of Stability Biologics, LLC

On September 30, 2017, we completed the previously announced divestiture (the “Stability Divestiture”) of our wholly-owned subsidiary, Stability Biologics, LLC, a Georgia limited liability company (successor-in-interest to Stability Inc., a Florida corporation) (“Stability LLC”), pursuant to the Membership Interest Purchase Agreement (“Agreement”) by and among the Company, Stability LLC, each person that, as of January 13, 2016, was a stockholder (the “Stockholders”) of Stability Inc., a Florida corporation and a predecessor-in-interest to Stability LLC ("Stability, Inc."), and Brian Martin, as stockholder representative, the terms of which were previously disclosed in the Current Report on Form 8-K dated August 18, 2017.

A summary of the assets divested and consideration received follows (in thousands):



	September 30,
	2017
Assets divested
Trade receivables	$	2,405
Inventories	2,800
Prepaid expenses and other assets	1,610
Goodwill (a)	309
Intangible assets	11,857
Property and equipment, net of accumulated depreciation	1,446
Total assets divested	20,427

Liabilities divested
Accounts payable and accrued liabilities	3,487
Total liabilities divested	3,487

Total net assets divested	$	16,940

Transaction costs	$	400

Consideration received
Non-trade receivable	150
Note receivable	3,190
Intangible assets	630
Extinguishment of earn out liability	17,644
Total consideration received	$	21,614

Gain on sale	$	4,274

(a) In accordance with ASC 350-20-35-52 when a portion of a reporting unit is disposed of, goodwill associated with that business shall be included in the carrying amount of the business in determining the gain on disposal. In accordance with ASC 350-20-35-53, the amount of goodwill to be included in that carrying amount shall be based on the relative fair values of the business to be disposed of and the portion of the reporting unit that will be retained. Based on an estimated approximate fair value of Stability LLC compared to the business retained, approximately $300,000 out of the total goodwill of $20.2 million residing in the reporting unit was included in the carrying amount of the business sold.

The total gain on the Stability Divestiture of $10,011,000 is comprised of a pretax book gain of $4,274,000 and an associated tax benefit of $5,737,000, which consists principally of the write off of deferred tax liabilities related to Stability LLC.