Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Mar. 12, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Chanticleer Holdings, Inc. | |
Entity Central Index Key | 1106838 | |
Document Type | 10-Q | |
Current Fiscal Year End Date | -19 | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 12,321,330 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $3,324,569 | $245,828 |
Accounts and other receivables | 309,062 | 313,509 |
Inventories | 607,317 | 532,803 |
Due from related parties | 45,615 | 46,015 |
Prepaid expenses and other current assets | 463,575 | 330,745 |
TOTAL CURRENT ASSETS | 4,750,138 | 1,468,900 |
Property and equipment, net | 14,993,351 | 13,315,409 |
Goodwill | 15,445,739 | 15,617,308 |
Intangible assets, net | 6,096,665 | 3,396,503 |
Investments at fair value | 35,362 | 35,362 |
Other investments | 1,550,000 | 1,550,000 |
Deposits and other assets | 486,736 | 408,492 |
TOTAL ASSETS | 43,357,991 | 35,791,974 |
Current liabilities: | ||
Current maturities of long-term debt and notes payable | 997,370 | 1,813,647 |
Current maturities of convertible notes payable, net of debt discount of $803,846 and $63,730, respectively | 196,154 | 436,270 |
Derivative liability | 2,080,047 | 1,945,200 |
Accounts payable and accrued expenses | 6,424,712 | 5,580,131 |
Current maturities of capital leases payable | 54,946 | 42,032 |
Deferred rent | 320,043 | 118,986 |
Due to related parties | 818,854 | 1,299,083 |
Deferred revenue | 48,140 | |
Liabilities of discontinued operations | 179,186 | 177,393 |
TOTAL CURRENT LIABILITIES | 11,119,452 | 11,412,742 |
Convertible notes payable, net of debt discount of $2,239,580 and $1,872,587, respectively | 2,010,420 | 1,477,413 |
Capital leases payable, less current maturities | 55,449 | 36,628 |
Deferred rent | 2,206,681 | 2,196,523 |
Deferred tax liabilities | 652,552 | 686,884 |
Long-term debt, less current maturities, net of debt discount of $300,766 and$ 343,733, respectively | 5,654,506 | 5,009,283 |
TOTAL LIABILITIES | 21,699,060 | 20,819,473 |
Stockholders' equity: | ||
Preferred stock: no par value; authorized 5,000,000 shares; none issued and outstanding | ||
Common stock: $0.0001 par value; authorized 45,000,000 shares; issued and outstanding 12,306,230 and 7,249,442 shares at March 31, 2015 and December 31, 2014, respectively | 1,231 | 725 |
Additional paid in capital | 42,983,138 | 32,601,400 |
Accumulated other comprehensive loss | -2,943,936 | -1,657,908 |
Non-controlling interest | 4,762,686 | 4,904,471 |
Accumulated deficit | -23,144,188 | -20,876,187 |
TOTAL STOCKHOLDERS' EQUITY | 21,658,931 | 14,972,501 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $43,357,991 | $35,791,974 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement Of Financial Position Parenthetical [Abstract] | ||
Debt Instrument Unamortized Discount, Current | $803,846 | $63,730 |
Debt Instrument Unamortized Discount, Noncurrent | 2,239,580 | 1,872,587 |
Debt Instrument Unamortized Discount | $300,766 | $343,733 |
Preferred stock, par value | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 12,306,230 | 7,249,442 |
Common stock, shares outstanding | 12,306,230 | 7,249,442 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenue: | ||
Restaurant sales, net | $8,421,842 | $5,268,468 |
Gaming income, net | 132,027 | 55,511 |
Management fee income - non-affiliates | 101,221 | 25,000 |
Franchise income | 16,059 | |
Total revenue | 8,671,149 | 5,348,979 |
Expenses: | ||
Restaurant cost of sales | 2,961,658 | 1,876,926 |
Restaurant operating expenses | 5,068,139 | 3,103,526 |
Restaurant pre-opening expenses | 206,747 | |
General and administrative expenses | 1,898,353 | 1,608,583 |
Depreciation and amortization | 438,637 | 344,611 |
Total expenses | 10,573,534 | 6,933,646 |
Loss from operations | -1,902,385 | -1,584,667 |
Other (expense) income | ||
Interest expense | -704,852 | -336,830 |
Change in fair value of derivative liabilities | 338,053 | 432,100 |
Loss on extinguishment of debt | -170,089 | |
Realized gains on securities | 97,345 | |
Equity in losses of investments | -40,694 | |
Other (expense) income | -1,533 | 3,336 |
Total other (expense) income | -538,421 | 155,257 |
Loss from continuing operations before income taxes | -2,440,806 | -1,429,410 |
Income tax benefit | -32,920 | -8,888 |
Loss from continuing operations | -2,407,886 | -1,420,522 |
Loss from discontinued operations, net of taxes | -1,899 | -32,674 |
Consolidated net loss | -2,409,785 | -1,453,196 |
Less: Net loss attributable to non-controlling interest | 141,784 | 2,886 |
Net loss attributable to Chanticleer Holdings, Inc. | -2,268,001 | -1,450,310 |
Net loss attributable to Chanticleer Holdings, Inc.: | ||
Loss from continuing operations | -2,266,102 | -1,417,636 |
Loss from discontinued operations | -1,899 | -32,674 |
Net loss attributable to Chanticleer Holdings, Inc. | -2,268,001 | -1,450,310 |
Other comprehensive loss: | ||
Unrealized loss on available-for-sale securities (none applies to non-controlling interest) | -11,718 | |
Foreign currency translation (loss) gain | -1,286,028 | 35,746 |
Other comprehensive loss | ($3,554,029) | ($1,426,282) |
Net loss attributable to Chanticleer Holdings, Inc. per common share, basic and diluted: | ||
Continuing operations attributable to common shareholders, basic and diluted | ($0.27) | ($0.24) |
Discontinued operations attributable to common shareholders, basic and diluted | $0 | ($0.01) |
Weighted average shares outstanding, basic and diluted | 8,249,453 | 5,974,495 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities: | ||
Net loss | ($2,409,785) | ($1,453,196) |
Less net loss attributable to non-controlling interest | 141,784 | 2,886 |
Net loss attributable to Chanticleer Holdings, Inc | -2,268,001 | -1,450,310 |
Net loss from discontinued operations | 1,899 | 32,674 |
Net loss from continuing operations | -2,266,102 | -1,417,636 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 438,637 | 344,611 |
Equity in losses of investments | 40,694 | |
Common stock issued for services | 83,725 | 228,857 |
Amortization of debt discount | 474,874 | 259,442 |
Amortization of warrants | 22,375 | 22,375 |
Change in fair value of derivative liabilities | -338,053 | -432,100 |
Change in operating assets and liabilities | ||
Decrease in amounts payable to affiliate | -479,830 | |
Decrease in accounts and other receivables | 19,743 | 57,775 |
(Increase) decrease in prepaid expenses and other assets | -85,204 | 9,293 |
Decrease in inventory | 41,790 | 85,879 |
Increase in accounts payable and accrued expenses | 635,776 | 49,788 |
Decrease (increase) in deferred rent | -78,785 | 1,688 |
Decrease in deferred income taxes | -32,920 | -26,550 |
Net cash used in operating activities from continuing operations | -1,563,974 | -775,884 |
Net cash used in operating activities from discontinued operations | -4,500 | -73,621 |
Net cash used in operating activities | -1,568,474 | -849,505 |
Cash flows from investing activities: | ||
Purchase of property and equipment | -262,764 | -67,702 |
Cash paid for acquisitions, net of cash acquired | -4,222,929 | 23,910 |
Purchase of investments | -100,000 | |
Net cash used in investing activities from continuing operations | -4,485,693 | -143,792 |
Cash flows from financing activities: | ||
Proceeds from sale of common stock and warrants | 7,062,715 | 29,250 |
Loan proceeds | 2,204,369 | 993,088 |
Loan repayments | -137,079 | -72,328 |
Capital lease payments | -14,271 | |
Net cash provided by financing activities from continuing operations | 9,115,733 | 950,010 |
Effect of exchange rate changes on cash | 17,174 | 35,746 |
Net increase (decrease) in cash | 3,078,741 | -7,541 |
Cash, beginning of period | 245,828 | 442,694 |
Cash, end of period | 3,324,569 | 435,153 |
Cash paid for interest and income taxes: | ||
Interest | 315,476 | 30,038 |
Income taxes | 1,776 | |
Non-cash investing and financing activities: | ||
Purchase of equipment using capital leases | 50,087 | |
Issuance of stock in connection with business combinations | 1,000,000 | |
Debt discount for fair value of warrants and conversion feature issued in connection with debt | 1,233,908 | |
Reclassification of derivative liability to equity | 306,000 | |
Convertible debt settled through issuance of common stock | 507,428 | |
Long-term debt settled through issuance of common stock | 100,000 | |
Purchases of businesses: | ||
Current assets excluding cash | 200,549 | 201,895 |
Property and equipment | 2,154,023 | 3,122,493 |
Goodwill | 426,038 | 2,671,649 |
Trade name/trademarks/franchise fees | 2,750,000 | 60,937 |
Deposits and other assets | 56,921 | 25,468 |
Liabilities assumed | -364,602 | -1,128,046 |
Common stock issued | -1,000,000 | -4,978,306 |
Cash paid | -4,233,929 | |
Cash received in excess of cash paid in acquisition | $11,000 | $23,910 |
Nature_of_Business
Nature of Business | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Nature of Business | 1 | Nature of Business | |||||
Organization | |||||||
Chanticleer Holdings, Inc. (the “Company”) is in the business of owning, operating and franchising fast casual dining concepts domestically and internationally. The Company was organized October 21, 1999, under its original name, Tulvine Systems, Inc., under the laws of the State of Delaware. On April 25, 2005, Tulvine Systems, Inc. formed a wholly owned subsidiary, Chanticleer Holdings, Inc., and on May 2, 2005, Tulvine Systems, Inc. merged with and changed its name to Chanticleer Holdings, Inc. | |||||||
The consolidated financial statements include the accounts of Chanticleer Holdings, Inc. and its subsidiaries presented below (collectively referred to as the “Company”): | |||||||
Name | Jurisdiction of Incorporation | Name | Jurisdiction of Incorporation | ||||
Chanticleer Advisors, LLC | Nevada, U.S.A. | Chanticleer Investment Partners, LLC | North Carolina, USA | ||||
Avenel Ventures, LLC | Nevada, U.S.A. | JF Restaurants, LLC | North Carolina, USA | ||||
Avenel Financial Services, LLC | Nevada, USA | JF Franchising Systems, L.L.C. | North Carolina, USA | ||||
Crown Restaurants Kft. | Hungary | American Burger Morehead, LLC | North Carolina, USA | ||||
Chanticleer Holdings Limited | Jersey | Dallas Spoon, LLC | Texas, USA | ||||
DineOut SA Ltd. | England | Dallas Spoon Beverage, LLC | Texas, USA | ||||
Chanticleer Holdings Australia Pty, Ltd. | Australia | Tacoma Wings, LLC | Washington, USA | ||||
Hooters Umhlanga (Pty.) Ltd. | South Africa | Oregon Owl’s Nest, LLC | Oregon, USA | ||||
Tundraspex (Pty.) Ltd. | South Africa | Jantzen Beach Wings, LLC | Oregon, U.S.A. | ||||
Hooters CapeTown (Pty.) Ltd. | South Africa | Chanticleer Holdings Australia Pty, Ltd. | Australia | ||||
Hooters Emperors Palace (Pty.) Ltd. | South Africa | Hoot Surfers Paradise Pty. Ltd. | Australia | ||||
Chanticleer South Africa (Pty) Ltd. | South Africa | Hoot Townsville Pty. Ltd | Australia | ||||
Hooters SA (Pty) Ltd | South Africa | Hoot Parramatta Pty Ltd | Australia | ||||
Pulse Time (Pty) Ltd | South Africa | Hoot Australia Pty Ltd | Australia | ||||
Hooters Ruimsig (Pty) Ltd. | South Africa | Hoot Penrith Pty Ltd | Australia | ||||
American Roadside Burgers, Inc. | Delaware, U.S.A. | TMIX Management Australia Pty Ltd. | Australia | ||||
West End Wings LTD | United Kingdom | BGR Acquisition, LLC | North Carolina, USA | ||||
All significant inter-company balances and transactions have been eliminated in consolidation. | |||||||
The Company operates on a calendar year-end. The accounts of two subsidiaries, Just Fresh and Hooters Nottingham (“WEW”), are consolidated based on either a 52- or 53-week period ending on the Sunday closest to each December 31. No events occurred related to the difference between the Company’s reporting calendar quarter end and the Company’s two subsidiaries quarter ends that materially affected the company’s financial position, results of operations, or cash flows. | |||||||
GENERAL | |||||||
The accompanying condensed consolidated financial statements included in this report have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting and include all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation. These condensed consolidated financial statements have not been audited. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the operating results for the full year. | |||||||
Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations for interim reporting. The Company believes that the disclosures contained herein are adequate to make the information presented not misleading. However, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on April 15, 2015 and amended on April 30, 2015. Certain amounts for the prior year have been reclassified to conform to the current year presentation. | |||||||
LIQUIDITY AND CAPITAL RESOURCES | |||||||
As of March 31, 2015, our cash balance was $3,324,569. The level of additional cash needed to fund operations and our ability to conduct business for the next twelve months will be influenced primarily by the following factors: | |||||||
● | the pace of growth in our restaurant businesses and related investments in opening new stores; | ||||||
● | the level of investment in acquisition of new restaurant businesses and entering new markets; | ||||||
● | our ability to manage our operating expenses and maintain gross margins as we grow: | ||||||
● | our ability to access the capital and debt markets; | ||||||
● | popularity of and demand for our fast casual dining concepts; and | ||||||
● | general economic conditions and changes in consumer discretionary income. | ||||||
We have typically funded our operating costs, acquisition activities, working capital investments and capital expenditures with proceeds from the issuances of our common stock and other financing arrangements, including convertible debt, lines of credit, notes payable and capital leases. | |||||||
Our operating plans for 2015 contemplate moderate organic growth, opening 3-4 new stores within our current markets and restaurant concepts, as well as growing through the acquisition of additional restaurant businesses to expand our market scale. We completed a rights offering in March 2015 raising gross proceeds of approximately $7.8 million and issued convertible debt transaction for another $2.2 million to fund the acquisition of The Burger Joint and for general corporate purposes. We are also in negotiations to extend and increase our $500,000 line of credit, extend payment terms on our $5 million note to defer principal payments until 2016, and are in discussions with certain investors to raise additional capital. | |||||||
As we execute our growth plans throughout the balance of 2015, we intend to carefully monitor the impact of growth on our working capital needs and cash balances relative to the availability of cost-effective debt and equity financing. We believe the capital resources available to us will be sufficient to fund our ongoing operations and to support our operating plans through December 31, 2015. We may raise additional capital from the issuance of new debt and equity during 2015 to continue to execute our growth plans, although there can be no assurance that we will be able to do so. In the event that such capital is not available, we may have to scale back or freeze our organic growth plans, reduce general and administrative expenses and/or curtail future acquisition plans to manage our liquidity and capital resources. |
Significant_Accounting_Policie
Significant Accounting Policies | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Significant Accounting Policies | 2 | SIGNIFICANT ACCOUNTING POLICIES | |||||||
There have been no material changes to our significant accounting policies previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2014. The Company is now engaged in franchising operations as a result of its acquisition of BGR: The Burger Joint (“BGR”) in March 2015. Accordingly, the Company’s policy regarding revenue recognition has been expanded to address revenue recognition for franchise operations. | |||||||||
USE OF ESTIMATES | |||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include the valuation of the investments in portfolio companies, deferred tax asset valuation allowances, valuing options and warrants using the Binomial Lattice and Black Scholes models, intangible asset valuations and useful lives, depreciation and uncollectible accounts and reserves. Actual results could differ from those estimates. | |||||||||
REVENUE RECOGNITION | |||||||||
Revenue is recognized when all of the following criteria have been satisfied: | |||||||||
● | Persuasive evidence of an arrangement exists; | ||||||||
● | Delivery has occurred or services have been rendered; | ||||||||
● | The seller’s price to the buyer is fixed or determinable; and | ||||||||
● | Collectability is reasonably assured. | ||||||||
Restaurant Net Sales and Food and Beverage Costs | |||||||||
The Company records revenue from restaurant sales at the time of sale, net of discounts, coupons, employee meals, and complimentary meals and gift cards. Sales, value added (“VAT”) and goods and services tax (“GST”) collected from customers and remitted to governmental authorities are presented on a net basis within sales in our consolidated statements of operations. Cost of sales primarily includes the cost of food, beverages, and merchandise and disposable paper and plastic goods used in preparing and selling our menu items, and exclude depreciation and amortization. Vendor allowances received in connection with the purchase of a vendor’s products are recognized as a reduction of the related food and beverage costs as earned. | |||||||||
Management Fee Income | |||||||||
The Company receives revenue from management fees from certain non-affiliated companies, including Hooters of America. | |||||||||
Gaming Income | |||||||||
The Company receives revenue from operating a gaming facility adjacent to its Hooters restaurant in Jantzen Beach, Oregon. The Company also receives gaming revenue from gaming machines located in Sydney, Australia, which continues until the $5 million of debt assumed connection with the acquisition of the Hooters franchise stores in Australia is repaid. After that debt has been repaid, our participation in the gaming revenue at the Sydney location will decrease from 100% to 60%. Revenue is recognized as earned from gaming activities, net of taxes and other government fees. | |||||||||
Franchise Income | |||||||||
The Company accounts for initial franchisee fees in accordance with FASB ASC 952, Franchisors. The Company grants franchises to operators in exchange for initial franchise license fees and continuing royalty payments. Franchise license fees are deferred when received and recognized as revenue when the Company has performed substantially all initial services required by the franchise or license agreement, which is generally upon the opening of a store. Continuing fees, which are based upon a percentage of franchisee and licensee sales are recognized on the accrual basis as those sales occur. | |||||||||
BUSINESS COMBINATIONS | |||||||||
For business combinations, the assets acquired, the liabilities assumed, and any non-controlling interest are recognized at the acquisition date, measured at their fair values as of that date. In a business combination achieved in stages, the identifiable assets and liabilities, as well as the non-controlling interest in the acquiree, are recognized at the full amounts of their fair values. In a bargain purchase in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any non-controlling interest in the acquire, that excess in earnings was recognized as a gain attributable to the Company. | |||||||||
AMORTIZATION OF DEBT DISCOUNT | |||||||||
The Company has issued various debt with warrants for which total proceeds were allocated to individual instruments based on the relative fair value of the each instrument at the time of issuance. The value of the debt was recorded as discount on debt and amortized over the term of the respective debt. For the three months ended March 31, 2015 and 2014 amortization of debt discount was $474,874 and $259,442, respectively. | |||||||||
FOREIGN CURRENCY TRANSLATION | |||||||||
Assets and liabilities denominated in local currency are translated to US dollars using the exchange rates as in effect at the balance sheet date. Results of operations are translated using average exchange rates prevailing throughout the period. Adjustments resulting from the process of translating foreign currency financial statements from functional currency into U.S. dollars are included in accumulated other comprehensive loss within stockholders’ equity. Foreign currency translation adjustments were $(1,286,028) and $35,746 for the three months ended March 31, 2015 and 2014, respectively. Foreign currency transaction gains and losses are included in current earnings. The Company has determined that local currency is the functional currency for each of its foreign operations. | |||||||||
LOSS PER COMMON SHARE | |||||||||
The Company is required to report both basic earnings per share, which is based on the weighted-average number of shares outstanding and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all diluted shares outstanding. The following table summarizes the number of common shares potentially issuable upon the exercise of certain warrants, convertible notes payable and convertible interest as of March 31, 2015 and December 31, 2014 that have been excluded from the calculation of diluted net loss per common share since the effect would be antidilutive. | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Warrants | 9,470,304 | 8,715,804 | |||||||
Convertible notes payable | 2,482,471 | 2,626,900 | |||||||
Convertible interest | 34,809 | 42,306 | |||||||
Total | 11,987,584 | 11,385,010 | |||||||
CONCENTRATION OF CREDIT RISK | |||||||||
The Company maintains its cash with major financial institutions. Cash held in U.S. bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. No similar insurance or guarantee exists for cash held in Australia, South Africa, Hungary or United Kingdom bank accounts. There was a $136,033 and $122,633 aggregate uninsured cash balances at March 31, 2015 and December 31, 2014, respectively. | |||||||||
SUBSEQUENT EVENTS | |||||||||
Management has evaluated all events and transactions that occurred from April 1, 2015 through the date these condensed consolidated financial statements were issued for subsequent events requiring recognition or disclosure in the condensed consolidated financial statements. | |||||||||
RECLASSIFICATIONS | |||||||||
Certain amounts in the prior period have been reclassified to conform to the current period presentation. These reclassifications have no effect on previously reported results of operations or loss per share. | |||||||||
Recent Accounting Pronouncements | |||||||||
There are several other new accounting pronouncements issued by FASB, which are not yet effective. Each of these pronouncements has been or will be adopted, as applicable, by the Company. At May 15, 2015, none of these pronouncements are expected to have a material effect on the financial position, results of operations or cash flows of the Company. |
Acquisitions
Acquisitions | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||
Acquisitions | 3 | ACQUISITIONS | |||||||||||||||||||||||
The Company completed the acquisition of BGR: The Burger Joint effective March 15, 2015. As of March, 31, 2015, the Company allocated the purchase price as of the date of acquisition based on fair value of the acquired assets and assumed liabilities. In consideration of the purchased assets, the Company paid a purchase price consisting of $4,000,000 in cash and 500,000 shares of the Company’s common stock, and a contractual working capital adjustment of $233,929. | |||||||||||||||||||||||||
The company acquired BGR for its current and future franchisee business, experienced management team, markets for company-owned stores, and award winning burgers. | |||||||||||||||||||||||||
The Company’s acquisitions were accounted for using the purchase method of accounting in accordance with ASC 805 “Business Combinations” and, accordingly, the condensed consolidated statements of operations and comprehensive loss include the results of these operations from the dates of acquisition. The assets acquired and the liabilities assumed were recorded at fair values based on information currently available and based on certain assumptions as to future operations as follows: | |||||||||||||||||||||||||
2015 Acquisition | |||||||||||||||||||||||||
BGR: | |||||||||||||||||||||||||
The Burger Joint | |||||||||||||||||||||||||
Consideration paid: | |||||||||||||||||||||||||
Common stock | $ | 1,000,000 | |||||||||||||||||||||||
Cash | 4,233,929 | ||||||||||||||||||||||||
Total consideration paid | 5,233,929 | ||||||||||||||||||||||||
Property and equipment | 2,154,023 | ||||||||||||||||||||||||
Goodwill | 426,038 | ||||||||||||||||||||||||
Trademark/trade name/franchise fee | 2,750,000 | ||||||||||||||||||||||||
Inventory, deposits and other assets | 257,470 | ||||||||||||||||||||||||
Total assets acquired, less cash | 5,587,531 | ||||||||||||||||||||||||
Liabilities assumed | (364,602 | ) | |||||||||||||||||||||||
Common stock and warrants issued | (1,000,000 | ) | |||||||||||||||||||||||
Cash paid | (4,233,929 | ) | |||||||||||||||||||||||
Cash received in excess of cash paid | $ | 11,000 | |||||||||||||||||||||||
2014 Acquisitions | |||||||||||||||||||||||||
Hooters | Hooters Australia | The | |||||||||||||||||||||||
Pacific NW | Spoon | 1-Apr-14 | 1-Jul-14 | Burger Co. | Total | ||||||||||||||||||||
Consideration paid: | |||||||||||||||||||||||||
Common stock | $ | 2,891,156 | $ | 828,750 | $ | - | $ | - | $ | 300,000 | $ | 4,019,906 | |||||||||||||
Warrants | 978,000 | 280,400 | - | 123,333 | - | 1,381,733 | |||||||||||||||||||
Assumption of debt | - | - | - | 5,000,000 | - | 5,000,000 | |||||||||||||||||||
Cash | - | - | 100,000 | - | 250,000 | 350,000 | |||||||||||||||||||
Total consideration paid | 3,869,156 | 1,109,150 | 100,000 | 5,123,333 | 550,000 | 10,751,639 | |||||||||||||||||||
Current assets, excluding cash | 112,078 | 89,817 | 377,296 | 47,777 | 9,926 | 636,894 | |||||||||||||||||||
Property and equipment | 2,731,031 | 391,462 | 2,934,307 | 1,603,557 | 284,795 | 7,945,152 | |||||||||||||||||||
Goodwill | 1,951,909 | 698,583 | - | 8,487,138 | 256,379 | 11,394,009 | |||||||||||||||||||
Trademark/trade name/franchise fee | 60,937 | - | 277,867 | 220,500 | - | 559,304 | |||||||||||||||||||
Deposits and other assets | 20,275 | 5,193 | 90,371 | 20,186 | - | 136,025 | |||||||||||||||||||
Total assets acquired, less cash | 4,876,230 | 1,185,055 | 3,679,841 | 10,379,158 | 551,100 | 20,671,384 | |||||||||||||||||||
Liabilities assumed | (1,009,348 | ) | (97,541 | ) | (1,560,710 | ) | (1,496,536 | ) | (1,100 | ) | (4,165,235 | ) | |||||||||||||
Deferred tax liabilities | - | - | - | - | |||||||||||||||||||||
Non-controlling interest | - | - | (993,999 | ) | (3,759,289 | ) | - | (4,753,288 | ) | ||||||||||||||||
Chanticleer equity | - | - | (1,028,749 | ) | - | - | (1,028,749 | ) | |||||||||||||||||
Common stock and warrants issued | (3,869,156 | ) | (1,109,150 | ) | - | (123,333 | ) | (300,000 | ) | (5,401,639 | ) | ||||||||||||||
Assumption of debt | - | - | - | (5,000,000 | ) | - | (5,000,000 | ) | |||||||||||||||||
Cash paid | - | - | (100,000 | ) | - | (250,000 | ) | (350,000 | ) | ||||||||||||||||
Cash received in excess of cash paid | $ | 2,274 | $ | 21,636 | $ | 3,617 | $ | - | $ | - | $ | 27,527 | |||||||||||||
Unaudited pro forma results of operations for the three month periods ended March 31, 2015 and 2014, as if the Company had acquired majority ownership of all operations acquired during 2014 and 2015 on January 1, 2014 is as follows. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated, or which may result in the future. | |||||||||||||||||||||||||
The following table includes information for the three months ended March 31, 2015 and 2014 for the Company’s 2014 and 2015 acquisitions. | |||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
Total revenues | $ | 10,442,476 | $ | 10,735,901 | |||||||||||||||||||||
Loss from continuing operations | (2,533,885 | ) | (1,186,466 | ) | |||||||||||||||||||||
Loss from discountinued operations | (1,899 | ) | (32,674 | ) | |||||||||||||||||||||
Loss attributable to non-controlling interest | 139,806 | (3,801 | ) | ||||||||||||||||||||||
Net loss | $ | (2,394,079 | ) | $ | (1,190,267 | ) | |||||||||||||||||||
Net loss per share, basic and diluted | $ | (0.31 | ) | $ | (0.20 | ) | |||||||||||||||||||
Net loss per share,discontinued operations | $ | (0.00 | ) | $ | (0.01 | ) | |||||||||||||||||||
Weighted average shares outstanding, basic and diluted | 8,249,453 | 5,974,495 |
Discontinued_Operations
Discontinued Operations | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||
Discontinued Operations | 4 | DISCONTINUED OPERATIONS | |||||||
On December 31, 2014, management concluded it was in the best interest of the Company to exit the Spoon business, whereby the Company executed an Asset Purchase Agreement to sell the assets of Spoon Bar & Kitchen back to the original owner. In connection with the sale of Spoon, the Company reacquired 185,000 Stock Units that had been issued at acquisition in exchange for the asset transferred pursuant to the Asset Purchase Agreement. The stock was valued at $446,050 and the net assets were valued at $1,109,062, resulting in a loss of $683,012 in December 2014. | |||||||||
The results of operations and related non-recurring costs associated with Spoon have been presented as discontinued operations. Additionally, the assets and liabilities of the discontinued operations have been segregated in the accompanying consolidated balance sheets. | |||||||||
The operating results from the discontinued operations for the three months ended March 31, 2015 and 2014 consisted of the following: | |||||||||
Three Months Ended | |||||||||
31-Mar-15 | 31-Mar-14 | ||||||||
Total revenue | $ | - | $ | 278,469 | |||||
Total operating expenses | 1,899 | 311,143 | |||||||
Net loss from discontinued operations | $ | (1,899 | ) | $ | (32,674 | ) | |||
As of March 31, 2015 and December 31, 2014, liabilities from discontinued operations totaled $179,168 and $177,393, respectively. The Company did not retain any assets related to the discontinued operation. |
Property_and_Equipment
Property and Equipment | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment | 5 | PROPERTY AND EQUIPMENT | |||||||
Property and equipment consists of the following: | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Leasehold improvements | $ | 11,362,052 | $ | 9,940,517 | |||||
Restaurant furniture and equipment | 8,199,525 | 7,827,925 | |||||||
Construction in progress | 750,393 | 727,934 | |||||||
Office and computer equipment | 92,444 | 51,746 | |||||||
Land and buildings | 432,866 | 437,223 | |||||||
Office furniture and fixtures | 59,361 | 60,302 | |||||||
20,896,641 | 19,045,647 | ||||||||
Accumulated depreciation and amortization | (5,903,290 | ) | (5,730,238 | ) | |||||
$ | 14,993,351 | $ | 13,315,409 | ||||||
Restaurant furnishings and equipment includes assets under capital leases from our South African restaurants $206,961 and $263,392, net book value of 99,912 and $158,446 as of March 31, 2015 and December 31, 2014, respectively. Depreciation and amortization expense $21,480 and $21,250 for capital lease assets for the three months ended March 31, 2015 and 2014, respectively. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets, Net | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Goodwill and Intangible Assets, Net | 6 | GOODWILL AND OTHER INTANGIBLE ASSETS, NET | |||||||
Goodwill is summarized by location as follows: | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
South Africa | $ | 263,149 | $ | 273,737 | |||||
ABC | 2,806,990 | 2,806,990 | |||||||
WEW | 2,738,909 | 2,868,192 | |||||||
Just Fresh | 425,151 | 425,151 | |||||||
Australia | 6,833,593 | 7,291,329 | |||||||
Hooters Pacific NW | 1,951,909 | 1,951,909 | |||||||
BGR | 426,038 | - | |||||||
Total | $ | 15,445,739 | $ | 15,617,308 | |||||
The changes in the carrying amount of goodwill are summarized as follows: | |||||||||
Three Months Ended | |||||||||
31-Mar-15 | 31-Mar-14 | ||||||||
Beginning Balance | $ | 15,617,308 | $ | 6,496,756 | |||||
Acquisitions | 426,038 | 2,671,649 | |||||||
Foreign currency translation | (597,608 | ) | - | ||||||
Ending Balance | $ | 15,445,739 | $ | 9,168,405 | |||||
Other intangible assets, consisting of franchise costs, trademarks and tradenames, is summarized by location as follows: | |||||||||
Intagible assets | 31-Mar-15 | 31-Dec-14 | |||||||
Franchise fees: | |||||||||
South Africa | $ | 354,731 | $ | 290,986 | |||||
Europe | 89,152 | 106,506 | |||||||
Australia | 355,911 | 383,529 | |||||||
Hootres Pacific NW | 90,000 | 90,000 | |||||||
BGR | 1,320,000 | - | |||||||
Brazil * | 135,000 | 135,000 | |||||||
2,344,794 | 1,006,021 | ||||||||
Trademark, Tradenames: | |||||||||
Just Fresh | 1,010,000 | 1,010,000 | |||||||
American Roadside Burger | 1,783,954 | 1,783,954 | |||||||
BGR | 1,430,000 | - | |||||||
4,223,954 | 2,793,954 | ||||||||
Total Intangibles at cost | 6,568,748 | 3,799,975 | |||||||
Accumulated amortization | (472,083 | ) | (403,472 | ) | |||||
Intangible assets, net | $ | 6,096,665 | $ | 3,396,503 | |||||
* Amortization of the Brazil franchise cost will begin with the opening of a restaurant in that market. |
LongTerm_Debt_and_Notes_Payabl
Long-Term Debt and Notes Payable | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
Long-Term Debt and Notes Payable | 7 | LONG-TERM DEBT AND NOTES PAYABLE | |||||||||
Long-term debt and notes payable are summarized as follows: | |||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||
Note payable to a bank due in monthly installments of $4,406 including interest at Wall Street Journal Prime plus 1% (minimum of 5.5%); remaining balance due October 10, 2018; collateralized by substantially all of the Company’s assets and guaranteed by an officer of the Company | (a) | $ | 165,861 | $ | 176,731 | ||||||
Line of credit to a bank, expired May 10, 2015, interest rate of Wall Street Journal Prime (3.25% as of March 31, 2015) plus 1%, floor rate of 5% Renewal in process. | (b) | 500,000 | 500,000 | ||||||||
Note payable to a bank due interest only at a 5% rate, balloon principal payment due June 10, 2019 collateralized by substantially all of the Company’s assets and guaranteed by an officer of the Company | (c) | 500,000 | 500,000 | ||||||||
Loan agreement March an outside company on December 13, 2013, interest at 1% per month, paid in full in 2015 | (d) | - | 100,000 | ||||||||
Loan agreement with an outside company on June 20, 2014, interest at 8% annual rate, paid in full in 2015 | (e) | - | 100,000 | ||||||||
Mortage loan dated April 2014, interest at South African prime rate + 2.6% (11.85% as of March 31, 2015); due July 31, 2024; secured by a bond on all assets at our Port Elizabeth, South Africa location and partially guaranteed by our CEO and South African COO | (f) | 278,806 | 294,362 | ||||||||
Loan agreement with an outside company on July 1, 2014, interest at 12% annual rate, secured by certain secured assets and gaming revenue of the Australian entities, net of discount of $300,766 and $343,733, respectively; matures January 31, 2017 | (g) | 4,699,234 | 4,656,267 | ||||||||
Bank overdraft facilities; unsecured; maximum facilities $260,000; interest rate 11% at March 31, 2015, with annual renewal each December | (h) | 198,846 | 151,868 | ||||||||
Term facility with monthly payments of 45,288 Rand, including interest at South African Prime + 1.0% (10.25% as of March 31, 2015), due June 14, 2016 | (i) | 51,968 | 64,309 | ||||||||
Term facility with monthly payments of 44,727 Rand including interest at South African Prime + 3.0% (12.25% as of March 31, 2015); due November 15, 2019. | (j) | 157,221 | 170,053 | ||||||||
Term facility with monthly payments of 33,750 Rand, including interest at South African Prime + 3 0% (12.25% as of March 31, 2015); due December 1, 2018 | (k) | 99,940 | 109,340 | ||||||||
Total long-term debt | 6,651,876 | 6,822,930 | |||||||||
Current portion of long- term debt | 997,370 | 1,813,647 | |||||||||
Long-term debt, less current portion | $ | 5,654,506 | $ | 5,009,283 | |||||||
(a) and (b) On April 11, 2013, the Company and Paragon Commercial Bank (“Paragon”) entered into a credit agreement (the “Credit Agreement”) which provides for a $500,000 revolving credit facility with a one-year term from the closing date. The Credit Agreement is available to be drawn at the Company’s discretion to finance investments in new business ventures and for the Company’s general corporate working capital requirements in the ordinary course of business. The note payable originally matured on August 10, 2013 and on November 4, 2013 the note was extended to October 10, 2018 with monthly principal and interest payments of $4,406, whereas the new credit facility (b) expired on May 10, 2015. The Company is currently in negotiations to extend the maturity date of the credit facility. Borrowings under the Credit Agreement bear monthly interest at the greater of: (i) floor rate of 5.00% or (ii) the Wall Street Journal’s prime plus rate (3.25% as of March 31, 2015) plus 1.00%. Any borrowings are secured by a lien on all of the Company’s assets. The obligations under the Credit Agreement are guaranteed by Mike Pruitt, the Company’s Chief Executive Officer. | |||||||||||
(c) During February 2014, the Company secured a note with Paragon for $500,000 due on June 10, 2019. The note bears interest at a 5% annual rate, interest only monthly payments until the maturity date. | |||||||||||
(d) On December 23, 2013, the Company entered into a loan agreement with an outside company for $150,000, originally due on February 23, 2014. Interest is compounded monthly at a rate of 1%. As of February 23, 2014, the Company was not in compliance with the terms of this note due to non-payment of principal and interest. On March 21 and August 20, 2014, the Company paid the note holder $25,000 each of principal and accrued interest. In March 2015, the Company repaid the loan in full. | |||||||||||
(e) On June 20, 2014, the Company entered into a loan agreement with an outside company for $100,000, originally due on July 11, 2014. In March 2015, the Company issued 100,000 shares of its common stock to repay the loan, accrued interest and penalties in full. The Company recognized a loss on extinguishment of debt of $45,000, representing the difference between the fair value of the shares issued and the carrying value of the outstanding debt and accrued interest. | |||||||||||
(f) In April 2014, our South African subsidiary entered into a mortgage note with a South African bank for the purchase of the building in Port Elizabeth for our Hooters location. The 10-year note is for $278,806 with an annual interest rate of 2.6% above the South African prime rate (prime currently 9.25%). Monthly principal and interest payments of approximately $4,600 commenced in August, 2014. The mortgage note is personally guaranteed by our CEO and South African COO and secured by the assets of the Port Elizabeth building. | |||||||||||
(g) On July 1, 2014, pursuant to Purchase Agreements executed on June 30, 2014, the Company completed the acquisition of a sixty percent (60%) ownership interest in Hoot Parramatta Pty Ltd, Hoot Australia Pty Ltd, Hoot Penrith Pty Ltd, and TMIX Management Australia Pty Ltd (collectively, the “Australian Entities”), which own, operate, and manage Hooters restaurant locations and gaming operations in Australia. The ownership interest in the Australian Entities was purchased from the respective entities in exchange for the Company agreeing to assume a five million dollar ($5,000,000) debt bearing interest at 12% annually and issuing two hundred fifty thousand (250,000) warrants to purchase shares of our common stock. Originally principal repayments were as follows: $2,000,000 on December 31, 2014, $2,000,000 on June 30, 2015, and $1,000,000 on December 31, 2015. On October 15, 2014, principal repayments were restructured whereby $200,000 was due on December 31, 2014, $50,000 is payable each month from January 2015 through December 2015, $2,000,000 is payable January 31, 2016, $1,200,000 is payable on July 31, 2016 and the remaining $1,000,000 is due by January 31, 2017. The Company and the note holder are currently in discussion to renegotiate the terms of the above payments and other terms of the agreement. The note holder has agreed not to demand the above payments (as of December 31, 2014 through currently) nor will they unless the negotiations terminate. The Company has paid the agreed upon monthly interest payments in 2015 and is currently negotiating a change in payment terms. | |||||||||||
(h) The Company’s South African subsidiary has local bank financing in the form of term and overdraft facilities totaling of approximately $198,846 and $151,868 outstanding as of March 31, 2015 and December 31, 2014, respectively. | |||||||||||
(i) The Company’s South African subsidiary has local bank financing in the form of a term loan with monthly payments of 45,000 Rand, including interest at South African Prime +1.0%. The term loan matures on June 14, 2016. | |||||||||||
(j) The Company’s South African subsidiary has local bank financing in the form of a term loan with monthly payments of 44,000 Rand, including interest South African Prime +3.0%. The term loan matures on November 15, 2019. | |||||||||||
(k) The Company’s South African subsidiary has local bank financing in the form of a term loan with monthly payments of 34.000 Rand, including interest at South African Prime + 3.0%. The term loan matures on December 1, 2018. |
Convertible_Notes_Payable
Convertible Notes Payable | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Convertible Notes Payable [Abstract] | |||||||||||||||||||||
Convertible Notes Payable | 8 | cONVERTIBLE NOTEs PAYABLE | |||||||||||||||||||
Convertible notes payable are as follows: | |||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||
6% Convertible notes payable issued in August 2013 | $ | 3,000,000 | $ | 3,000,000 | |||||||||||||||||
Discounts on above convertible note | (1,333,338 | ) | (1,583,333 | ) | |||||||||||||||||
15% Convertible notes payable issued in March 2014 | - | 500,000 | |||||||||||||||||||
Discounts on above convertible note | - | (63,730 | ) | ||||||||||||||||||
8% Convertible notes payable issued in Nov/Dec 2014 | 100,000 | 350,000 | |||||||||||||||||||
Discounts on above convertible note | (58,979 | ) | (289,254 | ) | |||||||||||||||||
8% Convertible notes payable issued in January 2015 | 150,000 | - | |||||||||||||||||||
Discounts on above convertible note | (127,960 | ) | - | ||||||||||||||||||
8% Convertible notes payable issued in January 2015 | 1,000,000 | - | |||||||||||||||||||
Discounts on above convertible note | (803,846 | ) | - | ||||||||||||||||||
9% Convertible notes payable issued in March 2015 | 1,000,000 | - | |||||||||||||||||||
Discounts on above convertible note | (719,303 | ) | - | ||||||||||||||||||
2,206,574 | 1,913,683 | ||||||||||||||||||||
Current portion of convertible notes payable | (196,154 | ) | (436,270 | ) | |||||||||||||||||
Convertible notes payable, less current portion | $ | 2,010,420 | $ | 1,477,413 | |||||||||||||||||
In the first three months of 2015, the Company entered into agreements whereby the Company issued new convertible promissory notes for a total of $2,150,000. In addition, the holders of two convertible notes in the amounts of $500,000 and $250,000 elected to convert their notes to common stock during the first three months of 2015. | |||||||||||||||||||||
In January 2015, the Company issued a convertible promissory note for $1,000,000. The note accrues interest at 8% per annum until the date the note is converted. The note is convertible into the Company’s common stock at 85% of the average of the lowest three closing trading prices over ten days prior the conversion date. The conversion price is subject to a floor of $1.00 per share and a ceiling of $2.00. If not converted, the note matures three years from the issuance date. The holder may demand payment in full after one year from the issuance date. The Company also issued warrants to purchase 250,000 shares of common stock, exercisable at $2.50 per share for a period of up to 5 years from the note’s original issuance date. The fair value of the embedded conversion feature and the warrants is $670,300 and $202,358, respectively. The resulting debt discount is being amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the straight-line method which approximates the interest method. The amortization of debt discount is included as a component of interest expense in the condensed consolidated statements of operations and comprehensive loss. The embedded conversion feature is accounted for as a derivative liability in the accompanying condensed consolidated balance sheet, with its carrying value marked to market at each balance sheet date. | |||||||||||||||||||||
In January 2015, the Company also issued a convertible promissory note for a total of $150,000. The note accrues interest at 8% per annum until the date the note is converted. The note is convertible into the Company’s common stock at 85% of the average of the lowest three closing trading prices over ten days prior the conversion date. The conversion price is subject to a floor of $1.00 per share and a ceiling of $2.00. If not converted, the note matures three years from the issuance date. The Company also issued warrants to purchase 37,500 shares of common stock, exercisable at $2.50 per share for a period of up to 5 years from the note’s original issuance date. The fair value of the embedded conversion feature and the warrants is $108,600 and $30,314, respectively. The resulting debt discount is being amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the straight-line method which approximates the interest method. The amortization of debt discount is included as a component of interest expense in the condensed consolidated statements of operations and comprehensive loss. The embedded conversion feature is accounted for as a derivative liability in the accompanying condensed consolidated balance sheet, with its carrying value marked to market at each balance sheet date. | |||||||||||||||||||||
In January 2015, a convertible debt holder converted $500,000 principal plus accrued interest into 373,333 shares of the Company’s common stock. In addition, another convertible debt holder converted $250,000 principal plus accrued interest into 168,713 shares of the Company’s common stock. In connection with the conversions, the Company recognized a loss on extinguishment of convertible debt, related accrued interest, penalties and derivative liabilities totaling $125,089. | |||||||||||||||||||||
In March 2015, the Company issued a convertible promissory note for $1,000,000. The note accrues interest at 9% per annum until the date the note is converted. The note is convertible into the Company’s common stock at $2.00 per share. If not converted, the note matures two years from the issuance date. The Company also issued warrants to purchase 400,000 shares of common stock, exercisable at $2.50 per share for a period of up to 5 years from the note’s original issuance date. The fair value of the warrants is $315,008. The resulting debt discount $455,008 is being amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the straight-line method which approximates the interest method. The amortization of debt discount is included as a component of interest expense in the condensed consolidated statements of operations and comprehensive loss. The embedded conversion feature is accounted for as a component of additional paid-in capital in the accompanying condensed consolidated balance sheet. | |||||||||||||||||||||
The March 2015 note is secured as follows: (i) a first priority security interest in and to the assets located at the Company’s Townsville and Just Fresh #7 restaurant locations (the “Collateral Assets”); (ii) a second priority security interest in the existing assets, operations and locations the four locations owned by the Company in Australia, operating under Hoot Parramatta Pty. Ltd., Hoot Penrith Pty Ltd., Hoot Campbelltown Pty. Ltd. and Hoot Surfers Paradise Pty. Ltd. and the gaming and management contracts relating thereto; and (iii) a third priority security interest in and to all assets of the Company subordinated to the Company’s current senior bank loan and mezzanine debt. Upon the full payment of this note (a) the investor will be paid an amount, in perpetuity equal to fifty (50%) percent of the monthly net income that the Company receives from its sixty (60%) percent ownership interest in Townsville and Just Fresh #7 stores (collectively, the “Collateral Assets”); provided however that such monthly payment shall not be less than the amount of the average of the prior 12 month period of the actual net income of the Collateral Assets. The investor will also receive fifty (50%) percent of the sale proceeds received by the Company in the event that Townsville and/or Just Fresh #7 stores are sold; provided however should the Company close or liquidate the business or affairs of Townsville and/or Just Fresh #7 stores within a five (5) year period commencing on the Subsequent Closing date, the Company shall pay the investor a monthly amount equal to the average net income generated by the Collateral Assets from their opening until their closing or liquidation; and provided further that the Company shall pay the investor such amount in thirty-six (36) equal installments. | |||||||||||||||||||||
The Company accounts for the issuance of the convertible promissory notes and the related warrants attached to the note in accordance with ASC 815 “Derivatives and Hedging.” Accordingly, the embedded conversion option of the convertible notes are recorded as derivative liabilities at their fair market value and are marked to market through earnings at the end of each reporting period. The gross proceeds from the sale of the note are recorded net of a discount related to the beneficial conversion feature embedded in the conversion option and the fair value of the warrants attached to the notes. The debt discount is charged back to interest expense ratably over the term of the convertible note. | |||||||||||||||||||||
The fair value of the embedded conversion feature and the warrants were estimated using the Black-Scholes option-pricing model which approximates the Binomial Lattice model. The model includes subjective input assumptions that can materially affect the fair value estimates. The Company determined the fair value of the Binomial Lattice Model and the Black-Scholes Valuation Model to be materially the same. The expected stock price volatility was determined by the historical volatilities for industry peers and used an average of those volatilities. The risk free interest rate was obtained from U.S. Treasury rates for the applicable periods. The contractual terms of the agreement does not provide for and the Company does not expect to declare dividends in the near future. Key assumptions used to apply this pricing model as of the date of issuance, December 31, 2014 and March 31, 2015 are presented in the table below: | |||||||||||||||||||||
6% Note Issued on | 15% Note Issued on | 8% Note Issued on | 8% Note Issued on | 8% Notes Issued on | |||||||||||||||||
2-Aug-13 | 19-Mar-14 | 19-Nov-14 | 16-Dec-14 | 5-Jan-15 | |||||||||||||||||
Common stock closing price | $ | 4.15 | $ | 3.87 | $ | 1.7 | $ | 1.53 | $ | 1.75 | |||||||||||
Conversion per share price | $ | 3.73 | $ | 3.29 | $ | 1.45 | $ | 1.3 | $ | 1.33 | |||||||||||
Conversion shares | 804,764 | 151,999 | 172,672 | 77,061 | 112,402 | ||||||||||||||||
Expected life (in years) | 3 | 1 | 3 | 3 | 3 | ||||||||||||||||
Expected volatility | 110 | % | 62 | % | 74 | % | 74 | % | 73 | % | |||||||||||
Call option value | $ | 2.82 | $ | 1.19 | $ | 0.9 | $ | 0.81 | $ | 0.97 | |||||||||||
Risk-free interest rate | 0.59 | % | 0.15 | % | 1.1 | % | 1.1 | % | 0.9 | % | |||||||||||
Dividends | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||
31-Dec-14 | 31-Dec-14 | 31-Dec-14 | 31-Dec-14 | 31-Dec-14 | |||||||||||||||||
Common stock closing price | $ | 1.73 | $ | 1.73 | $ | 1.73 | $ | 1.73 | NA | ||||||||||||
Conversion per share price | $ | 1.49 | $ | 1.47 | $ | 1.26 | $ | 1.26 | NA | ||||||||||||
Conversion shares | 2,008,032 | 340,020 | 199,177 | 77,061 | NA | ||||||||||||||||
Expected life (in years) | 1.6 | 0.2 | 2.9 | 3 | NA | ||||||||||||||||
Expected volatility | 64 | % | 66 | % | 74 | % | 74 | % | NA | ||||||||||||
Call option value | $ | 0.64 | $ | 0.35 | $ | 0.77 | $ | 0.78 | NA | ||||||||||||
Risk-free interest rate | 0.67 | % | 0.4 | % | 1.1 | % | 1.1 | % | NA | ||||||||||||
Dividends | 0 | % | 0 | % | 0 | % | 0 | % | NA | ||||||||||||
31-Mar-15 | 31-Mar-15 | 31-Mar-15 | 31-Mar-15 | 31-Mar-15 | |||||||||||||||||
Common stock closing price | $ | 2.39 | NA | NA | $ | 2.39 | $ | 2.39 | |||||||||||||
Conversion per share price | $ | 2.23 | NA | NA | $ | 1.96 | $ | 1.96 | |||||||||||||
Conversion shares | 1,343,085 | NA | NA | 51,151 | 76,726 | ||||||||||||||||
Expected life (in years) | 1.3 | NA | NA | 2.7 | 2.8 | ||||||||||||||||
Expected volatility | 65 | % | NA | NA | 65 | % | 73 | % | |||||||||||||
Call option value | $ | 0.77 | NA | NA | $ | 1.14 | $ | 1.24 | |||||||||||||
Risk-free interest rate | 0.64 | % | NA | NA | 0.99 | % | 1.02 | % | |||||||||||||
Dividends | 0 | % | NA | NA | 0 | % | 0 | % |
Capital_Leases_Payable
Capital Leases Payable | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Capital Lease Obligations [Abstract] | |||||||||
Capital Lease Obligations | 9 | capital leases payable | |||||||
Capital leases payable are as follows: | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Capital lease payable, bearing interest at 10%, through August 2017 | $ | 9,275 | $ | 10,502 | |||||
Capital lease payable, bearing interest at 11.5%, through December 2017 | 45,189 | - | |||||||
Capital lease payable, bearing interest at 11.5%, through July 2016 | 21,744 | 26,489 | |||||||
Capital lease payable, bearing interest at 11.5%, through November 2016 | 34,186 | 40,336 | |||||||
Capital lease payable, bearing interest at 10%, through March 2015 | - | 1,333 | |||||||
Total capital leases payable | 110,394 | 78,660 | |||||||
Current maturities | 54,946 | 42,032 | |||||||
Capital leases payable, less current maturities | $ | 55,449 | $ | 36,628 |
Accounts_Payable_and_Accrued_E
Accounts Payable and Accrued Expenses | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Accounts Payable and Accrued Expenses | 10 | accounts payable and accrued expenses | |||||||
Accounts payable and accrued expenses are summarized as follows: | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Accounts payable | $ | 4,516,241 | $ | 3,382,818 | |||||
Accrued taxes (VAT, GST, Sales Payroll) | 1,499,356 | 1,604,829 | |||||||
Accrued income taxes | 107,815 | 92,618 | |||||||
Accrued interest | 301,300 | 499,866 | |||||||
$ | 6,424,712 | $ | 5,580,131 |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Stockholders' Equity | 11 | Stockholders’ Equity | ||||||||||||
The Company has 45,000,000 shares of its $0.0001 par value common stock authorized at both March 31, 2015 and December, 2014, and 12,306,230 shares issued and 7,249,442 shares outstanding at March 31, 2015 and December 31, 2014, respectively. | ||||||||||||||
The Company has 5,000,000 shares of its no par value preferred stock authorized at both March 31, 2015 and December 31, 2014. No shares have been issued or outstanding at either March 31, 2015 or December 31, 2014. | ||||||||||||||
In January 2015, a convertible debt holder converted $500,000 principal plus accrued interest into 373,333 shares of the Company’s common stock. In addition, another convertible debt holder converted $250,000 principal plus accrued interest into 168,713 shares of the Company’s common stock. In March 2015, the Company issued 100,000 shares of its common stock to repay $100,000 of long term debt and related accrued interest and penalties. (See Note 7 – Long Term Debt and Notes Payable and Note 8 – Convertible Notes Payable). | ||||||||||||||
On March 16, 2015, the Company completed a rights offering, receiving subscriptions (including both basic and over subscriptions) for 3,899,742 shares of its common stock for net proceeds of $7,062,325 (gross proceeds of $7,799,484). The Company used the proceeds for the BGR acquisition and for general corporate purposes. | ||||||||||||||
Effective March 15, 2015, the Company closed the purchase of BGR Holdings, LLC. In consideration of the purchased assets, the Company issued 500,000 shares of the Company’s common stock as a component of the total purchase price (See Note 3- Acquisitions). | ||||||||||||||
In March 2015, the Company issued 15,000 shares valued at $30,000 for consulting services. | ||||||||||||||
Options and Warrants | ||||||||||||||
There are no options outstanding as of March 31, 2015 and December 31, 2014. | ||||||||||||||
Fair value of any warrant issuances are valued utilizing the Black-Scholes mode. The model includes subjective input assumptions that can materially affect the fair value estimates. The Company determined the fair value of the Binomial Lattice Model and the Black-Scholes Valuation Model to be materially the same. The expected stock price volatility for the Company’s warrants was determined by the historical volatilities for industry peers and used an average of those volatilities. | ||||||||||||||
A summary of warrant activity is presented below: | ||||||||||||||
Number of | Weighted | Weighted | ||||||||||||
Warrants | Average | Average | ||||||||||||
Exercise Price | Remaining Life | |||||||||||||
Outstanding January 1, 2015 | 8,715,804 | $ | 5.49 | 2.7 | ||||||||||
Granted | 754,500 | 2.5 | ||||||||||||
Exercised | - | - | ||||||||||||
Forfeited | - | - | ||||||||||||
Outstanding March 31, 2015 | 9,470,304 | $ | 5.25 | 2.8 | ||||||||||
Exercisable March 31, 2015 | 9,470,304 | $ | 5.25 | 2.8 | ||||||||||
The following table presents information related to stock warrants as of March 31, 2015: | ||||||||||||||
Exercise Price | Outstanding | Weighted Average | Exercisable | |||||||||||
Number of Warrants | Remaining Life | Number of Warrants | ||||||||||||
in Years | ||||||||||||||
>$5.00 | 3,554,514 | 2.6 | 3,554,514 | |||||||||||
$4.00-$5.00 | 3,935,117 | 2.7 | 3,935,117 | |||||||||||
$3.00-$4.00 | 663,901 | 4.6 | 663,901 | |||||||||||
$2.00-$3.00 | 1,316,772 | 3.5 | 1,316,772 | |||||||||||
9,470,304 | 9,470,304 | |||||||||||||
Warrant amortization is summarized as follows: | ||||||||||||||
Three Months Ended | ||||||||||||||
31-Mar-15 | 31-Mar-14 | |||||||||||||
Additional paid-in capital | $ | 22,375 | $ | 22,375 | ||||||||||
$ | 22,375 | $ | 22,375 | |||||||||||
Interest expense | 474,874 | 259,442 | ||||||||||||
Consulting expense | 22,375 | 22,375 | ||||||||||||
$ | 497,249 | $ | 281,817 |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Related Party Transactions | 12 | RELATED PARTY TRANSACTIONS | |||||||
Due to related parties | |||||||||
The Company has received non-interest bearing loans and advances from related parties as follows: | |||||||||
31-Mar-15 | December 31, 2014 | ||||||||
Hoot SA I, LLC | $ | 12,963 | $ | 12,196 | |||||
Hooters Australia Partner | 606,455 | 1,087,451 | |||||||
Chanticleer Investors, LLC | 199,436 | 199,436 | |||||||
$ | 818,854 | $ | 1,299,083 | ||||||
At March 31, 2015, the Company has an outstanding loan payable to its Australian partner of $606,455 in connection with Surfers Paradise and Townsville construction costs. The loan is payable on demand. | |||||||||
Due from related parties | |||||||||
The Company has made advances to related parties. The amounts owed to the Company are as follows: | |||||||||
31-Mar-15 | December 31, 2014 | ||||||||
Hoot SA II, III, IV LLC | $ | 45,615 | $ | 46,015 | |||||
$ | 45,615 | $ | 46,015 |
Segments_Information
Segments Information | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting [Abstract] | |||||||||
Segments of Information | 13 | SEGMENT INFORMATION | |||||||
The Company operates and reports its results as a single operating segment. The following are revenues, operating loss, and long-lived assets by geographic area: | |||||||||
Three Months Ended | |||||||||
31-Mar-15 | 31-Mar-14 | ||||||||
Revenue: | |||||||||
United States | $ | 4,097,542 | $ | 2,637,759 | |||||
South Africa | 1,677,582 | 1,641,086 | |||||||
Australia | 1,971,597 | - | |||||||
Europe | 924,428 | 1,070,134 | |||||||
$ | 8,671,149 | $ | 5,348,979 | ||||||
Operating Loss: | |||||||||
United States | $ | (1,491,129 | ) | $ | (1,490,956 | ) | |||
South Africa | (53,628 | ) | (81,700 | ) | |||||
Australia | (365,067 | ) | - | ||||||
Europe | 7,439 | (12,011 | ) | ||||||
$ | (1,902,385 | ) | $ | (1,584,667 | ) | ||||
Long Lived Assets: | 31-Mar-15 | December 31, 2014 | |||||||
United States | $ | 19,986,903 | $ | 15,299,108 | |||||
South Africa | 2,266,506 | 2,172,528 | |||||||
Australia | 12,783,771 | 13,068,305 | |||||||
Europe | 3,435,673 | 3,648,133 | |||||||
Brazil | 135,000 | 135,000 | |||||||
$ | 38,607,853 | $ | 34,323,074 |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |
Mar. 31, 2015 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | 14 | COMMITMENTS AND CONTINGENCIES |
On March 26, 2013, our South African operations received Notice of Motion filed in the Kwazulu-Natal High Court, Durban, Republic of South Africa, filed against Rolalor (PTY) LTD (“Rolalor”) and Labyrinth Trading 18 (PTY) LTD (“Labyrinth”) by Jennifer Catherine Mary Shaw (“Shaw”). Rolalor and Labyrinth were the original entities formed to operate the Johannesburg and Durban locations, respectively. On September 9, 2011, the assets and the then-disclosed liabilities of these entities were transferred to Tundraspex (PTY) LTD (“Tundraspex”) and Dimaflo (PTY) LTD (“Dimaflo”), respectively. The current entities, Tundraspex and Dimaflo are not parties in the lawsuit. Shaw is requesting that the Respondents, Rolalor and Labyrinth, be wound up in satisfaction of an alleged debt owed in the total amount of R4,082,636 (approximately $480,000). The two Notices were defended and argued in the High Court of South Africa (Durban) on January 31, 2014. Madam Justice Steryi dismissed the action with costs on May 5, 2014. Ms. Shaw has appealed this decision. | ||
In connection with our 2011 acquisitions of the South African entities (whereby, on October 1, 2011, Rolalor, Alimenta 177(Pty.) Ltd. and Labyrinth transferred their respective net assets to the newly formed entities controlled by the Company), the Company believes the purchase and sale with the seller was accomplished in accordance with the laws and regulations of the taxing authorities in South Africa. However, there can be no absolute assurance as to whether the business acquired continues to have any outstanding tax and regulatory filing requirements, (i.e. not filed certain corporate tax returns for previous years) as well as whether the local authorities could seek to recover any unpaid taxes, interest, penalties, or other amounts due from the Company, its shareholders or others. The Company is not aware of any existing obligations that remain outstanding for which the Company may be required to settle. In connection with acquiring the net assets of the business, the Company may be entitled to be reimbursed by the seller for any pre-acquisition obligations of the business that may arise post-acquisition. | ||
In addition to the matters disclosed above, the Company may be involved in legal proceedings and claims that have arisen in the ordinary course of business. These actions, when ultimately concluded and settled, will not, in the opinion of management, have a material adverse effect upon the financial position, results of operations or cash flows of the company. |
Disclosures_about_Fair_Value
Disclosures about Fair Value | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Disclosures about Fair Value | 15 | DISCLOSURES ABOUT FAIR VALUE | |||||||||||||||
Assets and liabilities measured at fair value on a recurring basis are summarized in the following tables according to FASB ASC 820 pricing levels. | |||||||||||||||||
Fair Value Measurement Using | |||||||||||||||||
Quoted prices | |||||||||||||||||
in active | Significant | ||||||||||||||||
markets of | other | Significant | |||||||||||||||
identical | observable | Unobservable | |||||||||||||||
Recorded | assets | inputs | Inputs | ||||||||||||||
value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
31-Mar-15 | |||||||||||||||||
Assets: | |||||||||||||||||
Available-for-sale securities | $ | 35,362 | $ | 35,362 | $ | - | $ | 35,362 | |||||||||
Liabilities: | |||||||||||||||||
Embedded conversion feature | $ | 1,767,300 | $ | - | $ | - | $ | 1,767,300 | |||||||||
Warrants | $ | 312,747 | $ | 312,747 | |||||||||||||
31-Dec-14 | |||||||||||||||||
Assets: | |||||||||||||||||
Available-for-sale securities | $ | 35,362 | $ | 35,362 | $ | - | $ | 35,362 | |||||||||
Liabilities: | |||||||||||||||||
Embedded conversion feature | $ | 1,610,900 | $ | - | $ | - | $ | 1,610,900 | |||||||||
Warrants | $ | 334,300 | $ | - | $ | - | $ | 334,300 | |||||||||
At March 31, 2015 and December 31, 2014, the Company’s available-for-sale equity securities were valued using Level 1 and Level 2 inputs as summarized above. Level 1 inputs are based on unadjusted prices for identical assets in active markets that the Company can access. Level 2 inputs are based on quoted prices for similar assets other than quoted prices in Level 1, quoted prices in markets that are not yet active, or other inputs that are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets. | |||||||||||||||||
The derivative liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical quoted market prices for the Company’s common stock, and are classified within Level 3 of the valuation hierarchy. | |||||||||||||||||
Certain assets are not carried at fair value on a recurring basis, including investments accounted for under the equity and cost methods. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the consolidated financial statements. | |||||||||||||||||
The following table provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets measured at fair value on a recurring basis using significant unobservable inputs: | |||||||||||||||||
Conversion | |||||||||||||||||
Warrants | Feature | Total | |||||||||||||||
Balance at January 1, 2015 | $ | 334,300 | $ | 1,610,900 | $ | 1,945,200 | |||||||||||
Change in fair value of derivative liability | 44,647 | (382,700 | ) | (338,053 | ) | ||||||||||||
Amounts included in debt discount | 778,900 | 778,900 | |||||||||||||||
Reclassification of derivative liability to equity | (66,200 | ) | (239,800 | ) | (306,000 | ) | |||||||||||
Balance at March 31, 2015 | $ | 312,747 | $ | 1,767,300 | $ | 2,080,047 |
Subsequent_Events
Subsequent Events | 3 Months Ended | |
Mar. 31, 2015 | ||
Subsequent Events [Abstract] | ||
Subsequent Events | 16 | SUBSEQUENT EVENTS |
On April 27, 2015, the Company announced that it has entered a letter of intent for the acquisition of an eight store, award-winning “better burger” concept in the Pacific Northwest. This acquisition would considerably expand Chanticleer’s presence in the Pacific Northwest region and further expand the Company’s presence in the better burger sector. The Company expects to close the acquisition in mid-2015. | ||
On April 24, 2015, the Company entered into a waiver agreement relating to the $1 million convertible note payable issued on March 15, 2015, whereby the Company agreed to register the shares of common stock underlying the notes and warrants on or before April 27, 2015. Pursuant to the waiver agreement, the Company filed a registration statement on Form S-3 with the Securities and Exchange Commission on April 27, 2015, which is subject to review by the Securities and Exchange Commission prior to becoming effective. | ||
The note holders agreed to waive the following rights: (i) the note holders shall withdraw all requests for repayment of any portion of the notes, and shall not be entitled to any payments or conversion of the interest that has accrued, including but not limited to the right to receive not less than 10% of the net funds raised in all equity or debt offerings of the Company prior to the date hereof toward any outstanding amount owed under the notes; and (ii) shall waive any right to receive the payment of any interest that may have accrued from the date of issuance of each of the notes until such time as the registration statement is declared effective by the Securities and Exchange Commission. | ||
Additionally, the note holders agreed that upon any conversion of the notes, in any amounts, the following rights shall be deemed immediately waived: (i) the note holders shall note retain any security interests rights in Townsville or Just Fresh #7 stores; (ii) the note holders shall waive the right to receive not less than 10% of the net funds raised in all equity or debt offerings of the Company toward any outstanding amount owed under the Notes; (iii) the note holders shall waive all rights to receive payments relating to the net income derived from Townsville and Just Fresh #7 stores after the full repayment of the Notes, as well as (iv) waiving other rights and covenants contained in the related securities purchase agreement. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Use Of Estimates | USE OF ESTIMATES | ||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include the valuation of the investments in portfolio companies, deferred tax asset valuation allowances, valuing options and warrants using the Binomial Lattice and Black Scholes models, intangible asset valuations and useful lives, depreciation and uncollectible accounts and reserves. Actual results could differ from those estimates. | |||||||||
Revenue Recognition | REVENUE RECOGNITION | ||||||||
Revenue is recognized when all of the following criteria have been satisfied: | |||||||||
● | Persuasive evidence of an arrangement exists; | ||||||||
● | Delivery has occurred or services have been rendered; | ||||||||
● | The seller’s price to the buyer is fixed or determinable; and | ||||||||
● | Collectability is reasonably assured. | ||||||||
Restaurant Net Sales and Food and Beverage Costs | |||||||||
The Company records revenue from restaurant sales at the time of sale, net of discounts, coupons, employee meals, and complimentary meals and gift cards. Sales, value added (“VAT”) and goods and services tax (“GST”) collected from customers and remitted to governmental authorities are presented on a net basis within sales in our consolidated statements of operations. Cost of sales primarily includes the cost of food, beverages, and merchandise and disposable paper and plastic goods used in preparing and selling our menu items, and exclude depreciation and amortization. Vendor allowances received in connection with the purchase of a vendor’s products are recognized as a reduction of the related food and beverage costs as earned. | |||||||||
Management Fee Income | |||||||||
The Company receives revenue from management fees from certain non-affiliated companies, including Hooters of America. | |||||||||
Gaming Income | |||||||||
The Company receives revenue from operating a gaming facility adjacent to its Hooters restaurant in Jantzen Beach, Oregon. The Company also receives gaming revenue from gaming machines located in Sydney, Australia, which continues until the $5 million of debt assumed connection with the acquisition of the Hooters franchise stores in Australia is repaid. After that debt has been repaid, our participation in the gaming revenue at the Sydney location will decrease from 100% to 60%. Revenue is recognized as earned from gaming activities, net of taxes and other government fees. | |||||||||
Franchise Income | |||||||||
The Company accounts for initial franchisee fees in accordance with FASB ASC 952, Franchisors. The Company grants franchises to operators in exchange for initial franchise license fees and continuing royalty payments. Franchise license fees are deferred when received and recognized as revenue when the Company has performed substantially all initial services required by the franchise or license agreement, which is generally upon the opening of a store. Continuing fees, which are based upon a percentage of franchisee and licensee sales are recognized on the accrual basis as those sales occur. | |||||||||
Business Combinations | BUSINESS COMBINATIONS | ||||||||
For business combinations, the assets acquired, the liabilities assumed, and any non-controlling interest are recognized at the acquisition date, measured at their fair values as of that date. In a business combination achieved in stages, the identifiable assets and liabilities, as well as the non-controlling interest in the acquiree, are recognized at the full amounts of their fair values. In a bargain purchase in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any non-controlling interest in the acquire, that excess in earnings was recognized as a gain attributable to the Company. | |||||||||
Amortization of Debt Discount | AMORTIZATION OF DEBT DISCOUNT | ||||||||
The Company has issued various debt with warrants for which total proceeds were allocated to individual instruments based on the relative fair value of the each instrument at the time of issuance. The value of the debt was recorded as discount on debt and amortized over the term of the respective debt. For the three months ended March 31, 2015 and 2014 amortization of debt discount was $474,874 and $259,442, respectively. | |||||||||
Foreign Currency Translation | FOREIGN CURRENCY TRANSLATION | ||||||||
Assets and liabilities denominated in local currency are translated to US dollars using the exchange rates as in effect at the balance sheet date. Results of operations are translated using average exchange rates prevailing throughout the period. Adjustments resulting from the process of translating foreign currency financial statements from functional currency into U.S. dollars are included in accumulated other comprehensive loss within stockholders’ equity. Foreign currency translation adjustments were $(1,286,028) and $35,746 for the three months ended March 31, 2015 and 2014, respectively. Foreign currency transaction gains and losses are included in current earnings. The Company has determined that local currency is the functional currency for each of its foreign operations. | |||||||||
Loss Per Common Share | LOSS PER COMMON SHARE | ||||||||
The Company is required to report both basic earnings per share, which is based on the weighted-average number of shares outstanding and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all diluted shares outstanding. The following table summarizes the number of common shares potentially issuable upon the exercise of certain warrants, convertible notes payable and convertible interest as of March 31, 2015 and December 31, 2014 that have been excluded from the calculation of diluted net loss per common share since the effect would be antidilutive. | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Warrants | 9,470,304 | 8,715,804 | |||||||
Convertible notes payable | 2,482,471 | 2,626,900 | |||||||
Convertible interest | 34,809 | 42,306 | |||||||
Total | 11,987,584 | 11,385,010 | |||||||
Concentration of Credit Risk | CONCENTRATION OF CREDIT RISK | ||||||||
The Company maintains its cash with major financial institutions. Cash held in U.S. bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. No similar insurance or guarantee exists for cash held in Australia, South Africa, Hungary or United Kingdom bank accounts. There was a $136,033 and $122,633 aggregate uninsured cash balances at March 31, 2015 and December 31, 2014, respectively. | |||||||||
Subsequent Events | SUBSEQUENT EVENTS | ||||||||
Management has evaluated all events and transactions that occurred from April 1, 2015 through the date these condensed consolidated financial statements were issued for subsequent events requiring recognition or disclosure in the condensed consolidated financial statements. | |||||||||
Reclassifications | RECLASSIFICATIONS | ||||||||
Certain amounts in the prior period have been reclassified to conform to the current period presentation. These reclassifications have no effect on previously reported results of operations or loss per share. | |||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||
There are several other new accounting pronouncements issued by FASB, which are not yet effective. Each of these pronouncements has been or will be adopted, as applicable, by the Company. At May 15, 2015, none of these pronouncements are expected to have a material effect on the financial position, results of operations or cash flows of the Company. |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the number of common shares potentially issuable upon the exercise of certain warrants, convertible notes payable and convertible interest as of March 31, 2015 and December 31, 2014 that have been excluded from the calculation of diluted net loss per common share since the effect would be antidilutive. | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Warrants | 9,470,304 | 8,715,804 | |||||||
Convertible notes payable | 2,482,471 | 2,626,900 | |||||||
Convertible interest | 34,809 | 42,306 | |||||||
Total | 11,987,584 | 11,385,010 |
Acquisitions_Tables
Acquisitions (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||
Schedule of Assets Acquired and Liabilities Assumed Recorded At Estimated Fair Values | The Company’s acquisitions were accounted for using the purchase method of accounting in accordance with ASC 805 “Business Combinations” and, accordingly, the condensed consolidated statements of operations and comprehensive loss include the results of these operations from the dates of acquisition. The assets acquired and the liabilities assumed were recorded at fair values based on information currently available and based on certain assumptions as to future operations as follows: | ||||||||||||||||||||||||
2015 Acquisition | |||||||||||||||||||||||||
BGR: | |||||||||||||||||||||||||
The Burger Joint | |||||||||||||||||||||||||
Consideration paid: | |||||||||||||||||||||||||
Common stock | $ | 1,000,000 | |||||||||||||||||||||||
Cash | 4,233,929 | ||||||||||||||||||||||||
Total consideration paid | 5,233,929 | ||||||||||||||||||||||||
Property and equipment | 2,154,023 | ||||||||||||||||||||||||
Goodwill | 426,038 | ||||||||||||||||||||||||
Trademark/trade name/franchise fee | 2,750,000 | ||||||||||||||||||||||||
Inventory, deposits and other assets | 257,470 | ||||||||||||||||||||||||
Total assets acquired, less cash | 5,587,531 | ||||||||||||||||||||||||
Liabilities assumed | (364,602 | ) | |||||||||||||||||||||||
Common stock and warrants issued | (1,000,000 | ) | |||||||||||||||||||||||
Cash paid | (4,233,929 | ) | |||||||||||||||||||||||
Cash received in excess of cash paid | $ | 11,000 | |||||||||||||||||||||||
2014 Acquisitions | |||||||||||||||||||||||||
Hooters | Hooters Australia | The | |||||||||||||||||||||||
Pacific NW | Spoon | 1-Apr-14 | 1-Jul-14 | Burger Co. | Total | ||||||||||||||||||||
Consideration paid: | |||||||||||||||||||||||||
Common stock | $ | 2,891,156 | $ | 828,750 | $ | - | $ | - | $ | 300,000 | $ | 4,019,906 | |||||||||||||
Warrants | 978,000 | 280,400 | - | 123,333 | - | 1,381,733 | |||||||||||||||||||
Assumption of debt | - | - | - | 5,000,000 | - | 5,000,000 | |||||||||||||||||||
Cash | - | - | 100,000 | - | 250,000 | 350,000 | |||||||||||||||||||
Total consideration paid | 3,869,156 | 1,109,150 | 100,000 | 5,123,333 | 550,000 | 10,751,639 | |||||||||||||||||||
Current assets, excluding cash | 112,078 | 89,817 | 377,296 | 47,777 | 9,926 | 636,894 | |||||||||||||||||||
Property and equipment | 2,731,031 | 391,462 | 2,934,307 | 1,603,557 | 284,795 | 7,945,152 | |||||||||||||||||||
Goodwill | 1,951,909 | 698,583 | - | 8,487,138 | 256,379 | 11,394,009 | |||||||||||||||||||
Trademark/trade name/franchise fee | 60,937 | - | 277,867 | 220,500 | - | 559,304 | |||||||||||||||||||
Deposits and other assets | 20,275 | 5,193 | 90,371 | 20,186 | - | 136,025 | |||||||||||||||||||
Total assets acquired, less cash | 4,876,230 | 1,185,055 | 3,679,841 | 10,379,158 | 551,100 | 20,671,384 | |||||||||||||||||||
Liabilities assumed | (1,009,348 | ) | (97,541 | ) | (1,560,710 | ) | (1,496,536 | ) | (1,100 | ) | (4,165,235 | ) | |||||||||||||
Deferred tax liabilities | - | - | - | - | |||||||||||||||||||||
Non-controlling interest | - | - | (993,999 | ) | (3,759,289 | ) | - | (4,753,288 | ) | ||||||||||||||||
Chanticleer equity | - | - | (1,028,749 | ) | - | - | (1,028,749 | ) | |||||||||||||||||
Common stock and warrants issued | (3,869,156 | ) | (1,109,150 | ) | - | (123,333 | ) | (300,000 | ) | (5,401,639 | ) | ||||||||||||||
Assumption of debt | - | - | - | (5,000,000 | ) | - | (5,000,000 | ) | |||||||||||||||||
Cash paid | - | - | (100,000 | ) | - | (250,000 | ) | (350,000 | ) | ||||||||||||||||
Cash received in excess of cash paid | $ | 2,274 | $ | 21,636 | $ | 3,617 | $ | - | $ | - | $ | 27,527 | |||||||||||||
Schedule of Business Combination Pro Forma Information | The following table includes information for the three months ended March 31, 2015 and 2014 for the Company’s 2014 and 2015 acquisitions. | ||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
Total revenues | $ | 10,442,476 | $ | 10,735,901 | |||||||||||||||||||||
Loss from continuing operations | (2,533,885 | ) | (1,186,466 | ) | |||||||||||||||||||||
Loss from discountinued operations | (1,899 | ) | (32,674 | ) | |||||||||||||||||||||
Loss attributable to non-controlling interest | 139,806 | (3,801 | ) | ||||||||||||||||||||||
Net loss | $ | (2,394,079 | ) | $ | (1,190,267 | ) | |||||||||||||||||||
Net loss per share, basic and diluted | $ | (0.31 | ) | $ | (0.20 | ) | |||||||||||||||||||
Net loss per share,discontinued operations | $ | (0.00 | ) | $ | (0.01 | ) | |||||||||||||||||||
Weighted average shares outstanding, basic and diluted | 8,249,453 | 5,974,495 |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||
Schedule of Operating Results From Discontinued Operations | The operating results from the discontinued operations for the three months ended March 31, 2015 and 2014 consisted of the following: | ||||||||
Three Months Ended | |||||||||
31-Mar-15 | 31-Mar-14 | ||||||||
Total revenue | $ | - | $ | 278,469 | |||||
Total operating expenses | 1,899 | 311,143 | |||||||
Net loss from discontinued operations | $ | (1,899 | ) | $ | (32,674 | ) |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of Property, Plant and Equipment | Property and equipment consists of the following: | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Leasehold improvements | $ | 11,362,052 | $ | 9,940,517 | |||||
Restaurant furniture and equipment | 8,199,525 | 7,827,925 | |||||||
Construction in progress | 750,393 | 727,934 | |||||||
Office and computer equipment | 92,444 | 51,746 | |||||||
Land and buildings | 432,866 | 437,223 | |||||||
Office furniture and fixtures | 59,361 | 60,302 | |||||||
20,896,641 | 19,045,647 | ||||||||
Accumulated depreciation and amortization | (5,903,290 | ) | (5,730,238 | ) | |||||
$ | 14,993,351 | $ | 13,315,409 |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets, Net (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Schedule of Goodwill | Goodwill is summarized by location as follows: | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
South Africa | $ | 263,149 | $ | 273,737 | |||||
ABC | 2,806,990 | 2,806,990 | |||||||
WEW | 2,738,909 | 2,868,192 | |||||||
Just Fresh | 425,151 | 425,151 | |||||||
Australia | 6,833,593 | 7,291,329 | |||||||
Hooters Pacific NW | 1,951,909 | 1,951,909 | |||||||
BGR | 426,038 | - | |||||||
Total | $ | 15,445,739 | $ | 15,617,308 | |||||
Summary of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill are summarized as follows: | ||||||||
Three Months Ended | |||||||||
31-Mar-15 | 31-Mar-14 | ||||||||
Beginning Balance | $ | 15,617,308 | $ | 6,496,756 | |||||
Acquisitions | 426,038 | 2,671,649 | |||||||
Foreign currency translation | (597,608 | ) | - | ||||||
Ending Balance | $ | 15,445,739 | $ | 9,168,405 | |||||
Schedule of Other Intangible Assets | Other intangible assets, consisting of franchise costs, trademarks and tradenames, is summarized by location as follows: | ||||||||
Intagible assets | 31-Mar-15 | 31-Dec-14 | |||||||
Franchise fees: | |||||||||
South Africa | $ | 354,731 | $ | 290,986 | |||||
Europe | 89,152 | 106,506 | |||||||
Australia | 355,911 | 383,529 | |||||||
Hootres Pacific NW | 90,000 | 90,000 | |||||||
BGR | 1,320,000 | - | |||||||
Brazil * | 135,000 | 135,000 | |||||||
2,344,794 | 1,006,021 | ||||||||
Trademark, Tradenames: | |||||||||
Just Fresh | 1,010,000 | 1,010,000 | |||||||
American Roadside Burger | 1,783,954 | 1,783,954 | |||||||
BGR | 1,430,000 | - | |||||||
4,223,954 | 2,793,954 | ||||||||
Total Intangibles at cost | 6,568,748 | 3,799,975 | |||||||
Accumulated amortization | (472,083 | ) | (403,472 | ) | |||||
Intangible assets, net | $ | 6,096,665 | $ | 3,396,503 | |||||
* Amortization of the Brazil franchise cost will begin with the opening of a restaurant in that market. |
LongTerm_Debt_and_Notes_Payabl1
Long-Term Debt and Notes Payable (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
Summary of Long-Term Debt and Notes Payable | Long-term debt and notes payable are summarized as follows: | ||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||
Note payable to a bank due in monthly installments of $4,406 including interest at Wall Street Journal Prime plus 1% (minimum of 5.5%); remaining balance due October 10, 2018; collateralized by substantially all of the Company’s assets and guaranteed by an officer of the Company | (a) | $ | 165,861 | $ | 176,731 | ||||||
Line of credit to a bank, expired May 10, 2015, interest rate of Wall Street Journal Prime (3.25% as of March 31, 2015) plus 1%, floor rate of 5% Renewal in process. | (b) | 500,000 | 500,000 | ||||||||
Note payable to a bank due interest only at a 5% rate, balloon principal payment due June 10, 2019 collateralized by substantially all of the Company’s assets and guaranteed by an officer of the Company | (c) | 500,000 | 500,000 | ||||||||
Loan agreement March an outside company on December 13, 2013, interest at 1% per month, paid in full in 2015 | (d) | - | 100,000 | ||||||||
Loan agreement with an outside company on June 20, 2014, interest at 8% annual rate, paid in full in 2015 | (e) | - | 100,000 | ||||||||
Mortage loan dated April 2014, interest at South African prime rate + 2.6% (11.85% as of March 31, 2015); due July 31, 2024; secured by a bond on all assets at our Port Elizabeth, South Africa location and partially guaranteed by our CEO and South African COO | (f) | 278,806 | 294,362 | ||||||||
Loan agreement with an outside company on July 1, 2014, interest at 12% annual rate, secured by certain secured assets and gaming revenue of the Australian entities, net of discount of $300,766 and $343,733, respectively; matures January 31, 2017 | (g) | 4,699,234 | 4,656,267 | ||||||||
Bank overdraft facilities; unsecured; maximum facilities $260,000; interest rate 11% at March 31, 2015, with annual renewal each December | (h) | 198,846 | 151,868 | ||||||||
Term facility with monthly payments of 45,288 Rand, including interest at South African Prime + 1.0% (10.25% as of March 31, 2015), due June 14, 2016 | (i) | 51,968 | 64,309 | ||||||||
Term facility with monthly payments of 44,727 Rand including interest at South African Prime + 3.0% (12.25% as of March 31, 2015); due November 15, 2019. | (j) | 157,221 | 170,053 | ||||||||
Term facility with monthly payments of 33,750 Rand, including interest at South African Prime + 3 0% (12.25% as of March 31, 2015); due December 1, 2018 | (k) | 99,940 | 109,340 | ||||||||
Total long-term debt | 6,651,876 | 6,822,930 | |||||||||
Current portion of long- term debt | 997,370 | 1,813,647 | |||||||||
Long-term debt, less current portion | $ | 5,654,506 | $ | 5,009,283 | |||||||
(a) and (b) On April 11, 2013, the Company and Paragon Commercial Bank (“Paragon”) entered into a credit agreement (the “Credit Agreement”) which provides for a $500,000 revolving credit facility with a one-year term from the closing date. The Credit Agreement is available to be drawn at the Company’s discretion to finance investments in new business ventures and for the Company’s general corporate working capital requirements in the ordinary course of business. The note payable originally matured on August 10, 2013 and on November 4, 2013 the note was extended to October 10, 2018 with monthly principal and interest payments of $4,406, whereas the new credit facility (b) expired on May 10, 2015. The Company is currently in negotiations to extend the maturity date of the credit facility. Borrowings under the Credit Agreement bear monthly interest at the greater of: (i) floor rate of 5.00% or (ii) the Wall Street Journal’s prime plus rate (3.25% as of March 31, 2015) plus 1.00%. Any borrowings are secured by a lien on all of the Company’s assets. The obligations under the Credit Agreement are guaranteed by Mike Pruitt, the Company’s Chief Executive Officer. | |||||||||||
(c) During February 2014, the Company secured a note with Paragon for $500,000 due on June 10, 2019. The note bears interest at a 5% annual rate, interest only monthly payments until the maturity date. | |||||||||||
(d) On December 23, 2013, the Company entered into a loan agreement with an outside company for $150,000, originally due on February 23, 2014. Interest is compounded monthly at a rate of 1%. As of February 23, 2014, the Company was not in compliance with the terms of this note due to non-payment of principal and interest. On March 21 and August 20, 2014, the Company paid the note holder $25,000 each of principal and accrued interest. In March 2015, the Company repaid the loan in full. | |||||||||||
(e) On June 20, 2014, the Company entered into a loan agreement with an outside company for $100,000, originally due on July 11, 2014. In March 2015, the Company issued 100,000 shares of its common stock to repay the loan, accrued interest and penalties in full. The Company recognized a loss on extinguishment of debt of $45,000, representing the difference between the fair value of the shares issued and the carrying value of the outstanding debt and accrued interest. | |||||||||||
(f) In April 2014, our South African subsidiary entered into a mortgage note with a South African bank for the purchase of the building in Port Elizabeth for our Hooters location. The 10-year note is for $278,806 with an annual interest rate of 2.6% above the South African prime rate (prime currently 9.25%). Monthly principal and interest payments of approximately $4,600 commenced in August, 2014. The mortgage note is personally guaranteed by our CEO and South African COO and secured by the assets of the Port Elizabeth building. | |||||||||||
(g) On July 1, 2014, pursuant to Purchase Agreements executed on June 30, 2014, the Company completed the acquisition of a sixty percent (60%) ownership interest in Hoot Parramatta Pty Ltd, Hoot Australia Pty Ltd, Hoot Penrith Pty Ltd, and TMIX Management Australia Pty Ltd (collectively, the “Australian Entities”), which own, operate, and manage Hooters restaurant locations and gaming operations in Australia. The ownership interest in the Australian Entities was purchased from the respective entities in exchange for the Company agreeing to assume a five million dollar ($5,000,000) debt bearing interest at 12% annually and issuing two hundred fifty thousand (250,000) warrants to purchase shares of our common stock. Originally principal repayments were as follows: $2,000,000 on December 31, 2014, $2,000,000 on June 30, 2015, and $1,000,000 on December 31, 2015. On October 15, 2014, principal repayments were restructured whereby $200,000 was due on December 31, 2014, $50,000 is payable each month from January 2015 through December 2015, $2,000,000 is payable January 31, 2016, $1,200,000 is payable on July 31, 2016 and the remaining $1,000,000 is due by January 31, 2017. The Company and the note holder are currently in discussion to renegotiate the terms of the above payments and other terms of the agreement. The note holder has not demanded the above payments (as of December 31, 2014 through currently) nor will they unless the negotiations terminate. The Company has paid the agreed upon monthly interest payments in 2015 and is currently negotiating a change in payment terms. | |||||||||||
(h) The Company’s South African subsidiary has local bank financing in the form of term and overdraft facilities totaling of approximately $198,846 and $151,868 outstanding as of March 31, 2015 and December 31, 2014, respectively. | |||||||||||
(i) The Company’s South African subsidiary has local bank financing in the form of a term loan with monthly payments of 45,000 Rand, including interest at South African Prime +1.0%. The term loan matures on June 14, 2016. | |||||||||||
(j) The Company’s South African subsidiary has local bank financing in the form of a term loan with monthly payments of 44,000 Rand, including interest South African Prime +3.0%. The term loan matures on November 15, 2019. | |||||||||||
(k) The Company’s South African subsidiary has local bank financing in the form of a term loan with monthly payments of 34.000 Rand, including interest at South African Prime + 3.0%. The term loan matures on December 1, 2018. |
Convertible_Notes_Payable_Tabl
Convertible Notes Payable (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Convertible Notes Payable [Abstract] | |||||||||||||||||||||
Schedule of Convertible Notes Payable | Convertible notes payable are as follows: | ||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||
6% Convertible notes payable issued in August 2013 | $ | 3,000,000 | $ | 3,000,000 | |||||||||||||||||
Discounts on above convertible note | (1,333,338 | ) | (1,583,333 | ) | |||||||||||||||||
15% Convertible notes payable issued in March 2014 | - | 500,000 | |||||||||||||||||||
Discounts on above convertible note | - | (63,730 | ) | ||||||||||||||||||
8% Convertible notes payable issued in Nov/Dec 2014 | 100,000 | 350,000 | |||||||||||||||||||
Discounts on above convertible note | (58,979 | ) | (289,254 | ) | |||||||||||||||||
8% Convertible notes payable issued in January 2015 | 150,000 | - | |||||||||||||||||||
Discounts on above convertible note | (127,960 | ) | - | ||||||||||||||||||
8% Convertible notes payable issued in January 2015 | 1,000,000 | - | |||||||||||||||||||
Discounts on above convertible note | (803,846 | ) | - | ||||||||||||||||||
9% Convertible notes payable issued in March 2015 | 1,000,000 | - | |||||||||||||||||||
Discounts on above convertible note | (719,303 | ) | - | ||||||||||||||||||
2,206,574 | 1,913,683 | ||||||||||||||||||||
Current portion of convertible notes payable | (196,154 | ) | (436,270 | ) | |||||||||||||||||
Convertible notes payable, less current portion | $ | 2,010,420 | $ | 1,477,413 | |||||||||||||||||
Fair Value Measurements, Valuation Assumptions of Embedded Conversion Feature and Warrants | The contractual terms of the agreement does not provide for and the Company does not expect to declare dividends in the near future. Key assumptions used to apply this pricing model as of the date of issuance, December 31, 2014 and March 31, 2015 are presented in the table below: | ||||||||||||||||||||
6% Note Issued on | 15% Note Issued on | 8% Note Issued on | 8% Note Issued on | 8% Notes Issued on | |||||||||||||||||
2-Aug-13 | 19-Mar-14 | 19-Nov-14 | 16-Dec-14 | 5-Jan-15 | |||||||||||||||||
Common stock closing price | $ | 4.15 | $ | 3.87 | $ | 1.7 | $ | 1.53 | $ | 1.75 | |||||||||||
Conversion per share price | $ | 3.73 | $ | 3.29 | $ | 1.45 | $ | 1.3 | $ | 1.33 | |||||||||||
Conversion shares | 804,764 | 151,999 | 172,672 | 77,061 | 112,402 | ||||||||||||||||
Expected life (in years) | 3 | 1 | 3 | 3 | 3 | ||||||||||||||||
Expected volatility | 110 | % | 62 | % | 74 | % | 74 | % | 73 | % | |||||||||||
Call option value | $ | 2.82 | $ | 1.19 | $ | 0.9 | $ | 0.81 | $ | 0.97 | |||||||||||
Risk-free interest rate | 0.59 | % | 0.15 | % | 1.1 | % | 1.1 | % | 0.9 | % | |||||||||||
Dividends | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||
31-Dec-14 | 31-Dec-14 | 31-Dec-14 | 31-Dec-14 | 31-Dec-14 | |||||||||||||||||
Common stock closing price | $ | 1.73 | $ | 1.73 | $ | 1.73 | $ | 1.73 | NA | ||||||||||||
Conversion per share price | $ | 1.49 | $ | 1.47 | $ | 1.26 | $ | 1.26 | NA | ||||||||||||
Conversion shares | 2,008,032 | 340,020 | 199,177 | 77,061 | NA | ||||||||||||||||
Expected life (in years) | 1.6 | 0.2 | 2.9 | 3 | NA | ||||||||||||||||
Expected volatility | 64 | % | 66 | % | 74 | % | 74 | % | NA | ||||||||||||
Call option value | $ | 0.64 | $ | 0.35 | $ | 0.77 | $ | 0.78 | NA | ||||||||||||
Risk-free interest rate | 0.67 | % | 0.4 | % | 1.1 | % | 1.1 | % | NA | ||||||||||||
Dividends | 0 | % | 0 | % | 0 | % | 0 | % | NA | ||||||||||||
31-Mar-15 | 31-Mar-15 | 31-Mar-15 | 31-Mar-15 | 31-Mar-15 | |||||||||||||||||
Common stock closing price | $ | 2.39 | NA | NA | $ | 2.39 | $ | 2.39 | |||||||||||||
Conversion per share price | $ | 2.23 | NA | NA | $ | 1.96 | $ | 1.96 | |||||||||||||
Conversion shares | 1,343,085 | NA | NA | 51,151 | 76,726 | ||||||||||||||||
Expected life (in years) | 1.3 | NA | NA | 2.7 | 2.8 | ||||||||||||||||
Expected volatility | 65 | % | NA | NA | 65 | % | 73 | % | |||||||||||||
Call option value | $ | 0.77 | NA | NA | $ | 1.14 | $ | 1.24 | |||||||||||||
Risk-free interest rate | 0.64 | % | NA | NA | 0.99 | % | 1.02 | % | |||||||||||||
Dividends | 0 | % | NA | NA | 0 | % | 0 | % |
Capital_Leases_Payable_Tables
Capital Leases Payable (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Capital Lease Obligations [Abstract] | |||||||||
Schedule of Lease Payments for Capital Leases | Capital leases payable are as follows: | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Capital lease payable, bearing interest at 10%, through August 2017 | $ | 9,275 | $ | 10,502 | |||||
Capital lease payable, bearing interest at 11.5%, through December 2017 | 45,189 | - | |||||||
Capital lease payable, bearing interest at 11.5%, through July 2016 | 21,744 | 26,489 | |||||||
Capital lease payable, bearing interest at 11.5%, through November 2016 | 34,186 | 40,336 | |||||||
Capital lease payable, bearing interest at 10%, through March 2015 | - | 1,333 | |||||||
Total capital leases payable | 110,394 | 78,660 | |||||||
Current maturities | 54,946 | 42,032 | |||||||
Capital leases payable, less current maturities | $ | 55,449 | $ | 36,628 |
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are summarized as follows: | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Accounts payable | $ | 4,516,241 | $ | 3,382,818 | |||||
Accrued taxes (VAT, GST, Sales Payroll) | 1,499,356 | 1,604,829 | |||||||
Accrued income taxes | 107,815 | 92,618 | |||||||
Accrued interest | 301,300 | 499,866 | |||||||
$ | 6,424,712 | $ | 5,580,131 |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Stockholders Equity Tables | ||||||||||||||
Schedule of Warrants Activity | A summary of warrant activity is presented below: | |||||||||||||
Number of | Weighted | Weighted | ||||||||||||
Warrants | Average | Average | ||||||||||||
Exercise Price | Remaining Life | |||||||||||||
Outstanding January 1, 2015 | 8,715,804 | $ | 5.49 | 2.7 | ||||||||||
Granted | 754,500 | 2.5 | ||||||||||||
Exercised | - | - | ||||||||||||
Forfeited | - | - | ||||||||||||
Outstanding March 31, 2015 | 9,470,304 | $ | 5.25 | 2.8 | ||||||||||
Exercisable March 31, 2015 | 9,470,304 | $ | 5.25 | 2.8 | ||||||||||
Schedule of Warrants Outstanding | The following table presents information related to stock warrants as of March 31, 2015: | |||||||||||||
Exercise Price | Outstanding | Weighted Average | Exercisable | |||||||||||
Number of Warrants | Remaining Life | Number of Warrants | ||||||||||||
in Years | ||||||||||||||
>$5.00 | 3,554,514 | 2.6 | 3,554,514 | |||||||||||
$4.00-$5.00 | 3,935,117 | 2.7 | 3,935,117 | |||||||||||
$3.00-$4.00 | 663,901 | 4.6 | 663,901 | |||||||||||
$2.00-$3.00 | 1,316,772 | 3.5 | 1,316,772 | |||||||||||
9,470,304 | 9,470,304 | |||||||||||||
Schedule of Warrant Amortization | Warrant amortization is summarized as follows: | |||||||||||||
Three Months Ended | ||||||||||||||
31-Mar-15 | 31-Mar-14 | |||||||||||||
Additional paid-in capital | $ | 22,375 | $ | 22,375 | ||||||||||
$ | 22,375 | $ | 22,375 | |||||||||||
Interest expense | 474,874 | 259,442 | ||||||||||||
Consulting expense | 22,375 | 22,375 | ||||||||||||
$ | 497,249 | $ | 281,817 |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Related Party Transactions Tables | |||||||||
Schedule of Non-Interest Bearing Loans and Advances from Related Parties | The Company has received non-interest bearing loans and advances from related parties as follows: | ||||||||
31-Mar-15 | December 31, 2014 | ||||||||
Hoot SA I, LLC | $ | 12,963 | $ | 12,196 | |||||
Hooters Australia Partner | 606,455 | 1,087,451 | |||||||
Chanticleer Investors, LLC | 199,436 | 199,436 | |||||||
$ | 818,854 | $ | 1,299,083 | ||||||
Scheudle of Earned Income and Made Advance to Related Parties | The Company has made advances to related parties. The amounts owed to the Company are as follows: | ||||||||
31-Mar-15 | December 31, 2014 | ||||||||
Hoot SA II, III, IV LLC | $ | 45,615 | $ | 46,015 | |||||
$ | 45,615 | $ | 46,015 |
Segments_Information_Tables
Segments Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segments Information Tables | |||||||||
Summary of Revenues, Operating Loss, Long-Lived Assets By Geographic Area | The Company operates and reports its results as a single operating segment. The following are revenues, operating loss, and long-lived assets by geographic area: | ||||||||
Three Months Ended | |||||||||
31-Mar-15 | 31-Mar-14 | ||||||||
Revenue: | |||||||||
United States | $ | 4,097,542 | $ | 2,637,759 | |||||
South Africa | 1,677,582 | 1,641,086 | |||||||
Australia | 1,971,597 | - | |||||||
Europe | 924,428 | 1,070,134 | |||||||
$ | 8,671,149 | $ | 5,348,979 | ||||||
Operating Loss: | |||||||||
United States | $ | (1,491,129 | ) | $ | (1,490,956 | ) | |||
South Africa | (53,628 | ) | (81,700 | ) | |||||
Australia | (365,067 | ) | - | ||||||
Europe | 7,439 | (12,011 | ) | ||||||
$ | (1,902,385 | ) | $ | (1,584,667 | ) | ||||
Long Lived Assets: | 31-Mar-15 | December 31, 2014 | |||||||
United States | $ | 19,986,903 | $ | 15,299,108 | |||||
South Africa | 2,266,506 | 2,172,528 | |||||||
Australia | 12,783,771 | 13,068,305 | |||||||
Europe | 3,435,673 | 3,648,133 | |||||||
Brazil | 135,000 | 135,000 | |||||||
$ | 38,607,853 | $ | 34,323,074 |
Disclosure_About_Fair_Value_Ta
Disclosure About Fair Value (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Schedule of Fair Value of Measured Assets and Liabilities | Assets and liabilities measured at fair value on a recurring basis are summarized in the following tables according to FASB ASC 820 pricing levels. | ||||||||||||||||
Fair Value Measurement Using | |||||||||||||||||
Quoted prices | |||||||||||||||||
in active | Significant | ||||||||||||||||
markets of | other | Significant | |||||||||||||||
identical | observable | Unobservable | |||||||||||||||
Recorded | assets | inputs | Inputs | ||||||||||||||
value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
31-Mar-15 | |||||||||||||||||
Assets: | |||||||||||||||||
Available-for-sale securities | $ | 35,362 | $ | 35,362 | $ | - | $ | 35,362 | |||||||||
Liabilities: | |||||||||||||||||
Embedded conversion feature | $ | 1,767,300 | $ | - | $ | - | $ | 1,767,300 | |||||||||
Warrants | $ | 312,747 | $ | 312,747 | |||||||||||||
31-Dec-14 | |||||||||||||||||
Assets: | |||||||||||||||||
Available-for-sale securities | $ | 35,362 | $ | 35,362 | $ | - | $ | 35,362 | |||||||||
Liabilities: | |||||||||||||||||
Embedded conversion feature | $ | 1,610,900 | $ | - | $ | - | $ | 1,610,900 | |||||||||
Warrants | $ | 334,300 | $ | - | $ | - | $ | 334,300 | |||||||||
Summary of Changes in Fair Value | The following table provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets measured at fair value on a recurring basis using significant unobservable inputs: | ||||||||||||||||
Conversion | |||||||||||||||||
Warrants | Feature | Total | |||||||||||||||
Balance at January 1, 2015 | $ | 334,300 | $ | 1,610,900 | $ | 1,945,200 | |||||||||||
Change in fair value of derivative liability | 44,647 | (382,700 | ) | (338,053 | ) | ||||||||||||
Amounts included in debt discount | 778,900 | 778,900 | |||||||||||||||
Reclassification of derivative liability to equity | (66,200 | ) | (239,800 | ) | (306,000 | ) | |||||||||||
Balance at March 31, 2015 | $ | 312,747 | $ | 1,767,300 | $ | 2,080,047 |
Nature_of_Business_Details_Nar
Nature of Business (Details Narrative) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash | $3,324,569 |
Proceeds from equity issuance | 7,800,000 |
Proceeds from convertible debt | 2,200,000 |
Increase in line of credit | 500,000 |
Line of credit extended payment terms | $5,000,000 |
Significant_Accounting_Policie3
Significant Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Gaming revenue | $5,000,000 | ||
Amortization of debt discount | 474,874 | 259,442 | |
Foreign currency translation adjustments | -1,286,028 | 35,746 | |
Cash FDIC insured amount | 250,000 | ||
Uninsured cash balances | $136,033 | $122,633 | |
Maximum [Member] | |||
Percentage of gaming revenue increase decrease | 100.00% | ||
Minimum [Member] | |||
Percentage of gaming revenue increase decrease | 60.00% |
Significant_Accounting_Policie4
Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 11,987,584 | 11,385,010 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 9,470,304 | 8,715,804 |
Convertible Notes Payable [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,482,471 | 2,626,900 |
Convertible Interest [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 34,809 | 42,306 |
Acquisions_Details_Narrative
Acquisions (Details Narrative) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Business Combinations [Abstract] | |
Business acquisition purchase price assumption | $4,000,000 |
Business acquisition purchase of shares | 500,000 |
Business acquisition purchase of workng capital adjustment | $233,929 |
Acquisitions_Schedule_of_Asset
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed Recorded At Estimated Fair Values (Details) (USD $) | 12 Months Ended | 3 Months Ended | |
Dec. 31, 2014 | Mar. 31, 2015 | Sep. 30, 2014 | |
Business Acquisition [Line Items] | |||
Common stock | $4,019,906 | ||
Warrants | 1,381,733 | ||
Assumption of debt | 5,000,000 | ||
Cash | 350,000 | ||
Total consideration paid | 10,751,639 | ||
Current assets, excluding cash | 636,894 | ||
Property and equipment | 7,945,152 | ||
Goodwill | 11,394,009 | ||
Trademark/trade name/franchise fee | 559,304 | ||
Inventory, deposits and other assets | 136,025 | ||
Total assets acquired, less cash | 20,671,384 | ||
Liabilities assumed | -4,165,235 | ||
Deferred tax liabilities | |||
Non-controlling interest | -4,753,288 | ||
Chanticleer equity | -1,028,749 | ||
Common stock and warrants issued | -5,401,639 | ||
Assumption of debt | -5,000,000 | ||
Cash paid | -350,000 | ||
Cash received in excess of cash paid | 27,527 | ||
The Burger Joint [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | 1,000,000 | ||
Warrants | |||
Assumption of debt | |||
Cash | 4,233,929 | ||
Total consideration paid | 5,233,929 | ||
Current assets, excluding cash | |||
Property and equipment | 2,154,023 | ||
Goodwill | 426,038 | ||
Trademark/trade name/franchise fee | 2,750,000 | ||
Inventory, deposits and other assets | 257,470 | ||
Total assets acquired, less cash | 5,587,531 | ||
Liabilities assumed | -364,602 | ||
Deferred tax liabilities | |||
Non-controlling interest | |||
Chanticleer equity | |||
Common stock and warrants issued | -1,000,000 | ||
Assumption of debt | |||
Cash paid | -4,233,929 | ||
Cash received in excess of cash paid | 11,000 | ||
Hooters Pacific NW [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | 2,891,156 | ||
Warrants | 978,000 | ||
Assumption of debt | |||
Cash | |||
Total consideration paid | 3,869,156 | ||
Current assets, excluding cash | 112,078 | ||
Property and equipment | 2,731,031 | ||
Goodwill | 1,951,909 | ||
Trademark/trade name/franchise fee | 60,937 | ||
Inventory, deposits and other assets | 20,275 | ||
Total assets acquired, less cash | 4,876,230 | ||
Liabilities assumed | -1,009,348 | ||
Deferred tax liabilities | |||
Non-controlling interest | |||
Chanticleer equity | |||
Common stock and warrants issued | -3,869,156 | ||
Assumption of debt | |||
Cash paid | |||
Cash received in excess of cash paid | 2,274 | ||
Spoon [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | 828,750 | ||
Warrants | 280,400 | ||
Assumption of debt | |||
Cash | |||
Total consideration paid | 1,109,150 | ||
Current assets, excluding cash | 89,817 | ||
Property and equipment | 391,462 | ||
Goodwill | 698,583 | ||
Trademark/trade name/franchise fee | |||
Inventory, deposits and other assets | 5,193 | ||
Total assets acquired, less cash | 1,185,055 | ||
Liabilities assumed | -97,541 | ||
Deferred tax liabilities | |||
Non-controlling interest | |||
Chanticleer equity | |||
Common stock and warrants issued | -1,109,150 | ||
Assumption of debt | |||
Cash paid | |||
Cash received in excess of cash paid | 21,636 | ||
Hooters Australia April 1, 2014 [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | |||
Warrants | |||
Assumption of debt | |||
Cash | 100,000 | ||
Total consideration paid | 100,000 | ||
Current assets, excluding cash | 377,296 | ||
Property and equipment | 2,934,307 | ||
Goodwill | |||
Trademark/trade name/franchise fee | 277,867 | ||
Inventory, deposits and other assets | 90,371 | ||
Total assets acquired, less cash | 3,679,841 | ||
Liabilities assumed | -1,560,710 | ||
Non-controlling interest | -993,999 | ||
Chanticleer equity | -1,028,749 | ||
Common stock and warrants issued | |||
Assumption of debt | |||
Cash paid | -100,000 | ||
Cash received in excess of cash paid | 3,617 | ||
Hooters Australia July 1, 2014 [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | |||
Warrants | 123,333 | ||
Assumption of debt | 5,000,000 | ||
Cash | |||
Total consideration paid | 5,123,333 | ||
Current assets, excluding cash | 47,777 | ||
Property and equipment | 1,603,557 | ||
Goodwill | 8,487,138 | ||
Trademark/trade name/franchise fee | 220,500 | ||
Inventory, deposits and other assets | 20,186 | ||
Total assets acquired, less cash | 10,379,158 | ||
Liabilities assumed | -1,496,536 | ||
Non-controlling interest | -3,759,289 | ||
Chanticleer equity | |||
Common stock and warrants issued | -123,333 | ||
Assumption of debt | -5,000,000 | ||
Cash paid | |||
Cash received in excess of cash paid | |||
Burger Company [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | 300,000 | ||
Warrants | |||
Assumption of debt | |||
Cash | 250,000 | ||
Total consideration paid | 550,000 | ||
Current assets, excluding cash | 9,926 | ||
Property and equipment | 284,795 | ||
Goodwill | 256,379 | ||
Trademark/trade name/franchise fee | |||
Inventory, deposits and other assets | |||
Total assets acquired, less cash | 551,100 | ||
Liabilities assumed | -1,100 | ||
Deferred tax liabilities | |||
Non-controlling interest | |||
Chanticleer equity | |||
Common stock and warrants issued | -300,000 | ||
Assumption of debt | |||
Cash paid | -250,000 | ||
Cash received in excess of cash paid |
Acquisitions_Schedule_of_Busin
Acquisitions - Schedule of Business Combination Pro Forma Information (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Business Combinations [Abstract] | ||
Net revenues | $10,442,476 | $10,735,901 |
Loss from continuing operations | -2,533,885 | -1,186,466 |
Loss from discontinued operations | -1,899 | -32,674 |
Loss attributable to non-controlling interest | 139,806 | -3,801 |
Net loss | ($2,394,079) | ($1,190,267) |
Net loss per share, basic and diluted | ($0.31) | ($0.20) |
Net loss per share, discontinued operations | $0 | ($0.01) |
Weighted average shares outstanding, basic and diluted | 8,249,453 | 5,974,495 |
Discontinued_Operations_Detail
Discontinued Operations (Details Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Number of stock units reacquired | 185,000 | |
Number of stock units reacquired during period, value | $446,050 | |
Net assets | 1,109,062 | |
Net loss | 683,012 | |
Liabilities from discontinued | $179,186 | $177,393 |
Discontinued_Operations_Schedu
Discontinued Operations - Schedule of Operating Results From Discontinued Operations (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Total revenue | $278,469 | |
Total operating expenses | 1,899 | 311,143 |
Net loss from discontinued operations | ($1,899) | ($32,674) |
Property_and_Equipment_Details
Property and Equipment (Details Narrative) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $21,480 | $21,250 | |
South African Restaurants [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Capital leased assets net | 206,961 | 263,392 | |
Net book value of property and equipment | $99,912 | $158,446 |
Property_and_Equipment_Schedul
Property and Equipment - Schedule of Property, Plant and Equipment (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $20,896,641 | $19,045,647 |
Accumulated depreciation and amortization | -5,903,290 | -5,730,238 |
Property and equipment, net | 14,993,351 | 13,315,409 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,362,052 | 9,940,517 |
Restaurant Furnishings and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 8,199,525 | 7,827,925 |
Construction In Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 750,393 | 727,934 |
Office and Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 92,444 | 51,746 |
Land And Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 432,866 | 437,223 |
Office Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $59,361 | $60,302 |
Goodwill_and_other_Intangible_
Goodwill and other Intangible Assets, Net - Schedule of Goodwill (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Goodwill [Line Items] | ||||
Goodwill | $15,445,739 | $15,617,308 | $9,168,405 | $6,496,756 |
South Africa [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 263,149 | 273,737 | ||
American Burger Company [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 2,806,990 | 2,806,990 | ||
West End Wings [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 2,738,909 | 2,868,192 | ||
Just Fresh [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 425,151 | 425,151 | ||
Australia [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 6,833,593 | 7,291,329 | ||
Hooters Pacific NW [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 1,951,909 | |||
The Burger Joint [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | $426,038 |
Goodwill_and_other_Intangible_1
Goodwill and other Intangible Assets, Net - Summary of Changes in Carrying Amount of Goodwill (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning Balance | $15,617,308 | $6,496,756 |
Acquisitions | 426,038 | 2,671,649 |
Foreign currency translation | -597,608 | |
Ending Balance | $15,445,739 | $9,168,405 |
Goodwill_and_other_Intangible_2
Goodwill and other Intangible Assests, Net - Schedule of Other Intangible Assets (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | $6,568,748 | $3,799,975 | ||
Accumulated amortization | -472,083 | 403,472 | ||
Intangible assets, net | 6,096,665 | 3,396,503 | ||
Franchise Rights [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 2,344,794 | 1,006,021 | ||
Franchise Rights [Member] | South Africa [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 354,731 | 290,986 | ||
Franchise Rights [Member] | Europe [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 89,152 | 106,506 | ||
Franchise Rights [Member] | Australia [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 355,911 | 383,529 | ||
Franchise Rights [Member] | Hooters Pacific NW and Spoon [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 90,000 | 90,000 | ||
Franchise Rights [Member] | The Burger Joint [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 1,320,000 | |||
Franchise Rights [Member] | Brazil [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 135,000 | [1] | 135,000 | [1] |
Trademarks and Trade Names [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 4,223,954 | 2,793,954 | ||
Trademarks and Trade Names [Member] | Just Fresh [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 1,010,000 | 1,010,000 | ||
Trademarks and Trade Names [Member] | American Roadside Burgers [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 1,783,954 | 1,783,954 | ||
Trademarks and Trade Names [Member] | The Burger Joint [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | $1,430,000 | |||
[1] | * Amortization of the Brazil franchise cost will begin with the opening of a restaurant in that market. |
LongTerm_Debt_and_Notes_Payabl2
Long-Term Debt and Notes Payable - Summary of Long-Term Debt and Notes Payable (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2014 | Dec. 31, 2013 | |||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | $6,651,876 | $6,822,930 | |||||
Current portion of long-term debt | 997,370 | 1,813,647 | 278,806 | ||||
Long-term debt, less current portion | 5,654,506 | 5,009,283 | |||||
Note Payable To A Bank Due In Monthly Installments Of $4,406 Including Interest At Wall Street Journal Prime Plus 1% (minimum Of 5.5%); Remaining Balance Due October 10, 2018 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | 165,861 | [1] | 176,731 | [1] | |||
Line Of Credit To A Bank, Expired May 10, 2015, Interest Rate Of Wall Street Journal Prime (3.25% As Of March 31, 2015) Plus 1%, Floor Rate Of 5% Renewal In Process [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | 500,000 | [2] | 500,000 | [2] | |||
Note Payable To A Bank Due Interest Only At A 5% Rate, Balloon Principal Payment Due June 10, 2019 Collateralized By Substantially All Of The CompanyBs Assets And Guaranteed By An Officer Of The Company [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | 500,000 | [3] | 500,000 | [3] | |||
Loan Agreement March An Outside Company On December 13, 2013, Interest At 1% Per Month, Paid In Full In 2015 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | [4] | 100,000 | [4] | ||||
Loan Agreement With An Outside Company On June 20, 2014, Interest At 8% Annual Rate, Paid In Full In 2015 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | [5] | 100,000 | [5] | ||||
Mortage Loan Dated April 2014, Interest At South African Prime Rate + 2.6% (11.85% As Of March 31, 2015); Due July 31, 2024; Secured By A Bond On All Assets At Our Port Elizabeth [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | 278,806 | [6] | 294,362 | [6] | |||
Loan Agreement With An Outside Company On July 1, 2014, Interest At 12% Annual Rate, Secured By Certain Secured Assets And Gaming Revenue Of The Australian Entities, Net Of Discount Of $300,766 And $343,733, Respectively; Matures January 31, 2017 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | 4,699,234 | [7] | 4,656,267 | [7] | |||
Bank Overdraft Facilities; Unsecured; Maximum Facilities $260,000; Interest Rate 11% At March 31, 2015, With Annual Renewal Each December [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | 198,846 | [8] | 151,868 | [8] | |||
Term Facility With Monthly Payments Of 45,288 Rand, Including Interest At South African Prime + 1.0% (10.25% As Of March 31, 2015), Due June 14, 2016 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | 51,968 | [9] | 64,309 | [9] | |||
Term facility with monthly payments of 44,727 Rand including interest at South African Prime + 3.0% (12.25% as of March 31, 2015); due November 15, 2019 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | 157,221 | [10] | 170,053 | [10] | |||
Term Facility With Monthly Payments Of 33,750 Rand, Including Interest At South African Prime + 3 0% (12.25% As Of March 31, 2015); Due December 1, 2018 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Total Long-term Debt | $99,940 | $109,340 | |||||
[1] | (a) and (b) On April 11, 2013, the Company and Paragon Commercial Bank (bParagonb) entered into a credit agreement (the bCredit Agreementb) which provides for a $500,000 revolving credit facility with a one-year term from the closing date. The Credit Agreement is available to be drawn at the Companybs discretion to finance investments in new business ventures and for the Companybs general corporate working capital requirements in the ordinary course of business. The note payable originally matured on August 10, 2013 and on November 4, 2013 the note was extended to October 10, 2018 with monthly principal and interest payments of $4,406, whereas the new credit facility (b) expired on May 10, 2015. The Company is currently in negotiations to extend the maturity date of the credit facility. Borrowings under the Credit Agreement bear monthly interest at the greater of: (i) floor rate of 5.00% or (ii) the Wall Street Journalbs prime plus rate (3.25% as of March 31, 2015) plus 1.00%. Any borrowings are secured by a lien on all of the Companybs assets. The obligations under the Credit Agreement are guaranteed by Mike Pruitt, the Companybs Chief Executive Officer. | ||||||
[2] | (b) On April 11, 2013, the Company and Paragon Commercial Bank ("Paragon") entered into a credit agreement (the "Credit Agreement") which provides for a $500,000 revolving credit facility with a one-year term from the closing date. The Credit Agreement is available to be drawn at the Companybs discretion to finance investments in new business ventures and for the Companybs general corporate working capital requirements in the ordinary course of business. The note payable originally matured on August 10, 2013 and on November 4, 2013 the note was extended to October 10, 2018 with monthly principal and interest payments of $4,406, whereas the new credit facility (b) expired on May 10, 2015. The Company is currently in negotiations to extend the maturity date of the credit facility. Borrowings under the Credit Agreement bear monthly interest at the greater of: (i) floor rate of 5.00% or (ii) the Wall Street Journalbs prime plus rate (3.25% as of March 31, 2015) plus 1.00%. Any borrowings are secured by a lien on all of the Companybs assets. The obligations under the Credit Agreement are guaranteed by Mike Pruitt, the Companybs Chief Executive Officer. | ||||||
[3] | (c) During February 2014, the Company secured a note with Paragon for $500,000 due on June 10, 2019. The note bears interest at a 5% annual rate, interest only monthly payments until the maturity date. | ||||||
[4] | (d) On December 23, 2013, the Company entered into a loan agreement with an outside company for $150,000, originally due on February 23, 2014. Interest is compounded monthly at a rate of 1%. As of February 23, 2014, the Company was not in compliance with the terms of this note due to non-payment of principal and interest. On March 21 and August 20, 2014, the Company paid the note holder $25,000 each of principal and accrued interest. In March 2015, the Company repaid the loan in full. | ||||||
[5] | (e) On June 20, 2014, the Company entered into a loan agreement with an outside company for $100,000, originally due on July 11, 2014. In March 2015, the Company issued 100,000 shares of its common stock to repay the loan, accrued interest and penalties in full. The Company recognized a loss on extinguishment of debt of $45,000, representing the difference between the fair value of the shares issued and the carrying value of the outstanding debt and accrued interest. | ||||||
[6] | (f) In April 2014, our South African subsidiary entered into a mortgage note with a South African bank for the purchase of the building in Port Elizabeth for our Hooters location. The 10-year note is for $330,220 with an annual interest rate of 2.6% above the South African prime rate (prime currently 9.25%). Monthly principal and interest payments of approximately $4,600 commenced in August, 2014. The mortgage note is personally guaranteed by our CEO and South African COO and secured by the assets of the Port Elizabeth building. | ||||||
[7] | (g) On July 1, 2014, pursuant to Purchase Agreements executed on June 30, 2014, the Company completed the acquisition of a sixty percent (60%) ownership interest in Hoot Parramatta Pty Ltd, Hoot Australia Pty Ltd, Hoot Penrith Pty Ltd, and TMIX Management Australia Pty Ltd (collectively, the bAustralian Entitiesb), which own, operate, and manage Hooters restaurant locations and gaming operations in Australia. The ownership interest in the Australian Entities was purchased from the respective entities in exchange for the Company agreeing to assume a five million dollar ($5,000,000) debt bearing interest at 12% annually and issuing two hundred fifty thousand (250,000) warrants to purchase shares of our common stock. Originally principal repayments were as follows: $2,000,000 on December 31, 2014, $2,000,000 on June 30, 2015, and $1,000,000 on December 31, 2015. On October 15, 2014, principal repayments were restructured whereby $200,000 was due on December 31, 2014, $50,000 is payable each month from January 2015 through December 2015, $2,000,000 is payable January 31, 2016, $1,200,000 is payable on July 31, 2016 and the remaining $1,000,000 is due by January 31, 2017. The Company and the note holder are currently in discussion to renegotiate the terms of the above payments and other terms of the agreement. The note holder has not demanded the above payments (as of December 31, 2014 through currently) nor will they unless the negotiations terminate. The Company has paid the agreed upon monthly interest payments in 2015 and is currently negotiating a change in payment terms. | ||||||
[8] | (h) The Company's South African subsidiary has local bank financing in the form of term and overdraft facilities totaling of approximately $198,846 and $151,868 outstanding as of March 31, 2015 and December 31, 2014 respectively. | ||||||
[9] | (i) The Company's South African subsidiary has local bank financing in the form of a term loan with monthly payments of 45,000 Rand, including interest at South African Prime +1.0%. The term loan matures on June 14, 2016. | ||||||
[10] | (j) The Company's South African subsidiary has local bank financing in the form of a term loan with monthly payments of 44,000 Rand, including interest South African Prime +3.0%. The term loan matures on November 15, 2019. |
LongTerm_Debt_and_Notes_Payabl3
Long-Term Debt and Notes Payable - Summary of Long-Term Debt and Notes Payable (Details) (Parenthetical) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | |||||||||
Nov. 04, 2013 | Apr. 11, 2013 | Apr. 30, 2014 | Feb. 28, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Aug. 20, 2014 | Jun. 20, 2014 | Mar. 21, 2014 | Dec. 23, 2013 | Jul. 02, 2014 | Oct. 15, 2014 | Dec. 31, 2014 | |
Line of credit revolving facility | $500,000 | ||||||||||||
Note payable maturity date | 10-Aug-13 | 31-Jul-24 | 10-Jun-19 | ||||||||||
Noe payable extended date | 10/10/18 | ||||||||||||
Note payable interest rate description | prime plus rate (3.25% as of March 31, 2015) plus 1.00%. | ||||||||||||
Note payable monthly installment amount | 4,406 | 4,600 | |||||||||||
Line of credit expires date | 10-May-15 | ||||||||||||
Secured note | 500,000 | ||||||||||||
Note interest rate | 5.00% | 11.00% | |||||||||||
Long term note | 278,806 | 997,370 | 1,813,647 | ||||||||||
Loss on extinguishment of debt | -170,089 | ||||||||||||
Note term | 10 years | ||||||||||||
Business acquisition ownership interest percentage | 49.00% | ||||||||||||
Revenue | 8,671,149 | 5,348,979 | |||||||||||
Bank overdraft facilities | 198,846 | ||||||||||||
Line of credit monthly payment | 5,000,000 | ||||||||||||
South African Subsidiary [Member] | |||||||||||||
Bank overdraft facilities | 151,868 | ||||||||||||
South African Subsidiary One [Member] | |||||||||||||
Line of credit expires date | 14-Jun-16 | ||||||||||||
Line of credit interest rate | 10.25% | ||||||||||||
South African Subsidiary One [Member] | South Africa, Rand [Member] | |||||||||||||
Line of credit monthly payment | 45,000 | ||||||||||||
South African Subsidiary Two [Member] | |||||||||||||
Line of credit expires date | 15-Nov-19 | ||||||||||||
Line of credit interest rate | 12.25% | ||||||||||||
South African Subsidiary Two [Member] | South Africa, Rand [Member] | |||||||||||||
Line of credit monthly payment | 44,000 | ||||||||||||
South African Subsidiary Three [Member] | |||||||||||||
Line of credit expires date | 1-Dec-18 | ||||||||||||
Line of credit interest rate | 12.25% | ||||||||||||
South African Subsidiary Three [Member] | South Africa, Rand [Member] | |||||||||||||
Line of credit monthly payment | 34,000 | ||||||||||||
Prime Rate [Member] | South African Subsidiary One [Member] | |||||||||||||
Line of credit interest rate | 1.00% | ||||||||||||
Prime Rate [Member] | South African Subsidiary Two [Member] | |||||||||||||
Line of credit interest rate | 3.00% | ||||||||||||
Prime Rate [Member] | South African Subsidiary Three [Member] | |||||||||||||
Line of credit interest rate | 3.00% | ||||||||||||
Interest Rate Floor [Member] | |||||||||||||
Note interest rate | 2.60% | 11.85% | |||||||||||
Interest Rate Floor [Member] | South African [Member] | |||||||||||||
Note interest rate | 92.50% | ||||||||||||
Credit Agreement [Member] | |||||||||||||
Line of credit interest rate description | Prime (3.25% as of March 31, 2015) plus 1.00%, | ||||||||||||
Credit Agreement [Member] | Interest Rate Floor [Member] | |||||||||||||
Line of credit interest rate | 5.00% | ||||||||||||
Loan Agreement [Member] | |||||||||||||
Note payable maturity date | 11-Jul-14 | 23-Feb-14 | |||||||||||
Note payable interest rate description | repaid in full in early 2015 | repaid in full in early 2015 | |||||||||||
Note payable monthly installment amount | 25,000 | 25,000 | |||||||||||
Note interest rate | 8.00% | 1.00% | |||||||||||
Short term borrowing | 100,000 | 150,000 | |||||||||||
Loss on extinguishment of debt | 45,000 | ||||||||||||
Number of shares issued for repay the loan | 100,000 | ||||||||||||
Loan Agreement [Member] | Australian Entities [Member] | |||||||||||||
Note payable maturity date | 31-Jan-17 | ||||||||||||
Revenue | 343,733 | ||||||||||||
Purchase Agreements [Member] | Australian Entities [Member] | |||||||||||||
Note payable maturity date | 31-Jan-17 | ||||||||||||
Note interest rate | 12.00% | ||||||||||||
Business acquisition ownership interest percentage | 60.00% | ||||||||||||
Debt annual payment amount | 5,000,000 | 200,000 | |||||||||||
Issuance of warrant to purchase of common stock, shares | 250,000 | ||||||||||||
Purchase Agreements [Member] | Australian Entities [Member] | December 31, 2014 [Member] | |||||||||||||
Note payable monthly installment amount | 2,000,000 | ||||||||||||
Purchase Agreements [Member] | Australian Entities [Member] | June 30, 2015 [Member] | |||||||||||||
Note payable monthly installment amount | 2,000,000 | ||||||||||||
Purchase Agreements [Member] | Australian Entities [Member] | December 31, 2015 [Member] | |||||||||||||
Note payable monthly installment amount | 1,000,000 | ||||||||||||
Purchase Agreements [Member] | Australian Entities [Member] | January 2015 through December 2015 [Member] | |||||||||||||
Note payable monthly installment amount | 50,000 | ||||||||||||
Purchase Agreements [Member] | Australian Entities [Member] | January 31, 2016 [Member] | |||||||||||||
Note payable monthly installment amount | 2,000,000 | ||||||||||||
Purchase Agreements [Member] | Australian Entities [Member] | July 31, 2016 [Member] | |||||||||||||
Note payable monthly installment amount | 1,200,000 | ||||||||||||
Purchase Agreements [Member] | Australian Entities [Member] | January 31, 2017 [Member] | |||||||||||||
Note payable monthly installment amount | 1,000,000 | ||||||||||||
Revolving Credit Facility [Member] | Paragon Commercial Bank [Member] | Credit Agreement [Member] | |||||||||||||
Line of credit revolving facility | $500,000 | ||||||||||||
Line of credit term | 1 year |
Convertible_Notes_Payable_Deta
Convertible Notes Payable (Details Narrative) (USD $) | 1 Months Ended | 3 Months Ended | |||||||||
Mar. 31, 2015 | Jan. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Feb. 28, 2014 | Jan. 05, 2015 | Dec. 16, 2014 | Nov. 19, 2014 | Mar. 19, 2014 | Aug. 02, 2013 | |
Debt Instrument, Redemption [Line Items] | |||||||||||
Proceeds from issuance of debt | $2,200,000 | ||||||||||
Convertible notes payable | 2,206,574 | 2,206,574 | 1,913,683 | ||||||||
Debt instrument, interest rate, stated percentage | 11.00% | 11.00% | 5.00% | ||||||||
Amortized debt discount | 474,874 | 259,442 | |||||||||
Conversion of convertible debt amount | 250,000 | 5,000,000 | |||||||||
Conversion of debt into shares | 168,713 | 373,333 | |||||||||
Derivative liabilities | 1,767,300 | 125,089 | 1,767,300 | 1,610,900 | |||||||
Convertible Promissory Notes [Member] | |||||||||||
Debt Instrument, Redemption [Line Items] | |||||||||||
Proceeds from issuance of debt | 2,150,000 | ||||||||||
Convertible Promissory Notes One [Member] | |||||||||||
Debt Instrument, Redemption [Line Items] | |||||||||||
Proceeds from issuance of debt | 500,000 | ||||||||||
Convertible notes payable | 1,000,000 | ||||||||||
Debt instrument, interest rate, stated percentage | 8.00% | ||||||||||
Percentage of convertible debt to common stock tading price | 85.00% | ||||||||||
Conversion price per share | $1 | ||||||||||
Ceiling price per share | $2 | ||||||||||
Issuance of warrants to purchase of common stock | 250,000 | ||||||||||
Common stock, exercisable price per share | $2.50 | ||||||||||
Warrant term | 5 years | ||||||||||
Conversion of convertible debt amount | 500,000 | ||||||||||
Conversion of debt into shares | 373,333 | ||||||||||
Convertible Promissory Notes One [Member] | Warrants One [Member] | |||||||||||
Debt Instrument, Redemption [Line Items] | |||||||||||
Fair value of the embedded conversion feature and the warrants | 670,300 | ||||||||||
Convertible Promissory Notes One [Member] | Warrants Two [Member] | |||||||||||
Debt Instrument, Redemption [Line Items] | |||||||||||
Fair value of the embedded conversion feature and the warrants | 202,358 | ||||||||||
Convertible Promissory Notes Two [Member] | |||||||||||
Debt Instrument, Redemption [Line Items] | |||||||||||
Proceeds from issuance of debt | 250,000 | ||||||||||
Convertible notes payable | 150,000 | ||||||||||
Debt instrument, interest rate, stated percentage | 8.00% | ||||||||||
Percentage of convertible debt to common stock tading price | 85.00% | ||||||||||
Conversion price per share | $1 | ||||||||||
Ceiling price per share | $2 | ||||||||||
Issuance of warrants to purchase of common stock | 37,500 | ||||||||||
Common stock, exercisable price per share | $2.50 | ||||||||||
Warrant term | 5 years | ||||||||||
Conversion of convertible debt amount | 373,333 | ||||||||||
Conversion of debt into shares | 168,713 | ||||||||||
Convertible Promissory Notes Two [Member] | Warrants One [Member] | |||||||||||
Debt Instrument, Redemption [Line Items] | |||||||||||
Fair value of the embedded conversion feature and the warrants | 108,600 | ||||||||||
Convertible Promissory Notes Two [Member] | Warrants Two [Member] | |||||||||||
Debt Instrument, Redemption [Line Items] | |||||||||||
Fair value of the embedded conversion feature and the warrants | 30,314 | ||||||||||
Convertible Promissory Notes Two [Member] | |||||||||||
Debt Instrument, Redemption [Line Items] | |||||||||||
Convertible notes payable | 1,000,000 | 1,000,000 | |||||||||
Debt instrument, interest rate, stated percentage | 9.00% | 9.00% | |||||||||
Conversion price per share | $2 | $2 | |||||||||
Issuance of warrants to purchase of common stock | 400,000 | ||||||||||
Common stock, exercisable price per share | $2.50 | $2.50 | |||||||||
Warrant term | 5 years | ||||||||||
Fair value of the embedded conversion feature and the warrants | 315,008 | 315,008 | |||||||||
Amortized debt discount | $455,008 | ||||||||||
Convertible Debt [Member] | |||||||||||
Debt Instrument, Redemption [Line Items] | |||||||||||
Conversion price per share | $1.33 | $1.30 | $1.45 | $3.29 | $3.73 | ||||||
Percentage of net income received from ownership interest | 60.00% | ||||||||||
Equity ownerhip interest rate | 50.00% | 50.00% |
Convertible_Notes_Payable_Sche
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Convertible Notes Payable [Line Items] | ||
Convertible Notes Payable, Total | $2,206,574 | $1,913,683 |
Current portion of convertible notes payable | -196,154 | -436,270 |
Convertible notes payable, less current portion | 2,010,420 | 1,477,413 |
6% Convertible notes payable issued in August 2013 [Member] | ||
Convertible Notes Payable [Line Items] | ||
Convertible Notes Payable, Total | 3,000,000 | 3,000,000 |
Discounts on above convertible note | -1,333,338 | -1,583,333 |
15% Convertible notes payable issued in March 2014 [Member] | ||
Convertible Notes Payable [Line Items] | ||
Convertible Notes Payable, Total | 500,000 | |
Discounts on above convertible note | -63,730 | |
8% Convertible notes payable issued in Nov/Dec 2014 [Member] | ||
Convertible Notes Payable [Line Items] | ||
Convertible Notes Payable, Total | 100,000 | 350,000 |
Discounts on above convertible note | -58,979 | -289,254 |
8% Convertible notes payable issued in January 2015 [Member] | ||
Convertible Notes Payable [Line Items] | ||
Convertible Notes Payable, Total | 150,000 | |
Discounts on above convertible note | -127,960 | |
8% Convertible notes payable issued in January 2015 [Member] | ||
Convertible Notes Payable [Line Items] | ||
Convertible Notes Payable, Total | 1,000,000 | |
Discounts on above convertible note | -803,846 | |
9% Convertible notes payable issued in March 2015 [Member] | ||
Convertible Notes Payable [Line Items] | ||
Convertible Notes Payable, Total | 1,000,000 | |
Discounts on above convertible note | ($719,303) |
Convertible_Notes_Payable_Sche1
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) | Mar. 31, 2015 | Feb. 28, 2014 | Dec. 31, 2014 |
Convertible notes payable interest rate | 11.00% | 5.00% | |
6% Convertible notes payable issued in August 2013 [Member] | |||
Convertible notes payable interest rate | 6.00% | 6.00% | |
15% Convertible notes payable issued in March 2014 [Member] | |||
Convertible notes payable interest rate | 15.00% | 15.00% | |
8% Convertible notes payable issued in Nov/Dec 2014 [Member] | |||
Convertible notes payable interest rate | 8.00% | 8.00% | |
8% Convertible notes payable issued in January 2015 [Member] | |||
Convertible notes payable interest rate | 8.00% | 8.00% | |
8% Convertible notes payable issued in January 2015 [Member] | |||
Convertible notes payable interest rate | 8.00% | 8.00% | |
9% Convertible notes payable issued in March 2015 [Member] | |||
Convertible notes payable interest rate | 9.00% | 9.00% |
Convertible_Notes_Payable_Fair
Convertible Notes Payable - Fair Value Measurements, Valuation Assumptions of Embedded Conversion Feature and Warrants (Details) (USD $) | 0 Months Ended | 12 Months Ended | 3 Months Ended | ||||
Jan. 05, 2015 | Dec. 16, 2014 | Nov. 19, 2014 | Mar. 19, 2014 | Aug. 02, 2013 | Dec. 31, 2014 | Mar. 31, 2015 | |
Convertible Debt [Member] | |||||||
Debt Instrument, Redemption [Line Items] | |||||||
Common stock closing price | $1.75 | $1.53 | $1.70 | $3.87 | $4.15 | ||
Conversion per share price | $1.33 | $1.30 | $1.45 | $3.29 | $3.73 | ||
Conversion shares | 112,402 | 77,061 | 172,672 | 151,999 | 804,764 | ||
Expected life (in years) | 3 years | 3 years | 3 years | 1 year | 3 years | ||
Expected volatility | 73.00% | 74.00% | 74.00% | 62.00% | 110.00% | ||
Call option value | $0.97 | $0.81 | $0.90 | $1.19 | $2.82 | ||
Risk-free interest rate | 0.90% | 1.10% | 1.10% | 0.15% | 0.59% | ||
Dividends | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||
Convertible Debt One [Member] | |||||||
Debt Instrument, Redemption [Line Items] | |||||||
Common stock closing price | $1.73 | ||||||
Conversion per share price | $1.49 | ||||||
Conversion shares | 2,008,032 | ||||||
Expected life (in years) | 1 year 7 months 6 days | ||||||
Expected volatility | 64.00% | ||||||
Call option value | $0.64 | ||||||
Risk-free interest rate | 0.67% | ||||||
Dividends | 0.00% | ||||||
Convertible Debt Two [Member] | |||||||
Debt Instrument, Redemption [Line Items] | |||||||
Common stock closing price | $1.73 | ||||||
Conversion per share price | $1.47 | ||||||
Conversion shares | 340,020 | ||||||
Expected life (in years) | 2 months 12 days | ||||||
Expected volatility | 66.00% | ||||||
Call option value | $0.35 | ||||||
Risk-free interest rate | 0.40% | ||||||
Dividends | 0.00% | ||||||
Convertible Debt Three [Member] | |||||||
Debt Instrument, Redemption [Line Items] | |||||||
Common stock closing price | $1.73 | ||||||
Conversion per share price | $1.26 | ||||||
Conversion shares | 199,177 | ||||||
Expected life (in years) | 2 years 10 months 24 days | ||||||
Expected volatility | 74.00% | ||||||
Call option value | $0.77 | ||||||
Risk-free interest rate | 1.10% | ||||||
Dividends | 0.00% | ||||||
Convertible Debt Four [Member] | |||||||
Debt Instrument, Redemption [Line Items] | |||||||
Common stock closing price | $1.73 | ||||||
Conversion per share price | $1.26 | ||||||
Conversion shares | 77,061 | ||||||
Expected life (in years) | 3 years | ||||||
Expected volatility | 74.00% | ||||||
Call option value | $0.78 | ||||||
Risk-free interest rate | 1.10% | ||||||
Dividends | 0.00% | ||||||
Convertible Debt Five [Member] | |||||||
Debt Instrument, Redemption [Line Items] | |||||||
Common stock closing price | |||||||
Conversion per share price | |||||||
Conversion shares | |||||||
Expected volatility | |||||||
Call option value | |||||||
Risk-free interest rate | |||||||
Dividends | |||||||
Convertible Debt Six [Member] | |||||||
Debt Instrument, Redemption [Line Items] | |||||||
Common stock closing price | $2.39 | ||||||
Conversion per share price | $2.23 | ||||||
Conversion shares | 1,343,085 | ||||||
Expected life (in years) | 1 year 3 months 18 days | ||||||
Expected volatility | 0.65% | ||||||
Call option value | $0.77 | ||||||
Risk-free interest rate | 0.64% | ||||||
Dividends | 0.00% | ||||||
Convertible Debt Seven [Member] | |||||||
Debt Instrument, Redemption [Line Items] | |||||||
Common stock closing price | |||||||
Conversion per share price | |||||||
Conversion shares | |||||||
Expected volatility | |||||||
Call option value | |||||||
Risk-free interest rate | |||||||
Dividends | |||||||
Convertible Debt Eight [Member] | |||||||
Debt Instrument, Redemption [Line Items] | |||||||
Common stock closing price | |||||||
Conversion per share price | |||||||
Conversion shares | |||||||
Expected volatility | |||||||
Call option value | |||||||
Risk-free interest rate | |||||||
Dividends | |||||||
Convertible Debt Nine [Member] | |||||||
Debt Instrument, Redemption [Line Items] | |||||||
Common stock closing price | $2.39 | ||||||
Conversion per share price | $1.96 | ||||||
Conversion shares | 51,151 | ||||||
Expected life (in years) | 2 years 8 months 12 days | ||||||
Expected volatility | 0.65% | ||||||
Call option value | $1.14 | ||||||
Risk-free interest rate | 0.99% | ||||||
Dividends | 0.00% | ||||||
Convertible Debt Ten [Member] | |||||||
Debt Instrument, Redemption [Line Items] | |||||||
Common stock closing price | $2.39 | ||||||
Conversion per share price | $1.96 | ||||||
Conversion shares | 76,726 | ||||||
Expected life (in years) | 2 years 9 months 18 days | ||||||
Expected volatility | 0.73% | ||||||
Call option value | $1.24 | ||||||
Risk-free interest rate | 1.02% | ||||||
Dividends | 0.00% |
Capital_Leases_Payable_Schedul
Capital Leases Payable - Schedule of Lease Payments for Capital Leases (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Capital Leases Payable [Line Items] | ||
Total capital leases payable | $110,394 | $78,660 |
Current maturities | 54,946 | 42,032 |
Capital leases payable, less current maturities | 55,449 | 36,628 |
Capital lease payable, bearing interest at 10%. through August 2017 [Member] | ||
Capital Leases Payable [Line Items] | ||
Total capital leases payable | 9,275 | 10,502 |
Capital lease payable, bearing interest at 11.5%, through December 2017 [Member] | ||
Capital Leases Payable [Line Items] | ||
Total capital leases payable | 45,189 | |
Capital lease payable, bearing interest at 11.5%, through July 2016 [Member] | ||
Capital Leases Payable [Line Items] | ||
Total capital leases payable | 21,744 | 26,489 |
Capital lease payable, bearing interest at 11.5%, through November 2016 [Member] | ||
Capital Leases Payable [Line Items] | ||
Total capital leases payable | 34,186 | 40,336 |
Capital lease payable, bearing interest at 10%, through March 2015 [Member] | ||
Capital Leases Payable [Line Items] | ||
Total capital leases payable | $1,333 |
Capital_Leases_Payable_Schedul1
Capital Leases Payable - Schedule of Lease Payments for Capital Leases (Details) (Parenthetical) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Capital lease payable, bearing interest at 10%. through August 2017 [Member] | ||
Capital lease interest rate | 10.00% | 10.00% |
Capital lease description | through August 2017 | through August 2017 |
Capital lease payable, bearing interest at 11.5%, through December 2017 [Member] | ||
Capital lease interest rate | 11.50% | 11.50% |
Capital lease description | through December 2017 | through December 2017 |
Capital lease payable, bearing interest at 11.5%, through July 2016 [Member] | ||
Capital lease interest rate | 11.50% | 11.50% |
Capital lease description | through July 2016 | through July 2016 |
Capital lease payable, bearing interest at 11.5%, through November 2016 [Member] | ||
Capital lease interest rate | 11.50% | 11.50% |
Capital lease description | through November 2016 | through November 2016 |
Capital lease payable, bearing interest at 10%, through March 2015 [Member] | ||
Capital lease interest rate | 10.00% | 10.00% |
Capital lease description | through March 2015 | through March 2015 |
Accounts_Payable_and_Accrued_E2
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Disclosure Text Block [Abstract] | ||
Accounts payable | $4,516,241 | $3,382,818 |
Accrued taxes (VAT, GST, Sales Payroll) | 1,499,356 | 1,604,829 |
Accrued income taxes | 107,815 | 92,618 |
Accrued interest | 301,300 | 499,866 |
Accounts Payable and Accrued Liabilities, Total | $6,424,712 | $5,580,131 |
Stockholders_Equity_Details_Na
Stockholders' Equity (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | ||
Mar. 16, 2015 | Mar. 31, 2015 | Jan. 31, 2015 | Dec. 31, 2014 | |
Stockholders' Equity Note [Abstract] | ||||
Common stock, par value | $0.00 | $0.00 | ||
Common stock, shares authorized | 45,000,000 | 45,000,000 | ||
Common stock, shares issued | 12,306,230 | 7,249,442 | ||
Common stock, shares outstanding | 12,306,230 | 7,249,442 | ||
Preferred stock, par value | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||
Preferred stock, shares issued | ||||
Preferred stock, shares outstanding | ||||
Conversion of debt into shares | 168,713 | 373,333 | ||
Conversion of debt into shares value | $250,000 | $5,000,000 | ||
Commons stock shares issued during period for accrued interest | 100,000 | |||
Commons stock shares issued during period for accrued interest,shares | 100,000 | |||
Number of common stock warrants issued during period | 3,899,742 | |||
Proceeds from class of warrant or right issued | 7,062,325 | |||
Gross proceeds from warrant or right issued | 7,799,484 | |||
Number of shares available for future issuance | 500,000 | |||
Stock issued during period, shares, issued for services | 15,000 | |||
Stock issued during period, value, issued for services | $30,000 |
Stockholders_Equity_Schedule_o
Stockholders' Equity - Schedule of Warrants Activity (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | ||
Number of Warrants Outstanding beginning balance, shares | 8,715,804 | |
Granted, shares | 754,500 | |
Exercised, shares | ||
Forfeited, shares | ||
Number of Warrants Outstanding ending balance, shares | 9,470,304 | 8,715,804 |
Exercisable, shares | 9,470,304 | |
Weighted-average exercise price, Outstanding beginning balance | $5.49 | |
Weighted-average exercise price, Granted | $2.50 | |
Weighted-average exercise price, Exercised | ||
Weighted-average exercise price, Forfeited | ||
Weighted-average exercise price, Outstanding ending balance | $5.25 | $5.49 |
Exercisable, Weighted-average exercise price | $5.25 | |
Weighted Average Remaining Life In Years, Outstanding | 2 years 9 months 18 days | 2 years 8 months 12 days |
Weighted Average Remaining Life In Years, Exercisable | 2 years 9 months 18 days |
Stockholders_Equity_Schedule_o1
Stockholders' Equity - Schedule of Warrants Outstanding (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 2 years 9 months 18 days | 2 years 8 months 12 days |
Warrant [Member] | ||
Number of warrants, outstanding | 9,470,304 | |
Number of warrants exercisable | 9,470,304 | |
Range 1 [Member] | Warrant [Member] | ||
Range of exercise prices, upper limit | 5 | |
Number of warrants, outstanding | 3,554,514 | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 2 years 7 months 6 days | |
Number of warrants exercisable | 3,554,514 | |
Range 2 [Member] | Warrant [Member] | ||
Range of exercise prices, lower limit | 4 | |
Range of exercise prices, upper limit | 5 | |
Number of warrants, outstanding | 3,935,117 | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 2 years 8 months 12 days | |
Number of warrants exercisable | 3,935,117 | |
Range 3 [Member] | Warrant [Member] | ||
Range of exercise prices, lower limit | 3 | |
Range of exercise prices, upper limit | 4 | |
Number of warrants, outstanding | 663,901 | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 4 years 7 months 6 days | |
Number of warrants exercisable | 663,901 | |
Range 4 [Member] | Warrant [Member] | ||
Range of exercise prices, lower limit | 2 | |
Range of exercise prices, upper limit | 3 | |
Number of warrants, outstanding | 1,316,772 | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 3 years 6 months | |
Number of warrants exercisable | 1,316,772 |
Stockholders_Equity_Schedule_o2
Stockholders Equity - Schedule of Warrant Amortization (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Equity [Abstract] | ||
Added to additional paid-in capital | $22,375 | $22,375 |
Amortization of warrants | 22,375 | 22,375 |
Interest expense | 474,874 | 259,442 |
Consulting expense | 22,375 | 22,375 |
Other Additional Capital | $497,249 | $281,817 |
Related_Party_Transactions_Sch
Related Party Transactions - Schedule of Non-Interest Bearing Loans and Advances from Related Parties (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Related Party Transaction [Line Items] | ||
Due to related parties | $818,854 | $1,299,083 |
Chanticleer Investors LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 199,436 | |
Hoot SA I, LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 12,196 | 12,191 |
Hooters Australia Partner [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 606,455 | 1,087,451 |
Chanticleer Investors LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $199,436 |
Related_Party_Transactions_Sch1
Related Party Transactions - Schedule of Earned Income and Made Advance to Related Parties (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Related Party Transaction [Line Items] | ||
Due from related parties | $45,615 | $46,015 |
Hoot Sa II, III, IV Llc [Member] | ||
Related Party Transaction [Line Items] | ||
Due from related parties | $45,615 | $46,015 |
Segments_of_Business_Summary_o
Segments of Business - Summary of Revenues, Operating Loss, Long-Lived Assets By Geographic Area (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Revenue: | $8,671,149 | $5,348,979 | |
Operating loss: | -1,902,385 | -1,584,667 | |
Long Lived Assets: | 38,607,853 | 34,323,074 | |
United States [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue: | 4,097,542 | 2,637,759 | |
Operating loss: | -1,491,129 | -1,490,956 | |
Long Lived Assets: | 19,986,903 | 15,299,108 | |
South Africa [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue: | 1,677,582 | 1,641,086 | |
Operating loss: | -53,628 | -81,700 | |
Long Lived Assets: | 2,266,506 | 2,172,528 | |
Australia [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue: | 1,971,597 | ||
Operating loss: | -365,067 | ||
Long Lived Assets: | 12,783,771 | 13,068,305 | |
Europe [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue: | 924,428 | 1,070,134 | |
Operating loss: | 7,439 | -12,011 | |
Long Lived Assets: | 3,435,673 | 3,648,133 | |
Brazil [Member] | |||
Segment Reporting Information [Line Items] | |||
Long Lived Assets: | $135,000 | $135,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Narrative) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Debt owned amount | $480,000 |
Disclosures_About_Fair_Value_S
Disclosures About Fair Value - Schedule of Fair Value of Measured Assets and Liabilities (Details) (USD $) | Mar. 31, 2015 | Jan. 31, 2015 | Dec. 31, 2014 |
Fair Value Disclosure [Line Items] | |||
Available-for-sale securities | $35,362 | $35,362 | |
Embedded conversion feature | 1,767,300 | 125,089 | 1,610,900 |
Warrants | 312,747 | 334,300 | |
Quoted Prices In Active Markets Of Identical Assets (Level 1) [Member] | |||
Fair Value Disclosure [Line Items] | |||
Available-for-sale securities | 35,362 | 35,362 | |
Embedded conversion feature | |||
Warrants | |||
Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value Disclosure [Line Items] | |||
Available-for-sale securities | |||
Embedded conversion feature | |||
Warrants | |||
Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value Disclosure [Line Items] | |||
Available-for-sale securities | 35,362 | 35,362 | |
Embedded conversion feature | 1,767,300 | 1,610,900 | |
Warrants | $312,747 | $334,300 |
Disclosures_About_Fair_Value_S1
Disclosures About Fair Value - Summary of Changes in Fair Value (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $1,945,200 | |
Change in fair value of derivative liability | -338,053 | |
Amount included in debt discounts | 778,900 | |
Reclassification of derivative liability to equity | -306,000 | |
Ending balance | 2,080,047 | |
Conversion Feature [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 1,610,900 | |
Change in fair value of derivative liability | -382,700 | |
Amount included in debt discounts | 778,900 | |
Reclassification of derivative liability to equity | -239,800 | |
Ending balance | 1,767,300 | |
Warrant [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 334,300 | |
Change in fair value of derivative liability | 44,647 | |
Reclassification of derivative liability to equity | -66,200 | |
Ending balance | $312,747 |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (Subsequent Event [Member], USD $) | 0 Months Ended |
Apr. 24, 2015 | |
Subsequent Event [Member] | |
Convertible note payable issued | $1,000,000 |