Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 10, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Chanticleer Holdings, Inc. | |
Entity Central Index Key | 1,106,838 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,500,534 | |
Trading Symbol | HOTR | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 377,695 | $ 268,575 |
Restricted cash | 275,463 | |
Accounts and other receivables | 330,055 | 524,481 |
Inventories | 560,243 | 539,550 |
Prepaid expenses and other current assets | 367,443 | 461,074 |
Assets held for sale, net | 578,321 | |
TOTAL CURRENT ASSETS | 2,489,220 | 1,793,680 |
Property and equipment, net | 10,342,514 | 11,513,693 |
Goodwill | 12,540,817 | 12,405,770 |
Intangible assets, net | 6,374,427 | 6,530,243 |
Investments | 800,000 | 800,000 |
Deposits and other assets | 509,907 | 442,737 |
TOTAL ASSETS | 33,056,885 | 33,486,123 |
Current liabilities: | ||
Accounts payable and accrued expenses | 5,040,696 | 5,553,068 |
Current maturities of long-term debt and notes payable, | 928,870 | 6,171,649 |
Current maturities of capital leases payable | 9,294 | 18,449 |
Due to related parties | 194,350 | 194,350 |
Deferred rent | 106,818 | 173,775 |
TOTAL CURRENT LIABILITIES | 6,280,028 | 12,111,291 |
Long-term debt, less current portion, net of debt discount and deferred financing costs of $2,161,422 and $0, respectively | 4,533,161 | 287,445 |
Convertible notes payable, net of debt discount (premium) of ($17,156) and $46,936, respectively | 3,217,156 | 3,678,064 |
Redeemable preferred stock: no par value, 62,876 and 19,050 shares issued and outstanding, net of discount of $226,089 and $0, respectively | 622,737 | 257,175 |
Deferred rent | 2,207,160 | 1,961,751 |
Deferred tax liabilities | 1,559,074 | 1,485,554 |
TOTAL LIABILITIES | 18,419,316 | 19,781,280 |
Common stock subject to repurchase obligation; 0 and 56,290 shares issued and outstanding, respectively | 349,000 | |
Stockholders' equity: | ||
Preferred stock: no par value; authorized 5,000,000 shares; 62,876 and 19,050 issued issued and outstanding, respectively | ||
Common stock: $0.0001 par value; authorized 45,000,000 shares; issued and outstanding 2,500,534 and 2,139,424 shares, respectively | 250 | 213 |
Additional paid in capital | 59,996,594 | 55,926,196 |
Accumulated other comprehensive loss | (966,489) | (1,155,658) |
Accumulated deficit | (45,357,031) | (42,206,325) |
Total Chanticleer Holdings, Inc, Stockholders' Equity | 13,673,324 | 12,564,426 |
Non-Controlling Interests | 964,245 | 791,417 |
TOTAL STOCKHOLDERS' EQUITY | 14,637,569 | 13,355,843 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 33,056,885 | $ 33,486,123 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Long-term debt net of debt discount | $ 2,161,422 | $ 0 |
Convertible notes payable, noncurrent | $ (17,156) | $ 46,936 |
Redeemable preferred stock, no par value | ||
Redeemable preferred stock, shares issued | 62,876 | 19,050 |
Redeemable preferred stock, shares outstanding | 62,876 | 19,050 |
Redeemable preferred stock, net of discount | $ 226,089 | $ 0 |
Common stock repurchase obligation, shares issued | 0 | 56,290 |
Common stock repurchase obligation, shares outstanding | 0 | 56,290 |
Preferred stock, no par value | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 62,876 | 19,050 |
Preferred stock, shares outstanding | 62,876 | 19,050 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 2,500,534 | 2,139,424 |
Common stock, shares outstanding | 2,500,534 | 2,139,424 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue: | ||||
Restaurant sales, net | $ 10,524,787 | $ 10,525,629 | $ 20,177,941 | $ 20,330,320 |
Gaming income, net | 107,520 | 97,978 | 213,588 | 197,511 |
Management fee income | 24,993 | 25,000 | 49,983 | 50,000 |
Franchise income | 108,017 | 103,387 | 183,803 | 285,939 |
Total revenue | 10,765,317 | 10,751,994 | 20,625,315 | 20,863,770 |
Expenses: | ||||
Restaurant cost of sales | 3,579,558 | 3,445,116 | 6,770,947 | 6,695,086 |
Restaurant operating expenses | 5,855,410 | 5,737,168 | 11,529,971 | 11,252,183 |
Restaurant pre-opening and closing expenses | 90,761 | 105,196 | 7,555 | |
General and administrative expenses | 1,084,422 | 1,374,835 | 2,460,042 | 3,049,714 |
Asset impairment charge | 633,962 | 633,962 | ||
Depreciation and amortization | 602,659 | 577,942 | 1,196,039 | 1,148,382 |
Total expenses | 11,846,772 | 11,135,061 | 22,696,157 | 22,152,920 |
Operating loss from continuing operations | (1,081,455) | (383,067) | (2,070,842) | (1,289,150) |
Other (expense) income | ||||
Interest expense | (504,706) | (650,479) | (908,842) | (1,251,406) |
Change in fair value of derivative liabilities | 513,439 | 1,129,101 | ||
Gain (loss) on debt refinancing | 267,512 | (95,310) | ||
Other income (expense) | (21) | (27,706) | 12,212 | (19,969) |
Total other expense | (237,216) | (164,746) | (991,940) | (142,274) |
Loss from continuing operations before income taxes | (1,318,672) | (547,813) | (3,062,782) | (1,431,424) |
Income tax expense | (109,531) | (51,405) | (113,328) | (85,393) |
Loss from continuing operations | (1,428,201) | (599,217) | (31,761,110) | (1,516,817) |
Discontinued operations | ||||
Loss from discontinued operations, net of tax | (556,528) | (1,235,909) | ||
Loss on write down of net assets | (3,876,161) | (3,876,161) | ||
Consolidated net loss | (1,428,201) | (5,031,906) | (31,761,110) | (6,628,887) |
Less: Net loss attributable to non-controlling interest of continuing operations | 56,328 | (21,375) | 77,171 | 14,365 |
Net loss attributable to Chanticleer Holdings, Inc. | (1,371,873) | (5,053,281) | (3,098,939) | (6,614,522) |
Net loss attributable to Chanticleer Holdings, Inc.: | ||||
Loss from continuing operations | (1,371,873) | (620,592) | (3,098,939) | (1,502,452) |
Loss from discontinued operations | (4,432,689) | (5,112,070) | ||
Net loss attributable to Chanticleer Holdings, Inc. | (1,371,873) | (5,053,281) | (3,098,939) | (6,614,522) |
Dividends on redeemable preferred stock | (27,622) | (51,769) | ||
Net loss attributable to common shareholders of Chanticleer Holdings, Inc. | $ (1,399,495) | $ (5,053,281) | $ (3,150,708) | $ (6,614,522) |
Net loss attributable to Chanticleer Holdings, Inc. per common share, basic and diluted: | $ (0.58) | $ (2.35) | $ (1.40) | $ (3.09) |
Continuing operations attributable to common stockholders, basic and diluted | (0.58) | (0.29) | (1.40) | (0.70) |
Discontinued operations attributable to common stockholders, basic and diluted | $ (2.06) | $ (2.39) | ||
Weighted average shares outstanding, basic and diluted | 2,432,313 | 2,152,282 | 2,257,767 | 2,143,003 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Net loss attributable to Chanticleer Holdings, Inc. | $ (1,371,873) | $ (5,053,281) | $ (3,098,939) | $ (6,614,522) |
Unrealized loss on available-for-sale securities, net of tax | (22,381) | (24,501) | ||
Foreign currency translation gain (loss) | 142,339 | (307,543) | 189,170 | (109,140) |
Total other comprehensive income (loss) | 142,339 | (329,924) | 189,170 | (133,641) |
Comprehensive loss | $ (1,229,535) | $ (5,383,205) | $ (2,909,770) | $ (6,748,163) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (31,761,110) | $ (6,628,887) |
Net loss from discontinued operations | 5,112,070 | |
Net loss from continuing operations | (31,761,110) | (1,516,817) |
Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,196,039 | 1,148,382 |
Asset impairment charge | 633,962 | |
Loss on debt refinancing | 95,310 | |
Common stock and warrants issued for services | 154,318 | 24,510 |
Common stock and warrants issued for interest | 349,000 | |
Amortization of debt discount | 408,359 | 726,317 |
Change in assets and liabilities: | ||
Accounts and other receivables | 194,426 | 32,395 |
Prepaid and other assets | 26,460 | 140,440 |
Inventory | (20,693) | 73,315 |
Accounts payable and accrued liabilities | (19,125) | 502,777 |
Change in amounts payable to related parties | 197,000 | |
Derivative liabilities | (1,129,101) | |
Deferred income taxes | 73,520 | 67,841 |
Deferred rent | 178,453 | (257,507) |
Net cash provided by (used in) operating activities from continuing operations | (255,081) | 358,551 |
Net cash used in operating activities from discontinued operations | (75,000) | |
Net cash provided by (used in) operating activities | (255,081) | 283,551 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (984,301) | (392,829) |
Cash paid for acquisitions, net of cash acquired | (72,215) | |
Proceeds from sale of investments | 8,902 | |
Net cash used in investing activities from continuing operations | (984,301) | (456,142) |
Cash flows from financing activities: | ||
Proceeds from sale of preferred stock | 591,651 | |
Payments related to sale of preferred stock | (258,153) | |
Loan proceeds | 6,598,161 | 125,000 |
Payments of deferred financing costs | (293,294) | |
Loan repayments | (5,478,494) | (206,267) |
Capital lease payments | (14,551) | (10,783) |
Contribution of non-controlling interest | 500,000 | 46,911 |
Net cash provided by (used in) financing activities from continuing operations | 1,645,320 | (45,139) |
Effect of exchange rate changes on cash | (21,355) | (23,474) |
Net increase (decrease) in cash and restricted cash | 384,583 | (241,204) |
Cash and restricted cash, beginning of period | 268,575 | 1,224,415 |
Cash and restricted cash, end of period | 377,695 | 983,211 |
Supplemental cash flow information: | ||
Interest | 526,680 | 68,467 |
Income taxes | 6,532 | |
Non-cash investing and financing activities: | ||
Convertible debt settled through issuance of common stock | 625,000 | |
Accrued interest settled through issuance of convertible debt | 95,107 | |
Preferred stock dividends paid through issuance of common stock | 15,067 | |
Commons stock issued in connection with business combination | 27,018 | |
Purchases of businesses: | ||
Current assets excluding cash | 1,611 | |
Goodwill | 70,604 | |
Cash paid for acquisitions | $ 72,215 |
Nature of Business
Nature of Business | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | 1. Nature of Business Organization Chanticleer Holdings, Inc. and its subsidiaries (together, the “Company”) are in the business of owning, operating and franchising fast casual dining concepts domestically and internationally. The consolidated financial statements include the accounts of Chanticleer Holdings, Inc. and its subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. The Company operates on a calendar year-end. The accounts of Hooters Nottingham (“WEW”), are consolidated based on a 13 and 26 week periods ending on the Sunday closest to each calendar quarter end. No events occurred related to the difference between the Company’s reporting calendar period-end and the subsidiary’s period end that materially affected the company’s financial position, results of operations, or cash flows. Name Jurisdiction of Incorporation Percent Owned Name Jurisdiction of Incorporation Percent Owned CHANTICLEER HOLDINGS, INC. DE, USA Burger Business Just Fresh American Roadside Burgers, Inc. DE, USA 100 % JF Franchising Systems, LLC NC, USA 56 % ARB Stores JF Restaurants, LLC NC, USA 56 % American Burger Ally, LLC NC, USA 100 % American Burger Morehead, LLC NC, USA 100 % West Coast Hooters American Roadside McBee, LLC NC, USA 100 % Jantzen Beach Wings, LLC OR, USA 100 % American Roadside Southpark LLC NC, USA 100 % Oregon Owl’s Nest, LLC OR, USA 100 % American Roadside Burgers Smithtown, Inc. DE, USA 100 % Tacoma Wings, LLC WA, USA 100 % American Burger Prosperity, LLC NC, USA 100 % BGR Acquisition, LLC NC, USA 100 % South African Entities BGR Acquisition 1, LLC Chanticleer South Africa (Pty) Ltd. South Africa 100 % BGR Franchising, LLC VA, USA 100 % Hooters Emperors Palace (Pty.) Ltd. South Africa 88 % BGR Operations, LLC VA, USA 100 % Hooters On The Buzz (Pty) Ltd South Africa 95 % BGR Arlington, LLC VA, USA 100 % Hooters PE (Pty) Ltd South Africa 100 % BGR Cascades, LLC VA, USA 100 % Hooters Ruimsig (Pty) Ltd. South Africa 100 % BGR Dupont, LLC DC, USA 100 % Hooters SA (Pty) Ltd South Africa 78 % BGR Old Keene Mill, LLC VA, USA 100 % Hooters Umhlanga (Pty.) Ltd. South Africa 90 % BGR Old Town, LLC VA, USA 100 % Hooters Willows Crossing (Pty) Ltd South Africa 100 % BGR Potomac, LLC MD, USA 100 % BGR Springfield Mall, LLC VA, USA 100 % European Entities BGR Tysons, LLC VA, USA 100 % Chanticleer Holdings Limited Jersey 100 % BGR Washingtonian, LLC MD, USA 100 % West End Wings LTD United Kingdom 100 % Capitol Burger, LLC MD, USA 100 % Chanticleer Finance UK (No. 1) Plc United Kingdom 100 % BGR Mosaic, LLC VA, USA 100 % BGR Michigan Ave, LLC DC, USA 100 % Inactive Entities BGR Chevy Chase, LLC MD, USA 100 % Hoot Surfers Paradise Pty. Ltd. Australia 60 % BT Burger Acquisition, LLC NC, USA 100 % Hooters Brazil Brazil 100 % BT’s Burgerjoint Biltmore, LLC NC, USA 100 % DineOut SA Ltd. England 89 % BT’s Burgerjoint Promenade, LLC NC, USA 100 % Avenel Financial Services, LLC NV, USA 100 % BT’s Burgerjoint Rivergate LLC NC, USA 100 % Avenel Ventures, LLC NV, USA 100 % BT’s Burgerjoint Sun Valley, LLC NC, USA 100 % Chanticleer Advisors, LLC NV, USA 100 % LBB Acquisition, LLC NC, USA 100 % Chanticleer Investment Partners, LLC NC, USA 100 % Cuarto LLC OR, USA 100 % Dallas Spoon Beverage, LLC TX, USA 100 % LBB Acquisition 1 LLC OR, USA 100 % Dallas Spoon, LLC TX, USA 100 % LBB Green Lake LLC OR, USA 50 % American Roadside Cross Hill, LLC NC, USA 100 % LBB Hassalo LLC OR, USA 80 % UK Bond Company United Kingdom 100 % LBB Platform LLC OR, USA 80 % LBB Progress Ridge LLC OR, USA 50 % Noveno LLC OR, USA 100 % Octavo LLC OR, USA 100 % Primero LLC OR, USA 100 % Quinto LLC OR, USA 100 % Segundo LLC OR, USA 100 % Septimo LLC OR, USA 100 % Sexto LLC OR, USA 100 % Wallingford, LLC OR, USA 50 % Capitol Hill, LLC WA, USA 50 % LBB Franchising, LLC NC, USA 100 % GENERAL The accompanying condensed consolidated financial statements included in this report have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting and include all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation. These condensed consolidated financial statements have not been audited. The results of operations for the three month and six months periods ended June 30, 2017 are not necessarily indicative of the operating results for the full year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations for interim reporting. The Company believes that the disclosures contained herein are adequate to make the information presented not misleading. However, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 31, 2017. Certain amounts for the prior year have been reclassified to conform to the current year presentation. LIQUIDITY AND CAPITAL RESOURCES As of June 30, 2017, our unrestricted cash balance was $0.4 million and, our working capital was negative $3.8 million. We incurred losses from continuing operations of $3.2 million and cash used in operating activities was $0.3 million for the six months ended June 30, 2017 and our debt, preferred stock, accounts payable and accrual obligations total approximately $14.3 million. 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: ● our ability to access the capital and debt markets to satisfy current obligations and operate the business; ● our ability to continue to extend, refinance or recapitalize our debt obligations; ● the level of investment in acquisition of new restaurant businesses and entering new markets; ● our ability to manage our operating expenses and generate positive cash flow as we grow: ● 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 deficits and expenditures with proceeds from the issuances of our common stock and other financing arrangements, including convertible debt, lines of credit, notes payable, capital leases, and other forms of external financing. Our operating plans for the next twelve months contemplate moderate organic growth, opening 6-10 new company stores within our current markets and restaurant concepts, the majority of which will utilize funds already committed from outside investors. As we execute our growth plans over the next twelve months, 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 have approximately $6.3 million in current liabilities payable within the next twelve months from date of issuance of these financial statements and approximately $7.8 million in obligations payable within the next twenty-four months. In the event that additional working capital is not available, we may then have to scale back or freeze our growth plans, sell assets on less than favorable terms, reduce expenses, and/or curtail future acquisition plans to manage our liquidity and capital resources. We also have financial covenants and debt service obligations and may incur financial penalties or other negative actions from our lenders if we are not able to meet our obligations. During March 2017, we extended the payment terms of our convertible debt obligations. During May 2017, we completed a $6 million private placement of 8% debentures and warrants, the proceeds of which were used to repay, settle and release the $5 million note payable and related obligations to Florida Mezzanine Fund and to provide additional working capital for new store openings and operations. Management is actively considering the possible benefits of selling certain of its operating assets to reduce debt and provide additional working capital to fund future growth of its domestic burger business, as well as possibly closing certain underperforming store locations to improve operating cash flow. Our evaluations are at a preliminary stage, no decisions have been made, and we can provide no assurance that the Company will proceed with any asset sales, or that such asset sales could be completed on favorable terms, or at all. In the event that management does elect to proceed with asset sales and/or store closures in the future rather than continue to hold and operate all its assets long term, management’s assessment of the fair value, and ultimate recoverability, of goodwill, intangibles, and other long-lived assets could be impacted and the Company could incur significant noncash charges and cash exit costs in future periods. There can be no assurance that we will be successful in implementing our growth plans, obtaining additional debt or equity financing at reasonable terms, if at all, or selling any of our operating assets. Accordingly, this raises substantial doubt about our ability to continue on a going concern for a period of one year from the issuance of these condensed consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might become necessary should the Company decide to liquidate assets or be unable to continue as a going concern. REVERSE SPLIT As of May 19, 2017, the Company effected a one-for-ten reverse stock split of the Company’s shares of common stock. As a result of reverse stock split, each ten shares of common stock issued and outstanding were combined into one share of common stock. No fractional shares were issued in connection with the reverse stock split. The Company rounded fractional shares up to the nearest whole number. The reverse stock split had no impact on the par value per share of the Company’s common stock or the number of authorized shares. All current and prior period amounts related to shares, share prices and earnings per share contained in the accompanying unaudited condensed consolidated financial statements have been restated to give retrospective presentation for the reverse stock split. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
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, 2016. 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 warrants using the Black Scholes models, intangible asset valuations and useful lives, depreciation and uncollectible accounts and reserves. Actual results could differ from those estimates. REVENUE RECOGNITION Revenue is recognized when all of the following criteria have been satisfied: ● Persuasive evidence of an arrangement exists; ● Delivery has occurred or services have been rendered; ● The seller’s price to the buyer is fixed or determinable; and ● Collectability is reasonably assured. Restaurant Net Sales and Food and Beverage Costs The Company records revenue from restaurant sales at the time of sale, net of discounts, coupons, employee meals, and complimentary meals and gift cards. Sales, value added 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 and comprehensive loss. 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 vendor’s products are recognized as a reduction of the related food and beverage costs as earned. Management Fee Income The Company receives revenue from management fees from certain non-affiliated companies, including from managing its investment in 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 revenues, are recognized on the accrual basis as those sales occur. 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 potentially diluted shares outstanding. The following table summarizes the number of common shares potentially issuable upon the exercise of certain warrants, convertible notes payable and convertible interest as of June 30, 2017 and 2016 that have been excluded from the calculation of diluted net loss per common share since the effect would be antidilutive. June 30, 2017 June 30, 2016 Warrants 1,862,758 950,630 Convertible notes 366,667 390,074 Accrued interest on convertible notes - 23,327 Total 2,229,425 1,364,031 Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers (as subsequently amended)” which provides a single, comprehensive accounting model for revenue arising from contracts with customers. This guidance supersedes most of the existing revenue recognition guidance, including industry-specific guidance. Under this model, revenue is recognized at an amount that a company expects to be entitled to upon transferring control of goods or services to a customer. The new guidance also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flow arising from customer contracts, including significant judgments and changes in judgments. The new guidance will be effective for the Company beginning in calendar 2018 and may be applied retrospectively to all prior periods presented or through a cumulative adjustment to the opening retained earnings balance in the year of adoption. The Company is currently evaluating the effect of this update on its consolidated financial statements and believes that the primary change will be the recognition of initial franchise fees over the life of the related franchise agreements, which will cause up front franchise fee revenue deferrals to extend over a longer timeframe. In November 2015, the FASB issued ASU No. 2015-07 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” related to the presentation of deferred income taxes. The guidance requires that deferred tax assets and liabilities be classified as non-current in a consolidated balance sheet. This guidance was adopted in the first quarter of 2017 and did not materially affect the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02 “Leases,” which supersedes ASC 840 “Leases” and creates a new topic, ASC 842 “Leases.” This update requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with earlier adoption permitted. This update will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company has not completed its evaluation of effect this update will have on its consolidated financial statements, but does expect there could be a material increase in both assets and liabilities reflect on its consolidated balance sheets as a result of adoption as of January 1, 2019. In January 2017, the FASB issued ASU No. 2017-04 “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance simplifies the test for goodwill impairment. Currently, the fair value of the reporting unit is compared with the carrying value of the reporting unit (identified as “Step 1”). If the fair value of the reporting unit is lower than its carrying amount then, the implied fair value of goodwill is calculated. If the implied fair value of goodwill is lower than the carrying value of goodwill an impairment is recognized (identified as “Step 2”). The new standard eliminates Step 2 from the impairment test; therefore, a goodwill impairment will be recognized as the difference of the fair value and the carrying value of the reporting unit. The new standard becomes effective on January 1, 2020 with early adoption permitted. The Company is currently evaluating the effect of this update on its consolidated financial statements. There are several other new accounting pronouncements issued by FASB, which are not yet effective. Each of these pronouncements has been or will be adopted, as applicable, by the Company. At June 30, 2017, other than the adoption of ASU No. 2016-02 “Leases,” none of these pronouncements are expected to have a material effect on the financial position, results of operations or cash flows of the Company. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS 2016 Acquisition The Company completed one acquisition during 2016, which was the acquisition of a restaurant location in the Harris YMCA in Charlotte, N.C. to expand our Just Fresh business. The Company allocated the purchase price as of the date of acquisition based on the estimated fair value of the acquired assets and assumed liabilities. In consideration of the purchased assets, the Company paid a purchase price totaling $72,215 in cash, of which $1,611 was allocated to acquired inventory and $70,604 to goodwill. The equipment and other assets used in the operation of the business are property of the YMCA and no other tangible or identifiable intangible assets other than inventory were acquired, with the balance being allocated to goodwill. No proforma information was included as the proforma impact of the acquisition is not material. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued operations | |
Discontinued Operations | 4. DISCONTINUED OPERATIONS In June 2016, the Company approved a plan to exit the Australia and Eastern Europe markets, authorizing management to sell or close its five Hooters stores in Australia and its one store in Budapest. The Company completed the sale of the Hooters Australia and Budapest stores during the third quarter of 2016, transferring substantially all of the assets and liabilities of those operations to the local operating groups. In both cases, the Company did not receive any proceeds from the transfer, although in the case of Hooters Australia, the Company retained a five-year option to repurchase a 20% interest in the stores for $1. There were no remaining balances attributable to discontinued operations on the accompanying condensed consolidated balance sheets as of June 30, 2017 or December 31, 2016. The major line items comprising the loss of discontinued operations are as follows: Major line items constituting pre-tax loss of discontinued operations: Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Revenue $ - $ 1,464,459 $ - $ 2,970,401 Restaurant cost of sales - 515,718 - 1,042,543 Restaurant operating expenses - 1,147,178 - 2,450,557 General and administrative expenses - 168,048 - 254,174 Depreciation and amortization - 177,929 - 436,144 Other - 12,114 - 22,892 Loss of discontinued operations - (556,528 ) - (1,235,909 ) Loss on write-down of net assets - (3,876,161 ) - (3,876,161 ) Total pretax loss of discontinued operations - (4,432,689 ) - (5,112,070 ) Income tax - - - - Loss on discontinued operations $ - $ (4,432,689 ) $ - $ (5,112,070 ) |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. PROPERTY AND EQUIPMENT Property and equipment consists of the following: June 30, 2017 December 31, 2016 Leasehold improvements $ 11,450,081 $ 10,363,996 Restaurant furniture and equipment 6,814,102 6,716,926 Construction in progress 59,963 582,265 Office and computer equipment 68,303 68,303 Land and buildings - 826,664 Office furniture and fixtures 108,030 108,030 18,500,479 18,666,184 Accumulated depreciation and amortization (8,157,965 ) (7,152,491 ) $ 10,342,514 $ 11,513,693 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2017 | |
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: June 30, 2017 December 31, 2016 Hooters Full Service $ 4,596,214 $ 4,461,167 Better Burgers Fast Casual 7,448,848 7,448,848 Just Fresh Fast Casual 495,755 495,755 $ 12,540,817 $ 12,405,770 The changes in the carrying amount of goodwill are summarized as follows: June 30, 2017 December 31, 2016 Beginning Balance $ 12,405,770 $ 12,702,139 Acquisitions - 70,604 Adjustments - 62,192 Foreign currency translation (loss) gain 135,047 (429,165 ) Ending Balance $ 12,540,817 $ 12,405,770 Other intangible assets, consisting of franchise costs, trademarks and tradenames, is summarized by location as follows: Estimated Useful Life June 30, 2017 December 31, 2016 Trademark, Tradenames: Just Fresh 10 years $ 1,010,000 $ 1,010,000 American Roadside Burger 10 years 1,786,930 1,786,930 BGR: The Burger Joint Indefinite 1,430,000 1,430,000 Little Big Burger Indefinite 1,550,000 1,550,000 5,776,930 5,776,930 Franchise fees: Hooters South Africa 20 years 338,458 322,258 Hooters Pacific NW 20 years 88,826 88,826 BGR: The Burger Joint Indefinite 1,320,000 1,320,000 Hooters UK 5 years 12,665 30,848 1,759,949 1,761,932 Total Intangibles at cost 7,536,879 7,538,862 Accumulated amortization (1,162,452 ) (1,008,619 ) Intangible assets, net $ 6,374,427 $ 6,530,243 The Company reviews goodwill for impairment annually or more frequently if indicators of impairment exist. Goodwill is not subject to amortization and has been assigned to reporting units for purposes of impairment testing. The reporting units are our segments. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in our stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; the testing for recoverability of a significant asset group within a reporting unit; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact on the Company’s consolidated financial statements. The goodwill impairment test involves a two-step process. The first step is a comparison of each reporting unit’s fair value to its carrying value. The Company estimates fair value using the best information available, including market information and discounted cash flow projections (also referred to as the income approach). The income approach uses a reporting unit’s projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions. The projection uses management’s best estimates of economic and market conditions over the projected period including growth rates in sales, costs and number of units, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. The Company validates its estimates of fair value under the income approach by comparing the values to fair value estimates using a market approach. A market approach estimates fair value by applying cash flow and sales multiples to the reporting unit’s operating performance. The multiples are derived from comparable publicly traded companies with similar operating and investment characteristics of the reporting units. If the fair value of the reporting unit is higher than its carrying value, goodwill is deemed not to be impaired, and no further testing is required. If the carrying value of the reporting unit is higher than its fair value, there is an indication that impairment may exist and the second step must be performed to measure the amount of impairment loss. The amount of impairment is determined by comparing the implied fair value of reporting unit goodwill to the carrying value of the goodwill in the same manner as if the reporting unit was being acquired in a business combination. Specifically, fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that would calculate the implied fair value of goodwill. If the implied fair value of goodwill is less than the recorded goodwill, the Company would record an impairment loss for the difference. Management tested its long-lived assets for impairment as of June 30, 2017 comparing each reporting unit’s fair value to its carrying value. That assessment included the assumption that management would continue to hold and operate each segment and generate cash flows over a period of years. Those cash flows were discounted using the income approach and compared to the carrying value of each segment. Management also evaluated the fair value of the reporting segments using the market value approach, comparing the carrying value to fair value based on multiples of current earnings and other indicators of value for each reporting unit. Management determined that the estimated fair value of its reporting unites was greater than the carrying value of the reporting units and that the Company’s goodwill, intangibles and long-lived assets were not impaired as of June 30, 2017. However, management noted that the margin between the estimated fair value and carrying value was very narrow for one of its reporting units and that the impairment assessment in future periods would be sensitive to changes in estimates of cash flow, discount rates and other assumptions increasing the risk that an impairment could be triggered in future periods. The Company is also considering various strategies to improve cash flow and reduce long term debt, which could include selling certain of its operating assets, as well as possibly closing certain underperforming store locations to improve operating cash flow. Those strategic evaluations are at a preliminary stage as of the date of this report, no decisions have been made, and management can provide no assurance that the Company will proceed with any asset sales, or that such asset sale can be completed on favorable terms, or at all. In the event that management does elect to proceed with asset sales and/or effect store closures in the future rather than continue to hold and operate all its assets long term, management’s assessment of the fair value, and ultimate recoverability, of goodwill, intangibles, property and equipment and other assets would be impacted and the Company could incur significant noncash impairment charges and cash exit costs in future periods. |
Long-Term Debt and Notes Payabl
Long-Term Debt and Notes Payable | 6 Months Ended |
Jun. 30, 2017 | |
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. June 30, 2017 December 31, 2016 Note Payable, due January 2019, net of discount and deferred financing costs of $2,161,422 and $0, respectively (a) $ 3,838,578 $ - Note Payable, due January 2017, net of discount of $0 and $171,868, respectively (a) - 5,000,000 Notes Payable Paragon Bank (b) 701,043 811,205 Note Payable (c ) 75,000 - Receivables financing facilities (d) 326,168 161,899 Mortgage Note, South Africa, due July 2024 (e) 224,395 215,962 Bank overdraft facilities, South Africa, annual renewal 174,084 124,599 Equipment financing arrangements, South Africa 122,763 145,430 Total long-term debt $ 5,462,031 $ 6,459,094 Current portion of long-term debt 928,870 6,171,649 Long-term debt, less current portion $ 4,533,161 $ 287,445 For the six months ended June 30, 2017 and 2016 amortization of debt discount was $432,932 and $ 85,938, respectively. a) In conjunction with the financing described above, the Company entered into a Satisfaction, Settlement and Release Agreement with Florida Mezzanine Fund LLLP, a Florida limited liability partnership (“Florida Mezz”), pursuant to which Florida Mezz agreed to release the Company from all claims and outstanding obligations pursuant to that certain Assumption Agreement dated June 30, 2014, as amended October 15, 2014 and October 22, 2016, and that certain Agreement dated May 23, 2016, as amended January 30, 2017, in exchange for payment of $5,000,000. Five million of the net proceeds from the offering were remitted to Florida Mezz, $500,000 will be reserved to fund the opening of new stores, and the balance of $206,746, after transaction expenses, will be used for working capital and general corporate purposes. As of June 30, 2017, $275,463 of the proceeds restricted to fund the opening of new stores remains unexpended, and has been presented as restricted cash in the accompanying condensed consolidated balance sheet. As a result of the issuance of the debentures and the settlement of the Florida Mezz obligations subsequent to March 31, 2016, the $5 million notes payable are no longer outstanding, the Company’s share repurchase obligation from Florida Mezz has been terminated and Florida Mezz waived unpaid interest and penalties previously recorded in the Company’s consolidated financial statements which resulted in the Company recognizing a gain of $267,512. As a result, as of June 30, 2017, the shares subject to repurchase were reclassified from temporary equity to permanent capital and the amounts accrued for interest and penalties reversed effective as of May 14, 2017. The new $6 million loan was accounted for as a new borrowing with consideration allocated between the loan and the warrants based upon the relative fair value of the loan and the warrants. The Company valued the warrants associated with the new debt obligation using the Black Sholes model, which resulted in the allocation of $2.3 million to additional paid in capital with a corresponding offset to debt discount. In addition, there were $293,294 in debt origination costs that are also accounted for as an offset to outstanding debt. The resulting debt discount of $2.6 million is being amortized to interest expense over the 20-month term of the notes. b) The Company has three term loans with Paragon Bank, all of which are collateralized by all assets of the Company and personally guaranteed by our Chief Executive Officer. The outstanding balance, interest rate and maturity date of each loan is as follows: Maturity date Interest rate Principal balance Monthly principal and interest payment Note 1 9/10/2018 5.50 % $ 61,151 $ 4,406 Note 2 5/10/2019 5.25 % 262,778 11,532 Note 3 8/10/2021 5.25 % 377,114 8,500 $ 701,043 $ 24,438 (c ) The Company has a promissory note payable on demand in the amount of $75,000 with 800 shares of restricted company common stock to be paid to the lender each month while the note is outstanding. d) th (e) The Company’s mortgage note is secured by the Company’s land and building used for the Hooters Port Elizabeth facility. The Company has identified several potential purchases for its land and building and anticipates closing the Port Elizabeth Hooters location in the third calendar quarter of 2017 and closing the sale of the land and building. If a transaction closes, the Company estimates it would receive gross proceeds of approximately 6 million to 8 million Rand (approximately $470,000 - $570,000 USD net estimated proceeds after broker commissions). The Company expects to pay the mortgage in full at closing using the net proceeds from the sale of the property. The net assets and liabilities related to Port Elizabeth location have been reclassified to Assets Held for Sale in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2017 and an impairment loss of $634 thousand has been reflected in the accompanying unaudited condensed statement of operations for the periods ended June 30, 2017. These amounts are still subject to change and there can be no assurance that the transaction will be consummated and the estimated net proceeds and impairment loss remain subject to adjustment until finalization of the transaction. |
Convertible Notes Payable
Convertible Notes Payable | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | 8. cONVERTIBLE NOTEs PAYABLE Convertible Notes payable are summarized as follows: June 30, 2017 December 31, 2016 6% Convertible notes payable due June 2018 $ 3,000,000 $ 3,000,000 8% Convertible notes payable due March 2019 100,000 100,000 Premium on above convertible note 8,578 - 8% Convertible notes payable due March 2019 100,000 150,000 Premium (discount) on above convertible note 8,578 (46,936 ) 8% Convertible notes payable due March 2019 - 475,000 Total Convertible notes payable 3,217,156 3,678,064 Current portion of convertible notes payable - - Convertible notes payable, less current portion $ 3,217,156 $ 3,678,064 For the six months ended June 30, 2017 and 2016 amortization of debt discount was $24,573 and $640,379, respectively. Pursuant to exchange agreements dated and effective March 10, 2017 by and between the Company and four existing note holders, the Company exchanged its 8% convertible notes in the aggregate principal amount of $725,000, which notes were in default, for new two-year 2% notes, in the aggregate principal amount of $820,107, representing $725,000 in principal and $95,107 unpaid accrued interest. The original convertible notes were canceled and new convertible notes issued that may be converted to common stock of the Company, at the option of the holder, at a conversion price of $3.00 per share. The notes have a two-year term, but may be called by the holder after the one-year anniversary of the exchange date. During March 2017, subsequent to the exchange agreements, convertible notes in the amount of $150,000 were converted by the holders into 50,000 shares of common stock. During April and May 2017, convertible notes in the amount of $475,000, plus related accrued interest balances, were converted by the holders into 187,798 shares of common stock. The exchange of the convertible notes was accounting for as an extinguishment of the previous debt, resulting in the recognition of a net loss on extinguishment of $362,822 in the accompanying condensed consolidated financial statements, which was recorded during March 2017. In addition, the lenders of the $3 million 6% convertible debt agreed to waive defaults and extend the note maturity by eighteen months to December 2018. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 9. accounts payable and accrued expenses Accounts payable and accrued expenses are summarized as follows: June 30,2017 December 31, 2016 Accounts payable and accrued expenses $ 3,675,139 $ 3,807,880 Accrued taxes (VAT, Sales Payroll) 879,254 988,056 Accrued income taxes 134,828 71,713 Accrued interest 351,475 685,419 $ 5,040,696 $ 5,553,068 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity The Company had 45,000,000 shares of its $0.0001 par value common stock authorized at both June 30, 2017 and December 31, 2016. The Company had 2,500,534 and 2,190,014 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively (including 56,290 shares that were previously classified as shares subject to repurchase obligations as of December 31, 2016). All current and prior period amounts related to shares, share prices and earnings per share contained in the accompanying unaudited condensed consolidated financial statements, have been restated to give retrospective presentation for the reverse stock split (See Note 1). The Company has 5,000,000 shares of its no par value preferred stock authorized at both June 30, 2017 and December 31, 2016. Beginning in December 2016, the Company conducted a rights offering of units, each unit consisting of one share of 9% Redeemable Series 1 Preferred Stock (“Series 1 Preferred”) and one Series 1 Warrant (“Series 1 Warrant”) to purchase 10 shares of common stock. Holders of the Series 1 Preferred are entitled to receive cumulative dividends out of legally available funds at the rate of 9% of the purchase price per year for a term of seven years, payable quarterly on the last day of March, June, September and December in each year in cash or registered common stock at the election of the Company. Shares of common stock issued as dividends will be issued at a 10% discount to the five-day volume weighted average price per share of common stock prior to the date of issuance. Dividends are to be paid prior to any dividend to the holders of common stock. The Series 1 Preferred is non-voting and has a liquidation preference of $13.50 per share, equal to its purchase price. Chanticleer is required to redeem the outstanding Series 1 Preferred at the expiration of the seven-year term. The redemption price for any shares of Series 1 Preferred will be an amount equal to the $13.50 purchase price per share plus any accrued but unpaid dividends to the date fixed for redemption. As of December 31, 2016, 19,050 shares of preferred stock were issued pursuant to the Preferred Stock Units rights offering. In addition, 43,826 additional shares were issued following in February 2017 for a total of 62,876 issued and outstanding as June 30, 2017. In connection with the payment of past due interest on its $5 million note payable, the Company issued 56,290 shares of its common stock to the lender. Concurrently, the Company entered into a put agreement with Florida Mezzanine Fund during 2016, which provided the lender the right to require the Company to repurchase those shares at a price of $0.62 cents per share. This put right originally expired in January 2017 and was subsequently extended to June 30, 2017. The shares subject to the repurchase were reflected as a redeemable temporary equity on the accompanying consolidated balance sheet as of December 31, 2016. In May 2017, Florida Mezzanine fund’s put right terminated in connection with the Company’s repayment of its principal and the shares were reclassified as permanent equity in the accompanying consolidated balance sheet as of June 30, 2017. Options and Warrants The Company’s shareholders have approved the Chanticleer Holdings, Inc. 2014 Stock Incentive Plan (the “2014 Plan”), authorizing the issuance of options, stock appreciation rights, restricted stock awards and units, performance shares and units, phantom stock and other stock-based and dividend equivalent awards. Pursuant to the approved 2014 Plan, 400,000 shares have been approved for grant. As of June 30, 2017, the Company had issued 32,534 restricted and unrestricted shares on a cumulative basis under the plan pursuant to compensatory arrangements with employees, board members and outside consultants. No employee stock options have been issued or are outstanding as of June 30, 2017 or December 31, 2016. The Company issued 15,000 restricted stock units to an employee during 2016. Approximately 367,466 shares remained available for grant in the future. The Company also has issued warrants to investors in connection with financing transactions in prior periods. A summary of the warrants outstanding and related activity is presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life Outstanding January 1, 2017 922,203 $ 49.80 1.7 Granted 1,200,000 $ 3.50 - Exercised - - - Forfeited (259,445 ) 51.01 - Outstanding June 30, 2017 1,862,758 $ 19.79 2.6 Exercisable June 30, 2017 1,862,758 $ 19.79 2.6 Exercise Price Outstanding Number of Warrants Weighted Average Remaining Life in Years Exercisable Number of Warrants >$40.00 484,518 1.47 484,518 $30.00-$39.99 49,990 2.14 49,990 $20.00-$29.99 77,950 2.57 77,950 $10.00-$19.99 50,300 3.78 50,300 $0.00-$9.99 1,200,000 9.84 1,200,000 1,862,758 2.56 1,862,758 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. RELATED PARTY TRANSACTIONS Due to related parties The Company has received non-interest bearing, short-term advances Chanticleer Investors, LCC, a related party, in the amount of $194,350 as of June 30, 2017 and December 31, 2016. The amount owed to Chanticleer Investors LLC is related to cash distributions received from Chanticleer Investors LLC’s interest Hooters of America which is payable to the Company’s co-investors in that investment. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | 12. SEGMENT INFORMATION The Company is in the business of operating restaurants and its operations are organized by geographic region and by brand within each region. Further each restaurant location produces monthly financial statements at the individual store level. The Company’s chief operating decision maker reviews revenues and profitability at the at the group level comprised of: Full Service Hooters, Better Burger Fast Casual, Just Fresh Fast Casual, and Corporate. The following are revenues and operating income (loss) from continuing operations by segment as of and for the periods presented. The Company does not aggregate or review non-current assets at the segment level. Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Revenue: Hooters Full Service $ 3,392,766 $ 3,338,259 $ 6,528,229 $ 6,512,172 Better Burgers Fast Casual 6,010,542 5,898,316 11,326,830 11,449,966 Just Fresh Fast Casual 1,337,017 1,490,419 2,720,274 2,851,632 Corporate and Other 24,992 25,000 49,982 50,000 $ 10,765,317 $ 10,751,994 $ 20,625,315 $ 20,863,770 Operating Income (Loss): Hooters Full Service $ (546,770 ) $ 54,196 $ (589,616 ) $ 43,744 Better Burgers Fast Casual 110,488 7,524 (58,622 ) (60,514 ) Just Fresh Fast Casual (109,524 ) 45,753 (45,884 ) (27,455 ) Corporate and Other (535,649 ) (490,540 ) (1,376,720 ) (1,244,925 ) $ (1,081,455 ) $ (383,067 ) $ (2,070,842 ) $ (1,289,150 ) Depreciation and Amortization Hooters Full Service $ 142,759 $ 132,650 $ 278,938 $ 261,926 Better Burgers Fast Casual 379,331 365,092 755,963 730,224 Just Fresh Fast Casual 79,726 79,247 159,452 154,370 Corporate and Other 843 953 1,686 1,862 $ 602,659 $ 577,942 $ 1,196,039 $ 1,148,382 The following are revenues and operating income (loss) from continuing operations and non-current assets by geographic region as of and for the periods presented. Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Revenue: United States $ 8,598,831 $ 8,675,754 $ 16,510,926 $ 16,904,900 South Africa 1,482,379 1,307,517 2,866,773 2,521,573 Europe 684,107 768,723 1,247,616 1,437,297 $ 10,765,317 $ 10,751,994 $ 20,625,315 $ 20,863,770 Operating Income (Loss): United States $ (1,123,772 ) $ (406,169 ) $ (2,064,843 ) $ (1,271,981 ) South Africa (28,453 ) (57,571 ) (85,514 ) (117,629 ) Europe 70,770 80,673 79,515 100,460 $ (1,081,455 ) $ (383,067 ) $ (2,070,842 ) $ (1,289,150 ) Non-current Assets: June 30, 2017 December 31, 2016 United States $ 26,800,768 $ 26,812,062 South Africa 1,299,979 2,519,135 Europe 2,466,918 2,361,246 $ 30,567,665 $ 31,692,443 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
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 appealed this decision and in December 2016, the Court dismissed the Labyrinth case with costs payable to the Company, and allowed the Rolalor case to proceed to liquidation. The Company did not object to the proposed liquidation of Rolalor as the entity has no assets. Mrs. Shaw has since applied to the High Court for Rolalor to be re registered to seek to set aside the transfer by Rolalor [Pty] Limited, which is now in final liquidation, of its assets to Tundraspex [Pty] Limited. This request to re-register Rolalor is being opposed by Tundraspex [Pty] Limited. No amounts have been accrued as of June 30, 2017 or December 31, 2016 in the accompanying condensed consolidated balance sheets. On January 28, 2016, our Just Fresh subsidiary was notified that it had been served with a copyright infringement complaint, Kevin Chelko Photography, Inc. f. JF Restaurants, LLC, Case No. 3:13-CV-60-GCM (W.D. N.C.). The claim was filed in the United States District Court for the Western District of North Carolina Charlotte Division and seeks unspecified damages related to the use of certain photographic assets allegedly in violation of the United States copyright laws. On January 19, 2017, the case was dismissed with no damages being awarded and no amounts have been reflected in the accompanying condensed consolidated balance sheets as of June 30, 2017 or December 31, 2016. From time to time, 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. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. SUBSEQUENT EVENTS Management has evaluated all events and transactions that occurred from July 1, 2017 through the date these unaudited condensed consolidated financial statements were issued for subsequent events requiring recognition or disclosure in the condensed consolidated financial statements. |
Significant Accounting Polici21
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
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 warrants using the Black Scholes models, intangible asset valuations and useful lives, depreciation and uncollectible accounts and reserves. Actual results could differ from those estimates. |
Revenue Recognition | REVENUE RECOGNITION Revenue is recognized when all of the following criteria have been satisfied: ● Persuasive evidence of an arrangement exists; ● Delivery has occurred or services have been rendered; ● The seller’s price to the buyer is fixed or determinable; and ● Collectability is reasonably assured. Restaurant Net Sales and Food and Beverage Costs The Company records revenue from restaurant sales at the time of sale, net of discounts, coupons, employee meals, and complimentary meals and gift cards. Sales, value added 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 and comprehensive loss. 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 vendor’s products are recognized as a reduction of the related food and beverage costs as earned. Management Fee Income The Company receives revenue from management fees from certain non-affiliated companies, including from managing its investment in 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 revenues, are recognized on the accrual basis as those sales occur. |
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 potentially diluted shares outstanding. The following table summarizes the number of common shares potentially issuable upon the exercise of certain warrants, convertible notes payable and convertible interest as of June 30, 2017 and 2016 that have been excluded from the calculation of diluted net loss per common share since the effect would be antidilutive. June 30, 2017 June 30, 2016 Warrants 1,862,758 950,630 Convertible notes 366,667 390,074 Accrued interest on convertible notes - 23,327 Total 2,229,425 1,364,031 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers (as subsequently amended)” which provides a single, comprehensive accounting model for revenue arising from contracts with customers. This guidance supersedes most of the existing revenue recognition guidance, including industry-specific guidance. Under this model, revenue is recognized at an amount that a company expects to be entitled to upon transferring control of goods or services to a customer. The new guidance also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flow arising from customer contracts, including significant judgments and changes in judgments. The new guidance will be effective for the Company beginning in calendar 2018 and may be applied retrospectively to all prior periods presented or through a cumulative adjustment to the opening retained earnings balance in the year of adoption. The Company is currently evaluating the effect of this update on its consolidated financial statements and believes that the primary change will be the recognition of initial franchise fees over the life of the related franchise agreements, which will cause up front franchise fee revenue deferrals to extend over a longer timeframe. In November 2015, the FASB issued ASU No. 2015-07 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” related to the presentation of deferred income taxes. The guidance requires that deferred tax assets and liabilities be classified as non-current in a consolidated balance sheet. This guidance was adopted in the first quarter of 2017 and did not materially affect the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02 “Leases,” which supersedes ASC 840 “Leases” and creates a new topic, ASC 842 “Leases.” This update requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with earlier adoption permitted. This update will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company has not completed its evaluation of effect this update will have on its consolidated financial statements, but does expect there could be a material increase in both assets and liabilities reflect on its consolidated balance sheets as a result of adoption as of January 1, 2019. In January 2017, the FASB issued ASU No. 2017-04 “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance simplifies the test for goodwill impairment. Currently, the fair value of the reporting unit is compared with the carrying value of the reporting unit (identified as “Step 1”). If the fair value of the reporting unit is lower than its carrying amount then, the implied fair value of goodwill is calculated. If the implied fair value of goodwill is lower than the carrying value of goodwill an impairment is recognized (identified as “Step 2”). The new standard eliminates Step 2 from the impairment test; therefore, a goodwill impairment will be recognized as the difference of the fair value and the carrying value of the reporting unit. The new standard becomes effective on January 1, 2020 with early adoption permitted. The Company is currently evaluating the effect of this update on its consolidated financial statements. There are several other new accounting pronouncements issued by FASB, which are not yet effective. Each of these pronouncements has been or will be adopted, as applicable, by the Company. At June 30, 2017, other than the adoption of ASU No. 2016-02 “Leases,” none of these pronouncements are expected to have a material effect on the financial position, results of operations or cash flows of the Company. |
Nature of Business (Tables)
Nature of Business (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Subsidiaries | The Company operates on a calendar year-end. The accounts of Hooters Nottingham (“WEW”), are consolidated based on a 13 and 26 week periods ending on the Sunday closest to each calendar quarter end. No events occurred related to the difference between the Company’s reporting calendar period-end and the subsidiary’s period end that materially affected the company’s financial position, results of operations, or cash flows. Name Jurisdiction of Incorporation Percent Owned Name Jurisdiction of Incorporation Percent Owned CHANTICLEER HOLDINGS, INC. DE, USA Burger Business Just Fresh American Roadside Burgers, Inc. DE, USA 100 % JF Franchising Systems, LLC NC, USA 56 % ARB Stores JF Restaurants, LLC NC, USA 56 % American Burger Ally, LLC NC, USA 100 % American Burger Morehead, LLC NC, USA 100 % West Coast Hooters American Roadside McBee, LLC NC, USA 100 % Jantzen Beach Wings, LLC OR, USA 100 % American Roadside Southpark LLC NC, USA 100 % Oregon Owl’s Nest, LLC OR, USA 100 % American Roadside Burgers Smithtown, Inc. DE, USA 100 % Tacoma Wings, LLC WA, USA 100 % American Burger Prosperity, LLC NC, USA 100 % BGR Acquisition, LLC NC, USA 100 % South African Entities BGR Acquisition 1, LLC Chanticleer South Africa (Pty) Ltd. South Africa 100 % BGR Franchising, LLC VA, USA 100 % Hooters Emperors Palace (Pty.) Ltd. South Africa 88 % BGR Operations, LLC VA, USA 100 % Hooters On The Buzz (Pty) Ltd South Africa 95 % BGR Arlington, LLC VA, USA 100 % Hooters PE (Pty) Ltd South Africa 100 % BGR Cascades, LLC VA, USA 100 % Hooters Ruimsig (Pty) Ltd. South Africa 100 % BGR Dupont, LLC DC, USA 100 % Hooters SA (Pty) Ltd South Africa 78 % BGR Old Keene Mill, LLC VA, USA 100 % Hooters Umhlanga (Pty.) Ltd. South Africa 90 % BGR Old Town, LLC VA, USA 100 % Hooters Willows Crossing (Pty) Ltd South Africa 100 % BGR Potomac, LLC MD, USA 100 % BGR Springfield Mall, LLC VA, USA 100 % European Entities BGR Tysons, LLC VA, USA 100 % Chanticleer Holdings Limited Jersey 100 % BGR Washingtonian, LLC MD, USA 100 % West End Wings LTD United Kingdom 100 % Capitol Burger, LLC MD, USA 100 % Chanticleer Finance UK (No. 1) Plc United Kingdom 100 % BGR Mosaic, LLC VA, USA 100 % BGR Michigan Ave, LLC DC, USA 100 % Inactive Entities BGR Chevy Chase, LLC MD, USA 100 % Hoot Surfers Paradise Pty. Ltd. Australia 60 % BT Burger Acquisition, LLC NC, USA 100 % Hooters Brazil Brazil 100 % BT’s Burgerjoint Biltmore, LLC NC, USA 100 % DineOut SA Ltd. England 89 % BT’s Burgerjoint Promenade, LLC NC, USA 100 % Avenel Financial Services, LLC NV, USA 100 % BT’s Burgerjoint Rivergate LLC NC, USA 100 % Avenel Ventures, LLC NV, USA 100 % BT’s Burgerjoint Sun Valley, LLC NC, USA 100 % Chanticleer Advisors, LLC NV, USA 100 % LBB Acquisition, LLC NC, USA 100 % Chanticleer Investment Partners, LLC NC, USA 100 % Cuarto LLC OR, USA 100 % Dallas Spoon Beverage, LLC TX, USA 100 % LBB Acquisition 1 LLC OR, USA 100 % Dallas Spoon, LLC TX, USA 100 % LBB Green Lake LLC OR, USA 50 % American Roadside Cross Hill, LLC NC, USA 100 % LBB Hassalo LLC OR, USA 80 % UK Bond Company United Kingdom 100 % LBB Platform LLC OR, USA 80 % LBB Progress Ridge LLC OR, USA 50 % Noveno LLC OR, USA 100 % Octavo LLC OR, USA 100 % Primero LLC OR, USA 100 % Quinto LLC OR, USA 100 % Segundo LLC OR, USA 100 % Septimo LLC OR, USA 100 % Sexto LLC OR, USA 100 % Wallingford, LLC OR, USA 50 % Capitol Hill, LLC WA, USA 50 % LBB Franchising, LLC NC, USA 100 % |
Significant Accounting Polici23
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 June 30, 2017 and 2016 that have been excluded from the calculation of diluted net loss per common share since the effect would be antidilutive. June 30, 2017 June 30, 2016 Warrants 1,862,758 950,630 Convertible notes 366,667 390,074 Accrued interest on convertible notes - 23,327 Total 2,229,425 1,364,031 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued operations | |
Schedule of Operating Results From Discontinued Operations Pre-Tax Loss | Major line items constituting pre-tax loss of discontinued operations: Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Revenue $ - $ 1,464,459 $ - $ 2,970,401 Restaurant cost of sales - 515,718 - 1,042,543 Restaurant operating expenses - 1,147,178 - 2,450,557 General and administrative expenses - 168,048 - 254,174 Depreciation and amortization - 177,929 - 436,144 Other - 12,114 - 22,892 Loss of discontinued operations - (556,528 ) - (1,235,909 ) Loss on write-down of net assets - (3,876,161 ) - (3,876,161 ) Total pretax loss of discontinued operations - (4,432,689 ) - (5,112,070 ) Income tax - - - - Loss on discontinued operations $ - $ (4,432,689 ) $ - $ (5,112,070 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property and equipment consists of the following: June 30, 2017 December 31, 2016 Leasehold improvements $ 11,450,081 $ 10,363,996 Restaurant furniture and equipment 6,814,102 6,716,926 Construction in progress 59,963 582,265 Office and computer equipment 68,303 68,303 Land and buildings - 826,664 Office furniture and fixtures 108,030 108,030 18,500,479 18,666,184 Accumulated depreciation and amortization (8,157,965 ) (7,152,491 ) $ 10,342,514 $ 11,513,693 |
Goodwill and Other Intangible26
Goodwill and Other Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill is summarized by location as follows: June 30, 2017 December 31, 2016 Hooters Full Service $ 4,596,214 $ 4,461,167 Better Burgers Fast Casual 7,448,848 7,448,848 Just Fresh Fast Casual 495,755 495,755 $ 12,540,817 $ 12,405,770 |
Summary of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill are summarized as follows: June 30, 2017 December 31, 2016 Beginning Balance $ 12,405,770 $ 12,702,139 Acquisitions - 70,604 Adjustments - 62,192 Foreign currency translation (loss) gain 135,047 (429,165 ) Ending Balance $ 12,540,817 $ 12,405,770 |
Schedule of Other Intangible Assets | Other intangible assets, consisting of franchise costs, trademarks and tradenames, is summarized by location as follows: Estimated Useful Life June 30, 2017 December 31, 2016 Trademark, Tradenames: Just Fresh 10 years $ 1,010,000 $ 1,010,000 American Roadside Burger 10 years 1,786,930 1,786,930 BGR: The Burger Joint Indefinite 1,430,000 1,430,000 Little Big Burger Indefinite 1,550,000 1,550,000 5,776,930 5,776,930 Franchise fees: Hooters South Africa 20 years 338,458 322,258 Hooters Pacific NW 20 years 88,826 88,826 BGR: The Burger Joint Indefinite 1,320,000 1,320,000 Hooters UK 5 years 12,665 30,848 1,759,949 1,761,932 Total Intangibles at cost 7,536,879 7,538,862 Accumulated amortization (1,162,452 ) (1,008,619 ) Intangible assets, net $ 6,374,427 $ 6,530,243 |
Long-Term Debt and Notes Paya27
Long-Term Debt and Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt and Notes Payable | Long-term debt and notes payable are summarized as follows. June 30, 2017 December 31, 2016 Note Payable, due January 2019, net of discount and deferred financing costs of $2,161,422 and $0, respectively (a) $ 3,838,578 $ - Note Payable, due January 2017, net of discount of $0 and $171,868, respectively (a) - 5,000,000 Notes Payable Paragon Bank (b) 701,043 811,205 Note Payable (c ) 75,000 - Receivables financing facilities (d) 326,168 161,899 Mortgage Note, South Africa, due July 2024 (e) 224,395 215,962 Bank overdraft facilities, South Africa, annual renewal 174,084 124,599 Equipment financing arrangements, South Africa 122,763 145,430 Total long-term debt $ 5,462,031 $ 6,459,094 Current portion of long-term debt 928,870 6,171,649 Long-term debt, less current portion $ 4,533,161 $ 287,445 For the six months ended June 30, 2017 and 2016 amortization of debt discount was $432,932 and $ 85,938, respectively. a) In conjunction with the financing described above, the Company entered into a Satisfaction, Settlement and Release Agreement with Florida Mezzanine Fund LLLP, a Florida limited liability partnership (“Florida Mezz”), pursuant to which Florida Mezz agreed to release the Company from all claims and outstanding obligations pursuant to that certain Assumption Agreement dated June 30, 2014, as amended October 15, 2014 and October 22, 2016, and that certain Agreement dated May 23, 2016, as amended January 30, 2017, in exchange for payment of $5,000,000. Five million of the net proceeds from the offering were remitted to Florida Mezz, $500,000 will be reserved to fund the opening of new stores, and the balance of $206,746, after transaction expenses, will be used for working capital and general corporate purposes. As of June 30, 2017, $275,463 of the proceeds restricted to fund the opening of new stores remains unexpended, and has been presented as restricted cash in the accompanying condensed consolidated balance sheet. As a result of the issuance of the debentures and the settlement of the Florida Mezz obligations subsequent to March 31, 2016, the $5 million notes payable are no longer outstanding, the Company’s share repurchase obligation from Florida Mezz has been terminated and Florida Mezz waived unpaid interest and penalties previously recorded in the Company’s consolidated financial statements which resulted in the Company recognizing a gain of $267,512. As a result, as of June 30, 2017, the shares subject to repurchase were reclassified from temporary equity to permanent capital and the amounts accrued for interest and penalties reversed effective as of May 14, 2017. The new $6 million loan was accounted for as a new borrowing with consideration allocated between the loan and the warrants based upon the relative fair value of the loan and the warrants. The Company valued the warrants associated with the new debt obligation using the Black Sholes model, which resulted in the allocation of $2.3 million to additional paid in capital with a corresponding offset to debt discount. In addition, there were $293,294 in debt origination costs that are also accounted for as an offset to outstanding debt. The resulting debt discount of $2.6 million is being amortized to interest expense over the 20-month term of the notes. b) The Company has three term loans with Paragon Bank, all of which are collateralized by all assets of the Company and personally guaranteed by our Chief Executive Officer. The outstanding balance, interest rate and maturity date of each loan is as follows: Maturity date Interest rate Principal balance Monthly principal and interest payment Note 1 9/10/2018 5.50 % $ 61,151 $ 4,406 Note 2 5/10/2019 5.25 % 262,778 11,532 Note 3 8/10/2021 5.25 % 377,114 8,500 $ 701,043 $ 24,438 (c ) The Company has a promissory note payable on demand in the amount of $75,000 with 800 shares of restricted company common stock to be paid to the lender each month while the note is outstanding. d) th (e) The Company’s mortgage note is secured by the Company’s land and building used for the Hooters Port Elizabeth facility. The Company has identified several potential purchases for its land and building and anticipates closing the Port Elizabeth Hooters location in the third calendar quarter of 2017 and closing the sale of the land and building. If a transaction closes, the Company estimates it would receive gross proceeds of approximately 6 million to 8 million Rand (approximately $470,000 - $570,000 USD net estimated proceeds after broker commissions). The Company expects to pay the mortgage in full at closing using the net proceeds from the sale of the property. The net assets and liabilities related to Port Elizabeth location have been reclassified to Assets Held for Sale in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2017 and an impairment loss of $634 thousand has been reflected in the accompanying unaudited condensed statement of operations for the periods ended June 30, 2017. These amounts are still subject to change and there can be no assurance that the transaction will be consummated and the estimated net proceeds and impairment loss remain subject to adjustment until finalization of the transaction. |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Convertible Notes Payable [Abstract] | |
Schedule of Convertible Notes Payable | Convertible Notes payable are summarized as follows: June 30, 2017 December 31, 2016 6% Convertible notes payable due June 2018 $ 3,000,000 $ 3,000,000 8% Convertible notes payable due March 2019 100,000 100,000 Premium on above convertible note 8,578 - 8% Convertible notes payable due March 2019 100,000 150,000 Premium (discount) on above convertible note 8,578 (46,936 ) 8% Convertible notes payable due March 2019 - 475,000 Total Convertible notes payable 3,217,156 3,678,064 Current portion of convertible notes payable - - Convertible notes payable, less current portion $ 3,217,156 $ 3,678,064 |
Accounts Payable and Accrued 29
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are summarized as follows: June 30,2017 December 31, 2016 Accounts payable and accrued expenses $ 3,675,139 $ 3,807,880 Accrued taxes (VAT, Sales Payroll) 879,254 988,056 Accrued income taxes 134,828 71,713 Accrued interest 351,475 685,419 $ 5,040,696 $ 5,553,068 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Warrants Activity | The Company also has issued warrants to investors in connection with financing transactions in prior periods. A summary of the warrants outstanding and related activity is presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life Outstanding January 1, 2017 922,203 $ 49.80 1.7 Granted 1,200,000 $ 3.50 - Exercised - - - Forfeited (259,445 ) 51.01 - Outstanding June 30, 2017 1,862,758 $ 19.79 2.6 Exercisable June 30, 2017 1,862,758 $ 19.79 2.6 |
Schedule of Warrants Outstanding | Exercise Price Outstanding Number of Warrants Weighted Average Remaining Life in Years Exercisable Number of Warrants >$40.00 484,518 1.47 484,518 $30.00-$39.99 49,990 2.14 49,990 $20.00-$29.99 77,950 2.57 77,950 $10.00-$19.99 50,300 3.78 50,300 $0.00-$9.99 1,200,000 9.84 1,200,000 1,862,758 2.56 1,862,758 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenues and Operating Income (loss) by Segment | The following are revenues and operating income (loss) from continuing operations by segment as of and for the periods presented. The Company does not aggregate or review non-current assets at the segment level. Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Revenue: Hooters Full Service $ 3,392,766 $ 3,338,259 $ 6,528,229 $ 6,512,172 Better Burgers Fast Casual 6,010,542 5,898,316 11,326,830 11,449,966 Just Fresh Fast Casual 1,337,017 1,490,419 2,720,274 2,851,632 Corporate and Other 24,992 25,000 49,982 50,000 $ 10,765,317 $ 10,751,994 $ 20,625,315 $ 20,863,770 Operating Income (Loss): Hooters Full Service $ (546,770 ) $ 54,196 $ (589,616 ) $ 43,744 Better Burgers Fast Casual 110,488 7,524 (58,622 ) (60,514 ) Just Fresh Fast Casual (109,524 ) 45,753 (45,884 ) (27,455 ) Corporate and Other (535,649 ) (490,540 ) (1,376,720 ) (1,244,925 ) $ (1,081,455 ) $ (383,067 ) $ (2,070,842 ) $ (1,289,150 ) Depreciation and Amortization Hooters Full Service $ 142,759 $ 132,650 $ 278,938 $ 261,926 Better Burgers Fast Casual 379,331 365,092 755,963 730,224 Just Fresh Fast Casual 79,726 79,247 159,452 154,370 Corporate and Other 843 953 1,686 1,862 $ 602,659 $ 577,942 $ 1,196,039 $ 1,148,382 |
Summary of Revenues, Operating Loss, Long-Lived Assets By Geographic Area | The following are revenues and operating income (loss) from continuing operations and non-current assets by geographic region as of and for the periods presented. Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Revenue: United States $ 8,598,831 $ 8,675,754 $ 16,510,926 $ 16,904,900 South Africa 1,482,379 1,307,517 2,866,773 2,521,573 Europe 684,107 768,723 1,247,616 1,437,297 $ 10,765,317 $ 10,751,994 $ 20,625,315 $ 20,863,770 Operating Income (Loss): United States $ (1,123,772 ) $ (406,169 ) $ (2,064,843 ) $ (1,271,981 ) South Africa (28,453 ) (57,571 ) (85,514 ) (117,629 ) Europe 70,770 80,673 79,515 100,460 $ (1,081,455 ) $ (383,067 ) $ (2,070,842 ) $ (1,289,150 ) Non-current Assets: June 30, 2017 December 31, 2016 United States $ 26,800,768 $ 26,812,062 South Africa 1,299,979 2,519,135 Europe 2,466,918 2,361,246 $ 30,567,665 $ 31,692,443 |
Nature of Business (Details Nar
Nature of Business (Details Narrative) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017USD ($)Stores | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)Stores | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Cash | $ 377,695 | $ 983,211 | $ 377,695 | $ 983,211 | $ 268,575 | $ 1,224,415 |
Working capital deficit | 3,800,000 | 3,800,000 | ||||
Net loss | 1,371,873 | $ 5,053,281 | 3,098,939 | 6,614,522 | ||
Cash used in operating activities | 255,081 | $ (283,551) | ||||
Total amount of liabilities | 14,300,000 | 14,300,000 | ||||
Current liabilities | 6,280,028 | 6,280,028 | $ 12,111,291 | |||
Obligations payable | $ 7,800,000 | 7,800,000 | ||||
May 2017 [Member] | ||||||
Proceeds from private placement | $ 6,000,000 | |||||
Debentures percentage | 8.00% | |||||
Proceeds from repayment of note payable | $ 5,000,000 | |||||
Minimum [Member] | ||||||
Number of stores | Stores | 6 | 6 | ||||
Maximum [Member] | ||||||
Number of stores | Stores | 10 | 10 |
Nature of Business - Schedule o
Nature of Business - Schedule of Subsidiaries (Details) | 6 Months Ended | 18 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Chanticleer Holdings Inc [Member] | ||
Company name | CHANTICLEER HOLDINGS, INC. | |
Jurisdiction of Incorporation | DE, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | American Roadside Burgers, Inc [Member] | ||
Company name | American Roadside Burgers, Inc. | |
Jurisdiction of Incorporation | DE, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | American Burger Ally, LLC [Member] | ||
Company name | American Burger Ally, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | American Burger Morehead, LLC [Member] | ||
Company name | American Burger Morehead, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | American Roadside McBee, LLC [Member] | ||
Company name | American Roadside McBee, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | American Roadside Southpark LLC [Member] | ||
Company name | American Roadside Southpark LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | American Roadside Burgers Smithtown Inc [Member] | ||
Company name | American Roadside Burgers Smithtown, Inc. | |
Jurisdiction of Incorporation | DE, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | American Burger Prosperity LLC [Member] | ||
Company name | American Burger Prosperity, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Acquisition, LLC [Member] | ||
Company name | BGR Acquisition, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Franchising, LLC [Member] | ||
Company name | BGR Franchising, LLC | |
Jurisdiction of Incorporation | VA, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Operations, LLC [Member] | ||
Company name | BGR Operations, LLC | |
Jurisdiction of Incorporation | VA, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Arlington, LLC [Member] | ||
Company name | BGR Arlington, LLC | |
Jurisdiction of Incorporation | VA, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Cascades, LLC [Member] | ||
Company name | BGR Cascades, LLC | |
Jurisdiction of Incorporation | VA, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Dupont, LLC [Member] | ||
Company name | BGR Dupont, LLC | |
Jurisdiction of Incorporation | DC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Old Keene Mill, LLC [Member] | ||
Company name | BGR Old Keene Mill, LLC | |
Jurisdiction of Incorporation | VA, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Old Town, LLC [Member] | ||
Company name | BGR Old Town, LLC | |
Jurisdiction of Incorporation | VA, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Potomac, LLC [Member] | ||
Company name | BGR Potomac, LLC | |
Jurisdiction of Incorporation | MD, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Springfield Mall, LLC [Member] | ||
Company name | BGR Springfield Mall, LLC | |
Jurisdiction of Incorporation | VA, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Tysons, LLC [Member] | ||
Company name | BGR Tysons, LLC | |
Jurisdiction of Incorporation | VA, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Washingtonian, LLC [Member] | ||
Company name | BGR Washingtonian, LLC | |
Jurisdiction of Incorporation | MD, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | Capitol Burger, LLC [Member] | ||
Company name | Capitol Burger, LLC | |
Jurisdiction of Incorporation | MD, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Mosaic, LLC [Member] | ||
Company name | BGR Mosaic, LLC | |
Jurisdiction of Incorporation | VA, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Michigan Ave, LLC [Member] | ||
Company name | BGR Michigan Ave, LLC | |
Jurisdiction of Incorporation | DC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Chevy Chase, LLC [Member] | ||
Company name | BGR Chevy Chase, LLC | |
Jurisdiction of Incorporation | MD, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BGR Acquisition 1, LLC [Member] | ||
Company name | BGR Acquisition 1, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BT Burger Acquisition, LLC [Member] | ||
Company name | BT Burger Acquisition, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BT's Burgerjoint Biltmore, LLC [Member] | ||
Company name | BTs Burgerjoint Biltmore, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BT's Burgerjoint Promenade, LLC [Member] | ||
Company name | BTs Burgerjoint Promenade, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BT's Burgerjoint Rivergate LLC [Member] | ||
Company name | BTs Burgerjoint Rivergate LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | BT's Burgerjoint Sun Valley, LLC [Member] | ||
Company name | BTs Burgerjoint Sun Valley, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | LBB Acquisition, LLC [Member] | ||
Company name | LBB Acquisition, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | Cuarto LLC [Member] | ||
Company name | Cuarto LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | LBB Acquisition 1 LLC [Member] | ||
Company name | LBB Acquisition 1 LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | LBB Green Lake LLC [Member] | ||
Company name | LBB Green Lake LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 50.00% | 50.00% |
Burger Business [Member] | LBB Hassalo LLC [Member] | ||
Company name | LBB Hassalo LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 80.00% | 80.00% |
Burger Business [Member] | LBB Platform LLC [Member] | ||
Company name | LBB Platform LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 80.00% | 80.00% |
Burger Business [Member] | LBB Progress Ridge LLC [Member] | ||
Company name | LBB Progress Ridge LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 50.00% | 50.00% |
Burger Business [Member] | Noveno LLC [Member] | ||
Company name | Noveno LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | Octavo LLC [Member] | ||
Company name | Octavo LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | Primero LLC [Member] | ||
Company name | Primero LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | Quinto LLC [Member] | ||
Company name | Quinto LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | Segundo LLC [Member] | ||
Company name | Segundo LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | Septimo LLC [Member] | ||
Company name | Septimo LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | Sexto LLC [Member] | ||
Company name | Sexto LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 100.00% | 100.00% |
Burger Business [Member] | Wallingford.LLC [Member] | ||
Company name | Wallingford. LLC | |
Jurisdiction of Incorporation | OR. USA | |
Percent Owned | 50.00% | 50.00% |
Burger Business [Member] | Capitol Hill, LLC [Member] | ||
Company name | Capitol Holl. LLC | |
Jurisdiction of Incorporation | WA. USA | |
Percent Owned | 50.00% | 50.00% |
Burger Business [Member] | LBB Franchising , LLC [Member] | ||
Company name | LBB Franchising. LLC | |
Jurisdiction of Incorporation | NC. USA | |
Percent Owned | 100.00% | 100.00% |
Just Fresh [Member] | JF Franchising Systems, LLC [Member] | ||
Company name | JF Franchising Systems, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 56.00% | 56.00% |
Just Fresh [Member] | JF Restaurants, LLC [Member] | ||
Company name | JF Restaurants, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 56.00% | 56.00% |
West Coast Hooters [Member] | Jantzen Beach Wings, LLC [Member] | ||
Company name | Jantzen Beach Wings, LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 100.00% | 100.00% |
West Coast Hooters [Member] | Oregon Owl's Nest, LLC [Member] | ||
Company name | Oregon Owls Nest, LLC | |
Jurisdiction of Incorporation | OR, USA | |
Percent Owned | 100.00% | 100.00% |
West Coast Hooters [Member] | Tacoma Wings, LLC [Member] | ||
Company name | Tacoma Wings, LLC | |
Jurisdiction of Incorporation | WA, USA | |
Percent Owned | 100.00% | 100.00% |
South African Entities [Member] | Chanticleer South Africa (Pty) Ltd [Member] | ||
Company name | Chanticleer South Africa (Pty) Ltd. | |
Jurisdiction of Incorporation | South Africa | |
Percent Owned | 100.00% | 100.00% |
South African Entities [Member] | Hooters Emperors Palace (Pty) Ltd. [Member] | ||
Company name | Hooters Emperors Palace (Pty.) Ltd. | |
Jurisdiction of Incorporation | South Africa | |
Percent Owned | 88.00% | 88.00% |
South African Entities [Member] | Hooters On The Buzz (Pty) Ltd [Member] | ||
Company name | Hooters On The Buzz (Pty) Ltd | |
Jurisdiction of Incorporation | South Africa | |
Percent Owned | 95.00% | 95.00% |
South African Entities [Member] | Hooters PE (Pty) Ltd [Member] | ||
Company name | Hooters PE (Pty) Ltd | |
Jurisdiction of Incorporation | South Africa | |
South African Entities [Member] | Hooters Ruimsig (Pty) Ltd [Member] | ||
Company name | Hooters Ruimsig (Pty) Ltd. | |
Jurisdiction of Incorporation | South Africa | |
Percent Owned | 100.00% | 100.00% |
South African Entities [Member] | Hooters SA (Pty) Ltd [Member] | ||
Company name | Hooters SA (Pty) Ltd | |
Jurisdiction of Incorporation | South Africa | |
Percent Owned | 90.00% | 90.00% |
South African Entities [Member] | Hooters Umhlanga (Pty.) Ltd [Member] | ||
Company name | Hooters Umhlanga (Pty.) Ltd. | |
Jurisdiction of Incorporation | South Africa | |
Percent Owned | 81.00% | 81.00% |
South African Entities [Member] | Hooters Willows Crossing (Pty) Ltd [Member] | ||
Company name | Hooters Willows Crossing (Pty) Ltd | |
Jurisdiction of Incorporation | South Africa | |
Percent Owned | 100.00% | 100.00% |
South African Hooters [Member] | Hooters PE (Pty) Ltd [Member] | ||
Percent Owned | 100.00% | 100.00% |
European Entities [Member] | Chanticleer Holdings Limited [Member] | ||
Company name | Chanticleer Holdings Limited | |
Jurisdiction of Incorporation | Jersey | |
Percent Owned | 100.00% | 100.00% |
European Entities [Member] | West End Wings LTD [Member] | ||
Company name | West End Wings LTD | |
Jurisdiction of Incorporation | United Kingdom | |
Percent Owned | 100.00% | 100.00% |
European Entities [Member] | Chanticleer Finance UK (No. 1) Plc [Member] | ||
Company name | Chanticleer Finance UK (No. 1) Plc | |
Jurisdiction of Incorporation | United Kingdom | |
Percent Owned | 100.00% | 100.00% |
Inactive Entities [Member] | Hoot Surfers Paradise Pty. Ltd [Member] | ||
Company name | Hoot Surfers Paradise Pty. Ltd. | |
Jurisdiction of Incorporation | Australia | |
Percent Owned | 60.00% | 60.00% |
Inactive Entities [Member] | Hooters Brazil [Member] | ||
Company name | Hooters Brazil | |
Jurisdiction of Incorporation | Brazil | |
Percent Owned | 100.00% | 100.00% |
Inactive Entities [Member] | DineOut SA Ltd [Member] | ||
Company name | DineOut SA Ltd. | |
Jurisdiction of Incorporation | England | |
Percent Owned | 89.00% | 89.00% |
Inactive Entities [Member] | Avenel Financial Services, LLC [Member] | ||
Company name | Avenel Financial Services, LLC | |
Jurisdiction of Incorporation | NV, USA | |
Percent Owned | 100.00% | 100.00% |
Inactive Entities [Member] | Avenel Ventures, LLC [Member] | ||
Company name | Avenel Ventures, LLC | |
Jurisdiction of Incorporation | NV, USA | |
Percent Owned | 100.00% | 100.00% |
Inactive Entities [Member] | Chanticleer Advisors, LLC [Member] | ||
Company name | Chanticleer Advisors, LLC | |
Jurisdiction of Incorporation | NV, USA | |
Percent Owned | 100.00% | 100.00% |
Inactive Entities [Member] | Chanticleer Investment Partners, LLC [Member] | ||
Company name | Chanticleer Investment Partners, LLC | |
Jurisdiction of Incorporation | NV, USA | |
Percent Owned | 100.00% | 100.00% |
Inactive Entities [Member] | Dallas Spoon Beverage, LLC [Member] | ||
Company name | Dallas Spoon Beverage, LLC | |
Jurisdiction of Incorporation | TX, USA | |
Percent Owned | 100.00% | 100.00% |
Inactive Entities [Member] | Dallas Spoon, LLC [Member] | ||
Company name | Dallas Spoon, LLC | |
Jurisdiction of Incorporation | TX, USA | |
Percent Owned | 100.00% | 100.00% |
Inactive Entities [Member] | American Roadside Cross Hill, LLC [Member] | ||
Company name | American Roadside Cross Hill, LLC | |
Jurisdiction of Incorporation | NC, USA | |
Percent Owned | 100.00% | 100.00% |
Inactive Entities [Member] | UK Bond Company [Member] | ||
Company name | UK Bond Company | |
Jurisdiction of Incorporation | United Kingdom | |
Percent Owned | 100.00% | 100.00% |
Significant Accounting Polici34
Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 2,229,425 | 1,364,031 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 1,862,758 | 950,630 |
Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 366,667 | 390,074 |
Convertible Interest [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 23,327 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||||
Payments to acquire business in cash | $ 72,215 | |||
Goodwill | $ 12,540,817 | $ 12,405,770 | $ 12,702,139 | |
Just Fresh Business [Member] | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire business in cash | 72,215 | |||
Payment to allocated to acquire inventory | 1,611 | |||
Goodwill | $ 70,604 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Discontinued operations | |
Repurchase option term | 5 years |
Repurchase option percentage | 20.00% |
Repurchase amount | $ 1 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Operating Results From Discontinued Operations Pre-Tax Loss (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Discontinued operations | ||||
Revenue | $ 1,464,459 | $ 2,970,401 | ||
Restaurant cost of sales | 515,718 | 1,042,543 | ||
Restaurant operating expenses | 1,147,178 | 2,450,557 | ||
General and administrative expenses | 168,048 | 254,174 | ||
Depreciation and amortization | 177,929 | 436,144 | ||
Other | 12,114 | 22,892 | ||
Loss of discontinued operations | (556,528) | (1,235,909) | ||
Loss on write-down of net assets | (3,876,161) | (3,876,161) | ||
Total pretax loss of discontinued operations | (4,432,689) | (5,112,070) | ||
Income tax | ||||
Loss on discontinued operations | $ (4,432,689) | $ (5,112,070) |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 18,500,479 | $ 18,666,184 |
Accumulated depreciation and amortization | (8,157,965) | (7,152,491) |
Property and equipment, net | 10,342,514 | 11,513,693 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,450,081 | 10,363,996 |
Restaurant Furnishings and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 6,814,102 | 6,716,926 |
Construction In Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 59,963 | 582,265 |
Office and Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 68,303 | 68,303 |
Land and Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 826,664 | |
Office Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 108,030 | $ 108,030 |
Goodwill and Other Intangible39
Goodwill and Other Intangible Assets, Net - Schedule of Goodwill (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill [Line Items] | |||
Goodwill | $ 12,540,817 | $ 12,405,770 | $ 12,702,139 |
Hooters Full Service [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 4,596,214 | 4,461,167 | |
Better Burgers Fast Casual [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 7,448,848 | 7,448,848 | |
Just Fresh Fast Casual [Member] | |||
Goodwill [Line Items] | |||
Goodwill | $ 495,755 | $ 495,755 |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets, Net - Summary of Changes in Carrying Amount of Goodwill (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning Balance | $ 12,405,770 | $ 12,702,139 |
Acquisitions | 70,604 | |
Adjustments | 62,192 | |
Foreign currency translation (loss) gain | 135,047 | (429,165) |
Ending Balance | $ 12,540,817 | $ 12,405,770 |
Goodwill and Other Intangible41
Goodwill and Other Intangible Assets, Net - Schedule of Other Intangible Assets (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 7,536,879 | $ 7,538,862 |
Accumulated amortization | 1,162,452 | (1,008,619) |
Intangible assets, net | 6,374,427 | 6,530,243 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | 5,776,930 | 5,776,930 |
Trademarks and Trade Names [Member] | Just Fresh [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 1,010,000 | 1,010,000 |
Estimated useful Life | 10 years | |
Trademarks and Trade Names [Member] | American Roadside Burgers [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 1,786,930 | 1,786,930 |
Estimated useful Life | 10 years | |
Trademarks and Trade Names [Member] | BGR The Burger Joint [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 1,430,000 | 1,430,000 |
Estimated useful Life description | Indefinite | |
Trademarks and Trade Names [Member] | Little Big Burger [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 1,550,000 | 1,550,000 |
Estimated useful Life description | Indefinite | |
Franchise Fees [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 1,759,949 | 1,761,932 |
Franchise Fees [Member] | Hooters South Africa [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 338,458 | 322,258 |
Estimated useful Life | 20 years | |
Franchise Fees [Member] | Hooters Pacific NW [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 88,826 | 88,826 |
Estimated useful Life | 20 years | |
Franchise Fees [Member] | Hooter UK [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 12,665 | 30,848 |
Estimated useful Life | 5 years | |
Franchise Fees [Member] | BGR The Burger Joint [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 1,320,000 | $ 1,320,000 |
Estimated useful Life description | Indefinite |
Long-Term Debt and Notes Paya42
Long-Term Debt and Notes Payable (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Debt Disclosure [Abstract] | ||
Amortization expenses | $ 432,932 | $ 85,938 |
Long-Term Debt and Notes Paya43
Long-Term Debt and Notes Payable - Summary of Long-Term Debt and Notes Payable (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 | |
Short-term Debt [Line Items] | |||
Total Long-term Debt | $ 5,462,031 | $ 6,459,094 | |
Current portion of long-term debt | 928,870 | 6,171,649 | |
Long-term debt, less current portion | 4,533,161 | 287,445 | |
Note Payable, due January 2019, net of discount and deferred financing costs of $2,161,422 and $0, respectively [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | [1] | 3,838,578 | |
Note Payable, due January 2017, net of discount of $0 and $171,868, respectively [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | [1] | 5,000,000 | |
Notes Payable Paragon Bank [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | [2] | 701,043 | 811,205 |
Note Payable [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | [3] | 75,000 | |
Receivables financing facilities [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | [4] | 326,168 | 161,899 |
Mortgage Note, South Africa, Due July 2024[Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | [5] | 224,395 | 215,962 |
Bank Overdraft Facilities, South Africa, Annual Renewal [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | 174,084 | 124,599 | |
Equipment Financing Arrangements, South Africa [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | $ 122,763 | $ 145,430 | |
[1] | On May 4, 2017, pursuant to a Securities Purchase Agreement, the Company issued 8% non-convertible secured debentures in the principal amount of $6,000,000 and warrants to purchase 1,200,000 shares of common stock (as adjusted for the Company’s subsequent one-for-ten reverse stock split) to accredited investors. The debentures bear interest at a rate of 8% per annum, payable in cash quarterly in arrears. The debentures mature on December 31, 2018 and contain customary financial and other covenants, including a requirement to maintain positive earnings before interest, taxes, depreciation and amortization. The debentures are secured by a second priority security interest on the Company’s assets and the obligation is guaranteed by the Company’s subsidiaries. The debentures contain a mandatory redemption provision that is triggered by an asset sale. Sale of greater than 33% of the Company’s assets will also trigger an event of default. Upon any event of default, in addition to other customary remedies, the holders have the right, at their sole option, to purchase Little Big Burger from the Company, for an aggregate purchase price of $6,500,000. The warrants have an exercise price of $3.50 (as adjusted for the reverse stock split) and a ten-year term. The warrants are not exercisable until November 4, 2017. Warrants to purchase 800,000 shares include a beneficial ownership limit upon exercise of 4.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of the warrant; warrants to purchase the remaining 400,000 shares were amended to increase the beneficial ownership limit upon exercise to 19.99%. The shares of common stock underlying the warrants have registration rights, and, if the warrant shares are not registered, the holders will have the right to cashless exercise. | ||
[2] | The Company has three term loans with Paragon Bank, all of which are collateralized by all assets of the Company and personally guaranteed by our Chief Executive Officer. The outstanding balance, interest rate and maturity date of each loan is as follows: Maturity date Interest rate Principal balance Monthly principal and interest payment Note 1 9/10/2018 5.50 % $ 61,151 $ 4,406 Note 2 5/10/2019 5.25 % 262,778 11,532 Note 3 8/10/2021 5.25 % 377,114 8,500 $ 701,043 $ 24,438 | ||
[3] | The Company has a promissory note payable on demand in the amount of $75,000 with 800 shares of restricted company common stock to be paid to the lender each month while the note is outstanding. | ||
[4] | During February 2017, in consideration for proceeds of $330,000, the Company agreed to remit a total of $412,500 from the merchant accounts of eight of its restaurant locations directly to a lender. The Company agreed to make payments of $1,965 per day for 210 days. The Company has the option to payoff the loan early by remitting a total of $372,900 by the 120th day. Also, during March 2017 in consideration for proceeds of $150,000, the company agreed to remit a total of $205,500 from the merchant accounts of three of its restaurant locations directly to the lender. The Company agreed to make payments of $856 per day for 240 days. The Company granted a security interest in the credit card receivables of the specified restaurants in connection with the Receivables Financing Agreements. | ||
[5] | The Company’s mortgage note is secured by the Company’s land and building used for the Hooters Port Elizabeth facility. The Company has identified several potential purchases for its land and building and anticipates closing the Port Elizabeth Hooters location in the third calendar quarter of 2017 and closing the sale of the land and building. If a transaction closes, the Company estimates it would receive gross proceeds of approximately 6 million to 8 million Rand (approximately $470,000 - $570,000 USD net estimated proceeds after broker commissions). The Company expects to pay the mortgage in full at closing using the net proceeds from the sale of the property. The net assets and liabilities related to Port Elizabeth location have been reclassified to Assets Held for Sale in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2017 and an impairment loss of $634 thousand has been reflected in the accompanying unaudited condensed statement of operations for the periods ended June 30, 2017. These amounts are still subject to change and there can be no assurance that the transaction will be consummated and the estimated net proceeds and impairment loss remain subject to adjustment until finalization of the transaction. |
Long-Term Debt and Notes Paya44
Long-Term Debt and Notes Payable - Summary of Long-Term Debt and Notes Payable (Details) (Parenthetical) - USD ($) | May 04, 2017 | May 04, 2017 | Mar. 31, 2017 | Feb. 28, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | May 31, 2017 | Apr. 30, 2017 | Dec. 31, 2016 |
Convertible secured debentures principal balance | $ 187,798 | $ 475,000 | |||||||
Sale of assets trigger percentage | 8.00% | ||||||||
Proceeds from long term debt | $ 6,598,161 | $ 125,000 | |||||||
Long term debt | 5,462,031 | $ 6,459,094 | |||||||
Gain on extinguishment of debt | (95,310) | ||||||||
Debt discount amortized value | 408,359 | $ 726,317 | |||||||
Lender [Member] | |||||||||
Convertible secured debentures principal balance | 3,000,000 | ||||||||
Proceeds from long term debt | $ 150,000 | $ 330,000 | |||||||
Total remit amount | $ 205,500 | 412,500 | |||||||
Lender [Member] | 210 days [Member] | |||||||||
Debt periodic payment | 1,965 | ||||||||
Lender [Member] | 120 days [Member] | |||||||||
Debt periodic payment | $ 372,900 | ||||||||
Lender [Member] | 240 days [Member] | |||||||||
Debt periodic payment | 856 | ||||||||
Florida Mezzanine [Member] | |||||||||
Payment for exchange | $ 5,000,000 | ||||||||
Agreement description | Company from all claims and outstanding obligations pursuant to that certain Assumption Agreement dated June 30, 2014, as amended October 15, 2014 and October 22, 2016, and that certain Agreement dated May 23, 2016, as amended January 30, 2017, in exchange for payment of $5,000,000. | ||||||||
Proceeds from long term debt | $ 500,000 | ||||||||
Long term debt | 206,746 | ||||||||
Note Payable | 5,000,000 | ||||||||
Proceeds from restricted cash | 275,463 | ||||||||
Gain on extinguishment of debt | 267,512 | ||||||||
Additional paid in capital warrant issued | 2,300,000 | ||||||||
Debt origination costs | 293,294 | ||||||||
Debt discount amortized value | 2,600,000 | ||||||||
Florida Mezzanine [Member] | Loan [Member] | |||||||||
Long term debt | 6,000,000 | ||||||||
Paragon Bank [Member] | Note One [Member] | |||||||||
Convertible secured debentures principal balance | $ 61,151 | ||||||||
Debt instruments bears interest rate | 5.50% | ||||||||
Note payable maturity date | Sep. 10, 2018 | ||||||||
Debt periodic payment | $ 4,406 | ||||||||
Paragon Bank [Member] | Note Two [Member] | |||||||||
Convertible secured debentures principal balance | $ 262,778 | ||||||||
Debt instruments bears interest rate | 5.25% | ||||||||
Note payable maturity date | May 10, 2019 | ||||||||
Debt periodic payment | $ 11,532 | ||||||||
Paragon Bank [Member] | Note Three [Member] | |||||||||
Convertible secured debentures principal balance | $ 377,114 | ||||||||
Debt instruments bears interest rate | 5.25% | ||||||||
Note payable maturity date | Aug. 10, 2021 | ||||||||
Debt periodic payment | $ 8,500 | ||||||||
Paragon Bank [Member] | Loan [Member] | |||||||||
Note Payable | $ 75,000 | ||||||||
Number of restricted stock shares issued | 800 | ||||||||
Securities Purchase Agreement [Member] | |||||||||
Convertible secured debentures principal balance | $ 6,000,000 | $ 6,000,000 | |||||||
Number of warrant to purchase shares of common stock | 1,200,000 | 1,200,000 | |||||||
Debt instruments bears interest rate | 8.00% | 8.00% | |||||||
Securities Purchase Agreement [Member] | November 4, 2017 [Member] | |||||||||
Number of warrant to purchase shares of common stock | 800,000 | ||||||||
Securities Purchase Agreement [Member] | Warrants [Member] | |||||||||
Reverse stock split | one-for-ten reverse stock split | ||||||||
Note payable maturity date | Dec. 31, 2018 | ||||||||
Sale of assets trigger percentage | 33.00% | ||||||||
Beneficial ownership limit, percentage | 4.99% | ||||||||
Securities Purchase Agreement [Member] | Warrants One [Member] | |||||||||
Number of warrant to purchase shares of common stock | 400,000 | 400,000 | |||||||
Aggregate purchase price | $ 6,500,000 | $ 6,500,000 | |||||||
Warrant exercise price per share | $ 3.50 | $ 3.50 | |||||||
Beneficial ownership limit, percentage | 19.99% | ||||||||
Non-Binding Agreement [Member] | |||||||||
Asset impairment loss | $ 634,000 | ||||||||
Non-Binding Agreement [Member] | Minimum [Member] | |||||||||
Proceeds from sale of property | 6,000,000 | ||||||||
Non-Binding Agreement [Member] | Minimum [Member] | USD [Member] | |||||||||
Proceeds from sale of property | 470,000 | ||||||||
Non-Binding Agreement [Member] | Maximum [Member] | |||||||||
Proceeds from sale of property | 8,000,000 | ||||||||
Non-Binding Agreement [Member] | Maximum [Member] | USD [Member] | |||||||||
Proceeds from sale of property | $ 570,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | May 31, 2017 | Apr. 30, 2017 | |
Debt Instrument, Redemption [Line Items] | |||||
Amortized debt discount | $ 408,359 | $ 726,317 | |||
Debt conversion percentage | 8.00% | ||||
Convertible debt principal amount | $ 820,107 | ||||
Convertible notes payable | 725,000 | ||||
Unpaid accrued interest | $ 95,107 | ||||
Conversion price per share | $ 3 | ||||
Net loss on extinguishment | $ 95,310 | ||||
Convertible debt | $ 187,798 | $ 475,000 | |||
Lender [Member] | |||||
Debt Instrument, Redemption [Line Items] | |||||
Convertible debt | $ 3,000,000 | ||||
Convertible debt percentage | 6.00% | ||||
2% notes [Member] | |||||
Debt Instrument, Redemption [Line Items] | |||||
Convertible note payable term | 2 years | ||||
Convertible Notes [Member] | |||||
Debt Instrument, Redemption [Line Items] | |||||
Convertible notes payable | $ 150,000 | ||||
Debt conversion on converted shares | 50,000 | ||||
Net loss on extinguishment | $ 362,822 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | $ 725,000 | ||
Convertible notes payable, less current portion | 3,217,156 | $ 3,678,064 | |
6% Convertible notes payable due June 2018 [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | 3,000,000 | 3,000,000 | |
8% Convertible notes payable due March 2019 [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | 100,000 | 100,000 | |
Premium on Above Convertible Note [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | 8,578 | ||
8% Convertible Notes Payable due March 2019 [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | 100,000 | 475,000 | |
Premium (Discount) on Above Convertible Note [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | 8,578 | ||
Convertible Notes Payable [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | 3,217,156 | 3,678,064 | |
Current portion of convertible notes payable | |||
Convertible notes payable, less current portion | $ 3,217,156 | 3,678,064 | |
8% Convertible Notes Payable Due March 2019 [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | 150,000 | ||
Premium (Discount) on Above Convertible Note [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | $ (46,936) |
Convertible Notes Payable - S47
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
6% Convertible notes payable due June 2018 [Member] | |||
Note payable, due date | June 2,018 | ||
Convertible notes payable, Percentage | 6.00% | ||
8% Convertible notes payable due March 2019 [Member] | |||
Note payable, due date | March 2,019 | ||
Convertible notes payable, Percentage | 8.00% | ||
8% Convertible notes payable due March 2019 [Member] | |||
Note payable, due date | March 2,019 | ||
8% Convertible Notes Payable Due March 2019 [Member] | |||
Note payable, due date | March 2,019 | ||
Convertible notes payable, Percentage | 8.00% | ||
Premium on Above Convertible Note [Member] | |||
Convertible notes payable, Percentage | 8.00% |
Accounts Payable and Accrued 48
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $ 3,675,139 | $ 3,807,880 |
Accrued taxes (VAT, Sales Payroll) | 879,254 | 988,056 |
Accrued income taxes | 134,828 | 71,713 |
Accrued interest | 351,475 | 685,419 |
Accounts payable and accrued expenses | $ 5,040,696 | $ 5,553,068 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Dec. 31, 2016 | Feb. 29, 2016 | Jun. 30, 2017 |
Stockholder's Equity [Line Items] | |||
Common stock, shares authorized | 45,000,000 | 45,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Common stock, shares outstanding | 2,139,424 | 2,500,534 | |
Common stock, shares issued | 2,139,424 | 2,500,534 | |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Preferred stock, par value | |||
Preferred stock, shares issued | 19,050 | 62,876 | |
Preferred stock, shares outstanding | 19,050 | 62,876 | |
repurchase obligation | $ 56,290 | ||
2014 Stock Incentive Plan [Member] | |||
Stockholder's Equity [Line Items] | |||
Number of shares available for future issuance | 400,000 | ||
Lender [Member] | |||
Stockholder's Equity [Line Items] | |||
Exercise price | $ 0.62 | ||
Number of shares issued | 56,290 | ||
Date description | This put right originally expired in January 2017 and was subsequently extended to March 31, 2017. | ||
Employees, Board Members and Outside Consultants [Member] | |||
Stockholder's Equity [Line Items] | |||
Number of restricted shares issued | 32,534 | ||
Employees [Member] | |||
Stockholder's Equity [Line Items] | |||
Number of restricted shares issued | 15,000 | ||
Stock options granted | 367,466 | ||
Florida Mezzanine Fund [Member] | |||
Stockholder's Equity [Line Items] | |||
Note Payable | $ 5,000,000 | ||
Series 1 Warrant [Member] | |||
Stockholder's Equity [Line Items] | |||
Purchase of common stock | 10 | ||
Redeemable Series 1 Preferred Stock [Member] | |||
Stockholder's Equity [Line Items] | |||
Cumulative dividends rate | 9.00% | ||
Exercise price | $ 13.50 | ||
Series 1 Preferred Stock [Member] | |||
Stockholder's Equity [Line Items] | |||
Cumulative dividends rate | 9.00% | ||
Warrant term | 7 years | ||
Exercise price | $ 13.50 | ||
Preferred Stock [Member] | |||
Stockholder's Equity [Line Items] | |||
Number of shares issued | 43,826 | 19,050 | |
Preferred stock, shares issued | 62,876 | ||
Preferred stock, shares outstanding | 62,876 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrants Activity (Details) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Equity [Abstract] | |
Number of Warrants Outstanding beginning balance, shares | shares | 922,203 |
Granted, shares | shares | 1,200,000 |
Exercised, shares | shares | |
Forfeited, shares | shares | (259,445) |
Number of Warrants Outstanding ending balance, shares | shares | 1,862,758 |
Exercisable, shares | shares | 1,862,758 |
Weighted-average exercise price, Outstanding beginning balance | $ / shares | $ 49.80 |
Weighted-average exercise price, Granted | $ / shares | 3.50 |
Weighted-average exercise price, Exercised | $ / shares | |
Weighted-average exercise price, Forfeited | $ / shares | 51.01 |
Weighted-average exercise price, Outstanding ending balance | $ / shares | 19.79 |
Exercisable, Weighted-average exercise price | $ / shares | $ 19.79 |
Weighted Average Remaining Life In Years, Outstanding beginning balance | 1 year 4 months 24 days |
Weighted Average Remaining Life In Years, Granted | 0 years |
Weighted Average Remaining Life In Years, Exercised | 0 years |
Weighted Average Remaining Life In Years, Outstanding ending balance | 2 years 7 months 6 days |
Weighted Average Remaining Life In Years, Exercisable | 2 years 7 months 6 days |
Stockholders' Equity - Schedu51
Stockholders' Equity - Schedule of Warrants Outstanding (Details) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 1 year 4 months 24 days |
Warrant [Member] | |
Number of warrants, outstanding | 1,862,758 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 2 years 6 months 21 days |
Number of warrants exercisable | 9,072,032 |
Range 1 [Member] | Warrant [Member] | |
Range of exercise prices, upper limit | $ / shares | $ 4 |
Number of warrants, outstanding | 484,518 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 1 year 5 months 20 days |
Number of warrants exercisable | 484,518 |
Range 2 [Member] | Warrant [Member] | |
Range of exercise prices, lower limit | $ / shares | $ 30 |
Range of exercise prices, upper limit | $ / shares | $ 39.99 |
Number of warrants, outstanding | 49,990 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 2 years 1 month 20 days |
Number of warrants exercisable | 49,990 |
Range 3 [Member] | Warrant [Member] | |
Range of exercise prices, lower limit | $ / shares | $ 20 |
Range of exercise prices, upper limit | $ / shares | $ 29.99 |
Number of warrants, outstanding | 77,950 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 2 years 6 months 25 days |
Number of warrants exercisable | 77,950 |
Range 4 [Member] | Warrant [Member] | |
Range of exercise prices, lower limit | $ / shares | $ 10 |
Range of exercise prices, upper limit | $ / shares | $ 19.99 |
Number of warrants, outstanding | 50,300 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 3 years 9 months 11 days |
Number of warrants exercisable | 50,300 |
Range 5 [Member] | Warrant [Member] | |
Range of exercise prices, lower limit | $ / shares | $ 0 |
Range of exercise prices, upper limit | $ / shares | $ 9.99 |
Number of warrants, outstanding | 1,200,000 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 9 years 10 months 3 days |
Number of warrants exercisable | 1,200,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Due to related parties | $ 194,350 | $ 194,350 |
Chanticleer Investors LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 194,350 |
Segments of Business - Schedule
Segments of Business - Schedule of Revenues and Operating Income (loss) by Segment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue | $ 10,765,317 | $ 10,751,994 | $ 20,625,315 | $ 20,863,770 |
Operating Income (Loss): | (1,081,455) | (383,067) | (2,070,842) | (1,289,150) |
Depreciation and Amortization | 602,659 | 577,942 | 1,196,039 | 1,148,382 |
Operating Segments [Member] | ||||
Revenue | 10,765,317 | 10,751,994 | 20,625,315 | 20,863,770 |
Operating Income (Loss): | (1,081,455) | 383,067 | (2,070,842) | (1,289,150) |
Depreciation and Amortization | 602,659 | 577,942 | 1,196,039 | 1,148,382 |
Operating Segments [Member] | Hooters Full Service [Member] | ||||
Revenue | 3,392,766 | 3,338,259 | 6,528,229 | 6,512,172 |
Operating Income (Loss): | (546,770) | 54,196 | (589,616) | 43,744 |
Depreciation and Amortization | 142,759 | 132,650 | 278,938 | 261,926 |
Operating Segments [Member] | Better Burgers Fast Casual [Member] | ||||
Revenue | 6,010,542 | 5,898,316 | 11,326,830 | 11,449,966 |
Operating Income (Loss): | (110,488) | (68,397) | (58,622) | (60,514) |
Depreciation and Amortization | 379,331 | 365,092 | 755,963 | 730,224 |
Operating Segments [Member] | Just Fresh Fast Casual [Member] | ||||
Revenue | 337,017 | 1,490,419 | 2,720,274 | 2,851,632 |
Operating Income (Loss): | 109,524 | (45,753) | (45,884) | (27,455) |
Depreciation and Amortization | 79,726 | 79,247 | 159,452 | 154,370 |
Operating Segments [Member] | Corporate and Other [Member] | ||||
Revenue | 24,992 | 25,000 | 49,982 | 50,000 |
Operating Income (Loss): | (535,649) | (490,540) | (1,376,720) | (1,244,925) |
Depreciation and Amortization | $ 843 | $ 953 | $ 1,686 | $ 1,862 |
Segments of Business - Summary
Segments of Business - Summary of Revenues, Operating Loss, Long-Lived Assets By Geographic Area (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||
Revenue: | $ 10,765,317 | $ 10,751,994 | $ 20,625,315 | $ 20,863,770 | |
Operating Income (Loss): | (1,081,455) | (383,067) | (2,070,842) | (1,289,150) | |
Non-current Assets: | 30,567,665 | 30,567,665 | $ 31,692,443 | ||
United States [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue: | 8,598,831 | 8,675,754 | 16,510,926 | 16,904,900 | |
Operating Income (Loss): | (1,123,772) | (406,169) | (2,064,843) | (1,271,981) | |
Non-current Assets: | 26,800,768 | 26,800,768 | 26,812,062 | ||
South Africa [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue: | 1,482,379 | 1,307,517 | 2,866,773 | 2,521,573 | |
Operating Income (Loss): | (28,453) | (57,571) | (85,514) | (117,629) | |
Non-current Assets: | 1,299,979 | 1,299,979 | 2,519,135 | ||
Europe [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue: | 684,107 | 768,723 | 1,247,616 | 1,437,297 | |
Operating Income (Loss): | 70,770 | $ 80,673 | 79,515 | $ 100,460 | |
Non-current Assets: | $ 2,466,918 | $ 2,466,918 | $ 2,361,246 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Debt owned amount | $ 480,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 6 Months Ended | |||
Jun. 30, 2017 | May 31, 2017 | May 04, 2017 | Apr. 30, 2017 | |
Convertible secured debentures in the principal amount | $ 187,798 | $ 475,000 | ||
Securities Purchase Agreement [Member] | ||||
Convertible secured debentures in the principal amount | $ 6,000,000 | |||
Number of warrant to purchase shares of common stock | 1,200,000 | |||
Debt instruments interest rate | 8.00% | |||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | ||||
Convertible secured debentures in the principal amount | $ 6,000,000 | |||
Percentage sold convertible secured debentures | 8.00% | |||
Number of warrant to purchase shares of common stock | 12,000,000 | |||
Debt maturity date | Dec. 31, 2018 | |||
Debt instruments interest rate | 8.00% | |||
Sale of stock purchase during period | $ 6,500,000 | |||
Exchange for payment description | Assumption Agreement dated June 30, 2014, as amended October 15, 2014 and October 22, 2016, and that certain Agreement dated May 23, 2016, as amended January 30, 2017, in exchange for payment of $5,000,000. | |||
Proceeds from offering | $ 500,000 | |||
Transaction expenses | $ 206,746 | |||
Reverse stock split | reverse stock split at a ratio of 1-for-2 up to 1-for-10 | |||
Increasing share price of common stock price per share | $ 1 | |||
Florida Mezzanine Fund [Member] | Subsequent Event [Member] | ||||
Issuance of non convertible secured debenture | $ 600,000 | |||
Repayment of outstanding notes | $ 500,000 |