Sale of Medicomp, Inc.

12 Months Ended

Dec. 31, 2012

Sale of Medicomp, Inc.

Sale of Medicomp, Inc.

17. Sale of Medicomp, Inc.

        On March 31, 2011, we sold 100 percent of the outstanding stock of Medicomp, our wholly-owned telemedicine subsidiary, to a group of private investors. At closing, we received 42,004 shares of our common stock held by the investors, with an aggregate value of $2.8 million, and a $12.1 million, ten-year promissory note bearing interest at 5.0 percent per annum. At December 31, 2012, the balance of the note receivable was $8.8 million, net of discount. Immediately after closing the sale, we purchased a 19.9 percent ownership interest in Medicomp in exchange for $1.0 million in cash and an approximately $2.0 million reduction in the face value of the promissory note. The carrying value of our investment in Medicomp was based on the consideration Medicomp received, which we believe approximated the fair value of our non-controlling interest.

        With the termination of our development of and commercialization efforts relating to an arrhythmia detection application in June 2011, we have not generated further direct continuing cash flows from telemedicine-related activities. As such, we met the criteria for reporting discontinued operations. Accordingly, we have included the operating results of Medicomp, including the gain recognized on its disposal, within discontinued operations on our consolidated statements of operations.

        We sold the following assets and liabilities of Medicomp as of the closing date (in thousands):

	March 31, 2011
Assets
Cash	$	1,221
Accounts receivable and inventory		1,028
Deferred tax assets		4,262
Equipment and other assets		7,089
Total assets	$	13,600
Other current liabilities	$	1,433

        Medicomp's revenues and loss before income tax reported in discontinued operations for the years ended December 31, 2012, 2011 and 2010 are presented below (in thousands):

	Year Ended December 31,
	2012		2011		2010
Revenues	$	—	$	3,107	$	10,932
Income (loss) before income tax	$	—	$	935	$	(7,313	)