DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

On September 8, 2015, we entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Edge BioSystems, Inc. (“Edge Bio”), pursuant to which we sold our manufacturing, marketing and selling of high quality polymer and silica based beads and resin and chromatography columns business (collectively, the “Columns Business”). The Columns Business was part of our former segment, Genetic Assays and Platforms. Pursuant to the Asset Purchase Agreement, Edge Bio acquired substantially all of the assets used solely in connection with the Columns Business and assumed certain liabilities of the Columns Business for a total cash purchase price of approximately $2.1 million (the “Asset Sale”), which was paid on September 8, 2015 upon the closing of the Asset Sale. During the year ended December 31, 2015, we recorded a gain on the sale of the Columns Business of $1.5 million.

On November 25, 2015, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with ADSTEC Corporation (“ADSTEC”) and ADS Biotec Inc., a wholly-owned subsidiary of ADSTEC (“Buyer”), pursuant to which we sold (1) to ADSTEC our facilities located in Glasgow, Scotland and on Irvington Road in Omaha, Nebraska (together, the “Facilities”) and all of our stock, inventory and raw materials located at the Facilities (collectively, the “Inventory”), and (2) to Buyer (a) all of the remaining assets relating to our Genetic Assays and Platforms business segment (the “Business”), other than the Inventory (the “Purchased Assets”), and (b) all of the ordinary shares of Transgenomic Limited, a wholly-owned subsidiary of ours (the “Shares”).

Pursuant to the Purchase Agreement, ADSTEC and Buyer acquired the Facilities, the Inventory, the Purchased Assets and the Shares for an aggregate purchase price of approximately $300,000, and Buyer assumed our financial and human resources commitments related to the Business (the “Transaction”). During the year ended December 31, 2015, we recorded a loss on the Transaction of $1.7 million.

Together, the Asset Sale and the Transaction represent the divestiture of our Genetic Assays and Platforms business resulting in a strategic shift that had a major effect on our operations and financial results. Therefore, the divested operations of our Genetic Assays and Platforms business meet the criteria to be reported as discontinued operations.

During the fourth quarter of 2015, our Board of Directors took actions to begin the process of divesting our Patient Testing business in New Haven, Connecticut. In March of 2016, we announced that we had suspended testing services in our Patient Testing laboratory as we reviewed and evaluated various strategic alternatives for that business. As a result of these actions, as of December 31, 2015, our Patient Testing business met the criteria to be reported as discontinued operations.

The related assets, liabilities, results of operations and cash flows for both the Genetic Assays and Platforms business and Patient Testing business are classified as assets held for sale, liabilities held for sale and discontinued operations for all periods presented.

Results of the discontinued operations consisted of the following:

	Years ended December 31,
(dollars in thousands)	2016			2015
Net sales	$	2,163		$	18,308
Cost of goods sold	574			12,287
Gross profit	1,589			6,021
Selling, general and administrative expense	1,710			15,187
Research and development expense	167			408
Impairment of long-lived assets	—			13,942
Operating income (loss) from discontinued operations	(288		)	(23,516		)
Gain on settlement of accounts payable	325			—
Gain (loss) on sale of assets/business	1,047			(224		)
Income (loss) from discontinued operations before income taxes	1,084			(23,740		)
Income tax expense (benefit)	431			(648		)
Income (loss) from discontinued operations	$	653		$	(23,092	)

The income from discontinued operations for the year ended December 31, 2016, includes approximately $1.0 million in proceeds received from the sale of assets of our discontinued Patient Testing business and approximately $0.3 million of a gain resulting from a settlement of accounts payable with a vendor.

In addition during the 2016 the Company determined it was going to continue providing services related to its oncology testing. As such, revenues previously reported in discontinued operations for the year ended December 31, 2015 were reclassified to continuing operations. The result was, revenue from continuing operations increased and loss from discontinued operations increased by $0.3 million for the year ended December 31, 2015. There was no effect on net loss or stockholders’ deficit for 2015.

Assets and liabilities of the discontinued operations are classified as assets held for sale and liabilities held for sale in the consolidated balance sheets and consisted of the following:

	Dollars in Thousands
	December 31, 2016		December 31, 2015
ASSETS
Accounts receivable, net	$	—	$	1,905
Other current assets	31		82
Total Assets	$	31	$	1,987
LIABILITIES
Accrued compensation	$	—	$	264
Total Liabilities	$	—	$	264

The following is a summary of activity for the allowance for doubtful accounts from discontinued operations during the years ended December 31, 2016 and 2015. The allowance for doubtful accounts from discontinued operations are included in the assets held for sale in the consolidated balance sheets.

	Dollars in Thousands
	Beginning Balance		Provision		Write Offs			Ending Balance
Twelve months ended December 31, 2016	$	14,664	$	—	$	(14,664	)	$	—
Twelve months ended December 31, 2015	$	7,927	$	9,447	$	(2,710	)	$	14,664