Note 2 - Discontinued Operations

9 Months Ended

Sep. 30, 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

and

nine

months ended

September 30, 2019

and

2018

(in thousands):

	Three Months				Nine Months
	Ended				Ended
	Sept. 30,		Sept. 30,		Sept. 30,		Sept. 30,
	201 9		2018		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 operation, net of taxes	$	-	$	-	$	-	$	(3,011	)

Included in selling, general and administrative expenses incurred for the

nine

months ended

September 30, 2018

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

As a result of the Asset Sale, the Company had

no

revenue-generating operations. Beginning

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. A rights offering could provide the Company greater resources and flexibility in acquiring additional non-furniture assets, which

may

include purchasing additional HC Realty Series B Stock.