DISCONTINUED OPERATIONS - BUSINESS DIVESTITURE

9 Months Ended

Dec. 31, 2014

DISCONTINUED OPERATIONS - BUSINESS DIVESTITURE

DISCONTINUED OPERATIONS - BUSINESS DIVESTITURE

3.DISCONTINUED OPERATIONS - BUSINESS DIVESTITURE

On November 15, 2013, the Company completed the sale of the MDMS Business, and the related underlying ERP platform required to support the MDMS Business, to Rocket for a total sale price of approximately $22.0 million (the “Sale”), of which approximately $19.8 million was received at closing and the remaining $2.2 million was released from escrow and received in November 2014. As a result of this divestiture, the historical results of the MDMS Business have been reclassified and presented as discontinued operations for all periods presented.  Also, in connection with, and effective on, the closing of the Sale, the Company assigned to Rocket its Lease Agreement with The Irvine Company, dated November 9, 2004, as amended by the First Amendment thereto dated December 7, 2009. The lease was for approximately 15,000 square feet of office space in Irvine, California and runs through October 2015.  Rocket agreed to allow the Company to continue to occupy a portion of the space until April 2014 when the Company relocated to a new facility to accommodate the personnel previously employed at the premises and continuing with the Company following the Sale.

In connection with the Sale, the parties also entered, at closing, into several ancillary and related agreements, including a transition services agreement designed to facilitate the transition of the MDMS Business to Rocket and minimize disruptions to the Company’s retained businesses, and an intellectual property license agreement, which will permit Rocket to use certain intellectual property owned by the Company and will permit the Company to use certain intellectual property owned by Rocket following the Sale. The costs of providing these services were considered immaterial and therefore were not included in discontinued operations on the unaudited condensed consolidated statements of comprehensive loss.

As of December 31, 2014, the Company has not had and does not anticipate generating any future cash flows related to the MDMS Business.

The financial results of the discontinued operations for the three and nine months ended December 31, 2013 were as follows (in thousands):

	Three Months Ended December 31, 2013			Nine Months Ended December 31, 2013
Revenue of discontinued operations	$	1,140		$	5,821
Income from discontinued operations	567			3,230
Income tax expense (benefit)	(515		)	561
Income from discontinued operations, net of tax	$	1,082		$	2,669
Gain on sale of discontinued operations	9,926			9,926
Income tax expense	3,813			3,813
Gain on sale of discontinued operations, net of tax	6,113			6,113
Total income from discontinued operations	$	7,195		$	8,782