The Company completed the sale of its Pharos dermatology business (the “Dermatology Business”) to STRATA Skin Sciences, Inc. (“Strata”) on August 16, 2021 for net proceeds of $3.7 million, resulting in a gain on the sale of the Dermatology Business of $3.5 million which was included as a component of income (loss) from discontinued operations in the statement of operations for the year ended December 31, 2021. The Dermatology Business was previously disclosed as a separate reportable segment of the Company.

The results of the Dermatology Business are reported as loss from discontinued operations in the condensed statements of operations for the three and nine months ended September 30, 2021. 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 three and nine months ended September 30, 2021.

The following table summarizes the loss from discontinued operations in the condensed statements of operations for the periods presented (in thousands):

	Three Months Ended September 30, 2021			Nine Months Ended September 30, 2021
Revenues	$	489		$	2,600
Cost of revenues		396			2,290
Gross income		93			310
Operating expenses		464			1,498
Operating loss		(371	)		(1,188	)
Other expense, net		(22	)		(94	)
Gain on sale of Dermatology Business		3,473			3,473
Income from discontinued operations	$	3,080		$	2,191

Depreciation expense for the Dermatology Business was $0.1 million and $0.3 million for the three and nine months ended September 30, 2021, respectively. There were no capital expenditures for the Dermatology Business during the three and nine months ended September 30, 2021.

Stock-based compensation expense for the Dermatology Business was de minimis and approximately $18,000 for the three and nine months ended September 30, 2021, respectively. Stock-based compensation expense of approximately $4,000 and $0.1 million was capitalized to inventory and property and equipment during the three and nine months ended September 30, 2021, respectively.