| Discontinued Operations |
4. DISCONTINUED OPERATIONS
In June 2016, the
Company approved a plan to exit the Australia and Eastern Europe markets, authorizing management to sell or close its five Hooters
stores in Australia and its one store in Budapest. Management expects to complete negotiation of terms during the third quarter
of 2016, and complete disposal of the operations by the end of 2016. If the Company is unable to come to acceptable terms for the
sale of the stores, management intends to close the Australia and Budapest operations.
Carrying amount of major classes of assets and liabilities
included as part of discontinued operations:
| |
|
June 30, 2016 |
|
|
December 31, 2015 |
|
| Cash |
|
$ |
177,404 |
|
|
$ |
303,471 |
|
| Accounts receivable |
|
|
21,600 |
|
|
|
19,328 |
|
| Inventory |
|
|
111,899 |
|
|
|
157,079 |
|
| Property, plant and equipment |
|
|
4,162,347 |
|
|
|
4,497,168 |
|
| Goodwill and intangible assets |
|
|
480,182 |
|
|
|
370,138 |
|
| Other Assets |
|
|
460,763 |
|
|
|
500,546 |
|
| Valuation allowance |
|
|
(3,740,688 |
) |
|
|
- |
|
| Total |
|
|
1,673,507 |
|
|
|
5,982,730 |
|
| |
|
|
|
|
|
|
|
|
| Accounts payable and accrued liabilities |
|
|
1,363,232 |
|
|
|
889,177 |
|
| Due to affiliates |
|
|
414,595 |
|
|
|
390,779 |
|
| Deferred rent |
|
|
54,724 |
|
|
|
58,647 |
|
| Total |
|
|
1,832,550 |
|
|
|
1,338,603 |
|
| |
|
|
|
|
|
|
|
|
| Net assets (liabilities) of discontinued operations |
|
$ |
(159,043 |
) |
|
$ |
4,644,126 |
|
Major line items constituting pre-tax loss of discontinued
operations:
| |
|
Six Months Ended |
|
| |
|
June 30, 2016 |
|
|
June 30, 2015 |
|
| |
|
|
|
|
|
|
| Revenue |
|
$ |
2,970,401 |
|
|
$ |
4,308,500 |
|
| Restaurant cost of sales |
|
|
1,042,543 |
|
|
|
1,426,151 |
|
| Restaurant operating expenses |
|
|
2,450,557 |
|
|
|
2,825,018 |
|
| Restaurant pre-opening and closing expenses |
|
|
- |
|
|
|
258,850 |
|
| General and administrative expenses |
|
|
254,174 |
|
|
|
467,062 |
|
| Depreciation and amortization |
|
|
436,144 |
|
|
|
227,693 |
|
| Other |
|
|
22,893 |
|
|
|
33,229 |
|
| Loss of discontinued operations |
|
|
(1,235,909 |
) |
|
|
(929,503 |
) |
| Loss on classification as held for sale |
|
|
(3,876,161 |
) |
|
|
- |
|
| Total pretax loss of discontinued operations |
|
$ |
(5,112,070 |
) |
|
$ |
(929,503 |
) |
| |
|
|
|
|
|
|
|
|
| Income tax |
|
|
- |
|
|
|
- |
|
| Loss on discontinued operations |
|
$ |
(5,112,070 |
) |
|
$ |
(929,503 |
) |
|