3. Disposal of Business

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

3. Disposal of Business

3. Disposal of Business

On February 14, 2017, in terms of the details outlined in note 1 above, the Company disposed of the business and certain assets of its Canadian Rehab Clinic for gross proceeds of CDN$10,000,000, a total of CDN$1,500,000 of the gross proceeds is being held in escrow for up to two years, in addition there is an earnout payment of up to CDN$3,000,000 to be received in 2019, if certain clinic performance metrics are met, see note 8 below.

The proceeds realized from the sale of the Canadian Rehab Clinic were used to settle outstanding tax liabilities, refer note 11 below, and to acquire the business of Seastone of Delray, refer note 5 below.

The proceeds realized on disposal have been allocated as follows:

	Amount
Proceeds on disposal	$   7,644,000
Assets sold:
Accounts receivable	113,896
Plant and equipment	109,075
	222,971
Liabilities assumed by purchaser
Deferred revenue	(73,799)
Net assets and liabilities sold	149,172
Net profit realized on disposal	$   7,494,828