Disposal of business

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Disposal of business

3. Disposal of business

In the prior year, 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 was being held in escrow. There is an earnout payment of up to CDN$3,000,000 to be received in 2019, if certain clinic performance metrics are met.

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 Addiction Recovery Institute of America, LLC (formerly Seastone of Delray) (“ARIA”), refer note 5 below. 

The proceeds realized on disposal have been allocated as follows: 

	Year ended December 31, 2017
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