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Discontinued Operations and Divestitures
 9 Months Ended
Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations and Divestitures Discontinued Operations and Divestitures
Discontinued Operations
Sale of Connected Care Business

On January 13, 2020, the Company entered into an asset purchase agreement (the “Purchase Agreement”) with Masimo Corporation (“Masimo”), VCCB Holdings, Inc., a wholly owned subsidiary of Masimo (collectively with Masimo, the “Purchaser”), and, solely with respect to certain provisions of the Purchase Agreement, NantWorks, LLC, an affiliate of the Company. Pursuant to the Purchase Agreement, the Company agreed to sell to the Purchaser certain of its assets related to its Connected Care business, including the products known as DCX (formerly DeviceConX), VCX (formerly VitalsConX), HBox and Shuttle Cable (collectively, the “Connected Care Business”).

On February 3, 2020, the Company completed the sale of the Connected Care Business for $47,250 of cash consideration in exchange for assets primarily related to the Connected Care Business (as defined under the terms of the Purchase Agreement). The cash consideration is subject to adjustment based upon the final amount of working capital as of the closing date.

The sale of the Connected Care Business qualified as a discontinued operation because it comprised operations and cash flows that could be distinguished, operationally and for financial reporting purposes, from the rest of the Company. The disposal of the Connected Care Business, which represented the Company's medical device interoperability solutions, represented a strategic shift in the Company’s operations as the sale enables the Company to focus on genomic sequencing, clinical decision support, and payer engagement.

The total gain on sale of the Connected Care Business consisted of the following:
Cash received as consideration$47,250 
Less: Carrying value of net assets sold(14,190)
Less: Costs to sell(849)
Gain on sale of the Connected Care Business$32,211 

The carrying amounts of the major classes of assets and liabilities of the Company's discontinued operation as of December 31, 2019 were as follows:
December 31,
2019
Accounts receivable, net$4,739 
Inventories798 
Prepaid expenses and other current assets790 
Current assets of discontinued operation6,327 
Property, plant, and equipment, net1,110 
Goodwill18,623 
Operating lease right-of-use assets1,603 
Total assets of discontinued operation$27,663 
Accounts payable$574 
Accrued and other current liabilities456 
Deferred revenue9,650 
Current liabilities of discontinued operation10,680 
Deferred revenue, net of current157 
Deferred income taxes, net210 
Operating lease liabilities$1,282 
Total liabilities of discontinued operation$12,329 
The operating results of the Company's discontinued operation are as follows:
Three Months Ended September 30,Nine Months Ended
September 30,
2020201920202019
Major classes of line items constituting pretax income (loss) of discontinued operations
Net revenue$— $3,752 $1,165 $12,906 
Cost of revenue— (1,008)(467)(3,130)
Selling, general and administrative1 (1,428)(525)(4,259)
Research and development(18)(1,306)(601)(3,729)
Other expense, net— (2)(5)(17)
Pretax income (loss) from discontinued operations related to major classes of pretax income (loss)(17)8 (433)1,771 
Pretax gain on sale of the Connected Care Business— — 32,211 — 
Total pretax income (loss) from discontinued operations(17)8 31,778 1,771 
Provision for (benefit from) income taxes(1)2 (217)491 
Total income (loss) from discontinued operations, net of tax$(16)$6 $31,995 $1,280 

The significant operating and investing cash and noncash items of the discontinued operation included on the Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019 were as follows:
Nine Months Ended
September 30,
20202019
Cash flows from operating activities:
Depreciation and amortization$10 $352 
Gain on sale of the Connected Care Business32,211 — 
Cash flows from investing activities:
Net proceeds from sale of the Connected Care Business$46,401 $— 
Purchases of property and equipment, including internal-use software76 152 
Divestitures
Sale of Home Health Care Services Business

On June 7, 2019, the Company completed the divestiture of its home health care services business in exchange for cash proceeds of $300, which resulted in a loss on sale of business of $582. The home health care services business does not qualify as a discontinued operation as its divestiture does not represent a strategic shift that has had a major impact on the Company's operations or financial results.