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 1,484 shares of common stock at an exercise price of $149.50 per share. The warrant was 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 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 approximately $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 as income from discontinued operations and excluded such results from continuing operations in the statement of operations for the year ended December 31, 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 year ended December 31, 2021.

The following table summarizes the major classes of items constituting income from discontinued operations in the statement of operations for the year ended December 31, 2021 (in thousands):

Net revenues
Product sales	$	852
Service and other		1,748
Total net revenues		2,600
Cost of revenues
Product sales		1,201
Service and other		1,089
Total cost of revenues		2,290
Gross income		310
Operating expenses
Selling, general and administrative		1,110
Research and development		388
Total operating expenses		1,498
Operating loss		(1,188	)
Interest income (expense), net		(94	)
Loss from discontinued operations		(1,282	)
Gain on sale of the Dermatology Business		3,473
Income from discontinued operations	$	2,191

Depreciation expense for the Dermatology Business was $0.3 million for the year ended December 31, 2021. There were no capital expenditures for the Dermatology Business during the year ended December 31, 2021. There was no provision for credit losses for the Dermatology Business for the year ended December 31, 2021. Stock-based compensation expense for the Dermatology Business was approximately $18,000 for the year ended December 31, 2021. Stock-based compensation expense of approximately $0.1 million was capitalized to inventory and property and equipment for the Dermatology Business during the year ended December 31, 2021.