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Note 18 - Divestiture and Discontinued Operations | 6 Months Ended
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Jun. 30, 2024
Notes to Financial Statements |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | NOTE 18. DIVESTITURE AND DISCONTINUED OPERATIONS On March 12, 2024, the Company entered into an agreement to sell 100% of the membership units of DERMAdoctor for a closing purchase price of $1.1 million. The sale of the membership units closed, and the DERMAdoctor Divestiture occurred, on March 25, 2024. In order to close the sale, the Company was required to obtain the consent of the holders of the Secured Convertibles Notes (see Note 10, “Convertible Notes”) issued in May 2023 to (i) amend the Security Agreement to remove the Membership Units and any assets of DERMAdoctor as collateral for the Company’s obligations pursuant to the Secured Convertible Notes and for DERMAdoctor to be removed as a party to the Security Agreement and (ii) terminate the Subsidiary Guarantee, which DERMAdoctor entered into in connection with the issuance of the Secured Convertible Notes. On March 24, 2024, the Company and the secured parties entered into a First Amendment to the Security Agreement, to effect an amendment to the Security Agreement and a Consent and Release to terminate the Subsidiary Guarantee. To obtain the secured parties’ consent and as consideration for the secured parties taking the necessary actions to execute and deliver the First Amendment and the Subsidiary Guarantee Consent, the Company provided each secured party the option, at the secured party’s election, to receive only upon the closing of the DERMAdoctor Sale Transaction either: a March 2024 Warrant or the Unsecured Convertible Notes (see Note 10 “Convertible Notes”). The accounting requirements for reporting the DERMAdoctor business as discontinued operations were met during the first quarter of 2024. Accordingly, the condensed consolidated financial statements and notes to the condensed consolidated financial statements reflect the results of the DERMAdoctor business as a discontinued operation for the periods presented. In accordance with the provisions of ASC 205-20, the Company has separately reported the assets and liabilities of the discontinued operations in the condensed consolidated balance sheets. The assets and liabilities have been reflected as discontinued operations in the condensed consolidated balance sheets as of December 31, 2023, and consist of the following (in thousands):
|  | Balance at December 31, 2023 |
ASSETS |  |  |  |
Current assets: |  |  |  |
Cash and cash equivalents |  | $ | 206 |
Accounts receivable, net of allowance for credit losses ($0 at December 31, 2023) |  |  | 79 |
Inventory, net of allowance for excess and obsolete inventory and lower of cost or estimated net realizable value adjustments ($363 at December 31, 2023) |  |  | 2,313 |
Prepaid expenses and other current assets |  |  | 132 |
Total current assets, discontinued operations |  |  | 2,730 |
Other assets |  |  | 19 |
Total assets, discontinued operations |  | $ | 2,749 |
LIABILITIES |  |  |  |
Liabilities: |  |  |  |
Current liabilities: |  |  |  |
Accounts payable |  | $ | 224 |
Accrued liabilities |  |  | 347 |
Operating lease liabilities |  |  | 127 |
Total current liabilities, discontinued operations |  |  | 698 |
Total liabilities, discontinued operations |  | $ | 698 |
In accordance with the provisions of ASC 205-20, the Company has not included in the results of continuing operations the results of operations of the discontinued operations in the unaudited condensed consolidated statements of operations. The results of DERMAdoctor’s operations for the six months ended June 30, 2024 and 2023 have been reflected as discontinued operations in the unaudited condensed consolidated statements of operations and consist of the following (in thousands):
|  | Six Months Ended |
|  | 2024 |  |  | 2023 |
Sales: |  |  |  |  |  |  |  |
Product revenue, net |  | $ | 717 |  |  | $ | 1,861 |
Total sales, net |  |  | 717 |  |  |  | 1,861 |
Cost of goods sold |  |  | 493 |  |  |  | 958 |
Gross profit |  |  | 224 |  |  |  | 903 |
Operating expenses |  |  |  |  |  |  |  |
Research and development |  |  | 2 |  |  |  | 21 |
Sales and marketing |  |  | 292 |  |  |  | 960 |
General and administrative |  |  | 48 |  |  |  | 615 |
Total operating expenses |  |  | 342 |  |  |  | 1,596 |
Operating loss |  |  | (118 | ) |  |  | (693 | )
Other expense, net |  |  | (6 | ) |  |  | (9 | )
Net loss from discontinued operations |  | $ | (124 | ) |  | $ | (702 | )
In accordance with the provisions of ASC 205-20, the Company has not included in the results of continuing operations the results of operations of the discontinued operations in the unaudited condensed consolidated statements of cash flows. The results of DERMAdoctor for the six months ended June 30, 2024 and 2023 have been reflected as discontinued operations in the unaudited condensed consolidated statements of cash flows and consist of the following (in thousands):
|  | Six Months Ended June 30, |
|  | 2024 |  |  | 2023 |
Operating activities: |  |  |  |  |  |  |  |
Net loss from discontinued operations |  | $ | (124 | ) |  | $ | (702 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |  |  |  |
Amortization of intangible assets |  |  | — |  |  |  | 76 |
Non-cash right-of-use amortization |  |  | — |  |  |  | 55 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Accounts receivable |  |  | (262 | ) |  |  | (169 | )
Inventory |  |  | 183 |  |  |  | (142 | )
Prepaid expenses and other current assets |  |  | (4 | ) |  |  | 125 |
Other assets |  |  | 15 |  |  |  | (9 | )
Accounts payable and accrued liabilities |  |  | 63 |  |  |  | 264 |
Operating lease liabilities |  |  | (31 | ) |  |  | (59 | )
Net cash used in operating activities, discontinued operations |  |  | (160 | ) |  |  | (561 | )
Investing activities: |  |  |  |  |  |  |  |
Cash transferred to New Age Investments, LLC |  |  | (46 | ) |  |  | — |
Net cash used in investing activities, discontinued operations |  |  | (46 | ) |  |  | — |
Net decrease in cash and cash equivalents, discontinued operations |  | $ | (206 | ) |  | $ | (561 | )

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