Note 10. Discontinued Operations

9 Months Ended

Mar. 31, 2013

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Discontinued Operations

10. Discontinued Operations

BH Holdings, S.A.S

On January 12, 2012 BHH initiated the filing of an insolvency declaration with the Tribunal de Commerce de Rennes, France ("Commercial Court").  The Commercial Court on January 18, 2012 opened the liquidation proceedings with continuation of BHH's activity for 3 months and named an administrator to manage BHH. Since Drew no longer had a controlling financial interest in BHH it was deconsolidated in the December 31, 2011 quarterly condensed consolidated financial statements and prior period amounts were presented as discontinued operations.

The following tables summarize the results of discontinued operations of BHH for the three months and nine months ended March 31, 2013 and 2012 (in thousands):

For the Three Months Ended March 31,	2013		2012
Revenue, net	$	—	$	—
Cost of goods sold	—		—
Marketing, general and administrative	—		—
Research & development	—		—
Total Costs and expenses	—		—
Loss from discontinued operations	—		—
Loss on liquidation of net assets from discontinued operations	—		—
Net loss from discontinued operations	$	—	$	—

For the Nine Months Ended March 31,	2013		2012
Revenue, net	$	—	$	1,970
Cost of goods sold	—		574
Marketing, general and administrative	—		1,945
Research & development	—		—
Total Costs and expenses	—		2,519
Loss from discontinued operations	—		(549		)
Loss on liquidation of net assets from discontinued operations	—		(2,216		)
Net loss from discontinued operations	$	—	$	(2,765	)

Assets and liabilities of discontinued operations of BHH included in the condensed consolidated balance sheets are summarized as follows at March 31, 2013 and June 30, 2012 (in thousands):

	March 31			June 30,
	2013			2012
Assets
Total assets	$	—		$	—
Liabilities
Accounts payable	—			—
Accrued expenses	—			—
Accrued lease termination costs	338			338
Total liabilities	338			338
Net assets of discontinued operations	$	(338	)	$	(338	)

Discontinued operation of ECD

On October 3, 2012 the Company sold its Clinical Diagnostics Business to ERBA Diagnostics, Inc. The ECD consisted of Drew Scientific, Inc., and its wholly owned subsidiaries JAS and Drew Scientific Limited Co. The sales price was $6,500,000 in cash and gain on sale of assets was approximately $2,717,000.

	October 3, 2012
Sales Price	$	6,500,000
Broker's fee	(325,000		)
Net Proceeds	6,175,000
Net Assets Sold	(3,457,931		)
Gain on Sale of Assets	$	2,717,069
Net assets sold
Assets:
Cash and cash equivalents	$	4,378
Accounts receivable, net	1,660,992
Inventory, net	1,996,775
Other current assets	112,980
Furniture and equipment, net	286,823
Goodwill	93,181
Trademarks and trade names, net	89,000
Customer list, net	461,558
Total Assets	4,705,687
Liabilities:
Accounts payable	638,541
Accrued expenses	609,215
Total liabilities	1,247,756
Net assets sold	$	3,457,931

On October 18, 2012, the Company and its debt holder reached an agreement whereby the Company paid the balance of the seller-provided financing plus accrued interest related to the purchase of certain assets of Biocode of $4,367,604 with a one-time payment of $2,487,480 resulting in a gain on extinguishment of debt of $1,880,124. The repayment of the debt has reduced the Company's debt related to Biocode to zero. The total gain from the extinguishment of debt and the gain on the sale of assets, offset by the cumulative translation adjustment ("CTA") related to Drew of $578,422 was $4,019,000 before tax.

The following tables summarize the results of discontinued operations for the three months and nine months ended March 31, 2013 and 2012 (in thousands):

For the three months ended March 31,	2013			2012
Revenue, net	$	—		$	2,968
Cost of goods sold	—			2,094
Marketing, general and administrative	1			1,059
Research & development	—			115
Total costs and expenses	1			3,268
Other expense	—			—
Net (loss) from discontinued operations	(1		)	(300		)
Gain from sale of assets and debt settlement net of tax (CTA included)	(1		)	—
Net income (loss) from discontinued operations, net of tax	$	(2	)	$	(300	)

For the nine months ended March 31,	2013		2012
Revenue, net	$	3,637	$	9,675
Cost of goods sold	2,194		7,261
Marketing, general and administrative	1,249		3,187
Research & development	76		386
Total costs and expenses	3,519		10,834
Other expense	—		(90		)
Income (loss) from discontinued operations	118		(1,249		)
Gain from sale of assets and debt settlement, net of tax (CTA included)	3,938		—
Net income (loss) from discontinued operations, net of tax	$	4,056	$	(1,249	)

Assets and liabilities of discontinued operations of ECD included in the condensed consolidated balance sheets are summarized as follows at March 31, 2013 and June 30, 2012 (in thousands):

	March 31,			June 30,
	2013			2012
Assets
Accounts receivable	$	—		$	1,555
Inventory	—			2,348
Other assets	—			110
Total current assets	—			4,013
Furniture and fixture	—			323
Non-current accounts receivable	—			69
Goodwill	—			93
Intangible assets	—			627
Total non-current assets	—			1,112
Total Assets	—			5,125
Liabilities
Accounts payable	—			691
Accrued expenses	163			589
Total liabilities	163			1,280
Net assets of discontinued operations	$	(163	)	$	3,845

BH Holdings, S.A.S [Member]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Schedule of Discontinued Operations

BH Holdings, S.A.S

On January 12, 2012 BHH initiated the filing of an insolvency declaration with the Tribunal de Commerce de Rennes, France ("Commercial Court").  The Commercial Court on January 18, 2012 opened the liquidation proceedings with continuation of BHH's activity for 3 months and named an administrator to manage BHH. Since Drew no longer had a controlling financial interest in BHH it was deconsolidated in the December 31, 2011 quarterly condensed consolidated financial statements and prior period amounts were presented as discontinued operations.

The following tables summarize the results of discontinued operations of BHH for the three months and nine months ended March 31, 2013 and 2012 (in thousands):

For the Three Months Ended March 31,	2013		2012
Revenue, net	$	—	$	—
Cost of goods sold	—		—
Marketing, general and administrative	—		—
Research & development	—		—
Total Costs and expenses	—		—
Loss from discontinued operations	—		—
Loss on liquidation of net assets from discontinued operations	—		—
Net loss from discontinued operations	$	—	$	—

For the Nine Months Ended March 31,	2013		2012
Revenue, net	$	—	$	1,970
Cost of goods sold	—		574
Marketing, general and administrative	—		1,945
Research & development	—		—
Total Costs and expenses	—		2,519
Loss from discontinued operations	—		(549		)
Loss on liquidation of net assets from discontinued operations	—		(2,216		)
Net loss from discontinued operations	$	—	$	(2,765	)

Assets and liabilities of discontinued operations of BHH included in the condensed consolidated balance sheets are summarized as follows at March 31, 2013 and June 30, 2012 (in thousands):

	March 31			June 30,
	2013			2012
Assets
Total assets	$	—		$	—
Liabilities
Accounts payable	—			—
Accrued expenses	—			—
Accrued lease termination costs	338			338
Total liabilities	338			338
Net assets of discontinued operations	$	(338	)	$	(338	)

ECD [Member]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Schedule of Discontinued Operations

On October 3, 2012 the Company sold its Clinical Diagnostics Business to ERBA Diagnostics, Inc. The ECD consisted of Drew Scientific, Inc., and its wholly owned subsidiaries JAS and Drew Scientific Limited Co. The sales price was $6,500,000 in cash and gain on sale of assets was approximately $2,717,000.

	October 3, 2012
Sales Price	$	6,500,000
Broker's fee	(325,000		)
Net Proceeds	6,175,000
Net Assets Sold	(3,457,931		)
Gain on Sale of Assets	$	2,717,069
Net assets sold
Assets:
Cash and cash equivalents	$	4,378
Accounts receivable, net	1,660,992
Inventory, net	1,996,775
Other current assets	112,980
Furniture and equipment, net	286,823
Goodwill	93,181
Trademarks and trade names, net	89,000
Customer list, net	461,558
Total Assets	4,705,687
Liabilities:
Accounts payable	638,541
Accrued expenses	609,215
Total liabilities	1,247,756
Net assets sold	$	3,457,931

On October 18, 2012, the Company and its debt holder reached an agreement whereby the Company paid the balance of the seller-provided financing plus accrued interest related to the purchase of certain assets of Biocode of $4,367,604 with a one-time payment of $2,487,480 resulting in a gain on extinguishment of debt of $1,880,124. The repayment of the debt has reduced the Company's debt related to Biocode to zero. The total gain from the extinguishment of debt and the gain on the sale of assets, offset by the cumulative translation adjustment ("CTA") related to Drew of $578,422 was $4,019,000 before tax.

The following tables summarize the results of discontinued operations for the three months and nine months ended March 31, 2013 and 2012 (in thousands):

For the three months ended March 31,	2013			2012
Revenue, net	$	—		$	2,968
Cost of goods sold	—			2,094
Marketing, general and administrative	1			1,059
Research & development	—			115
Total costs and expenses	1			3,268
Other expense	—			—
Net (loss) from discontinued operations	(1		)	(300		)
Gain from sale of assets and debt settlement net of tax (CTA included)	(1		)	—
Net income (loss) from discontinued operations, net of tax	$	(2	)	$	(300	)

For the nine months ended March 31,	2013		2012
Revenue, net	$	3,637	$	9,675
Cost of goods sold	2,194		7,261
Marketing, general and administrative	1,249		3,187
Research & development	76		386
Total costs and expenses	3,519		10,834
Other expense	—		(90		)
Income (loss) from discontinued operations	118		(1,249		)
Gain from sale of assets and debt settlement, net of tax (CTA included)	3,938		—
Net income (loss) from discontinued operations, net of tax	$	4,056	$	(1,249	)

Assets and liabilities of discontinued operations of ECD included in the condensed consolidated balance sheets are summarized as follows at March 31, 2013 and June 30, 2012 (in thousands):

	March 31,			June 30,
	2013			2012
Assets
Accounts receivable	$	—		$	1,555
Inventory	—			2,348
Other assets	—			110
Total current assets	—			4,013
Furniture and fixture	—			323
Non-current accounts receivable	—			69
Goodwill	—			93
Intangible assets	—			627
Total non-current assets	—			1,112
Total Assets	—			5,125
Liabilities
Accounts payable	—			691
Accrued expenses	163			589
Total liabilities	163			1,280
Net assets of discontinued operations	$	(163	)	$	3,845