Consistent with the Company’s continued focus on the PAD market, the Company completed the sale of its Dermatology Business to STRATA Skin Sciences, Inc. (“Strata”) on August 16, 2021, for cash proceeds of $3.7 million. The Company paid broker and legal fees of approximately $0.2 million related to the sale of the Dermatology Business. In addition, the Company issued a warrant to the broker to purchase 74,247 shares of common stock at an exercise price of $2.99 per share. The warrant is immediately exercisable and expires five years following the date of issuance. The warrant was valued at approximately $0.1 million on the grant date using the Black-Scholes option pricing model based on the following assumptions: expected volatility of 104.55%, risk-free interest rate of 0.32%, expected dividend yield of 0% and an expected term of 2.5 years.

The Dermatology Business was previously disclosed as a separate reportable segment of the Company. The sale of the Dermatology Business resulted in a gain of $3.5 million which is included as a component of income from discontinued operations in the statement of operations for the year ended December 31, 2021.

The Company has reported the results of the Dermatology Business in income (loss) from discontinued operations in the statements of operations and excluded such results from continuing operations for the years ended December 31, 2021 and 2020. The assets and liabilities of the Dermatology Business are recorded as assets of discontinued operations and liabilities of discontinued operations, respectively, in the balance sheet at December 31, 2020.

Certain overhead costs previously allocated to the Dermatology Business for segment reporting purposes did not qualify for classification as discontinued operations and have been reallocated to continuing operations for the years ended December 31, 2021 and 2020.

The following table summarizes the carrying amounts of the assets and liabilities included as discontinued operations in the balance sheet at December 31, 2020 (in thousands):

	December 31,
	2020
Assets of discontinued operations
Accounts receivable, net	$	214
Inventories		1,341
Prepaid expenses and other current assets		158
Property and equipment, net		684
Other long-term assets		78
Total assets of discontinued operations	$	2,475

Liabilities of discontinued operations
Accounts payable	$	100
Accrued expenses		201
Deferred revenue		2,487
Total liabilities of discontinued operations	$	2,788

The assets and liabilities of discontinued operations have been classified as current and long-term, as applicable, in the balance sheet at December 31, 2020.

The following table summarizes the major classes of items constituting income (loss) from discontinued operations in the statements of operations for each of the periods presented (in thousands):

	Year Ended December 31,
	2021			2020
Net revenues
Product sales	$	852		$	1,154
Service and other		1,748			2,992
Total net revenues		2,600			4,146
Cost of revenues
Product sales		1,201			1,522
Service and other		1,089			1,789
Total cost of revenues		2,290			3,311
Gross income		310			835
Operating expenses
Selling, general and administrative		1,110			1,440
Research and development		388			54
Total operating expenses		1,498			1,494
Operating loss		(1,188	)		(659	)
Interest income (expense), net		(94	)		(66	)
Loss from discontinued operations		(1,282	)		(725	)
Gain on sale of the Dermatology Business		3,473			—
Income (loss) from discontinued operations	$	2,191		$	(725	)

Depreciation expense for the Dermatology Business was $0.3 million and $0.4 million for the years ended December 31, 2021 and 2020, respectively. There were no capital expenditures for the Dermatology Business during the years ended December 31, 2021 and 2020. The provision for credit losses for the Dermatology Business for the years ended December 31, 2021 and 2020 was nil and $0.1 million, respectively. Stock-based compensation expense for the Dermatology Business was approximately $18,000 and $0.2 million for the years ended December 31, 2021 and 2020, respectively. Stock-based compensation expense of approximately $0.1 million and $0.2 million was

capitalized to inventory and property and equipment for the Dermatology Business during the years ended December 31, 2021 and 2020, respectively.