Discontinued Operations

12 Months Ended

Dec. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

4. Discontinued operations

On January 7, 2022, the Company entered into a definitive agreement (the “Agreement”) with ImmunityBio, Inc. (the “Buyer”) whereby the Company agreed to sell to the Buyer its leasehold interest in a manufacturing facility in Dunkirk, New York (the “Dunkirk Facility”) and certain other related assets, as described below, in exchange for reimbursement of certain expenditures that the Company made in the Dunkirk Facility totaling $40 million. The transaction closed on February 14, 2022 and was subject to approval from the Company's lender, Oaktree. The provisions of this approval included prepayment of the senior secured loans, as described in Note 12 - Debt and Lease Obligations. The Buyer has agreed to manufacture 503B products for the Company on mutually agreed upon commercial terms.

In addition to the leasehold interest in the Dunkirk Facility, the Buyer purchased the Company’s interests in certain leased manufacturing equipment and personal property, and owned personal property and inventory at the Dunkirk Facility, along with the Company’s rights in and obligations under its agreements relating to the Dunkirk Facility with Empire State Development ("ESD"), Fort Schuyler Management Corporation ("FSMC"), and County of Chautauqua Industrial Development Agency ("CCIDA") and other parties (collectively, the "Dunkirk Operations"). The Buyer will assume all capital expenditure and hiring obligations of the Company related to the Dunkirk Operations pursuant to the Company’s existing agreements with ESD and FSMC. The Company has not assigned any of its rights to its corporate headquarters in Buffalo, New York, under this Agreement and will retain all of its rights and obligations with respect to its corporate headquarters.

As of December 31, 2021, the Dunkirk Operations met all conditions required to be classified as discontinued operations. Therefore, the operating results of the Dunkirk Operations are reported as loss from discontinued operations in the accompanying consolidated statements of operations and comprehensive loss. The assets and liabilities related to the Dunkirk Operations are reported as assets and liabilities of discontinued operations in the accompanying balance sheets as of December 31, 2021 and 2020. These assets are recorded at the lesser of cost or fair value less cost to sell. The Dunkirk Operations have historically been included within the Global Supply Chain Platform on its consolidated financial statements.

The following table presents the financial results of the discontinued operations (in thousands):

	Year Ended December 31,
	2021			2020		2019
Selling, general, and administrative expenses	$	10,190		$	3,996	$	489
Income from government grant		(2,459	)		—		—
Loss from discontinued operations	$	7,731		$	3,996	$	489

The selling, general, and administrative costs during the years presented was comprised primarily of compensation and consultant expenses, as well as operating expenses needed to prepare the facility.

The consolidated statements of cash flows include cash flows related to the discontinued operations due to the Company's centralized treasury and cash management processes. The following table presents additional cash flow information for the discontinued operations (in thousands):

	Year Ended December 31,
	2021			2020			2019
Depreciation expense	$	321		$	31		$	10
Cash paid for capital expenditures		(14,943	)		(4,634	)		(3,858	)
Property and equipment financed under finance leases		—			848			—
Repayment of finance lease obligations		(178	)		(92	)		—

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations (in thousands):

	December 31,
	2021		2020
Prepaid expenses and other current assets	$	1,280	$	4,777
Property and equipment, net		26,848		10,578
Total assets attributable to discontinued operations	$	28,128	$	15,355
Accounts payable	$	3,763	$	255
Accrued expenses		1,198		4,403
Current portion of finance lease obligations		101		101
Long-term finance lease obligations		126		208
Total liabilities attributable to discontinued operations	$	5,188	$	4,967