Annual report pursuant to Section 13 and 15(d)

Discontinued Operations

v3.22.1
Discontinued Operations
12 Months Ended
Dec. 31, 2021
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

Note 20 — Discontinued Operations

 

Discontinued operations are accounted for in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification Section 360-10-35 Property, Plant and Equipment. In accordance with FASB ASC Section 360-10-35, the net assets of discontinued operations are recorded on our consolidated balance sheets at carrying value. The results of operations of discontinued operations are segregated from continuing operations and reported separately as discontinued operations in our consolidated statements of operations.

 

On March 12, 2021, the bankruptcy court approved the sale of the CBAV1, LLC Assets to BTL Diffusion SARL, the winning bidder, at the auction held on March 10, 2021 and March 11, 2021 for a total sum of $3,000,000, which includes a cash payment at closing in the amount of $2,650,000, less certain closing costs and credits, and additional royalty payments in the amount of $150,000 on April 15, 2022 and in the amount of $200,000 on April 15, 2023.

 

A first closing of the CBAV1-BTL Transaction occurred on April 16, 2021, with the transfer of assets and release of funds completed on April 21, 2021. Contemporaneously with the Final Closing, a certain license agreement between CBAV1 and Edison Nation terminated and any remaining operational assets of Edison Nation were transferred to BTL.

 

On November 30, 2020, the Company and its wholly owned subsidiary, SRM entered into a Stock Exchange Agreement with Jupiter Wellness, Inc.. Under the terms of the Exchange Agreement, Jupiter agreed to purchase all outstanding shares of common stock issued by SRM from the Company. As consideration for the purchase of the Exchange Shares, Jupiter agreed to exchange 200,000 shares of its restricted common stock, symbol JUPW as listed on NASDAQ Capital Markets. The Company made the decision to divest the amusement park business due to the slow re-openings of amusement parks around the world and the investment that would have been needed to remain open and the investment required to relaunch as the amusement parks begin to get back to full capacity.

 

The following table presents the carrying values of the assets and liabilities of our discontinued operations at December 31, 2021 and 2020, respectively:

 

    2021     2020  
   

For the Twelve Months

Ended December 31,

 
    2021     2020  
             
Assets                
Current assets:                
Cash and cash equivalents   $ -     $ -  
Accounts receivable, net     -       220,964  
Inventory     -       559,737  
Prepaid expenses and other current assets     -       261,979  
Income tax receivable     -       -  
Total current assets     -       1,042,680  
Intangible assets, net     -       5,739,524  
Total assets   $ -     $ 6,782,204  
                 
Liabilities and stockholders’ equity                
Current liabilities:                
Accounts payable   $ -     $ 487,454  
Accrued expenses and other current liabilities     -       -  
Line of credit     -       -  
Notes payable, current     -       -  
Due to related party     -       -  
Total current liabilities   $ -     $ 487,454  

 

The following table presents the summary results of operations of our discontinued operations for the years ended December 31, 2021 and 2020, respectively:

 

    2021     2020  
Revenues, net   $ 697,883     $ 6,492,360  
Cost of revenues     490,195       3,979,258  
Gross profit     207,688       2,513,102  
                 
Operating expenses:                
Selling, general and administrative     385,888       3,481,517  
Operating income     (178,200 )     (968,415 )
                 
Other (expense) income:                
(Loss) gain on disposal     (4,933,900 )     6,153,675
Total other (expense) income     (4,933,900 )     6,153,675
Loss before income taxes     (5,112,100 )     5,185,260  
Income tax expense     -       12,940  
Net (loss) income   $ (5,112,100 )   $ 5,172,320