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Discontinued Operations

9 Months Ended

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