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DISCONTINUED OPERATIONS | 6 Months Ended
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Jun. 30, 2023
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONSOn January 12, 2022, the Company entered into the Purchase Agreement with Journey pursuant to which the Company sold its MST Franchise to Journey. The Company has determined that the sale of the MST Franchise represents a strategic shift that had a major effect on the business and therefore the MST Franchise met the criteria for classification as discontinued operations at March 31, 2022. Accordingly the MST Franchise is reported as discontinued operations in accordance with ASC 205-20, Discontinued Operations. Amounts applicable to prior years have been recast to conform to the discontinued operations presentation. The Company recognized a gain on the sale of the MST Franchise upon closing. The following table presents the combined results of discontinued operations of the MST Franchise:
|  | Three Months Ended June 30 |  | Six Months Ended June 30
(in thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Product sales, net |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 106 |
Cost of goods sold |  | — |  |  | — |  |  | — |  |  | 80 |
Operating expenses: |  |  |  |  |  |  |  |
Research and development |  | — |  |  | — |  |  | — |  |  | — |
Selling, general and administrative |  | 20 |  |  | 241 |  |  | 30 |  |  | (92) |
Total operating expenses |  | 20 |  |  | 241 |  |  | 30 |  |  | (92) |
(Loss) income from discontinued operations |  | (20) |  |  | (241) |  |  | (30) |  |  | 118 |
Gain on the sale of the MST Franchise |  | — |  |  | — |  |  | — |  |  | 13,005 |
(Loss) income from discontinued operations, before income taxes |  | (20) |  |  | (241) |  |  | (30) |  |  | 13,123 |
Income tax expense |  | — |  |  | — |  |  | — |  |  | — |
Net (loss) income from discontinued operations |  | $ | (20) |  |  | $ | (241) |  |  | $ | (30) |  |  | $ | 13,123 |
The following table presents non-cash items related to discontinued operations, which are included in the Company's unaudited condensed consolidated statement of cash flows for the six months ended June 30, 2022. There were no non-cash items related to discontinued operations as of June 30, 2023.
(in thousands) |  |  | Six Months Ended June 30, 2022
Cash Flows From Operating Activities: |  |  |
Stock-based compensation (income) expense* |  |  | $ | (352) |
Gain on the sale of the MST Franchise |  |  | (13,005) |
Total non-cash items of discontinued operations |  |  | $ | (13,357) |
Supplemental disclosure of cash flow information: |  |  |
Amount due from sale of MST Franchise |  |  | $ | 5,000 |
*Income from stock-based compensation is related to forfeitures. The following table presents the gain on the sale of the MST Franchise:
(in thousands) |  | Six Months Ended June 30, 2022
Cash proceeds |  | $ | 20,000 |
Proceeds paid in January 2023 |  | 5,000
|  | 25,000 |
Less transaction costs |  | (4,247)
Less carrying value of assets sold |  | (7,748)
Gain on sale, before income taxes |  | 13,005
Income tax expense |  | — |
Gain on sale net of tax |  | $ | 13,005 |
In accordance with ASC 205-20, only expenses specifically identifiable and related to a business to be disposed may be presented in discontinued operations. As such, the research and development, marketing, selling and general and administrative expenses in discontinued operations include corporate costs incurred directly to solely support the MST Franchise. The milestone payments for sales of ZILXI, AMZEEQ and FCD105 represent contingent consideration. Contingent consideration has been accounted for as a gain contingency in accordance with ASC 450, Contingencies, and will be recognized in earnings in the period when realizable.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//360/tableOfContent + Details
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