Discontinued Operations

During the third quarter of fiscal 2015 we made the decision to exit the Citrus Lane business through either a sale or wind-down as it was no longer a strategic priority. In the fourth quarter of fiscal 2015, we made the decision to shut down the business and had substantially completed our plans for exiting the business. In the fourth quarter of fiscal 2016, we completed the plans to exit the business. As such, financial results of Citrus Lane have been presented as income (loss) from discontinued operations, net of tax on the consolidated statements of operations for the fiscal years ended December 30, 2017, December 31, 2016, and December 26, 2015. As of December 30, 2017 and December 31, 2016 there were no recorded assets or liabilities of the Citrus Lane business.

In February 2016, we entered into a settlement agreement with the previous shareholders of Citrus Lane. The settlement agreement related to our acquisition of Citrus Lane and the merger agreement pursuant to which the acquisition was consummated. Under the terms of the settlement agreement, we paid the previous shareholders of Citrus Lane $15.6 million in contingent consideration payments that were valued at $16.0 million as of December 26, 2015 ($16.4 million was the undiscounted value at the time of the acquisition) that was otherwise payable to them in the event Citrus Lane achieved certain milestones in 2015 and 2016. In exchange, the former shareholders forfeited the $5.0 million in original cash consideration that was being held in an escrow account, as well as the 0.4 million shares of common stock issued at closing (valued at $2.0 million as of the February 2016 settlement date and $3.9 million as of the original closing date) and 0.1 million shares of common stock which was subject to the achievement of certain milestones in 2015 and 2016 (valued at $0.6 million as of the February 2016 settlement date and $1.1 million as of the original closing date) offered as part of the deal consideration. We retired these shares of common stock as of December 31, 2016. As a result of this settlement, and based on our assessment that there was not a clear and direct link to the original consideration transferred at the acquisition date, we recognized a gain within income (loss) from discontinued operations on the consolidated statements of operations for fiscal 2016 of $8.0 million.

The following table presents financial results of the Citrus Lane business included in income (loss) from discontinued operations, net of tax for the fiscal years ended December 31, 2016 and December 26, 2015 (in thousands). There were no financial results of the Citrus Lane business included in income (loss) from discontinued operations, net of tax, for the fiscal year ended December 30, 2017.



	Fiscal Year Ended
	December 31, 2016			December 26, 2015

Revenue	$	101		11,530
Cost of revenue	108			11,849
Operating expenses:
Selling and marketing	54			2,229
Research and development	11			904
General and administrative	(7,835		)	2,698
Impairment of goodwill and intangible assets	—			8,766
Depreciation and amortization	8			99
Operating (loss) income	7,755			(15,015		)
Other income (expense), net	6			(30		)
Income (loss) from discontinued operations before income taxes	7,761			(15,045		)
Loss on disposal of assets before income taxes	—			(2,071		)
Provision for income tax	—			—
Net income (loss) from discontinued operations	$	7,761		$	(17,116	)

For further details on the impairment of goodwill and intangible assets please refer to Note 2 of these Notes to Consolidated Financial Statements.