Disposition of the Hospital Business - (Tables)

9 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations

The $45,760 gain represents the aggregate consideration of $42,000, transaction fees of $2,928, plus the assets and liabilities either transferred to the Exela Buyer or eliminated by us due to the sale of the Hospital Products, which are listed below.

	September 30, 2020
Prepaid expenses and other current assets	$	(134)
Inventories	(4,922)
Goodwill	(1,654)
Intangible assets, net	(407)
Other non-current assets	(1,095)
Total long-term contingent consideration payable	14,900
Net liabilities disposed of	6,688
Aggregate consideration	42,000
Less transaction fees	(2,928)
Net gain on the sale of the Hospital Products	$	45,760

Schedule of Error Corrections and Prior Period Adjustments

The pro forma adjustments are based on available information and assumptions that the Company believes are attributable to the sale.

	Unaudited Pro Forma Condensed Combined Balance Sheets
	As of December 31, 2019
	As Reported		Pro Forma Adjustments		Notes	Pro Forma
ASSETS
Cash and cash equivalents	$	9,774	$	12,935	(a)	$	22,709
Inventories	3,570		(3,570)		(b)	—
Prepaid expenses and other current assets	4,264		27,500		(c)	31,764
Goodwill	18,491		(1,654)		(d)	16,837
Intangible assets, net	813		(813)		(e)	—
Other non-current assets	39,274		(9,702)		(f)	29,572
Total assets	$	151,436	$	24,696		$	176,132
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current portion of long-term contingent consideration payable	$	5,554	$	(5,054)	(g)	$	500
Accrued expenses	19,810		2,800		(h)	22,610
Long-term contingent consideration payable, less current portion	11,773		(11,773)		(g)	—
Total liabilities	180,635		(14,027)			166,608
Shareholders’ equity (deficit):
Accumulated deficit	(391,215)		38,723		(i)	(352,492)
Total shareholders’ (deficit) equity	(29,199)		38,723			9,524
Total liabilities and shareholders’ equity (deficit)	$	151,436	$	24,696		$	176,132

Adjustments to the pro forma unaudited condensed combined balance sheet

(a) This adjustment represents the receipt of $14,500 cash consideration from the Exela Buyer at the closing of the Transaction less $1,565 placed into escrow for the estimated earn outs and royalties payable to Breaking Stick Holdings L.L.C., Horizon Santé FLML, Sarl, Deerfield Private Design Fund II, L.P., all affiliates of Deerfield Capital L.P. ("Deerfield") and Broadfin Healthcare Master Fund ("Broadfin") for the current quarter ended.

(b) This adjustment reflects the elimination of Inventories that were purchased as part of the Transaction.

(c) This adjustment reflects the Transaction consideration in the form of ten monthly installment payments of $2,750 (totaling $27,500) beginning 90 days from the Closing date.

(d) This adjustment reflects the elimination of $1,654 of Goodwill based on the relative fair value of the Hospital Products as a portion of the overall value of the Company.

(e) This adjustment reflects the elimination of the unamortized balance of the Intangible asset on acquired developed technology for Vazculep.

(f) This adjustment reflects the elimination of $1,228 of other long-term assets and $8,474 of deferred tax assets at December 31, 2019. The eliminated deferred tax assets are tax attributes of the Hospital Products.

(g) This adjustment reflects the elimination of short and long term related party payables, less the expected amounts due to Deerfield and Broadfin after taking into consideration the escrow discussed in Note (a). As part of the Transaction, the buyer agreed to assume the quarterly earn-out and royalty payments for periods after the close of the Transaction. The Company will no longer be responsible for these payments.

(h) This adjustment reflects the estimated transaction fees payable related to the Transaction.

(i) This adjustment reflects the estimated gain of $38,723 arising from the Transaction for the year ended December 31, 2019. This estimated gain has not been reflected in the pro forma unaudited condensed combined statements of loss as it is considered to be nonrecurring in nature. No adjustment has been made to the sale proceeds to give effect to any potential post-closing adjustments under the terms of the Purchase Agreement.

	Unaudited Pro Forma Condensed Combined Statement of Income (Loss)
	Nine Months Ended September 30, 2020
	As Reported		Pro Forma Adjustments		Notes	Pro Forma
Product sales	$	22,334	$	(22,175)	(j)	$	159
Total operating expense	2,259		(8,489)		(k)	(6,230)
Operating income	20,075		(13,686)			6,389
Income (loss) before income taxes	$	9,048	$	(13,251)	(l)	$	(4,203)

	Unaudited Pro Forma Condensed Combined Statement of Loss
	Nine Months Ended September 30, 2019
	As Reported		Pro Forma Adjustments		Notes	Pro Forma
Product sales	$	48,220	$	(48,007)	(j)	$	213
Total operating expense	64,985		(14,398)		(m)	50,587
Operating loss	(16,765)		(33,609)			(50,374)
Loss before income taxes	$	(26,846)	$	(33,113)	(n)	$	(59,959)

Adjustments to the pro forma unaudited condensed combined statements of income (loss)

(j) This adjustment reflects Product sales attributable to the Hospital Products.

(k) This adjustment reflects the following estimated expenses attributable to the Hospital Products:

•Cost of products of $3,540.

•Research and Development expenses of $407.

•Selling, general and administrative expenses of $809.

•Intangible asset amortization on acquired development technology for Vazculep of $406.

•Changes in fair value of related party contingent consideration of $3,327. The Company will no longer be responsible for these payments.

(l) This amount reflects the adjustments noted in (j) and (k) above, as well as estimated Changes in fair value of related party payable of $435 attributable to the Hospital Products. The Company will no longer be responsible for these payments.

(m) This adjustment reflects the following estimated expenses attributable to the Hospital Products:

•Cost of products of $8,972.

•Research and Development expenses of $1,604.

•Selling, general and administrative expenses of $828.

•Intangible asset amortization on acquired development technology for Vazculep of $610.

•Changes in fair value of related party contingent consideration of $2,384. The Company will no longer be responsible for these payments.

(n) This amount reflects the adjustments noted in (j) and (m) above, as well as the reversal of estimated Changes in fair value of related party payable of $496 attributable to the Hospital Products. The Company will no longer be responsible for these payments.