2. Discontinued Operations and Assets Held for Sale

On October 24, 2025, the Company completed the Asset Sale. The transaction represented a strategic shift that had a major effect on the Company's operations and financial results. Accordingly, the results of the disposed component are presented as discontinued operations in the accompanying condensed consolidated statements of operations and cash flows for all periods presented, in accordance with ASC 205-20.

The disposal of the product business was completed prior to December 31, 2025, and the Company generated no revenue from discontinued operations in the three or six months ended June 30, 2026. Product returns and related credits are reflected within cost of goods sold. The amounts reported within discontinued operations in the 2026 periods relate to the settlement and wind-down of the previously disposed business rather than to any continuing activity, and consist principally of (i) a benefit from the release of liabilities for uncertain tax positions upon the lapse of statutes of limitations, (ii) product warranty and returns cost adjustments, and (iii) costs associated with the wind-down of the Company’s former foreign subsidiaries. These amounts are presented as adjustments to amounts previously reported in discontinued operations in accordance with ASC 205-20-45-4. Residual assets and liabilities of the disposed component remain on the condensed consolidated balance sheets and are presented separately as assets and liabilities related to discontinued operations pending final collection and settlement.

The Company continues to fulfill limited warranty and technical support obligations for legacy products sold prior to the Asset Sale. Those activities, together with residual collections, are reflected in continuing operations. Settlements of liabilities of the disposed component are reflected within discontinued operations.

Cash flows of discontinued operations were as follows: net cash (used in) provided by operating activities of $(860) and $4,484, and net cash used in investing activities of $0 and $(21), for the six months ended June 30, 2026 and 2025, respectively.

For a full description of the Asset Sale, including the Strategic Plan approved by the Board in September 2025, and the classification of assets and liabilities as held for sale, see Note 2 to the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

Major line items of results of discontinued operations (unaudited):

		Three months ended June 30,						Six months ended June 30,
		2026			2025			2026			2025
Revenue	$	—		$	1,916		$	—		$	4,229
Cost of goods sold		107			2,047			195			4,212
Gross profit (loss)		(107	)		(131	)		(195	)		17
Operating expenses		(92	)		3,236			172			5,404
Other (income) expenses, net		(50	)		—			28			—
Income (loss) from discontinued operations before income taxes		35			(3,367	)		(395	)		(5,387	)
Provision (benefit) for income taxes		30			—			(763	)		—
Income (Loss) from discontinued operations, net of tax	$	5		$	(3,367	)	$	368		$	(5,387	)

The following table disaggregates the Company’s revenue into primary product groups:

	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Audio conferencing	$	—	$	625	$	—	$	1,579
Microphones		—		971		—		2,089
Video products		—		320		—		561
	$	—	$	1,916	$	—	$	4,229

The following table disaggregates the Company’s revenue into major regions:

	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
North and South America	$	—	$	1,331	$	—	$	2,291
Asia Pacific (includes Middle East, India and Australia)		—		230		—		1,418
Europe and Africa		—		355		—		520
	$	—	$	1,916	$	—	$	4,229

Assets grouped into discontinued operations (unaudited):

		June 30, 2026		December 31, 2025
Accounts receivable, net	$	—	$	353
Inventories, net		—		—
Prepaids and other current assets		140		251
Property, plant and equipment, net		—		80
Other long-term assets		14		29
Total assets	$	154	$	713

Liabilities grouped into discontinued operations (unaudited):

		June 30, 2026		December 31, 2025
Accounts payable	$	—	$	63
Accrued liabilities, current		—		521
Other long-term liabilities		442		1,236
Total liabilities	$	442	$	1,820

Management concluded the disposal constituted a component and a strategic shift because it eliminated significant revenue-generating activities. The Company continues to provide limited product support and warranty services. On July 1, 2026, the Company entered into an Agreement and Plan of Merger by and among the Company, CLRO Merger Sub, Inc., Cortigent, Inc. and Vivani Medical, Inc.; see Note 14 — Subsequent Events.