets of discontinued operation: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 608 |  |  | $ | 1,169 |
Trade receivables |  |  | 894 |  |  |  | 1,420 |
Prepaid expenses and other current assets |  |  | 157 |  |  |  | 107 |
Total current assets of discontinued operation |  |  | 1,659 |  |  |  | 2,696 |
Long-term assets of discontinued operation: |  |  |  |  |  |  |  |
Deferred tax assets |  |  | — |  |  |  | 115 |
Property and equipment, net |  |  | 365 |  |  |  | 475 |
Operating lease right-of-use assets |  |  | 1,590 |  |  |  | 1,798 |
Goodwill |  |  | 18,463 |  |  |  | 17,983 |
Intangible assets, net |  |  | 3,323 |  |  |  | 4,288 |
Total long-term assets of discontinued operation |  |  | 23,741 |  |  |  | 24,659 |
Total assets of discontinued operation |  | $ | 25,400 |  |  | $ | 27,355 |
Liabilities of discontinued operation |  |  |  |  |  |  |  |
Current liabilities of discontinued operation: |  |  |  |  |  |  |  |
Trade payables |  | $ | 21 |  |  | $ | 136 |
Deferred revenues |  |  | 124 |  |  |  | 70 |
Accrued expenses and other payables |  |  | 8 |  |  |  | 115 |
Accrued payroll and related benefits |  |  | 217 |  |  |  | 969 |
Operating lease liabilities |  |  | 285 |  |  |  | 302 |
Total current liabilities of discontinued operation |  |  | 655 |  |  |  | 1,592 |
Long-term liabilities of discontinued operation: |  |  |  |  |  |  |  |
Operating lease liabilities |  |  | 1,305 |  |  |  | 1,496 |
Total long-term liabilities of discontinued operation |  |  | 1,305 |  |  |  | 1,496 |
Total liabilities of discontinued operation |  | $ | 1,960 |  |  | $ | 3,088 |
The following table shows the Company's results of discontinued operation for the below presented periods:
|  | Nine months ended September 30, |  |  | Three months ended September 30, |
|  | 2023 (unaudited) |  |  | 2022 (unaudited) |  |  | 2023 (unaudited) |  |  | 2022 (unaudited) |
Revenues |  | $ | 7,868 |  |  | $ | 11,013 |  |  | $ | 2,145 |  |  | $ | 3,610 |
Cost of revenue |  |  | 5,091 |  |  |  | 9,340 |  |  |  | 1,236 |  |  |  | 2,287 |
Gross profit |  |  | 2,777 |  |  |  | 1,673 |  |  |  | 909 |  |  |  | 1,323 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research and development, net |  |  | 5,464 |  |  |  | 5,947 |  |  |  | 1,809 |  |  |  | 1,981 |
Sales and marketing |  |  | 679 |  |  |  | 1,042 |  |  |  | 190 |  |  |  | 534 |
General and administrative |  |  | 1,472 |  |  |  | 886 |  |  |  | 993 |  |  |  | 305 |
Amortization of intangible assets |  |  | 373 |  |  |  | 524 |  |  |  | 24 |  |  |  | 175 |
Total operating expenses |  |  | 7,988 |  |  |  | 8,399 |  |  |  | 3,016 |  |  |  | 2,995 |
Operating loss |  |  | (5,211 | ) |  |  | (6,726 | ) |  |  | (2,107 | ) |  |  | (1,672 | )
Financial income, net |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | — |
Loss from discontinued operations before taxes on income |  |  | (5,208 | ) |  |  | (6,726 | ) |  |  | (2,107 | ) |  |  | (1,672 | )
Income tax expense |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |
Net loss from discontinued operation |  | $ | (5,308 | ) |  | $ | (6,726 | ) |  | $ | (2,207 | ) |  | $ | (1,672 | )
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED) The following table presents cash flows from discontinued operations:
|  | Nine months ended September 30, |
|  | 2023 (unaudited) |  |  | 2022 (unaudited) |
Net cash flows (used in) provided by operating activities (*) |  | $ | (556 | ) |  | $ | 360 |
Net cash flows used in investing activities |  |  | (5 | ) |  |  | (433 | )
(*) Amortization and depreciation allocated to discontinued operation for the nine-month periods ended September 30, 2023 and 2022 amounted to $1,081 and $1,666, respectively. In addition, on November 7, 2023, the Compensation Committee of the Company’s Board of Directors revised financial targets associated with executive bonus and short-term equity awards to exclude results from Intrinsix.

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