Note 3. Discontinued Operations

The Company completed the sale of its Dermatology Business to STRATA Skin Sciences, Inc. (“Strata”) on August 16, 2021 for net proceeds of $3.7 million, resulting in a gain on the sale of the Dermatology Business of $3.5 million which was included as a component of income (loss) from discontinued operations in the statement of operations for the year December 31, 2021. The Dermatology Business was previously disclosed as a separate reportable segment of the Company.

The results of the Dermatology Business is reported as loss from discontinued operations in the condensed statement of operations for the three months ended March 31, 2021. Certain overhead costs previously allocated to the Dermatology Business for segment reporting purposes did not qualify for classification as discontinued operations and have been reallocated to continuing operations for the three months ended March 31, 2021.

The following table summarizes the loss from discontinued operations in the condensed statement of operations for the three months ended March 31, 2021 (in thousands):

Depreciation expense for the Dermatology Business was $0.1 million for the three months ended March 31, 2021. There were no capital expenditures for the Dermatology Business during the three months ended March 31, 2021.

Stock-based compensation expense for the Dermatology Business was approximately $19,000 for the three months ended March 31, 2021. Stock-based compensation expense of approximately $38,000 was capitalized to inventory and property and equipment during the three months ended March 31, 2021.