Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS

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INVESTMENTS
 9 Months Ended
Sep. 30, 2014
Investments, Debt and Equity Securities [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
4.
INVESTMENTS
 
OTHER INVESTMENTS ARE SUMMARIZED AS FOLLOWS AT SEPTEMBER 30, 2014 AND DECEMBER 31, 2013.
 
 
 
September 30,
 
December 31,
 
 
 
2014
 
2013
 
Investments accounted for under the equity method
 
$
-
 
$
941,963
 
Investments accounted for under the cost method
 
 
1,550,000
 
 
1,550,000
 
Total
 
$
1,550,000
 
$
2,491,963
 
 
INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
 
Effective April 1, 2014, the Company increased its ownership stake in Hooters restaurant in Campbelltown, Australia from 49% to 60%. In addition, the Company increased its ownership stake to 60% in the two new stores recently completed or under construction in Surfers Paradise (which opened on July 4, 2014), Australia and Townsville, Australia which we expect to open late 2014. The Company consolidated these entities beginning with this Quarterly Report on form 10-Q for the quarter ended September 30, 2014.
 
Also on July 1, 2014, the Company acquired 60% of the two other Hooters restaurants in Australia, in Penrith and Parramatta, suburbs of Sydney, as well as 60% interest in the related Australian management company. These entities own, operate, and manage Australian Hooters restaurants and gaming operations. The purchase price was the assumption of $5 million in debt. Also as part of the transaction, the Company will receive 100% of all gaming revenue until the debt is repaid, and thereafter the Company will receive 60% of such revenue for the remainder of the lifetime of the gaming machines.
 
Activity in investments accounted for using the equity method is summarized as follows:
 
 
 
Nine Months Ended
 
Year Ended
 
 
 
September 30,
 
December 31,
 
 
 
2014
 
2013
 
 
 
 
 
 
 
Balance, beginning of year
 
$
941,963
 
$
1,066,915
 
Equity in losses
 
 
(40,694)
 
 
(125,017)
 
New investments
 
 
100,000
 
 
100,000
 
Step acquisition reclassification
 
 
(1,001,269)
 
 
-
 
Return of capital
 
 
-
 
 
(99,935)
 
Balance, end of period
 
$
-
 
$
941,963
 
 
Equity investments consist of the following at September 30, 2014 and December 31, 2013:
 
 
 
September 30,
 
December 31,
 
 
 
2014
 
2013
 
Carrying value:
 
 
 
 
 
 
 
Hoot Campbelltown Pty. Ltd. (49%) - Australia
 
$
-
 
$
483,603
 
Second Hooters location (49%) - Australia
 
 
-
 
 
384,605
 
Third Hooters location (49%) - Australia
 
 
-
 
 
73,755
 
 
 
$
-
 
$
941,963
 
 
The summarized balance sheets for the three locations in Australia of which we owned 49% at December 31, 2013 follows:
 
 
 
December 31,
 
 
 
2013
 
ASSETS
 
 
 
 
Current assets
 
$
362,085
 
Non-current assets
 
 
3,089,230
 
TOTAL ASSETS
 
$
3,451,315
 
LIABILITIES
 
 
 
 
Current liabilities
 
$
972,885
 
PARTNER'S EQUITY
 
 
2,478,430
 
TOTAL LIABILITIES AND PARTNERS' EQUITY
 
$
3,451,315