Discontinued Operations

6 Months Ended

Jun. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

In the second quarter of 2023, the Company exited its then-existing U.S. hemp-derived cannabinoid product operations. Accordingly, the net loss of the U.S. operations for the three and six months ended June 30, 2023 are reported separately as loss from discontinued operations on the condensed consolidated statements of net loss and comprehensive income (loss). There was no activity in discontinued operations for the three and six months ended June 30, 2024.

The following table presents the major components comprising loss from discontinued operations in the condensed consolidated statements of operations for the three and six months ended June 30, 2023:


	Three months ended June 30,			Six months ended June 30,
		2023
Net revenue		$	380		$	1,029
Cost of sales		848			2,044
Inventory write-down		839			839
Gross profit		(1,307)			(1,854)
Operating expenses
Sales and marketing		387			518
Research and development		18			20
General and administrative		213			736
Restructuring costs		534			534
Share-based compensation		5			21
Depreciation and amortization		5			13

Impairment loss on long-lived assets(i)		205			205
Total operating expenses		1,367			2,047
Interest income		3			8
Other, net(ii)		(163)			(163)
Total other income (loss)		(160)			(155)
Loss before income taxes		(2,834)			(4,056)
Income tax expense (benefit)		—			—
Net loss from discontinued operations		$	(2,834)		$	(4,056)

(i)During the three and six months ended June 30, 2023, as a result of the exit of the U.S. operations, the Company recognized an impairment charge of $205 related to the right-of-use lease assets associated with the Company’s former U.S. manufacturing facility in Los Angeles, California.

(ii)For the three and six months ended June 30, 2023, Other, net related to loss on disposal of assets that were part of the U.S. operations.

The following tables present the Company’s discontinued operations revenue by major product category:


	Three months ended June 30,		Six months ended June 30,
	2023
Cannabis extracts	380		1,029
Net revenue	$	380	$	1,029

The following tables summarize the Company’s discontinued operations restructuring activity for the three and six months ended June 30, 2023:


	Accrual as of April 1, 2023		Expenses		Payments/Write-offs		Accrual as of June 30, 2023
Employee Termination Benefits	$	—	$	442	$	(223)	$	219

Other Restructuring Costs	—		92		—		92
Total	$	—	$	534	$	(223)	$	311


	Accrual as of January 1, 2023		Expenses		Payments/Write-offs		Accrual as of June 30, 2023
Employee Termination Benefits	$	—	$	442	$	(223)	$	219

Other Restructuring Costs	—		92		—		92
Total	$	—	$	534	$	(223)	$	311

The Company had no assets or liabilities presented in the condensed consolidated balance sheets related to its discontinued operations as of both June 30, 2024 and December 31, 2023.

For the six months ended June 30, 2024, there were no purchases of property plant and equipment related to discontinued operations. For the six months ended June 30, 2023, purchases of property plant and equipment related to discontinued operations were $67.