| Supplemental Financial Statement Information |
Note 17: Supplemental Financial Statement Information
Other Expense, net
Components of Other Expense, net, are summarized
as follows (in thousands):
| Schedule of other income expense, net |
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2025 |
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2024 |
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2025 |
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2024 |
|
| Interest Expense (a) |
|
$ |
(165 |
) |
|
$ |
(246 |
) |
|
$ |
(293 |
) |
|
$ |
(449 |
) |
| |
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| Gain (Loss) on Revaluation of Warrants (b) |
|
|
(678 |
) |
|
|
23 |
|
|
|
(232 |
) |
|
|
60 |
|
| Loss on Revaluation of Equity Investment in YFE (c) |
|
|
(3,778 |
) |
|
|
(881 |
) |
|
|
(7,418 |
) |
|
|
(881 |
) |
| Realized Loss on Marketable Securities Investments (d) |
|
|
(32 |
) |
|
|
(216 |
) |
|
|
(28 |
) |
|
|
(357 |
) |
| Gain (Loss) on Foreign Exchange (e) |
|
|
1,713 |
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|
|
(330 |
) |
|
|
2,380 |
|
|
|
(980 |
) |
| Loss on Debt Settlement (f) |
|
|
– |
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– |
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|
|
(944 |
) |
|
|
– |
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| Interest Income (g) |
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|
12 |
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|
42 |
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|
66 |
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|
95 |
|
| Finance Lease Interest Expense (h) |
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|
(6 |
) |
|
|
(24 |
) |
|
|
(10 |
) |
|
|
(54 |
) |
| Gain on Lease Termination (i) |
|
|
4 |
|
|
|
– |
|
|
|
4 |
|
|
|
– |
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| Other (j) |
|
|
(122 |
) |
|
|
370 |
|
|
|
(89 |
) |
|
|
534 |
|
| Other Expense, net |
|
$ |
(2,887 |
) |
|
$ |
(1,016 |
) |
|
$ |
(6,271 |
) |
|
$ |
(1,583 |
) |
Three Months and Six Months Ended June 30, 2025
| |
(a) |
Interest Expense during the three and
six months ended June 30, 2025 consisted of $0.2 million and $0.3 million respectively, primarily due to interest incurred on
production facilities. |
| |
(b) |
The Loss on Revaluation of Warrants during the three months ended June 30, 2025 is related to the remeasurement occurred immediately before reclassification of the outstanding 7,894,736 Series A warrants and 7,894,736 Series B warrants from liability to equity. The Loss on Revaluation of Warrants during the six months ended June 30, 2025 consists of $0.7 million Loss recorded at remeasurement offset by a $0.4 million fair value gain in the period ended March 31, 2025 of the outstanding 7,894,736 Series A warrants and 7,894,736 Series B warrants. These Warrants were classified as a liability in the period ended March 31, 2025 and change in their Fair Value resulted in a recorded gain due to a decrease of expiration period. |
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(c) |
As accounted for using the fair value option, the Loss on Revaluation of Equity Investment in YFE of $3.8 million and $7.4 million, respectively, recorded in the three and six months ended June 30, 2025, is a result of the decreases in YFE’s stock price as of the current reporting period when compared to the prior reporting period. This excludes the impact of foreign currency recorded separately. |
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(d) |
The Realized Loss on Marketable Securities Investments of $32,145 recorded during the three months ended June 30, 2025 is related to the Loss of $37,197 on sale of certain securities prior to the maturity date, offset by the Gain of $5,053 attributable to the sale of U.S. Treasury Securities. The Realized Loss on Marketable Securities Investments of $27,691 recorded during the six months ended June 30, 2025 is related to the Loss of $37,197 on sale of certain securities prior to the maturity date, offset by the Gain of $9,507 attributable to the sale of U.S. Treasury Securities. |
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(e) |
The Gain on Foreign Exchange during the three and six months ended June 30, 2025 primarily related to the revaluation of the YFE investment, resulting in a gain of $1.7 million and $2.4 million, respectively, due to the depreciation of the U.S. dollar against the Euro relative to prior periods.. |
| |
(f) |
In April 2025, a settlement agreement with YFE related to the Shareholder Loan Agreement was finalized. As the settlement was considered probable and the loss reasonably estimable as of March 31, 2025, the Company recorded a loss of approximately $0.9 million during the period ended June 30, 2025. |
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(g) |
Interest Income during the three and six months ended June 30, 2025 and 2024 primarily consisted of income from investments in marketable securities, net of premium amortization expense, as well as other transactions, including interest income related to Employee Retention Tax Credit (“ERTC”) receivable and interest income related to the Shareholder Loan. Each of these sources was individually immaterial. |
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(h) |
The Finance Lease Interest Expense represents the interest portion of the finance lease obligations for equipment purchased under an equipment lease line. |
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(i) |
On April 1, 2025, a subsidiary, Beacon Communications, executed a rent reassignment agreement relinquishing one floor of its office space in Toronto to a new tenant who assumed the lease obligation for that floor. This transaction resulted in a gain of $4,253 on lease modification recorded during the period ended June 30, 2025. |
| |
(j) |
During the three months ended June 30, 2025, a
net loss of $0.1
million was recognized in connection with the reversal of previously accrued other income related to Employee Retention Tax Credit
(ERTC) claims. Other income had initially been recorded based on anticipated recoveries from submitted claims. Recent legislative
developments reduced the expected recoverable amounts, resulting in a partial reversal of the accrued other income. The amount
also included $11,991
of other income, primarily consisting of late fees from select clients on payment plans. For the six months ended June 30,
2025, other income primarily related to such late fees totaled $50,197. |
Three Months and Six Months Ended June 30, 2024
| |
(a) |
Interest Expense during the three and six months ended June 30, 2024 consisted of $0.2 million and $0.4 million, respectively, primarily due to interest incurred on production facilities and bank indebtedness. |
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(b) |
The Gain on Revaluation of Warrants recorded during the three and six months ended June 30, 2024 was related to the remeasurement of 89,286 outstanding liability warrants which expired in March 2025. |
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(c) |
As accounted for using the fair value option, the Loss on Revaluation of Equity Investment in YFE of $0.9 million recorded in the three and six months ended June 30, 2024, was a result of the decreases in YFE’s stock price as of the current reporting period when compared to the prior reporting period. This excluded the impact of foreign currency recorded separately. |
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(d) |
The Realized Loss on Marketable Securities Investments during the three and six months ended June 30, 2024 reflected the loss that was not recovered from the investments due to selling securities prior to maturity. |
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(e) |
The Gain (Loss) on Foreign Exchange during the three and six months ended June 30, 2024 was primarily related to the revaluation of the YFE investment, resulting in a loss of $0.2 million and $0.6 million, respectively due to the EURO fluctuation to USD, as compared to the prior reporting period. The remaining balance was related to remeasurements of transactions made in foreign currencies that are outstanding as of the condensed consolidated balance sheet date. |
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(f) |
No loss on settlement of debt was recorded during the three and six months ended June 30, 2024. |
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(g) |
Interest Income during the three and six months ended June 30, 2024 primarily consisted of interest income, net of premium amortization expense, recorded for the investments in marketable securities. |
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(h) |
The Finance Lease Interest Expense during the three and six months ended June 30, 2024 represented the interest portion of the finance lease obligations for equipment purchased under an equipment lease line. |
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(j) |
Other Income during the three and six months ended June 30, 2024 was primarily related to late fees from select clients on a payment plan. |
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