Put Options and Temporary Equity

12 Months Ended

Sep. 30, 2013

Put Options And Temporary Equity [Abstract]

Put Options And Temporary Equity [Text Block]

H. Put Options and Temporary Equity

As part of certain of the Company’s acquisition transactions, we have entered into Lock-Up/Leak-Out Agreements with the sellers pursuant to which, on or after a contractual period after the closing date, the seller had the right, but not the obligation, to have the Company purchase from seller a certain number of our shares of common stock issued in the transactions in an amount and at a rate of not more than a contractual number of the shares per month (the “Monthly Shares”) calculated at a price per share equal to a contractual value per share (“Value of the Rick’s Shares”). At our election during any given month, we could either buy the Monthly Shares or, if we elected not to buy the Monthly Shares from the seller, then the seller could sell the Monthly Shares in the open market. Any deficiency between the amount which the seller received from the sale of the Monthly Shares and the value of the shares could be paid by us within three (3) business days of the date of sale of the Monthly Shares during that particular month. Our obligation to purchase the Monthly Shares from the Seller would terminate and cease at such time as the seller received a contractual amount from the sale of the Rick’s Shares and any deficiency. Under the terms of the Lock-Up/Leak-Out Agreements, the seller could not sell more than a contractual number of our shares per 30-day period, regardless of whether the seller “Put” the shares to us or sold them in the open market or otherwise.

During April and May 2009, we completed renegotiation of terms of certain of our long term debt and a significant portion of outstanding put options.  Before the renegotiation, the maximum obligation that could be owed if our stock were valued at zero was $13.9 million and was recorded in our consolidated balance sheet as Temporary Equity. If we were required to buy back any of these put options, the buy-back transaction would be purely a balance sheet transaction, affecting only Temporary Equity or Derivative Liability and Stockholders’ Equity and would have no income statement effect.  The only income statement effect from these put options is the “mark to market” valuation quarterly of the derivative liability.

We finished liquidating the put options during the quarter ended March 31, 2013 and we have no more obligations under the put options.