Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations

Discontinued Operations

9.             Discontinued Operations

On November 5, 2010, the Company entered into an agreement to sell its TMR business to Novadaq. This transaction was approved by the Company’s shareholders at a special meeting on January 31, 2011 and the transaction closed on February 1, 2011.

Under terms of the agreement, Novadaq acquired substantially all of the Company’s assets that were used in the TMR business including all manufacturing rights, substantially all product inventories, and all equipment, intellectual property, regulatory approvals, clinical data and documentation related to TMR, for a purchase price of $1 million in cash and the assumption of all the Company’s obligations under service contracts as of the closing date totaling $614,000. The total carrying value of the assets sold as of the transaction date was $385,000. In addition, the Company incurred transaction costs of $50,000. The Company has recorded a gain on sale of discontinued operations before income taxes of $1,179,000 in the statement of operations.

The operating results of these operations, including those related to the prior periods, have been reclassified from continuing operations to discontinued operations in the accompanying consolidated financial statements.

Revenues and net income attributable to discontinued operations for the years ended December 31, 2011 and 2010 are as follows:

	Year ended December 31
	(In thousands)
	2011		2010
Revenues:
Product sales	$	455	$	2,219
Service fees	68		1,104
Total	523		3,323
Income from discontinued operations	$	53	$	2,604

A summary of discontinued operations on the consolidated balance sheets at December 31, 2011 and 2010 are as follows:

	December 31, 2011		December 31, 2010
	(In thousands)
Current assets:
Accounts receivable, net	$	—	$	217
Inventory	—		526
Prepaid expenses and other current assets	—		352
	$	—	$	1,095
Current liabilities:
Accounts payable	—		$	30
Accrued compensation	—		27
Accrued expenses	—		50
Deferred revenue	—		1,010
	$	—	$	1,117