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Discontinued Operations | 9 Months Ended
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Sep. 30, 2025
Discontinued Operations [Abstract] |
Discontinued Operations | Note 6 — Discontinued Operations Cultivation Business Discontinued Operations On December 31, 2024, the Company executed and closed the Purchase Agreement with CP for the sale of assets relating to the Company’s Cultivation Business. The consideration for the sale of the Cultivation Business consisted of the assumption by CP of all the Company’s secured indebtedness currently held by CP with an aggregate amount of principal and accrued interest of approximately $7 million, as well as certain other liabilities related to the Cultivation Business. The sale represents efforts to strategically shift the Company’s direction to focus on its hemp-related business operations. As a result, the Cultivation Business has been presented as discontinued operations in the condensed consolidated financial statements for all periods presented. The disposition resulted in a loss on sale of $11.9 million, which was recorded in net loss from discontinued operations in the consolidated statement of operations for the year ended December 31, 2024. The operating results of the Cultivation Business were reported as a net loss from discontinued operations in the consolidated statements of operations through December 31, 2024, the date of disposition, and were considered material. The assets and liabilities related to the Cultivation Business have been separately classified in the accompanying condensed consolidated balance sheets as of September 30, 2025 and 2024. Extraction Business Discontinued Operations On March 30, 2025, the Company approved the discontinuation and wind down of its legacy Extraction Business. As a result, all operations associated with the Extraction Business have ceased as of March 31, 2025, and the Company has initiated the sale or disposal of all remaining assets related to the Extraction Business. In addition, all outstanding contracts associated with the Extraction Business have been or are in the process of being terminated in accordance with their respective terms. In connection with the discontinuation of the business, the Company reduced its workforce by nine employees on April 1, 2025. The discontinuation of the legacy Extraction Business represents efforts to strategically shift the Company’s direction to support the continued expansion of its hemp-derived products business operations. As a result, the Extraction Business has been presented as discontinued operations in the condensed consolidated financial statements for all periods presented. As a result of the decision to wind down the Extraction Business, a gain of approximately $3.5 million, was recorded in income from discontinued operations in the condensed consolidated statement of operations for the nine months ended September 30, 2025. The operating results of the Extraction Business were reported as a net loss from discontinued operations in the condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024, and were considered material. The assets and liabilities related to the Extraction Business have been separately classified in the accompanying condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024. The assets and liabilities associated with Discontinued Operations consisted of the following as of September 30, 2025 and December 31, 2024, respectively:
(In thousands) |  | September 30, 2025 |  |  | December 31, 2024 |
Assets |  |  |  |  |  |
Current assets: |  |  |  |  |  |
Accounts receivable, net |  | $ | 6 |  |  | $ | 318 |
Inventory, net |  |  | — |  |  |  | 1,079 |
Prepaid expenses and other current assets |  |  | 42 |  |  |  | 1,199 |
Current assets of discontinued operations |  |  | 48 |  |  |  | 2,596 |
Property and equipment, net |  |  | — |  |  |  | 186 |
Operating lease right-of-use assets |  |  | 50 |  |  |  | 504 |
Other non-current assets |  |  | — |  |  |  | 25 |
Non-current assets of discontinued operations |  |  | 50 |  |  |  | 715 |
Total assets of discontinued operations |  | $ | 98 |  |  | $ | 3,311 |
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 600 |  |  | $ | 1,249 |
Accrued expenses and other current liabilities |  |  | 126 |  |  |  | 5,207 |
Operating lease liabilities, current |  |  | 76 |  |  |  | 261 |
Customer deposits |  |  | 1,358 |  |  |  | 2,525 |
Current liabilities of discontinued operations |  |  | 2,160 |  |  |  | 9,242 |
Operating lease liabilities, net of current |  |  | — |  |  |  | 257 |
Non-current liabilities of discontinued operations |  |  | — |  |  |  | 257 |
Total liabilities |  | $ | 2,160 |  |  | $ | 9,499 |
The following table summarizes the Company’s (loss) income from Discontinued Operations for the three and nine months ended September30, 2025 and 2024, respectively:
|  | For the three months ended September 30, |  |  | For the nine months ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |
Revenue |  | $ | — |  |  | $ | 1,934 |  |  | $ | 1,188 |  |  | $ | 7,526 |
Cost of goods sold |  |  | — |  |  |  | 1,709 |  |  |  | 1,835 |  |  |  | 6,009 |
Gross profit (loss) |  |  | — |  |  |  | 225 |  |  |  | (647 | ) |  |  | 1,517 |
Selling, general and administrative |  |  | 31 |  |  |  | 2,660 |  |  |  | 1,403 |  |  |  | 7,763 |
Gain on settlement of contingent liabilities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (5,935 | )
Impairment of right-of-use assets |  |  | — |  |  |  | — |  |  |  | 24 |  |  |  | — |
Loss (gain) on disposal on property and equipment |  |  | — |  |  |  | 10 |  |  |  | (2 | ) |  |  | (38 | )
Total operating expenses |  |  | 31 |  |  |  | 2,670 |  |  |  | 1,425 |  |  |  | 1,790 |
Operating loss from discontinued operations |  |  | (31 | ) |  |  | (2,445 | ) |  |  | (2,072 | ) |  |  | (273 | )
Other (Expense) income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain on disposal of Extraction business |  |  | — |  |  |  | — |  |  |  | 3,534 |  |  |  | — |
Other (expense) income, net |  |  | (1 | ) |  |  | 150 |  |  |  | (1 | ) |  |  | 169 |
Total other (expense) income |  |  | (1 | ) |  |  | 150 |  |  |  | 3,533 |  |  |  | 169 |
Net (loss) income from discontinued operations |  |  | (32 | ) |  |  | (2,295 | ) |  |  | 1,461 |  |  |  | (104 | )
Income tax effect on discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
(Loss) income from discontinued operations, net of income taxes |  |  | (32 | ) |  |  | (2,295 | ) |  |  | 1,461 |  |  |  | (104 | )
The consolidated statements of cash flows include continuing operations and discontinued operations. The following table summarizes the depreciation and amortization of long-lived assets, provisions for credit losses, change in inventory reserves, and capital expenditures and disposals related to the Discontinued Operations for the three and nine months ended September 30:
|  | For the three months ended September 30, |  |  | For the nine months ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Depreciation and amortization |  | $ | — |  |  | $ | 332 |  |  | $ | 52 |  |  | $ | 1,114 |
Change in provision for credit losses, net |  |  | — |  |  |  | 74 |  |  |  | 52 |  |  |  | 409 |
Change in inventory reserves |  |  | — |  |  |  | (111 | ) |  |  | — |  |  |  | (1,833 | )
Proceeds from disposal of property and equipment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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