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DISCONTINUED OPERATIONS

9 Months Ended

Mar. 31, 2017

Notes to Financial Statements

DISCONTINUED OPERATIONS

NOTE 3. DISCONTINUED OPERATIONS

On January 27, 2017, we sold certain of the assets and the business operations of our OMS division located in Beaverton Oregon. We sold the business to our long time general manager of the division. The sale was structured as an asset sale as disclosed in a Form 8-K filed with the SEC on January 30, 2017. The aggregate sales price received was $636,000, and no liabilities other than warranty obligations were assumed by the buyer. As a result of the sale, this division has been classified as a discontinued operation in conformity with applicable accounting guidance and the assets that were sold have been reclassified as assets held for sale on our condensed consolidated balance sheet as of June 30, 2016. Accordingly, unless otherwise indicated, OMS’s results have been reported as discontinued operations and removed from all financial discussions of continuing operations.

The following summarizes the carrying values of the assets sold as of June 30, 2016 (in thousands):


		June 30, 2016
Assets held for sale:
Inventory		$	209
Fixed assets			64
Prepaid expenses			5
Other assets			9
Assets held for sale		$	287

The divestiture was completed in support of raising capital to invest in our core medical device product development efforts.

Operating results of the OMS division are as follows (in thousands):


		Three Months Ended March 31,								Nine Months Ended March 31,
		2017				2016				2017				2016
Revenues		$	52			$	161			$	715			$	673

Income (loss) from discontinued operations:
Gain on sale, net of taxes of $126,000			201				—				201				—
Income (loss) from discontinued operations, before taxes		$	(28	)		$	(126	)		$	68			$	(270	)
Income tax (expense) benefit			12				—				(26	)			—
Net income (loss) from discontinued operations		$	185			$	(126	)		$	243			$	(270	)

Income from discontinued operations consists of direct revenues and direct expenses of the OMS business, including cost of revenues, as well as other fixed costs to the extent that such costs will be eliminated as a result of the sale. The Company historically did not allocate corporate overhead to this division. Additionally, the OMS division has historically been the only division that was significant enough to require segment disclosures and as such, effective with this divestiture, we no longer require segment disclosure as our business is currently run.