Discontinued Operations and Assets Held for Sale

9 Months Ended

Sep. 30, 2025

Discontinued Operations and Assets Held for Sale

Discontinued Operations and Assets Held for Sale

2. Discontinued Operations and Assets Held for Sale

As discussed above in Note 1 - Business Description, Basis of Presentation and Significant Accounting Policies – Going Concern, in September 2025 the Board of Directors approved a Strategic Plan to sell various operating assets related to its product business, including inventory and certain intellectual property (developed technology, trademarks and related intangibles). Management determined the criteria in ASC 360-10-45-9 were met as of September 30, 2025 (probable sale within one year, assets available for immediate sale in present condition, active program to locate buyer and complete plan). Accordingly, the disposal group was classified as held for sale and measured at FVLCTS.

At September 30, 2025, the disposal group of asset’s carrying amount was $13,641, consisting primarily of inventory of $12,856 and intangible assets of $785. Based on an executed asset purchase agreement subsequently closed on October 24, 2025, for cash consideration of $3,000 and estimated transaction costs of $100, management recorded an impairment of $10,741 to reduce the disposal group of assets to FVLCTS at September 30, 2025. The impairment is presented in “Loss from discontinued operations” in the unaudited condensed consolidated statements of operations.

Because the disposal represents a strategic shift that will have a significant effect on the Company’s operations and financial results, the related operating results are presented as discontinued operations for all periods presented in the accompanying unaudited condensed consolidated financial statements (ASC 205-20).

Carrying amounts classified as held for sale (unaudited):

Assets held for sale — $2,900 at September 30, 2025 (comprised primarily of inventory $12,856 and intangibles $785, less impairment to FVLCTS of $10,741 and transaction costs of $100).
Liabilities held for sale — $0 at September 30, 2025 (no obligations transferred).

Major line items of results of discontinued operations (unaudited):

Revenue — $1,262 and $5,491 for the three and nine months ended September 30, 2025, respectively; $2,504 and $8,430 for the comparable 2024 periods.

The following table disaggregates the Company’s revenue into primary product groups:

	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Audio conferencing	$	259	$	929	$	1,838	$	3,357
Microphones		798		1,172		2,885		3,786
Video products		205		403		768		1,287
	$	1,262	$	2,504	$	5,491	$	8,430

The following table disaggregates the Company’s revenue into major regions:

	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
North and South America	$	981	$	932	$	3,271	$	3,236
Asia Pacific (includes Middle East, India and Australia)		15		1,358		1,433		4,200
Europe and Africa		266		214		787		994
	$	1,262	$	2,504	$	5,491	$	8,430

Cost of goods sold — $2,148 and $6,435 for the three and nine months ended September 30, 2025, respectively; $1,865 and $6,607 for the comparable 2024 periods.
Gross profit / (loss) — ($886) and ($944) for the three and nine months ended September 30, 2025, respectively; $639 and $1,823 for the comparable 2024 periods.
Operating expenses directly attributable — $1,238 and $6,179 for the three and nine months ended September 30, 2025, respectively; $1,985 and $6,517 for the comparable 2024 periods.
Impairment on held for sale — $10,741 (Q3 2025 only).
(Loss) income before income taxes — ($12,865) and ($17,864) for the three and nine months ended September 30, 2025, respectively; ($1,346) and ($4,694) for the comparable 2024 periods.
(Loss) income from discontinued operations, net of tax — ($12,865) and ($17,864) for the three and nine months ended September 30, 2025, respectively; ($1,346) and ($4,694) for the comparable 2024 periods.

Assets grouped into discontinued operations (unaudited):

Accounts receivable, net - $865 and $2,218 for the periods ended September 30, 2025 and December 31, 2024, respectively.
Inventories short and long term and intangible assets - $0 and $14,391 for the periods ended September 30, 2025 and December 31, 2024, respectively.
Prepaids and other current assets - $3,678 and $3,894 for the periods ended September 30, 2025 and December 31, 2024, respectively.
Property, plant and equipment, net - $259 and $500 for the periods ended September 30, 2025 and December 31, 2024, respectively.
Other long-term assets - $69 and $82 for the periods ended September 30, 2025 and December 31, 2024, respectively.

Liabilities grouped into discontinued operations (unaudited):

Accounts payable - $2,778 and $1,728 for the periods ended September 30, 2025 and December 31, 2024, respectively.
Accrued liabilities, current - $444 and $1,107 for the periods ended September 30, 2025 and December 31, 2024, respectively.
Deferred revenue - $12 and $17 for the periods ended September 30, 2025 and December 31, 2024, respectively.
Other long-term liabilities - $1,155 and $1,154 for the periods ended September 30, 2025 and December 31, 2024, respectively.

Management concluded the disposal constitutes a component and a strategic shift since it eliminates significant revenue-generating activities. The Company will continue to provide product support and warranty services as it pursues a Strategic Transaction in the fourth quarter of 2025.