|9 Months Ended|
Sep. 30, 2022
|Discontinued Operations and Disposal Groups [Abstract]|
Note 3. Discontinuing Operations
In December 2021, the Company’s Board of Directors approved a plan to sell the business of vivoPharm Pty Ltd and its subsidiaries (“vivoPharm”) to focus the Company on the development of neurological developmental and degenerative disease therapeutics. In December 2021, the Company engaged an investment bank to sell the vivoPharm business which is expected to be completed 2022.
On November 2, 2022 the Company completed the sale of its principal vivoPharm subsidiary, vivoPharm LLC located in Hershey, Pennsylvania, to Reaction Biology Corporation for $5.5 million in an upfront cash payment, subject to customary adjustments for working capital, closing cash, indebtedness and transaction expenses. After these closing adjustments were reflected, $5.5 million was paid at closing. Vyant Bio expects to net approximately $4.4 million in cash after transaction related expenses and income taxes, as well as incur $0.6 million in exit costs associated with this transaction. Exit costs associated with the vivoPharm business are expected to be paid by March 31, 2023. In connection with the sale of the vivoPharm LLC business, the Company agreed to retain certain liabilities aggregating to $357 thousand.
The Company classified the vivoPharm business as held for sale as of December 31, 2021, and, given the significance of the change in the Company’s strategy, classified this business as discontinuing operations in these condensed consolidated financial statements. Therefore, the results for the three and nine months ended September 30, 2021 have been retroactively restated to reflect the vivoPharm business as discontinuing operations. In connection with the reclassification of the vivoPharm business as held for sale in the fourth quarter of 2021, the Company completed a valuation of the net carrying value of this business and recorded a goodwill impairment charge of $20.2 million. The Company valued the vivoPharm business as of December 31, 2021 equally weighting public company revenue multiples as of December 31, 2021 and comparable transaction revenue multiples, which are classified as Level 3 measurements within the fair value hierarchy. The Company updated the valuation of the vivoPharm business as of March 31, 2022 based on equally weighting public company revenue multiples as of the valuation date and comparable transaction revenue multiples. As a result of this analysis, the Company recorded an additional impairment charge of $4.3 million during the quarter ended March 31, 2022 consisting of the write-off of the remaining $2.2 million goodwill balance and reducing the cost basis of customer relationships and tradenames by $1.8 million and $0.3 million, respectively. During the second quarter of 2022, the Company received two offers for mutually exclusive components of the vivoPharm business and assessed the carrying value of each asset group using the estimated net sales proceeds based on these offers. As a result, the Company recorded a net impairment charge of $1.5 million during the second quarter of 2022 which was reduced in the third quarter of 2022 by $388 thousand based upon revised estimated net sales proceeds as of September 30, 2022.
Also included in discontinuing operations are pre-Merger-related payables related to Cancer Genetic’s sale of its BioPharma and Clinical businesses (“Pre-Merger discontinuing operations”). As of September 30, 2022 and December 31, 2021, $280 thousand and $409 thousand, respectively, of liabilities relating to these businesses are classified as other current liabilities – discontinuing operations on the Company’s condensed consolidated balance sheets.
Results of discontinuing operations were as follows for the three and nine months ended September 30, 2022 and 2021:
Schedule of Discontinuing Operations from Income Statement and Balance Sheet
Assets and liabilities of discontinuing operations were as follows as of September 30, 2022 and December 31, 2021:
In January 2022, the vivoPharm business signed an extension to its Hershey, Pennsylvania facility lease and a new lease in South Australia resulting in an increase of $1.0 million of right-of-use (“ROU”) assets and related liability within discontinuing operations.
Intangible assets consisted of the following as of September 30, 2022 and December 31, 2021:
Schedule of Intangible Assets
Goodwill arising from the Merger was solely attributed to the vivoPharm business. The following is a roll forward of goodwill as of and for the nine months ended September 30, 2022:
Schedule of Goodwill Rollforward
No definition available.
The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef