Aterian, Inc.

Current report

The completion of the Preferred Stock Sale resulted in a change in control, and a single controlling stockholder now exercises overwhelming control over corporate strategy and stockholder decisions.

Current report

On July 17, 2026, we completed the second closing under the Securities Purchase Agreement with David E. Lazar, resulting in the issuance of Series AAA Preferred Stock and a fundamental change in control of the Company. Upon full conversion of the Series AA and Series AAA Preferred Stock, Mr. Lazar controls approximately 95% of our fully diluted share capitalization. As a result, existing common stockholders have experienced immediate, severe dilution of their equity interests and voting power.

Current report

This extreme concentration of ownership gives Mr. Lazar majority voting control and effective decision-making authority over our corporate strategy, business affairs, and all matters requiring stockholder approval. This includes the power to elect directors, approve major strategic transactions, amend our certificate of incorporation and bylaws, and authorize future equity or debt issuances. The interests of Mr. Lazar may differ substantially from the interests of our other stockholders. Additionally, his ability to control the Company may have the effect of delaying, deterring, or preventing a future change in control, takeover attempt, or merger that other stockholders might consider favorable or in their best financial interest.

Current report

On July 17, 2026, we completed the sale of substantially all of our historical assets and operating operations—including our marquee consumer brands (Mueller Living, PurSteam, hOmeLabs, Squatty Potty, Healing Solutions, and Photo Paper Direct)—to Trademark Global, LLC. Following the consummation of the Asset Sale, our remaining business operations consist primarily of our smaller legacy brands, Vremi and Xtava, and residual corporate activities.

Current report

As a result, our ongoing operating model has been fundamentally altered, and our future viability depends heavily on our ability to successfully execute a strategic "Pivot" or evaluate potential strategic transactions to create long-term growth opportunities. We may be unable to successfully scale our remaining operations or identify and complete a suitable strategic transaction before our capital resources are depleted, and even if we do, there is no assurance that any such initiative will achieve its intended financial or operational benefits.

Current report

On July 17, 2026, following the completion of the Asset Sale and the Preferred Stock Sale, David E. Lazar was appointed as Chief Executive Officer and Chairman of the Board, succeeding Arturo Rodriguez. In connection with this transition, Mr. Rodriguez entered into a Transition and Separation Agreement to assist with operational handoff through September 30, 2026, and Chief Financial Officer Joshua Feldman entered into a similar transition agreement through September 4, 2026.

Current report

The transition to new executive management, combined with the substantial reduction in our operating footprint following the sale of our marquee brands, represents a fundamental shift in our corporate leadership and organizational structure. These ongoing changes may create uncertainty regarding our future operational strategy, which could lead to increased employee attrition or hinder our ability to attract, retain, and motivate well-qualified personnel.

Current report

The loss of key remaining operational, financial, or corporate staff during this transition period or an inability to identify suitable long-term successors following the expiration of current executive transition agreements could disrupt our business operations, impair our financial reporting capabilities, and adversely affect our ability to execute our strategic pivot.

Current report

We experienced significant after-tax losses for the three and six months ended June 30, 2026 and 2025. In addition, our operating costs have increased historically and may fluctuate in future periods as we adjust our organizational structure, which could negatively affect our operating results and our ability to achieve long-term continuous profitability. Following the completion of the Asset Sale on July 17, 2026, our historical core revenue-generating marquee brands are no longer part of our ongoing operations, and our business model relies on our smaller retained legacy brands, Vremi and Xtava, alongside the execution of an unproven strategic pivot.

Current report

We have historically relied on a combination of cash flows from operations, debt facilities, and private placements of equity to fund our business. While we completed the Asset Sale and Preferred Stock Sale on July 17, 2026—generating $25.0 million in aggregate gross proceeds prior to transaction expenses, adjustments, and debt settlements—there can be no assurance that our capital resources will be sufficient to sustain long-term operations or that our revised business strategy will generate positive cash flows.

Current report

U.S. government trade actions, including the expiration of Section 122 tariffs and the transition to alternative tariff authorities, create ongoing uncertainty that could adversely affect our remaining operations.

Current report

Over the past several years, the U.S. trade environment has undergone unprecedented volatility. Following the Supreme Court’s February 2026 ruling in Learning Resources Inc. v. Trump, which invalidated the administration's broad IEEPA tariffs, the government transitioned to a 10% baseline tariff under Section 122 of the Trade Act of 1974. By statute, these Section 122 tariffs were limited to 150 days and expired on July 24, 2026, as Congress did not pass legislation to extend them.

Current report

While the U.S. Court of International Trade (CIT) ruled on May 7, 2026, in Burlap and Barrel, Inc. v. Trump that these Section 122 tariffs were unlawful, the U.S. Court of Appeals for the Federal Circuit subsequently stayed that decision pending appeal on June 11, 2026. As a result, U.S. Customs and Border Protection continued to collect the 10% surcharge on our imports through the July 24, 2026 expiration date.

Current report

During the three months ended June 30, 2026, the Company received tariff refunds of approximately $2.8 million related to previously paid IEEPA tariffs. The Company recognized this amount as a reduction to cost of goods sold within its Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2026.

Current report

Furthermore, the expiration of the Section 122 surcharge does not eliminate our tariff exposure. The administration has advanced replacement measures under alternative statutory authorities, such as Section 301 and Section 232, which carry no statutory rate ceiling or fixed expiration. Any implementation of these replacement tariffs, or the imposition of additional trade barriers and retaliatory measures, could materially increase the cost of goods sold for our retained legacy brands, disrupt our supply chain, and adversely affect our financial condition and results of operations.

Current report

On May 19, 2026, Nasdaq notified the Company in the Compliance Notice that from May 1, 2026 to May 18, 2026 the closing bid price of the Company’s common stock had been $1.00 per share or greater and, accordingly, the Company had regained compliance with Nasdaq Listing Rule 5550(a)(2) and that the matter was now closed.

Current report

However, on July 29, 2026, the implementation of this new continued listing requirement was automatically stayed pursuant to Rule 431(e) of the SEC’s Rules of Practice. The stay was triggered after the Small Public Company Coalition (“SPCC”) and Cemtrex, Inc. each filed notices of their intent to petition the full Commission to review the approval order previously issued by the SEC’s Division of Trading and Markets under delegated authority. On July 29, 2026, the SEC issued a letter confirming that the approval order had been automatically stayed pending further action by the Commission.

Current report

As a result of the stay, Nasdaq’s $5.0 million MVLS requirement is currently not effective. Under SEC procedures, the petitioners have five days from their notice to file formal petitions for review setting forth the legal and factual bases for challenging the approval. The Commission may decide whether to grant or decline review and, if granted, may affirm, modify, reverse, set aside, or remand the Division’s approval order. There is no prescribed statutory timeline for the Commission to reach a final decision, and the stay remains in effect during this administrative review process. Furthermore, because seeking Commission review is generally a prerequisite to judicial review, the matter may ultimately be appealed to a federal court of appeals, which could extend the stay and delay potential implementation of the rule for a significant period.

Current report

Notwithstanding the current stay, significant uncertainty remains regarding the ultimate outcome of the regulatory and potential judicial review processes. If the Commission affirms the rule, if the stay is lifted, or if the rule is otherwise upheld and becomes effective, and if our MVLS remains below $5.0 million for 30 consecutive business days:

Current report

If the rule is ultimately reinstated and our market capitalization fluctuates below the required $5.0 million threshold for 30 consecutive business days, there can be no assurance that we will avoid immediate delisting or that a Hearings Panel would grant an exception, any of which would have a material adverse effect on our business, financial condition, results of operations, and the trading value of your investment.

Current report

Recent Sales of Unregistered Securities

Current report

There were no unregistered sales of the Company’s equity securities during the three months ended June 30, 2026, other than those previously reported in a Current Report on Form 8-K.

Current report

Share Repurchase Program

Current report

On March 14, 2025, the Board of Directors authorized a share repurchase program to acquire up to $3.0 million of the Company’s common stock. The Company may purchase common stock on the open market, through privately negotiated transactions, or by other means including through the use of trading plans intended to qualify under Rule 10b-18 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The share repurchase program will have a term of 24 months and may be suspended or discontinued at any time and does not obligate the company to acquire any amount of common stock. The objective of this program is to repurchase shares of common stock opportunistically when management believes that the Company’s stock is trading below the Company’s determination of long-term fair value.

Current report

The Company has not repurchased any shares of its common stock under this program to date. As of May 2, 2025, the Company had temporarily suspended its share repurchase program.

Previous report

The Aterian Transactions are subject to significant conditions, including stockholder approval; failure to complete these transactions could materially harm our business and our ability to continue as a going concern.

Previous report

On April 27, 2026, we entered into an Asset Purchase Agreement with Trademark Global, LLC and a Securities Purchase Agreement with David E. Lazar (collectively, the "Aterian Transactions"); however, there can be no assurance that we will obtain the necessary stockholder approvals or that other closing conditions will be satisfied. These transactions are subject to significant conditions, including the receipt of stockholder approval for the Asset Sale and the issuance of Common Stock upon conversion of the Preferred Stock, as well as our ability to achieve specific contribution margin targets. If the Aterian Transactions are not consummated, we will have incurred substantial legal, accounting, and advisory fees without the benefit of the $25 million in total anticipated gross proceeds, and we may be required to pay a termination fee of $1.1 million and reimburse up to $0.6 million of expenses under certain circumstances. Furthermore, our current liquidity position and our ability to remain in compliance with the covenants of our MidCap Credit Facility are significantly dependent on the closing of these transactions. A failure to close would likely impair our ability to continue as a going concern, and during the pendency of these transactions, we face ongoing operational risks including potential disruptions to business relationships with customers such as Amazon, Walmart, and Target, as well as broader macroeconomic hurdles.

Previous report

The strategic investment made by David E. Lazar will result in a change in control and significant dilution of existing stockholders, giving a single investor outsized influence over our corporate strategy.

Previous report

Existing stockholders will experience immediate and substantial dilution and a change in control as a result of the Aterian Transactions. Upon the Second SPA Closing and the subsequent conversion of the Series AA and Series AAA Preferred Stock, Mr. Lazar is expected to hold approximately 95.13% of our fully diluted share capitalization. This extreme concentration of ownership will give Mr. Lazar significantly outsized influence over our corporate strategy and all matters requiring stockholder approval, including the election of directors and the approval of significant corporate transactions. The interests of Mr. Lazar may differ from the interests of our other stockholders, and his ability to control the Company may have the effect of delaying or preventing a future change in control or other mergers that other stockholders might consider favorable.

Previous report

The Company will not have any material business assets following the consummation of the Asset Sale, as the sale to Trademark Global constitutes a sale of substantially all of our assets and revenue-generating operations, including our marquee brands. Consequently, our future viability will depend entirely on our ability to identify and consummate a "Post-Investment Transaction" or strategic "Pivot," which involves combining with a target company to create future growth opportunities. We may not be able to identify a suitable target company before our capital resources are depleted, and even if we do, there is no assurance that such a transaction will be successful or achieve anticipated benefits. Additionally, the final amount of net proceeds we receive from the Asset Sale remains subject to substantial uncertainty due to potential adjustments for net working capital, the satisfaction of unforeseen liabilities, and ongoing operational costs. There is also no guarantee that the Contingent Value Rights (CVRs) issued in connection with potential tariff refunds will result in any future cash payments to stockholders.

Previous report

The consummation of the Asset Sale and the strategic investment is subject to several conditions that may not be satisfied, including the receipt of stockholder approval. The uncertainty regarding the successful completion of these transactions, as well as the transition of leadership following the Second SPA Closing, may create significant anxiety regarding our future direction and ownership. This uncertainty could lead to increased employee attrition and further hinder our ability to attract and motivate key personnel. Additionally, the Asset Purchase Agreement requires the Company to maintain certain contribution margins, and any failure to meet these financial thresholds could jeopardize the closing of the sale, potentially impacting our ability to retain well-qualified employees.

Previous report

Following the Second SPA Closing, David Lazar is expected to be appointed as the sole Chief Executive Officer, succeeding Arturo Rodriguez, which represents a significant shift in our senior management team. The loss of one or more of our key personnel during this transition period, or our inability to promptly identify suitable successors, could have an adverse effect on our business. Each of our executive officers and other employees could terminate their employment relationship with us at any time.

Previous report

We have experienced significant after-tax losses for the three months ended March 31, 2026 and 2025. In addition, our costs have increased historically and may increase further in future periods, which could negatively affect our future operating results and ability to achieve and sustain long-term ongoing profitability. For example, we may need to continue to expend substantial financial and other resources on the ideation, sourcing and development of products, our technology infrastructure, sales and marketing, international expansion and general administration, including expenses related to being a public company. We have had to rely on a combination of cash flow from operations and new capital to sustain our business. Even though we have raised significant capital, there can be no assurance that we will ever achieve long-term continuous profitability. Even if we do, there can be no assurance that we will be able to maintain or increase profitability on a quarterly or annual basis. Failure to achieve or sustain profitability could have a material adverse effect on our business.

Previous report

Our Credit Facility contains various restrictions and covenants that could limit our operating flexibility, and we may be unable to refinance or repay our Credit Facility. We also rely on credit export insurance for our vendors in China, the unavailability of which could have a material adverse impact on our business, operating results, financial condition, and cash flows.

Previous report

On December 22, 2021, we obtained a revolving credit facility from Midcap Funding IV Trust (the “Credit Facility”). Our Credit Facility contains covenants and other restrictions that, among other things, requires us to satisfy certain liquidity and borrowing availability tests, restricts our ability to execute M&A transactions and to incur additional indebtedness. These restrictions and covenants, and those in other future financing arrangements, may limit our ability to respond to market conditions, to provide for capital investment needs or to take advantage of business opportunities.

Previous report

On February 23, 2024, the Company amended the Credit Facility to extend the term to December 2026 and provide us with access to $17 million in current commitments which can be increased, subject to certain conditions, to $30.0 million. On March 25, 2025, the Company amended the Credit Facility to add repurchases of the Company’s common stock of up to $1.5 million per year, consisting of up to $1.5 million in repurchases allowed during the period from March 25, 2025 through December 22, 2025, and up to an additional $1.5 million allowed during the period from December 23, 2025 through the maturity date, subject to certain liquidity and compliance conditions.

Previous report

On August 29, 2025, the Company amended the Credit Facility to include a reduction to the Minimum Credit Party Liquidity covenant to $5.0 million. Upon the Company’s delivery of a Liquidity Certificate evidencing liquidity of at least $6.8 million, the Minimum Liquidity Covenant Reduction Period will terminate and the covenant will increase to $6.8 million thereafter, and an Availability Reserve of $2.8 million during the Minimum Liquidity Covenant Reduction Period and $1.0 million thereafter.

Previous report

On March 13, 2026, the Company and its subsidiaries entered into Amendment No. 5 to its Credit and Security Agreement with MidCap Funding IV Trust. Under the terms of the amendment, the Company’s minimum liquidity covenant was reduced from $5.0 million to $3.5 million during the Minimum Liquidity Covenant Reduction Period. This reduction period commenced on the Fifth Amendment Effective Date and is subject to extension at the Company's option on a weekly basis through May 9, 2026, provided it remains in compliance with certain fee payment obligations.

Previous report

There is no guarantee that we will be available to repay or refinance our Credit Facility. Further, at any time, if we violate the terms of the Credit Facility, we may not be able to obtain a waiver from our lender under satisfactory terms, or at all, which would limit our operating flexibility and/or liquidity and which could have a material adverse effect on our business, operating results, financial condition, and cash flows.

Previous report

We also rely on the availability of export credit insurance from the China Export & Credit Insurance Corporation (“Sinosure”), a Chinese state-owned enterprise, that provides export credit insurance to our contract manufacturers. From time to time, our contract manufacturers have experienced reductions in the availability of such credit from Sinosure as a result of our failure to timely pay them. While we currently believe our contract manufacturers have insurance at levels that we believe are sufficient to fund our operations, there can be no assurance that such insurance will be available at levels we require for our business, or at all, whether or not we make timely payments to our vendors, which would have a material adverse effect on our business, operating results, financial condition, and cash flows.

Previous report

In addition, the Company has cash deposits at financial institutions in excess of the insured amount of $0.3 million by the Federal Deposit Insurance Corporation.

Previous report

U.S. government trade actions could have a material adverse effect on our business, financial position, and results of operation.

Previous report

Over the past several years, the U.S. government has taken a number of trade actions that impact or could impact our operations, including imposing tariffs on certain goods imported into the United States.

Previous report

Throughout 2025, the U.S. trade environment underwent a period of unprecedented volatility characterized by the implementation of a broad “reciprocal” tariff regime. Utilizing the International Emergency Economic Powers Act (IEEPA), the administration imposed steep duties on nearly all imported goods, including a baseline 10% global tariff and targeted rates on major trading partners like China that reached historic highs before a late-year temporary truce. These actions were compounded by expanded Section 232 duties on industrial metals and the elimination of “de minimis” exemptions for low-value imports, significantly increasing our landed costs and requiring frequent adjustments to our pricing and sourcing strategies. While these measures were the primary drivers of trade policy for much of the year, their legal foundation remained a point of intense litigation until early 2026.

Previous report

On February 20, 2026, the U.S. Supreme Court ruled in Learning Resources Inc. v. Trump that the International Emergency Economic Powers Act does not authorize the President to impose sweeping revenue-raising tariffs, invalidating previous broad reciprocal duties. In response, the administration immediately transitioned to a 10% baseline tariff under Section 122 of the Trade Act of 1974, effective February 24, 2026. These tariffs are subject to a 150-day statutory limit (expiring July 24, 2026) unless extended by Congress.

Previous report

On May 7, 2026, the U.S. Court of International Trade (CIT) ruled in Burlap and Barrel, Inc. v. Trump that these Section 122 tariffs are unlawful, finding the administration exceeded its statutory authority. However, because the CIT limited its permanent injunction only to the specific plaintiffs in that case, the federal government continues to collect the 10% duty from all other importers, including the Company. We expect the administration to appeal this decision, and there is significant uncertainty regarding whether the tariffs will be stayed, if Congress will provide a legislative extension, or if the administration will pivot to alternative authorities, such as Section 301 investigations, to maintain or increase duty levels. Any prolonged collection of these duties, or the imposition of higher replacement tariffs, could materially increase our cost of goods sold and adversely affect our operating results.

Previous report

These tariff actions, along with the potential for retaliatory measures, create uncertainty and may increase our product costs, disrupt our supply chain, and adversely affect our competitive position. In particular, continued or escalated trade and political tensions with China or other key trading partners could result in retaliatory restrictions that impair our ability to source products and components from contract manufacturers or service providers operating in those countries. Any sustained increase in tariffs, or the imposition of additional trade barriers, could materially and adversely affect our business, financial condition, and results of operations.

Previous report

In addition to the tariff measures described above, changes in U.S. or foreign trade policy may create ongoing uncertainty in international trade relations. Future actions by the United States or other governments — including the imposition, increase, or extension of tariffs, quotas, or other trade restrictions, or changes to existing trade agreements or policies — could occur at any time and without notice. Any such actions, whether unilateral or in response to geopolitical or economic developments, could reduce demand for our products, increase our costs, disrupt our supply chain, reduce our profitability, or otherwise have a material adverse effect on our business, financial condition, and results of operations.

Previous report

We are continually evaluating the impact of the current and any possible new tariffs on our supply chain, costs and sales and are considering strategies to mitigate such impact, including reviewing sourcing options and working with our suppliers. We can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful or that any newly sourced products will be of the same quality of those previously sourced elsewhere. Given the uncertainty regarding the scope and duration of these trade actions by the U.S. government or other countries, as well as the potential for additional trade actions, the impact on our operations and results remains uncertain.

Previous report

The Bid Price Notice has no immediate effect on the continued listing status of the Common Stock on The Nasdaq Capital Market, and, therefore, the Company's listing remains fully effective.

Previous report

The Company is provided a compliance period of 180 calendar days from the date of the Bid Price Notice, or until June 8, 2026, to regain compliance with the minimum closing bid requirement, pursuant to Nasdaq Listing Rule 5810(c)(3)(A). If at any time before June 8, 2026, the closing bid price of the Common Stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, subject to Nasdaq’s discretion to extend this period pursuant to Nasdaq Listing Rule 5810(c)(3)(H) to 20 consecutive business days, Nasdaq will provide written notification that the Company has achieved compliance with the minimum bid price requirement, and the matter would be resolved. If the Company does not regain compliance during the compliance period ending June 8, 2026, then Nasdaq may grant the Company a second 180 calendar day period to regain compliance, provided the Company meets the continued listing requirement for market value of publicly-held shares and all other initial listing standards for The Nasdaq Capital Market, other than the minimum closing bid price requirement, and notifies Nasdaq of its intent to cure the deficiency during the second compliance period.

Previous report

The Company will continue to monitor the closing bid price of its Common Stock and seek to regain compliance with all applicable Nasdaq requirements within the allotted compliance periods. If the Company does not regain compliance within the allotted compliance periods, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that the Common Stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that the Company will regain compliance with the minimum bid price requirement during the 180-day compliance period, secure a second period of 180 days to regain compliance or maintain compliance with the other Nasdaq listing requirements.

Previous report

As of the date of this filing, the Company has not yet received formal written confirmation from Nasdaq that it has regained compliance, as the closing bid price of the Company’s common stock has been at or above $1.00 per share for 10 consecutive business days, ending on May 14, 2026.

Previous report

If this rule is approved and we fail to maintain a $5 million MVLS for a period of 30 consecutive business days, our common stock would be subject to immediate suspension and delisting. Unlike other Nasdaq listing deficiencies, such as the $1.00 minimum bid price requirement, which typically allows for a 180-day compliance period, the proposed rule does not provide for a cure or compliance period. Furthermore, the proposal specifies that any appeal of a delisting determination under this rule would not stay the suspension of trading.

Previous report

If our common stock is delisted from Nasdaq, it would likely trade on the over-the-counter (“OTC”) market. Such a move could:

Previous report

There can be no assurance that the SEC will not approve this rule or that we will be able to maintain a market capitalization sufficient to comply with these new requirements. Any such delisting would have a material adverse effect on our financial condition and the value of your investment.

Previous report

None.