Discontinued Operations

12 Months Ended

Dec. 31, 2024

Discontinued Operations

Discontinued Operations

Note 3: Discontinued Operations

On February 28, 2025, the Company and Direct Transfer, LLC, its wholly owned subsidiary entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Equiniti Trust Company, LLC (the “Buyer”). Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Buyer purchased certain assets related to the Company’s compliance business (the “Purchased Assets”). The Purchased Assets consist of certain accounts receivable, prepaid assets, contracts and intellectual property, among other things, related to the Company’s services of providing i) disclosure software and services for financial reporting, ii) stock transfer services, iii) annual meeting, print and shareholder distribution and fulfillment services and iv) virtual annual meeting services (but not the intellectual property relating to the virtual annual meeting services). Revenue related to these services was previously included in the Company’s “compliance revenue” stream as reported with the SEC in previous filings, except revenue related to virtual annual meeting services, which was previously reported in “communications revenue” stream in previous SEC filings. Additionally, revenue related to providing SEDAR services and revenue related to our whistleblower hotline, which was previously reported as “compliance revenue” will be retained by the Company. The Buyer will only assume certain liabilities related to the Purchased Assets, which includes certain accounts payable, accrued liabilities and deferred revenue. This transaction also closed on February 28, 2025.

The Company reviewed Accounting Standards Codification (ASC) 205-20-45, which provides guidance over the disposal of a component of an entity and determined that the criteria were met to classify the assets of the compliance business as held-for-sale as of December 31, 2024. Further guidance states that once a group of assets are determined to be held-for-sale, then they should be recorded as discontinued operations in the financial statements of the entity.

Performance obligations of contracts included in discontinued operations include providing subscriptions to certain modules of our compliance software or other stand-ready obligations to deliver services and annual report printing and distribution.  Additionally, services are provided on a per project basis. Set up fees for disclosure services are considered a separate performance obligation and are satisfied upfront. Set up fees for the transfer agent module and investor relations content management module are immaterial. For service contracts that include stand ready obligations, revenue is recognized evenly over the contract period. For all other services delivered on a per project or event basis, the revenue is recognized at the completion of the event. The Company believes recognizing revenue for subscriptions and stand ready obligations using a time-based measure of progress, best reflects the Company’s performance in satisfying the obligations.

The following table sets forth the assets and liabilities included in discontinued operations as of December 31, 2024 and 2023 as presented into the Consolidated Balance Sheets:

in $000’s	December 31,
	2024		2023
Accounts Receivable (net of provision for credit losses of $559 and $398 as of December 31, 2024 and 2023, respectively	$	1,321	$	1,363
Other current assets		17		56
Total current assets		1,338		1,419
Goodwill		2,885		2,885
Intangible Assets (net of accumulated amortization of $5,265 and $5,097 as of December 31, 2024 and 2023, respectively		637		805
Other non current assets		55		56
Total assets	$	4,915	$	5,165

Accounts Payable	$	107	$	128
Accrued Expenses		168		81
Deferred Revenue		618		662
Total liabilities	$	893	$	871

The following table sets forth the details of income from discontinued operations for the years ended December 31, 2024 and 2023 as presented in the Consolidated Statement of Operations:

In $000's

	Years Ended December 31,
	2024		2023
Revenues	$	5,831	$	8,856
Cost of revenues		1,690		2,322
Gross margin		4,141		6,534
Operating costs and expenses:
General and administrative		666		581
Sales and marketing		104		223
Product development		—		7
Depreciation and amortization		168		168
Total operating costs and expenses		938		979
Operating income		3,203		5,555
Other income (expense)
Interest income		31		133
Income before income taxes		3,234		5,688
Income tax expense		746		1,481
Net income from discontinued operations	$	2,488	$	4,207