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Discontinued Operations

12 Months Ended

Dec. 31, 2025

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 3: Discontinued Operations

On February 28, 2025 (the “Closing Date”), the Company and Direct Transfer, LLC, its wholly owned subsidiary, entered into and closed 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 consisted 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” was retained by the Company. The Buyer assumed certain liabilities related to the Purchased Assets, which included certain accounts payable, accrued liabilities and deferred revenue.

The Company reviewed 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.

On February 26, 2026, the Buyer submitted an indemnification notice to the Company alleging indemnity claims under the Purchase Agreement in the aggregate amount of $549,000. While the Company disputes this amount and is in the process of discussing and negotiating the matter with the Buyer, there is no guaranty that we will receive all or a substantial portion of the $500,000 holdback from the Buyer.

As of the Closing Date, there was $1,227,000 of gross accounts receivable that did not transfer to the Buyer as a result of the Purchase Agreement. The following table sets forth the assets and liabilities included in discontinued operations as of December 31, 2025 and 2024 as presented in the Consolidated Balance Sheets (in thousands):


		December 31,
		2025				2024
Accounts Receivable (net of provision for credit losses of $559 as of December 31, 2024		$	–			$	1,321
Other current assets			–				17
Total current assets			–				1,338
Goodwill			–				2,885
Intangible Assets (net of accumulated amortization of $5,265 at December 31, 2024			–				637
Other non current assets			–				55
Total assets		$	–			$	4,915

Accounts Payable		$	–			$	107
Accrued Expenses			–				168
Deferred Revenue			–				618
Total liabilities		$	–			$	893

The following table sets forth the details of income from discontinued operations for the years ended December 31, 2025 and 2024 as presented in the Consolidated Statement of Operations (in thousands):


		Years Ended December 31,
		2025				2024
Revenues		$	650			$	5,831
Cost of revenues			315				1,690
Gross margin			335				4,141
Operating costs and expenses:
General and administrative			560				666
Sales and marketing			17				104
Product development			–				–
Depreciation and amortization			28				168
Total operating costs and expenses			605				938
Operating income			(270	)			3,203
Other income (expense)
Interest income, net			8				31
Other income, net			8,974				–
Income before income taxes			8,712				3,234
Income tax expense			2,863				746
Net income from discontinued operations		$	5,849			$	2,488

The following table presents the significant non-cash items related to discontinued operations for the year ended December 31, 2025 and 2024 that are included in the accompanying statement of cash flows (in thousands):


		December 31,
		2025				2024
Depreciation and amortization		$	28			$	168
Provision for credit loses			420				240
Stock-based compensation expense			78				89
Gain on disposal of business			8,974				–