Effective March 15, 2021, a wholly owned subsidiary of the Company and Spireon entered into an agreement (“Sale Agreement”) pursuant to which we sold certain assets and transferred certain liabilities of the LoJack North America business (“LoJack Transaction”) for an upfront cash purchase price of approximately $8.0 million. We received net proceeds of $6.6 million, based on an estimate of certain adjustments to the gross purchase price as of the closing date. On November 9, 2021, the purchase price was reduced by $0.9 million, which was paid to Spireon, due to final working capital adjustments. We recognized a gain on the sale of the LoJack North America business of $4.1 million during the year ended February 28, 2022.

Concurrent with the closing of the transaction, we also entered into a Transition Services Agreement (the “TSA”) to provide support to Spireon in the transition of customers to its telematics solution and to provide recovery services to the existing installed base of LoJack North America customers, as an agent of Spireon, for a period of six months commencing March 15, 2021. Subsequently, the transition period was extended and then effectively terminated on March 31, 2022. As consideration for these services, Spireon reimbursed us for the direct and certain indirect costs, as well as certain overhead or administrative expenses related to operating the business. Additionally, we entered into a services agreement that commenced April 1, 2022 upon the expiration of the TSA, under which we will provide certain services related to the LoJack North America tower infrastructure for a period no longer than fifty-four months. As consideration for these services, Spireon will pay us a monthly service fee over the stipulated contract term. Further, we entered into a license agreement pursuant to which we license certain intellectual property rights related to the LoJack North America business in the U.S. and Canada to Spireon. In connection with the services provided to Spireon during the three and nine months ended November 30, 2022, respectively, we incurred a total cost of $0.5 million and $2.5 million of which $0.3 million and $1.3 million was billed to Spireon for the services and the net amount of $0.2 million and $1.2 million is included as a component of other expense in the condensed consolidated statement of comprehensive loss as these costs represent non-operating expenses. During the three and nine months ended November 30, 2021, respectively, we incurred a total cost of $0.5 million and $3.8 million of which $0.4 million and $1.8 million was billed to Spireon for services under the TSA and the remaining $0.1 million and $2.0 million is included within other income (expense) in the condensed consolidated statement of comprehensive loss.

The operating results and cash flows related to the LoJack North America operations are reflected as discontinued operations in the unaudited condensed consolidated statements of comprehensive loss and the unaudited condensed consolidated statements of cash flows for the nine months ended November 30, 2021. For the nine months ended November 30, 2021, we have reported the operating results and cash flows related to the LoJack North America operations through March 14, 2021:

The amounts in the statement of operations that are included in discontinued operations are summarized in the following table (in thousands):

	Three Months Ended			Nine Months Ended
	November 30,			November 30,
	2021			2021
Revenues	$	—		$	823
Cost of revenues		—			950
Gross profit (loss)		—			(127	)
Operating expenses:
Research and development		—			32
Selling and marketing		—			167
General and administrative		—			75
Intangible asset amortization		—			141
Restructuring		—			404
Total operating expenses		—			819
Operating loss from discontinued operations		—			(946	)
(Loss) Gain on sale of discontinued operations		(895	)		4,103
Net (loss) income from discontinued operations, net of tax	$	(895	)	$	3,157

The amounts in the statement of cash flows that are included in discontinued operations are summarized in the following table (in thousands):

	Nine Months Ended
	November 30,
	2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from discontinued operations, net of tax	$	3,157
Adjustments to reconcile net income from discontinued operations to net cash used in operating activities:
Intangible asset amortization		141
Stock-based compensation		25
Gain on sale of discontinued operations		(4,103	)
Changes in operating assets and liabilities:
Accounts receivable		452
Inventories		425
Prepaid expenses and other current assets		4
Accounts payable		(331	)
Accrued liabilities		(135	)
Deferred revenue		(30	)
NET CASH USED IN OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS		(395	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of discontinued operations		5,721
NET CASH PROVIDED BY INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS		5,721
Net change in cash and cash equivalents	$	5,326