Note 2 - Discontinued Operations

6 Months Ended

Jun. 30, 2025

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE 2 – DISCONTINUED OPERATIONS

In July 2024, the Company’s Board of Directors approved a plan to implement a strategic cost savings initiative, primarily related to the Company’s Birmingham laboratory. In September 2024, the Company transferred certain pieces of computer hardware with alternative use to the Pittsburgh laboratory, while the rest of the laboratory equipment and inventories from the Birmingham laboratory were marketed for sale and the related product and service lines were discontinued. The Company executed a sales agreement for all remaining laboratory equipment and inventories from the Birmingham laboratory and all items were removed from the laboratory premises as of September 30, 2024. As of September 30, 2024, the Company vacated and ceased use of the Birmingham laboratory and office space. The Company’s lease continues through August 2025. The Company concluded that, in aggregate, the disposal of these assets comprising the former Birmingham operating segment met the criteria for discontinued operations presentation in the third quarter of 2024.

On March 14, 2025, the Company entered into an asset purchase agreement (the “APA”) and closed the transactions contemplated therein with DeRoyal Industries, Inc., a Tennessee corporation (“DeRoyal”), to sell and assign to DeRoyal assets and liabilities exclusively related to the business of providing products for automated, direct-to-drain medical fluid disposal, including the Company’s STREAMWAY® product line (the “Eagan Business”). These assets were operated by the Company’s wholly owned subsidiary, Skyline Medical, and were previously reported in the Company’s Eagan operating segment. The purchased assets exclusively related to the Eagan Business included but were not limited to cash, certain accounts receivable, inventories, patents, fixed assets, and real property leased by the Company and exclusively used in connection with the Eagan Business. The total purchase price for the purchased assets was $625,000, plus the assumption of certain liabilities related to the Eagan Business including the lease for the office and warehouse space located at 2915 Commers Drive Suite 900 Eagan, MN 55121, certain accounts payable, and contract liabilities associated with the Eagan Business. The ongoing activities of the former Eagan operating segment are limited to wind down activities.

As a result of these developments, the former Birmingham and Eagan operating segments have been reclassified to discontinued operations in these condensed consolidated financial statements for all periods presented.

The following table presents a reconciliation of the carrying amounts of the major classes of assets and liabilities to the current assets and liabilities of discontinued operations as presented in the Company’s condensed consolidated balance sheets:

	June 30, 2025		December 31, 2024
Assets:
Cash	$	-	$	122,851
Accounts receivable, net		37,297		746,266
Inventories		-		339,968
Prepaid expense and other assets		10,426		52,318
Total current assets of discontinued operations		47,723		1,261,403
Property and equipment, net		-		21,882
Intangibles, net		-		159,158
Lease right-of-use assets		-		17,266
Other long-term assets		4,031		4,031
Total assets of discontinued operations	$	51,754	$	1,463,740
Liabilities:
Accounts payable	$	1,149	$	97,780
Accrued expenses and other liabilities		252,015		248,086
Contract liabilities		-		80,909
Lease liability		89,040		106,609
Total current liabilities of discontinued operations		342,204		533,384
Other long-term liabilities		-		23,487
Total liabilities	$	342,204	$	556,871

The following table provides details about the major classes of line items constituting the loss from discontinued operations presented in the Company’s condensed consolidated statements of net loss:

		Three Months Ended          June 30,						Six Months Ended  June 30,
		2025			2024			2025			2024
Revenue	$	-		$	211,467		$	157,179		$	626,255
Cost of sales		-			139,109			122,800			304,092
Gross profit (loss) from discontinued operations		-			72,358			34,379			322,163
Operating expenses:
General and administrative		101,103			291,813			204,341			593,223
Operations, research and development		2,669			334,699			125,495			806,807
Sales and marketing		-			150,234			130,318			281,259
Total operating expenses		103,772			776,746			460,154			1,681,289
Total operating (loss) from discontinued operations		(103,772	)		(704,388	)		(425,775	)		(1,359,126	)
Gain on disposal of discontinued operations		-			-			172,451			-
Other income (expense)		12,205			(20,204	)		4,300			(20,204	)
Net (loss) from discontinued operations	$	(91,567	)	$	(724,592	)	$	(249,024	)	$	(1,379,330	)

The gain on disposal of discontinued operations represents the gain on assets sold and liabilities assumed by DeRoyal.