Assets Held for Sale

6 Months Ended

Jun. 30, 2025

Discontinued Operations and Disposal Groups [Abstract]

We entered into a definitive merger agreement to combine our wholly owned subsidiaries, Pelthos Therapeutics Inc. and LNHC, Inc. (collectively “Pelthos”) with CHRO Merger Sub Inc., a wholly owned subsidiary of Channel Therapeutics Corporation (“Channel”) in April 2025. As a result of meeting the criteria to classify the disposal group as held for sale under generally accepted accounting principles, Pelthos was classified as held for sale as of June 30, 2025. Classification of our disposal group held for sale occurs when sufficient authority to sell the disposal group has been obtained, the disposal group is available for immediate sale and its sale is probable within one year. If at any time these criteria are no longer met, the disposal group would be reclassified as held and used. Assets classified as held for sale are recorded at the lower of their carrying amount or fair value less costs to sell and are not depreciated or amortized. We evaluate the held for sale classification during each reporting period. The disposal group did not meet the requirements for presentation as discontinued operations and are included in income from continuing operations for the three and six months ended June 30, 2025.

We did not have any assets held for sale as of December 31, 2024. The following table presents the carrying amounts of major classes of assets and liabilities related to assets held for sale with respect to the Pelthos divestiture as of June 30, 2025.


	June 30, 2025
Assets:
Cash and cash equivalents	$	2,817
Accounts receivable, net	48
Other current assets	7,910
Property and equipment, net	11,091
Goodwill	3,709
Operating lease right-of-use assets	3,625
Deferred income taxes, net	5,499
Other assets	529
Total assets held for sale	$	35,228

Liabilities:
Accounts payable	$	993
Accrued liabilities	3,894
Deferred revenue	1,072
Current operating lease liabilities	626
Short-term bridge loan	6,963
Long-term deferred revenue	1,763
Long-term operating lease liability	2,940
Other long-term liabilities	17,441
Total liabilities related to assets held for sale	$	35,692

The estimated fair value of the Pelthos other long-term liabilities was $20.6 million compared to a carrying value of $17.4 million as of June 30, 2025. The estimated fair value of the Pelthos other long-term liabilities was $19.1 million compared to a carrying value of $15.9 million as of December 31, 2024.

The merger was closed in July 2025. For additional information, see Note 11, Subsequent Events.