Note 7 - Investment in Closely Held Company

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Investments and Other Noncurrent Assets [Text Block]

7 . Investment in Closely Held Company

The Company held an equity interest in Churchill Downs Holdings Ltd (“Churchill”), a British Virgin Island business company which it received as partial consideration for the sale of substantially all of its assets during

first

quarter

2018.

The investment in Churchill is accounted for as investments in equity securities of nonpublic entities without readily determinable fair values, which are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company reviews its equity securities without readily determinable fair values on a regular basis to determine if the investment is impaired. For purposes of this assessment, the Company considers the investee’s cash position, liquidity, earnings and revenue outlook, equity position, and ownership, among other factors, in its review. If management’s assessment indicates that an impairment exists, the Company estimates the fair value of the equity investment and recognizes in current earnings an impairment loss that is equal to the difference between the fair value of the equity investment and its carrying amount.

During the prior year, the Company determined that the equity investment was impaired and determined the fair value to be zero. The cumulative amount of the impairment at

March 31, 2019

totaled

$168,000.

In determining the amount of the impairment for

2018,

management considered relevant known transactions that occurred on or before the balance sheet date and the different rights and obligations of the securities subject to the impairment assessment. Factors that significantly influenced the determination of the impairment loss included the equity security’s voting rights, priority claims to the equity security, distributions rights and preferences, and the investee’s cash position, liquidity, earnings and revenue outlook.

Pursuant to a stock purchase agreement dated

February 7, 2019,

Buyer’s British Virgin Island parent company repurchased

2,500

shares of its stock held by the Company. The Company

no

longer maintains an equity interest in Buyer’s British Virgin Island parent company. The Company recorded a gain on the sale of the stock of

$120,000

during the

three

months ended

March 31, 2019.