Note 3 - Held for Sale Classification and Discontinued Operations Presentation

6 Months Ended

Jun. 30, 2026

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

3.	HELD FOR SALE CLASSIFICATION AND DISCONTINUED OPERATIONS PRESENTATION

Held for sale classification—We report and classify a business or a component of an entity as held-for-sale (Held-For-Sale Business) when management has approved the sale or received approval to sell the business and is committed to a formal plan, the business is available for immediate sale, the business is being actively marketed, the sale is anticipated to occur during the next 12 months and certain other specified criteria are met. A Held-For-Sale Business is recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated fair value, a loss is recognized. As of June 30, 2026, assets and liabilities related to a Held-For-Sale Business are reported in Assets held for sale and Liabilities held for sale, respectively, in our Condensed Consolidated Balance Sheets.

The following table summarizes the components of assets and liabilities held-for-sale on the Condensed Consolidated Balance Sheets at June 30, 2026 (in thousands):

		*June 30, 2026*				*December 31, 2025*
ASSETS
Accounts receivable			4,190				2,455
Inventory, net			11,843				13,724
Prepaid and other current assets			690				871
Property and equipment, net ⁽¹⁾			724				69
Intangibles, net			735				4,371
Total assets held for sale		$	18,182			$	21,490
LIABILITIES
Accounts payable			3,102				2,765
Accrued and other current liabilities			1,059				1,047
Total liabilities held for sale		$	4,161			$	3,812

(1)

As of June 30, 2026, Assets Held for Sale includes the net carrying value of the Company's UK warehouse facility, consisting of land, building, and related accumulated depreciation of $0.6 million. In accordance with ASC 360, the asset was classified as held for sale as management, having the appropriate authority, committed to a plan to sell the facility, the asset is available for immediate sale in its present condition, an active marketing program is underway to locate a buyer at a reasonable price relative to fair value, and completion of the sale is considered probable within one year. This asset was not included in the sale of assets to Trademark Global, LLC.

As of June 30, 2026, Liabilities Held for Sale includes the mortgage secured by the UK warehouse facility with an outstanding balance of $0.2 million. Because the mortgage is directly associated with the disposal group, it has been classified as a liability held for sale in accordance with applicable accounting guidance. The mortgage will remain outstanding until the sale of the facility is completed.

Discontinued operations presentation—We present a business, or a component of an entity, as discontinued operations if a) it meets the held-for-sale criteria, or is disposed of by sale, or is disposed of other than by sale, and b) the disposal of the business, or component of an entity, represents a strategic shift that has (or will have) a major effect on the Company's financial results. As of June 30, 2026, we have retrospectively adjusted our Condensed Consolidated Statement of Operations to reflect the classification of continuing and discontinued operations.

The following table presents the amounts related to the operations of the Company that have been reflected in Income (loss) from discontinued operations (in thousands):

		*Three Months Ended June 30,*								*Six Months Ended June 30,*
		*2026*				*2025*				*2026*				*2025*
Net revenue		$	13,297			$	19,374			$	25,711			$	34,671
Cost of goods sold			3,016				8,849				7,450				14,772
Gross profit			10,281				10,525				18,261				19,899
Operating expenses:
Sales and distribution			6,706				11,322				13,892				20,946
General and administrative			73				130				138				235
Impairment loss on intangibles⁽¹⁾			—				—				3,427				—
Total operating expenses from discontinued operations			6,779				11,452				17,457				21,181
Operating income (loss) from discontinued operations			3,502				(927	)			804				(1,282	)
Other expense, net			24				157				10				259
Income (loss) from discontinued operations before income taxes			3,478				(1,084	)			794				(1,541	)
Provision for income taxes			(7	)			(11	)			(20	)			(31	)
Income (loss) from discontinued operations		$	3,471			$	(1,095	)		$	774			$	(1,572	)

(1)

On July 17, 2026, the Company completed the sale of substantially all of its assets to Trademark Global, pursuant to the Asset Purchase Agreement, dated as of April 27, 2026. Pursuant to the Asset Purchase Agreement, Trademark Global acquired certain specified assets and liabilities of the Company, including, among other things, assets associated with the Company’s marquee consumer brands: Mueller Living, PurSteam, hOmeLabs, Squatty Potty, Healing Solutions, and Photo Paper Direct for $18.0 million in cash, subject to certain purchase price adjustments.

Based on the definitive deal terms, specifically the $18.0 million base purchase price and the estimated purchase price adjustments, the Company evaluated the carrying value of its brand intangible assets. As of June 30, 2026, management evaluated the carrying value of these brand intangible assets based on the finalized deal terms and expected net proceeds, and determined that no impairment was required for the three months ended June 30, 2026. Previously, the Company determined that the estimated allocated proceeds from the Asset Purchase Agreement were lower than the carrying values for certain definite-lived brand assets, and accordingly recorded a non-cash impairment charge of $3.4 million during the first quarter of 2026. This charge was recorded within Income (loss) from discontinued operations on the Condensed Consolidated Statement of Operations.