(7) IMPAIRMENT ASSESSMENT

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During the three months ended September 30, 2025, the Company decided to seek a commercialization partner for NiCO, a multi-parameter pulse oximeter developed by ZMS, rather than pursue commercialization independently.

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The assets associated with the change in commercialization strategy include property and equipment, right-of-use assets for leased facilities, definite-lived intangible assets, and goodwill associated with the ZMS business. While the Company will continue to pursue commercialization opportunities for NiCO with potential commercialization partners, this impairment reflects a change in direction for the acquired business as no assurance can be provided that the Company will be successful in attracting a commercialization partner.

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During the quarter ended September 30, 2025, management identified indicators of impairment for the ZMS subsidiary under ASC 350-20 Intangibles – Goodwill and Other and ASC 360-10 Property, Plant and Equipment. The indicators included the decision to seek a commercialization partner for NiCO, the decision to terminate substantially all ZMS personnel, and the cessation of independent operations. The Company recorded an impairment of all goodwill and other assets associated with the ZMS business based on a valuation analysis of the ZMS asset group to determine fair value less cost to sell. The valuation uses a discounted cash flow model and market approach inputs as appropriate.

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Based on this analysis, the Company recognized total impairment charges of $30.7 million during the quarter ended September 30, 2025, as summarized below:

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The impairment charges are reflected in “Impairment charges” in the unaudited condensed consolidated statements of operations. The impairment is non-cash in nature and does not impact the Company’s liquidity or compliance with debt covenants. The recorded impairment represents a full impairment of the affected asset group, and no additional write-downs are expected. No additional impairment indicators were identified for the Company’s other asset groups as of September 30, 2025. Future charges will be incurred for employee severance and facility exit costs as those actions are finalized.