Note 4—Divestiture of Majority Interest in Atid Drilling Ltd.

Following the Company’s decision to suspend its oil and gas exploration drilling activities, in June 2018, the Company initiated a plan to sell primarily all of Atid’s assets and liabilities. In the three and nine months ended September 30, 2018, the Company recorded a write-down to fair value of Atid’s assets held for sale in the amounts of $0.5 million and $2.7 million for the three and nine months ended September 30, 2018, respectively. On September 1, 2018, Genie Israel Holdings Ltd., a wholly-owned subsidiary of GOGAS (“Genie Israel”) contributed to Atid Drilling 613 Ltd., (the “New Atid”) the equity of Atid with net book value of $1.0 million as of September 1, 2018 in exchange for 37.5% interest in New Atid. The remaining interest in New Atid are held by Howard Jonas, the Company’s Chairman (37.5%) and by Geoffrey Rochwarger, the Company’s former Vice Chairman (25.0%) and the Chief Executive Officer of New Atid.

Genie Israel also entered into a Shareholder Agreement with New Atid and the other shareholders of New Atid to govern certain issues regarding management of New Atid. Under the Shareholder Agreement, among other things, Genie Israel has agreed to make available New Atid a working capital financing up to $0.4 million (“Credit Facility”). The Credit Facility bears a variable interest rate as defined in the Shareholder Agreement.

As of September 30, 2018, the outstanding balance of Credit Facility was $0.2 million, included in other assets account in the consolidated balance sheet.

The divestiture of majority interest in Atid does not represent a strategic shift that is expected to have a major effect on the Company’s operations or financial statements.

Genie Israel accounts for its investments in New Atid using the equity method of accounting. At September 30, 2018, the Company’s maximum exposure to loss as a result of its involvement with New Atid were its net book value of investment of $0.9 million and notes receivable of $0.2 million, since there were no other arrangements, events or circumstances that could expose the Company to additional loss.

The following is the summarized unaudited statements of operations of New Atid for the period from September 1, 2018 to September 30, 2018:

Revenues	$	—
Operating expenses:
Cost of revenues		—
Selling, general and administrative expenses		256
Loss from operations		256
Other expense		(7	)
Net loss	$	249
Genie’s equity in net loss	$	94