Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

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Discontinued Operations
6 Months Ended
Jun. 30, 2024
Discontinued Operations [Abstract]  
Discontinued Operations NOTE 5 – DISCONTINUED OPERATIONS

On June 30, 2023, the Company sold substantially all of the assets of its legacy non-core subsidiaries, JDL and Ecessa, to TheIPGuys.net LLC doing business as OneNet Global for total net proceeds of $1,231,616. The Company received net initial proceeds of $1,106,616, consisting of $1,175,000 in initial consideration less $68,384 in adjustments. An additional $125,000 in consideration was held in escrow until July 1, 2024 for potential indemnification claims that may arise under the asset purchase agreement. The amount in escrow represented a consideration receivable that is included in other current assets within the condensed consolidated balance sheet as of June 30, 2024, as it was considered to be probable that the amount will be received in full at the conclusion of the escrow period. The amount of escrow proceeds that will be received will depend on whether any indemnification obligations arise under the asset purchase agreement and the receivable will be monitored for potential impairment. There were no indemnification obligations identified and the escrow funds will be released in the third quarter of 2024. The Company recorded a loss on sale of $1,190,002 during the second quarter of 2023. The presentation of discontinued operations with respect to this transaction has been retrospectively applied to all prior periods presented.

The financial results of the discontinued operations are as follows:

Three Months Ended June 30

Six Months Ended June 30

2024

2023

2024

2023

Sales

$

$

1,662,629

$

$

3,414,810

Cost of sales

1,199,646

2,444,014

Selling, general and administrative expenses

430,509

879,214

Transaction costs

14,426

Restructuring expenses

56,717

56,717

Loss on sale of assets

1,190,002

1,190,002

Operating loss before income taxes

(1,214,245)

(1,169,563)

Income tax expense

2,689

2,689

Loss from discontinued operations

$

$

(1,216,934)

$

$

(1,172,252)

During the three and six months ended June 30, 2023, the Company recorded a total of $56,717 in expected restructuring expenses, which consisted of severance and related benefits costs. The Company paid $56,717 in restructuring charges in 2023 and had no restructuring accruals recorded at either June 30, 2024 or December 31, 2023.