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Discontinued Operations

12 Months Ended

Dec. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

3. Discontinued Operations

On March 18, 2024, the Company discontinued the Sports Illustrated media business (the “SI Business”) that was operated under the Licensing Agreement with ABG-SI, LLC (“ABG”) dated June 14, 2019 (as amended to date, the “Licensing Agreement”). This discontinuation of the SI Business (i.e., discontinued operations) followed the termination of the Licensing Agreement by ABG on January 18, 2024. The last date of any obligation of the Company to perform under the Licensing Agreement was March 18, 2024. In connection with the termination, certain ABG Warrants vested (further details are provided under the heading Vesting of Warrants in Note 21).

The table below sets forth the loss from discontinued operations:

Schedule of Discontinued Operations

		2024				2023
		Years Ended December 31,
		2024				2023
Revenue		$	22,159			$	100,573
Cost of revenue			15,137				53,883
Gross profit (loss)			7,022				46,690
Operating expense
Selling and marketing			12,358				49,982
General and administrative (1)			45,907				369
Depreciation and amortization			2,401				14,681
Loss on impairment of assets (2)			39,391				-
Total operating expenses			100,057				65,032
Loss from discontinued operations			(93,035	)			(18,342	)
Income tax provision			(8	)			(25	)
Net loss from discontinued operations		$	(93,043	)		$	(18,367	)

(1)	General and administrative expenses for the year ended December 31, 2024, includes a $45,000 termination fee liability.

(2)	Loss on impairment of assets for the year ended December 31, 2024 of $39,391, includes $8,601 for the impairment of intangible assets and $30,790 for the impairment of subscription acquisition costs.

The table below sets forth the major classes of assets and liabilities of the discontinued operations:

		2024				2023
		As of December 31,
		2024				2023
Assets
Accounts receivable, net		$	-			$	13,135
Subscription acquisition costs, current portion			-				29,706
Prepayments and other current assets			-				807
Current assets from discontinued operations			-				43,648
Subscription acquisition costs, net of current portion			-				7,215
Acquired and other intangibles assets, net			-				11,002
Noncurrent assets from discontinued operations			-				18,217
Total assets from discontinued operations		$	-			$	61,865
Liabilities
Accounts payable		$	1,783			$	2,554
Accrued expenses and other			519				1,868
Subscription refund liability			423				403
Royalty fee liability ⁽¹⁾			3,750				-
Termination fee liability ⁽¹⁾			45,000				-
Subscription liability, current portion			44,684				42,848
Current liabilities from discontinued operations			96,159				47,673
Subscription liability, net of current portion			-				10,137
Noncurrent liabilities from discontinued operations			-				10,137
Total liabilities from discontinued operations		$	96,159			$	57,810

⁽¹⁾	Further details related to the alleged and disputed royalty fee liability of $3,750 and termination fee liability of $45,000 are described under the heading ABG Group Legal Matters in Note 25.

The table below sets forth the cash flows of the discontinued operations:

		2024				2023
		Years Ended December 31,
		2024				2023
Cash flows from operating activities from discontinued operations
Net loss from discontinued operations		$	(93,043	)		$	(18,367	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets			2,401				14,681
Loss on impairment of assets			39,391				-
Stock-based compensation			606				2,768
Bad debt expense			1,058				-
Change in operating assets and liabilities:
Accounts receivable, net			12,077				(64	)
Subscription acquisition costs			6,131				3,143
Prepayments and other current assets			807				724
Accounts payable			(771	)			(4,700	)
Accrued expenses and other (1)			(1,349	)			114
Subscription refund liability			20				(442	)
Subscription liability			(8,301	)			(4,712	)
Royalty fee liability (1)			3,750				-
Termination fee liability (1)			45,000				-
Net cash provided by operating activities from discontinued operations		$	7,777			$	(6,855	)

(1)	Included within accrued expenses and other on consolidated statements of cash flows.

Further details regarding legal matters in connection with the discontinued operations are provided under the heading ABG Group Legal Matters in Note 25.