| Discontinued Operations Financials |
Prior period balances have been reclassified to present the operations of the agricultural business as a discontinued operation.
Discontinued Operations Income Statement |
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Three Months Ended May 31, |
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Nine Months Ended May 31, |
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2018 |
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2017 |
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2018 |
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2017 |
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Farm revenues |
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$ |
1,000 |
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$ |
600 |
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$ |
2,400 |
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$ |
6,300 |
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Farm expenses |
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- |
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- |
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- |
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- |
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Gross profit |
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1,000 |
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|
600 |
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|
2,400 |
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6,300 |
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General and administrative expenses |
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- |
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11,900 |
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- |
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48,300 |
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Operating profit (loss) |
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1,000 |
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(11,300 |
) |
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2,400 |
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(42,000 |
) |
Finance charges |
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- |
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- |
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- |
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9,400 |
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Income (loss) from discontinued operations |
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$ |
1,000 |
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$ |
(11,300 |
) |
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$ |
2,400 |
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$ |
(32,600 |
) |
The carrying amounts of the major classes of assets and liabilities included as part of the discontinued business are presented in the following table:
Discontinued Operations Balance Sheet |
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May 31, 2018 |
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August 31, 2017 |
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Assets: |
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Trade accounts receivable |
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$ |
86,800 |
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$ |
110,700 |
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Land held for sale (*) |
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450,600 |
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450,600 |
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Total assets |
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$ |
537,400 |
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$ |
561,300 |
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Liabilities: |
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Accrued liabilities |
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$ |
5,600 |
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$ |
11,200 |
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Total liabilities |
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$ |
5,600 |
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$ |
11,200 |
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(*) Land Held for Sale. During the fiscal quarter ended November 30, 2015, the Company purchased three farms totaling 700 acres for approximately $450,600. The farms were acquired in order to correct dry-up covenant issues related to water only farms in order to obtain the release of the escrow funds related to the Company’s farm sale to Arkansas River Farms, LLC. The Company intends to sell the farms in due course and has classified the farms as long-term assets.
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| Effects of New Accounting Standard |
The cumulative effect of the changes made to the Company’s consolidated September 1, 2017 balance sheet for the adoption of ASU 2014-09 were as follows:
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Balance at
August 31, 2017
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Adjustments
Due to ASU 2014-09
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Balance at
September 1, 2017
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Balance Sheet |
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Assets |
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Deferred tax assets (Deferred revenue) |
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$ |
316,400 |
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$ |
(316,400 |
) |
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$ |
- |
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Deferred tax assets - valuation allowance (Deferred revenue) |
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(316,400 |
) |
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316,400 |
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- |
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Liabilities |
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Deferred revenues, current |
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$ |
55,800 |
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$ |
(55,800 |
) |
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$ |
- |
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Deferred revenues, less current portion |
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999,249 |
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(999,249 |
) |
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- |
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Equity |
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Accumulated deficit |
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$ |
(103,993,900 |
) |
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$ |
1,055,049 |
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$ |
(102,938,851 |
) |
In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company’s consolidated statements of operations and comprehensive income (loss) and balance sheet was as follows:
For the Nine Months Ended May 31, 2018 |
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As Reported
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Amounts that would
have been reported
under ASC 605
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Effect of Change
Higher/(Lower)
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Income statement |
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Revenues |
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Special facility fees |
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$ |
- |
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$ |
31,131 |
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$ |
(31,131 |
) |
Water tap fees |
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49,948 |
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60,669 |
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(10,721 |
) |
Net income |
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$ |
58,153 |
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$ |
100,004 |
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$ |
(41,852 |
) |
As of May 31, 2018 |
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As Reported
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Amounts that would
have been reported
under ASC 605 (1)
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Effect of Change
Higher/(Lower)
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Balance Sheet |
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Liabilities |
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Deferred revenues, current |
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$ |
- |
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$ |
55,800 |
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$ |
(55,800 |
) |
Deferred revenues, less current portion |
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- |
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957,836 |
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(957,836 |
) |
Deferred oil and gas lease payment, current (1)
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55,733 |
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|
55,733 |
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- |
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Deferred oil and gas lease payment, less current portion |
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74,311 |
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|
74,311 |
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|
- |
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Equity |
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Accumulated deficit |
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$ |
(102,880,698 |
) |
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$ |
(103,893,896 |
) |
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$ |
1,013,198 |
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(1) |
Inclusive of the Bison Lease deferred oil and gas lease payment and water tap and construction fee deferred revenues as described in the 2017 Annual Report. |
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