Sale of Ads Business

3 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Sale of Ads BusinessOn 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 us, Thinknear, Inc., our wholly owned subsidiary, 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. A reconciliation of the major line items comprising loss from operations of the Ads Business included as part of discontinued operations to the amount presented separately in our condensed consolidated statement of operations for the three months ended September 30, 2019 is presented in the following table:


	Three Months Ended September 30, 2019
Revenue - services	$	3,614
Cost of revenue - services	1,335
Gross profit	2,279
Operating expenses:
Research and development	697
Sales and marketing	750
General and administrative	—
Total operating expenses	1,447
Provision for (benefit from) income taxes	—
Income from operations of Ads Business	$	832

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 September 30, 2020 and June 30, 2020. See Note 4. Our loss from the sale of the Ads Business of $4.8 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.