Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

v3.5.0.2
Discontinued Operations
 9 Months Ended
Sep. 30, 2016
Discontinued operations  
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.

 

The Company completed the sale of the Hooters Australia and Budapest stores during the third quarter of 2016, transferring substantially all of the assets and liabilities of those operations to the local operating groups. In both cases, the Company did not receive any proceeds from the transfer, although in the case of Hooters Australia, the Company did retain a five-year option to repurchase a 20% interest in the stores for $1.

 

The carrying amount of major classes of assets and liabilities included as part of discontinued operations are as follows:

 

    June 30, 2016     December 31, 2015  
Cash   $ -     $ 303,471  
Accounts receivable     -       19,328  
Inventory     -       157,079  
Property, plant and equipment     -       4,497,170  
Goodwill and intangible assets     -       505,138  
Other assets     -       500,544  
Valuation allowance     -       -  
Total     -       5,982,730  
                 
Accounts payable and accrued liabilites     161,168       889,176  
Due to affiliates     -       390,779  
Deferred rent     -       58,648  
Total     161,168       1,338,603  
                 
Net Assets of discontinued operations   $ (161,168 )   $ 4,644,127  

 

The major line items constituting pre-tax loss of discontinued operations are as follows:

 

    Nine Months Ended  
    September 30, 2016     September 30, 2015  
             
Revenue   $ 3,427,928     $ 5,301,607  
Restaurant cost of sales     1,196,734       1,745,566  
Restaurant operating expenses     2,780,441       3,647,470  
Restaurant pre-opening and closing expenses     -       258,850  
General and administrative expenses     296,343       492,620  
Depreciation and amortization     436,144       231,881  
Other     22,893       14,927  
Loss of discontinued operations     (1,304,627 )     (1,089,707 )
Loss on write-down of net assets     (3,876,161 )     (4,489,043 )
Total pretax loss of discontinued operations     (5,180,788 )     (5,578,750 )
                 
Income tax     -       -  
Loss on discontinued operations   $ (5,180,788 )   $ (5,578,750 )