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Discontinued Operations | 12 Months Ended
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Dec. 31, 2024
Discontinued Operations |
Discontinued Operations | Note 3: Discontinued Operations On February 28, 2025, the Company and Direct Transfer, LLC, its wholly owned subsidiary entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Equiniti Trust Company, LLC (the “Buyer”). Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Buyer purchased certain assets related to the Company’s compliance business (the “Purchased Assets”). The Purchased Assets consist of certain accounts receivable, prepaid assets, contracts and intellectual property, among other things, related to the Company’s services of providing i) disclosure software and services for financial reporting, ii) stock transfer services, iii) annual meeting, print and shareholder distribution and fulfillment services and iv) virtual annual meeting services (but not the intellectual property relating to the virtual annual meeting services). Revenue related to these services was previously included in the Company’s “compliance revenue” stream as reported with the SEC in previous filings, except revenue related to virtual annual meeting services, which was previously reported in “communications revenue” stream in previous SEC filings. Additionally, revenue related to providing SEDAR services and revenue related to our whistleblower hotline, which was previously reported as “compliance revenue” will be retained by the Company. The Buyer will only assume certain liabilities related to the Purchased Assets, which includes certain accounts payable, accrued liabilities and deferred revenue. This transaction also closed on February 28, 2025. The Company reviewed Accounting Standards Codification (ASC) 205-20-45, which provides guidance over the disposal of a component of an entity and determined that the criteria were met to classify the assets of the compliance business as held-for-sale as of December 31, 2024. Further guidance states that once a group of assets are determined to be held-for-sale, then they should be recorded as discontinued operations in the financial statements of the entity. Performance obligations of contracts included in discontinued operations include providing subscriptions to certain modules of our compliance software or other stand-ready obligations to deliver services and annual report printing and distribution. Additionally, services are provided on a per project basis. Set up fees for disclosure services are considered a separate performance obligation and are satisfied upfront. Set up fees for the transfer agent module and investor relations content management module are immaterial. For service contracts that include stand ready obligations, revenue is recognized evenly over the contract period. For all other services delivered on a per project or event basis, the revenue is recognized at the completion of the event. The Company believes recognizing revenue for subscriptions and stand ready obligations using a time-based measure of progress, best reflects the Company’s performance in satisfying the obligations. The following table sets forth the assets and liabilities included in discontinued operations as of December 31, 2024 and 2023 as presented into the Consolidated Balance Sheets:
in $000’s |  | December 31, |
|  | 2024 |  |  | 2023 |
Accounts Receivable (net of provision for credit losses of $559 and $398 as of December 31, 2024 and 2023, respectively |  | $ | 1,321 |  |  | $ | 1,363 |
Other current assets |  |  | 17 |  |  |  | 56 |
Total current assets |  |  | 1,338 |  |  |  | 1,419 |
Goodwill |  |  | 2,885 |  |  |  | 2,885 |
Intangible Assets (net of accumulated amortization of $5,265 and $5,097 as of December 31, 2024 and 2023, respectively |  |  | 637 |  |  |  | 805 |
Other non current assets |  |  | 55 |  |  |  | 56 |
Total assets |  | $ | 4,915 |  |  | $ | 5,165 |
Accounts Payable |  | $ | 107 |  |  | $ | 128 |
Accrued Expenses |  |  | 168 |  |  |  | 81 |
Deferred Revenue |  |  | 618 |  |  |  | 662 |
Total liabilities |  | $ | 893 |  |  | $ | 871 |
The following table sets forth the details of income from discontinued operations for the years ended December 31, 2024 and 2023 as presented in the Consolidated Statement of Operations: In $000's
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |
Revenues |  | $ | 5,831 |  |  | $ | 8,856 |
Cost of revenues |  |  | 1,690 |  |  |  | 2,322 |
Gross margin |  |  | 4,141 |  |  |  | 6,534 |
Operating costs and expenses: |  |  |  |  |  |  |  |
General and administrative |  |  | 666 |  |  |  | 581 |
Sales and marketing |  |  | 104 |  |  |  | 223 |
Product development |  |  | — |  |  |  | 7 |
Depreciation and amortization |  |  | 168 |  |  |  | 168 |
Total operating costs and expenses |  |  | 938 |  |  |  | 979 |
Operating income |  |  | 3,203 |  |  |  | 5,555 |
Other income (expense) |  |  |  |  |  |  |  |
Interest income |  |  | 31 |  |  |  | 133 |
Income before income taxes |  |  | 3,234 |  |  |  | 5,688 |
Income tax expense |  |  | 746 |  |  |  | 1,481 |
Net income from discontinued operations |  | $ | 2,488 |  |  | $ | 4,207 |

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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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