Note 2 - Discontinued Operation and Assets and Liabilities Related to Discontinued Operation

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

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

2. Discontinued Operation and Assets and Liabilities Related to Discontinued Operation

The Company’s decision to sell certain assets and wind down the operations of OKC met the “held for sale” definition under ASC 205-20-45-9 Discontinued Operations and represented a strategic shift that had a significant impact on the Company’s overall operations and financial results. Accordingly, the assets and liabilities of OKC are reflected as “Assets and Liabilities related to Discontinued Operation” in the Condensed Consolidated Balance Sheets as of  March 31, 2025 and December 31, 2024. In addition, OKC’s operating loss, divestiture costs, and impairment charges on long-lived assets were reclassified to “Loss from Discontinued Operation, net of tax” in the Condensed Consolidated Statements of Operations for the three-months period ended March 31, 2025 and 2024.

Under the terms of the Asset Purchase Agreement, the Company sold inventory, machinery & equipment and intellectual property (patents & trademarks/tradenames) to a third party on August 1, 2023. As a direct result of Management’s decision to sell OKC’s assets, divest the operations, and exit the CPG business segment, the Company incurred impairment charges on its long-lived asset (building) in 2023 based on independent, third-party appraisals (less estimated costs to sell).  No impairment charges were incurred for the three-month period ended March 31, 2025

Operating loss from the discontinued operation was approximately $17,000 and $25,000 for the three-month periods ended March 31, 2025 and 2024, respectively. Divestiture and impairment costs were $0 and approximately ($8,000) the three-month periods ended March 31, 2025 and 2024, respectively.

Discontinued Operation Financial Information

Consolidated Statements of Operations are as follows:

	Three Months Ended
(in thousands)	March 31, 2025			March 31, 2024
Operating costs	$	(17	)	$	(25	)
Loss from discontinued operation		(17	)		(25	)
Gain from discontinued operation - impairment and divestiture recovery costs		-			8
Loss from discontinued operation before income taxes		(17	)		(17	)
Loss from discontinued operation, net of tax	$	(17	)	$	(17	)

Assets & Liabilities Related to Discontinued Operation Financial Information

A summary of the carrying amounts of major classes of assets and liabilities, which are included in assets and liabilities related to discontinued operation in the Condensed Consolidated Balance Sheets, are as follows:

	March 31,		December 31,
(in thousands)	2025		2024
Prepaid and other assets	$	22	$	8
Building, net of estimated costs to sell		1,428		1,428
Assets related to discontinued operation	$	1,450	$	1,436
Accounts payable	$	23	$	23
Liabilities related to discontinued operation	$	23	$	23

The Company is actively marketing the building for sale using a commercial real estate broker with a selling price equals its appraised value.  To date, no events have occurred that would trigger further impairment, and Management expects to sell the real property within the next twelve months. Most of the remaining assets and liabilities are expected to be expensed or settled in 2025, as divestiture and wind-down activities are substantially complete.