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 $786 thousand of interest expense from the Convertible Note and Advance from NDX to discontinuing operations during the three months ended March 31, 2019. 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, 2019.
Summarized results of the Company's unaudited condensed consolidated discontinuing operations are as follows for the three months ended March 31, 2020 and 2019 (in thousands):
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Revenue |
$ |
— |
|
|
$ |
5,017 |
|
Cost of revenues |
— |
|
|
3,635 |
|
Gross profit |
— |
|
|
1,382 |
|
Operating expenses: |
|
|
|
Research and development |
— |
|
|
454 |
|
General and administrative |
(8 |
) |
|
1,527 |
|
Sales and marketing |
— |
|
|
923 |
|
Transaction costs |
— |
|
|
249 |
|
Total operating expenses |
(8 |
) |
|
3,153 |
|
Income (loss) from discontinuing operations |
8 |
|
|
(1,771 |
) |
Other income (expense): |
|
|
|
Interest expense |
— |
|
|
(1,110 |
) |
Total other income (expense) |
— |
|
|
(1,110 |
) |
Net income (loss) from discontinuing operations |
$ |
8 |
|
|
$ |
(2,881 |
) |
Unaudited condensed consolidated carrying amounts of major classes of assets and liabilities from discontinuing operations were as follows as of March 31, 2020 and December 31, 2019 (in thousands):
|
|
|
|
|
|
|
|
|
|
March 31, 2020 |
|
December 31, 2019 |
Current assets of discontinuing operations: |
|
|
|
Accounts receivable, net of allowance for doubtful accounts of $4,518 in 2020; $4,536 in 2019 |
$ |
— |
|
|
$ |
71 |
|
Current assets of discontinuing operations |
$ |
— |
|
|
$ |
71 |
|
|
|
|
|
Current liabilities of discontinuing operations |
|
|
|
Accounts payable and accrued expenses |
$ |
764 |
|
|
$ |
1,137 |
|
Due to Interpace Biosciences, Inc. |
97 |
|
|
92 |
|
Current liabilities of discontinuing operations |
$ |
861 |
|
|
$ |
1,229 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Income (loss) from discontinuing operations |
$ |
8 |
|
|
$ |
(2,881 |
) |
|
|
|
|
Adjustments to reconcile income (loss) from discontinuing operations to net cash used in operating activities, discontinuing operations |
|
|
|
Depreciation |
— |
|
|
256 |
|
Amortization |
— |
|
|
6 |
|
Provision for bad debts |
(18 |
) |
|
— |
|
Accounts payable settlements |
(26 |
) |
|
— |
|
Stock-based compensation |
— |
|
|
39 |
|
Amortization of operating lease right-of-use assets |
— |
|
|
94 |
|
Amortization of discount of debt and debt issuance costs |
— |
|
|
593 |
|
Interest added to Convertible Note |
— |
|
|
113 |
|
Change in working capital components: |
|
|
|
Accounts receivable |
89 |
|
|
(151 |
) |
Other current assets |
— |
|
|
(272 |
) |
Other non-current assets |
— |
|
|
(1 |
) |
Accounts payable, accrued expenses and deferred revenue |
(347 |
) |
|
(942 |
) |
Obligations under operating leases |
— |
|
|
(31 |
) |
Deferred rent payable and other |
— |
|
|
(151 |
) |
Due to Interpace Biosciences, Inc. |
5 |
|
|
— |
|
Net cash used in operating activities, discontinuing operations |
$ |
(289 |
) |
|
$ |
(3,328 |
) |
|