Discontinued Operations
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Dec. 31, 2013
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations |
Glyderm Skin Care
On September 3, 2013, we entered into an Asset Purchase Agreement, (the APA), by and among the Company, BioZone Laboratories, Inc., the Companys wholly owned subsidiary (BZL) and Lautus Pharmaceuticals LLC, a New Jersey limited liability company (Lautus or the Buyer). (The Company and BZL are referred to herein as the Sellers).
Pursuant to the APA, the Buyer purchased from the Sellers certain assets relating to the Glyderm brand of skin care products currently manufactured and sold by BZL. Specifically, the Sellers sold all of their interests in (A) the Glyderm trademark, the Glyderm patents, the Glyderm product formulations, the domain names, www.glydermonline.com and www.glydermskincare.com, and the Glyderm internet website; and (B) the Sellers entire inventory of Glyderm products held for resale (the Purchased Assets).
The purchase price for the Purchased Assets is an aggregate amount equal to: (A) one million dollars ($1,000,000), payable as follows: (i) six hundred thousand dollars ($600,000) payable at the closing of the APA (the Closing Date), (ii) two hundred thousand dollars ($200,000) payable six (6) months after the Closing Date, and (iii) two hundred thousand dollars ($200,000) payable twelve (12) months after the Closing Date; plus (B) the purchase price for the inventory, calculated based on the amount of units of Glyderm products purchased on the Closing Date at the price per unit that BZL charges its non-retail customers for similar products. The Buyer will pay the purchase price for the inventory as the Glyderm products contained in the inventory are sold by the Buyer to third parties.
Simultaneous with the closing of the APA, BZL and the Buyer entered into a Supply Agreement providing for the manufacture of Glyderm products by BZL on behalf of the Buyer. The term of the Supply Agreement is five years and is subject to termination upon various events set forth in the Supply Agreement, including termination at the Buyers option upon ninety days prior written notice. The Supply Agreement contains a schedule of the price per unit that the Buyer has agreed to pay BZL for the manufacture of Glyderm products. The Buyer is not obligated to purchase any minimum amount of Glyderm products from BZL during the term of the Supply Agreement. In addition, BZL and the Buyer entered into a Services Agreement on the Closing Date pursuant to which BZL will provide to Buyer certain ongoing operational support on behalf of Buyer for a period of twelve months from the Closing Date.
The following table describes the total gain on disposal and the carrying values of the assets and liabilities disposed:
BioZone Labs and Baker Cummins
On November 12, 2013, we entered into an Asset Purchase Agreement, dated as of that date, by and among the Company, BioZone Labs, Baker Cummins, Brian Keller, MusclePharm Corporation (Musclepharm) and Biozone Laboratories, Inc. (Acquisition Co.) a newly formed subsidiary of Musclepharm, pursuant to which Acquisition Co. acquired substantially all of the operating assets of Biozone Labs and Baker Cummins, including the QuSomes, HyperSorb and EquaSomes drug delivery technologies (excluding certain assets including cash on hand). The closing of the Asset Purchase Agreement occurred on January 2, 2014. The Company has no significant continuing involvement in the operations of BioZone Labs or Baker Cummins. The sale of BioZone Labs and Baker Cummins qualified as a discontinued operation of the Company and accordingly, the Company has excluded results of BioZone Labs and Baker Cummins operations from its Consolidated Statements of Operations to present these businesses in discontinued operations.
The following tables show the assets and liabilities and results of operations of the discontinued operations for fiscal years 2013 and 2012:
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