We changed our business in 2022, by out-licensing our products to receive royalties and future sales related milestone payments, after granting an exclusive license to commercialize the Company’s IMVEXXY, BIJUVA, and prescription prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands in the United States and assigning the Company’s exclusive license to commercialize ANNOVERA to Mayne Pharma.

This plan represented a strategic shift having a major effect on the Company's operations and financial results. Upon the completion of the Company’s restructuring and ultimate conversion from a commercial pharmaceutical company to a licensing only company with the consummation of the Mayne Transaction, the Company classified all direct revenues, costs and expenses related to commercial operations, within income (loss) from discontinued operations, net of tax, in the consolidated statements of operations for all periods presented. No amounts for shared general and administrative operating support expense were allocated to discontinued operations. As required by the terms of our Financing Agreement, the proceeds from both transactions were used to fully repay our outstanding debt borrowings, and as a result interest expense and amortization of deferred financing costs as well as expense for accretion of Series A Preferred Stock and loss on extinguishment of debt are included within income (loss) from discontinued operations, net of tax (as disclosed below).

Additionally, the related assets and liabilities have been reported as assets and liabilities of discontinued operations in the Company’s consolidated balance sheet as of December 31, 2022 and 2021.

The total consideration from Mayne Pharma was (i) a cash payment of $140.0 million at closing, (ii) a cash payment of $12.1 million for the acquisition of net working capital subject to certain adjustments, (iii) a cash payment of approximately $1.0 million for prepaid royalties in connection with the License Agreement Amendment and (iv) the right to receive the contingent consideration set forth in the License Agreement, as amended.

The Company’s estimate of net working capital at closing was determined in accordance with the Transaction Agreement which establishes the process for the determination of final net working capital. The determination of net working capital includes significant estimates which could change materially for a period of up to two years following the Closing Date. On March 29, 2023, the Company received Mayne Pharma’s closing net working capital calculation which differed significantly from the Company’s estimate of closing net working capital. The Company believes that its estimate of net working capital is reasonable and intends to resolve this matter through the process outlined in the Transaction Agreement. Given the recent receipt of Mayne Pharma’s calculation and the nature of the estimates involved, the outcome of this matter is uncertain at this point. As a result, the Company cannot reasonably estimate a range of loss, and accordingly, the Company has not accrued any additional liability associated with Mayne Pharma’s calculation.

The proceeds at closing were allocated separately to the sale of ANNOVERA and the license grant related to the other products, as the sale of ANNOVERA was accounted for under ASC 610-20, Gains and Losses from Derecognition of Nonfinancial Assets in arriving at the gain on disposal. We recognized $70.0 million in revenue from transaction with Mayne Pharma, which represented license to commercialize the Company’s IMVEXXY, BIJUVA, and prescription prenatal vitamin products as well as present value of future minimum royalty payments (as discussed in Note 1).

The Company classified the $143.4 million gain on the sale of the vitaCare business and $62.0 gain on sale of ANNOVERA, net of transaction costs in discontinued operations.

The Company recorded a restructuring expense of $15.7 million, for the year ended December 31, 2022 for contract terminations, severance, and fixed asset write-downs, of which $6.2 million was recorded in discontinued operations.

	Year ended December 31,
	2022			2021
Product revenue, net	$	80,749		$	84,378
Cost of goods sold		15,640			17,436
Gross profit		65,109			66,942
Operating expenses:
Selling and marketing		75,208			108,195
General and administrative		11,301			11,854
Research and development		4,942			7,086
Restructuring charges		6,180			—
Total operating expenses		97,631			127,135
Loss from discontinued operations		(32,522	)		(60,193	)
Other (expense) income:
Gain on sale of vitaCare		143,384			—
Gain on ANNOVERA sale		62,031			—
Loss on the extinguishment of debt		(8,380	)		—
Interest expense and other financing costs		(36,065	)		(32,917	)
Expense for accretion of Series A Preferred Stock		(16,973	)		—
Other income, net		—			—
Total other income (expense), net		143,997			(32,917	)
Loss before from income taxes		111,475			(93,110	)
Provision for income taxes		(552	)		—
Net income (loss) from discontinued operations	$	110,923		$	(93,110	)

The following table presents the carrying amounts of the classes of assets and liabilities of discontinued operations as of December 31, 2022 and December 31, 2021 (in thousands):

	As of December 31,
	2022		2021
Assets:
Current assets:
Cash	$	—	$	215
Accounts receivable		—		36,176
Inventory		—		7,622
Prepaid and other current assets		—		4,689
Total current assets		—		48,702
Fixed assets, net		—		376
License rights and other intangible assets, net		—		33,174
Total assets	$	—	$	82,252
Liabilities:
Current liabilities:
Accounts payable	$	12,243	$	16,945
Accrued expenses and other current liabilities		13,588		30,966
Total current liabilities	$	25,831	$	47,911