Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

v3.21.1
Discontinued Operations
6 Months Ended
Feb. 28, 2021
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

20.

Discontinued Operations

 

 

On November 19, 2020 the Company entered a definitive asset sale agreement through its wholly owned subsidiary Lexaria Canpharm ULC to sell certain non-core business assets for gross proceeds of C$3,850,000.

 

On December 10, 2020 the sale closed. The Company received from Hill Street Beverage Company C$350,000 in cash, 6,031,363 restricted common shares at a deemed price of C$0.0829 per share as the first required equity-based payment, a promissory note having a principal amount of C$2,000,000 and bearing interest at the rate of 10% per annum. Pursuant to the terms of the transaction, the Company will receive another C$1,000,000 worth of common shares over a period sixteen months in C$500,000 issuances eight months and sixteen months after the closing date. The C$ were converted at the spot rate of 0.78107 at the closing date. The promissory note was included at its nominal value of $NIL.

 

Gain on asset disposal

 

$

 

Book value of assets sold

 

 

 

Cash consideration

 

 

273,373

 

Shares received

 

 

468,264

 

Shares receivable

 

 

781,067

 

Promissory note

 

 

 

 

 

 

1,522,704

 

 

  

 

The financial results of the group of assets sold are presented as income (loss) from discontinued operations, net of income taxes in our consolidated statement of income. The following table presents financial results of the assets:
 

 

 

 SIX MONTHS ENDED

 

 

 

 February 28

 

 

 February 29

 

 

 

2021

 

 

2020

 

Revenue

 

$ 3,000

 

 

$ 69,750

 

Operating Expenses

 

 

25,000

 

 

 

5,566

 

Net Income

 

$ (22,000 )

 

$ 64,184

 

   

 

The following table presents cash flows of discontinued operations:

 

 

 

SIX MONTHS ENDED

 

 

 

February 28

 

February 29

 

 

 

2021

 

 

2020

 

Cash flows used in discontinued operating activities

 

 

 

 

 

 

Net income

 

$ (22,000

)

 

$ 64,184

 

Change in working capital

 

 

105,000  

 

 

(99,000 )

Net cash provided by (used in) discontinued operating activities

 

$ 83,000  

 

$ (34,816 )

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) discontinued operations

 

 

83,000  

 

$ (34,816 )

 

 

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of the assets:

  

 

 

February 28

 

 

August 31

 

 

 

2021

 

 

2020

 

Current Assets

 

 

 

 

 

 

Accounts receivable

 

$

 

 

$ 105,250

 

Total assets classified as discontinued operations in the consolidated balance sheet

 

 

 

 

 

105,250

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

 

 

$ 250

 

Total liabilities classified as discontinued operations in the consolidated balance sheet

 

 

 

 

 

250