Sale of In-Store Marketing Business and Presentation as Discontinued Operations

12 Months Ended

Dec. 31, 2024

Sale of In-Store Marketing Business and Presentation as Discontinued Operations

Sale of In-Store Marketing Business and Presentation as Discontinued Operations

4. Sale of In-Store Marketing Business and Presentation as Discontinued Operations.

On August 3, 2023, the Company completed the sale of certain assets and certain liabilities relating to the Company’s In-Store Marketing Business for a price of $3,500,000 to TIMIBO LLC, an affiliate of Park Printing, Inc. (the “Buyer”) under an Asset Purchase Agreement (the “Purchase Agreement”). The Company retained accounts receivable, as well as cash, cash equivalents and marketable securities. The cash consideration for the sale was subject to a post-closing adjustment. The final purchase adjustment for the net balance was to reduce the cash consideration by $1,500,000, with the Company retaining an equal amount of cash that had been received for unexecuted programs. Under the Purchase Agreement, $200,000 was escrowed for a twelve-month period for any future claims, as defined in the Purchase Agreement, by the Buyer against the Company and was included in receivable from escrow account on the consolidated balance sheets as of December 31, 2023. The escrow payment was received in fiscal year 2024. The results of the In- Store Marketing Business have been presented as discontinued operations and the related assets and liabilities have been classified as related to discontinued operations, for all periods presented. The carrying amounts of major classes of assets and liabilities that were reclassified as related to discontinued operations on the consolidated balance sheets were as follows:

	December 31, 2024		December 31, 2023
Current Assets:
Accounts receivable, net	$	—	$	292,000
Current assets related to discontinued operations	$	—	$	292,000
Current Liabilities:
Accounts payable	$	—	$	7,000
Accrued sales tax		24,000		169,000
Other accrued liabilities		9,000		81,000
Current liabilities related to discontinued operations	$	33,000	$	257,000

Years Ended December 31	2024		2023
Service revenues, net	$	—	$	21,078,000
Cost of services		—		16,087,000
Gross Profit		—		4,991,000
Operating Expenses:
Selling		(224,000)		1,135,000
Marketing		—		806,000
General and administrative		—		679,000
Total Operating Expenses		(224,000)		2,620,000
Operating Income	$	224,000	$	2,371,000
Other Income		—		91,000
Income from discontinued operations	$	224,000	$	2,462,000
Gain from sale of discontinued operations before income taxes	$	—	$	3,044,000
Income tax (benefit) expense		—		83,000
Gain from the sale of discontinued operations, net of tax	$	—	$	2,961,000

Results of discontinued operations are summarized below:

For the year ended December 31, 2024, the Company recognized approximately $224,000 of benefit in sales, general and administrative expense of discontinued operations from the reduction in the accrual for sales tax due to the expiration of the statute of limitations.