Assets Held for Sale and Discontinued Operations |
4. Assets Held for Sale and Discontinued Operations
See Note 2 — Basis of Presentation and Summary of Significant Accounting Policies under the caption “Assets Held for Sale and Discontinued Operations” for details on accounting criteria for held for sale and discontinued operations treatment.
The following tables summarize the results of operations of the entities that are being reported as discontinued operations in the condensed consolidated statements of operations and comprehensive loss:
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2025 |
|
2024 |
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2025 |
|
2024 |
Revenues, net |
$ |
5,242 |
|
$ |
7,603 |
|
$ |
11,036 |
|
$ |
15,175 |
Cost of goods sold |
|
(4,129) |
|
|
(6,929) |
|
|
(9,551) |
|
|
(13,207) |
Gross profit |
|
1,113 |
|
|
674 |
|
|
1,485 |
|
|
1,968 |
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|
|
|
|
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|
|
|
|
Operating expenses: |
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Wages and benefits |
|
1,083 |
|
|
1,468 |
|
|
2,502 |
|
|
2,961 |
General and administrative |
|
497 |
|
|
594 |
|
|
1,109 |
|
|
1,200 |
Sales and marketing |
|
15 |
|
|
57 |
|
|
36 |
|
|
119 |
Depreciation and amortization |
|
237 |
|
|
387 |
|
|
578 |
|
|
773 |
Impairment loss |
|
— |
|
|
15,723 |
|
|
— |
|
|
15,734 |
Total operating expenses |
|
1,832 |
|
|
18,229 |
|
|
4,225 |
|
|
20,787 |
Operating loss |
|
(719) |
|
|
(17,555) |
|
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(2,740) |
|
|
(18,819) |
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2025 |
|
2024 |
|
2025 |
|
2024 |
Other income (expense): |
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Interest income |
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— |
|
|
— |
|
|
— |
|
|
1 |
Other income |
|
81 |
|
|
249 |
|
|
81 |
|
|
390 |
Gain (loss) on foreign currency exchange |
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— |
|
|
— |
|
|
— |
|
|
— |
Interest expense |
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(1,821) |
|
|
(1,415) |
|
|
(3,282) |
|
|
(2,783) |
Corporate cost allocation |
|
(452) |
|
|
(676) |
|
|
(948) |
|
|
(1,178) |
Total other expense |
|
(2,192) |
|
|
(1,842) |
|
|
(4,149) |
|
|
(3,570) |
Loss from discontinued operations |
$ |
(2,911) |
|
$ |
(19,397) |
|
$ |
(6,889) |
|
$ |
(22,389) |
Depreciation expense related to discontinued operations was $2,048 and $2,891 for the six months ended June 30, 2025 and 2024, respectively. Upon meeting the held for sale criteria, the Company ceased depreciating and amortizing its long-lived assets for the Disposal Groups, which primarily includes right-of-use assets and property, plant, and equipment.
Capital expenditures related to discontinued operations were $9 and $402 for the six months ended June 30, 2025 and 2024, respectively.
The following tables summarize the assets and liabilities classified as discontinued operations in the condensed consolidated balance sheets:
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June 30, 2025 |
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December 31, 2024 |
ASSETS |
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Current assets |
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Cash and cash equivalents |
$ |
832 |
|
$ |
1,360 |
Restricted cash |
|
24 |
|
|
24 |
Trade receivables, net |
|
2,206 |
|
|
1,257 |
Inventories |
|
7,171 |
|
|
8,037 |
Prepaid expenses and other current assets |
|
214 |
|
|
345 |
Assets held for sale, current portion |
|
10,447 |
|
|
11,023 |
|
|
|
|
|
|
Non-current assets |
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|
|
|
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Property, plant and equipment, net |
|
27,682 |
|
|
29,721 |
Right-of-use assets – finance, net |
|
577 |
|
|
1,255 |
Right-of-use assets – operating, net |
|
496 |
|
|
557 |
Other assets |
|
1,133 |
|
|
1,324 |
Assets held for sale, net of current portion |
$ |
29,888 |
|
$ |
32,857 |
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|
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LIABILITIES |
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Current liabilities |
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|
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|
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Accounts payable and accrued liabilities |
|
3,624 |
|
|
5,022 |
Finance lease liability, current portion |
|
213 |
|
|
842 |
Operating lease liability, current portion |
|
148 |
|
|
139 |
Liabilities held for sale, current portion |
|
3,985 |
|
|
6,003 |
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|
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Non-current liabilities |
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|
|
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Finance lease liability, net of current portion |
|
524 |
|
|
2,022 |
Operating lease liability, net of current portion |
|
425 |
|
|
502 |
Massachusetts lease liability |
|
45,239 |
|
|
41,556 |
Other liabilities |
|
— |
|
|
6 |
Liabilities held for sale, net of current portion |
$ |
46,188 |
|
$ |
44,086 |
Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell. As of June 30, 2025, we determined that the fair value of the Disposal Groups, less costs to sell, was not less than their carrying value. The fair value of the Disposal Groups was estimated using the expected sale price as negotiated with the third-party buyers.
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