On June 14, 2026, we entered into the Purchase Agreement to sell the Disposal Group to Gilat. The Purchase Agreement provides for a base purchase price of $157,500,000 in cash, subject to customary adjustments as defined in the Purchase Agreement. Upon execution of the Purchase Agreement, we received $10,000,000 of the purchase price (the "Advance Payment"). We will have the right to retain the Advance Payment in the event that the Purchase Agreement is terminated, if at the time of such termination: (i) all closing conditions have been satisfied or waived, other than certain conditions relating to regulatory approval and clearance, and any conditions by their nature are to be satisfied at the closing, and (ii) Sellers, as defined, are not in material breach of the Purchase Agreement. At closing, $3,000,000 of the base purchase price will be held in escrow to fund potential working capital related adjustments. The Strategic Transaction is expected to close in calendar 2026, subject to certain closing conditions and regulatory approvals. The consummation of the Strategic Transaction does not require the approval of our common stockholders.

As of July 31, 2026, we determined that the Disposal Group met the criteria to be classified as held for sale. Assets classified as held for sale are recorded at the lower of carrying value or fair value, less costs to sell and are no longer depreciated.

We classify the results of operations and assets and liabilities related to a disposal group in discontinued operations if all of the following criteria are met: (1) the operations and cash flows of the disposal group can be clearly distinguished from the rest of the company; (2) the disposal group meets the criteria to be classified as held for sale; and (3) the disposal represents a strategic shift that has or will have a major effect on our operations and financial results. For businesses classified as discontinued operations, the associated balances included in the consolidated balance sheets and consolidated statements of operations are reclassified from their historical presentation to assets and liabilities of discontinued operations on the consolidated balance sheets and to discontinued operations on the consolidated statements of operations, respectively, for all periods presented. The gains or losses associated with the discontinued operation are also recorded in discontinued operations on the consolidated statements of operations.

As the Strategic Transaction represents a material strategic shift in our business, the results and net assets of the Disposal Group are presented in our consolidated financials as "discontinued operations" and comparable prior periods have been recast to reflect this change.

The tables below present the carrying amounts of the major classes of assets and liabilities of discontinued operations as of July 31, 2026 and 2025 and the major classes of line items comprising net loss from discontinued operations for the fiscal years ended July 31, 2026 and 2025.


Assets	July 31, 2026		July 31, 2025
Accounts receivable, net	$	58,781,000	57,661,000
Inventories, net	51,841,000		62,019,000
Other current assets (1)	6,719,000		8,307,000
Total current assets	$	117,341,000	127,987,000

Property, plant and equipment, net (2)	$	14,324,000	15,451,000
Operating lease right-of-use assets and other assets, net (2)	27,460,000		27,618,000
Goodwill and intangibles with finite lives, net (2)	62,261,000		66,177,000
Total non-current assets	$	104,045,000	109,246,000
Liabilities
Accounts payable	$	10,503,000	11,306,000
Accrued expenses, other current liabilities and operating lease liabilities, current	19,725,000		21,170,000
Contract liabilities	23,962,000		20,591,000
Total current liabilities	$	54,190,000	53,067,000

Operating lease liabilities and other liabilities, non-current	$	19,384,000	20,969,000
Deferred tax liability, net and income taxes payable, non-current (3)	5,314,000		5,887,000
Total non-current liabilities	$	24,698,000	26,856,000


	Fiscal Years Ended July 31,
	2026		2025
Net sales	$	185,837,000	198,656,000
Cost of sales	134,198,000		165,989,000
Impairment of long-lived assets, including goodwill	—		74,251,000
Other operating expenses	40,763,000		67,610,000
Other expenses (4)	27,683,000		26,912,000
Loss from discontinued operations before income taxes	(16,807,000)		(136,106,000)
Provision for income taxes	1,081,000		199,000
Net loss from discontinued operations	$	(17,888,000)	(136,305,000)