Discontinued Operations and Assets and Liabilities Held for Sale

On July 31, 2017, we divested i4c to One Health Group, LLC (the "Purchaser"), pursuant to the terms and conditions of a membership interest purchase agreement (the "Purchase Agreement"). i4c conducted our Pet Health Monitoring business known as Voyce. The purchase price for the assets was equal to (i) the sum of $100, plus (ii) a revenue participation of up to $20.0 million, payable pursuant to the terms and conditions of the Purchase Agreement. We have determined that the revenue participation is a gain contingency and therefore will be recognized if and when it is earned.

The total value of the consideration paid pursuant to the Purchase Agreement was determined through negotiations that took into account a number of factors of the Pet Health Monitoring business, including historical revenues, operating history, business contracts, obligations and commitments and other factors. The terms of the transaction were approved by our independent directors of the Board of Directors and required the consent of our lender.

The Purchaser is a newly-formed entity of which Michael R. Stanfield, our Executive Chairman and President, is a minority investor, and certain former members of the i4c management team are the managing member and investors. Except as described above, there are no material relationships between the Purchaser, on the one hand, and us or any of our affiliates, directors, officers, or any associate of such directors or officers, on the other hand. For our policy on identifying a controlling financial interest, please see "—Variable Interest Entities" in Note 2.

These consolidated financial statements present our results of operations for the year ended December 31, 2017 and 2016 and our financial position as of December 31, 2017 and 2016 giving effect to the disposal of i4c, with the historical financial results of the Pet Health Monitoring segment reflected as discontinued operations, since the disposal constituted a strategic business shift. We made adjustments to our historical financial results for certain costs and overhead allocations to either discontinued or continuing operations for the years ended December 31, 2017 and 2016; for additional information, please see "—Variable Interest Entities" in Note 2.

In the year ended December 31, 2017, we recorded a loss on sale of $613 thousand (including $516 thousand of transaction costs), which is included in loss from discontinued operations, net of tax in our consolidated statements of operations. The following table summarizes the components of loss from discontinued operations, net of income taxes included in the consolidated statements of operations (in thousands):



	Year Ended December 31,
	2017			2016
Major classes of line items constituting loss from discontinued operations:
Revenue	$	—		70
Marketing expenses	(18		)	(1,552		)
Cost of revenue	(4		)	(1,421		)
General and administrative expenses	(1,718		)	(15,604		)
Impairment	(180		)	(7,043		)
Depreciation and amortization	(1		)	(1,538		)
Interest expense	—			(3		)
Other income	—			4
Loss from discontinued operations before income taxes	(1,921		)	(27,087		)
Loss on disposal of discontinued operations	(613		)	—
Income tax benefit	—			57
Total loss from discontinued operations, net of tax	$	(2,534	)	$	(27,030	)

In 2016, our Board of Directors approved a plan to sell Captira, which comprises our Bail Bonds Industry Solutions segment. Captira met all the criteria under U.S. GAAP to classify its assets and liabilities as held for sale in our consolidated balance sheets as of December 31, 2016. Effective January 31, 2017, we completed the sale of Captira for a nominal amount, which resulted in a loss on sale of $130 thousand and marks the conclusion of our operations in the Bail Bonds Industry Solutions segment. The disposal did not represent a strategic shift that will have a major effect on operations and financial results, and therefore, it is not classified as discontinued operations. For information on the operating results of the Bail Bonds Industry Solutions segment, please see "Item 7. —Management’s Discussion and Analysis of Financial Condition and Results of Operations."

The major classes of assets and liabilities in the consolidated balance sheets that were included in discontinued operations related to the sale of Voyce (which comprised our Pet Health Monitoring segment), as well as the major classes of assets and liabilities held for sale related to Captira (which comprised our Bail Bonds Industry Solutions segment), consisted of the following (in thousands):



	December 31, 2016
Carrying amounts of the major classes of assets included in discontinued operations:
Cash and cash equivalents	$	60
Accounts receivable, net	8
Prepaid expenses and other current assets	153
Inventory	250
Total major classes of assets of the discontinued operations	471
Other assets in the disposal group classified as held for sale:
Cash and cash equivalents	321
Accounts receivable, net	177
Prepaid expenses and other current assets	97
Property and equipment, net	247
Other assets	6
Write-down to fair value	(744		)
Total other assets in the disposal group classified as held for sale:	104
Current assets of discontinued operations and assets held for sale	$	575

Carrying amounts of the major classes of liabilities included in discontinued operations:
Accounts payable	$	536
Accrued expenses and other current liabilities	90
Accrued payroll and employee benefits	128
Total major classes of liabilities of the discontinued operations	754
Other liabilities in the disposal group classified as held for sale:
Accounts payable	9
Accrued expenses and other current liabilities	15
Accrued payroll and employee benefits	80
Total other liabilities in the disposal group classified as held for sale:	104
Current liabilities of discontinued operations and liabilities held for sale	$	858

In March 2017, we executed an agreement to dispose of our Habits at Work business, the results of which are recorded in our Personal Information Services segment. Habits at Work met all the criteria under U.S. GAAP to classify its assets and liabilities as held for sale in our consolidated balance sheets as of March 31, 2017. Effective June 1, 2017, we completed the sale of Habits at Work for a nominal amount, which resulted in a gain on sale of $24 thousand. The disposal did not represent a strategic shift that will have a major effect on operations and financial results, and therefore, it is not classified as discontinued operations.