DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2022

Unaudited Condensed Consolidated Statements of Operations

DISCONTINUED OPERATIONS

NOTE 6 - DISCONTINUED OPERATIONS

On July 22, 2022, CURE completed the sale of certain assets comprising the pharmaceutical segment of the Company pursuant to an Asset Purchase Agreement (the “APA”) with TF Tech Ventures, Inc. (the “Buyer”), under which the Buyer purchased certain assets of the Company (the “Asset Sale”), including certain pharmaceutical patents, trademarks and related machinery and equipment. The total consideration received at closing in connection with the Asset Sale was $20.0 million, which consisted of (i) the cancellation of indebtedness owed by the Company to the Buyer in an amount equal to $4.15 million, (ii) a $2.0 million one-year note payable in the form of a secured promissory note, and (iii) the remainder in cash reduced by approximately $41,000 in assumed liabilities transferred to the Buyer at closing. The Company retained 15 other patents that were not included in the Asset Sale, which the Company expects to monetize through product development, licensing arrangements and/or the sale of such patents.

The following table calculates the net cash received from the Asset Sale (in thousands):

Sales price	$	20,000
Forgiveness of Buyer advances		(4,150	)
Holdback secured by promissory note		(2,000	)
Obligations assumed by Buyer		(41	)
Buyer expenses paid by seller		82
Net cash received	$	13,891

The following table calculates the loss incurred from the Asset Sale (in thousands):

Sales price for assets sold	$	20,000
Net book value of assets sold		20,616
Net book value of liabilities sold		(51	)
Net book value of net assets sold		20,565
Loss on sale of net assets	$	(565	)

As of June 30, 2022, the cost of assets and liabilities held for sale were $20.6 million and $4.0 million, respectively. Included in the liabilities held for sale were notes payable amounting to $3.4 million which form part of the $20.0 million consideration received from the Buyer. To write down the total net assets to fair value an additional impairment loss of $2.0 million, including $0.1 million of estimated cost to sell, was charged to impairment of goodwill as of June 30, 2022 and included in the disposal group loss.

The following table presents the aggregate carrying amounts of assets and liabilities held for sale of in the unaudited condensed consolidated balance sheet as of the date indicated (in thousands):

	December 31,
	2021
Carrying amounts of assets included as part of assets held for sale:
Inventory, net	$	243
Prepaid expenses and other assets		97
Property and equipment, net		1,837
Finance lease right-of-use assets, net		40
Goodwill, net		9,178
Intellectual property and patents, net		14,401
In-process research and development, net		329
Other assets		35
Total assets classified as assets held for sale in the unaudited condensed consolidated balance sheet	$	26,160
Carrying amounts of liabilities included as part of liabilities held for sale:
Accrued expenses	$	268
Finance lease payable		40
Contract liabilities		215
Total liabilities classified as liabilities held for sale in the unaudited condensed consolidated balance sheet	$	523

The following table presents the financial results of the pharmaceutical segment for the three and nine months ended September 30, 2022 and 2021 which is presented as loss from disposal group on our unaudited condensed consolidated statements of operations (in thousands):

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
Revenue:
Product sales, net of discounts and refunds	$	-		$	16		$	108		$	151
Consulting research & development income		-			-			58			52
Shipping and other sales		-			18			40			57
Total revenue		-			34			206			260
Cost of goods sold:
Cost of goods sold		-			75			75			256
Gross profit		-			(41	)		131			4
Operating expenses:
Research and development expenses		28			601			492			1,944
Selling, general and administrative expenses		91			394			1,313			743
Loss on disposition		565			-			565			-
Impairment of goodwill		-			-			4,728			-
Total operating expenses		684			995			6,533			2,687
Net loss before income taxes		(684	)		(1,036	)		(6,967	)		(2,683	)
Provision for income taxes		-			-			-			-
Net loss	$	(684	)	$	(1,036	)	$	(6,402	)	$	(2,683	)