Discontinued Operations

3 Months Ended

Mar. 31, 2025

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 3. Discontinued Operations

On September 6, 2024, the Company completed the sale of its Physical Security Business to Buyer, and Buyer assumed certain of the Company’s liabilities related to the Physical Security Business (collectively, the “Asset Sale”) pursuant to that certain Stock and Asset Purchase Agreement, dated as of April 2, 2024, by and between the Company and Buyer. As consideration for the Asset Sale, the Company received approximately $143.9 million in cash.

In connection with the closing of the Asset Sale, the Company and Buyer entered into a transition services agreement (the “Transition Services Agreement”). The Transition Services Agreement outlines the information technology, people, and facility support the Company will provide to Buyer for a period of 12 months to 18 months after the transaction closing date. The agreed upon charges for such services are intended to allow the Company and Buyer, respectively, to recover all costs and expenses of providing such services. Fees earned and incurred under the Transition Services Agreement for the three months ended March 31, 2025 were immaterial.

As the sale of the Company's Physical Security Business represented a significant strategic shift that has a material effect on the Company's operations and financial results, the Company has separately reported the results of its Physical Security Business as discontinued operations in the condensed consolidated statement of comprehensive loss for the 2024 period presented.

The following presents the financial results of discontinued operations (in thousands):

	Three Months Ended March 31,
	2024
Net revenue	$	15,836
Cost of revenue		7,927
Gross profit		7,909
Operating expenses:
Research and development		2,114
Selling and marketing		4,133
General and administrative		772
Restructuring and severance		22
Total operating expenses		7,041
Income from operations		868
Non-operating income (expense):
Foreign currency losses, net		(30	)
Income before income tax provision		838
Income tax provision		(14	)
Income from discontinued operations	$	824

The cash flows related to the discontinued operations have not been segregated and are included in the condensed consolidated statements of cash flows. The following presents the significant non-cash items and capital expenditures related to discontinued operations (in thousands):

	Three Months Ended March 31, 2024
Depreciation and amortization	$	93
Capital expenditures		71
Stock-based compensation		500