Assets Held for Sale

12 Months Ended

Jun. 30, 2020

Assets Held for Sale

Assets held for Sale

Note 18. Assets Held for Sale

In the first quarter of Fiscal 2019, the Company approved a plan to sell the Cody API business, which includes the manufacturing and distribution of active pharmaceutical ingredients for use in finished goods production.  As a result of the plan, the Company recorded the assets of the Cody API business at fair value less costs to sell.  The Company performed a fair value analysis which resulted in a $29.9 million impairment of the Cody Labs long-lived assets in Fiscal 2019. 

The Company was unable to sell the Cody API business as an ongoing operation and intended to sell the equipment utilized by the Cody API business as well as the real estate upon receiving approval of the Company’s cocaine hydrochloride solution Section 505(b)(2) NDA application and to have Cody Labs cease all operations.  During Fiscal 2020, the Company completed the sale of the equipment associated with the Cody API business for approximately $3.0 million. In the second quarter of Fiscal 2020, the Company signed a two year agreement to lease a portion of the real estate to a third party. As of June 30, 2020, the real estate associated with the Cody API business, totaling $2.7 million, is recorded in the assets held for sale caption in the Consolidated Balance Sheet.    

The following table summarizes the financial results of the Cody API business for the fiscal years ended June 30, 2020 and 2019:

	Fiscal Year Ended
	June 30,
(In thousands)	2020		2019
Net sales	$	1,067	$	3,139
Pretax loss attributable to Cody API business		(6,549)		(51,509)

The pretax loss attributable to the Cody API business during the fiscal year ended June 30, 2020 includes a full impairment of a $1.2 million ROU lease asset that was recorded upon adoption of ASU No. 2016-02 on July 1, 2019.

The pretax loss attributable to the Cody API business during the fiscal year ended June 30, 2019 includes impairment charges totaling $32.8 million to adjust the long-lived assets to their fair value less costs to sell.