| Discontinued Operations |
Discontinuing Operations
As described in Note 1, the Company sold its BioPharma Business and Clinical Business in July 2019. In conjunction with the BioPharma Disposal, the Company repaid its debt to SVB and PFG. The Company elected to allocate approximately $22,000 and $1,464,000 of interest expense from the Convertible Note and Advance from NDX to discontinuing operations during the three and nine months ended September 30, 2019, respectively. The Company elected to allocate approximately $105,000 of interest expense from the Convertible Note and Advance from NDX to discontinuing operations during the three and nine months ended September 30, 2018. Revenue and other significant accounting policies associated with the discontinuing operations have not changed since the most recently filed audited financial statements as of and for the year ended December 31, 2018, except for the adoption of ASC 842 as described in Note 1.
Summarized results of our unaudited condensed consolidated discontinuing operations are as follows for the three and nine months ended September 30, 2019 and 2018 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenue |
$ |
428 |
|
|
$ |
5,405 |
|
|
$ |
10,066 |
|
|
$ |
17,400 |
|
Cost of revenues |
563 |
|
|
3,969 |
|
|
7,692 |
|
|
12,444 |
|
Gross profit (loss) |
(135 |
) |
|
1,436 |
|
|
2,374 |
|
|
4,956 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
47 |
|
|
692 |
|
|
937 |
|
|
2,046 |
|
General and administrative |
782 |
|
|
3,065 |
|
|
4,121 |
|
|
9,714 |
|
Sales and marketing |
15 |
|
|
960 |
|
|
1,527 |
|
|
3,312 |
|
Restructuring costs |
100 |
|
|
1,418 |
|
|
100 |
|
|
2,151 |
|
Transaction costs |
— |
|
|
— |
|
|
651 |
|
|
— |
|
Impairment of patents and other intangible assets |
601 |
|
|
— |
|
|
601 |
|
|
— |
|
Total operating expenses |
1,545 |
|
|
6,135 |
|
|
7,937 |
|
|
17,223 |
|
Loss from discontinuing operations |
(1,680 |
) |
|
(4,699 |
) |
|
(5,563 |
) |
|
(12,267 |
) |
Other income (expense): |
|
|
|
|
|
|
|
Interest expense |
(38 |
) |
|
(383 |
) |
|
(2,211 |
) |
|
(1,195 |
) |
Gain on disposal of Clinical Business |
1,222 |
|
|
— |
|
|
1,222 |
|
|
— |
|
Gain on disposal of BioPharma Business |
7,274 |
|
|
— |
|
|
7,274 |
|
|
— |
|
Total other income (expense) |
8,458 |
|
|
(383 |
) |
|
6,285 |
|
|
(1,195 |
) |
Net income (loss) from discontinuing operations |
$ |
6,778 |
|
|
$ |
(5,082 |
) |
|
$ |
722 |
|
|
$ |
(13,462 |
) |
Unaudited condensed consolidated carrying amounts of major classes of assets and liabilities from discontinuing operations were as follows as of September 30, 2019 and December 31, 2018 (in thousands):
|
|
|
|
|
|
|
|
|
|
September 30, 2019 |
|
December 31, 2018 |
Current assets of discontinuing operations: |
|
|
|
Accounts receivable, net of allowance for doubtful accounts of $3,785 in 2019; $3,462 in 2018 |
$ |
1,082 |
|
|
$ |
6,261 |
|
Other current assets |
43 |
|
|
1,652 |
|
Fixed assets, net of accumulated depreciation |
— |
|
|
3,559 |
|
Patents and other intangible assets, net of accumulated amortization |
— |
|
|
655 |
|
Goodwill |
— |
|
|
11,294 |
|
Current assets of discontinuing operations |
$ |
1,125 |
|
|
$ |
23,421 |
|
|
|
|
|
Current liabilities of discontinuing operations |
|
|
|
Accounts payable and accrued expenses |
$ |
3,229 |
|
|
$ |
9,967 |
|
Obligations under finance leases |
— |
|
|
666 |
|
Deferred revenue |
— |
|
|
1,337 |
|
Line of credit |
— |
|
|
2,621 |
|
Term note |
— |
|
|
6,000 |
|
Deferred rent payable and other |
— |
|
|
151 |
|
Current liabilities of discontinuing operations |
$ |
3,229 |
|
|
$ |
20,742 |
|
|