Interest Income and Total Other Income (Expense), net
There was interest income and other income of $0.3 million for the three months ended March 31, 2022. Other expense was $0.3 million for the three months ended March 31, 2021. The increase was the result of interest income related to purchase of bonds and dividend income from securities purchased in the three months ended March 31, 2022. For the three months ended March 31, 2021, the other expense of $0.3 million was related to litigation settlement costs recorded as a liability in relation to the lawsuit filed by a former CEO of the Company (see Note 8 to the financial statements for additional information).
Realized Gain on Investments, net
Realized gain on investments, net consists of available for sale and equity securities. Realized gain on investments, net increased $0.1 million, or 100% for the three months ended March 31, 2022. The increase was a result of investments purchased by the Company for the three months ended March 31, 2022.
Unrealized Gain on Equity Securities, net
Unrealized gain on equity securities, net increased $0.1 million, or 100% for the three months ended March 31, 2022. Our unrealized gains and losses on equity securities each period are a function of changes in the fair value of the equity securities that we hold as of the current reporting period balance sheet date relative to the preceding balance sheet date. Our unrealized gains during the current period were attributable to increases in the fair value of our equity securities holdings during the period.
Income Taxes
We recorded net income tax benefit from continuing operations of $0.1 million and less than $0.1 million for the three months ended March 31, 2022 and 2021 respectively.
We use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. As of March 31, 2022, and 2021, we had no liability for unrecognized tax benefits. We do not believe there will be any material changes to our unrecognized tax positions over the next twelve months.
Discontinued Operations
On December 31, 2021, the Company closed on the terms for the sale and transfer of substantially all of the Company’s operating subsidiaries and all of its assets. The financial results of discontinued operations primarily reflect the results of our foreign operating subsidiaries conducting business as provider of real-time digital engagement solutions and services of software solutions and services to the wireless carriers throughout the world. This included the Company’s portfolio of solutions and services for real-time analytics, customer acquisition and activation, customer value management and loyalty for the telecom industry promoting partnerships into retail and financial services.
FINANCIAL CONDITION
Our working capital position decreased by $6.8 million to $30.9 million as of March 31, 2022 from $37.7 million as of December 31, 2021. The decrease in working capital is related to the purchase of investments.
LIQUIDITY AND CAPITAL RESOURCES
We have historically financed operations through cash flows from operations and bank borrowings. On December 31, 2021, the Company closed on the terms of the Purchase Agreements. Following the sale of its assets in December 2021, the Company is currently conducting research and development in two initial areas of product focus, each of which are in research-oriented pre-release mode. The two areas of focus are in the application of self-learning algorithms as well as the symbolic tagging and organizing of physical objects. At March 31, 2022, our principal source of liquidity was $28.1 million in cash and cash equivalents. Our anticipated uses of cash in the future will be to fund the expansion of our business through both organic growth as well as possible acquisition activities. Other uses of cash may include investments, capital expenditures and technology expansion.