Note 3 - Lime Fresh Mexican Grill

12 Months Ended

Jun. 06, 2017

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

3.

  Lime Fresh Mexican Grill 

On

May 31, 2016,

we entered into agreements with

two

separate buyers to sell various Lime Fresh Mexican Grill assets.

  Pursuant to the terms of an asset purchase agreement with another restaurant company, we agreed to sell our

eight

remaining Lime Fresh Mexican Grill Company-owned restaurants for

$6.0

million.  Given that closing requirements were satisfied for only

six

of the

eight

restaurants, an amendment was agreed upon which allowed for the payment of

$5.0

million upon the transfer of the

six

restaurants and the holdback of

$1.0

million until such time that both of the remaining

two

restaurants had closed and transferred to the buyer.  The

six

restaurants closed and were transferred on

May 31, 2016. 

Both of the remaining

two

Lime Fresh restaurants remained open and operated by Ruby Tuesday as of our

May 31

fiscal year-end and were subsequently closed during fiscal year

2017.

 

Because we did

not

collect the

$5.0

million on the sale of the

six

Lime Fresh restaurants until the

first

day of our fiscal year

2017,

the gain of

$3.1

million included in our fiscal year

2016

Consolidated Statements of Operations and Comprehensive Loss is non-cash.

  Further, given that the closing requirements were

not

satisfied on the

two

remaining restaurants as of the close of our fiscal year

2016,

we did

not

reflect those restaurants as having been sold in fiscal year

2016,

nor we did accrue as a receivable the

$1.0

million holdback.

Also on

May 31, 2016,

we sold the Lime Fresh Mexican Grill brand, including the intellectual property and franchising rights for all

eight

Lime Fresh franchised restaurants to a

third

party buyer for

$4.6

million, substantially all of which was received in cash on that date.

  We recognized a gain of

$2.8

million on the transaction.