On June 10, 2021, the Company completed the sale of its miraDry business (the “Sale”) to miraDry Acquisition Company, Inc., a Delaware corporation (“Buyer”), an entity affiliated with 1315 Capital II, LP, as a result of the Company’s strategic decision to focus investment on its core Plastic Surgery segment. The Sale was made pursuant to the terms and conditions of the Asset Purchase Agreement (the “Purchase Agreement”), dated May 11, 2021, among the Company and certain of its subsidiaries, Buyer, and, solely for purposes of Section 8.14 of the Purchase Agreement, 1315 Capital II, LP. The aggregate purchase price was $10.0 million, which after certain adjustments for agreed upon changes in the estimated net asset value amount of purchased assets and assumed liabilities resulted in net cash proceeds of $11.3 million to the Company on the date of close. In October 2021, the Company finalized the transaction and paid $3.2 million to the Buyer in accordance with the agreed upon post close changes in the net asset value and recognized a loss on sale of $2.5 million.

In accordance with the Purchase Agreement, assumed liabilities did not include product liabilities, environmental, and employee claims arising prior to the closing date. The Purchase Agreement also included customary representations and warranties, as well as certain covenants, including, among other things, that: (i) the Company will abide by certain non-solicitation, exclusivity, and non-competition covenants, and (ii) the Company would enter into a transition services agreement (“TSA”) to provide certain transition services related to the business.

Under the TSA, the Company provided certain post-closing services to the Buyer related to the miraDry business for a period of six months, including accounting, accounts receivable support, customer service, IT, regulatory, quality assurance, and clinical support. As consideration for these services, the Buyer reimbursed the Company for direct and certain indirect costs, as well as certain overhead or administrative expenses related to operating the business. The Company recognized $0.2 million of TSA fees and cost reimbursements in operating expenses from continuing operations in the consolidated statement of operations for the year ended December 31, 2021. As of December 31, 2021, the Company has received $0.3 million relating to the TSA services and has recorded a receivable of $0.1 million within other current assets in the consolidated balance sheets. In connection with the accounts receivable support under the TSA, the Company received $2.3 million in customer payments and remitted $2.3 million to the Buyer during the period from June 10, 2021 through December 31, 2021. As of December 31, 2021, the Company does not have a payable to the Buyer on the consolidated balance sheets.

Additionally, the Company and the Buyer entered into a sublease agreement whereby the Buyer subleased the miraDry office space in Santa Clara, CA. The sublease term was for an initial period of six months, with subsequent option periods for up to a total of twenty four months. Following the initial period, the Buyer exercised an additional period of six months. During year ended December 31, 2021, the Company recognized $0.5 million of sublease income in general and administrative expenses in the consolidated statements of operations.

The Sale met the discontinued operations criteria given that the business is a component and represented a strategic shift. The following table presents the aggregate carrying amounts of major classes of assets and liabilities of discontinued operations (in thousands):


	December 31,		December 31,
	2021		2020
Assets of discontinued operations:
Accounts receivable, net	$	—	$	3,732
Inventories, net		—		9,480
Prepaid expenses and other current assets		4		263
Current assets of discontinued operations		4		13,475
Property and equipment, net		—		805
Total assets of discontinued operations	$	4	$	14,280
Liabilities of discontinued operations:
Accounts payable	$	6	$	704
Accrued and other current liabilities		494		3,982
Total liabilities of discontinued operations	$	500	$	4,686

The results of operations for the miraDry business were included in income (loss) from discontinued operations on the accompanying consolidated statements of operations. The following table provides information regarding the results of discontinued operations (in thousands):


	Year Ended
	December 31,
	2021			2020			2019
Net sales	$	9,347		$	16,244		$	37,337
Cost of goods sold		4,805			8,703			16,659
Gross profit		4,542			7,541			20,678
Operating expenses		1,940			30,440			69,355
Income (loss) from operations of discontinued operations		2,602			(22,899	)		(48,677	)
Other income (expense), net		(77	)		64			(54	)
Income (loss) from discontinued operations before income taxes		2,525			(22,835	)		(48,731	)
Loss on sale of discontinued operations before income taxes		(2,488	)		—			—
Total income (loss) from discontinued operations before income taxes		37			(22,835	)		(48,731	)
Income tax expense (benefit)		—			—			—
Income (loss) from discontinued operations, net of income taxes	$	37		$	(22,835	)	$	(48,731	)

The results of the miraDry business, including the results of operations, cashflows, and related assets and liabilities are reported as discontinued operations for all periods presented herein.