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DISCONTINUED OPERATIONS | 9 Months Ended
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Sep. 30, 2025
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | NOTE 3 – DISCONTINUED OPERATIONS During the third quarter of 2025, following authorization from the Board of Directors, management initiated a review of strategic options for THP. To facilitate this review, the Company engaged an investment bank to search for potential investors or purchasers. By mid-September 2025, the Company concluded that these efforts were unlikely to succeed and ended its engagement with the investment bank. Persistent losses in the THP segment and a lack of interest from investors led management and the Board of Directors to decide to dispose of THP and terminate a majority of the workforce related to THP operations as of mid-September 2025. The process of winding down THP is substantially complete as of September 30, 2025 and the remaining winding down procedures are expected to continue through the end of 2025. In line with this decision, the THP segment has met the accounting requirements to be classified under discontinued operations as of September 30, 2025. Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, representing a strategic business shift having a major effect on the Company’s operations and financial results according to ASC 205, “Presentation of Financial Statements.” In accordance with GAAP, the statements of operations from THP are reported in net loss from discontinued operations on the accompanying Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024, and the related assets and liabilities are classified as discontinued operations as of September 30, 2025 and December 31, 2024 in the accompanying Consolidated Balance Sheets. Assets remaining in continuing operations consist of the Company’s cost method investment in Direct Dermatology, Inc. and computers. As of September 30, 2025, the Company recognized $26,472,407 of asset impairment charges in connection with the disposal of the THP segment, which included $18,327,414 of intangible assets net of accumulated amortization, $3,772,146 of developed technology and $4,372,847 of internal use software. These assets were disposed of and written down to a zero basis as attempts to sell or find investors in the assets failed and there is no salvage value for the individual assets if sold separately. The following table provides the components of assets and liabilities related to discontinued operations that were included in the Company’s Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024. SCHEDULE OF DISCONTINUED OPERATIONS
|  | September 30, 2025 |  |  | December 31, 2024 |
Assets |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |
Accounts receivable, net |  | $ | 8,700 |  |  | $ | - |
Prepaids |  |  | 91,417 |  |  |  | 101,334 |
Current assets related to discontinued operations |  |  | 100,117 |  |  |  | 101,334 |
Long-term assets |  |  |  |  |  |  |  |
Intangible assets, net |  |  | - |  |  |  | 17,525,681 |
Investment in equity securities |  |  | - |  |  |  | 2,084,278 |
Long-term assets related to discontinued operations |  |  | - |  |  |  | 19,609,959 |
Total assets |  | $ | 100,117 |  |  | $ | 19,711,293 |
Liabilities |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |
Accrued royalties and expenses |  | $ | 309,955 |  |  | $ | 356,630 |
Accrued bonuses and commissions |  |  | 1,782,187 |  |  |  | 694,190 |
Current liabilities related to discontinued operations |  |  | 2,092,142 |  |  |  | 1,050,820 |
Total liabilities |  | $ | 2,092,142 |  |  | $ | 1,050,820 |
The assets and liabilities included in discontinued operations represent balances that are expected to be collected and expenses to be paid as part of the winding down of the THP segment. The following table provides the operating results of discontinued operations for the three and nine months ended September 30, 2025 and 2024.
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Net revenue |  | $ | 35,376 |  |  | $ | - |  |  | $ | 61,958 |  |  | $ | - |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling, general, and administrative expenses |  |  | 3,970,593 |  |  |  | 1,572,908 |  |  |  | 8,200,870 |  |  |  | 2,689,811 |
Research and development |  |  | 410,948 |  |  |  | 575,690 |  |  |  | 775,406 |  |  |  | 1,346,216 |
Depreciation and amortization |  |  | 428,029 |  |  |  | 406,966 |  |  |  | 1,284,092 |  |  |  | 1,220,984 |
Change in fair value of earnout liabilities |  |  | - |  |  |  | 147,000 |  |  |  | - |  |  |  | 82,000 |
Asset impairment charge |  |  | 26,472,407 |  |  |  | - |  |  |  | 26,472,407 |  |  |  | - |
Total operating expenses |  |  | 31,281,977 |  |  |  | 2,702,564 |  |  |  | 36,732,775 |  |  |  | 5,339,011 |
Operating loss |  |  | (31,246,601 | ) |  |  | (2,702,564 | ) |  |  | (36,670,817 | ) |  |  | (5,339,011 | )
Other expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss on disposal of property and equipment |  |  | - |  |  |  | - |  |  |  | (1,258 | ) |  |  | - |
Total other expense |  |  | - |  |  |  | - |  |  |  | (1,258 | ) |  |  | - |
Net loss from discontinued operations |  | $ | (31,246,601 | ) |  | $ | (2,702,564 | ) |  | $ | (36,672,075 | ) |  | $ | (5,339,011 | )
The following table provides operating, investing and financing cash flow information for discontinued operations for the nine months ended September 30, 2025 and 2024.
|  | 2025 |  |  | 2024 |
|  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |
Operating Activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 1,284,092 |  |  | $ | 1,220,984 |
Asset impairment charges |  |  | 26,472,407 |  |  |  | - |
Loss on disposal of property and equipment |  |  | 1,258 |  |  |  | - |
Share-based compensation |  |  | 182,229 |  |  |  | 108,031 |
Change in fair value of earnout liabilities |  |  | - |  |  |  | 82,000 |
Accounts receivable, net |  |  | (8,700 | ) |  |  | - |
Prepaid and other assets |  |  | 9,918 |  |  |  | - |
Accounts payable |  |  | - |  |  |  | (55 | )
Accrued royalties and expenses |  |  | (46,675 | ) |  |  | 167,059 |
Accrued bonuses and commissions |  |  | 1,087,997 |  |  |  | (60,500 | )
Investing Activities: |  |  |  |  |  |  |  |
Purchases of property and equipment |  | $ | (4,372,847 | ) |  | $ | - |
CarePICS acquisition |  |  | (2,122,146 | ) |  |  | - |
Financing Activities: |  |  |  |  |  |  |  |
Payoff of debt assumed in CarePICS acquisition |  | $ | (1,650,000 | ) |  | $ | - |
Supplemental noncash investing and financing activities: |  |  |  |  |  |  |  |
Non-monetary exchange to acquire intangible assets |  | $ | 2,084,278 |  |  | $ | - |
Earnout liability generated by CarePICS acquisition |  |  | 1,355,603 |  |  |  | - |

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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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