Annual report pursuant to Section 13 and 15(d)

Consolidated Statements of Cash Flows

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Consolidated Statements of Cash Flows - USD ($)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Cash flows from operating activities:    
Net loss $ (15,173,872) $ (8,797,321)
Adjustments to reconcile net loss to net cash used in operating activities:    
(Recovery) provision for bad debts (10,830) 61,629
Regional developer fees recognized upon acquisition of development rights (138,500) (254,250)
Regional developer fees recognized upon termination of regional developer agreements (282,750)
Net franchise fees recognized upon termination of franchise agreements (342,259) (521,350)
Notes receivable issued for payment of transfer fees (59,850)
Depreciation and amortization 2,566,136 1,268,955
Gain on sale of property and equipment (2,191) (11,500)
Loss on disposition or impairment 3,520,370
Bargain purchase gain (261,147)
Deferred income taxes 120,700 40,800
Stock based compensation expense 1,123,481 825,145
Cash paid for legal settlement 100,000
Changes in operating assets and liabilities, net of effects from acquisitions:    
Restricted cash 50,888 (160,706)
Accounts receivable (999,522) (99,963)
Income taxes receivable 28,967 324,833
Prepaid expenses and other current assets (133,492) 9,892
Deferred franchise costs 361,600 127,550
Deposits and other assets 71,549 (39,235)
Accounts payable (953,084) (291,480)
Accrued expenses (75,532) 165,602
Co-op funds liability (127,832) 14,474
Payroll liabilities (742,954) 875,431
Other liabilities (19,130) (105,973)
Deferred rent 824,390 246,686
Deferred revenue (896,195) 128,049
Net cash used in operating activities (10,847,312) (6,796,479)
Cash flows from investing activities:    
Cash paid for acquisitions (839,000) (4,925,525)
Reacquisition and termination of regional developer rights (325,000) (1,075,500)
Purchase of property and equipment (1,567,727) (4,065,946)
Proceeds received on sale of property and equipment 11,500
Payments received on notes receivable 35,905 42,388
Net cash used in investing activities (2,695,822) (10,013,083)
Cash flows from financing activities:    
Proceeds from issuance of common stock - follow-on public offering 14,374,998
Offering costs paid (1,351,403)
Issuance of common stock, offering costs adjustment (1,042)
Purchases of treasury stock under employee stock plans (83,391)
Proceeds from sale of treasury stock 210,000
Proceeds from exercise of stock options 70,931 534
Repayments on notes payable (436,350) (218,500)
Net cash (used in) provided by financing activities (239,852) 12,805,629
Net decrease in cash (13,782,986) (4,003,933)
Cash at beginning of year 16,792,850 20,796,783
Cash at end of year $ 3,009,864 $ 16,792,850