SEGMENT REPORTING (Tables)

12 Months Ended

Dec. 31, 2025

Reconciliation of Segment Net Revenue To Segment Adjusted Gross Profit

The following table includes segment revenue and significant segments expenses:


	Year ended December 31, 2025						Year ended December 31, 2024
(In thousands)	Obagi Medical		Milk Makeup		Total		Obagi Medical		Milk Makeup		Total
Net revenue	$	161,627	$	110,444	$	272,071	$	149,266	$	124,602	$	273,868
Adjusted cost of goods sold(1)	(38,403)		(38,951)		$	(77,354)	(30,697)		(39,618)		$	(70,315)
Adjusted gross profit	$	123,224	$	71,493	$	194,717	$	118,569	$	84,984	$	203,553

(1) Adjusted gross cost of goods sold excludes the fair value of the related party liability for the unfavorable discount to Obagi China Business as part of the Business Combination, the advanced purchase of specific products for the market in Vietnam sold through the SA Distributor that became obsolete when the contract was terminated, and the Supply Agreement and Formulations intangible assets amortized to cost of goods sold.


	Year ended December 31, 2023
(In thousands)	Obagi Medical		Milk Makeup		Total
Net revenue	$	117,651	$	100,487	$	218,138
Adjusted cost of goods sold(1)	(33,922)		(33,801)		$	(67,723)
Adjusted gross profit	$	83,729	$	66,686	$	150,415

(1) Adjusted gross cost of goods sold excludes the fair value of the related party liability for the unfavorable discount to Obagi China Business as part of the Business Combination, the amortization of the inventory fair value step-up as a result of the Business Combination, and the Supply Agreement and Formulations intangible assets amortized to cost of goods sold.

The following table reconciles total consolidated adjusted gross profit to consolidated net loss before and after income taxes:


(In thousands)	Year ended December 31, 2025		Year ended December 31, 2024		Year ended December 31, 2023
Adjusted gross profit	$	194,717	$	203,553	$	150,415

Amortization of the fair value of the related party liability(1)	—		(2,260)		(4,058)
Discontinued product write-off(2)	494		2,864		—
Amortization of the inventory fair value adjustment(3)	—		—		1,691
Amortization impact of intangible assets(4)	11,205		11,205		11,205

Selling, general and administrative	247,984		245,297		223,508
Loss on impairment of goodwill	152,018		5,031		—
Interest expense, net	25,094		17,155		18,906
Loss on extinguishment of debt	24,398		—		—
Gain on sale of trademark	(5,679)		—		—
Loss on acquisition	6,233		—		—
Change in fair value of derivative liabilities	(3,695)		(23,627)		10,337
Change in contingent consideration liabilities	(861)		—		—
Other expenses (income), net	(229)		(3,574)		1,769
Loss before income taxes	$	(262,245)	$	(48,538)	$	(112,943)

(1) Relates to the fair value of the related party liability for the unfavorable discount to Obagi China Business as part of the Business Combination.

(2) Relates to the advance purchase of specific products for the market in Vietnam sold through the SA Distributor that became obsolete when the contract was terminated.

(3) Relates to the amortization of the inventory fair value step-up as a result of the Business Combination.

(4) The Supply Agreement and Formulations intangible assets are amortized to cost of goods sold.