Supplemental Disclosure of Non-cash Information |
9 Months Ended | |||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||
| Cash Flow, Supplemental Disclosures [Text Block] |
Supplemental disclosure of cash flow information: During the nine months ended September 30, 2016 and 2015, cash paid for income taxes was $10,466 and $0, respectively. During the nine months ended September 30, 2016 and 2015, cash paid for interest was $15,262 and $1,445, respectively. Supplemental disclosure of non-cash activity: As of September 30, 2016, we had property and equipment purchases of $7,105 which were included in accounts payable. In connection with our reacquisition and termination of regional developer rights during the nine months ended September 30, 2016 and 2015, we had deferred revenue of $224,750 and $914,000, respectively, representing license fees collected upon the execution of the regional developer agreements. In accordance with ASC-952-605, we netted these amounts against the aggregate purchase price of the acquisitions (Note 5). In connection with our acquisitions of franchises during the nine months ended September 30, 2016, we acquired $293,014 of property and equipment, intangible assets of $339,000, goodwill of $269,780 and assumed deferred revenue associated with membership packages paid in advance of $45,072 in exchange for $839,000 in cash and notes payable issued to the sellers for an aggregate amount of $186,000. Additionally, at the time of these transactions, we carried deferred revenue of $29,000, representing franchise fees collected upon the execution of franchise agreements, and deferred costs of $1,450, related to our acquisition of undeveloped franchises. We netted these amounts against the aggregate purchase price of the acquisitions (Note 2). In connection with our acquisitions of franchises during the nine months ended September 30, 2015, we acquired $1,539,321 of property and equipment, intangible assets of $1,531,041, goodwill of $2,312,259, favorable leases of $17,469 and assumed deferred revenue associated with membership packages paid in advance of $117,301 in exchange for $4,652,525 in cash and notes payable issued to the sellers for an aggregate amount of $744,350. Additionally, at the time of these transactions, we carried deferred revenue of $976,500, representing franchise fees collected upon the execution of franchise agreements, and deferred costs of $478,200, related to our acquisition of undeveloped franchises. We netted these amounts against the aggregate purchase price of the acquisitions (Note 2). During the quarter ended September 30, 2016, the final valuation of a December 2015 acquisition was completed. The purchase price allocation for this acquisition was adjusted accordingly:
As of December 31, 2014, we recorded a deposit of $507,500 for the reacquisition and termination of regional developer rights, which were paid in advance. During the nine months ended September 30, 2015, upon the effective date of the reacquisition and termination agreement, we reclassified $507,500 from deposits to intangible assets.
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