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Discontinued Operations
 12 Months Ended
Dec. 31, 2012
Discontinued Operations  
Discontinued Operations

3                 Discontinued Operations

 

On August 10, 2012, the Company entered into an agreement with Sinclair to terminate, effective September 30, 2012, the distribution agreements relating to the promotion and sale of Xclair®, Numoisyn® Lozenges and Numoisyn® Liquid.

 

Product revenue, cost of goods sold and selling, general and administrative costs related to the promotion and sales of the of Xclair®, Numoisyn® Liquid and Numoisyn® Lozenges have been reclassified from operating results from continuing operations to (loss) income from discontinued operations in the consolidated statement of operations for all periods presented as follows:

 

 

 

Year ended
December 31,
2010

 

Year ended
December 31,
 2011

 

Year ended
December 31,
 2012

 

Period from
August 13,
1996
(inception) to
December 31,
2012

 

Product revenue

 

$

 574

 

$

 699

 

$

 583

 

$

 3,604

 

Cost of goods sold

 

(418

)

(360

)

(293

)

(2,045

)

Selling, general and administrative

 

(1,287

)

(979

)

(607

)

(9,295

)

Goodwill and intangible impairment

 

—

 

—

 

—

 

(5,187

)

Interest income

 

—

 

—

 

32

 

32

 

Interest expense

 

—

 

—

 

—

 

(110

)

Gain on termination of license agreement

 

—

 

—

 

1,192

 

1,192

 

(Loss) income from discontinued operations

 

(1,131

)

(640

)

907

 

(11,809

)

Income tax expense

 

—

 

—

 

(337

)

(337

)

(Loss) income from discontinued operations, net of tax

 

$

 (1,131

)

$

 (640

)

$

 570

 

$

 (12,146

)

 

The approximately $0.9 million present value of the estimated $1.0 million of minimum royalty payments the Company will receive over three years ending September 30, 2015 arising from the termination and settlement agreement and the recognition of approximately $0.3 million associated with a $0.3 million product returns provision liability for which an offsetting asset has been recorded based on our rights under the termination and settlement agreement resulted in a $1.2 million gain on termination of the distribution agreements for the year ended December 31, 2012.

 

The assets and liabilities associated with product promotion and sale have been classified within assets and liabilities of discontinued operations in the accompanying consolidated balance sheets:

 

 

 

December 31,
2011

 

December 31,
2012

 

 

 

 

 

 

 

Current assets of discontinued operations:

 

 

 

 

 

Inventory

 

$

182

 

$

—

 

Short term portion of minimum royalty arrangement receivable, net

 

—

 

536

 

Returns indemnification receivable

 

—

 

325

 

Accounts receivable and other current assets

 

131

 

—

 

Total current assets of discontinued operations

 

313

 

861

 

Long-term assets of discontinued operations:

 

 

 

 

 

Long-term portion of minimum royalty arrangement receivable, net

 

—

 

353

 

Total assets of discontinued operations

 

313

 

1,214

 

 

 

 

 

 

 

Current liabilities of discontinued operations:

 

 

 

 

 

Accounts payable

 

$

46

 

$

10

 

Returns provision

 

202

 

325

 

Accrued liabilities and other current liabilities

 

279

 

—

 

Total current liabilities of discontinued operations

 

$

527

 

$

335