On July 17, 2026, the Company completed its sale of assets to Trademark Global pursuant to the Asset Purchase Agreement. 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.

On July 17, 2026, the Company completed its sale of preferred stock to Lazar, pursuant to the Securities Purchase Agreement. Pursuant to the Securities Purchase Agreement, Lazar purchased from the Company (a) 1,750,000 shares of Series AA Preferred Stock, the closing of which occurred on April 27, 2026, and (b) 1,750,000 shares of Series AAA Preferred Stock, the closing of which occurred on July 17, 2026, in each case at a purchase price of $2.00 per share of Preferred Stock for aggregate gross proceeds of $7.0 million, subject to the terms and conditions of the Securities Purchase Agreement. As the Company received the requisite approvals at the Special Meeting, each (i) Series AA Preferred Share may be converted into 7.7 shares of common stock, which number is based on a conversion price of $0.25974, as determined in accordance with the terms of the Securities Purchase Agreement, and (ii) Series AAA Preferred Share may be converted into 135.1 shares of common stock, which number is based on a conversion price of $0.0148, as determined in accordance with the terms of the Securities Purchase Agreement.

In connection with the closing of these transactions, the Company entered into a Contingent Value Rights Agreement with Broadridge Corporate Issuer Solutions, LLC, as Rights Agent, on July 17, 2026. Each contingent value right represents a non-transferable contractual right to receive pro rata cash distributions derived from specified future proceeds, including net proceeds from the Asset Sale after satisfaction of certain indebtedness and transaction costs, setting aside $1.0 million for ongoing operational expenses, and establishing up to $6.0 million in reserves for specified liabilities. Additional potential proceeds include any remaining amounts from the specified liability reserves upon full satisfaction of such liabilities, net proceeds from future sales of remaining legacy assets and inventory not acquired by Trademark Global, and net proceeds from tax or tariff refunds, drawbacks, customs claims, or released restricted cash and escrow amounts held prior to closing.

The Board established August 17, 2026, as the distribution date of the contingent value rights to record holders. Upon the closing of the transactions on July 17, 2026, the condition precedent was satisfied. Consequently, the contingent value right obligation will be measured at fair value as of the effective date in the third quarter of 2026 and recognized as a distribution from equity, within retained earnings or additional paid-in capital, with a corresponding contingent value right liability or equity instrument as evaluated under ASC 480 and ASC 815. The contingent value rights represent contractual payment rights only, do not carry voting or dividend rights, accrue no interest, and do not represent equity ownership in the Company.

On July 17, 2026, in connection with the closing of the asset and preferred stock sales, all remaining commitments under the Existing Credit Agreement with MidCap Funding IV Trust were terminated, and all associated financial obligations thereunder were settled in full. Concurrently, all guarantees, mortgages, security interests, and liens securing the indebtedness under the Existing Credit Agreement were fully discharged and released. 

The Company is currently evaluating the accounting for the transaction, and an estimate of the financial effect, including the final gain or loss on the sale, cannot be made at this time.

Effective July 17, 2026, David E. Lazar was appointed as the Chief Executive Officer of the Company, succeeding Arturo Rodriguez, who ceased serving as Chief Executive Officer while remaining on the Company's Board of Directors. In connection with this transition, the Company entered into a Transition and Separation Agreement with Mr. Rodriguez to provide operational transition services through September 30, 2026.

On August 4, 2026, 875,000 shares of Series AA preferred stock were converted into 6,737,500 shares of common stock for David E. Lazar (at a conversion ratio of 7.7 common shares per preferred share).