2 .	Discontinued Operations

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

and

six

months ended

June 30, 2018

and

July 1, 2017 (

in thousands):

	Three Months					Six Months
	Ended					Ended
	June 30 ,		July 1,			June 30 ,			July 1,
	201 8		2017			201 8			2017
Net sales	$	-	$	11,615		$	6,787		$	22,805
Cost of sales		-		8,883			6,485			17,836
Selling, general and administrative expenses		-		2,503			2,438			4,889
Other income, net		-		(18	)		-			(22	)
Interest expense, net		-		-			10			-
Loss on sale of assets		-		-			(865	)		-
Loss from discontinued operations before income taxes		-		247			(3,011	)		102
Income tax (benefit) expense		-		(2	)		-			(3	)
Loss from discontinued operation, net of taxes	$	-	$	249		$	(3,011	)	$	105

Included in selling, general and administrative expenses incurred for the

six

months ended

June 30, 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):

	June 30 ,			December 31,
	2018			2017
Cash	$	-		$	975
Accounts receivable, net		-			3,146
Inventory		-			23,231
Prepaid expenses and other current assets		-			541
Property, plant and equipment		-			1,449
Other assets		-			2,128
Total assets		-			31,470
Accounts payable and other liabilities		3			9,252
Accrued salaries, wages, and benefits		-			1,716
Deferred revenue		-			500
Other accrued expenses		50			1,179
Deferred compensation		-			4,101
Supplemental retirement plan		-			1,701
Other long-term liabilities		-			976
Total liabilities		53			19,425
Net (liabilities) assets	$	(53	)	$	12,045

As a result of the Asset Sale, the Company has

revenue-generating operations. While the cash and subordinated secured promissory note received as partial consideration for the Asset Sale generate interest income, the Company believes that the cash on hand is sufficient to fund operating expenses for at least

months from the date of these financial statements. As previously announced, the Company

may

consider a rights offering of the Company’s common stock to existing shareholders to raise additional cash for acquisition purposes which could provide the Company greater resources and flexibility in acquiring non-furniture assets.