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Discontinued Operations | 6 Months Ended
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Jun. 30, 2013
Discontinued Operations [Abstract] |
Discontinued Operations [Text Block] | Discontinued Operations Regenerative Medicine - China segment In 2009, the Company operated its Regenerative Medicine-China business in the People’s Republic of China (“China” or “PRC”) through its subsidiary, a wholly foreign owned entity (“WFOE”) and entered into contractual arrangements with certain variable interest entities (“VIEs”). Foreign companies have commonly used VIE structures to operate in the PRC, and while such structures are not uncommon, they had drawn greater scrutiny from the local Chinese business community in the PRC who urged the PRC State Council to clamp down on these structures. In addition, in December 2011, China’s Ministry of Health announced its intention to more tightly regulate stem cell clinical trials and stem cell therapeutic treatments in the PRC, which created uncertainty regarding the ultimate regulatory environment in the PRC. Accordingly, the Company took steps to restrict, and ultimately eliminate, its regenerative medicine business in the PRC. As a result of these steps, the Company discontinued its operations in its Regenerative Medicine-China business. The Company determined that any liability arising from the activities of the WFOE and the VIEs will likely be limited to the net assets currently held by each entity. As of March 31, 2012, the Company recognized the following loss on exit of the Regenerative Medicine-China business (in thousands):
Cash | $ | 195.1 |
Prepaid expenses and other current assets | 14.9 |
Property, plant and equipment, net | 1,023.7 |
Other Assets | 330.5 |
Accounts payable | (177.1 | )
Accrued liabilities | (79.2 | )
Accumulated comprehensive income | (169.9 | )
Loss on exit of segment | $ | 1,138.0 |
The operations and cash flows of the Regenerative Medicine - China business were eliminated from ongoing operations as a result of our exit decision, and the Company will not have continuing involvement in this business going forward. The operating results of the Regenerative Medicine – China business for the six months ended June 30, 2012, which are included in discontinued operations, were as follows (in thousands):
| Six Months Ended June 30, 2012
Revenue | $ | 52.3 |
Cost of revenues | (30.6 | )
Research and development | (103.3 | )
Selling, general, and administrative | (497.3 | )
Other income (expense) | (6.8 | )
Loss on exit of segment | (1,138.0 | )
Loss from discontinued operations | $ | (1,723.7 | )
Pharmaceutical Manufacturing - China segment On November 13, 2012, the Company completed the divestiture (the “Erye Sale”) of our 51% interest (the “Erye Interest”) in Suzhou Erye Pharmaceuticals Company Ltd., a Sino-foreign equity joint venture with limited liability organized under the laws of the PRC primarily engaged in the manufacture of generic antibiotics (“Erye”), to Suzhou Erye Economy & Trading Co., Ltd., a limited liability company organized under the laws of the PRC (“EET”), and Highacheive Holdings Limited, a limited liability company organized under the laws of the British Virgin Islands (“Highacheive” and together with EET, each a “Purchaser” and collectively the “Purchasers”). The Erye Sale was consummated pursuant to the terms and conditions of the Equity Purchase Agreement, dated as of June 18, 2012 (as amended, the “Equity Purchase Agreement”), by and among our Company, China Biopharmaceuticals Holdings, Inc., a wholly-owned subsidiary of NeoStem (“CBH”), EET, Highacheive, Fullbright Finance Limited, a limited liability company organized under the laws of the British Virgin Islands (“Fullbright”), and Erye. Pursuant to the Equity Purchase Agreement, the aggregate purchase price paid to the Company by the Purchasers for the Erye Interest consisted of (i) approximately $12.3 million in cash, (ii) the return to the Company of 104,000 shares of NeoStem common stock and (iii) the cancellation of 117,000 options and 64,000 warrants to purchase our common stock. The fair value of the shares was based on the Company's closing price on the date of sale, and was recorded as Treasury Stock in our balance sheet. The fair values of the canceled options and warrants were based on the Black-Scholes values on the date of sale, and were recorded against Additional Paid in Capital in the accompanying balance sheet. The Company recognized the following loss on the date of sale of its 51% interest in Erye on November 13, 2012 (in thousands):
Fair value of consideration received | $ | 13,397.9 |
Carrying value of segment non-controlling interest | 6,015.0 |
Carrying value of segment accumulated comprehensive income | 4,387.4 |
| $ | 23,800.3 |
Less carrying amount of assets and liabilities sold: |
Cash | $ | 8,457.5 |
Restricted Cash | 2,918.1 |
Accounts Receivable | 6,130.2 |
Inventories | 15,077.7 |
Prepaid expenses and other current assets | 957.8 |
Property, plant and equipment, net | 38,102.0 |
Other assets | 5,946.3 |
Accounts payable | (9,604.8 | )
Accrued liabilities | (2,008.8 | )
Bank loans | (15,133.5 | )
Notes payable | (6,599.3 | )
Other liabilities | (9,166.8 | )
Amount due related party | (7,859.7 | )
| $ | (27,216.7 | )
Loss on exit of segment | $ | (3,416.4 | )
The operations and cash flows of the Pharmaceutical Manufacturing - China business were eliminated from ongoing operations with the sale of the Company's Erye Interest. The operating results of the Pharmaceutical Manufacturing - China business for the three and six months ended June 30, 2012, including the estimated asset impairments based on the definitive agreement purchase price as of June 30, 2012, were as follows (in thousands):
| Three Months Ended June 30, 2012 |  | Six Months Ended June 30, 2012
Revenue | $ | 18,934.3 |  |  | $ | 37,218.3 |
Cost of revenues | (12,214.2 | ) |  | (25,580.0 | )
Research and development | (852.3 | ) |  | (1,619.7 | )
Selling, general, and administrative | (3,160.1 | ) |  | (6,200.1 | )
Other expense | (514.8 | ) |  | (1,007.4 | )
Provision for income taxes | (383.2 | ) |  | (505.5 | )
Asset impairments | (27,994.6 | ) |  | (27,994.6 | )
Loss on sale of segment | — |  |  | — |
Loss from discontinued operations | $ | (26,184.9 | ) |  | $ | (25,689.0 | )

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- Definition The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 144 -Paragraph 43-48 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 + Details
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