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Discontinued Operations

3 Months Ended

Oct. 31, 2023

Discontinued Operations [Abstract]

DISCONTINUED OPERATIONS

NOTE 3 – DISCONTINUED OPERATIONS

On July 1, 2022, the Company determined that the 520 Property met the held-for-sale criteria and the Company therefore classified the 520 Property as held-for-sale in the consolidated balance sheets at July 31, 2022. The sale of the 520 Property also represented a significant strategic shift that will have a major effect on the Company's operations and financial results. Therefore, the Company has classified the results of operations related to the 520 Property as discontinued operations in the consolidated statements of operations and comprehensive loss. Depreciation on the 520 Property ceased on July 1, 2022, as a result of the 520 Property being classified as held-for-sale.

On August 22, 2022, Broad Atlantic completed the sale of the 520 Property for an aggregate gross purchase price of $49.4 million.

The 520 Property was encumbered by a mortgage securing a $15 million note payable which was paid off in this transaction. Refer to Note 15 for further information on the note payable. After repaying the note payable, commissions, taxes, and other related costs, the Company received a net cash amount of approximately $33 million at closing.

Discontinued operations include (i) rental and parking revenues, (ii) payroll, benefits, facility costs, real estate taxes, consulting and professional fees dedicated to the 520 Property, (iii) depreciation and amortization expenses and (iv) interest (including amortization of debt issuance costs) on the note payable on the 520 Property. The operating results of these items are presented in our consolidated statements of operations and comprehensive loss as discontinued operations for all periods presented.

The following table details the components comprising net loss from our discontinued operations:

		Three Months Ended October 31,
		2022

Revenue from discontinued operations:
Rental – Third Party		$	68
Rental – Related Party			115
Parking			66
Total revenue from discontinued operations			249

Costs and expenses from discontinued operations:
General and administrative			246
Loss from discontinued operations			3

Interest expense			(87	)
Loss from discontinued operations			(84	)
Gain on disposal of discontinued operations			6,784
Gain from discontinued operations		$	6,700

The gain on disposal of discontinued operations of approximately $6.8 million was derived from the gross proceeds of approximately $49.4 million from the sale of the 520 Property, less the carrying value of the 520 Property of approximately $40.2 million, net of approximately $1.2 million in transaction costs and the write off of approximately $1.2 million of deferred rental income.