Inventories consist of the following (in $000s):

During the first quarter of FY27, the Company completed the sale of its High Performance and High Visibility inventory and certain intellectual property associated with that inventory for total net cash consideration of $13.2 million. The consideration included a $1.4 million escrow receivable recorded in other assets on the condensed consolidated balance sheets. The Company recognized a gain on the sale of $6.5 million.

Cash proceeds received related to the sale of inventory has been reflected as deferred revenue in the condensed consolidated balance sheets as of July 31, 2026 due to the Company’s agreement with the buyer to continue to manufacture and warehouse the associated inventory. Deferred revenue will be recognized in the condensed consolidated statement of operations as the Company manufactures and ships the inventory to the buyer. During the three months ended July 31, 2026, $1.4 million of previously deferred revenue was recognized and offset against the related inventory writedown with no impact to the condensed consolidated statement of operations.