Divestiture of Orthobiologics Business

12 Months Ended

Dec. 31, 2022

Divestiture of Orthobiologics Business

Divestiture of Orthobiologics Business

Note 4. Divestiture of Orthobiologics Business

As described in Note 2, on September 17, 2023, the Company executed the Purchase Agreement for the sale of substantially all of its Orthobiologics Business. Accordingly, as initially presented in the Company’s Form 10-Q for the quarter ended September 30, 2023, the Orthobiologics Business is reported herein as discontinued operations in accordance with ASC 205-20 - Discontinued Operations.  The related assets and liabilities of the Orthobiologics Business are classified as assets and liabilities of discontinued operations as of December 31, 2022 and 2021 in the consolidated balance sheets and the results of operations from the Orthobiologics Business are reported as discontinued operations in the consolidated statements of operations for the years ended December 31, 2023 and 2022. Applicable amounts in the prior year have been recast to conform to this discontinued operations presentation.

The following tables shows the assets and liabilities of the discontinued operations:

	Year Ended December 31,
	2022		2021
Carrying amounts of the major classes of assets included in discontinued operations:
Accounts receivable, net	$	3,056	$	2,638
Inventory		5,812		6,768
Prepaid expenses and other current assets		628		667
Total current assets		9,496		10,073
Property and equipment, net		1,158		986
Operating lease right-of-use assets and other		1,350		—
Total non-current assets		2,508		986
Total assets of discontinued operations	$	12,004	$	11,059
Carrying amounts of the major classes of liabilities included in discontinued operations:
Accounts payable	$	954	$	971
Accrued expenses and other current liabilities		1,273		1,383
Payables to tissue suppliers		2,252		2,122
Current operating lease liabilities		450		—
Total current liabilities		4,929		4,476
Long-term operating lease liabilities		956		—
Total liabilities of discontinued operations	$	5,885	$	4,476

In accordance with ASC 205-20, only expenses specifically identifiable and related to a business to be disposed may be presented in discontinued operations. The following table shows the financial results of the discontinued operations:

	As of December 31,
	2022		2021
Net sales	$	25,338	$	26,934
Cost of goods sold		17,755		17,192
Gross profit		7,583		9,742
Sales and marketing		2,345		2,170
General and administrative		576		563
Research and development		1,213		1,512
Total operating expenses		4,134		4,245
Interest Expense		164		—
Net income (loss)	$	3,285		5,497

Total operating and investing cash flows of discontinued operations for the nine months ended September 30, 2023 and 2022 are comprised of the following:

	Twelve Months Ended
	December 31,
	2022		2021
Significant operating non-cash reconciliation items
Depreciation	$	167	$	120
Stock-based compensation		144		148
Changes in operating assets and liabilities:
Accounts receivable		(417)		1,832
Inventory		956		(1,048)
Prepaid expenses and other		39		(636)
Accounts payable and accrued expenses and other current liabilities		(127)		725
Obligations to tissue suppliers		130		305
Significant investing items
Expenditures for property, plant and equipment		378		255