Discontinued Operations | 3. Discontinued Operations In February 2022, the Company announced plans to evaluate non-core assets, refocus its corporate strategy, and increase stockholder value, and the Company commenced a plan to sell the DoseMe business, which the Company acquired in January 2019. In March 2022, the Company completed its evaluation of additional divestiture opportunities and commenced plans to sell the SinfoníaRx and PrescribeWellness businesses, which were acquired in September 2017 and March 2019, respectively. As described below, the Company completed the sale of its unincorporated PrescribeWellness business division (the “PrescribeWellness Business”) in August 2022. The DoseMe, SinfoníaRx, and PrescribeWellness businesses comprised the majority of the Company’s MedWise HealthCare segment. The Company’s completed sale of the PrescribeWellness Business and plan of sale with respect to DoseMe and SinfoníaRx represent a strategic business shift having a significant effect on the Company’s operations and financial results. As a result, the Company determined that these businesses met such requirements to be classified as held for sale and discontinued operations as of March 31, 2022 and continued to meet the requirements as of September 30, 2022. Accordingly, unless otherwise indicated, the accompanying consolidated financial statements have been recast for all periods presented to reflect the assets, liabilities, revenue, and expenses related to these businesses as discontinued operations. Divestiture of Business On August 1, 2022 (the “Sale Date”), the Company completed the sale of its PrescribeWellness Business, including the assets, properties, and rights that were primarily used or held for use in connection with the PrescribeWellness Business, as well as the KD Assets (as defined below) to Transaction Data Systems, Inc. (“TDS”). On the Sale Date, the Company also completed the acquisition of certain intellectual property from karmadata, Inc. (“KD”) that had historically been licensed to the Company, (the “KD Assets”). The KD Assets acquired were simultaneously transferred to TDS on the Sale Date. The purchase consideration included $125,000 in cash, subject to certain customary post-closing adjustments, of which $118,561 was paid directly to the Company and $5,900 was paid to KD on the Sale Date. In October 2022, TDS also paid the Company $1,477 for certain customary post-closing adjustments subsequent to the Sale Date. The Company is also entitled to receive up to $15,000 contingent consideration to be paid by TDS based upon the PrescribeWellness Business’s achievement of certain performance-based metrics during the fiscal years ending December 31, 2023 and 2024. The contingent consideration had an estimated fair value of $7,000 on the Sale Date. See Note 14 for additional discussion on the fair value assessment of the contingent consideration receivable. In connection with the sale of the PrescribeWellness Business, the Company entered into a transition services agreement (“TSA)” with TDS pursuant to which the Company is providing services, including, but not limited to, business support services for the PrescribeWellness business after the sale through April 2023. The Company recognized $479 of income related to the TSA for the three and nine months ended September 2022, which is reported in other income on the Company’s consolidated statement of operations. During the six months ended June 30, 2022, as a result of the Company’s intention to sell the PrescribeWellness Business, the Company prepared an impairment test on the related net assets held for sale. Using a market approach to determine fair value, the Company concluded that the carrying value of the net assets held for sale for the PrescribeWellness Business did not exceed its fair value, less costs to sell. As a result, the Company recorded goodwill impairment charges of $12,145 and impairment charges of $8,500 on net assets held for sale, summarized in the results of the PrescribeWellness business presented below. On August 1, 2022, the Company recorded an additional $2,879 for the final loss on the sale of the PrescribeWellness Business, resulting in an aggregate loss of $11,379 on the net assets sold for the nine months ended September 30, 2022. The following table summarizes the net assets sold as finally reported on the sale date of August 1, 2022 and as of December 31, 2021, classified as discontinued operations on the consolidated balance sheets as of December 31, 2021: August 1, December 31, 2022 2021 Accounts receivable, net $ 5,020 8,002 Prepaid expenses and other assets 1,751 1,038 Property and equipment, net 371 — Operating lease right-of-use assets 1,252 — Software development costs, net 14,536 — Goodwill 35,314 — Intangible assets, net 81,504 — Impairment of carrying value (8,500) — Total current assets of discontinued operations $ 131,248 $ 9,040 Property and equipment, net $ — $ 412 Operating lease right-of-use assets — 1,434 Software development costs, net — 11,474 Goodwill — 47,459 Intangible assets, net — 84,617 Other assets — 64 Total noncurrent assets of discontinued operations $ — $ 145,460 Operating lease liabilities $ 1,086 $ 620 Accounts payable 491 913 Accrued expenses and other liabilities 2,754 3,529 Total current liabilities of discontinued operations $ 4,331 $ 5,062 Noncurrent operating lease liabilities $ — $ 830 Other long-term liabilities — 135 Total noncurrent liabilities of discontinued operations $ — $ 965 The following table summarizes the results of operations of the PrescribeWellness Business, which are included in loss from discontinued operations, net of tax in the consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 2,537 $ 10,533 $ 19,306 $ 27,629 Cost of revenue, exclusive of depreciation and amortization 1,229 3,426 7,747 9,883 Operating expenses 2,336 8,373 14,930 24,427 Impairment charges — — 20,645 — Loss on disposal of business 2,879 — 2,879 — Loss from discontinued operations before income taxes (3,907) (1,266) (26,895) (6,681) Income tax (benefit) expense (11) 12 (299) 66 Net loss from discontinued operations, net of tax $ (3,896) $ (1,278) $ (26,596) $ (6,747) The following table summarizes the significant operating non-cash items and investing activities of PrescribeWellness Business: Nine Months Ended September 30, 2022 2021 Depreciation and amortization $ 4,551 $ 12,059 Impairment charges 20,645 — Stock-based compensation 1,697 2,352 Loss on disposal of business 2,879 — Purchases of property and equipment (22) (305) Software development costs (4,443) (9,783) Held for Sale The Company considers the sale of the DoseMe and SinfoníaRx businesses to be highly probable within one year. During the three and nine months ended September 30, 2022, as a result of the Company’s intention to sell the DoseMe and SinfoníaRx businesses, the Company prepared an impairment test on the related net assets held for sale. Using a market approach to determine fair value, the Company concluded that the carrying values of the net assets held for sale for the SinfoníaRx and DoseMe businesses did not exceed their fair values, less costs to sell. As a result, the Company recorded goodwill impairment charges of $6,127 and $15,521 of impairment charges on the net assets held for sale related to the DoseMe and SinfoníaRx businesses for the nine months ended September 30, 2022. For the three months ended September 30, 2022, the Company recorded $5,845 of impairment charges on the net assets held for sale related to the DoseMe and SinfoníaRx businesses. No goodwill impairment charges related to the DoseMe and SinfoníaRx businesses were recorded for the three months ended September 30, 2022. The following table s ummarizes the results of operations of the businesses, which are included in loss from discontinued operations, net of tax in the consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 6,407 $ 8,143 $ 23,094 $ 26,961 Cost of revenue, exclusive of depreciation and amortization 7,055 6,521 20,479 19,755 Operating expenses 3,879 5,659 13,639 18,827 Impairment charges 5,845 — 21,648 — Loss from discontinued operations before income taxes (10,372) (4,037) (32,672) (11,621) Income tax (benefit) expense (83) 40 (363) 116 Net loss from discontinued operations, net of tax $ (10,289) $ (4,077) $ (32,309) $ (11,737) The following table summarizes the DoseMe and SinfoníaRx businesses’ current and noncurrent assets and liabilities classified as discontinued operations on the consolidated balance sheets as of September 30, 2022 and December 31, 2021: September 30, December 31, 2022 2021 Cash $ 69 $ 273 Accounts receivable, net 4,964 4,644 Prepaid expenses and other assets 796 554 Property and equipment, net 1,349 — Operating lease right-of-use assets 3,732 — Software development costs, net 6,910 — Goodwill 1,927 — Intangible assets, net 22,635 — Impairment of carrying value (15,521) — Total current assets of discontinued operations $ 26,861 $ 5,471 Property and equipment, net $ — $ 1,485 Operating lease right-of-use assets — 3,296 Software development costs, net — 4,466 Goodwill — 8,053 Intangible assets, net — 24,675 Other assets — 123 Total noncurrent assets of discontinued operations $ — $ 42,098 Operating lease liabilities $ 3,458 $ 793 Accounts payable 3,077 3,395 Accrued expenses and other liabilities 4,597 3,130 Total current liabilities of discontinued operations $ 11,132 $ 7,318 Noncurrent operating lease liabilities — $ 2,608 Other long-term liabilities — — Total noncurrent liabilities of discontinued operations $ — $ 2,608 The following table summarizes the DoseMe and SinfoníaRx businesses’ significant operating non-cash items and investing activities of discontinued operations: Nine Months Ended September 30, 2022 2021 Depreciation and amortization $ 2,780 $ 8,175 Impairment charges 21,648 — Stock-based compensation 2,667 2,510 Purchases of property and equipment (50) (1,323) Software development costs (2,998) (6,155) |