Segment Information

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Segment Information

16. Segment information

The Company has two reportable operating segments:

a. Rental income from the property owned by CCH subsidiary located at 3571 Muskoka Road, #169, Bala, on which the operations of the Canadian Rehab Clinic were located prior to disposal on February 14, 2017 and subsequently leased to the purchasers of the business of the Canadian Rehab Clinic, for a period of 5 years renewable for a further three five-year periods and with an option to acquire the property at a fixed price.

b. Rehabilitation Services provided to customers, these services were provided to customers at the Company’s Addiction Recovery Institute of America and Seastone of Delray operations.

The segment operating results of the reportable segments are disclosed as follows:

	Three months ended June 30, 2019
	Rental Operations			In-Patient services			Total
Revenue	$	82,461		$	15,725		$	98,186
Operating expenses		36,989			1,456,334			1,493,323
Operating income (loss)		45,472			(1,440,609	)		(1,395,137	)
Other (expense) income
Loss on disposal of property		—			(692,488	)		(692,488	)
Bonus shares issued to investors		—			(143,500	)		(143,500	)
Interest expense		(40,666	)		(156,388	)		(197,054	)
Amortization of debt discount		—			(828,313	)		(828,313	)
Loss on change in fair value of derivative liability		—			1,728,172			1,728,172
Foreign exchange movements		(26,066	)		(116,766	)		(142,832	)
Net loss before taxation		(21,260	)		(1,649,892	)		(1,671,152	)
Taxation		—			—			—
Net loss from operations	$	(21,260	)	$	(1,649,892	)	$	(1,671,152	)

	Three months ended June 30, 2018
	Rental Operations			In-Patient services			Total
Revenue	$	83,031		$	(16,337	)	$	66,694
Operating expenses		45,102			750,366			795,468
Operating income (loss)		37,929			(766,703	)		(728,774	)
Other (expense) income
Interest income		—			(49	)		(49	)
Interest expense		(42,845	)		(133,742	)		(176,587	)
Amortization of debt discount		—			(1,339,885	)		(1,339,885	)
Loss on change in fair value of derivative liability		—			(796,795	)		(796,795	)
Foreign exchange movements		18,345			92,283			110,628
Net income (loss) before taxation		13,429			(2,944,891	)		(2,931,462	)
Taxation		—			—			—
Net income (loss) from operations	$	13,429		$	(2,944,891	)	$	(2,931,462	)

The segment operating results of the reportable segments are disclosed as follows:

	Six months ended June 30, 2019
	Rental Operations			In-Patient services			Total
Revenue	$	164,476		$	15,725		$	180,201
Operating expenses		74,229			2,895,607			2,969,836
Operating income (loss)		90,247			(2,879,882	)		(2,789,635	)
Other (expense) income
Interest income		—			15,262			15,262
Loss on disposal of property		—			(692,488	)		(692,488	)
Bonus shares issued to investors		—			(143,500	)		(143,500	)
Interest expense		(82,046	)		(460,091	)		(542,137	)
Amortization of debt discount		—			(1,590,255	)		(1,590,255	)
Loss on change in fair value of derivative liability		—			1,254,871			1,254,871
Foreign exchange movements		(45,296	)		(226,654	)		(271,950	)
Net loss before taxation		(37,095	)		(4,722,737	)		(4,759,832	)
Taxation		—			—			—
Net loss from operations	$	(37,095	)	$	(4,722,737	)	$	(4,759,832	)

	Six months ended June 30, 2018
	Rental Operations			In-Patient services			Total
Revenue	$	167,143		$	12,853		$	179,996
Operating expenses		76,504			1,250,811			1,327,315
Operating income (loss)		90,639			(1,237,958	)		(1,147,319	)
Other (expense) income
Interest expense		(92,895	)		(254,143	)		(347,038	)
Amortization of debt discount		—			(2,092,834	)		(2,092,834	)
Loss on change in fair value of derivative liability		—			(808,951	)		(808,951	)
Foreign exchange movements		47,555			200,969			248,524
Net income (loss) before taxation		45,299			(4,192,917	)		(4,147,618	)
Taxation		—			—			—
Net income (loss) from operations	$	45,299		$	(4,192,917	)	$	(4,147,618	)

The segment operating results of the reportable segments are disclosed as follows:

The operating assets and liabilities of the reportable segments are as follows:

	June 30, 2019
	Rental Operations			In-Patient services			Total
Purchase of fixed assets		—			22,868			22,868
Assets
Current assets		9,630			558,680			568,310
Non-current assets		2,916,346			20,509,941			23,426,287
Liabilities
Current liabilities		(2,075,136	)		(12,906,053	)		(14,981,189	)
Non-current liabilities		(4,016,852	)		(14,713,974	)		(18,730,826	)
Intercompany balances		719,954			(719,954	)		—
Net liability position		(2,446,058	)		(7,271,360	)		(9,717,418	)