|9 Months Ended|
Sep. 30, 2020
|Subsequent Events [Abstract]|
Note 14 – Subsequent Events
Impact from COVID-19 Coronavirus.
Historically, our operations have relied heavily on our and our students' ability to travel and attend live events where large groups of people gather in local markets within each of the segments in which we operate. On March 11, 2020, the World Health Organization (WHO) declared the COVID-19 outbreak as a pandemic. As a result of worldwide restrictions on travel and social distancing, in March 2020 we temporarily ceased conducting live sales and fulfillment and furloughed substantially all of our employees. We resumed sales operations in June 2020 with online sales events selling into our suite of online, on-demand, and over-the-phone products. We also resumed online, on-demand, and over-the-phone fulfillment activities in June 2020. These activities required the re-engagement by the Company of some furloughed employees and independent contractors. We have simplified our product offerings and restructured our compensation program with respect to both employees and independent contractors to reduce costs and improve margins, but there can be no assurances that the Company will be effective in selling its products and services, or what the impact such activities will have on our financial performance.
The Company conducted its first live in-person preview workshops in Miami, Ft. Lauderdale, Boca Raton and West Palm Beach, Florida over a four-day period commencing November 4, 2020. The workshops were a prelude to a three-day basic training event to be held in Ft. Lauderdale, Florida on November 20-22, 2020. The Company will be following strict safety protocols at the live events. The Company expects to conduct additional live events in other areas as lockdown restrictions continue to ease and hopes to return to a normal schedule over the coming months.
The ultimate impact from COVID-19 on the Company's operations and financial results during 2020 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, the rate at which historically large increases in unemployment rates will decrease, if at all, and whether, and the speed with which the economy recovers. We are not able to fully quantify the impact that these factors will have on our financial results during 2020 and beyond, but expect developments related to COVID-19 to materially affect the Company's financial performance in 2020.
Sale of Property, Cancellation of Promissory Note and Entry Into Operating Lease
On October 1, 2020, 1612 E. Cape Coral Parkway Holding Co., LLC ("Seller"), a subsidiary of the Company, closed on the sale of the real property and improvements located at 1612 E. Cape Coral Parkway, Cape Coral, Florida (the "Property") for $2.5 million to Daniel Thom, as Trustee of Torstonbo Trust, a Florida revocable trust ("Buyer). A portion of the proceeds realized by the Seller from the sale of the Property were used to satisfy Seller's obligations under a Promissory Note ("Note") and Mortgage, Assignment of Rents, and Security Agreement (collectively, the "Loan Documents") entered into on August 6, 2020 with Northern Equity Group, Inc., JKH Ventures, Inc., and Donald Ross, LLC pursuant to which Seller had borrowed the principal amount of $1 million. The Seller's obligations under the Loan Documents were secured by a first mortgage on the Property. The net proceeds realized by the Seller from the sale of the Property were $1.24 million after deductions for repayment of the Note, broker commissions, and other fees, and costs. See Note 7 "Short-Term and Long-Term Debt".
The Property served as the Company's headquarters until its sale date. On October 1, 2020, the Company relocated its headquarter to 1490 N.E. Pine Island Road, Suite 5D, Cape Coral, FL 33909 and entered into a two year operating lease for the new 1,600 square feet office and warehouse space. The new lease provides the Company an option to extend the term of the lease for a third year. The lease obligation is approximately $32 thousand plus other costs for shared services, maintenance and sales tax over the course of its life.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef