Discontinued Operations

3 Months Ended

Mar. 31, 2025

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

2. Discontinued Operations

On March 18, 2024, the Company discontinued the Sports Illustrated media business (the “SI Business”) that was operated under the Licensing Agreement with ABG-SI, LLC (“ABG”) dated June 14, 2019 (as amended to date, the “Licensing Agreement”). This discontinuation of the SI Business (i.e., discontinued operations) followed the termination of the Licensing Agreement by ABG on January 18, 2024. The last date of any obligation of the Company to perform under the Licensing Agreement was March 18, 2024. In connection with the termination, certain ABG Warrants vested (further details are provided under the heading Vesting of Warrants in Note 12).

The table below sets forth the income (loss) from discontinued operations:

	Three Months Ended March 31,
	2025			2024
	($ in thousands, except share data)
Revenue	$	-		$	21,848
Cost of revenue (1)		(23	)		13,981
Gross profit (loss)		23			7,867
Operating expense
Selling and marketing		-			11,503
General and administrative (2)		-			45,192
Depreciation and amortization		-			2,401
Loss on impairment of assets (3)		-			39,391
Total operating expenses		-			98,487
Income (loss) from discontinued operations		23			(90,620	)
Income tax provision		-			(18	)
Net income (loss) from discontinued operations	$	23		$	(90,638	)

⁽¹⁾ Cost of revenue for the three months ended March 31, 2025, includes an adjustment to previously reported accounts payable that was settled for a reduced amount.

⁽²⁾ General and administrative expenses for the three months ended March 31, 2024, includes a $45,000 termination fee liability as described in Note 16.

⁽³⁾ Loss on impairment of assets for the three months ended March 31, 2024 of $39,391 includes $8,601 for the impairment of intangible assets and $30,790 for the impairment of subscription acquisition costs.

The table below sets forth the major classes of liabilities of the discontinued operations:

	As of
	March 31, 2025		December 31, 2024
Liabilities
Accounts payable	$	1,680	$	1,783
Accrued expenses and other		519		519
Subscription refund liability		423		423
Royalty fee liability (1)		3,750		3,750
Termination fee liability (1)		45,000		45,000
Subscription liability, current portion		44,684		44,684
Current/total liabilities from discontinued operations	$	96,056	$	96,159

⁽¹⁾ Further details related to the royalty fee liability of $3,750 and termination fee liability of $45,000 are described under the heading ABG Group Legal Matters in Note 16.

The table below sets forth the cash flows of the discontinued operations:

	Three Months Ended March 31,
	2025			2024
Cash flows from operating activities from discontinued operations
Net income (loss) from discontinued operations	$	23		$	(90,638	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets		-			2,401
Loss on impairment of assets		-			39,391
Stock-based compensation		-			538
Change in operating assets and liabilities:
Accounts receivable, net		-			7,444
Subscription acquisition costs		-			6,131
Prepayments and other current assets		-			807
Accounts payable		(103	)		2,654
Accrued expenses and other		-			538
Subscription refund liability		-			20
Subscription liability		-			(7,148	)
Termination fee liability		-			45,000
Net cash (used in) provided by operating activities from discontinued operations	$	(80	)	$	7,138

Further details regarding legal matters in connection with the discontinued operations are provided under the heading ABG Group Legal Matters in Note 16.