On December 12, 2025, our Board of Directors approved a plan to divest our ust branded product line (the “Disposal Group”). The Disposal Group consists primarily of inventory and long-lived intangible assets associated with the brand. We expect to complete the divestiture within twelve months.

The Disposal Group does not represent a strategic shift that will have a major effect on our operations or financial results. We concluded that the Disposal Group met the criteria for classification as held for sale under ASC 360-10 – Property, Plant, and Equipment during fiscal 2026 and does not qualify as discontinued operations under ASC 205-20 – Presentation of Financial Statements. The results of the Disposal Group will continue to be reported within continuing operations.

Upon classification as held for sale, we measured the Disposal Group at the lower of its carrying amount or fair value less costs to sell. Based on our estimate of fair value using the income approach, we determined that the carrying value exceeded the fair value less costs to sell and recorded a non-cash impairment charge of $3.4 million during fiscal 2026 included within operating income in the Condensed Consolidated Statements of Operations.

The carrying amounts of the major classes of assets included in the Disposal Group were as follows (in thousands):


	April 30, 2026
Inventory	$	3,395
Long-lived intangible asset	788
Other	(16)
Impairment charge	(3,433)
Carrying value	$	734

The fair value of the Disposal Group was determined using Level 3 inputs under the fair value hierarchy in ASC 820 – Fair Value Measurement. Fair values were estimated using discounted cash flow analysis using significant assumptions including projected cash flows of the brand, terminal growth rates, discount rates, and market-based revenue multiples observed in comparable transactions. Costs to sell were estimated based on expected transaction-related fees and other incremental costs.

We will reassess the fair value of the Disposal Group at each reporting date until the transaction is completed. Any subsequent adjustments to fair value less costs to sell will be recognized in earnings in the period in which they are identified.