Annual report pursuant to Section 13 and 15(d)

Discontinued Operations

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Discontinued Operations
 12 Months Ended
Dec. 31, 2016
Discontinued operations  
Discontinued Operations

5. 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 retained 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:

 

    December 31, 2016     December 31, 2015  
Cash   $ -     $ 303,471  
Accounts receivable     -       19,328  
Inventory     -       157,079  
Property, plant and equipment     -       4,497,168  
Goodwill and intangible assets     -       505,138  
Other assets     -       500,546  
Valuation allowance     -       -  
Total     -       5,982,730  
                 
Accounts payable and accrued liabilites     -       889,177  
Due to affiliates     -       390,779  
Deferred rent     -       58,647  
Total     -       1,338,603  
                 
Net Assets of discontinued operations   $ -     $ 4,644,127  

 

The major line items comprising the loss of discontinued operations are as follows:

 

    Year Ended  
    December 31, 2016     December 31, 2015  
             
Revenue   $ 3,427,928     $ 7,043,222  
Restaurant cost of sales     1,196,734       2,281,649  
Restaurant operating expenses     2,780,441       5,137,605  
Restaurant pre-opening and closing expenses     -       258,850  
General and administrative expenses     296,343       616,740  
Depreciation and amortization     436,144       667,453  
Other     22,893       (34,328 )
Loss of discontinued operations     (1,304,627 )     (1,884,747 )
Loss on write-down of net assets     (3,762,253 )     (4,489,043 )
Total pretax loss of discontinued operations     (5,066,880 )     (6,373,790 )
Income tax     -       -  
Loss on discontinued operations   $ (5,066,880 )   $ (6,373,790 )