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Discontinued Operations
 9 Months Ended
Sep. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

14. Discontinued Operations

 

As described in Note 1, the Company entered into a Stock Purchase Agreement with Purchaser, pursuant to which the Company sold on April 11, 2022 all of the issued and outstanding shares of capital stock of its wholly-owned subsidiary, MTI Instruments for approximately $9.0 million in cash, net of transaction costs. For fiscal year 2022 and 2023, our Instrumentation business segment was classified as discontinued operations in our financial statements for all periods presented. The Company incurred approximately a $7.5 million pretax gain on sale of MTI Instruments for the year ended December 31, 2022, in which they did not receive until the second quarter of fiscal year 2022. The Company’s condensed consolidated balance sheets and condensed consolidated statements of operations report discontinued operations separate from continuing operations. The Company’s condensed consolidated statements of equity and statements of cash flows combine continuing and discontinued operations.

 

 

Set forth below are the results of the discontinued operations:

 

                 
(Dollars in thousands) 

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
                 
Product revenue  $-   $-   $-   $1,799 
Cost of sales   -    -    -    728 
Research and development   -    -    -    398 
General and administrative expenses   -    -    -    573 
Other income   -    -    -    - 
(Loss) income from discontinued operations before gain on disposal and income taxes   -    -    -    100 
Pretax gain on sale of MTI Instruments   -    (21)   -    7,581 
Deferred tax benefit   -    -    -    70 
Net income from discontinued operations  $-   $(21)  $-   $7,751 

 

MTI Instruments Sale

 

As described in Note 1, the Company entered into a Stock Purchase Agreement with Purchaser, pursuant to which the Company sold on April 11, 2022 all of the issued and outstanding shares of capital stock of our wholly-owned subsidiary, MTI Instruments for an all-cash purchase price of $10.75 million, subject to working capital and certain other adjustments as set forth in the Stock Purchase Agreement. The purchase price did not include specified debt of MTI Instruments, which is the responsibility of the Company. This debt was transferred to the Purchaser at the date of Sale and is included in the closing balance sheet as shown below, which resulted in a reduction in the consideration payable to the Company.

 

The following table presents the gain associated with the Sale that was reported within the 2022 Annual Report.

 

(Dollars in thousands)

   As of April 11, 
   2022 
Consideration received  $10,750 
Plus: closing cash   1 
Less: transaction costs   (908)
Less: closing indebtedness   (483)
Plus: new working capital adjustments   19 
Adjusted consideration received   9,379 
      
Cash   1 
Accounts receivable, net   1,119 
Inventories   888 
Prepaid expense and other current assets   42 
Operating lease right-of-use assets   579 
Deferred tax assets   171 
Property, plant and equipment, net   76 
Total assets   2,876 
      
Accounts payable   122 
Accrued liabilities   547 
Operating lease liability   579 
Total liabilities   1,248 
      
Net assets transferred   1,628 
      
Gain on sale  $7,751