Discontinued Operations

12 Months Ended

Dec. 31, 2018

Discontinued Operations

Discontinued Operations

On September 5, 2017, the Company completed the sale of its operating assets that were used with the Company's quality verification program testing and analytical chemistry business for food and food related products (the "Lab Business") to Covance Laboratories Inc. ("Covance") (the “Lab Business Sale”). In consideration of the Lab Business Sale, the Company received $6.75 million from Covance and additional cash consideration of $0.8 million is currently held in escrow to satisfy any potential indemnification claims by Covance. In 2017, the Company recorded a gain of approximately $5.5 million from the disposal.

(In thousands)
(A) Consideration received			(C) Carrying value of the Lab Business
	Amount		Assets disposed	Carrying value
Cash payment	$	6,750	Leasehold improvements and equipment, net	$	1,427
Cash payment held in escrow (1)		750	Prepaid expenses		11
Additional earnout payment		-	Deposits		20
	$	7,500
			Liabilities disposed
(B) Selling costs			Deferred revenue		(7	)
		Amount	Deferred rent		(215	)
Legal	$	428
Financial consulting		250
Other		118
	$	796	Net assets	$	1,236
Gain from disposal (A) - (B) - (C)	$	5,468
(1) $750,000 held in escrow to satisfy any indemnification claims.

 The sale of the Lab Business qualified as a discontinued operation as the sale represented a strategic shift that had a major effect on operations and financial results.

The results of operations from the discontinued operations for the years ended December 31, 2018 and December 30, 2017 are as follows:

Statements of Operations - Discontinued operations
Years Ended December 31, 2018 and December 30, 2017
(In thousands)
	2018		2017
Sales	$	-	$	2,821
Cost of sales		-		2,479
Gross profit		-		342
Operating expenses:
Sales and marketing		-		482
General and administrative		-		150
Operating expenses		-		632
Operating loss		-		(290	)
Nonoperating expenses:
Interest expense, net		-		(25	)
Nonoperating expenses		-		(25	)
Loss from discontinued operations	$	-	$	(315	)

Depreciation, capital expenditures and significant noncash investing activities of the discontinued operations for the years ended December 31, 2018 and December 30, 2017 are as follows:

Discontinued operations
Depreciation, amortization, captial expenditures and significant noncash operating and investing activities
Years Ended December 31, 2018 and December 30, 2017
(In thousands)
		2018		2017
Depreciation	$	-	$	169
Purchase of leasehod improvements and equipment	$	-	$	111
Noncash investing activity
Retirement of fully depreciated equipment - cost	$	-	$	56
Retirement of fully depreciated equipment - accumulated depreciation	$	-	$	(56	)