Note 3 – Discontinued Operations – Sale of Consumer Segment |
Note
3 – Discontinued Operations – Sale of Consumer Segment
In November 2022, the
Company agreed to the sale of its consumer segment consisting of Rotor Riot, (“RR”), and Fat Shark Holdings
(“FS”). The closing of the transaction is subject to the successful initial public offering by the buyer, Unusual
Machines, Inc. The Company has concluded that the transaction is presently likely to close within the next twelve months. Accordingly,
the Consumer segment has been classified as Discontinued Operations and reported in accordance with the applicable accounting
standards. See Note 22 for additional information regarding the transaction. Set forth below are the results of operations for:
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|
|
|
|
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Three
months ended July 31, |
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|
2023 |
|
2022 |
Revenues |
|
$ |
1,869,219 |
|
|
$ |
1,942,720 |
|
|
|
|
|
|
|
|
|
|
Cost
of goods sold |
|
|
1,385,116 |
|
|
|
1,667,213 |
|
|
|
|
|
|
|
|
|
|
Gross
margin |
|
|
484,103 |
|
|
|
275,507 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
Operations |
|
|
209,980 |
|
|
|
161,783 |
|
Research
and development |
|
|
46,249 |
|
|
|
82,806 |
|
Sales
and marketing |
|
|
404,104 |
|
|
|
195,278 |
|
General
and administrative |
|
|
43,606 |
|
|
|
55,161 |
|
Total
operating expenses |
|
|
703,939 |
|
|
|
495,028 |
|
Operating
loss |
|
|
(219,836 |
) |
|
|
(219,521 |
) |
|
|
|
|
|
|
|
|
|
Other
(income) expense |
|
|
|
|
|
|
|
|
Interest
expense |
|
|
22,856 |
|
|
|
— |
|
Other,
net |
|
|
(119 |
) |
|
|
(124 |
) |
Other
(income) expense |
|
|
22,737 |
|
|
|
(124 |
) |
|
|
|
|
|
|
|
|
|
Net
loss from discontinued operations |
|
$ |
(242,573 |
) |
|
$ |
(219,397 |
) |
Assets and liabilities
for the Consumer Segment included:
|
|
July
31, 2023 |
|
April
30, 2023 |
Current
assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
15,021 |
|
|
$ |
86,656 |
|
Accounts
receivable, net |
|
|
106,649 |
|
|
|
61,107 |
|
Inventory |
|
|
2,921,262 |
|
|
|
3,065,954 |
|
Other |
|
|
1,502,438 |
|
|
|
2,069,438 |
|
Total
current assets |
|
|
4,545,370 |
|
|
|
5,283,155 |
|
|
|
|
|
|
|
|
|
|
Intangible
assets, net |
|
|
20,000 |
|
|
|
20,000 |
|
Other |
|
|
3,853 |
|
|
|
3,853 |
|
Operating
lease right-of-use assets |
|
|
73,590 |
|
|
|
84,544 |
|
Total
long term assets |
|
|
97,443 |
|
|
|
108,397 |
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|
|
|
|
|
|
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Current
liabilities |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
65,058 |
|
|
$ |
606,872 |
|
Accrued
expenses |
|
|
89,014 |
|
|
|
109,480 |
|
Debt
obligations - short term |
|
|
237,814 |
|
|
|
— |
|
Customer
deposits |
|
|
28,079 |
|
|
|
244,688 |
|
Operating
lease liabilities |
|
|
51,234 |
|
|
|
49,461 |
|
Total
current liabilities |
|
|
471,199 |
|
|
|
1,010,501 |
|
|
|
|
|
|
|
|
|
|
Long
term liabilities - Operating lease liabilities |
|
|
28,290 |
|
|
|
41,814 |
|
|
|
|
|
|
|
|
|
|
Working
capital |
|
$ |
4,074,171 |
|
|
$ |
4,272,654 |
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