XML 24 R13.htm IDEA: XBRL DOCUMENT
v3.25.1

Discontinued Operations | 3 Months Ended
--- | ---
Mar. 31, 2025
Discontinued Operations [Abstract] |
Discontinued Operations | 6. Discontinued Operations On January 2, 2025, the Company completed the Divestiture. The consideration delivered by Meteor Mobile to the Company at the closing of the Divestiture consisted of (i) $1,350,000 in cash and (ii) the assumption of all of the liabilities of the Sellers arising out of, or relating to, the Business or the Transferred Assets, other than certain excluded liabilities. In addition to the Divestiture Closing Consideration, the Company is entitled to receive, with respect to each Earn-Out Period, as defined and described below, certain payments in cash based on the cash revenue, net of any refunds, received by Meteor Mobile that is attributable to the Business (such cash revenue, the “Legacy Business Revenue”), as follows:
| ● | from the six-month period beginning on July 1, 2025 and ending on December 31, 2025 (“Earn-Out Period 1”), an amount equal to (i) for any Legacy Business Revenue greater than or equal to $3,500,000 and less than $4,250,000, the amount of such Legacy Business Revenue multiplied by 0.30 plus (ii) for any Legacy Business Revenue greater than or equal to $4,250,000, the amount of such Legacy Business Revenue in excess of $4,250,000 multiplied by 0.40; and
| ● | from each of the twelve-month period beginning on January 1, 2026 and ending on December 31, 2026 (“Earn-Out Period 2”), the twelve-month period beginning on January 1, 2027 and ending on December 31, 2027 (“Earn-Out Period 3”), and the twelve-month period beginning on January 1, 2028 and ending on December 31, 2028 (“Earn-Out Period 4” and collectively with Earn-Out Period 1, Earn-Out Period 2 and Earn-Out Period 3, the “Earn-Out Periods”), an amount equal to (i) for any Legacy Business Revenue greater than or equal to $7,000,000 and less than $8,500,000, the amount of such Legacy Business Revenue multiplied by 0.30 plus (ii) for any Legacy Business Revenue greater than or equal to $8,500,000, the amount of such Legacy Business Revenue in excess of $8,500,000 multiplied by 0.40 (the aggregate amount, if any, earned during the Earn-Out Periods, the “Divestiture Earn-Out Amount”).
In the event of a change of control (as defined in the Divestiture Agreement) of Meteor Mobile during any of the Earn-Out Periods, the Company is entitled to receive an acceleration payment in cash, net of any Divestiture Earn-Out Amounts previously paid to us (the “Acceleration Payment”). If any of the Transferred Assets are sold independently from the other assets of Meteor Mobile, the Company will be entitled to (i) 50% of the aggregate consideration paid to Meteor Mobile for the Transferred Assets minus (ii) the aggregate amount of any Divestiture Earn-Out Amounts received by the Sellers by the date of the change of control, minus (iii) the aggregate amount of any Acceleration Payments previously paid through such date. If any of the Transferred Assets are sold contemporaneously with other assets of Meteor Mobile, the Company is entitled to (x) the aggregate consideration paid to Meteor Mobile for the Transferred Assets multiplied by the ratio of the trailing 12-month EBITDA of the Transferred Assets sold and the EBITDA of all assets sold minus (y) the aggregate amount of any Divestiture Earn-Out Amounts received by the Sellers by the date of the change of control, minus (z) the aggregate amount of any Acceleration Payments previously paid through such date. The minimum Acceleration Payment for the sale of “Paltalk,” “Camfrog” and “Vumber” is $1,650,000, $450,000 and $300,000, respectively, and the Acceleration Payments payable to the Company are capped at $5,000,000 in the aggregate. As discussed above, during the year ended December 31, 2024, the Transferred Assets met the criteria for classification as assets held for sale and discontinued operations as the Company received stockholder approval of the sale of its Transferred Assets at its special meeting of stockholders held on December 30, 2024. Accordingly, the assets and liabilities related to the Transferred Assets are presented as discontinued operations as of December 31, 2024 and for the three months ended March 31, 2024. There were no remaining assets and liabilities related to the Divestiture as of March 31, 2025 and no results of operations for the three months ended March 31, 2025. The $3.8 million impairment loss associated with the Divestiture was recognized in the fourth quarter of 2024. In the normal course of business, certain amounts were due to Meteor Mobile by the Company. These amounts are included in other accrued liabilities on the consolidated balance sheet in the amount of $421,622. The following table summarizes the operating results of the Transferred Assets for the period indicated:
|  | Three Months Ended March 31, 2024 (unaudited) |
Revenue |  |  |
Subscription revenue |  | $ | 2,211,410 |
Advertising revenue |  |  | 114,748 |
Total Revenue |  |  | 2,326,158 |
Costs and expenses |  |  |  |
Cost of revenue |  |  | 757,439 |
Sales and marketing expense |  |  | 175,569 |
Product development expense |  |  | 1,150,332 |
General and administrative expense |  |  | - |
Total Costs and Expenses |  |  | 2,083,340 |
Income from discontinued operations |  |  | 242,818 |
Income tax provision |  |  | (480,810 | )
Net loss from discontinued operations |  | $ | (237,992 | )
The following table summarizes the assets and liabilities of the Transferred Assets included in the consolidated balance sheets as of December 31, 2024, after recognition of the impairments described above and are included as assets and liabilities attributed to discontinued operations:
|  | As of December 31, 2024 |
Assets |  |  |
Accounts receivable, net |  | $ | 72,925 |
Total current assets |  |  | 72,925 |
Goodwill |  |  | 2,663,229 |
Total Assets - discontinued operations |  | $ | 2,736,154 |
Liabilities |  |  |  |
Accounts payable |  | $ | 311,506 |
Accrued expenses |  |  | 116,532 |
Deferred revenue |  |  | 1,596,199 |
Total Liabilities - discontinued operations |  | $ | 2,024,237 |

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration