Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 16, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Chanticleer Holdings, Inc. | |
Entity Central Index Key | 1,106,838 | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 21,468,021 | |
Trading Symbol | HOTR | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 1,805,927 | $ 245,828 |
Accounts and other receivables | 194,589 | 313,509 |
Inventories | 593,778 | 532,803 |
Due from related parties | 45,615 | 46,015 |
Prepaid expenses and other current assets | 421,508 | 330,745 |
TOTAL CURRENT ASSETS | 3,061,417 | 1,468,900 |
Property and equipment, net | 17,855,282 | 13,315,409 |
Goodwill | 12,269,504 | 15,617,308 |
Intangible assets, net | 7,542,395 | 3,396,503 |
Investments at fair value | 35,362 | 35,362 |
Other investments | 1,550,000 | 1,550,000 |
Deposits and other assets | 297,037 | 408,492 |
TOTAL ASSETS | 42,610,997 | 35,791,974 |
Current liabilities: | ||
Accounts payable and accrued expenses | 4,420,370 | 5,580,131 |
Current maturities of long-term debt and notes payable | 1,134,025 | 1,813,647 |
Current maturities of convertible notes payable, net of debt discount of $359,243 and $63,730, respectively | 215,757 | 436,270 |
Current maturities of capital leases payable | 47,370 | 42,032 |
Due to related parties | 212,399 | 1,299,083 |
Deferred rent | 686,622 | 118,986 |
Derivative liabilities | 1,318,661 | 1,945,200 |
Liabilities of discontinued operations | 177,204 | 177,393 |
TOTAL CURRENT LIABILITIES | 8,212,408 | 11,412,742 |
Long-term debt, less current maturities, net of debt discount of $214,833 and $343,733, respectively | 5,419,925 | 5,009,283 |
Convertible notes payable, net of debt discount of $955,177 and $1,872,587, respectively | 2,294,823 | 1,477,413 |
Capital leases payable, less current maturities | 25,144 | 36,628 |
Deferred rent | 1,784,840 | 2,196,523 |
Deferred tax liabilities | 655,050 | 686,884 |
TOTAL LIABILITIES | $ 18,392,190 | $ 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 21,328,830 and 7,249,442 shares, respectively | $ 2,133 | $ 725 |
Additional paid in capital | 55,208,098 | 32,601,400 |
Accumulated other comprehensive loss | (911,900) | (1,657,908) |
Non-controlling interest | (527,590) | 4,904,471 |
Accumulated deficit | (30,607,114) | (20,876,187) |
TOTAL STOCKHOLDERS' EQUITY | 24,218,807 | 14,972,501 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 42,610,997 | $ 35,791,974 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Statement Of Financial Position Parenthetical [Abstract] | ||
Debt Instrument Unamortized Discount, Current | $ 359,243 | $ 63,730 |
Debt Instrument Unamortized Discount | 214,833 | 343,733 |
Debt Instrument Unamortized Discount, Noncurrent | $ 955,177 | $ 1,872,587 |
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 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 21,328,830 | 7,249,442 |
Common stock, shares outstanding | 21,328,830 | 7,249,442 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue: | ||||
Restaurant sales, net | $ 10,005,324 | $ 8,753,554 | $ 28,907,536 | $ 20,465,510 |
Gaming income, net | 121,031 | 141,156 | 352,881 | 272,391 |
Management fee income - non-affiliates | 25,000 | $ 417,842 | 204,124 | $ 467,993 |
Franchise income | 119,950 | 270,948 | ||
Total revenue | 10,271,305 | $ 9,312,552 | 29,735,489 | $ 21,205,894 |
Expenses: | ||||
Restaurant cost of sales | 3,358,602 | 2,927,629 | 9,937,190 | 7,097,300 |
Restaurant operating expenses | 5,998,627 | 4,997,159 | 17,451,671 | 11,846,792 |
Restaurant pre-opening and closing expenses | 141,306 | 62,293 | 739,495 | 323,274 |
General and administrative expenses | 1,676,609 | $ 1,422,193 | 5,656,545 | $ 4,287,279 |
Asset impairment charge | 4,489,043 | 4,489,043 | ||
Depreciation and amortization | 358,307 | $ 435,404 | 1,205,255 | $ 1,162,088 |
Total expenses | 16,022,494 | 9,844,678 | 39,479,199 | 24,716,733 |
Loss from operations | (5,751,189) | (532,126) | (9,743,710) | (3,510,839) |
Other (expense) income | ||||
Interest expense | (657,906) | (581,215) | (2,736,555) | (1,268,756) |
Change in fair value of derivative liabilities | 262,232 | $ 221,000 | 833,139 | $ 925,200 |
Loss on extinguishment of debt | $ (145,834) | $ (315,923) | ||
Realized gains on securities | $ 101,472 | |||
Equity in losses of investments | (40,694) | |||
Other income (expense) | $ (40,262) | $ 438,607 | $ 35,064 | 446,445 |
Total other (expense) income | (581,770) | 78,392 | (2,184,275) | 163,667 |
Loss from continuing operations before income taxes | (6,332,959) | (453,734) | (11,927,985) | (3,347,172) |
Income tax benefit (expense) | (7,356) | 19,726 | 30,298 | 27,235 |
Loss from continuing operations | $ (6,340,315) | (434,008) | (11,897,687) | (3,319,937) |
Gain (loss) from discontinued operations, net of taxes | (56,223) | 189 | (161,196) | |
Consolidated net loss | $ (6,340,315) | (490,231) | (11,897,498) | (3,481,133) |
Less: Net loss (income) attributable to non-controlling interest | 1,823,601 | (61,209) | 2,166,570 | 68,318 |
Net loss attributable to Chanticleer Holdings, Inc. | (4,516,715) | (551,440) | (9,730,928) | (3,412,815) |
Net loss attributable to Chanticleer Holdings, Inc.: | ||||
Loss from continuing operations | $ (4,516,715) | (495,217) | (9,731,117) | (3,251,619) |
Gain (loss) from discontinued operations | (56,223) | 189 | (161,196) | |
Net loss attributable to Chanticleer Holdings, Inc. | $ (4,516,715) | $ (551,440) | $ (9,730,928) | (3,412,815) |
Other comprehensive loss: | ||||
Unrealized loss on available-for-sale securities (none applies to non-controlling interest) | (15,527) | |||
Foreign currency translation (loss) gain | $ (572,954) | $ 177,219 | $ (891,772) | 228,384 |
Total other comprehensive loss | (572,954) | 177,219 | (891,772) | 212,857 |
Comprehensive loss | $ (3,943,761) | $ (374,221) | $ (10,622,700) | $ (3,199,958) |
Net loss attributable to Chanticleer Holdings, Inc. per common share, basic and diluted: | ||||
Continuing operations attributable to common stockholders, basic and diluted | $ (0.31) | $ (0.07) | $ (0.69) | $ (0.52) |
Discontinued operations attributable to common stockholders, basic and diluted | $ (0.01) | $ 0 | $ (0.03) | |
Weighted average shares outstanding, basic and diluted | 14,802,370 | 6,628,011 | 14,059,116 | 6,279,688 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (11,897,498) | $ (3,481,133) |
Net (income) loss from discontinued operations | (189) | 161,196 |
Net loss from continuing operations | (11,897,687) | (3,319,937) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,205,255 | $ 1,162,088 |
Deferred income taxes | $ (31,834) | |
Equity in losses of investments | $ 40,694 | |
Asset impairment charge | $ 4,489,043 | |
Loss on extinguishment of debt | 315,923 | |
Loss on disposal of property and equipment | 514,522 | |
Common stock and warrants issued for services | 231,857 | $ 354,617 |
Amortization of debt discount | 1,356,365 | 930,392 |
Amortization of warrants | 22,375 | 152,325 |
Change in fair value of derivative liabilities | (833,139) | (925,200) |
(Increase) decrease in accounts and other receivables | (70,421) | (244,553) |
Decrease in prepaid expenses and other assets | (171,450) | (107,161) |
Decrease in inventory | 2,239 | 33,845 |
Increase in accounts payable and accrued expenses | 1,224,599 | $ 3,150,118 |
(Decrease) increase in deferred rent | (311,104) | |
Net cash (used in) provided by operating activities from continuing operations | (3,953,457) | $ 1,308,335 |
Net cash (used in) provided by operating activities from discontinued operations | (4,500) | (254,790) |
Net cash (used in) provided by operating activities | (3,957,957) | 1,053,545 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (1,518,747) | (3,569,775) |
Cash paid for acquisitions, net of cash acquired | (9,082,918) | 27,527 |
Net cash used in investing activities from continuing operations | (10,601,665) | (3,542,248) |
Cash flows from financing activities: | ||
Proceeds from sale of common stock and warrants | 14,920,937 | 835,000 |
Loan proceeds | 656,837 | $ 1,458,308 |
Loan repayments | (824,981) | |
Proceeds from convertible debt | 2,150,000 | |
Capital lease payments | (39,822) | $ (142,906) |
Decrease in amounts payable to affiliate | (1,086,684) | |
Minority Interest | 333,342 | $ 33,500 |
Net cash provided by financing activities from continuing operations | 16,109,629 | 2,183,902 |
Effect of exchange rate changes on cash | 10,092 | 119,884 |
Net increase (decrease) in cash | 1,560,099 | (184,917) |
Cash, beginning of period | 245,828 | 442,694 |
Cash, end of period | 1,805,927 | 257,777 |
Supplemental cash flow information: | ||
Interest | 810,028 | 63,503 |
Income taxes | 54,183 | $ 1,776 |
Non-cash investing and financing activities: | ||
Purchase of equipment using capital leases | 50,087 | |
Issuance of stock in connection with business combinations | 4,062,317 | $ (5,401,639) |
Debt discount for fair value of warrants and conversion feature issued in connection with debt | 1,176,108 | |
Convertible debt settled through issuance of common stock | 2,175,000 | |
Long-term debt settled through issuance of common stock | 100,000 | |
Purchases of businesses: | ||
Current assets excluding cash | 476,569 | $ 636,894 |
Property and equipment | 5,386,141 | 7,945,152 |
Goodwill | 4,019,972 | 11,394,009 |
Trade name/trademarks/franchise fees | $ 4,300,000 | 559,304 |
Deposits and other assets | 136,025 | |
Liabilities assumed | $ (1,037,446) | (4,165,235) |
Non-controlling interest | (4,753,288) | |
Chanticleer equity | (1,028,749) | |
Common stock issued | $ (4,062,317) | (5,401,639) |
Assumption of debt | (5,000,000) | |
Cash paid | $ (9,276,429) | (350,000) |
Cash acquired | $ 193,510 | $ 27,527 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 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 Percent Owned Name Jurisdiction of Incorporation Percent Owned CHANTICLEER HOLDINGS, INC. Delaware, USA Burger Business Pacific Northwest Hooters American Roadside Burgers, Inc. Delaware, USA 100 % Oregon Owls Nest, LLC Oregon, USA 100 % ARB Stores Jantzen Beach Wings, LLC Oregon, USA 100 % American Roadside McBee, LLC North Carolina, USA 100 % Tacoma Wings, LLC Washington, USA 100 % American Burger Morehead, LLC North Carolina, USA 100 % American Roadside Morrison, LLC North Carolina, USA 100 % South African Hooters American Burger Ally, LLC North Carolina, USA 100 % Hooters On The Buzz (Pty) Ltd South Africa 95 % American Roadside Cross Hill, LLC North Carolina, USA 100 % Chanticleer South Africa (Pty) Ltd. South Africa 100 % BGR Acquisition, LLC North Carolina, USA 100 % Hooters Emperors Palace (Pty.) Ltd. South Africa 88 % BGR Franchising, LLC Virginia, USA 100 % Hooters PE (Pty) Ltd South Africa 100 % BGR Operations, LLC Virginia, USA 100 % Hooters Ruimsig (Pty) Ltd. South Africa 90 % BGR Old Town, LLC Maryland, USA 100 % Hooters Umhlanga (Pty.) Ltd. South Africa 82 % BGR Dupont, LLC Virginia, USA 100 % Hooters SA (Pty) Ltd South Africa 90 % BGR Arlington, LLC Virginia, USA 100 % Hooters Willows Crossing (Pty) Ltd South Africa 100 % BGR Old Keene Mill, LLC Virginia, USA 100 % BGR Potomac, LLC Maryland, USA 100 % Australian Hooters BGR Cascades, LLC Virginia, USA 100 % HOTR AUSTRALIA PTY LTD Australia 80 % BGR Washingtonian, LLC Maryland, USA 100 % HOTR CAMPBELLTOWN PTY LTD Australia 80 % BGR Tysons, LLC Virginia, USA 100 % HOTR GOLD COAST PTY LTD Australia 80 % BGR Springfield Mall, LLC Virginia, USA 100 % HOTR PARRAMATTA PTY LTD Australia 80 % Capitol Burger, LLC Maryland, USA 100 % HOTR PENRITH PTY LTD Australia 80 % BT Burger Acquisition, LLC North Carolina, USA 100 % HOTR TOWNSVILLE PTY LTD Australia 80 % BTs Burgerjoint Biltmore, LLC North Carolina, USA 100 % BTs Burgerjoint Promenade, LLC North Carolina, USA 100 % European Hooters BTs Burgerjoint Sun Valley, LLC North Carolina, USA 100 % Chanticleer Holdings Limited Jersey 100 % BTs Burgerjoint Rivergate LLC North Carolina, USA 100 % West End Wings LTD United Kingdom 100 % LBB Acquisition, LLC North Carolina, USA 100 % Crown Restaurants Kft. Hungary 80 % Cuarto LLC Oregon, USA 100 % Segundo LLC Oregon, USA 100 % Inactive Entities Noveno LLC Oregon, USA 100 % Hooters Brazil Brazil 100 % Primero LLC Oregon, USA 100 % DineOut SA Ltd. England 89 % Septimo LLC Oregon, USA 100 % Avenel Financial Services, LLC Nevada, USA 100 % Quinto LLC Oregon, USA 100 % Avenel Ventures, LLC Nevada, USA 100 % Octavo LLC Oregon, USA 100 % Chanticleer Advisors, LLC Nevada, USA 100 % Sexto LLC Oregon, USA 100 % Chanticleer Investment Partners, LLC North Carolina, USA 100 % Dallas Spoon Beverage, LLC Texas, USA 100 % Just Fresh Dallas Spoon, LLC Texas, USA 100 % JF Franchising Systems, LLC North Carolina, USA 56 % Hoot Campbelltown Pty Ltd Australia 60 % JF Restaurants, LLC North Carolina, USA 56 % Chanticleer Holdings Australia Pty, Ltd. Australia 100 % Hoot Australia Pty Ltd Australia 60 % TMIX Management Australia Pty Ltd. Australia 60 % Hoot Parramatta Pty Ltd Australia 60 % Hoot Penrith Pty Ltd Australia 60 % Hoot Gold Coast Pty Ltd Australia 60 % Hoot Townsville Pty. Ltd Australia 60 % Hoot Surfers Paradise Pty. Ltd. Australia 60 % MVLE DARLING HARBOUR PTY LTD Australia 50 % MVLE GAMING PTY LTD Australia 100 % 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 Companys reporting calendar quarter end and the Companys two subsidiaries quarter ends that materially affected the companys 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 periods ended September 30, 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 Companys 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. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 2015, our cash balance was $1.8 million and working capital was a deficit of $3.2 million (excluding non-cash derivative liabilities and deferred rent). Cash and working capital as of September improved by $1.6 million and $4.1 million, respectively, as compared with December 31, 2014. 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 the next twelve months contemplate moderate organic growth, opening 3-4 new stores within our current markets and restaurant concepts. During the first nine months of 2015: ● During the first quarter of 2015, we completed a rights offering raising net proceeds of approximately $7.1 million and issued $2.2 million in convertible debt to fund the acquisition of BGR: The Burger Joint and for general corporate purposes. ● During the second quarter of 2015, we completed an equity transaction raising net proceeds of approximately $1.9 million to complete the acquisition of BTs Burger Joints and for general corporate purposes. ● During the third quarter of 2015, we completed a rights offering raising net proceeds of approximately $6.0 million to fund the acquisition of Little Big Burger, investments in Australia and general corporate purposes. As we execute our growth plans throughout the balance of 2015 and 2016, 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. We may raise additional capital from the issuance of new debt and equity 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 Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 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 Companys 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 sellers 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 tax (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. Restaurant 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 vendors 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 previously received gaming revenue from gaming machines located in Sydney, Australia. Revenue from gaming 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 and conversion features 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 nine months ended September 30, 2015 and 2014 amortization of debt discount was $1,356,365 and $930,392, 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 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. RESTAURANT PRE-OPENING AND CLOSING EXPENSES Restaurant pre-opening and closing expenses are non-capital expenditures, and are expensed as incurred. Restaurant pre-opening expenses consist of the costs of hiring and training the initial hourly work force for each new restaurant, travel, the cost of food and supplies used in training, grand opening promotional costs, the cost of the initial stocking of operating supplies and other direct costs related to the opening of a restaurant, including rent during the construction and in-restaurant training period. Restaurant closing expenses consists of the costs related to the closing of a restaurant location and include write-off of property and equipment, lease termination costs and other costs directly related to the closure. Pre-opening and closing expenses are expensed as incurred. 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 dilutive 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 September 30, 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. September 30, 2015 September 30, 2014 Warrants 9,556,304 8,965,048 Convertible notes payable 3,446,003 1,916,559 Convertible interest 53,405 88,649 Total 13,055,712 10,970,256 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 approximately $60,000 and $125,000 aggregate uninsured cash balances at September 30, 2015 and December 31, 2014, respectively. SUBSEQUENT EVENTS Management has evaluated all events and transactions that occurred from September 30, 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 In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which applies to inventory that is measured using first-in, first-out (FIFO) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (LIFO). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of adopting this guidance. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS During the first nine months of 2105, the Company acquired three businesses to complement and expand its current operations in the better burger fast casual restaurant category. In connection with these acquisitions, the Company acquired strategic opportunities to expand its scale and presence in the better burger category. Acquisition of BGR: The Burger Joint The Company completed the acquisition of BGR: The Burger Joint effective March 15, 2015. As of June 30, 2015, the Company allocated the purchase price as of the date of acquisition based on appraisals and estimated the 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, 500,000 shares of the Companys common stock valued at $1.0 million, and a contractual working capital adjustment of $276,429. Acquisition of BTs Burger Joint On July 1, 2015, the Company completed the acquisition with BTs Burgerjoint Management, LLC, a limited liability company organized under the laws of North Carolina (BTs), including the ownership interests of four operating restaurant subsidiaries engaged in the fast casual hamburger restaurant business under the name BTs Burger Joint. In consideration of the purchased assets, the Company paid a purchase price consisting of $1,400,000 in cash and 424,080 shares of the Companys common stock valued at $1.0 million. Acquisition of Little Big Burger On September 30, 2015, the Company completed the acquisition of various entities operating eight Little Big Burger restaurants in the State of Oregon. In consideration of the purchased assets, the Company paid a purchase price consisting of $3,600,000 in cash and 1,874,063 shares of the Companys common stock valued at $2.1 million. In connection with each acquisition, the Company determined the purchase price allocation in consideration of all identifiable intangibles. Based on our evaluation, there were no marketing related assets, customer related intangibles or contract based arrangements for which the purchase price would be required to be allocated. The value of any trademark/tradename was calculated using a relief of royalty method considering future franchise opportunities. With respect to customer related intangibles, the Company did not acquire any customer lists or enter into any customer contractual arrangements nor did the Company enter into any licensing or royalty arrangements requiring a further allocation of the purchase price. The premium paid for the businesses represents the economic value which is not captured by other assets such as the reputation of the businesses, the value of its human capital, its future growth potential and its professional management. The acquisition of these businesses will help the Company expand its domestic operations and presence in the Fast Casual burger market. The Companys 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 include the results of these operations from the dates of acquisition. The assets acquired and the liabilities assumed were recorded at estimated fair values based on information currently available and based on certain assumptions as to future operations. The allocation of purchase price presented below is based on preliminary analyses which are still continuing and may be subject to change as such analyses are finalized in future periods: 2015 Acquisitions BGR: The Burger Joint BTs Burger Joint Little Big Burger Total Consideration paid: Common stock $ 1,000,000 $ 1,000,848 $ 2,061,469 $ 4,062,317 Cash 4,276,429 1,400,000 3,600,000 9,276,429 Total consideration paid 5,276,429 2,400,848 5,661,469 13,338,746 Property and equipment 2,164,023 1,511,270 1,710,849 5,386,141 Goodwill 663,037 939,281 2,417,653 4,019,972 Trademark/trade name/franchise fee 2,750,000 - 1,550,000 4,300,000 Inventory, deposits ands other assets 296,104 103,451 77,014 476,569 Total assets acquired, less cash 5,873,164 2,554,002 5,755,516 14,182,682 Liabilities assumed (607,735 ) (161,154 ) (268,557 ) (1,037,446 ) Common stock and warrants issued (1,000,000 ) (1,000,848 ) (2,061,469 ) (4,062,317 ) Cash paid (4,276,429 ) (1,400,000 ) (3,600,000 ) (9,276,429 ) Cash acquired $ 11,000 $ 8,000 $ 174,511 $ 193,511 The allocation of purchase price presented for the Companys 2014 acquisitions: 2014 Acquisitions Hooters Hooters Australia The Pacific NW Spoon April 1, 2014 July 1, 2014 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 acquired $ 2,274 $ 21,636 $ 3,617 $ - $ - $ 27,527 Unaudited pro forma results of operations for the three and nine month periods ended September 30, 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. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Total revenues $ 11,551,329 $ 13,473,304 $ 36,159,199 $ 37,626,727 Loss from continuing operations (2,972,928 ) (1,287,982 ) (5,255,488 ) (2,091,978 ) Gain (loss) frorm discontinued operations 2,088 (72,300 ) 189 (104,973 ) Loss attributable to non-controlling interest 69,397 (61,209 ) 412,366 88,163 Net loss $ (2,901,443 ) $ (1,421,491 ) $ (4,842,933 ) $ (2,108,788 ) Net loss per share, basic and diluted $ (0.20 ) $ (0.21 ) $ (0.34 ) $ (0.34 ) Weighted average shares outstanding, basic and diluted 14,802,370 6,628,011 14,059,116 6,279,688 The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do not include any adjustments to reflect expected synergies or profit improvements that might be anticipated post-acquisition, and 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. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 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 carrying value of net assets was 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 and nine months ended September 30, 2015 and 2014 consisted of the following: Three Months Ended Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Total revenue $ - $ 314,190 $ - $ 968,103 Total operating (income) expenses - 370,413 (189 ) 1,129,299 Net (income) loss from discontinued operations $ - $ (56,223 ) $ 189 $ (161,196 ) As of September 30, 2015 and December 31, 2014, liabilities from discontinued operations totaled $177,204 and $177,393, respectively. The Company did not retain any assets related to the discontinued operation. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. PROPERTY AND EQUIPMENT Property and equipment consists of the following: 2015 2014 Restaurant equipment and furniture and fixtures $ 11,067,483 $ 7,827,926 Leasehold improvements 11,916,630 9,940,517 Construction in progress 54,602 727,934 Land and buildings 586,275 437,223 Office and computer equipment 11,734 51,746 Other furniture and fixtures 109,450 60,301 23,746,173 19,045,647 Accumulated depreciation and amortization (5,890,891 ) (5,730,238 ) $ 17,855,282 $ 13,315,409 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | 6. GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill is summarized by location as follows: September 30, 2015 December 31, 2014 South Africa $ 226,795 $ 273,737 ABC 2,806,990 2,806,990 WEW 2,800,504 2,868,192 Just Fresh 425,151 425,151 Australia - 7,291,329 Hooters Pacific NW 1,951,909 1,951,909 BGR: The Burger Joint 663,037 - Little Big Burger 2,417,653 - BTs Burger Joint 977,465 - Total $ 12,269,504 $ 15,617,308 The changes in the carrying amount of goodwill are summarized as follows: Nine Months Ended September 30, 2015 September 30, 2014 Beginning Balance $ 15,617,308 $ 6,496,756 Acquisitions 4,058,155 11,000,045 Impairment (6,803,537 ) - Foreign currency translation (loss) gain (602,422 ) 41,981 Ending Balance $ 12,269,504 $ 17,538,782 Other intangible assets, consisting of franchise costs, trademarks and tradenames, is summarized by location as follows: Intangible assets September 30, 2015 December 31, 2014 Trademark, Tradenames: Just Fresh $ 1,010,000 $ 1,010,000 American Roadside Burger 1,786,930 1,783,954 BGR: The Burger Joint 1,430,000 - Little Big Burger 1,550,000 - 5,776,930 2,793,954 Franchise fees: South Africa 316,086 290,986 Europe 59,129 106,506 Australia 353,775 383,529 Hooters Pacific NW 90,000 90,000 BGR: The Burger Joint 1,320,000 - Chanticleer Holdings * 135,000 135,000 2,273,990 1,006,021 Total Intangibles at cost 8,050,920 3,799,975 Accumulated amortization (508,525 ) (403,472 ) Intangible assets, net $ 7,542,395 $ 3,396,503 * Amortization of the Chanticleer franchise cost will begin with the opening of a related restaurant. |
Long-Term Debt and Notes Payabl
Long-Term Debt and Notes Payable | 9 Months Ended |
Sep. 30, 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: September 30, 2015 December 31, 2014 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 Companys assets and guaranteed by an officer of the Company (a) $ 143,870 $ 176,731 Line of credit to a bank, expired on October 10, 2015. (b) - 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 Companys assets and guaranteed by an officer of the Company (c) 971,670 500,000 Loan agreement with an outside company dated December 23, 2013, interest at 1% per month, paid in full in 2015 (d) - 100,000 Loan agreement with an outside company dated June 20, 2014, interest at 8% annual rate, paid in full in 2015 (e) - 100,000 Mortage loan dated April, 2014, interest ar South African prime rate + 2.6% (11.85% as of September 30, 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) 232,677 294,362 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 $214,834 and $343,733, respectively; matures January 31, 2017 (g) 4,785,166 4,656,267 Bank overdraft facilities; unsecured; maximum facilities $260,000; interest rate 11% at September 30, 2015, with annual renewal each December. (h) 192,428 151,868 Term facility with monthly payments of 45,288 Rand, including interest at South African Prime + 1.0% (10.25% as of September 30, 2015); due June 14, 2016 (i) 27,182 64,309 Term facility with monthly payments of 44,727 Rand including interest at South Afican Prime + 3.0% (12.25% as of September 30, 2015); due November 15, 2019. (j) 124,183 170,053 Term facility with monthly payments of 33,750 Rand, including interest at South Afican Prime + 3.0% (12.25% as of September 30, 2015); due December 1, 2018. (k) 76,774 109,340 Total long-term debt $ 6,553,950 $ 6,822,930 Current portion of long-term debt 1,134,025 1,813,647 Long-term debt, less current portion $ 5,419,925 $ 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 provided for a $500,000 revolving credit facility with a one-year term from the closing date. 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. The credit facility expired on October 10, 2015. Borrowings under the Credit Agreement bear monthly interest at the greater of: (i) floor rate of 5.00% or (ii) the Wall Street Journals prime plus rate (3.25% as of June 30, 2015) plus 1.00%. Any borrowings are secured by a lien on all of the Companys assets. The obligations under the Credit Agreement are guaranteed by Mike Pruitt, the Companys Chief Executive Officer. (c) Note with Paragon, due on June 10, 2019. The note bears interest at a 5% annual rate, with principal and interest monthly payments of $11,532 starting in June 2015 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, 2014 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 during the three months ended March 31, 2015, 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 was originally issued in the amount of $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. (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 Companys South African subsidiary has local bank financing in the form of term and overdraft facilities with $192,428 and $151,868 outstanding as of September 30, 2015 and December 31, 2014 respectively. (i) The Companys South African subsidiary has local bank financing in the form of a term loan with monthly payments of approximately $3,500, including interest at South African Prime +1.0%. The term loan matures on June 14, 2016. (j) The Companys South African subsidiary has local bank financing in the form of a term loan with monthly payments of approximately $3,500, including interest South African Prime +3.0%. The term loan matures on November 15, 2019. (k) The Companys South African subsidiary has local bank financing in the form of a term loan with monthly payments of approximately $2,700, including interest at South African Prime + 3.0%. The term loan matures on December 1, 2018. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2015 | |
Convertible Notes Payable [Abstract] | |
Convertible Notes Payable | 8. CONVERTIBLE NOTES PAYABLE Convertible notes payable are as follows: September 30. 2015 December 31, 2014 6% Convertible notes payable issued in November 2013 $ 3,000,000 $ 3,000,000 Discounts on above convertible note (833,340 ) (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 (17,029 ) (289,254 ) 8% Convertible notes payable issued in January 2015 150,000 - Discounts on above convertible note (104,808 ) - 8% Convertible notes payable issued in January 2015 575,000 - Discounts on above convertible note (359,243 ) - 2,510,580 1,913,683 Current portion of convertible notes payable 215,757 436,270 Convertible notes payable, less current portion $ 2,294,823 $ 1,477,413 In the first nine 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 convertible notes in the aggregate amount of $2,175,000 elected to convert their notes to common stock during the first nine months of 2015. In January 2015, the Company issued convertible promissory notes for $1,000,000. The notes accrue interest at 8% per annum until the date the notes are converted. The notes are convertible into the Companys 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 notes mature three years from the issuance date. The holder could 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 notes 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. $425,000 of the $1,000,000 note has been converted into common stock during the first nine months of 2015. 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 notes are converted. The notes are convertible into the Companys 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 notes 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 Companys common stock. In addition, another convertible debt holder converted $250,000 principal plus accrued interest into 168,713 shares of the Companys 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 during the three months ended March 31, 2015. In March 2015, the Company issued a convertible promissory note for $1,000,000, which was subsequently converted to common stock in June 2015. The note accrued interest at 9% per annum until the date the note was converted. The note was convertible into the Companys common stock at $2.00 per share. If not converted, the note matured two years from the issuance date. The Company also issued warrants to purchase 320,000 shares of common stock, exercisable at $2.50 per share for a period of up to 5 years from the notes original issuance date. The fair value of the embedded conversion feature and the warrants on the date of issuance was $455,008 and $315,008, respectively. The resulting debt discount was 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. During June 2015, this $1,000,000 million note was converted into 500,000 shares of common stock at the $2.00 per share contractual conversion price. On the date of conversion, $643,371 of unamortized debt discount was accelerated and recognized as interest expense in the accompanying condensed consolidated statement of operations and comprehensive loss. 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 September 30, 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 8% Notes Issued on August 2, 2013 March 19, 2014 November 19, 2014 December 16, 2014 January 5, 2015 January 5, 2015 Common stock closing price $ 4.15 $ 3.87 $ 1.70 $ 1.53 $ 1.75 $ 1.75 Conversion per share price $ 3.73 $ 3.29 $ 1.45 $ 1.30 $ 1.33 $ 1.33 Conversion shares 804,764 151,999 172,672 77,061 112,402 749,344 Expected life (in years) 3.0 1.0 3.0 3.0 3.0 3.0 Expected volatility 110 % 62 % 74 % 74 % 73 % 73 % Call option value $ 2.82 $ 1.19 $ 0.90 $ 0.81 $ 0.97 $ 0.97 Risk-free interest rate 0.59 % 0.15 % 1.10 % 1.10 % 0.90 % 0.90 % Dividends 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % December 31, 2014 December 31, 2014 December 31, 2014 December 31, 2014 December 31, 2014 December 31, 2014 Common stock closing price $ 1.73 $ 1.73 $ 1.73 $ 1.73 NA NA Conversion per share price $ 1.49 $ 1.47 $ 1.26 $ 1.26 NA NA Conversion shares 2,008,032 340,020 199,177 77,061 NA NA Expected life (in years) 1.6 0.2 2.9 3.0 NA NA Expected volatility 64 % 66 % 74 % 74 % NA NA Call option value $ 0.64 $ 0.35 $ 0.77 $ 0.78 NA NA Risk-free interest rate 0.67 % 0.40 % 1.10 % 1.10 % NA NA Dividends 0.00 % 0.00 % 0.00 % 0.00 % NA NA September 30, 2015 September 30, 2015 September 30, 2015 September 30, 2015 September 30, 2015 September 30, 2015 Common stock closing price $ 1.10 NA NA $ 1.10 $ 1.10 $ 1.10 Conversion per share price $ 1.16 NA NA $ 0.95 $ 0.95 $ 0.95 Conversion shares 2,581,978 NA NA 104,730 157,095 602,199 Expected life (in years) 0.8 NA NA 2.2 2.3 2.3 Expected volatility 73 % NA NA 77 % 77 % 77 % Call option value $ 0.27 NA NA $ 0.53 $ 0.53 $ 0.53 Risk-free interest rate 0.37 % NA NA 1.01 % 1.01 % 1.01 % Dividends 0.00 % NA NA 0.00 % 0.00 % 0.00 % |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure Text Block [Abstract] | |
Accounts Payable and Accrued Expenses | 9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses are summarized as follows: September 30, 2015 December 31, 2014 Accounts payable $ 3,433,738 $ 3,382,818 Accrued taxes (VAT, GST, Sales, Payroll) 650,012 1,604,829 Accrued income taxes 22,945 92,618 Accrued interest 313,675 499,866 $ 4,420,370 $ 5,580,131 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 10. STOCKHOLDERS EQUITY The Company has 45,000,000 shares of its $0.0001 par value common stock authorized at both September 30, 2015 and December, 2014, and 21,238,830 and 7,249,442 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively. The Company has 5,000,000 shares of its no par value preferred stock authorized at both September 30, 2015 and December 31, 2014. No shares have been issued or outstanding at either September 30, 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 Companys common stock. In addition, another convertible debt holder converted $250,000 principal plus accrued interest into 168,713 shares of the Companys 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 oversubscriptions) for 3,899,742 shares of its common stock for net proceeds of $7,062,325. 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 Companys common stock as a component of the total purchase price (See Note 3- Acquisitions). In June 2015, a convertible debt holder converted $1,000,000 principal into 500,000 shares of the Companys common stock. On June 19, 2015, the Company entered into an agreement with an institutional investor and accredited investors for a registered direct placement of 860,000 shares of common stock at $2.50 per share. The agreement also provides an overallotment right for the investor(s) to purchase up to 860,000 additional shares of common stock at $2.50 per share during the 75 days following the initial closing. On September 22, 2015, the Company completed a rights offering, receiving subscriptions (including both basic and oversubscriptions) for 4,894,692 shares of its common stock for net proceeds of $6.0 million. From July through September 2015, convertible debt holders converted an aggregate of $425,000 principal into 289,176 shares of the Companys common stock. During the first nine months of 2015, the Company issued 49,800 shares of common stock and warrants for services valued at $231,857. The recorded value for common stock issued for services was based on the closing market prices for the Companys common stock. The recorded value of the warrants issued for services valued utilizing the Black-Scholes model. Options and Warrants There are no options outstanding as of September 30, 2015 and December 31, 2014. Fair value of any warrant issuances are valued utilizing the Black-Scholes 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 for the Companys 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 Warrants Weighted Average Exercise Price Weighted Average Remaining Life Outstanding January 1, 2015 8,715,804 $ 5.17 2.2 Granted 840,500 2.55 Exercised - - Forfeited - - Outstanding September 30, 2015 9,556,304 $ 4.94 2.3 Exercisable September 30, 2015 9,556,304 $ 4.94 2.3 The following table presents information related to stock warrants as of September 30, 2015: Exercise Price Outstanding Number of Warrants Weighted Average Remaining Life in Years Exerciseable Number of Warrants >$5.00 3,554,514 2.1 3,554,514 $4.00-$4.99 3,935,117 2.2 3,935,117 $3.00-$3.99 413,901 3.7 413,901 $2.00-$2.99 1,340,272 3.1 1,340,272 $1.00-$1.99 312,500 4.2 312,500 9,556,304 9,556,304 Warrant amortization is summarized as follows: Three Months Ended Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Interest expense $ 407,263 $ 259,442 $ 1,356,365 $ 930,392 Consulting expense - 22,375 22,375 152,325 $ 407,263 $ 281,817 $ 1,378,740 $ 1,082,717 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. RELATED PARTY TRANSACTIONS Due to related parties The Company has received non-interest bearing loans and advances from related parties as follows: September 30, 2015 December 31, 2014 Hoot SA I, LLC $ 12,963 $ 12,196 Hooters Australia Partner - 1,087,451 Chanticleer Investors, LLC 199,436 199,436 $ 212,399 $ 1,299,083 Due from related parties The Company has made non-interest bearing advances to related parties. The amounts owed to the Company are as follows: September 30, 2015 December 31, 2014 Hoot SA II, III, IV LLC $ 45,615 $ 46,015 $ 45,615 $ 46,015 |
Segments Information
Segments Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segments of Information | 12. SEGMENT INFORMATION The Company operates and reports its results as a single operating segment. Revenues and operating loss by geographic area were as follows: Three Months Ended Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Revenue: United States $ 6,872,531 $ 3,642,971 $ 17,200,288 $ 9,477,879 South Africa 1,380,665 1,601,493 4,626,094 4,905,249 Australia 830,653 2,641,909 4,824,036 3,153,589 Europe 1,187,456 1,426,179 3,085,071 3,669,177 $ 10,271,305 $ 9,312,552 $ 29,735,489 $ 21,205,894 Operating Income (Loss): United States $ (1,150,856 ) $ (673,118 ) $ (4,267,634 ) $ (3,247,467 ) South Africa (25,739 ) (70,571 ) (43,178 ) (220,186 ) Australia (4,608,773 ) 192,556 (5,466,548 ) (88,002 ) Europe 34,179 19,007 33,650 44,816 $ (5,751,189 ) $ (532,126 ) $ (9,743,710 ) $ (3,510,839 ) Non-current assets by geographic area were as follows: September 30, 2015 December 31, 2014 Non-current Assets: United States $ 33,226,470 $ 15,299,108 South Africa 2,428,590 2,172,528 Australia 404,717 13,068,305 Europe 3,354,803 3,648,133 Brazil 135,000 135,000 $ 39,549,580 $ 34,323,074 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. 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, and a court date has been set for February 1, 2016. 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 | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Disclosures about Fair Value | 14. 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) September 30, 2015 Assets: Available-for-sale securities $ 35,362 $ 35,362 $ - $ - Liabilities: Embedded conversion feature $ 1,150,300 $ - $ - $ 1,150,300 Warrants $ 168,361 $ 168,361 December 31, 2014 Assets: Available-for-sale securities $ 35,362 $ 35,362 $ - $ - Liabilities: Embedded conversion feature $ 1,610,900 $ - $ - $ 1,610,900 Warrants $ 334,300 $ - $ - $ 334,300 At September 30, 2015 and December 31, 2014, the Companys available-for-sale equity securities were valued using Level 1 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 Companys 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. |
Australia Administration Transa
Australia Administration Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Australia Administration Transactions | 15. AUSTRALIA ADMINISTRATION TRANSACTIONS On July 14, 2015, voluntary administrators were appointed to review the affairs and assess the financial condition of the Hooters Australia stores. The initiation of voluntary administration followed the request of the Company because the Company believed its operating partner had been mismanaging the business. The Company believed that the Administration process would be the most effective means to objectively evaluate the state of the business and enhance the Companys position and ability to restore the operational and financial performance of the Hooters Australia stores. From July 14, 2015 through the end of September, the Hooters Australia stores operated under the management of administrators which were appointed by the directors of the Australia entities to facilitate the Administration process. In August, 2015, the Company entered into definitive agreements to invest additional consideration into the Australia business to increase its ownership in the Australia Hooters stores from 60% to 80% and to obtain the assets of those stores free of any prior liabilities or liens. In addition, the Company agreed to purchase the Margaritaville property in Australia which it did not previously control. The Company and a new local partner, PCS Investments, Pty (PCS) closed on the purchase of the five Hooters Australia stores in early October 2015, with the Company contributing $1.0 million in additional capital for 80% ownership and PCS investing $0.3 million for 20% ownership in the five Hooters stores. The Company did not complete the purchase the Margaritaville site as the administrator was unable to provide an acceptable lease transfer for the property. Effective early October, the Company resume management and operating control for the Hooters stores. During the Administration period from July 14, 2015 through early October, 2015, the Companys control was temporarily restricted and management did not recognize revenue or expenses related to the operation of the stores during this brief period. Effective with the resumption of control in early October, 2015, the Company resume normal operations and recognition of revenue. In connection with the Administration process, the Company evaluated its long-lived assets for impairment and evaluated the carrying value of all other assets and liabilities related to the Australia stores to their net realizable value. As a result of that analysis, management concluded that the goodwill balance had been impaired and that certain other balances were no longer valid or realizable as a consequence of the Administration process. As a result, the Company recorded a net impairment charge of $4.5 million during the three months ended September 30, 2015. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. SUBSEQUENT EVENTS During October 2015, the Company issued 100,000 common shares for the conversion of a convertible note payable. |
Significant Accounting Polici22
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 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 sellers 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 tax (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. Restaurant 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 vendors 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 previously received gaming revenue from gaming machines located in Sydney, Australia. Revenue from gaming 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 and conversion features 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 nine months ended September 30, 2015 and 2014 amortization of debt discount was $1,356,365 and $930,392, 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 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. |
Restaurant Pre-opening and Closing Expenses | RESTAURANT PRE-OPENING AND CLOSING EXPENSES Restaurant pre-opening and closing expenses are non-capital expenditures, and are expensed as incurred. Restaurant pre-opening expenses consist of the costs of hiring and training the initial hourly work force for each new restaurant, travel, the cost of food and supplies used in training, grand opening promotional costs, the cost of the initial stocking of operating supplies and other direct costs related to the opening of a restaurant, including rent during the construction and in-restaurant training period. Restaurant closing expenses consists of the costs related to the closing of a restaurant location and include write-off of property and equipment, lease termination costs and other costs directly related to the closure. Pre-opening and closing expenses are expensed as incurred. |
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 dilutive 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 September 30, 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. September 30, 2015 September 30, 2014 Warrants 9,556,304 8,965,048 Convertible notes payable 3,446,003 1,916,559 Convertible interest 53,405 88,649 Total 13,055,712 10,970,256 |
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 approximately $60,000 and $125,000 aggregate uninsured cash balances at September 30, 2015 and December 31, 2014, respectively. |
Subsequent Events | SUBSEQUENT EVENTS Management has evaluated all events and transactions that occurred from September 30, 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 In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which applies to inventory that is measured using first-in, first-out (FIFO) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (LIFO). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of adopting this guidance. |
Significant Accounting Polici23
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 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. September 30, 2015 September 30, 2014 Warrants 9,556,304 8,965,048 Convertible notes payable 3,446,003 1,916,559 Convertible interest 53,405 88,649 Total 13,055,712 10,970,256 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed Recorded At Estimated Fair Values | The allocation of purchase price presented below is based on preliminary analyses which are still continuing and may be subject to change as such analyses are finalized in future periods: 2015 Acquisitions BGR: The Burger Joint BTs Burger Joint Little Big Burger Total Consideration paid: Common stock $ 1,000,000 $ 1,000,848 $ 2,061,469 $ 4,062,317 Cash 4,276,429 1,400,000 3,600,000 9,276,429 Total consideration paid 5,276,429 2,400,848 5,661,469 13,338,746 Property and equipment 2,164,023 1,511,270 1,710,849 5,386,141 Goodwill 663,037 939,281 2,417,653 4,019,972 Trademark/trade name/franchise fee 2,750,000 - 1,550,000 4,300,000 Inventory, deposits ands other assets 296,104 103,451 77,014 476,569 Total assets acquired, less cash 5,873,164 2,554,002 5,755,516 14,182,682 Liabilities assumed (607,735 ) (161,154 ) (268,557 ) (1,037,446 ) Common stock and warrants issued (1,000,000 ) (1,000,848 ) (2,061,469 ) (4,062,317 ) Cash paid (4,276,429 ) (1,400,000 ) (3,600,000 ) (9,276,429 ) Cash acquired $ 11,000 $ 8,000 $ 174,511 $ 193,511 The allocation of purchase price presented for the Companys 2014 acquisitions: 2014 Acquisitions Hooters Hooters Australia The Pacific NW Spoon April 1, 2014 July 1, 2014 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 acquired $ 2,274 $ 21,636 $ 3,617 $ - $ - $ 27,527 |
Schedule of Business Combination Pro Forma Information | Unaudited pro forma results of operations for the three and nine month periods ended September 30, 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. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Total revenues $ 11,551,329 $ 13,473,304 $ 36,159,199 $ 37,626,727 Loss from continuing operations (2,972,928 ) (1,287,982 ) (5,255,488 ) (2,091,978 ) Gain (loss) frorm discontinued operations 2,088 (72,300 ) 189 (104,973 ) Loss attributable to non-controlling interest 69,397 (61,209 ) 412,366 88,163 Net loss $ (2,901,443 ) $ (1,421,491 ) $ (4,842,933 ) $ (2,108,788 ) Net loss per share, basic and diluted $ (0.20 ) $ (0.21 ) $ (0.34 ) $ (0.34 ) Weighted average shares outstanding, basic and diluted 14,802,370 6,628,011 14,059,116 6,279,688 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Operating Results From Discontinued Operations | The operating results from the discontinued operations for the three and nine months ended September 30, 2015 and 2014 consisted of the following: Three Months Ended Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Total revenue $ - $ 314,190 $ - $ 968,103 Total operating (income) expenses - 370,413 (189 ) 1,129,299 Net (income) loss from discontinued operations $ - $ (56,223 ) $ 189 $ (161,196 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property and equipment consists of the following: 2015 2014 Restaurant equipment and furniture and fixtures $ 11,067,483 $ 7,827,926 Leasehold improvements 11,916,630 9,940,517 Construction in progress 54,602 727,934 Land and buildings 586,275 437,223 Office and computer equipment 11,734 51,746 Other furniture and fixtures 109,450 60,301 23,746,173 19,045,647 Accumulated depreciation and amortization (5,890,891 ) (5,730,238 ) $ 17,855,282 $ 13,315,409 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill is summarized by location as follows: September 30, 2015 December 31, 2014 South Africa $ 226,795 $ 273,737 ABC 2,806,990 2,806,990 WEW 2,800,504 2,868,192 Just Fresh 425,151 425,151 Australia - 7,291,329 Hooters Pacific NW 1,951,909 1,951,909 BGR: The Burger Joint 663,037 - Little Big Burger 2,417,653 - BTs Burger Joint 977,465 - Total $ 12,269,504 $ 15,617,308 |
Summary of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill are summarized as follows: Nine Months Ended September 30, 2015 September 30, 2014 Beginning Balance $ 15,617,308 $ 6,496,756 Acquisitions 4,058,155 11,000,045 Impairment (6,803,537 ) - Foreign currency translation (loss) gain (602,422 ) 41,981 Ending Balance $ 12,269,504 $ 17,538,782 |
Schedule of Other Intangible Assets | Other intangible assets, consisting of franchise costs, trademarks and tradenames, is summarized by location as follows: Intangible assets September 30, 2015 December 31, 2014 Trademark, Tradenames: Just Fresh $ 1,010,000 $ 1,010,000 American Roadside Burger 1,786,930 1,783,954 BGR: The Burger Joint 1,430,000 - Little Big Burger 1,550,000 - 5,776,930 2,793,954 Franchise fees: South Africa 316,086 290,986 Europe 59,129 106,506 Australia 353,775 383,529 Hooters Pacific NW 90,000 90,000 BGR: The Burger Joint 1,320,000 - Chanticleer Holdings * 135,000 135,000 2,273,990 1,006,021 Total Intangibles at cost 8,050,920 3,799,975 Accumulated amortization (508,525 ) (403,472 ) Intangible assets, net $ 7,542,395 $ 3,396,503 * Amortization of the Chanticleer franchise cost will begin with the opening of a related restaurant. |
Long-Term Debt and Notes Paya28
Long-Term Debt and Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt and Notes Payable | Long-term debt and notes payable are summarized as follows: September 30, 2015 December 31, 2014 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 Companys assets and guaranteed by an officer of the Company (a) $ 143,870 $ 176,731 Line of credit to a bank, expired on October 10, 2015. (b) - 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 Companys assets and guaranteed by an officer of the Company (c) 971,670 500,000 Loan agreement with an outside company dated December 23, 2013, interest at 1% per month, paid in full in 2015 (d) - 100,000 Loan agreement with an outside company dated June 20, 2014, interest at 8% annual rate, paid in full in 2015 (e) - 100,000 Mortage loan dated April, 2014, interest ar South African prime rate + 2.6% (11.85% as of September 30, 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) 232,677 294,362 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 $214,834 and $343,733, respectively; matures January 31, 2017 (g) 4,785,166 4,656,267 Bank overdraft facilities; unsecured; maximum facilities $260,000; interest rate 11% at September 30, 2015, with annual renewal each December. (h) 192,428 151,868 Term facility with monthly payments of 45,288 Rand, including interest at South African Prime + 1.0% (10.25% as of September 30, 2015); due June 14, 2016 (i) 27,182 64,309 Term facility with monthly payments of 44,727 Rand including interest at South Afican Prime + 3.0% (12.25% as of September 30, 2015); due November 15, 2019. (j) 124,183 170,053 Term facility with monthly payments of 33,750 Rand, including interest at South Afican Prime + 3.0% (12.25% as of September 30, 2015); due December 1, 2018. (k) 76,774 109,340 Total long-term debt $ 6,553,950 $ 6,822,930 Current portion of long-term debt 1,134,025 1,813,647 Long-term debt, less current portion $ 5,419,925 $ 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 provided for a $500,000 revolving credit facility with a one-year term from the closing date. 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. The credit facility expired on October 10, 2015. Borrowings under the Credit Agreement bear monthly interest at the greater of: (i) floor rate of 5.00% or (ii) the Wall Street Journals prime plus rate (3.25% as of June 30, 2015) plus 1.00%. Any borrowings are secured by a lien on all of the Companys assets. The obligations under the Credit Agreement are guaranteed by Mike Pruitt, the Companys Chief Executive Officer. (c) Note with Paragon, due on June 10, 2019. The note bears interest at a 5% annual rate, with principal and interest monthly payments of $11,532 starting in June 2015 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, 2014 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 during the three months ended March 31, 2015, 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 was originally issued in the amount of $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. (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 Companys South African subsidiary has local bank financing in the form of term and overdraft facilities with $192,428 and $151,868 outstanding as of September 30, 2015 and December 31, 2014 respectively. (i) The Companys South African subsidiary has local bank financing in the form of a term loan with monthly payments of approximately $3,500, including interest at South African Prime +1.0%. The term loan matures on June 14, 2016. (j) The Companys South African subsidiary has local bank financing in the form of a term loan with monthly payments of approximately $3,500, including interest South African Prime +3.0%. The term loan matures on November 15, 2019. (k) The Companys South African subsidiary has local bank financing in the form of a term loan with monthly payments of approximately $2,700, including interest at South African Prime + 3.0%. The term loan matures on December 1, 2018. |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Convertible Notes Payable [Abstract] | |
Schedule of Convertible Notes Payable | Convertible notes payable are as follows: September 30. 2015 December 31, 2014 6% Convertible notes payable issued in November 2013 $ 3,000,000 $ 3,000,000 Discounts on above convertible note (833,340 ) (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 (17,029 ) (289,254 ) 8% Convertible notes payable issued in January 2015 150,000 - Discounts on above convertible note (104,808 ) - 8% Convertible notes payable issued in January 2015 575,000 - Discounts on above convertible note (359,243 ) - 2,510,580 1,913,683 Current portion of convertible notes payable 215,757 436,270 Convertible notes payable, less current portion $ 2,294,823 $ 1,477,413 |
Fair Value Measurements, Valuation Assumptions of Embedded Conversion Feature and Warrants | . Key assumptions used to apply this pricing model as of the date of issuance, December 31, 2014 and September 30, 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 8% Notes Issued on August 2, 2013 March 19, 2014 November 19, 2014 December 16, 2014 January 5, 2015 January 5, 2015 Common stock closing price $ 4.15 $ 3.87 $ 1.70 $ 1.53 $ 1.75 $ 1.75 Conversion per share price $ 3.73 $ 3.29 $ 1.45 $ 1.30 $ 1.33 $ 1.33 Conversion shares 804,764 151,999 172,672 77,061 112,402 749,344 Expected life (in years) 3.0 1.0 3.0 3.0 3.0 3.0 Expected volatility 110 % 62 % 74 % 74 % 73 % 73 % Call option value $ 2.82 $ 1.19 $ 0.90 $ 0.81 $ 0.97 $ 0.97 Risk-free interest rate 0.59 % 0.15 % 1.10 % 1.10 % 0.90 % 0.90 % Dividends 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % December 31, 2014 December 31, 2014 December 31, 2014 December 31, 2014 December 31, 2014 December 31, 2014 Common stock closing price $ 1.73 $ 1.73 $ 1.73 $ 1.73 NA NA Conversion per share price $ 1.49 $ 1.47 $ 1.26 $ 1.26 NA NA Conversion shares 2,008,032 340,020 199,177 77,061 NA NA Expected life (in years) 1.6 0.2 2.9 3.0 NA NA Expected volatility 64 % 66 % 74 % 74 % NA NA Call option value $ 0.64 $ 0.35 $ 0.77 $ 0.78 NA NA Risk-free interest rate 0.67 % 0.40 % 1.10 % 1.10 % NA NA Dividends 0.00 % 0.00 % 0.00 % 0.00 % NA NA September 30, 2015 September 30, 2015 September 30, 2015 September 30, 2015 September 30, 2015 September 30, 2015 Common stock closing price $ 1.10 NA NA $ 1.10 $ 1.10 $ 1.10 Conversion per share price $ 1.16 NA NA $ 0.95 $ 0.95 $ 0.95 Conversion shares 2,581,978 NA NA 104,730 157,095 602,199 Expected life (in years) 0.8 NA NA 2.2 2.3 2.3 Expected volatility 73 % NA NA 77 % 77 % 77 % Call option value $ 0.27 NA NA $ 0.53 $ 0.53 $ 0.53 Risk-free interest rate 0.37 % NA NA 1.01 % 1.01 % 1.01 % Dividends 0.00 % NA NA 0.00 % 0.00 % 0.00 % |
Accounts Payable and Accrued 30
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure Text Block [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are summarized as follows: September 30, 2015 December 31, 2014 Accounts payable $ 3,433,738 $ 3,382,818 Accrued taxes (VAT, GST, Sales, Payroll) 650,012 1,604,829 Accrued income taxes 22,945 92,618 Accrued interest 313,675 499,866 $ 4,420,370 $ 5,580,131 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders Equity Tables | |
Schedule of Warrants Activity | A summary of warrant activity is presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life Outstanding January 1, 2015 8,715,804 $ 5.17 2.2 Granted 840,500 2.55 Exercised - - Forfeited - - Outstanding September 30, 2015 9,556,304 $ 4.94 2.3 Exercisable September 30, 2015 9,556,304 $ 4.94 2.3 |
Schedule of Warrants Outstanding | The following table presents information related to stock warrants as of September 30, 2015: Exercise Price Outstanding Number of Warrants Weighted Average Remaining Life in Years Exerciseable Number of Warrants >$5.00 3,554,514 2.1 3,554,514 $4.00-$4.99 3,935,117 2.2 3,935,117 $3.00-$3.99 413,901 3.7 413,901 $2.00-$2.99 1,340,272 3.1 1,340,272 $1.00-$1.99 312,500 4.2 312,500 9,556,304 9,556,304 |
Schedule of Warrant Amortization | Warrant amortization is summarized as follows: Three Months Ended Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Interest expense $ 407,263 $ 259,442 $ 1,356,365 $ 930,392 Consulting expense - 22,375 22,375 152,325 $ 407,263 $ 281,817 $ 1,378,740 $ 1,082,717 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 2015 December 31, 2014 Hoot SA I, LLC $ 12,963 $ 12,196 Hooters Australia Partner - 1,087,451 Chanticleer Investors, LLC 199,436 199,436 $ 212,399 $ 1,299,083 |
Schedule of Earned Income and Made Advance to Related Parties | The Company has made non-interest bearing advances to related parties. The amounts owed to the Company are as follows: September 30, 2015 December 31, 2014 Hoot SA II, III, IV LLC $ 45,615 $ 46,015 $ 45,615 $ 46,015 |
Segments Information (Tables)
Segments Information (Tables) | 9 Months Ended |
Sep. 30, 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. Revenues and operating loss by geographic area were as follows: Three Months Ended Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Revenue: United States $ 6,872,531 $ 3,642,971 $ 17,200,288 $ 9,477,879 South Africa 1,380,665 1,601,493 4,626,094 4,905,249 Australia 830,653 2,641,909 4,824,036 3,153,589 Europe 1,187,456 1,426,179 3,085,071 3,669,177 $ 10,271,305 $ 9,312,552 $ 29,735,489 $ 21,205,894 Operating Income (Loss): United States $ (1,150,856 ) $ (673,118 ) $ (4,267,634 ) $ (3,247,467 ) South Africa (25,739 ) (70,571 ) (43,178 ) (220,186 ) Australia (4,608,773 ) 192,556 (5,466,548 ) (88,002 ) Europe 34,179 19,007 33,650 44,816 $ (5,751,189 ) $ (532,126 ) $ (9,743,710 ) $ (3,510,839 ) Non-current assets by geographic area were as follows: September 30, 2015 December 31, 2014 Non-current Assets: United States $ 33,226,470 $ 15,299,108 South Africa 2,428,590 2,172,528 Australia 404,717 13,068,305 Europe 3,354,803 3,648,133 Brazil 135,000 135,000 $ 39,549,580 $ 34,323,074 |
Disclosure About Fair Value (Ta
Disclosure About Fair Value (Tables) | 9 Months Ended |
Sep. 30, 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) September 30, 2015 Assets: Available-for-sale securities $ 35,362 $ 35,362 $ - $ - Liabilities: Embedded conversion feature $ 1,150,300 $ - $ - $ 1,150,300 Warrants $ 168,361 $ 168,361 December 31, 2014 Assets: Available-for-sale securities $ 35,362 $ 35,362 $ - $ - Liabilities: Embedded conversion feature $ 1,610,900 $ - $ - $ 1,610,900 Warrants $ 334,300 $ - $ - $ 334,300 |
Nature of Business (Details Nar
Nature of Business (Details Narrative) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015USD ($)Stores | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2015USD ($)Stores | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Cash | $ 1,800,000 | $ 1,800,000 | ||||
Working capital deficit | 3,200,000 | 3,200,000 | ||||
Cash and working capital | 1,600,000 | 1,600,000 | $ 4,100,000 | |||
Proceeds from equity issuance | $ 6,000,000 | $ 1,900,000 | $ 7,100,000 | |||
Proceeds from convertible debt | $ 2,200,000 | $ 2,150,000 | ||||
Minimum [Member] | ||||||
Number of stores | Stores | 3 | 3 | ||||
Maximum [Member] | ||||||
Number of stores | Stores | 4 | 4 |
Significant Accounting Polici36
Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Amortization of debt discount | $ 1,356,365 | $ 930,392 | |
Cash FDIC insured amount | 250,000 | ||
Uninsured cash balances | $ 60,000 | $ 125,000 |
Significant Accounting Polici37
Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 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 | 13,055,712 | 10,970,256 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 9,556,304 | 8,965,048 |
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 | 3,446,003 | 1,916,559 |
Convertible Interest [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 53,405 | 88,649 |
Acquisions (Details Narrative)
Acquisions (Details Narrative) - USD ($) | Sep. 30, 2015 | Jul. 02, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Common stock valued | $ 2,133 | $ 2,133 | $ 725 | ||
The Burger Joint [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquistion date | Mar. 15, 2015 | ||||
Business acquisition purchase of shares | 500,000 | ||||
Business acquisition purchase of working capital adjustment | $ 276,429 | ||||
BGR The Burger Joint [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition purchase price assumption | 4,000,000 | ||||
Common stock valued | $ 1,000,000 | ||||
BT's Burger Joint [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquistion date | Jul. 1, 2015 | ||||
Business acquisition purchase price assumption | $ 1,400,000 | ||||
Business acquisition purchase of shares | 1,874,063 | 424,080 | |||
Common stock valued | $ 1,000,000 | ||||
Little Big Burger [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquistion date | Sep. 30, 2015 | ||||
Business acquisition purchase price assumption | $ 3,600,000 | $ 3,600,000 | |||
Common stock valued | $ 2,100,000 | $ 2,100,000 |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed Recorded At Estimated Fair Values (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |
Business Acquisition [Line Items] | |||
Common stock | $ 4,062,317 | $ 4,019,906 | |
Cash | 9,276,429 | 350,000 | |
Warrants | 1,381,733 | ||
Assumption of debt | 5,000,000 | ||
Total consideration paid | 13,338,746 | 10,751,639 | |
Property and equipment | 5,386,141 | 7,945,152 | |
Current assets, excluding cash | 636,894 | ||
Goodwill | 4,019,972 | 11,394,009 | |
Trademark/trade name/franchise fee | 4,300,000 | 559,304 | |
Inventory, deposits and other assets | 476,569 | 136,025 | |
Total assets acquired, less cash | 14,182,682 | 20,671,384 | |
Liabilities assumed | (1,037,446) | $ (4,165,235) | |
Deferred tax liabilities | |||
Non-controlling interest | $ (4,753,288) | ||
Chanticleer equity | (1,028,749) | ||
Common stock and warrants issued | (4,062,317) | (5,401,639) | |
Assumption of debt | (5,000,000) | ||
Cash paid | (9,276,429) | (350,000) | |
Cash acquired | 193,511 | $ 27,527 | |
Hooters Australia July 1, 2014 [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | |||
Cash | |||
Warrants | $ 123,333 | ||
Assumption of debt | 5,000,000 | ||
Total consideration paid | 5,123,333 | ||
Property and equipment | 1,603,557 | ||
Current assets, excluding cash | 47,777 | ||
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 acquired | |||
The Burger Joint [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | 1,000,000 | ||
Cash | 4,276,429 | ||
Total consideration paid | 5,276,429 | ||
Property and equipment | 2,164,023 | ||
Goodwill | 663,037 | ||
Trademark/trade name/franchise fee | 2,750,000 | ||
Inventory, deposits and other assets | 296,104 | ||
Total assets acquired, less cash | 5,873,164 | ||
Liabilities assumed | (607,735) | ||
Common stock and warrants issued | (1,000,000) | ||
Cash paid | (4,276,429) | ||
Cash acquired | 11,000 | ||
BT's Burger Joint [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | 1,000,848 | ||
Cash | 1,400,000 | ||
Total consideration paid | 2,400,848 | ||
Property and equipment | 1,511,270 | ||
Goodwill | $ 939,281 | ||
Trademark/trade name/franchise fee | |||
Inventory, deposits and other assets | $ 103,451 | ||
Total assets acquired, less cash | 2,554,002 | ||
Liabilities assumed | (161,154) | ||
Common stock and warrants issued | (1,000,848) | ||
Cash paid | (1,400,000) | ||
Cash acquired | 8,000 | ||
Little Big Burger [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | 2,061,469 | ||
Cash | 3,600,000 | ||
Total consideration paid | 5,661,469 | ||
Property and equipment | 1,710,849 | ||
Goodwill | 2,417,653 | ||
Trademark/trade name/franchise fee | 1,550,000 | ||
Inventory, deposits and other assets | 77,014 | ||
Total assets acquired, less cash | 5,755,516 | ||
Liabilities assumed | (268,557) | ||
Common stock and warrants issued | (2,061,469) | ||
Cash paid | (3,600,000) | ||
Cash acquired | 174,511 | ||
Hooters Pacific NW [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | $ 2,891,156 | ||
Cash | |||
Warrants | $ 978,000 | ||
Assumption of debt | |||
Total consideration paid | $ 3,869,156 | ||
Property and equipment | 2,731,031 | ||
Current assets, excluding cash | 112,078 | ||
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 acquired | $ 2,274 | ||
Spoon [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | $ 828,750 | ||
Cash | |||
Warrants | $ 280,400 | ||
Assumption of debt | |||
Total consideration paid | $ 1,109,150 | ||
Property and equipment | 391,462 | ||
Current assets, excluding cash | 89,817 | ||
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 acquired | $ 21,636 | ||
Hooters Australia April 1, 2014 [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | |||
Cash | $ 100,000 | ||
Warrants | |||
Assumption of debt | |||
Total consideration paid | $ 100,000 | ||
Property and equipment | 2,934,307 | ||
Current assets, excluding cash | $ 377,296 | ||
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 acquired | 3,617 | ||
The Burger Company [Member] | |||
Business Acquisition [Line Items] | |||
Common stock | 300,000 | ||
Cash | $ 250,000 | ||
Warrants | |||
Assumption of debt | |||
Total consideration paid | $ 550,000 | ||
Property and equipment | $ 284,795 | ||
Current assets, excluding cash | 9,926 | ||
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 acquired |
Acquisitions - Schedule of Busi
Acquisitions - Schedule of Business Combination Pro Forma Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Combinations [Abstract] | ||||
Total revenues | $ 11,551,329 | $ 13,473,304 | $ 36,159,199 | $ 37,626,727 |
Loss from continuing operations | (2,972,928) | (1,287,982) | (5,255,488) | (2,091,978) |
Gain (loss) from discontinued operations | 2,088 | (72,300) | 189 | (104,973) |
Loss attributable to non-controlling interest | 69,397 | (61,209) | 412,366 | 88,163 |
Net loss | $ (2,901,443) | $ (1,421,491) | $ (4,842,933) | $ (2,108,788) |
Net loss per share, basic and diluted | $ (0.20) | $ (0.21) | $ (0.34) | $ (0.34) |
Weighted average shares outstanding, basic and diluted | 14,802,370 | 6,628,011 | 14,059,116 | 6,279,688 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) | 1 Months Ended | |
Dec. 31, 2014 | Sep. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Number of stock units reacquired | 185,000 | |
Number of stock units reacquired during period, value | $ 446,050 | |
Carrying value of net assets | 1,109,062 | |
Net loss | 683,012 | |
Liabilities from discontinued operation | $ 177,393 | $ 177,204 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Operating Results From Discontinued Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Total revenue | $ 314,190 | $ 968,103 | ||
Total operating (income) expenses | 370,413 | $ (189) | 1,129,299 | |
Net (income) loss from discontinued operations | $ (56,223) | $ 189 | $ (161,196) |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 23,746,173 | $ 19,045,647 |
Accumulated depreciation and amortization | (5,890,891) | (5,730,238) |
Property and equipment, net | 17,855,282 | 13,315,409 |
Restaurant Equipment and Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,067,483 | 7,827,926 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,916,630 | 9,940,517 |
Construction In Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 54,602 | 727,934 |
Land and Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 586,275 | 437,223 |
Office and Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,734 | 51,746 |
Office Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 109,450 | $ 60,301 |
Goodwill and other Intangible44
Goodwill and other Intangible Assets, Net - Schedule of Goodwill (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Goodwill [Line Items] | ||||
Goodwill | $ 12,269,504 | $ 15,617,308 | $ 17,538,782 | $ 6,496,756 |
Hooters Pacific NW [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 1,951,909 | |||
South Africa [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 226,795 | 273,737 | ||
ABC [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 2,806,990 | 2,806,990 | ||
WEW [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 2,800,504 | 2,868,192 | ||
Just Fresh [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 425,151 | 425,151 | ||
Australia [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 7,291,329 | |||
Hooters Pacific NW [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 1,951,909 | |||
BGR The Burger Joint [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 663,037 | |||
Little Big Burger [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 2,417,653 | |||
BT's Burger Joint [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 977,465 |
Goodwill and other Intangible45
Goodwill and other Intangible Assets, Net - Summary of Changes in Carrying Amount of Goodwill (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning Balance | $ 15,617,308 | $ 6,496,756 |
Acquisitions | 4,058,155 | $ 11,000,045 |
Impairment | (6,803,537) | |
Foreign currency translation (loss) gain | (602,422) | $ 41,981 |
Ending Balance | $ 12,269,504 | $ 17,538,782 |
Goodwill and other Intangible46
Goodwill and other Intangible Assests, Net - Schedule of Other Intangible Assets (Details) - USD ($) | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | $ 8,050,920 | $ 3,799,975 | ||
Accumulated amortization | (508,525) | (403,472) | ||
Intangible assets, net | 7,542,395 | 3,396,503 | ||
Trademarks and Trade Names [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 5,776,930 | 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 | 1,786,930 | $ 1,783,954 | ||
Trademarks and Trade Names [Member] | BGR The Burger Joint [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 1,430,000 | |||
Trademarks and Trade Names [Member] | Little Big Burger [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 1,550,000 | |||
Franchise Rights [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 2,273,990 | $ 1,006,021 | ||
Franchise Rights [Member] | BGR The Burger Joint [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 1,320,000 | |||
Franchise Rights [Member] | Chanticleer Holdings [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | [1] | $ 135,000 | 135,000 | |
Franchise Rights [Member] | Hooters Pacific NW and Spoon [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | $ 90,000 | |||
South Africa [Member] | Franchise Rights [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 316,086 | 290,986 | ||
Europe [Member] | Franchise Rights [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 59,129 | 106,506 | ||
Australia [Member] | Franchise Rights [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | 353,775 | $ 383,529 | ||
Hooters Pacific NW and Spoon [Member] | Franchise Rights [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible cost | $ 90,000 | |||
[1] | Amortization of the Chanticleer franchise cost will begin with the opening of a related restaurant. |
Long-Term Debt and Notes Paya47
Long-Term Debt and Notes Payable - Summary of Long-Term Debt and Notes Payable (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | Apr. 30, 2014 | |||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | $ 6,553,950 | $ 6,822,930 | ||||
Current portion of long-term debt | 1,134,025 | 1,813,647 | $ 330,220 | |||
Long-term debt, less current portion | 5,419,925 | 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; collateralized by substantially all of the Company's assets [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | [1] | $ 143,870 | 176,731 | |||
Line of credit to a bank, expired on October 10, 2015. [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | [1] | 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 Companys assets and guaranteed by an officer of the Company [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | $ 971,670 | [1],[2] | 500,000 | [3] | ||
Loan agreement with an outside company dated December 23, 2013, interest at 1% per month, paid in full in 2015 [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | [3] | 100,000 | [4] | |||
Loan agreement with an outside company dated June 20, 2014, interest at 8% annual rate, paid in full in 2015 [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | [4] | 100,000 | ||||
Mortage loan dated April, 2014, interest ar South African prime rate + 2.6% (11.85% as of September 30, 2015); due July 31, 2024; secured by a bond on all assets at our Port Elizabeth, South Africa location [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | [5] | $ 232,677 | 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 $214,834 and $343,733, respectively; matures January 31, 2017 [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | [6] | 4,785,166 | 4,656,267 | |||
Bank overdraft facilities; unsecured; maximum facilities $260,000; interest rate 11% at September 30, 2015, with annual renewal each December [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | [7] | 192,428 | 151,868 | |||
Term facility with monthly payments of 45,288 Rand, including interest at South African Prime + 1.0% (10.25% as of September 30, 2015); due June 14, 2016 [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | [8] | 27,182 | 64,309 | |||
Term facility with monthly payments of 44,727 Rand including interest at South Afican Prime + 3.0% (12.25% as of September 30, 2015); due November 15, 2019 [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | [9] | 124,183 | 170,053 | |||
Term facility with monthly payments of 33,750 Rand, including interest at South Afican Prime + 3.0% (12.25% as of September 30, 2015); due December 1, 2018 [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Total Long-term Debt | [10] | $ 76,774 | $ 109,340 | |||
[1] | On April 11, 2013, the Company and Paragon Commercial Bank (“Paragon”) entered into a credit agreement (the “Credit Agreement”) which provided for a $500,000 revolving credit facility with a one-year term from the closing date. 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. The credit facility expired on October 10, 2015. 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 June 30, 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. | |||||
[2] | Note with Paragon, due on June 10, 2019. The note bears interest at a 5% annual rate, with principal and interest monthly payments of $11,532 starting in June 2015 until the maturity date. | |||||
[3] | 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, 2014 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. | |||||
[4] | 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 during the three months ended March 31, 2015, representing the difference between the fair value of the shares issued and the carrying value of the outstanding debt and accrued interest. | |||||
[5] | 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 was originally issued in the amount of $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. | |||||
[6] | 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. | |||||
[7] | The Company’s South African subsidiary has local bank financing in the form of term and overdraft facilities with $192,428 and $151,868 outstanding as of September 30, 2015 and December 31, 2014 respectively. | |||||
[8] | The Company’s South African subsidiary has local bank financing in the form of a term loan with monthly payments of approximately $3,500, including interest at South African Prime +1.0%. The term loan matures on June 14, 2016. | |||||
[9] | The Company’s South African subsidiary has local bank financing in the form of a term loan with monthly payments of approximately $3,500, including interest South African Prime +3.0%. The term loan matures on November 15, 2019. | |||||
[10] | The Company’s South African subsidiary has local bank financing in the form of a term loan with monthly payments of approximately $2,700, including interest at South African Prime + 3.0%. The term loan matures on December 1, 2018. |
Long-Term Debt and Notes Paya48
Long-Term Debt and Notes Payable - Summary of Long-Term Debt and Notes Payable (Details) (Parenthetical) - USD ($) | Oct. 15, 2014 | Aug. 20, 2014 | Jul. 02, 2014 | Jun. 20, 2014 | Mar. 21, 2014 | Dec. 23, 2013 | Nov. 04, 2013 | Apr. 11, 2013 | Sep. 30, 2014 | Apr. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Line of credit revolving facility | $ 500,000 | $ 500,000 | |||||||||||||||
Note payable maturity date | Aug. 10, 2013 | Jun. 10, 2019 | Aug. 31, 2024 | ||||||||||||||
Note payable extended date | Oct. 10, 2018 | ||||||||||||||||
Note payable interest rate description | prime plus rate (3.25% as of June 30, 2015) plus 1.00%. | ||||||||||||||||
Note payable monthly installment amount | $ 4,406 | $ 4,600 | |||||||||||||||
Line of credit expires date | Oct. 10, 2015 | ||||||||||||||||
Interest amount | $ 11,532 | $ 11,532 | $ 11,532 | ||||||||||||||
Note interest rate | 5.00% | 11.00% | 5.00% | 11.00% | 5.00% | ||||||||||||
Long term note | $ 330,220 | $ 1,134,025 | $ 1,134,025 | $ 1,813,647 | |||||||||||||
Loss on extinguishment of debt | $ (145,834) | $ (315,923) | |||||||||||||||
Note term | 10 years | ||||||||||||||||
Business acquisition ownership interest percentage | 49.00% | 49.00% | |||||||||||||||
Revenue | $ 10,271,305 | $ 9,312,552 | $ 9,312,552 | $ 29,735,489 | $ 21,205,894 | ||||||||||||
Bank overdraft facilities | $ 192,428 | $ 192,428 | |||||||||||||||
South African Subsidiary [Member] | |||||||||||||||||
Bank overdraft facilities | $ 151,868 | ||||||||||||||||
South African Subsidiary One [Member] | |||||||||||||||||
Line of credit expires date | Jun. 14, 2016 | ||||||||||||||||
Line of credit interest rate | 10.25% | 10.25% | |||||||||||||||
South African Subsidiary One [Member] | Prime Rate [Member] | |||||||||||||||||
Line of credit interest rate | 1.00% | 1.00% | |||||||||||||||
South African Subsidiary One [Member] | South Africa, Rand [Member] | |||||||||||||||||
Line of credit monthly payment | $ 3,500 | ||||||||||||||||
South African Subsidiary Two [Member] | |||||||||||||||||
Line of credit expires date | Nov. 15, 2019 | ||||||||||||||||
Line of credit interest rate | 12.25% | 12.25% | |||||||||||||||
South African Subsidiary Two [Member] | Prime Rate [Member] | |||||||||||||||||
Line of credit interest rate | 3.00% | 3.00% | |||||||||||||||
South African Subsidiary Two [Member] | South Africa, Rand [Member] | |||||||||||||||||
Line of credit monthly payment | $ 3,500 | ||||||||||||||||
South African Subsidiary Three [Member] | |||||||||||||||||
Line of credit expires date | Dec. 1, 2018 | ||||||||||||||||
Line of credit interest rate | 12.25% | 12.25% | |||||||||||||||
South African Subsidiary Three [Member] | Prime Rate [Member] | |||||||||||||||||
Line of credit interest rate | 3.00% | 3.00% | |||||||||||||||
South African Subsidiary Three [Member] | South Africa, Rand [Member] | |||||||||||||||||
Line of credit monthly payment | $ 2,700 | ||||||||||||||||
Interest Rate Floor [Member] | |||||||||||||||||
Note interest rate | 2.60% | 11.85% | 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 June 30, 2015) plus 1.00%, | ||||||||||||||||
Credit Agreement [Member] | Interest Rate Floor [Member] | |||||||||||||||||
Line of credit interest rate | 5.00% | 5.00% | |||||||||||||||
Loan Agreement [Member] | |||||||||||||||||
Note payable maturity date | Jul. 11, 2014 | Feb. 23, 2014 | |||||||||||||||
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 | Jan. 31, 2017 | ||||||||||||||||
Revenue | $ 343,733 | ||||||||||||||||
Purchase Agreements [Member] | Australian Entities [Member] | |||||||||||||||||
Note payable maturity date | Jan. 31, 2017 | ||||||||||||||||
Note interest rate | 12.00% | ||||||||||||||||
Business acquisition ownership interest percentage | 60.00% | ||||||||||||||||
Debt annual payment amount | $ 200,000 | $ 5,000,000 | |||||||||||||||
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 ($) | Sep. 30, 2015 | Sep. 30, 2015 | Jan. 31, 2015 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2015 | Jan. 05, 2015 | Dec. 31, 2014 | 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 | $ 2,150,000 | ||||||||||||
Convertible notes payable | $ 2,510,580 | $ 2,510,580 | $ 2,510,580 | $ 2,510,580 | $ 1,913,683 | |||||||||
Debt instrument, interest rate, stated percentage | 11.00% | 11.00% | 11.00% | 11.00% | 5.00% | |||||||||
Amortized debt discount | $ 1,356,365 | $ 930,392 | ||||||||||||
Conversion of convertible debt amount | $ 1,000,000 | $ 250,000 | $ 5,000,000 | $ 425,000 | ||||||||||
Conversion of debt into shares | 500,000 | 168,713 | 373,333 | 289,176 | ||||||||||
Derivative liabilities | $ 1,150,300 | $ 1,150,300 | $ 125,089 | $ 1,150,300 | 1,150,300 | $ 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 | $ 2,175,000 | |||||||||||||
Convertible notes payable | $ 1,000,000 | |||||||||||||
Debt instrument, interest rate, stated percentage | 8.00% | |||||||||||||
Percentage of convertible debt to common stock trading 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 One [Member] | Conversion Feature [Member] | ||||||||||||||
Debt Instrument, Redemption [Line Items] | ||||||||||||||
Convertible notes payable | 425,000 | |||||||||||||
Convertible Promissory Notes Two [Member] | ||||||||||||||
Debt Instrument, Redemption [Line Items] | ||||||||||||||
Proceeds from issuance of debt | 500,000 | |||||||||||||
Convertible notes payable | $ 150,000 | |||||||||||||
Debt instrument, interest rate, stated percentage | 8.00% | |||||||||||||
Percentage of convertible debt to common stock trading 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 | $ 250,000 | |||||||||||||
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] | Conversion Feature [Member] | ||||||||||||||
Debt Instrument, Redemption [Line Items] | ||||||||||||||
Convertible notes payable | $ 1,000,000 | |||||||||||||
Convertible Promissory Notes Two [Member] | ||||||||||||||
Debt Instrument, Redemption [Line Items] | ||||||||||||||
Convertible notes payable | $ 1,000,000 | |||||||||||||
Debt instrument, interest rate, stated percentage | 9.00% | |||||||||||||
Conversion price per share | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | |||||||||
Issuance of warrants to purchase of common stock | 320,000 | |||||||||||||
Common stock, exercisable price per share | $ 2.50 | |||||||||||||
Warrant term | 5 years | |||||||||||||
Fair value of the embedded conversion feature and the warrants | $ 315,008 | |||||||||||||
Amortized debt discount | $ 455,008 | |||||||||||||
Unamortized debt discount | $ 643,371 | $ 643,371 | $ 643,371 | $ 643,371 | ||||||||||
Convertible Debt [Member] | ||||||||||||||
Debt Instrument, Redemption [Line Items] | ||||||||||||||
Conversion price per share | $ 1.33 | $ 1.3 | $ 1.45 | $ 3.29 | $ 3.73 | |||||||||
Conversion of convertible debt amount | $ 1,000,000 | |||||||||||||
Conversion of debt into shares | 500,000 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Convertible Notes Payable [Line Items] | ||
Convertible Notes Payable, Total | $ 2,510,580 | $ 1,913,683 |
Current portion of convertible notes payable | 215,757 | 436,270 |
Convertible notes payable, less current portion | 2,294,823 | 1,477,413 |
6% Convertible notes payable issued in November 2013 [Member] | ||
Convertible Notes Payable [Line Items] | ||
Convertible Notes Payable, Total | 3,000,000 | 3,000,000 |
Discounts on above convertible note | $ (833,340) | (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 | (17,029) | $ (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 | (104,808) | |
8% Convertible notes payable issued in January 2015 [Member] | ||
Convertible Notes Payable [Line Items] | ||
Convertible Notes Payable, Total | 575,000 | |
Discounts on above convertible note | $ (359,243) |
Convertible Notes Payable - S51
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 |
Convertible notes payable interest rate | 11.00% | 5.00% | |
6% Convertible notes payable issued in November 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% |
Convertible Notes Payable - Fai
Convertible Notes Payable - Fair Value Measurements, Valuation Assumptions of Embedded Conversion Feature and Warrants (Details) - $ / shares | Jan. 05, 2015 | Dec. 16, 2014 | Nov. 19, 2014 | Mar. 19, 2014 | Aug. 02, 2013 | Sep. 30, 2015 | Dec. 31, 2014 | Jun. 19, 2015 |
Debt Instrument, Redemption [Line Items] | ||||||||
Common stock closing price | $ 2.50 | |||||||
Convertible Debt [Member] | ||||||||
Debt Instrument, Redemption [Line Items] | ||||||||
Common stock closing price | $ 1.75 | $ 1.53 | $ 1.7 | $ 3.87 | $ 4.15 | |||
Conversion per share price | $ 1.33 | $ 1.3 | $ 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 | $ 0.9 | $ 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 | $ 1.75 | $ 1.73 | ||||||
Conversion per share price | $ 1.33 | $ 1.49 | ||||||
Conversion shares | 749,344 | 2,008,032 | ||||||
Expected life (in years) | 3 years | 1 year 7 months 6 days | ||||||
Expected volatility | 73.00% | 64.00% | ||||||
Call option value | $ 0.97 | $ 0.64 | ||||||
Risk-free interest rate | 0.90% | 0.67% | ||||||
Dividends | 0.00% | 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 | $ 1.10 | |||||||
Conversion per share price | $ 1.16 | |||||||
Conversion shares | 2,581,978 | |||||||
Expected life (in years) | 9 months 18 days | |||||||
Expected volatility | 73.00% | |||||||
Call option value | $ 0.27 | |||||||
Risk-free interest rate | 0.37% | |||||||
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 | $ 1.10 | |||||||
Conversion per share price | $ 0.95 | |||||||
Conversion shares | 104,730 | |||||||
Expected life (in years) | 2 years 2 months 12 days | |||||||
Expected volatility | 77.00% | |||||||
Call option value | $ 0.53 | |||||||
Risk-free interest rate | 1.01% | |||||||
Dividends | 0.00% | |||||||
Convertible Debt Ten [Member] | ||||||||
Debt Instrument, Redemption [Line Items] | ||||||||
Common stock closing price | $ 1.10 | |||||||
Conversion per share price | $ 0.95 | |||||||
Conversion shares | 157,095 | |||||||
Expected life (in years) | 2 years 3 months 18 days | |||||||
Expected volatility | 77.00% | |||||||
Call option value | $ 0.53 | |||||||
Risk-free interest rate | 1.01% | |||||||
Dividends | 0.00% | |||||||
Convertible Debt Eleven [Member] | ||||||||
Debt Instrument, Redemption [Line Items] | ||||||||
Common stock closing price | $ 1.10 | |||||||
Conversion per share price | $ 0.95 | |||||||
Conversion shares | 602,199 | |||||||
Expected life (in years) | 2 years 3 months 18 days | |||||||
Expected volatility | 77.00% | |||||||
Call option value | $ 0.53 | |||||||
Risk-free interest rate | 1.01% | |||||||
Dividends | 0.00% |
Accounts Payable and Accrued 53
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Disclosure Text Block [Abstract] | ||
Accounts payable | $ 3,433,738 | $ 3,382,818 |
Accrued taxes (VAT, GST, Sales Payroll) | 650,012 | 1,604,829 |
Accrued income taxes | 22,945 | 92,618 |
Accrued interest | 313,675 | 499,866 |
Accounts payable and accrued liabilities, total | $ 4,420,370 | $ 5,580,131 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Sep. 30, 2015 | Sep. 22, 2015 | Jun. 19, 2015 | Mar. 16, 2015 | Sep. 30, 2015 | Jan. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Stockholders' Equity Note [Abstract] | |||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares authorized | 45,000,000 | 45,000,000 | 45,000,000 | 45,000,000 | 45,000,000 | ||||
Common stock, shares issued | 21,328,830 | 21,328,830 | 21,328,830 | 21,328,830 | 7,249,442 | ||||
Common stock, shares outstanding | 21,328,830 | 21,328,830 | 21,328,830 | 21,328,830 | 7,249,442 | ||||
Preferred stock, par value | |||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | ||||
Preferred stock, shares issued | |||||||||
Preferred stock, shares outstanding | |||||||||
Conversion of debt into shares | 500,000 | 168,713 | 373,333 | 289,176 | |||||
Conversion of debt into shares value | $ 1,000,000 | $ 250,000 | $ 5,000,000 | $ 425,000 | |||||
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 | ||||||||
Number of shares available for future issuance | 500,000 | ||||||||
Sale of stock transaction during period, shares | 4,894,692 | 860,000 | |||||||
Sale of stock transaction during period, value | $ 6,000,000 | ||||||||
Sales price | $ 2.50 | ||||||||
Stock issued during period, shares, issued for services | 15,000 | 49,800 | |||||||
Stock issued during period, value, issued for services | $ 30,000 | $ 231,857 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrants Activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | ||
Number of Warrants Outstanding beginning balance, shares | 8,715,804 | |
Granted, shares | 840,500 | |
Exercised, shares | ||
Forfeited, shares | ||
Number of Warrants Outstanding ending balance, shares | 9,556,304 | 8,715,804 |
Exercisable, shares | 9,556,304 | |
Weighted-average exercise price, Outstanding beginning balance | $ 5.17 | |
Weighted-average exercise price, Granted | $ 2.55 | |
Weighted-average exercise price, Exercised | ||
Weighted-average exercise price, Forfeited | ||
Weighted-average exercise price, Outstanding ending balance | $ 4.94 | $ 5.17 |
Exercisable, Weighted-average exercise price | $ 4.94 | |
Weighted Average Remaining Life In Years, Outstanding | 2 years 3 months 18 days | 2 years 2 months 12 days |
Weighted Average Remaining Life In Years, Exercisable | 2 years 3 months 18 days |
Stockholders' Equity - Schedu56
Stockholders' Equity - Schedule of Warrants Outstanding (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 2 years 3 months 18 days | 2 years 2 months 12 days |
Warrant [Member] | ||
Number of warrants, outstanding | 9,556,304 | |
Number of warrants exercisable | 9,556,304 | |
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 1 month 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 | $ 4.99 | |
Number of warrants, outstanding | 3,935,117 | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 2 years 2 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 | $ 3.99 | |
Number of warrants, outstanding | 413,901 | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 3 years 8 months 12 days | |
Number of warrants exercisable | 413,901 | |
Range 4 [Member] | Warrant [Member] | ||
Range of exercise prices, lower limit | $ 2 | |
Range of exercise prices, upper limit | $ 2.99 | |
Number of warrants, outstanding | 1,340,272 | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 3 years 1 month 6 days | |
Number of warrants exercisable | 1,340,272 | |
Range 5 [Member] | Warrant [Member] | ||
Range of exercise prices, lower limit | $ 1 | |
Range of exercise prices, upper limit | $ 1.99 | |
Number of warrants, outstanding | 312,500 | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 4 years 2 months 12 days | |
Number of warrants exercisable | 312,500 |
Stockholders Equity - Schedule
Stockholders Equity - Schedule of Warrant Amortization (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Equity [Abstract] | ||||
Interest expense | $ 407,263 | $ 259,442 | $ 1,356,365 | $ 930,392 |
Consulting expense | 22,375 | 22,375 | 152,325 | |
Amortization expense | $ 407,263 | $ 281,817 | $ 1,378,740 | $ 1,082,717 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Non-Interest Bearing Loans and Advances from Related Parties (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Related Party Transaction [Line Items] | ||
Due to related parties | $ 212,399 | $ 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 | $ 12,963 | 12,191 |
Hooters Australia Partner [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 1,087,451 | |
Chanticleer Investors LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 199,436 |
Related Party Transactions - 59
Related Party Transactions - Schedule of Earned Income and Made Advance to Related Parties (Details) - USD ($) | Sep. 30, 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
Segments of Business - Summary of Revenues, Operating Loss, Long-Lived Assets By Geographic Area (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | ||||||
Revenue: | $ 10,271,305 | $ 9,312,552 | $ 9,312,552 | $ 29,735,489 | $ 21,205,894 | |
Operating loss: | (5,751,189) | (532,126) | $ (532,126) | (9,743,710) | (3,510,839) | |
Long Lived Assets: | 39,549,580 | 39,549,580 | $ 34,323,074 | |||
United States [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue: | 6,872,531 | 3,642,971 | 17,200,288 | 9,477,879 | ||
Operating loss: | (1,150,856) | (673,118) | (4,267,634) | (3,247,467) | ||
Long Lived Assets: | 33,226,470 | 33,226,470 | 15,299,108 | |||
South Africa [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue: | 1,380,665 | 1,601,493 | 4,626,094 | |||
Operating loss: | (25,739) | (70,571) | (43,178) | |||
Long Lived Assets: | 2,428,590 | 2,428,590 | 2,172,528 | |||
Australia [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue: | 830,653 | 2,641,909 | 4,824,036 | 3,153,589 | ||
Operating loss: | (4,608,773) | 192,556 | (5,466,548) | (88,002) | ||
Long Lived Assets: | 404,717 | 404,717 | 13,068,305 | |||
Europe [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue: | 1,187,456 | 1,426,179 | 3,085,071 | 3,669,177 | ||
Operating loss: | 34,179 | $ 19,007 | 33,650 | 44,816 | ||
Long Lived Assets: | 3,354,803 | 3,354,803 | 3,648,133 | |||
South Africa [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue: | 4,905,249 | |||||
Operating loss: | $ (220,186) | |||||
Brazil [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Long Lived Assets: | $ 135,000 | $ 135,000 | $ 135,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Debt owned amount | $ 480,000 |
Disclosures About Fair Value -
Disclosures About Fair Value - Schedule of Fair Value of Measured Assets and Liabilities (Details) - USD ($) | Sep. 30, 2015 | Jan. 31, 2015 | Dec. 31, 2014 |
Fair Value Disclosure [Line Items] | |||
Available-for-sale securities | $ 35,362 | $ 35,362 | |
Embedded conversion feature | 1,150,300 | $ 125,089 | 1,610,900 |
Warrants | 168,361 | 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 | |||
Embedded conversion feature | $ 1,150,300 | $ 1,610,900 | |
Warrants | $ 168,361 | $ 334,300 |
Disclosures About Fair Value 63
Disclosures About Fair Value - Summary of Changes in Fair Value (Details) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
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 |
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 | (691,500) |
Amount included in debt discounts | 778,900 |
Reclassification of derivative liability to equity | (239,801) |
Ending balance | 1,458,499 |
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 | 120,593 |
Reclassification of derivative liability to equity | (66,200) |
Ending balance | $ 388,693 |
Australia Administration Tran64
Australia Administration Transactions (Details Narrative) | 3 Months Ended | ||
Sep. 30, 2015USD ($)Stores | Oct. 31, 2015USD ($)Stores | Jul. 14, 2015 | |
Net impairment charge | $ | $ 4,500,000 | ||
Minimum [Member] | |||
Number of stores | 3 | ||
Maximum [Member] | |||
Number of stores | 4 | ||
Hooters Australia [Member] | PCS Investments [Member] | |||
Equity ownership percentage | 80.00% | ||
Additional capital | $ | $ 1,000,000 | ||
Number of stores | 5 | ||
Hooters Australia [Member] | Minimum [Member] | |||
Equity ownership percentage | 60.00% | ||
Hooters Australia [Member] | Maximum [Member] | |||
Equity ownership percentage | 80.00% | ||
Hooters [Member] | PCS Investments [Member] | |||
Equity ownership percentage | 20.00% | ||
Additional capital | $ | $ 300,000 | ||
Number of stores | 5 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - shares | Sep. 30, 2015 | Oct. 31, 2015 | Sep. 30, 2015 | Jan. 31, 2015 | Sep. 30, 2015 |
Number of shares issued for the conversion of a convertible note payable | 500,000 | 168,713 | 373,333 | 289,176 | |
Subsequent Event [Member] | Convertible Promissory Note [Member] | |||||
Number of shares issued for the conversion of a convertible note payable | 1,400,000 |