Discontinued Operations

6 Months Ended

Jun. 30, 2024

Discontinued Operations

Discontinued Operations

2. Discontinued Operations

On December 27, 2023, the Company completed the sale of all of its assets and equity interest in Elusys Therapeutics, Inc. (“Elusys”)  to Elusys Holdings, Inc., a company controlled by the Company’s Chairman, Chief Executive Officer, and President, Jeffrey Wolf for approximately $2.5 million before working capital, escrow adjustments and transaction expenses. Total consideration included $0.5 million of cash received at closing, $0.3 million related to consideration from a one-year convertible promissory note, related party and fair value of $1.7 million in future payments from Elusys upon the achievement by Elusys of certain financial goals. The gain on the transaction was approximately $1.5 million.

The Company has separately reported the financial results of Elusys as discontinued operations in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2023. Assets and liabilities of discontinued operations in the consolidated balance sheet have a carrying value of $0 as of December 31, 2023.

The Company determined that the disposal group represents a strategic shift that will have a major effect on the Company's operations and financial results, and has therefore reflected the Elusys Therapeutics business as a discontinued operation for all periods presented. Details of the loss from discontinued operations included in the Company’s consolidated statement of operations are as follows:

	Six Months Ended
	June 30, 2023
Operating expenses:
Research and development		1,283,982
Selling, general and administrative		693,211
Amortization of intangible assets		727,500
Change in fair value of contingent consideration		109,500
Total operating expenses		2,814,193
Loss from operations		(2,814,193)
Other income		(6,550)
Total non-operating gain		(6,550)
Net loss from discontinued operations before income taxes		(2,807,643)
Income tax expense		—
Net loss from discontinued operations	$	(2,807,643)

The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. Total operating, investing and financing cash flows of discontinued operations for the period ended June 30, 2023 are comprised of the following:

	Six Months Ended
	June 30, 2023
Total net cash provided by operating activities from discontinued operations	$	(917,492)
Total net cash used in investing activities from discontinued operations	$	5,581