On January 7, 2022, the Company entered into a definitive agreement (the “Dunkirk Agreement”) with ImmunityBio, Inc. (the "Dunkirk Buyer") whereby the Company agreed to sell to the Dunkirk 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 $40.0 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.

In addition to the leasehold interest in the Dunkirk Facility, the Dunkirk 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 Dunkirk Buyer assumed 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 did not assign any of its rights to its corporate headquarters in Buffalo, New York, under the Dunkirk Agreement and retained all of its rights and obligations with respect to its corporate headquarters.

The Dunkirk Operations have met all conditions required to be classified as discontinued operations. Therefore, the operating results of the Dunkirk Operations are reported within loss from discontinued operations in the accompanying consolidated statements of operations and comprehensive loss for all periods presented. 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. These assets are recorded at the lesser of cost or fair value less cost to sell. The Dunkirk Operations historically were included within the Global Supply Chain Platform on the Company's consolidated financial statements. All components within this operating segment are presented as a discontinued operation for all periods presented.

Additionally, on July 7, 2022, the Company entered into an Equity Purchase Agreement with TiHe Capital (Beijing) Co. Ltd. (the "API Buyer") pursuant to which the Company agreed to sell 100% of the equity interests in Chongqing Taihao Pharmaceutical Co., Ltd. and Athenex Pharmaceuticals (Chongqing) Limited (the “Equity Interests”) for RMB129.4 million, or approximately $18 million (“EPA Purchase Price”). The Equity Interests primarily represent the Company’s ownership of its active pharmaceutical ingredient (“API”) manufacturing business in China, including the right to operate the Taihao API facility in Chongqing, China, and its lease for the Sintaho API facility in Chongqing, China, with Chongqing Maliu Riverside Development and Investment Co., LTD (“CQ”), (collectively "China API Operations"). This transaction closed on November 16, 2022, (the “Closing Date”), upon which date the Buyer paid 70% of the EPA Purchase Price to the Company in cash. The remainder of the EPA Purchase Price will be paid in cash, with 20% of the EPA Purchase Price to be paid within three months after the Closing Date and the remaining balance of the EPA Purchase Price to be paid within six months after the Closing Date. Such amounts are included within prepaid expenses and other current assets on the consolidated balance sheet as of December 31, 2022.

The China API Operations met all conditions required to be classified as discontinued operations. Therefore, the operating results of the China API Operations are reported within loss from discontinued operations in the accompanying consolidated statements of operations and comprehensive loss. The assets and liabilities related to the China API Operations are reported as assets and liabilities of discontinued operations in the accompanying balance sheets as of December 31, 2022 and 2021. These assets are recorded at the lesser of cost or fair value less cost to sell. The China API Operations historically were included within the Global Supply Chain Platform on the Company's consolidated financial statements. All components within this operating segment are presented as a discontinued operation for all periods presented.

Further, on December 16, 2022, the Company announced that it is exiting the 503B sterile compounding business operated out of its facility in Clarence, NY. The Company will cease production of its 503B products in the first quarter of 2023. The 503B operations met all conditions required to be classified as a discontinued operation. Therefore, the operating results of the 503B operations are reported within loss from discontinued operations in the accompanying consolidated statements of operations and comprehensive loss. The assets and liabilities related to the 503B Operations are reported as assets and liabilities of discontinued operations in the accompanying balance sheets as of December 31, 2022 and 2021. These assets are recorded at the lesser of cost or fair value less cost to sell. The 503B Operations have historically been included within the Global Supply Chain Platform on the Company's consolidated financial statements and are presented as a discontinued operation for all periods presented.

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


	Year Ended December 31,
	2022			2021
Discontinued Dunkirk operations:
Selling, general, and administrative expenses	$	(1,922	)	$	(10,183	)
Gain on sale of discontinued operation		14,464			—
Income from government grant		—			2,459
Interest expense		(2	)		(32	)
(Loss) gain from discontinued Dunkirk operations	$	12,540		$	(7,756	)
Discontinued China API operations:
Revenue	$	1,916		$	5,060
Cost of sales		(8,212	)		(2,707	)
Research and development expenses		(1,324	)		(1,239	)
Selling, general, and administrative expenses		(7,074	)		(6,273	)
Gain on sale of discontinued operation		724			—
Impairments		(224	)		(23,823	)
Other income		3,118			102
Interest expense		(12	)		(53	)
Pre-tax loss from discontinued China API operations		(11,088	)		(28,933	)
Income tax expense		(1,194	)		—
Loss from discontinued China API operations	$	(12,282	)	$	(28,933	)
Discontinued 503B operations:
Revenue	$	23,315		$	19,753
Cost of sales		(22,929	)		(16,813	)
Research and development expenses		(1,249	)		(1,290	)
Selling, general, and administrative expenses		(3,354	)		(2,050	)
Impairments		(1,488	)		(4,585	)
Interest expense		(1	)		(8	)
Loss from discontinued 503B operations	$	(5,706	)	$	(4,993	)
Loss from discontinued operations	$	(5,448	)	$	(41,682	)

The Dunkirk operations selling, general, and administrative costs during the periods presented was comprised primarily of compensation and consultant expenses, as well as operating expenses needed to prepare the facility. The gain on sale of the Dunkirk discontinued operation was the result of the $40.0 million cash proceeds from the sale, less the net book value of assets and liabilities transferred to the Dunkirk Buyer, including property and equipment of $27.1 million, accounts payable and accrued expenses of $1.3 million and current and long-term finance lease obligations of $0.2 million.

The revenue and cost of sales of the China API discontinued operation arose from the sales of API. Cost of sales of the China API discontinued operation includes a write-off of excess and obsolete inventory of $7.1 million for the year ended December 31, 2022. Research and development costs of the China API discontinued operation represent development of API manufacturing methods and API product development for the Company's Orascovery platform. Other income of the China API discontinued operation includes the sale of pilot product which was previously developed at the facility and included within research and development expense. The impairment expense recognized during 2021 was related to the impairment of goodwill and other intangible assets.

The revenue and cost of sales of the 503B operations arose from the sales of 503B products to hospitals and end users. Research and development costs represented the development of manufacturing methods and products for the 503B operations. The selling, general, and administrative costs during the years presented was comprised primarily of compensation expenses and operating expenses needed to operate 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,
	2022			2021
Supplemental information for discontinued Dunkirk operations:
Depreciation expense	$	185		$	321
Gain on sale of discontinued operation		(14,464	)		—
Cash paid for capital expenditures		(1,949	)		(14,943	)
Repayment of finance lease obligations		(7	)		(77	)
Supplemental information for discontinued China API operations:
Depreciation and amortization expense	$	1,384		$	913
Impairments		224			23,823
Gain on sale of discontinued operation		(724	)		—
Write-off of inventory		7,120			—
Cash paid for capital expenditures		(107	)		(7,607	)
Proceeds from issuance of debt		—			783
Repayment of long-term debt		(785	)		(775	)
Non-cash settlement of debt transferred to China API buyer		(6,831	)		—
Supplemental information for discontinued 503B operations:
Depreciation expense	$	577		$	631
Impairments		1,488			4,585
Provision for credit losses		482			141
Cash paid for capital expenditures		(110	)		(316	)
Repayment of finance lease obligations		(16	)		(206	)

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


	December 31,
	2022		2021
Discontinued Dunkirk operations:
Prepaid expenses and other current assets	$	—	$	1,280
Property and equipment, net		—		26,841
Discontinued China API operations:
Accounts receivable, net of provision for credit losses of $0 and $110, respectively	$	—	$	351
Inventories		—		7,636
Prepaid expenses and other current assets		—		3,563
Property and equipment, net		—		22,797
Operating lease right-of-use assets, net		—		575
Discontinued 503B operations:
Accounts receivable, net of provision for credit losses of $137 and $127, respectively	$	4,775	$	3,507
Inventories		2,366		3,981
Property and equipment, net		167		1,997
Total assets attributable to discontinued operations	$	7,308	$	72,528
Discontinued Dunkirk operations:
Accounts payable	$	—	$	3,763
Accrued expenses		—		1,198
Current portion of finance lease obligation		—		101
Long-term finance lease obligation		—		125
Discontinued China API operations:
Accounts payable	$	—	$	2,224
Accrued expenses		—		568
Current portion of operating lease liabilities		—		431
Current portion of long-term debt		—		784
Long-term debt and lease obligations		—		7,849
Discontinued 503B operations:
Accounts payable	$	5,074	$	2,033
Accrued expenses		644		208
Current portion of finance lease obligation		—		21
Total liabilities attributable to discontinued operations	$	5,718	$	19,305