Annual report pursuant to Section 13 and 15(d)

Gain on Settlements

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Gain on Settlements
12 Months Ended
Dec. 31, 2017
Gain on Settlements [Abstract]  
GAIN ON SETTLEMENTS
14. GAIN ON SETTLEMENTS

 

For the year ended December 31, 2017, the Company recorded $322,058 in settlements which were comprised of two events.

 

In 2017, a fire in northern California resulted in our Santa Rosa store being closed for approximately 10 days. In addition to the loss of revenue, the contents of the store were damaged due to smoke from the fire. The Company had insurance coverage for both the contents of the store and business interruption. The settlement with our insurance carrier was $126,278.

 

In 2017, the Company entered into an asset purchase agreement to acquire the assets of an entity in California. One of the non-executing shareholders of the seller had various objections to the acquisition and asserted certain rights, claims and demands. The Company became aware that a third party was also interested in acquiring the target entity. The Company entered into an agreement to assign all its rights, title and interest in its asset purchase agreement to the third part in exchange for a payment of $75,000 and inventory from the third party valued at approximately $140,000, resulting in a gain on the settlement of approximately $195,000 after deducting costs of approximately $20,000.