Quarterly report pursuant to Section 13 or 15(d)

Note 3 - Discontinued Operations

Note 3 - Discontinued Operations
3 Months Ended
Mar. 31, 2018
Notes to Financial Statements  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
Discontinued Operations
March 3, 2017,
the Company completed the sale to Cardinal Health
of its assets used, held for use, or intended to be used in operating its business of developing, manufacturing and commercializing a product used for lymphatic mapping, lymph node biopsy, and the diagnosis of metastatic spread to lymph nodes for staging of cancer, including the Company’s radioactive diagnostic agent marketed under the Lymphoseek
trademark for current approved indications by the FDA and similar indications approved by the FDA in the future, in Canada, Mexico and the United States. In exchange for the Acquired Assets, Cardinal Health
(i) made a cash payment to the Company at closing of approximately
million after adjustments based on inventory being transferred and an advance of
million of guaranteed earnout payments as part of the CRG settlement, (ii) assumed certain liabilities of the Company associated with the Product as specified in the Purchase Agreement, and (iii) agreed to make periodic earnout payments (to consist of contingent payments and milestone payments which, if paid, will be treated as additional purchase price) to the Company based on net sales derived from the purchased Product. On
April 2, 2018,
the Company entered into an Amendment to the Asset Purchase Agreement. Pursuant to the Amendment, Cardinal Health
paid the Company approximately
million and agreed to pay the Company an amount equal to the unused portion of the letter of credit (
to exceed approximately
 million) promptly after the earlier of (i) the expiration of the letter of credit and (ii) the receipt by Cardinal Health
of evidence of the return and cancellation of the letter of credit. In exchange, the obligation of Cardinal Health
to make any further contingent payments has been eliminated. Cardinal Health
is still obligated to make the milestone payments in accordance with the terms of the earnout provisions of the Purchase Agreement.
We recorded a net gain on the sale of the Business of
million for the
months ended
March 31, 2017,
million in guaranteed consideration, which was discounted to the present value of future cash flows. The proceeds were offset by
million in estimated fair value of warrants issued to Cardinal Health
million in legal and other fees related to the sale,
in net balance sheet dispositions and write-offs, and
million in estimated taxes.
As a result of the Asset Sale, we reclassified certain assets and liabilities as assets and liabilities associated with discontinued operations. The following liabilities have been segregated and included in liabilities associated with discontinued operations, as appropriate, in the consolidated balance sheets:
March 31,
December 31,
Accrued liabilities
Liabilities associated with discontinued operations, current
In addition, we reclassified certain revenues and expenses related to the Business to discontinued operations for all periods presented, including interest expense related to the CRG and Platinum debt obligations as required by current accounting guidance. The following amounts have been segregated from continuing operations and included in discontinued operations in the consolidated statements of operations:
Three Months Ended March 31,
Lymphoseek sales revenue
Cost of goods sold
Gross profit
Operating expenses:
Research and development
Selling, general and administrative
Total operating expenses
Income from discontinued operations
Interest expense
Loss before income taxes
Benefit from income taxes
Loss from discontinued operations