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Variable Interest Entities | 6 Months Ended
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Jun. 30, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Variable Interest Entities | Variable Interest Entities Consolidated Variable Interest Entities (“VIE”) As of June 30, 2025 and December 31, 2024, we consolidated one entity that is a VIE, that relates to a manufacturing entity for Oru, for which we are the primary beneficiary. Through a management agreement governing the entity, we manage the entity and handle all day-to-day operating decisions. Accordingly, we have the decision-making power over the activities that most significantly impact the economic performance of our VIE and an obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. These decisions and significant activities include, but are not limited to, manufacturing schedules, production processes, units of production and types of products. The Company is contractually obligated to provide financial support to the VIE. Total assets of the VIE included on the consolidated balance sheet as of June 30, 2025 and December 31, 2024 were $2.5 million and $2.2 million, respectively. Total liabilities of the VIE included on the consolidated balance sheets as of June 30, 2025 and December 31, 2024 were $3.1 million and $2.8 million, respectively. The VIE’s assets may only be used to settle the VIE’s obligations and may not be used for other consolidated entities. The VIE’s liabilities are non-recourse to the general credit of the Company’s other consolidated entities. Unconsolidated VIE In June 2025, the Company disposed of 100% of the equity interests of the subsidiaries operating the TerraFlame business, which included disposition of the TerraFlame fixed assets (collectively, the “TerraFlame manufacturing operations”) to the individuals who originally sold to the Company the equity interests in those subsidiaries in 2023 (“Former Sellers”). Further, in connection with the disposition, the Company made a $2.5 million cash payment to the Former Sellers, in consideration for the termination of the Equity Purchase Agreement executed in 2023 and satisfaction of the remaining contingent consideration, which had a fair value of $6.4 million as of the date of the transaction. The purpose of the transaction was for the Company to maintain exclusive rights to TerraFlame intellectual property and the right to distribute TerraFlame products, while reducing costs to operate the business, and to allow the Former Sellers the opportunity to use the fixed assets of the TerraFlame business, which primarily consist of a manufacturing facility, the related equipment to produce TerraFlame and other concrete based products and the TerraFlame assembled workforce in Mexico, to pursue other business opportunities. Thus, the Company retained the intellectual property and all finished goods of TerraFlame, as it will continue to be the exclusive distributor of TerraFlame products. In line with the transaction, the Company and the Former Sellers executed a supply agreement in which the Former Sellers have agreed to continue to manufacture TerraFlame products and sell these products to the Company at cost plus a specified margin, as well as a required annual minimum purchase commitment of $0.8 million. In addition to the gain of $0.7 million recognized on remeasurement of the contingent consideration as of June 12, 2025, as discussed in Note 15, Fair Value Measurements, the Company recognized a loss of $1.4 million upon deconsolidation as of June 30, 2025, which was recorded to other operating expenses on the consolidated statements of operations and comprehensive income (loss). The assets transferred to the Former Sellers, which had a net book value of $5.5 million, were deconsolidated from the consolidated balance sheets as of June 30, 2025 and the remaining contingent consideration, which had a fair value of $6.4 million as of the transaction date, was relieved. The Company performed a VIE analysis and determined that TerraFlame was a VIE, but that the Company is not its primary beneficiary. The Former Sellers have the power due to their (i) 100% equity ownership of the VIE, (ii) ability to direct the VIE and (iii) make all significant decisions that impact the economic performance of the VIE. The Company’s maximum exposure to loss to the unconsolidated VIE is limited to the annual minimum purchase commitment of $0.8 million.

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- Definition The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 810 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/810/tableOfContent + Details
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