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Discontinued Operations
 12 Months Ended
Dec. 31, 2013
Discontinued Operations  
Discontinued Operations
13. 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 sale of the 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 (in $000s):

 

    Year ended
December 31,
2011		     Year ended
December 31,
 2012		     Year ended
December 31,
 2013		     Period from
August 13,
1996
(inception) to
December 31,
2013		  
                         
Product revenue   $ 699     $ 583     $ —     $ 3,604  
Cost of goods sold     (360 )     (293 )     —       (2,045 )
Selling, general and administrative     (979 )     (607 )     —       (9,295 )
Goodwill and intangible impairment     —       —       —       (5,187 )
Interest income     —       32       91       123  
Interest expense     —       —       —       (110 )
Gain on termination of license agreement     —       1,192       —       1,192  
(Loss) income from discontinued operations     (640 )     907       91       (11,718 )
Income tax expense     —       (337 )     (34 )     (371 )
(Loss) income from discontinued operations, net of tax   $ (640 )   $ 570     $ 57     $ (12,089 )

 

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 (in $000s):

 

    December 31,
2012		     December 31,
2013		  
             
Current assets of discontinued operations:                
Short term portion of minimum royalty arrangement receivable, net   $ 536     $ 379  
Returns indemnification receivable     325       260  
Total current assets of discontinued operations     861       639  
Long-term assets of discontinued operations:                
Long-term portion of minimum royalty arrangement receivable, net     353       72  
Total assets of discontinued operations   $ 1,214     $ 711  
                 
Current liabilities of discontinued operations:                
Accounts payable   $ 10     $ —  
Returns provision     325       260  
Total current liabilities of discontinued operations   $ 335     $ 260