Quarterly report [Sections 13 or 15(d)]

Discontinued Operations

Discontinued Operations

9 Months Ended

Jun. 30, 2025

3. Discontinued Operations

On April 18, 2024, the Company’s Mergers and Acquisitions (“M&A”) committee of the Board of Directors completed its review of strategic alternatives recommended by an outside investment banking firm. This included recommendation of divesture of the Company’s Industrial Segment which was subsequently approved by the Company’s full Board of Directors on May 13, 2024. Management thereafter began the process of identifying and contacting potential buyers. As of March 31, 2025, the Company’s plan to sell its Industrial Segment met all the criteria for the first time to be reported as discontinued operations under U.S. GAAP, the final one being making the determination that the sale or other disposition would be completed within twelve months.

On June 2, 2025, the Company entered into an agreement for the sale of certain operating assets of its Industrial Segment, including those of BMCH, Inc., Triad Logistics, Inc., and its Triad Staffing brand. The Company received total cash consideration of $250 from the buyer at closing and is to receive an additional $788 payable during the first 90 days following closing. The Company has received $462 of the additional payments due as of June 30, 2025. The remaining receivable of $326 is included in prepaid expenses and other current assets in the unaudited condensed consolidated balance sheet as of June 30, 2025. A pre-tax net gain of $133, including transaction costs of $97, is included in discontinued operations for the three-month period ended June 30, 2025. The remaining assets of the Industrial Segment not sold were distributed to the Company.

Assets and Liabilities of Discontinued Operations

The balances of assets and liabilities under the Industrial Segment as of June 30, 2025 and September 30, 2024 consisted of the following:

	June 30, 2025		September 30, 2024
Assets of discontinued operations:
Cash	$	-	$	93
Accounts receivable, net		-		996
Prepaid expenses and other current assets		-		64
Property and equipment, net		-		13
Right-of-use assets		-		138
Other long-term assets		-		57
Total assets of discontinued operations	$	-	$	1,361

Liabilities of discontinued operations:
Accounts payable	$	-	$	27
Accrued compensation		-		197
Current operating lease liabilities		-		105
Other current liabilities		-		18
Noncurrent operating lease liabilities		-		33
Total liabilities of discontinued operations	$	-	$	380

Net Loss from Discontinued Operations

Results of the Industrial Segment for the three and nine-month periods ended June 30, 2025 and 2024, respectively, consisted of the following:

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2025			2024			2025			2024

Revenue	$	1,068		$	2,408		$	4,614		$	7,363
Expenses:
Cost of contract services		744			2,042			3,663			6,223
Selling, general and administrative expenses		479			450			1,273			1,324
Depreciation expense		-			11			4			34
Goodwill impairment charge		-			1,084			-			1,084
Interest expense		-			2			-			6
Loss from discontinued operations before gain on sale and income taxes		(155	)		(1,181	)		(326	)		(1,308	)
Gain on sale of Industrial Segment		133			-			133			-
Provision for income tax expense attributable to discontinued operations		-			-			-			-
Loss from discontinued operations, net of tax	$	(22	)	$	(1,181	)	$	(193	)	$	(1,308	)

Cash Flows from Discontinued Operations

There were no capital expenditures or other significant cash flows under the Industrial Segment during the nine-month period ended June 30, 2024. The net cash flows of the Industrial Segment during the nine-month period ended June 30, 2025 included the cash proceeds of $712 received as consideration on the sale.