Note 3 - Discontinued Operations

6 Months Ended

Jun. 30, 2025

Notes to Financial Statements

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

3. Discontinued operations

On December 13, 2024, the Company’s Board of Directors discussed and approved a divestiture plan to sell and transfer about 90% to 100% of the Company’s interests in SEED to potential investors at a determined price.  The divestiture of SEED represents a strategic shift in the Company’s reallocation and optimization of the available resources to pipelines with greater potential. In accordance with ASC 205-20, all assets and liabilities of SEED were classified as held-for-sale in the consolidated balance sheets as of December 31, 2024 and June 30, 2025, and the results of operations of SEED were reflected as discontinued operations in the consolidated statement of operations for the three and six months ended June 30, 2025, and retroactively applied to the three and six months ended June 30, 2024.

On January 24, 2025, the Company entered into a Preferred Share Purchase Agreement (each, an “Agreement” and collectively, the “Agreements”) with each of Winning View Investment Limited, a business company organized in the British Virgin Islands (“BVI”), FULL TECH CORPORATE DEVELOPMENT LIMITED, a business company organized in the BVI, and Mapfil Investment Limited, a limited company organized in Hong Kong, respectively (each, a “Purchaser” and collectively, the “Purchasers”). On February 17, 2025, the Company and Winning View Investments Limited entered into the First Amendment to Purchase Agreement (the “Amendment”). Pursuant to the Agreements and the Amendment, the Company agreed to sell the Purchasers a total of 8,333,637 Series A-1 Preferred Shares (the “Shares”) of SEED to the Purchasers at a price per share of $4.25, in exchange of aggregate cash proceeds of $35,418.

The Agreements, as amended, will be executed in three separate closings as described below (ownership percentage calculated on an as-converted basis (excluding any shares that may be reserved under an employee stock ownership plan, or similar arrangement), after taking into account the issuance of an aggregate of 5,647,059 of the Series A-3 Preferred Shares in the first close of SEED’s Series A-3 financing, and assuming there is no other change to SEED’s share capital prior to such Closing.):

(i) On February 19, 2025, the First Closing (as defined in each Agreement, as amended) was completed. The Company sold and transferred a total of 1,730,454 Shares, comprised of 980,427 Shares to Winning View Investment Limited, 250,009 Shares to FULL TECH CORPORATE DEVELOPMENT LIMITED and 500,018 Shares to Mapfil Investment Limited, in exchange of aggregate cash proceeds of $7,354. Immediately upon the First Closing, the Company’s direct and indirect ownership in SEED decreased to 40.12%, but still retained the controlling interest of SEED through the control of the SEED Board. The Company’s noncontrolling interests increased by 6.75% upon the First Closing.

(ii) At the Second Closing (as defined in each Agreement, as amended, which shall be no later than December 15, 2025), the Company will sell and transfer to the Purchasers a total of 3,103,055 Shares, comprised of 1,436,327 Shares to Winning View Investment Limited, 555,576 Shares to FULL TECH CORPORATE DEVELOPMENT LIMITED and 1,111,152 Shares to Mapfil Investment Limited. Immediately upon the Second Closing, the Company’s direct and indirect ownership in SEED will further decrease to 28.02%. The Company will lose the controlling interest of SEED due to the loss of control of the SEED Board.

(iii) At the Third Closing (as defined in each Agreement, as amended, which shall be no later than December 15, 2026), the Company will sell and transfer to the Purchasers a total of 3,500,128 Shares, comprised of 1,750,064Shares to Winning View Investment Limited, 583,355 Shares to FULL TECH CORPORATE DEVELOPMENT LIMITED and 1,166,709 Shares to Mapfil Investment Limited. Immediately upon the Third Closing, the Company’s direct and indirect ownership in SEED will ultimately decrease to 14.37%.

The Company determined that the multiple arrangements of the SEED sales with the Purchasers and the three-tranche closings should be accounted for as a single transaction in accordance with ASC 810-10-40-6, as the transactions were entered in contemplation of one another and were essentially a single transaction designed to achieve an overall commercial effect.

The following tables set forth the assets, liabilities, statement of operations, and cash flows of discontinued operations which were included in the Company’s consolidated financial statements.

	As of
	December 31, 2024		June 30, 2025
			(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	13,125	$	13,583
Short-term investments		12,044		2,000
Advances to suppliers		86		68
Prepaid expenses and other current assets		92		61
Total current assets		25,347		15,712
Noncurrent assets:
Property and equipment, net		1,323		1,255
Operating right-of-use assets		3,182		2,934
Other noncurrent assets		268		294
Total noncurrent assets		4,773		4,483
Total assets	$	30,120	$	20,195
Liabilities and equity
Current liabilities:
Short-term loans	$	3,911	$	3,985
Accounts payable		505		285
Accrued expenses		1,354		2,183
Current portion of operating lease liabilities		400		415
Deferred revenue		2,001		2,001
Other current liabilities		642		750
Total current liabilities		8,813		9,619
Noncurrent liabilities:
Operating lease liabilities		2,375		2,165
Deferred revenue		3,822		2,821
Total noncurrent liabilities		6,197		4,986
Total liabilities	$	15,010	$	14,605

	Three months ended June 30,						Six months ended June 30,
	2024			2025			2024			2025
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	500		$	500		$	1,000		$	1,000
Operating expenses
Research and development		(1,425	)		(2,498	)		(2,599	)		(5,487	)
General and administrative		(565	)		(862	)		(1,128	)		(1,726	)
Loss from operations		(1,490	)		(2,860	)		(2,727	)		(6,213	)
Foreign exchange gain, net		-			1			-			1
Interest income		3			46			7			114
Other income, net		49			42			74			95
Loss before income tax		(1,438	)		(2,771	)		(2,646	)		(6,003	)
Income tax expense		-			-			-			-
Loss from discontinued operations before disposal		(1,438	)		(2,771	)		(2,646	)		(6,003	)
Gain on sale of subsidiary interests		-			-			-			6,986
Net income (loss) from discontinued operations	$	(1,438	)	$	(2,771	)	$	(2,646	)	$	983

	Six months ended June 30,
	2024			2025
	(Unaudited)			(Unaudited)
Net cash used in discontinued operating activities	$	(6,888	)	$	(5,790	)
Net cash provided by discontinued investing activities	$	-		$	9,800
Net cash provided by discontinued financing activities	$	-		$	-

In connection with the First Closing, the Company recorded a gain on the sale of subsidiary interests:

	Gain recognized on the First Closing
Fair value of consideration received	$	7,354
Less: Adjustments to noncontrolling interests (6.75% of the equity interests)		368
Gain on sale of subsidiary interests	$	6,986