Sale of Ads Business

9 Months Ended

Mar. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

On August 16, 2019, we completed the disposition of our Ads Business to inMarket, which we refer to as the inMarket Transaction. In consideration, inMarket issued to us limited liability company units of inMarket representing a 14.5%-member interest in inMarket at the time of the closing of the inMarket Transaction. We also received a perpetual, non-exclusive, irrevocable, royalty-free license under software and other intellectual property rights being assigned to inMarket as part of the inMarket Transaction, as set forth in the Asset Purchase Agreement, dated August 8, 2019, by and among Telenav, Thinknear, Inc., a wholly owned subsidiary of Telenav, and inMarket, as amended. Pursuant to the terms of a Transition Services Agreement, we also agreed to provide inMarket with transition services for a period of time generally not to exceed eight months following the closing of the inMarket Transaction.

The historical financial results attributable to the Ads Business are presented as discontinued operations in our condensed consolidated statements of operations for all periods presented. The carrying amounts of assets and liabilities included as part of discontinued operations have been classified as assets of discontinued operations and liabilities of discontinued operations, respectively, in our condensed consolidated balance sheet at June 30, 2019.

Reconciliations of the carrying amounts of major classes of assets and liabilities included as part of discontinued operations to the amounts presented separately in our June 30, 2019 condensed consolidated balance sheet are presented in the following table:



	June 30, 2019
Assets
Accounts receivable	$	6,011
Prepaid and other current assets	319
Assets of discontinued operations	$	6,330

Property and equipment, net	$	72
Operating lease right-of-use assets	—
Deferred income taxes, non-current	(59		)
Goodwill and intangible assets, net	11,786
Other assets	395
Assets of discontinued operations, non-current	$	12,194

Liabilities
Accounts payable	$	974
Accrued expenses	2,399
Operating lease liabilities	—
Liabilities of discontinued operations	$	3,373

Deferred rent, non-current	$	30
Operating lease liabilities, non-current	—
Liabilities of discontinued operations, non-current	$	30

Reconciliations of the major line items comprising loss from operations of the Ads Business included as part of discontinued operations to the amounts presented separately in our statements of operations for the three and nine months ended March 31, 2020 and 2019 are presented in the following tables:



	Three Months Ended March 31,					Nine Months Ended March 31,
	2020		2019			2020		2019
Revenue - services	$	—	$	4,529		$	3,614	$	17,492
Cost of revenue - services	—		2,178			1,335		8,683
Gross profit	—		2,351			2,279		8,809
Operating expenses:
Research and development	—		1,186			697		4,121
Sales and marketing	—		3,098			750		8,600
General and administrative	—		—			—		—
Total operating expenses	—		4,284			1,447		12,721
Provision for (benefit from) income taxes	—		14			—		(17		)
Income (loss) from operations of Ads Business	$	—	$	(1,947	)	$	832	$	(3,895	)

Our 14.5% member interest in inMarket was valued at $15.6 million at the closing of the inMarket Transaction and is recorded in other assets on our condensed consolidated balance sheet at March 31, 2020. See Note 4. Our loss from the sale of the Ads Business of $4.9 million included $1.9 million comprising severance for Ads Business employees who were not offered employment with inMarket and acceleration of stock-based awards vesting for certain Ads Business executives who were not offered employment with inMarket, and $363,000 comprising legal fees and third-party consulting fees associated with the inMarket Transaction.