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Discontinued Operations | 6 Months Ended
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Feb. 28, 2022
Discontinued Operations |
20. 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 to Hill Street Beverage Company (“Hill Street”) (TSX-V: BEER) for gross proceeds of C$3,850,000. With the closing of the sale on December 10, 2020, the Company received C$350,000 in cash, 6,031,363 restricted common shares at a fair value at C$500,000 as the first required equity-based payment, and a C$2,000,000 promissory note bearing interest at 10% per annum. The promissory note was included at its nominal value of $NIL. Pursuant to the terms of the transaction, the Company will receive an additional C$1,000,000 worth of common shares of Hill Street of which C$643,939 worth of Hill Street shares were issued to the Company on August 9, 2021, and the remaining C$356,061 worth of Hill Street shares are to be issued on April 9, 2022.
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, |
|  | 2022 |  |  | 2021 |
Revenue |  | $ | - |  |  | $ | 3,000 |
Operating Expenses |  |  | - |  |  |  | 25,000 |
Net Income (loss) |  | $ | - |  |  | $ | (22,000 | )
The following table presents cash flows of discontinued operations:
|  | SIX MONTHS ENDED |
|  | February 28, |
|  | 2022 |  |  | 2021 |
Cash flows used in discontinued operating activities |  |  |  |  |  |
Net income |  | $ | - |  |  | $ | (22,000 | )
Change in working capital |  |  | - |  |  |  | 105,000 |
Net cash used in discontinued operating activities |  | $ | - |  |  | $ | 83,000 |
Net cash provided by discontinued operations |  |  | - |  |  | $ | 83,000 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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