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, 2017
Dec. 31, 2016
Cash flows from operating activities:    
Net loss $ (3,275,233) $ (15,173,872)
Adjustments to reconcile net loss to net cash used in operating activities:    
(Recovery) provision for bad debts (40,000) (10,830)
Regional developer fees recognized upon acquisition of development rights (138,500)
Adjustment to deferred revenue from previous acquisitions 133,943
Net franchise fees recognized upon termination of franchise agreements (73,665) (342,259)
Depreciation and amortization 2,017,323 2,566,136
Gain on sale of fixed assets (14,525) (2,191)
Loss on disposition or impairment of assets 417,971 3,520,370
Deferred income taxes 15,734 120,700
Stock based compensation expense 594,371 1,123,481
Cash paid for legal settlement 100,000
Changes in operating assets and liabilities:    
Restricted cash 230,575 50,888
Accounts receivable (124,108) (999,522)
Income taxes receivable 42,014 28,967
Prepaid expenses and other current assets (42,817) (133,492)
Deferred franchise costs 269,719 361,600
Deposits and other assets 96,081 71,549
Accounts payable (36,751) (953,084)
Accrued expenses (213,038) (75,532)
Co-op funds liability 16,435 (127,832)
Payroll liabilities 117,009 (742,954)
Other liabilities (734,321) (19,130)
Deferred rent (410,964) 824,390
Deferred revenue 1,170,691 (896,195)
Net cash provided by (used in) operating activities 156,444 (10,847,312)
Cash flows from investing activities:    
Cash paid for acquisitions (839,000)
Reacquisition and termination of regional developer rights (325,000)
Purchase of property and equipment (449,204) (1,567,727)
Payments received on notes receivable 76,351 35,905
Net cash used in investing activities (372,853) (2,695,822)
Cash flows from financing activities:    
Borrowings on revolving credit note payable 1,000,000
Issuance of common stock, offering costs adjustment (1,042)
Purchases of treasury stock under employee stock plans (2,655) (83,391)
Proceeds from sale of treasury stock 292,671 210,000
Proceeds from exercise of stock options 364,250 70,931
Repayments on notes payable (231,500) (436,350)
Net cash provided by (used in) financing activities 1,422,766 (239,852)
Net increase (decrease) in cash 1,206,357 (13,782,986)
Cash at beginning of year 3,009,864 16,792,850
Cash at end of year $ 4,216,221 $ 3,009,864