Discontinued Operations and Divestitures

12 Months Ended

Dec. 31, 2021

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 clinical decision support, payer engagement, and molecular analysis.

The total gain on sale of the Connected Care Business consisted of the following:

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

The operating results of the Company's discontinued operation are as follows:

	Year Ended December 31,
	2020
Major classes of line items constituting pretax income of discontinued operations
Net revenue	$	1,165
Cost of revenue	(467)
Selling, general and administrative	(532)
Research and development	(601)
Other expense, net	(5)
Pretax loss from discontinued operations related to major classes of pretax loss	(440)
Pretax gain on sale of the Connected Care Business	32,211
Total pretax income from discontinued operations	31,771
Benefit from income taxes	(262)
Total income from discontinued operations, net of tax	$	32,033

The significant operating and investing cash and noncash items of the discontinued operation included in the Consolidated Statements of Cash Flows for the Year Ended December 31, 2020 was as follows:

	Year Ended December 31,
	2020
Cash flows from operating activities:
Depreciation and amortization	$	10
Gain on sale of the Connected Care Business	32,211
Cash flows from investing activities:
Net proceeds from sale of the Connected Care Business	46,401
Purchases of property and equipment, including internal-use software	76