Aterian, Inc. (the "Company") is a consumer products company that predominantly operates through online retail channels such as Amazon, Walmart, and Target and its own direct to consumer websites. The Company operates its owned brands, which were either incubated or purchased, selling products in multiple categories, including home and kitchen appliances, kitchenware, air quality appliances, health and beauty products and essential oils. 

On July 17, 2026, the Company completed a strategic sale of substantially all of its marquee consumer brands pursuant to the Asset Purchase Agreement described below (the “Asset Sale”). As of June 30, 2026, the assets and liabilities associated with the Asset Sale met the criteria for held-for-sale treatment and are presented as Assets Held for Sale and Liabilities Associated with Assets Held for Sale on the Condensed Consolidated Balance Sheets. Furthermore, the historical operating results and cash flows of these divested assets are classified as Discontinued Operations in the Condensed Consolidated Statements of Operations and cash flows for all periods presented. Following the Asset Sale, the Company's ongoing continuing operations consist primarily of its remaining legacy brands, including Vremi and Xtava.

Headquartered in New Jersey, the Company also maintains offices in China, the Philippines, and the United Kingdom.

Asset Purchase Agreement

On July 17, 2026, the Company completed the sale of substantially all of its assets to Trademark Global, LLC ("Trademark Global"), pursuant to the Asset Purchase Agreement, dated as of April 27, 2026 (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.

Securities Purchase Agreement

On July 17, 2026, the Company completed its previously announced sale of preferred stock to David E. Lazar (“Lazar”), pursuant to that certain Securities Purchase Agreement, dated as of April 27, 2026 (the “Securities Purchase Agreement”). Pursuant to the Securities Purchase Agreement, Lazar purchased from the Company (a) 1,750,000 shares of Series AA Convertible Non-Redeemable Preferred Stock, par value $0.0001 per share, of the Company (the “Series AA Preferred Stock” and such purchased shares, the “Series AA Preferred Shares”), the closing of which occurred on April 27, 2026 (the “Initial SPA Closing”), and (b) 1,750,000 shares of Series AAA Convertible Non-Redeemable Preferred Stock, par value $0.0001 per share, of the Company (the “Series AAA Preferred Stock” and together with the Series AA Preferred Stock, the “Preferred Stock” and such purchased shares, the “Series AAA Preferred Shares” and together with the Series AA Preferred Shares, the “Purchased Shares”), the closing of which occurred on July 17, 2026 (the “Second SPA Closing”), 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 (the “Stock Sale,” and together with the Asset Sale, the “Aterian Transactions”). As the Company received the requisite approvals at the Special Meeting (as defined below), each (i) Series AA Preferred Share may be converted into 7.7 shares of the Company's common stock, par value $0.0001 per share (the "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.

Liquidity and Going Concern

In accordance with Accounting Standards Codification 205-40, Presentation of Financial Statements - Going Concern, management evaluated whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these Condensed Consolidated Financial Statements are issued.

Since inception, the Company has incurred significant losses and used cash flows from operations to fund its enterprise. To preserve liquidity, management implemented fixed cost reduction plans in May 2025 and January 2026. However, these actions were insufficient to fully offset macroeconomic pressures, such as tariffs, geopolitical instabilities, rising costs for raw materials and shipping, higher marketplace fees, and reduced consumer spending, which continued to negatively impact operating results and cash flows.

On April 27, 2026, the Company entered into a series of definitive agreements (the "Aterian Transactions"), to restructure its operations and capital position. These agreements included the Asset Purchase Agreement with Trademark Global to sell marquee brands, including Mueller Living, PurSteam, hOmeLabs, Squatty Potty, Healing Solutions, and Photo Paper Direct, for $18.0 million in cash, subject to purchase price adjustments, and the Securities Purchase Agreement with Lazar for the issuance of Series AA Preferred Stock and Series AAA Preferred Stock for aggregate gross proceeds of $7.0 million. As of June 30, 2026, the Company received gross proceeds of $3.5 million from the issuance of the Series AA Preferred Stock, which were offset by approximately $0.3 million of transaction costs recorded as a reduction to additional paid-in capital, resulting in net proceeds of approximately $3.2 million.

On June 25, 2026, in connection with the Asset Sale to Trademark Global, LLC and the Securities Purchase Agreement with David E. Lazar, the Board of Directors of the Company conditionally declared a dividend in the form of contingent value rights. The contingent value rights were declared to record holders as of the close of business on July 8, 2026, comprising holders of the Company’s common stock, par value $0.0001 per share, and holders of certain unexercised participating warrants to purchase common stock. Each eligible holder is entitled to receive one contingent value right for each share of common stock held or issuable upon exercise of participating warrants as of the record date. Shares of Series AA and Series AAA Convertible Non-Redeemable Preferred Stock are expressly excluded from participating in the distribution. Because the payment of the dividend remained subject to unfulfilled conditions precedent, including stockholder approval and the closing of the transactions, and remained subject to revocation by the Board as of June 30, 2026, no liability or reduction of equity was recognized in the condensed consolidated financial statements for the period ended June 30, 2026.

On July 17, 2026, following the receipt of stockholder approval at a special meeting of stockholders, the Company completed both the Asset Sale to Trademark Global, LLC and the Stock Sale to Lazar. Upon the closing of the Stock Sale, Lazar became the beneficial owner of approximately 95.8% of the Company's issued and outstanding voting securities, constituting a change in control, and was appointed as Chief Executive Officer. Concurrently, all outstanding indebtedness under the Credit and Security Agreement with MidCap Funding IV Trust was repaid in full, all commitments thereunder were terminated, and all associated guarantees and liens were released.

On July 17, 2026, following approval by the Company's stockholders at a special meeting, the Company completed the Asset Sale to Trademark Global for $18.0 million in cash, subject to purchase price adjustments, and completed the issuance and sale of 1,750,000 shares of Series AAA Convertible Non-Redeemable Preferred Stock to Lazar for aggregate proceeds of $3.5 million. 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.

Following the consummation of the Aterian Transactions, the Company will continue to operate its remaining legacy brands, primarily Vremi and Xtava. Management intends to utilize remaining net proceeds to support working capital for these ongoing business segments.

While the completion of the Aterian Transactions eliminated senior debt obligations and provided immediate capital, the Company's retained legacy business operations remain limited in scale. The ongoing macroeconomic challenges, potential operational cash burn associated with scaling the remaining brands, and execution risks regarding the streamlined growth strategy continue to create uncertainty regarding future cash flows.

Based on these factors, management concluded that these conditions continue to raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these Condensed Consolidated Financial Statements are issued. Management’s ongoing plans include driving operational efficiencies across the retained business, optimizing supply chain expenditures, and evaluating additional strategic alternatives. The accompanying Condensed Consolidated Financial Statements do not include any adjustments that might result from the outcome of this uncertainty.

Nasdaq Listing—On December 9, 2025, the Company received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s common stock, for the last 30 consecutive business days, the Company is not currently in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Notice”).

On May 19, 2026, Nasdaq notified the Company in the Compliance Notice that from May 1, 2026 to May 18, 2026 the closing bid price of the Company’s common stock had been $1.00 per share or greater and, accordingly, the Company had regained compliance with Nasdaq Listing Rule 5550(a)(2) and that the matter was now closed.