On June 9, 2026, the Company and the Buyer consummated the Closing of the transactions contemplated by the Asset Sale. All of the assets and liabilities sold and assumed pursuant to the Asset Sale related to our historical footwear business. Refer to Note 1, Description of Business.
 

At the Closing, the aggregate consideration received by the Company in connection with the Asset Sale was $40.7 million in cash (the "Purchase Price"), as adjusted to reflect the purchase price adjustments set forth in the Asset Purchase Agreement and the release of $2.0 million in cash from the deposit amount. $3.0 million of the Purchase Price was deposited into an escrow account (the "Escrow Fund"), which Escrow Fund will serve as the primary source of recovery for (i) any negative purchase price adjustment under the Asset Purchase Agreement, and (ii) any inaccuracy in the Surviving Representations (as defined therein) for a period of 60 days following the Closing. 

In connection with the closing of the Asset Sale, the Company and Buyer entered into a transition services agreement (the "Transition Services Agreement"). The Transition Services Agreement outlines the infrastructure, people, and facility support the Company will provide to Buyer for a period of 60 days after the transaction closing date. The agreed upon charges for such services are intended to allow the Company and Buyer, respectively, to recover all costs and expenses of providing such services. Fees earned and incurred under the Transition Services Agreement for the three and six months ended June 30, 2026 were $0.9 million and $0.9 million, respectively.

Using the proceeds from the Asset Sale, we paid $19.7 million to extinguish our outstanding debt arrangement with Second Avenue Capital Partners LLC. The payment resulted in a debt extinguishment loss of $3.2 million and is included in "Loss from discontinued operations before gain from disposal, net of tax" on the condensed consolidated statement of operations and comprehensive loss. Refer to Note 5, Long-Term Debt, for more information.

The historical footwear business results and net assets are presented herein as discontinued operations for all periods presented, a change from prior presentation for the comparative periods. The Company recorded a gain from the Asset Sale of $21.6 million for the three months and six months ended June 30, 2026, and a net loss from discontinued operations of $4.9 million and $19.6 million for the three months and six months ended June 30, 2026, respectively. The Company recorded a net loss from discontinued operations of $10.4 million and $24.8 million for the three months and six months ended June 30, 2025, respectively.

The Asset Sale is treated as discontinued operations for all periods presented because the sale represents a strategic shift that had a material impact on the Company's operating results. The tables below set forth the assets and liabilities related to discontinued operations as of June 30, 2026, and December 31, 2025, and results of operations related to discontinued operations for the three and six months ended June 30, 2026 and 2025.