Discontinued Operations of Adeona Clinical Laboratory and Note Receivable

9 Months Ended

Sep. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

3.  Discontinued Operations of Adeona Clinical Laboratory and Note Receivable

On March 8, 2012, the Company sold all of its interest in Adeona Clinical Laboratory, LLC (the “Lab”) to Hartlab, LLC, an entity controlled by the Lab’s former owner. In connection with the sale of the Lab, the consideration received was (i) the immediate assignment of the Lab’s outstanding accounts receivable up through the date of closing, plus (ii) $700,000 payable pursuant to the terms of a two-year promissory note bearing interest at 5.7% per annum secured by all of the assets of the Lab. The note and all unpaid interest were due on March 1, 2014. During the three months ended September 30, 2013, the note receivable and associated interest receivable were deemed uncollectible. Accordingly, the Company recorded bad debt expense of $763,000.

In accordance with Accounting Standards Codification (“ASC”) Topic 205-20 “Presentation of Financial Statements-Discontinued Operations” (ASC 205-20), the Company determined that all the criteria for reporting a discontinued operation had been met. Accordingly, the Lab has been classified as a discontinued operation and its results of operations, financial position and cash flows are separately reported for all periods presented.

The summarized statement of operations data for Adeona Clinical Laboratory for the three and nine months ended September 30, 2013 and 2012 are as follows (in thousands):

 

	Three Months ended September 30,				Nine Months ended September 30,
	2013		2012		2013		2012
Laboratory fees, net	$	-	$	-	$	-	$	115
Operating Costs and Expenses:
General and administrative		-		104		-		287
Cost of laboratory services		-		-		-		116
Total operating costs and expenses		-		104		-		403
Loss from discontinued operations		-		(104)		-		(288)
Other Income:
Gain on sale of Adeona Clinical Laboratory		-		-		-		677
Income (loss) from discontinued operations	$	-	$	(104)	$	-	$	389