Note 2 - Discontinued Operations

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

2. Discontinued Operations

On 

March 2, 2018, 

we sold substantially all of our assets (the “Asset Sale”) to Churchill Downs LLC (“Buyer”), pursuant to the terms of the Asset Purchase Agreement, dated as of

November 20, 2017, 

as amended by the First Amendment thereto dated 

January 22, 2017 (

the “Asset Purchase Agreement”). Operations of the furniture business from

January 1, 2018

through

March 2, 2018

are reflected as discontinued operation pursuant to the provisions of Accounting Standards Codification

2015

-

20,

Presentation of Financial Statements – Discontinued Operations

for all periods presented.

Loss from discontinued operations, net of taxes, comprised the following for the

three

months ended

March 31, 2019

and

2018

(in thousands):

	201 9		2018
Net sales	$	-	$	6,787
Cost of sales		-		6,485
Selling, general and administrative expenses		-		2,438
Interest expense, net		-		10
Loss on sale of assets		-		(865	)
Loss from discontinued operations before income taxes		-		(3,011	)
Income tax (benefit) expense		-		-
Loss from discontinued operations, net of taxes	$	-	$	(3,011	)

Included in selling, general and administrative expenses incurred for the

three

months ended

March 31, 2018

were certain transaction costs including investment banking fees, legal fees, and other transaction costs directly attributable to the Asset Sale.

Net (liabilities) assets for discontinued operations are as follows (in thousands):

	March 31,		March 31,
	201 9		2018
Accounts payable and other liabilities	$	-	$	14
Accrued salaries, wages, and benefits		-		360
Other accrued expenses		-		186
Total liabilities		-		560
Net (liabilities) assets	$	-	$	(560	)

As a result of the Asset Sale, the Company had

no

revenue-generating operations.  As of

March 19, 2019,

our sources of income include dividends on HC Realty Series B Stock, interest paid on the loan we made to HC Realty’s operating partnership, and interest paid on cash and subordinated secured promissory notes. The Company believes that the revenue generating from these sources in addition to the cash on hand is sufficient to fund operating expenses for at least

12

months from the date of these consolidated financial statements.  As disclosed in previous filings, the Company

may

consider a rights offering of the Company’s common stock to existing stockholders to raise additional cash for acquisitions in addition to the equity interest we acquired in HC Realty which could provide the Company greater resources and flexibility in acquiring additional non-furniture assets, which

may

include purchasing additional HC Realty Series B Stock.