Quarterly report [Sections 13 or 15(d)]

Discontinued Operations

v3.25.1
Discontinued Operations
 3 Months Ended
Mar. 31, 2025
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations Discontinued Operations
On January 16, 2025, the Company entered into a Stock Purchase Agreement (the “Agreement”) with JL Projects, Inc., a Delaware corporation (“JL Projects”), pursuant to which JL Projects purchased from the Company all of the right, title, and interest in and to all of the issued and outstanding shares of capital stock of Pharmaloz Manufacturing, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“PMI”), and Pharmaloz Real Estate Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“PREH”). The transaction closed concurrently with the execution of the Agreement on January 16, 2025.
As part of the transaction, JL Projects provided approximately $2 million in cash payments to the Company and extinguished approximately $10 million of the Company’s debt. Additionally, JL Projects assumed (i) the existing $3.3 million mortgage on PMI's manufacturing facility, (ii) nearly $2 million in capital leases, and (iii) approximately $3 million in current and accrued payables, and paid down $200,000 on an existing loan from affiliates of JL Projects. The transaction also resulted in the cancellation of approximately $300,000 in accrued interest related to the retired debt. Furthermore, the Company avoided approximately $3 million of upcoming capital expenditures that JL Projects will now be responsible for. The transaction also transferred over $600,000 in employee annual overhead from the Company to PMI. As a result, the Company recognized a gain on sale of PMI and PREH of approximately $8.7 million for the three months ended March 31, 2025.
The Company has reported the results of the discontinued operations as a separate component of income below the income (loss) from continuing operations in each period presented.
The following table presents a reconciliation of discontinued operations for the three months ended March 31, 2025 and 2024, respectively (amount in thousands):
For the Three Months Ended
March 31, 2025 March 31, 2024
Revenues, net $ —  $ 1,278 
Cost of revenues —  1,651 
Gross loss —  (373)
Operating expenses:
General and administration 102  294 
Research and development —  — 
Total operating expenses 102  294 
Loss from operations (102) (667)
Interest expense —  (74)
Loss from discontinued operations, net of tax $ (102) $ (741)
The assets and liabilities classified in discontinued operations as of March 31, 2025 and December 31, 2024 are as follows (amount in thousands):
March 31, 2025 December 31, 2024
Restricted cash $ —  $ 627 
Accounts receivable, net —  605 
Inventory, net —  1,487 
Prepaid expenses and other current assets —  3,424 
Total current assets in discontinued operations —  6,143 
Property, plant and equipment, net —  4,895 
Other assets —  544 
Total non-current assets in discontinued operations —  5,439 
Total assets in discontinued operations —  11,582 
Accounts payable $ —  $ 2,432 
Secured promissory note payable —  1,000 
Finance lease liability —  2,356 
Other current liabilities —  79 
Total current liabilities in discontinued operations —  5,867 
Secured long-term debt, net of discount of $318
 —  2,924 
Total non-current liabilities in discontinued operations —  2,924 
Total liabilities in discontinued operations $ —  $ 8,791