Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 11, 2018 | |
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 | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 3,656,433 | |
Trading Symbol | HOTR | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 411,081 | $ 272,976 |
Restricted cash | 102,584 | 165,517 |
Accounts and other receivables, net | 344,769 | 475,988 |
Inventories | 388,490 | 460,756 |
Prepaid expenses and other current assets | 247,554 | 324,324 |
Assets held for sale, net | 2,090,000 | 100,000 |
TOTAL CURRENT ASSETS | 3,584,478 | 1,799,561 |
Property and equipment, net | 8,203,981 | 8,548,592 |
Goodwill | 10,164,374 | 12,647,806 |
Intangible assets, net | 5,759,818 | 5,896,732 |
Investment at cost | 800,000 | 800,000 |
Deposits and other assets | 452,957 | 490,328 |
TOTAL ASSETS | 28,965,608 | 30,183,019 |
Current liabilities: | ||
Accounts payable and accrued expenses | 6,305,556 | 5,797,252 |
Current maturities of long-term debt and notes payable net of unamortized discount and deferred financing costs of $880,043 and $1,173,190, respectively | 5,957,262 | 5,741,911 |
Current maturities of convertible notes payable | 3,000,000 | 3,000,000 |
Due to related parties | 191,850 | 191,850 |
TOTAL CURRENT LIABILITIES | 15,454,668 | 14,731,013 |
Convertible notes payable, net of unamortized debt premium of $0 and $12,256, respectively | 212,256 | |
Redeemable preferred stock: no par value;authorized 5,000,000 shares; 62,876 shares issued and outstanding, net of unamortized discount of $200,002 and $208,697, respectively | 648,824 | 640,129 |
Deferred rent | 2,107,173 | 2,156,378 |
Deferred tax liabilities | 443,163 | 779,359 |
Deferred revenue | 1,236,636 | 175,000 |
TOTAL LIABILITIES | 19,890,464 | 18,694,135 |
Stockholders' equity: | ||
Common stock: $0.0001 par value; authorized 45,000,000 shares; issued and outstanding 3,222,209 and 3,045,809 shares, respectively | 323 | 305 |
Additional paid-in capital | 61,263,606 | 60,750,330 |
Accumulated other comprehensive loss | (109,960) | (934,901) |
Accumulated deficit | (52,776,873) | (49,109,303) |
Total Chanticleer Holdings, Inc, Stockholders' Equity | 8,377,096 | 10,706,431 |
Non-Controlling Interests | 698,048 | 782,453 |
TOTAL STOCKHOLDERS' EQUITY | 9,075,144 | 11,488,884 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 28,965,608 | $ 30,183,019 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Long-term unamortized discount | $ 880,043 | $ 880,043 |
Unamortized deferred finance costs | 1,173,190 | 1,173,190 |
Convertible notes unamortized discount | $ 0 | $ 12,256 |
Redeemable preferred stock, no par value | ||
Redeemable preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Redeemable preferred stock, shares issued | 62,876 | 62,876 |
Redeemable preferred stock, shares outstanding | 62,876 | 62,876 |
Redeemable preferred stock, net of unamortized discount | $ 200,002 | $ 208,697 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 3,222,209 | 3,045,809 |
Common stock, shares outstanding | 3,222,209 | 3,045,809 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Revenue: | |||
Restaurant sales, net | $ 9,769,508 | $ 9,653,154 | |
Gaming income, net | 93,155 | 106,067 | |
Management fee income | 25,000 | 24,990 | |
Franchise income | 107,853 | 75,786 | |
Total revenue | 9,995,516 | 9,859,997 | |
Expenses: | |||
Restaurant cost of sales | 3,276,175 | 3,191,390 | |
Restaurant operating expenses | 5,586,149 | 5,674,560 | |
Restaurant pre-opening and closing expenses | 102,882 | 14,435 | |
General and administrative expenses | 1,193,417 | 1,375,620 | |
Asset impairment charge | 1,677,055 | ||
Depreciation and amortization | 540,679 | 593,380 | |
Total operating expenses | 12,376,357 | 10,849,385 | |
Operating loss | [1] | (2,380,841) | (989,388) |
Other (expense) income | |||
Interest expense | (635,081) | (404,136) | |
Gain (loss) on debt refinancing | (362,822) | ||
Other income (expense) | (2,114) | 12,234 | |
Total other expense | (637,195) | (754,724) | |
Loss from continuing operations before income taxes | (3,018,036) | (1,744,112) | |
Income tax expense | 336,197 | (3,797) | |
Consolidated net loss | (2,681,839) | (1,747,909) | |
Less net loss attributable to non-controlling interest: Continuing operations | 84,407 | 20,843 | |
Net loss attributable to Chanticleer Holdings, Inc. | (2,597,432) | (1,727,066) | |
Dividends on redeemable preferred stock | (27,794) | (24,717) | |
Net loss attributable to common shareholders of Chanticleer Holdings, Inc. | $ (2,625,226) | $ (1,751,213) | |
Net loss attributable to Chanticleer Holdings, Inc. per common share, basic and diluted: | $ (0.83) | $ (0.79) | |
Weighted average shares outstanding, basic and diluted | 3,165,972 | 2,210,624 | |
[1] | Note that Operating Income (Loss) includes $1.7 million of non-cash impairment charges for the three months ended March 31, 2018 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net loss attributable to Chanticleer Holdings, Inc. | $ (2,597,432) | $ (1,727,066) |
Foreign currency translation gain | 824,941 | 46,831 |
Comprehensive loss | $ (1,772,491) | $ (1,680,235) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (2,681,839) | $ (1,747,909) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 540,679 | 593,380 |
Loss on extinguishment of debt | 362,822 | |
Asset impairment charge | 1,677,055 | |
Common stock and warrants issued for services | 102,791 | |
Amortization of debt discount | 289,787 | 122,694 |
Change in assets and liabilities: | ||
Accounts and other receivables | 148,427 | 175,478 |
Prepaid and other assets | 48,238 | 14,054 |
Inventory | 12,556 | 19,526 |
Accounts payable and accrued liabilities | 470,496 | (231,283) |
Deferred income taxes | (336,196) | |
Deferred rent | (49,205) | 15,793 |
Net cash provided by (used in) operating activities | 119,998 | (572,654) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (166,589) | (450,641) |
Cash paid for acquisitions | (30,000) | |
Net cash used in investing activities | (196,589) | (450,641) |
Cash flows from financing activities: | ||
Proceeds from sale of common stock and warrants | 290,000 | |
Proceeds from sale of preferred stock | 591,651 | |
Payments related to sale of preferred stock | (258,153) | |
Loan proceeds | 512,780 | |
Loan repayments | (134,229) | (194,069) |
Capital lease payments | (4,779) | |
Contribution of non-controlling interest | 375,000 | |
Net cash provided by financing activities | 155,771 | 1,022,430 |
Effect of exchange rate changes on cash | (4,008) | 10,110 |
Net increase in cash and restricted cash | 75,172 | 9,245 |
Cash and restricted cash, beginning of period | 272,976 | 268,575 |
Cash and restricted cash, end of period | 411,081 | 277,820 |
Supplemental cash flow information: | ||
Interest | 141,573 | 335,669 |
Income taxes | 22,052 | |
Non-cash investing and financing activities: | ||
Convertible debt settled through issuance of common stock | 200,000 | 150,000 |
Accrued interest settled through issuance of convertible debt | 97,503 | |
Preferred stock dividends paid through issuance of common stock | $ 19,523 |
Nature of Business
Nature of Business | 3 Months Ended |
Mar. 31, 2018 | |
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. Name Jurisdiction of Incorporation Percent Owned CHANTICLEER HOLDINGS, INC. DE, USA Burger Business American Roadside Burgers, Inc. DE, USA 100 % ARB Stores American Burger Ally, LLC NC, USA 100 % American Burger Morehead, LLC NC, USA 100 % American Burger Prosperity, LLC NC, USA 100 % American Roadside Burgers Smithtown, Inc. DE, USA 100 % American Roadside McBee, LLC NC, USA 100 % American Roadside Southpark LLC NC, USA 100 % BGR Acquisition, LLC NC, USA 100 % BGR Franchising, LLC VA, USA 100 % BGR Operations, LLC VA, USA 100 % BGR Acquisition 1, LLC NC, USA 100 % BGR Annapolis, LLC MD, USA 100 % BGR Arlington, LLC VA, USA 100 % BGR Dupont, LLC DC, USA 100 % BGR Michigan Ave, LLC DC, USA 100 % BGR Mosaic, LLC VA, USA 100 % BGR Old Keene Mill, LLC VA, USA 100 % BGR Springfield Mall, LLC VA, USA 100 % BGR Tysons, LLC VA, USA 100 % BGR Washingtonian, LLC MD, USA 100 % Capitol Burger, LLC MD, USA 100 % BT Burger Acquisition, LLC NC, USA 100 % BT’s Burgerjoint Rivergate LLC NC, USA 100 % BT’s Burgerjoint Sun Valley, LLC NC, USA 100 % LBB Acquisition, LLC NC, USA 100 % Cuarto LLC OR, USA 100 % LBB Acquisition 1 LLC OR, USA 100 % LBB Capitol Hill LLC WA, USA 50 % LBB Franchising LLC NC, USA 100 % LBB Green Lake LLC OR, USA 50 % LBB Hassalo LLC OR, USA 80 % LBB Lake Oswego LLC OR, USA 100 % LBB Magnolia Plaza LLC NC, USA 100 % LBB Multnomah Village LLC OR, USA 50 % LBB Platform LLC OR, USA 80 % LBB Progress Ridge LLC OR, USA 50 % LBB Rea Farms LLC NC, USA 50 % LBB Wallingford LLC WA, 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 % Just Fresh JF Franchising Systems, LLC NC, USA 56 % JF Restaurants, LLC NC, USA 56 % West Coast Hooters Jantzen Beach Wings, LLC OR, USA 100 % Oregon Owl’s Nest, LLC OR, USA 100 % Tacoma Wings, LLC WA, USA 100 % South African Entities Chanticleer South Africa (Pty) Ltd. South Africa 100 % Hooters Emperors Palace (Pty.) Ltd. South Africa 88 % Hooters On The Buzz (Pty) Ltd South Africa 95 % Hooters Ruimsig (Pty) Ltd. South Africa 100 % Hooters SA (Pty) Ltd South Africa 78 % Hooters Umhlanga (Pty.) Ltd. South Africa 90 % Hooters Willows Crossing (Pty) Ltd South Africa 100 % European Entities Chanticleer Holdings Limited Jersey 100 % West End Wings LTD United Kingdom 100 % Inactive Entities American Roadside Cross Hill, LLC NC, USA 100 % Avenel Financial Services, LLC NV, USA 100 % Avenel Ventures, LLC NV, USA 100 % BGR Cascades, LLC VA, USA 100 % BGR Chevy Chase, LLC MD, USA 100 % BGR Old Town, LLC VA, USA 100 % BGR Potomac, LLC MD, USA 100 % BT’s Burgerjoint Biltmore, LLC NC, USA 100 % BT’s Burgerjoint Promenade, LLC NC, USA 100 % Chanticleer Advisors, LLC NV, USA 100 % Chanticleer Finance UK (No. 1) Plc United Kingdom 100 % Chanticleer Investment Partners, LLC NC, USA 100 % Dallas Spoon Beverage, LLC TX, USA 100 % Dallas Spoon, LLC TX, USA 100 % DineOut SA Ltd. England 89 % Hooters Brazil Brazil 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 periods ended March 31, 2018 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, 2017 filed with the SEC on March 30, 2018. Certain amounts for the prior year have been reclassified to conform to the current year presentation. LIQUIDITY AND CAPITAL RESOURCES As of March 31, 2018, our cash balance was $0.5 million, our working capital was negative $11.9 million and we have significant near-term commitments and contractual obligations. 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 refinance or otherwise extend maturities of current debt obligations; ● the level of investment in acquisition of new restaurant businesses and entering new markets; ● our ability to manage our operating expenses and maintain gross margins as we grow: ● 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 requirements and capital 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 opening at least eight additional company owned stores as well as growing our franchising businesses at Little Big Burger and BGR. We have contractual commitments related to store construction of approximately $1.5 million, of which we expect approximately $1.0 million to be funded by private investors and approximately $0.5 million will be funded internally by the Company. We also have $9.8 million of principal due on our debt obligations within the next 12 months plus interest. In addition, if our lenders were to assess default interest and penalties, our obligations could be accelerated and additional interest and penalties of approximately $1.0 million could potentially be assessed. We expect to be able to refinance our current debt obligations during 2018 and are also exploring the sale of certain assets and raising additional capital. However, we cannot provide assurance that we will be able to refinance our long-term debt, sell assets or raise additional capital. In May 2018, subsequent to the date of these financial statements, the Company completed the sale of 403,214 shares of common stock at a price of $3.50 per common share for proceeds of $1.4 million. Refer to Note 14 Subsequent Events for more information regarding the capital raise. In January 2018, the Company received net proceeds of $290,000 from the exercise of 100,000 common stock warrants. As we execute our growth plans over the next 12 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. In the event that capital is not available or we are unable to refinance our debt obligations or obtain waivers, we may then have to scale back or freeze our organic 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 may also incur financial penalties or other negative actions from our lenders if we are not able to refinance or otherwise extend or repay our current obligations or obtain waivers. These factors raise substantial doubt about our ability to continue as a going concern. 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 be necessary should the Company be unable to continue as a going concern. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include the valuation of the investments in portfolio companies, deferred tax asset valuation allowances, valuing options and warrants using the Binomial Lattice and Black Scholes models, intangible asset valuations and useful lives, depreciation and uncollectible accounts and reserves. Actual results could differ from those estimates. REVENUE RECOGNITION The Company accounts for revenue in accordance with Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers”. 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 tax, 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 which are generally earned and recognized upon receipt. Gaming Income The Company receives revenue from operating a gaming facility adjacent to its Hooters restaurant in Jantzen Beach, Oregon. Revenue from gaming is recognized as earned from gaming activities, net of payouts to customers, taxes and government fees. These fees are recognized as they are earned based on the terms of the agreements. Franchise Income The Company accounts for revenue in accordance with Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers”. The Company grants franchises to operators in exchange for initial franchise license fees and continuing royalty payments. The license granted for each restaurant or area is considered a performance obligation. All other performance obligations (such as providing assistance during the opening of a restaurant) are combined with the license and was determined to be a single performance obligation. Accordingly, the total transaction price (comprised of the restaurant opening and territory fees) are allocated to each restaurant expected to be opened by the licensee under the contract. There are significant judgments regarding the estimated total transaction price, including the number of stores expected to be opened. We recognize the fee allocated to each restaurant as revenue on a straight-line basis over the restaurant’s license term, which generally begins upon the signing of the contract for area development agreements and upon the signing of a store lease for franchise agreements. The payments for these upfront fees is generally received upon contract execution. Continuing fees, which are based upon a percentage of franchisee revenues and are not subject to any constraints, are recognized on the accrual basis as those sales occur. The payments for these continuing fees are generally made on a weekly basis. Revenue recognized for the period ended March 31, 2018 under ASC-606 and revenue that would have been recognized for the period ended March 31, 2018 had ASC-605 been applied is as follows: As reported under ASC-606 If reported under ASC-605 Increase (decrease) Restaurant sales, net $ 9,769,508 $ 9,769,508 $ - Gaming income, net 93,155 93,155 - Management fee income 25,000 25,000 - Franchise income 107,853 86,335 21,518 Total Revenue $ 9,995,516 $ 9,973,998 $ 21,518 For the period ended March 31, 2018, the Company recognized franchise revenues of $107,853. These revenues consisted of $86,335 in continuing, sales-based royalty revenues and $21,518 in recognition of initial fees. Prior to the adoption of ASC-606, the Company’s initial fees were recorded as deferred revenue when received and proportionate amounts were recognized as revenue when certain milestones such as completion of employee training, lease signing and store opening were met. 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 March 31, 2018 and 2017 that have been excluded from the calculation of diluted net loss per common share since the effect would be antidilutive. March 31, 2018 March 31, 2017 Warrants 2,262,615 907,203 Convertible notes 366,667 523,369 Accrued interest on convertible notes - 47,514 Total 2,629,282 1,478,086 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”. The FASB has also issued additional related standards (ASU’s 2015-14, 2016-08, 2016-10, 2016-12, 2016-20) all of which superseded the existing revenue recognition guidance and provides a new framework for recognizing revenue. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new standard also requires significantly more comprehensive disclosures than the existing standard. Guidance subsequent to ASU 2014-09 has been issued to clarify various provisions in the standard, including principal versus agent considerations, identifying performance obligations, licensing transactions, as well as various technical corrections and improvements. This standard may be adopted using either a retrospective or modified retrospective method. Early adoption is permitted. The Company adopted the new revenue standard effective January 1, 2018 utilizing the modified retrospective approach. The adoption did not have a significant effect on restaurant sales, gaming income or management fees or to sales-based royalty revenue. However, the pattern and timing of revenue recognition related to the fixed fees associated with our franchise agreements (such as restaurant opening and development area fees) are significantly different from period prior to adoption. Effective for franchise agreements entered into after January 1, 2018, and for existing agreements with terms extending beyond January 1, 2018, the license granted for each restaurant is considered a performance obligation. All other promises (such as providing assistance during the opening of a restaurant) are combined with the license and considered as a single performance obligation. Accordingly, the total transaction price (comprised of the restaurant opening and territory fees) are allocated to each restaurant expected to be opened by the licensee under the contract. We recognize the fee allocated to each restaurant as revenue on a straight-line basis over the restaurant’s license term, which generally begins upon the signing of the license/franchise agreement for area development agreements and upon signing of a store lease for franchise agreements . The adoption to resulted in a decrease to retained earnings of approximately $1.1 million on the transition date with a corresponding increase of $1.1 million in deferred revenue. The Company recognized an additional $21 thousand in franchise income for the three months ended March 31, 2018 as a result of the change in accounting policy. 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 is currently evaluating the impact this standard will have on its consolidated financial statements and are in process of identifying the population of leases to be analyzed and recognized as right to use assets and liabilities on the Company’s consolidated balance sheet upon adoption. The Company has not completed its evaluation or quantified the impact that adoption of ASU 2016-02 will have on its consolidated financial statements. However, management does expect there to be a material increase in both assets and liabilities reflected on its consolidated balance sheets as a result of adoption on January 1, 2019 with the majority of leases currently classified as operating will be reflected as right to use assets and capital lease obligations on the consolidated balance sheet under the new standard. 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 adopted ASU 2017-04 effective January 1, 2018 and it did not have any effect on the Company’s condensed 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 required, by the Company. At March 31, 2018, 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 | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS On March 7, 2018, the Company entered into an agreement to purchase two BGR franchise locations in Maryland. The Company has closed on the purchase of one of the locations in the period ended March 31, 2018 and intends to close on the second location pending completion of lease assignments in the second quarter of 2018. The Company allocated the purchase price as of the date of acquisition for the first store based on the estimated fair value of the acquired assets and assumed liabilities. The purchase accounting was considered preliminary as of March 31, 2018 and is expected to be finalized after the Company closes the purchase of the remaining location contemplated by the agreement. No proforma information was included as the proforma impact of the acquisition is not material. |
Assets Held For Sale
Assets Held For Sale | 3 Months Ended |
Mar. 31, 2018 | |
Assets Held-for-sale, Not Part of Disposal Group [Abstract] | |
Assets Held For Sale | 4. ASSETS HELD FOR SALE The Company has entered into Letters of Intent for the Sale of its Hooters Nottingham and Hooters Tacoma locations. Accordingly, the assets of those operations have been reclassified to Assets Held for Sale on the accompanying condensed consolidated balance sheet as of March 31, 2018. The Company recognized an impairment charge of $1.7 million for the three month ended March 31, 2018, primarily related to the impairment of goodwill and reversal of approximately $720 thousand of foreign exchange losses previously classified in Other Comprehensive loss. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. PROPERTY AND EQUIPMENT Property and equipment consists of the following: March 31, 2018 December 31, 2017 Leasehold improvements $ 9,799,270 $ 9,941,223 Restaurant furniture and equipment 5,889,211 5,952,934 Construction in progress 63,121 176,939 Office furntiture and equipment 148,451 148,451 15,900,053 16,219,547 Accumulated depreciation and amortization (7,696,072 ) (7,670,955 ) $ 8,203,981 $ 8,548,592 Depreciation and amortization expense was approximately $0.4 million for the three months ended March 31, 2018 and $0.5 million for the three months ended March 31, 2017. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | 6. GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill consists of the following: March 31, 2018 December 31, 2017 Hooters Full Service $ 2,219,771 $ 4,703,203 Better Burgers Fast Casual 7,448,848 7,448,848 Just Fresh Fast Casual 495,755 495,755 $ 10,164,374 $ 12,647,806 The changes in the carrying amount of goodwill are summarized as follows: March 31, 2018 December 31, 2017 Beginning Balance $ 12,647,806 $ 12,405,770 Acquisitions - - Impairment (2,495,375 ) - Foreign currency translation (loss) gain 11,943 242,036 Ending Balance $ 10,164,374 $ 12,647,806 Other intangible assets, consisting of franchise costs, trademarks and tradenames, is summarized by location as follows: Estimated Useful Life March 31, 2018 December 31, 2017 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 Acquired Franchise Rights BGR: The Burger Joint 7 years 1,056,000 1,056,000 Franchise License Fees: Hooters South Africa 20 years 285,889 273,194 Hooters Pacific NW 20 years 74,507 74,507 Hooters UK 5 years - 13,158 360,396 360,859 Total Intangibles at cost 7,193,326 7,193,789 Accumulated amortization (1,433,508 ) (1,297,057 ) Intangible assets, net $ 5,759,818 $ 5,896,732 Periods Ended March 31, 2018 March 31, 2017 Amortization expense $ 133,588 $ 75,776 |
Long-Term Debt and Notes Payabl
Long-Term Debt and Notes Payable | 3 Months Ended |
Mar. 31, 2018 | |
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: March 31, 2018 December 31, 2017 Notes Payable, due December 31, 2018, net of discount of $880,043 and $1,173,390, respectively (a) $ 5,119,957 $ 4,826,610 Notes Payable Paragon Bank (b) 506,405 572,276 Note Payable 75,000 75,000 Note Payable, due March 2019 9,580 - Receivables financing facilities 39,385 76,109 Bank overdraft facilities, South Africa, annual renewal 185,953 164,619 Equipment financing arrangements, South Africa 20,982 27,297 Total long-term debt $ 5,957,262 $ 5,741,911 For the three months ended March 31, 2018 and 2017 amortization of debt discount was $293,248 and $0, respectively. a) 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 annual 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, or demand repayment at 108% of the outstanding principal balance and any outstanding accrued interest. The warrants have an exercise price of $3.50 (as adjusted for the reverse stock split on May 19, 2017) and a ten-year term. 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 were not registered, the holders would have the right to cashless exercise. The registration statement underlying the warrants was declared effective on October 30, 2017. 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 contractual 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 % $ 23,736 $ 4,406 Note 2 5/10/2019 5.25 % 167,793 11,532 Note 3 8/10/2021 5.25 % 314,876 8,500 $ 506,405 $ 24,438 The Company’s various loan agreements contain financial and non-financial covenants and provisions providing for cross-default. The evaluation of compliance with these provisions is subject to interpretation and the exercise of judgement. The Company concluded that conditions could be interpreted as events of default under one or more of its loan obligations, which could also trigger cross default provisions across its various loan agreements. Management quantified the potential penalties and default interest that could be assessed in the event the loans were deemed to be in default. Accordingly, the Company recorded a liability for potential default interest and penalties of $1.0 million as accrued interest in the accompanying consolidated financial statements of March 31, 2018. |
Convertible Notes Payable
Convertible Notes Payable | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | 8. cONVERTIBLE NOTEs PAYABLE Convertible Notes payable are summarized as follows: March 31, 2018 December 31, 2017 6% Convertible notes payable due June 2018 (a) $ 3,000,000 $ 3,000,000 8% Convertible notes payable due March 2019 (b) - 200,000 Premium on above convertible note - 12,256 Total Convertible notes payable 3,000,000 3,212,256 Current portion of convertible notes payable 3,000,000 3,000,000 Convertible notes payable, less current portion $ - $ 212,256 (a) On August 2, 2013, the Company entered into an agreement with seven individual accredited investors, whereby the Company issued separate 6% Secured Subordinate Convertible Notes for a total of $3,000,000 in a private offering and is collateralized by the assets of the Hooters Nottingham restaurant and a subordinate position to all other assets of the Company. In connection with the Company’s agreement to conduct a capital raise in 2016, the lenders agreed to waive certain existing defaults and extended the original note maturity by eighteen months from December 31, 2016 to June 30, 2018. The Note holders shall receive 10%, pro rata, of the net profit of the Nottingham, England Hooters restaurant, paid quarterly, and 10% of the net proceeds should the location be sold. The sale is pending and contractual terms of any remaining principal are to be determined upon sale completion. (b) On February 22, 2018, $200,000 of the Company’s convertible debt was converted into 66,667 shares of Company common stock in accordance with the terms of the convertible debt agreements. For the three months ended March 31, 2018 and 2017 amortization of debt (premium) discount was $(12,256) and $122,694 respectively. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 9. accounts payable and accrued expenses Accounts payable and accrued expenses are summarized as follows: March 31, 2018 December 31, 2017 Accounts payable and accrued expenses $ 3,097,526 $ 3,408,691 Accrued taxes (VAT, Sales Payroll) 1,716,171 1,096,305 Accrued income taxes 71,002 83,878 Accrued interest 1,420,857 1,208,378 $ 6,305,556 $ 5,797,252 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 and December 31, 2017. The Company had 3,222,209 and 3,045,809 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively. The Company has 5,000,000 shares of its no par value preferred stock authorized at both March 31, 2018 and December 31, 2017. The Company had 62,876 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively. Holders of the preferred shares are entitled to receive cumulative dividends out of legally available funds at the rate of 9% 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 are issued at a 10% discount to the five-day volume weighted average price per share of common stock prior to payable date. The preferred shares are non-voting, have a liquidation preference of $13.50 per share and contain a required redemption at $13.50 plus any accrued but unpaid dividends upon maturity in 2023. 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, 4,000,000 shares have been approved for grant. As of March 31, 2018, the Company had issued 87,678 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. The Company issued 15,000 restricted stock units to employees in 2016 and none since that date. Approximately 297,322 shares remain available for grant under the plan. The Company also has issued warrants to investors in connection with financing transactions. Fair value of any warrant issuances is valued utilizing the Black-Scholes model. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected stock price volatility for the Company’s warrants was determined by the average of the historical volatilities for the Company’s common stock. A summary of the warrant activity is presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life Outstanding January 1, 2018 2,362,615 $ 16.34 2.2 Granted - $ - - Exercised (100,000 ) 3.50 5.0 Forfeited - - - Outstanding March 31, 2018 2,262,615 $ 16.91 1.9 Exercisable March 31, 2018 2,262,615 $ 16.91 1.9 Exercise Price Outstanding Number of Warrants Weighted Average Remaining Life in Years Exerciseable Number of Warrants > $40.00 484,518 0.7 484,518 $30.00-$39.99 49,990 1.4 49,990 $20.00-$29.99 77,950 1.8 77,950 $10.00-$19.99 50,300 3.0 50,300 $0.00-$9.99 1,599,857 8.1 1,599,857 2,262,615 1.9 2,262,615 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
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 from Chanticleer Investors, LCC, a related party, in the amount of $191,580 as of March 31, 2018 and December 31, 2017. The amount owed to Chanticleer Investors LLC is related to cash distributions received from Chanticleer Investors LLC’s interest in Hooters of America which is payable to the Company’s co-investors in that investment. Transactions with Board Members Larry Spitcaufsky, a significant shareholder and member of the Company’s board of directors, is also a lender to the Company lending $2 million of the Company’s $6 million note payable due December 31, 2018. In connection with this Note, the Company made payments of interest of $40,889 to the board member during the first three months of 2018 and $0 during the first three months of 2017and related entities as required under the Notes. The Company has also entered into a franchise agreement with entities controlled by Mr. Spitcaufsky providing him with the franchise rights for Little Big Burger in the San Diego area and an option for southern California. The Company received royalties of $739 during the first three months of 2018 and $0 in the first three months of 2017. |
Segments Information
Segments Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segments 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 March 31, 2018 March 31, 2017 Revenue: Hooters Full Service $ 3,531,074 $ 3,135,463 Better Burgers Fast Casual 5,360,522 5,316,287 Just Fresh Fast Casual 1,078,920 1,383,257 Corporate and Other 25,000 24,990 $ 9,995,516 $ 9,859,997 Operating Income (Loss): (1) Hooters Full Service $ (1,335,554 ) $ (42,846 ) Better Burgers Fast Casual (211,834 ) (169,110 ) Just Fresh Fast Casual (43,414 ) 63,640 Corporate and Other (790,039 ) (841,072 ) $ (2,380,841 ) $ (989,388 ) (1) Depreciation and Amortization Hooters Full Service $ 106,028 $ 136,180 Better Burgers Fast Casual 389,282 376,631 Just Fresh Fast Casual 44,525 79,726 Corporate and Other 844 843 $ 540,679 $ 593,380 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 March 31, 2018 March 31, 2017 Revenue: United States $ 7,782,401 $ 7,912,094 South Africa 1,501,419 1,384,394 Europe 711,696 563,509 $ 9,995,516 $ 9,859,997 Operating Income (Loss): (1) United States $ (963,012 ) $ (941,072 ) South Africa 10,546 (57,061 ) Europe (1,428,375 ) 8,745 $ (2,380,841 ) $ (989,388 ) (1) Non-current Assets: March 31, 2018 December 31, 2017 United States $ 24,163,653 $ 24,630,101 South Africa 1,217,477 1,203,610 Europe - 2,549,747 $ 25,381,130 $ 28,383,458 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
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 and the Company does not expect there to be any material impact on the Company. No amounts have been accrued as of March 31, 2018 or December 31, 2017 in the accompanying condensed consolidated balance sheets. 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. The Company has contractual commitments related to store construction of approximately $1.5 million, of which we expect approximately $1.0 million to be funded by private investors and approximately $0.5 million will be funded internally by the Company. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. SUBSEQUENT EVENTS The Company accepted subscriptions to purchase 403,214 shares of common stock at a purchase price of $3.50 per Share, for a total gross purchase price of approximately $1,411,249 pursuant to a Securities Purchase Agreement dated May 3, 2018 with institutional and accredited investors in a registered direct offering. The offering was made pursuant to a prospectus supplement filed with the Securities and Exchange Commission on March 8, 2018 and an accompanying prospectus dated October 16, 2017, pursuant to Chanticleer’s shelf registration statement on Form S-3 that was filed with the Securities and Exchange Commission on April 27, 2015, amended on June 3, 2015 and became effective on June 9, 2015 (File No. 333-203679). The Company also agreed to issue unregistered 5 ½ year warrants to purchase up to 403,214 shares of common stock to the investors in a concurrent private placement at an exercise price of $4.50 per share. The Company has agreed to register the resale of the common shares underlying the warrants. The warrants are exercisable for cash in full commencing six months after the issuance date. If a registration statement covering the shares underlying the warrants is not available at the time of exercise, the warrants may be exercised on a cashless basis. Larry Spitcaufsky, a director of the company and greater than 5% shareholder, subscribed for 70,000 Shares and will receive an equal number of Warrants in the transaction. Michael D. Pruitt, the company’s chairman and Chief Executive Officer also participated in the offering. Oak Ridge Financial Services Group, Inc., a registered broker-dealer acted as placement agent for the offering and received, as compensation, 7% of gross proceeds of the amounts subscribed by institutional investors introduced by Oak Ridge, for an aggregate commission of $36,767 and legal expenses in an amount not to exceed $2,500. |
Significant Accounting Polici21
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include the valuation of the investments in portfolio companies, deferred tax asset valuation allowances, valuing options and warrants using the Binomial Lattice and Black Scholes models, intangible asset valuations and useful lives, depreciation and uncollectible accounts and reserves. Actual results could differ from those estimates. |
Revenue Recognition | REVENUE RECOGNITION The Company accounts for revenue in accordance with Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers”. 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 tax, 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 which are generally earned and recognized upon receipt. Gaming Income The Company receives revenue from operating a gaming facility adjacent to its Hooters restaurant in Jantzen Beach, Oregon. Revenue from gaming is recognized as earned from gaming activities, net of payouts to customers, taxes and government fees. These fees are recognized as they are earned based on the terms of the agreements. Franchise Income The Company accounts for revenue in accordance with Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers”. The Company grants franchises to operators in exchange for initial franchise license fees and continuing royalty payments. The license granted for each restaurant or area is considered a performance obligation. All other performance obligations (such as providing assistance during the opening of a restaurant) are combined with the license and was determined to be a single performance obligation. Accordingly, the total transaction price (comprised of the restaurant opening and territory fees) are allocated to each restaurant expected to be opened by the licensee under the contract. There are significant judgments regarding the estimated total transaction price, including the number of stores expected to be opened. We recognize the fee allocated to each restaurant as revenue on a straight-line basis over the restaurant’s license term, which generally begins upon the signing of the contract for area development agreements and upon the signing of a store lease for franchise agreements. The payments for these upfront fees is generally received upon contract execution. Continuing fees, which are based upon a percentage of franchisee revenues and are not subject to any constraints, are recognized on the accrual basis as those sales occur. The payments for these continuing fees are generally made on a weekly basis. Revenue recognized for the period ended March 31, 2018 under ASC-606 and revenue that would have been recognized for the period ended March 31, 2018 had ASC-605 been applied is as follows: As reported under ASC-606 If reported under ASC-605 Increase (decrease) Restaurant sales, net $ 9,769,508 $ 9,769,508 $ - Gaming income, net 93,155 93,155 - Management fee income 25,000 25,000 - Franchise income 107,853 86,335 21,518 Total Revenue $ 9,995,516 $ 9,973,998 $ 21,518 For the period ended March 31, 2018, the Company recognized franchise revenues of $107,853. These revenues consisted of $86,335 in continuing, sales-based royalty revenues and $21,518 in recognition of initial fees. Prior to the adoption of ASC-606, the Company’s initial fees were recorded as deferred revenue when received and proportionate amounts were recognized as revenue when certain milestones such as completion of employee training, lease signing and store opening were met. |
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 March 31, 2018 and 2017 that have been excluded from the calculation of diluted net loss per common share since the effect would be antidilutive. March 31, 2018 March 31, 2017 Warrants 2,262,615 907,203 Convertible notes 366,667 523,369 Accrued interest on convertible notes - 47,514 Total 2,629,282 1,478,086 |
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”. The FASB has also issued additional related standards (ASU’s 2015-14, 2016-08, 2016-10, 2016-12, 2016-20) all of which superseded the existing revenue recognition guidance and provides a new framework for recognizing revenue. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new standard also requires significantly more comprehensive disclosures than the existing standard. Guidance subsequent to ASU 2014-09 has been issued to clarify various provisions in the standard, including principal versus agent considerations, identifying performance obligations, licensing transactions, as well as various technical corrections and improvements. This standard may be adopted using either a retrospective or modified retrospective method. Early adoption is permitted. The Company adopted the new revenue standard effective January 1, 2018 utilizing the modified retrospective approach. The adoption did not have a significant effect on restaurant sales, gaming income or management fees or to sales-based royalty revenue. However, the pattern and timing of revenue recognition related to the fixed fees associated with our franchise agreements (such as restaurant opening and development area fees) are significantly different from period prior to adoption. Effective for franchise agreements entered into after January 1, 2018, and for existing agreements with terms extending beyond January 1, 2018, the license granted for each restaurant is considered a performance obligation. All other promises (such as providing assistance during the opening of a restaurant) are combined with the license and considered as a single performance obligation. Accordingly, the total transaction price (comprised of the restaurant opening and territory fees) are allocated to each restaurant expected to be opened by the licensee under the contract. We recognize the fee allocated to each restaurant as revenue on a straight-line basis over the restaurant’s license term, which generally begins upon the signing of the license/franchise agreement for area development agreements and upon signing of a store lease for franchise agreements . The adoption to resulted in a decrease to retained earnings of approximately $1.1 million on the transition date with a corresponding increase of $1.1 million in deferred revenue. The Company recognized an additional $21 thousand in franchise income for the three months ended March 31, 2018 as a result of the change in accounting policy. 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 is currently evaluating the impact this standard will have on its consolidated financial statements and are in process of identifying the population of leases to be analyzed and recognized as right to use assets and liabilities on the Company’s consolidated balance sheet upon adoption. The Company has not completed its evaluation or quantified the impact that adoption of ASU 2016-02 will have on its consolidated financial statements. However, management does expect there to be a material increase in both assets and liabilities reflected on its consolidated balance sheets as a result of adoption on January 1, 2019 with the majority of leases currently classified as operating will be reflected as right to use assets and capital lease obligations on the consolidated balance sheet under the new standard. 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 adopted ASU 2017-04 effective January 1, 2018 and it did not have any effect on the Company’s condensed 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 required, by the Company. At March 31, 2018, 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) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Subsidiaries | 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. Name Jurisdiction of Incorporation Percent Owned CHANTICLEER HOLDINGS, INC. DE, USA Burger Business American Roadside Burgers, Inc. DE, USA 100 % ARB Stores American Burger Ally, LLC NC, USA 100 % American Burger Morehead, LLC NC, USA 100 % American Burger Prosperity, LLC NC, USA 100 % American Roadside Burgers Smithtown, Inc. DE, USA 100 % American Roadside McBee, LLC NC, USA 100 % American Roadside Southpark LLC NC, USA 100 % BGR Acquisition, LLC NC, USA 100 % BGR Franchising, LLC VA, USA 100 % BGR Operations, LLC VA, USA 100 % BGR Acquisition 1, LLC NC, USA 100 % BGR Annapolis, LLC MD, USA 100 % BGR Arlington, LLC VA, USA 100 % BGR Dupont, LLC DC, USA 100 % BGR Michigan Ave, LLC DC, USA 100 % BGR Mosaic, LLC VA, USA 100 % BGR Old Keene Mill, LLC VA, USA 100 % BGR Springfield Mall, LLC VA, USA 100 % BGR Tysons, LLC VA, USA 100 % BGR Washingtonian, LLC MD, USA 100 % Capitol Burger, LLC MD, USA 100 % BT Burger Acquisition, LLC NC, USA 100 % BT’s Burgerjoint Rivergate LLC NC, USA 100 % BT’s Burgerjoint Sun Valley, LLC NC, USA 100 % LBB Acquisition, LLC NC, USA 100 % Cuarto LLC OR, USA 100 % LBB Acquisition 1 LLC OR, USA 100 % LBB Capitol Hill LLC WA, USA 50 % LBB Franchising LLC NC, USA 100 % LBB Green Lake LLC OR, USA 50 % LBB Hassalo LLC OR, USA 80 % LBB Lake Oswego LLC OR, USA 100 % LBB Magnolia Plaza LLC NC, USA 100 % LBB Multnomah Village LLC OR, USA 50 % LBB Platform LLC OR, USA 80 % LBB Progress Ridge LLC OR, USA 50 % LBB Rea Farms LLC NC, USA 50 % LBB Wallingford LLC WA, 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 % Just Fresh JF Franchising Systems, LLC NC, USA 56 % JF Restaurants, LLC NC, USA 56 % West Coast Hooters Jantzen Beach Wings, LLC OR, USA 100 % Oregon Owl’s Nest, LLC OR, USA 100 % Tacoma Wings, LLC WA, USA 100 % South African Entities Chanticleer South Africa (Pty) Ltd. South Africa 100 % Hooters Emperors Palace (Pty.) Ltd. South Africa 88 % Hooters On The Buzz (Pty) Ltd South Africa 95 % Hooters Ruimsig (Pty) Ltd. South Africa 100 % Hooters SA (Pty) Ltd South Africa 78 % Hooters Umhlanga (Pty.) Ltd. South Africa 90 % Hooters Willows Crossing (Pty) Ltd South Africa 100 % European Entities Chanticleer Holdings Limited Jersey 100 % West End Wings LTD United Kingdom 100 % Inactive Entities American Roadside Cross Hill, LLC NC, USA 100 % Avenel Financial Services, LLC NV, USA 100 % Avenel Ventures, LLC NV, USA 100 % BGR Cascades, LLC VA, USA 100 % BGR Chevy Chase, LLC MD, USA 100 % BGR Old Town, LLC VA, USA 100 % BGR Potomac, LLC MD, USA 100 % BT’s Burgerjoint Biltmore, LLC NC, USA 100 % BT’s Burgerjoint Promenade, LLC NC, USA 100 % Chanticleer Advisors, LLC NV, USA 100 % Chanticleer Finance UK (No. 1) Plc United Kingdom 100 % Chanticleer Investment Partners, LLC NC, USA 100 % Dallas Spoon Beverage, LLC TX, USA 100 % Dallas Spoon, LLC TX, USA 100 % DineOut SA Ltd. England 89 % Hooters Brazil Brazil 100 % |
Significant Accounting Polici23
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Revenue Recognized | Revenue recognized for the period ended March 31, 2018 under ASC-606 and revenue that would have been recognized for the period ended March 31, 2018 had ASC-605 been applied is as follows: As reported under ASC-606 If reported under ASC-605 Increase (decrease) Restaurant sales, net $ 9,769,508 $ 9,769,508 $ - Gaming income, net 93,155 93,155 - Management fee income 25,000 25,000 - Franchise income 107,853 86,335 21,518 Total Revenue $ 9,995,516 $ 9,973,998 $ 21,518 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | March 31, 2018 March 31, 2017 Warrants 2,262,615 907,203 Convertible notes 366,667 523,369 Accrued interest on convertible notes - 47,514 Total 2,629,282 1,478,086 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property and equipment consists of the following: March 31, 2018 December 31, 2017 Leasehold improvements $ 9,799,270 $ 9,941,223 Restaurant furniture and equipment 5,889,211 5,952,934 Construction in progress 63,121 176,939 Office furntiture and equipment 148,451 148,451 15,900,053 16,219,547 Accumulated depreciation and amortization (7,696,072 ) (7,670,955 ) $ 8,203,981 $ 8,548,592 |
Goodwill and Other Intangible25
Goodwill and Other Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill consists of the following: March 31, 2018 December 31, 2017 Hooters Full Service $ 2,219,771 $ 4,703,203 Better Burgers Fast Casual 7,448,848 7,448,848 Just Fresh Fast Casual 495,755 495,755 $ 10,164,374 $ 12,647,806 |
Summary of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill are summarized as follows: March 31, 2018 December 31, 2017 Beginning Balance $ 12,647,806 $ 12,405,770 Acquisitions - - Impairment (2,495,375 ) - Foreign currency translation (loss) gain 11,943 242,036 Ending Balance $ 10,164,374 $ 12,647,806 |
Schedule of Other Intangible Assets | Other intangible assets, consisting of franchise costs, trademarks and tradenames, is summarized by location as follows: Estimated Useful Life March 31, 2018 December 31, 2017 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 Acquired Franchise Rights BGR: The Burger Joint 7 years 1,056,000 1,056,000 Franchise License Fees: Hooters South Africa 20 years 285,889 273,194 Hooters Pacific NW 20 years 74,507 74,507 Hooters UK 5 years - 13,158 360,396 360,859 Total Intangibles at cost 7,193,326 7,193,789 Accumulated amortization (1,433,508 ) (1,297,057 ) Intangible assets, net $ 5,759,818 $ 5,896,732 Periods Ended March 31, 2018 March 31, 2017 Amortization expense $ 133,588 $ 75,776 |
Long-Term Debt and Notes Paya26
Long-Term Debt and Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt and Notes Payable | Long-term debt and notes payable are summarized as follows: March 31, 2018 December 31, 2017 Notes Payable, due December 31, 2018, net of discount of $880,043 and $1,173,390, respectively (a) $ 5,119,957 $ 4,826,610 Notes Payable Paragon Bank (b) 506,405 572,276 Note Payable 75,000 75,000 Note Payable, due March 2019 9,580 - Receivables financing facilities 39,385 76,109 Bank overdraft facilities, South Africa, annual renewal 185,953 164,619 Equipment financing arrangements, South Africa 20,982 27,297 Total long-term debt $ 5,957,262 $ 5,741,911 For the three months ended March 31, 2018 and 2017 amortization of debt discount was $293,248 and $0, respectively. a) 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 annual 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, or demand repayment at 108% of the outstanding principal balance and any outstanding accrued interest. The warrants have an exercise price of $3.50 (as adjusted for the reverse stock split on May 19, 2017) and a ten-year term. 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 were not registered, the holders would have the right to cashless exercise. The registration statement underlying the warrants was declared effective on October 30, 2017. 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 contractual 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 % $ 23,736 $ 4,406 Note 2 5/10/2019 5.25 % 167,793 11,532 Note 3 8/10/2021 5.25 % 314,876 8,500 $ 506,405 $ 24,438 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | Convertible Notes payable are summarized as follows: March 31, 2018 December 31, 2017 6% Convertible notes payable due June 2018 (a) $ 3,000,000 $ 3,000,000 8% Convertible notes payable due March 2019 (b) - 200,000 Premium on above convertible note - 12,256 Total Convertible notes payable 3,000,000 3,212,256 Current portion of convertible notes payable 3,000,000 3,000,000 Convertible notes payable, less current portion $ - $ 212,256 (a) On August 2, 2013, the Company entered into an agreement with seven individual accredited investors, whereby the Company issued separate 6% Secured Subordinate Convertible Notes for a total of $3,000,000 in a private offering and is collateralized by the assets of the Hooters Nottingham restaurant and a subordinate position to all other assets of the Company. In connection with the Company’s agreement to conduct a capital raise in 2016, the lenders agreed to waive certain existing defaults and extended the original note maturity by eighteen months from December 31, 2016 to June 30, 2018. The Note holders shall receive 10%, pro rata, of the net profit of the Nottingham, England Hooters restaurant, paid quarterly, and 10% of the net proceeds should the location be sold. The sale is pending and contractual terms of any remaining principal are to be determined upon sale completion. (b) On February 22, 2018, $200,000 of the Company’s convertible debt was converted into 66,667 shares of Company common stock in accordance with the terms of the convertible debt agreements. |
Accounts Payable and Accrued 28
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are summarized as follows: March 31, 2018 December 31, 2017 Accounts payable and accrued expenses $ 3,097,526 $ 3,408,691 Accrued taxes (VAT, Sales Payroll) 1,716,171 1,096,305 Accrued income taxes 71,002 83,878 Accrued interest 1,420,857 1,208,378 $ 6,305,556 $ 5,797,252 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Warrants Activity | A summary of the warrant activity is presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life Outstanding January 1, 2018 2,362,615 $ 16.34 2.2 Granted - $ - - Exercised (100,000 ) 3.50 5.0 Forfeited - - - Outstanding March 31, 2018 2,262,615 $ 16.91 1.9 Exercisable March 31, 2018 2,262,615 $ 16.91 1.9 |
Schedule of Warrants Outstanding | Exercise Price Outstanding Number of Warrants Weighted Average Remaining Life in Years Exerciseable Number of Warrants > $40.00 484,518 0.7 484,518 $30.00-$39.99 49,990 1.4 49,990 $20.00-$29.99 77,950 1.8 77,950 $10.00-$19.99 50,300 3.0 50,300 $0.00-$9.99 1,599,857 8.1 1,599,857 2,262,615 1.9 2,262,615 |
Segments Information (Tables)
Segments Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 March 31, 2017 Revenue: Hooters Full Service $ 3,531,074 $ 3,135,463 Better Burgers Fast Casual 5,360,522 5,316,287 Just Fresh Fast Casual 1,078,920 1,383,257 Corporate and Other 25,000 24,990 $ 9,995,516 $ 9,859,997 Operating Income (Loss): (1) Hooters Full Service $ (1,335,554 ) $ (42,846 ) Better Burgers Fast Casual (211,834 ) (169,110 ) Just Fresh Fast Casual (43,414 ) 63,640 Corporate and Other (790,039 ) (841,072 ) $ (2,380,841 ) $ (989,388 ) (1) Depreciation and Amortization Hooters Full Service $ 106,028 $ 136,180 Better Burgers Fast Casual 389,282 376,631 Just Fresh Fast Casual 44,525 79,726 Corporate and Other 844 843 $ 540,679 $ 593,380 |
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 March 31, 2018 March 31, 2017 Revenue: United States $ 7,782,401 $ 7,912,094 South Africa 1,501,419 1,384,394 Europe 711,696 563,509 $ 9,995,516 $ 9,859,997 Operating Income (Loss): (1) United States $ (963,012 ) $ (941,072 ) South Africa 10,546 (57,061 ) Europe (1,428,375 ) 8,745 $ (2,380,841 ) $ (989,388 ) (1) Non-current Assets: March 31, 2018 December 31, 2017 United States $ 24,163,653 $ 24,630,101 South Africa 1,217,477 1,203,610 Europe - 2,549,747 $ 25,381,130 $ 28,383,458 |
Nature of Business (Details Nar
Nature of Business (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended |
Jan. 31, 2018 | Mar. 31, 2018 | |
Cash and restricted cash balance | $ 450,000 | |
Working capital deficit | 13,000,000 | |
Construction cost | 1,500,000 | |
Debt face amount | 9,800,000 | |
Interest and Penalties | $ 1,000,000 | |
Proceeds form exercise warrant | $ 290,000 | |
Excercise of common stock warrants | 100,000 | |
May 2018 [Member] | ||
Sale of common stock | 403,214 | |
Sale of stock, price per share | $ 3.50 | |
Proceeds from sale | $ 1,400,000 | |
Private Investors [Member] | ||
Construction cost | 1,000,000 | |
Company [Member] | ||
Construction cost | $ 500,000 |
Nature of Business - Schedule o
Nature of Business - Schedule of Subsidiaries (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Chanticleer Holdings Inc [Member] | |
Company name | CHANTICLEER HOLDINGS, INC. |
Jurisdiction of Incorporation | DE,USA |
Percent Owned | 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% |
Burger Business [Member] | American Burger Ally, LLC [Member] | |
Company name | American Burger Ally, LLC |
Jurisdiction of Incorporation | NC,USA |
Percent Owned | 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% |
Burger Business [Member] | American Burger Prosperity, LLC [Member] | |
Company name | American Burger Prosperity, LLC |
Jurisdiction of Incorporation | NC,USA |
Percent Owned | 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% |
Burger Business [Member] | American Roadside McBee, LLC [Member] | |
Company name | American Roadside McBee, LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 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% |
Burger Business [Member] | BGR Acquisition, LLC [Member] | |
Company name | BGR Acquisition, LLC |
Jurisdiction of Incorporation | NC,USA |
Percent Owned | 100.00% |
Burger Business [Member] | BGR Franchising, LLC [Member] | |
Company name | BGR Franchising, LLC |
Jurisdiction of Incorporation | VA, USA |
Percent Owned | 100.00% |
Burger Business [Member] | BGR Operations, LLC [Member] | |
Company name | BGR Operations, LLC |
Jurisdiction of Incorporation | VA, USA |
Percent Owned | 100.00% |
Burger Business [Member] | BGR Acquisition 1 [Member] | |
Company name | BGR Acquisition 1, LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 100.00% |
Burger Business [Member] | BGR Annapolis, LLC [Member] | |
Company name | BGR Annapolis, LLC |
Jurisdiction of Incorporation | MD, USA |
Percent Owned | 100.00% |
Burger Business [Member] | BGR Arlington, LLC [Member] | |
Company name | BGR Arlington, LLC |
Jurisdiction of Incorporation | VA, USA |
Percent Owned | 100.00% |
Burger Business [Member] | BGR Dupont, LLC [Member] | |
Company name | BGR Dupont, LLC |
Jurisdiction of Incorporation | DC, USA |
Percent Owned | 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% |
Burger Business [Member] | BGR Mosaic, LLC [Member] | |
Company name | BGR Mosaic, LLC |
Jurisdiction of Incorporation | VA, USA |
Percent Owned | 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% |
Burger Business [Member] | BGR Springfield Mall, LLC [Member] | |
Company name | BGR Springfield Mall, LLC |
Jurisdiction of Incorporation | VA, USA |
Percent Owned | 100.00% |
Burger Business [Member] | BGR Tysons, LLC [Member] | |
Company name | BGR Tysons, LLC |
Jurisdiction of Incorporation | VA, USA |
Percent Owned | 100.00% |
Burger Business [Member] | BGR Washingtonian, LLC [Member] | |
Company name | BGR Washingtonian, LLC |
Jurisdiction of Incorporation | MD, USA |
Percent Owned | 100.00% |
Burger Business [Member] | Capitol Burger, LLC [Member] | |
Company name | Capitol Burger, LLC |
Jurisdiction of Incorporation | MD, USA |
Percent Owned | 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% |
Burger Business [Member] | BT's Burgerjoint Rivergate LLC [Member] | |
Company name | BTs Burgerjoint Rivergate LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 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% |
Burger Business [Member] | LBB Acquisition, LLC [Member] | |
Company name | LBB Acquisition, LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 100.00% |
Burger Business [Member] | Cuarto LLC [Member] | |
Company name | Cuarto LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 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% |
Burger Business [Member] | LBB Capitol Hill LLC [Member] | |
Company name | LBB Capitol Hill LLC |
Jurisdiction of Incorporation | WA, USA |
Percent Owned | 50.00% |
Burger Business [Member] | LBB Franchising LLC [Member] | |
Company name | LBB Franchising LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 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% |
Burger Business [Member] | LBB Hassalo LLC [Member] | |
Company name | LBB Hassalo LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 80.00% |
Burger Business [Member] | LBB Lake Oswego LLC [Member] | |
Company name | LBB Lake Oswego LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 100.00% |
Burger Business [Member] | LBB Magnolia Plaza LLC [Member] | |
Company name | LBB Magnolia Plaza LLC |
Jurisdiction of Incorporation | NC,USA |
Percent Owned | 100.00% |
Burger Business [Member] | LBB Multnomah Village LLC [Member] | |
Company name | LBB Multnomah Village LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 50.00% |
Burger Business [Member] | LBB Platform LLC [Member] | |
Company name | LBB Platform LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 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% |
Burger Business [Member] | LBB Rea Farms LLC [Member] | |
Company name | LBB Rea Farms LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 50.00% |
Burger Business [Member] | LBB Wallingford LLC [Member] | |
Company name | LBB Wallingford LLC |
Jurisdiction of Incorporation | WA, USA |
Percent Owned | 50.00% |
Burger Business [Member] | Noveno LLC [Member] | |
Company name | Noveno LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 100.00% |
Burger Business [Member] | Octavo LLC [Member] | |
Company name | Octavo LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 100.00% |
Burger Business [Member] | Primero LLC [Member] | |
Company name | Primero LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 100.00% |
Burger Business [Member] | Quinto LLC [Member] | |
Company name | Quinto LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 100.00% |
Burger Business [Member] | Segundo LLC [Member] | |
Company name | Segundo LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 100.00% |
Burger Business [Member] | Septimo LLC [Member] | |
Company name | Septimo LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 100.00% |
Burger Business [Member] | Sexto LLC [Member] | |
Company name | Sexto LLC |
Jurisdiction of Incorporation | OR, USA |
Percent Owned | 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% |
Just Fresh [Member] | JF Restaurants, LLC [Member] | |
Company name | JF Restaurants, LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 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% |
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% |
West Coast Hooters [Member] | Tacoma Wings, LLC [Member] | |
Company name | Tacoma Wings, LLC |
Jurisdiction of Incorporation | WA, USA |
Percent Owned | 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% |
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% |
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% |
South African Entities [Member] | Hooters Ruimsig (Pty) Ltd [Member] | |
Company name | Hooters Ruimsig (Pty) Ltd. |
Jurisdiction of Incorporation | South Africa |
Percent Owned | 100.00% |
South African Entities [Member] | Hooters SA (Pty) Ltd [Member] | |
Company name | Hooters SA (Pty) Ltd |
Jurisdiction of Incorporation | South Africa |
Percent Owned | 78.00% |
South African Entities [Member] | Hooters Umhlanga (Pty.) Ltd [Member] | |
Company name | Hooters Willows Crossing (Pty) Ltd |
Jurisdiction of Incorporation | South Africa |
Percent Owned | 90.00% |
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% |
European Entities [Member] | Chanticleer Holdings Limited [Member] | |
Company name | Chanticleer Holdings Limited |
Jurisdiction of Incorporation | Jersey |
Percent Owned | 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% |
European Entities [Member] | American Roadside Cross Hill, LLC [Member] | |
Company name | American Roadside Cross Hill, LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 100.00% |
Inactive Entities [Member] | Avenel Financial Services, LLC [Member] | |
Company name | Avenel Financial Services, LLC |
Jurisdiction of Incorporation | NV, USA |
Percent Owned | 100.00% |
Inactive Entities [Member] | Avenel Ventures, LLC [Member] | |
Company name | Avenel Ventures, LLC |
Jurisdiction of Incorporation | NV, USA |
Percent Owned | 100.00% |
Inactive Entities [Member] | BGR Cascades, LLC [Member] | |
Company name | BGR Cascades, LLC |
Jurisdiction of Incorporation | VA, USA |
Percent Owned | 100.00% |
Inactive Entities [Member] | BGR Chevy Chase, LLC [Member] | |
Company name | BGR Chevy Chase, LLC |
Jurisdiction of Incorporation | MD, USA |
Percent Owned | 100.00% |
Inactive Entities [Member] | BGR Old Town, LLC [Member] | |
Company name | BGR Old Town, LLC |
Jurisdiction of Incorporation | VA, USA |
Percent Owned | 100.00% |
Inactive Entities [Member] | BGR Potomac, LLC [Member] | |
Company name | BGR Potomac, LLC |
Jurisdiction of Incorporation | MD, USA |
Percent Owned | 100.00% |
Inactive Entities [Member] | BT's Burgerjoint Biltmore, LLC [Member] | |
Company name | BTs Burgerjoint Biltmore, LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 100.00% |
Inactive Entities [Member] | BT's Burgerjoint Promenade, LLC [Member] | |
Company name | BTs Burgerjoint Promenade, LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 100.00% |
Inactive Entities [Member] | Chanticleer Advisors, LLC [Member] | |
Company name | Chanticleer Advisors, LLC |
Jurisdiction of Incorporation | NV, USA |
Percent Owned | 100.00% |
Inactive 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% |
Inactive Entities [Member] | Chanticleer Investment Partners, LLC [Member] | |
Company name | Chanticleer Investment Partners, LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 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% |
Inactive Entities [Member] | Dallas Spoon, LLC [Member] | |
Company name | Dallas Spoon, LLC |
Jurisdiction of Incorporation | TX, USA |
Percent Owned | 100.00% |
Inactive Entities [Member] | DineOut SA Ltd [Member] | |
Company name | DineOut SA Ltd. |
Jurisdiction of Incorporation | England |
Percent Owned | 89.00% |
Inactive Entities [Member] | Hooters Brazil [Member] | |
Company name | Hooters Brazil |
Jurisdiction of Incorporation | Brazil |
Percent Owned | 100.00% |
Significant Accounting Polici33
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 02, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||||
Accumulated deficit | $ (52,776,873) | $ 1,100,000 | $ (49,109,303) | |
Deferred revenue | $ 1,100,000 | |||
Franchise income | 107,853 | $ 75,786 | ||
Royalty revenue | 86,335 | |||
Initial fees | $ 21,518 |
Significant Accounting Polici34
Significant Accounting Policies - Schedule of Revenue Recognized (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Restaurant sales, net | $ 9,769,508 | $ 9,653,154 | |
Gaming income, net | 93,155 | 106,067 | |
Management fee income | 25,000 | 24,990 | |
Franchise income | 107,853 | 75,786 | |
Total revenue | 9,995,516 | $ 9,859,997 | $ 41,702,001 |
Increase (Decrease) [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Restaurant sales, net | |||
Gaming income, net | |||
Management fee income | |||
Franchise income | 21,518 | ||
Total revenue | 21,518 | ||
Reported under ASC-605 [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Restaurant sales, net | 9,769,508 | ||
Gaming income, net | 93,155 | ||
Management fee income | 25,000 | ||
Franchise income | 86,335 | ||
Total revenue | $ 9,973,998 |
Significant Accounting Polici35
Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 2,629,282 | 1,478,086 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 2,262,615 | 907,203 |
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 | 523,369 |
Accrued Interest on Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 47,514 |
Assets Held For Sale (Details N
Assets Held For Sale (Details Narrative) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Assets Held For Sale Details Narrative | |
Impairment charge | $ 1,700,000 |
Impairment of goodwill and reversal of foreign exchange losses | $ 720,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 540,679 | $ 593,380 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 15,900,053 | $ 16,219,547 |
Accumulated depreciation and amortization | 7,696,072 | (7,670,955) |
Property and equipment, net | 8,203,981 | 8,548,592 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 9,799,270 | 9,941,223 |
Restaurant Furnishings and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 5,889,211 | 5,952,934 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 63,121 | 176,939 |
Office and Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 148,451 | $ 148,451 |
Goodwill and Other Intangible39
Goodwill and Other Intangible Assets, Net - Schedule of Goodwill (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill [Line Items] | |||
Goodwill | $ 10,164,374 | $ 12,647,806 | $ 12,405,770 |
Hooters Full Service [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 2,219,771 | 4,703,203 | |
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 ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning Balance | $ 12,647,806 | $ 12,405,770 |
Acquisitions | ||
Impairment | (2,495,375) | |
Foreign currency translation (loss) gain | 11,943 | 242,036 |
Ending Balance | $ 10,164,374 | $ 12,647,806 |
Goodwill and Other Intangible41
Goodwill and Other Intangible Assets, Net - Schedule of Other Intangible Assets (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total intangible cost | $ 7,193,326 | $ 7,193,789 | |
Accumulated amortization | 1,433,508 | (1,297,057) | |
Intangible assets, net | 5,759,818 | 5,896,732 | |
Amortization expense | 133,588 | $ 75,776 | |
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 | ||
Acquired Franchise Rights [Member] | BGR The Burger Joint [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total intangible cost | $ 1,056,000 | 1,056,000 | |
Estimated useful Life | 7 years | ||
Franchise License Fees [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total intangible cost | $ 360,396 | 360,859 | |
Franchise License Fees [Member] | Hooters South Africa [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total intangible cost | $ 285,889 | 273,194 | |
Estimated useful Life | 20 years | ||
Franchise License Fees [Member] | Hooters Pacific NW [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total intangible cost | $ 74,507 | 74,507 | |
Estimated useful Life | 20 years | ||
Franchise License Fees [Member] | Hooter UK [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total intangible cost | $ 13,158 | ||
Estimated useful Life | 5 years |
Long-Term Debt and Notes Paya42
Long-Term Debt and Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Debt Disclosure [Abstract] | ||
Amortization of debt discount | $ 293,248 | $ 0 |
Contingent liability for potential default interest and penalties | $ 1,000,000 |
Long-Term Debt and Notes Paya43
Long-Term Debt and Notes Payable - Summary of Long-Term Debt and Notes Payable (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | |
Short-term Debt [Line Items] | |||
Total Long-term Debt | $ 5,957,262 | $ 5,741,911 | |
Note Payable, due December 31, 2018, Net of Discount of $880,043 and $1,173,390, Respectively [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | [1] | 5,119,957 | 4,826,610 |
Notes Payable Paragon Bank [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | [2] | 506,405 | 572,276 |
Note Payable [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | 75,000 | 75,000 | |
Note Payable, Due March 2019 [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | 9,580 | ||
Receivables Financing Facilities [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | 39,385 | 76,109 | |
Bank Overdraft Facilities, South Africa, Annual Renewal [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | 185,953 | 164,619 | |
Equipment Financing Arrangements, South Africa [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | $ 20,982 | $ 27,297 | |
[1] | a) 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 annual 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, or demand repayment at 108% of the outstanding principal balance and any outstanding accrued interest. The warrants have an exercise price of $3.50 (as adjusted for the reverse stock split on May 19, 2017) and a ten-year term. 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 were not registered, the holders would have the right to cashless exercise. The registration statement underlying the warrants was declared effective on October 30, 2017. | ||
[2] | 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 contractual 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 % $ 23,736 $ 4,406 Note 2 5/10/2019 5.25 % 167,793 11,532 Note 3 8/10/2021 5.25 % 314,876 8,500 $ 506,405 $ 24,438 |
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, 2018 | Dec. 31, 2017 | Feb. 22, 2018 |
Convertible secured debentures principal balance | $ 200,000 | ||||
Debentures [Member] | |||||
Debt instruments bears interest rate | 8.00% | 8.00% | |||
Note One [Member] | |||||
Debt instruments bears interest rate | 5.50% | 5.50% | |||
Convertible secured debentures principal balance | $ 23,736 | $ 23,736 | |||
Note payable maturity date | Sep. 10, 2018 | Sep. 10, 2018 | |||
Debt periodic payment | $ 4,406 | $ 4,406 | |||
Note Two [Member] | |||||
Debt instruments bears interest rate | 5.25% | 5.25% | |||
Convertible secured debentures principal balance | $ 167,793 | $ 167,793 | |||
Note payable maturity date | May 10, 2019 | May 10, 2019 | |||
Debt periodic payment | $ 11,532 | $ 11,532 | |||
Note Three [Member] | |||||
Debt instruments bears interest rate | 5.25% | 5.25% | |||
Convertible secured debentures principal balance | $ 314,876 | $ 314,876 | |||
Note payable maturity date | Aug. 10, 2021 | Aug. 10, 2021 | |||
Debt periodic payment | $ 8,500 | $ 8,500 | |||
Note [Member] | |||||
Convertible secured debentures principal balance | 506,405 | 506,405 | |||
Debt periodic payment | $ 24,438 | $ 24,438 | |||
Securities Purchase Agreement [Member] | |||||
Debt instruments bears interest rate | 8.00% | 8.00% | |||
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 | |||
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% | ||||
Demand repayment | 108.00% | ||||
Warrant term | 10 years | ||||
Securities Purchase Agreement [Member] | Warrants One [Member] | |||||
Number of warrant to purchase shares of common stock | 800,000 | 800,000 | |||
Aggregate purchase price | $ 6,500,000 | $ 6,500,000 | |||
Warrant exercise price per share | $ 3.50 | $ 3.50 | |||
Beneficial ownership limit, percentage | 4.99% | ||||
Securities Purchase Agreement [Member] | Warrants Two [Member] | |||||
Number of warrant to purchase shares of common stock | 400,000 | 400,000 | |||
Beneficial ownership limit, percentage | 19.99% |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Convertible Notes Payable [Line Items] | ||
Amortization of debt discount | $ 289,787 | $ 122,694 |
Convertible Notes Payable [Member] | ||
Convertible Notes Payable [Line Items] | ||
Amortization of debt discount | $ (12,256) | $ 122,694 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | |
Convertible Notes Payable [Line Items] | |||
Current portion of convertible notes payable | $ 3,000,000 | $ 3,000,000 | |
Convertible notes payable, less current portion | 212,256 | ||
6% Convertible Notes Payable Due June 2018 [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | [1] | 3,000,000 | 3,000,000 |
8% Convertible Notes Payable Due March 2019 [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | [2] | 200,000 | |
Premium on Above Convertible Note [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | 12,256 | ||
Convertible Notes Payable [Member] | |||
Convertible Notes Payable [Line Items] | |||
Convertible Notes Payable, Total | 3,000,000 | 3,212,256 | |
Current portion of convertible notes payable | 3,000,000 | 3,000,000 | |
Convertible notes payable, less current portion | $ 212,256 | ||
[1] | (a) On August 2, 2013, the Company entered into an agreement with seven individual accredited investors, whereby the Company issued separate 6% Secured Subordinate Convertible Notes for a total of $3,000,000 in a private offering and is collateralized by the assets of the Hooters Nottingham restaurant and a subordinate position to all other assets of the Company. In connection with the Company’s agreement to conduct capital raise in 2016, the lenders agreed to waive certain existing defaults and extended the original note maturity by eighteen months from December 31, 2016 to June 30, 2018. The Note holders shall receive 10%, pro rata, of the net profit of the Nottingham, England Hooters restaurant, paid quarterly, and 10% of the net proceeds should the location be sold. | ||
[2] | (b) On February 22, 2018, $200,000 of the Company’s convertible debt was converted into 66,667 shares of Company common stock in accordance with the terms of the convertible debt agreements. |
Convertible Notes Payable - S47
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) - USD ($) | Feb. 22, 2018 | Aug. 02, 2013 |
Debt Instrument, Redemption [Line Items] | ||
Convertible debt | $ 200,000 | |
Debt conversion on converted shares | 66,667 | |
6% Secured Subordinate Convertible Notes [Member] | Seven Individual Accredited Investors [Member] | ||
Debt Instrument, Redemption [Line Items] | ||
Convertible debt | $ 3,000,000 | |
Convertible debt percentage | 6.00% | |
Convertible note payable term | 18 months | |
Maturity date description | December 31, 2016 to June 30, 2018. | |
Net profit pro rata percentage | 10.00% |
Accounts Payable and Accrued 48
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $ 3,097,526 | $ 3,408,691 |
Accrued taxes (VAT, Sales Payroll) | 1,716,171 | 1,096,305 |
Accrued income taxes | 71,002 | 83,878 |
Accrued interest | 1,420,857 | 1,208,378 |
Accounts payable and accrued expenses | $ 6,305,556 | $ 5,797,252 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2016 | Dec. 31, 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 | 3,222,209 | 3,045,809 | |
Common stock, shares issued | 3,222,209 | 3,045,809 | |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Preferred stock, par value | |||
Preferred stock, shares issued | 62,876 | 62,876 | |
Preferred stock, shares outstanding | 62,876 | 62,876 | |
Employees [Member] | |||
Stockholder's Equity [Line Items] | |||
Number of restricted shares issued | 15,000 | ||
2014 Stock Incentive Plan [Member] | |||
Stockholder's Equity [Line Items] | |||
Stock options granted | 4,000,000 | ||
Number of shares issued | 87,678 | ||
Number of shares available for issuance | 297,322 | ||
Series 1 Preferred Stock [Member] | |||
Stockholder's Equity [Line Items] | |||
Cumulative dividends rate | 9.00% | ||
Warrant term | 7 years | ||
Exercise price | $ 13.50 | ||
Redeemable Series 1 Preferred Stock [Member] | |||
Stockholder's Equity [Line Items] | |||
Exercise price | $ 13.50 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrants Activity (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Equity [Abstract] | |
Number of Warrants Outstanding beginning balance, shares | shares | 2,362,615 |
Granted, shares | shares | |
Exercised, shares | shares | (100,000) |
Expired, shares | shares | |
Number of Warrants Outstanding ending balance, shares | shares | 2,262,615 |
Exercisable, shares | shares | 2,262,615 |
Weighted-average exercise price, Outstanding beginning balance | $ / shares | $ 16.34 |
Weighted-average exercise price, Granted | $ / shares | |
Weighted-average exercise price, Exercised | $ / shares | 3.50 |
Weighted-average exercise price, Expired | $ / shares | |
Weighted-average exercise price, Outstanding ending balance | $ / shares | 16.91 |
Exercisable, Weighted-average exercise price | $ / shares | $ 16.91 |
Weighted Average Remaining Life In Years, Outstanding beginning balance | 2 years 2 months 12 days |
Weighted Average Remaining Life In Years, Granted | 0 years |
Weighted Average Remaining Life In Years, Exercised | 5 years |
Weighted Average Remaining Life In Years, Expired | 0 years |
Weighted Average Remaining Life In Years, Outstanding ending balance | 1 year 10 months 25 days |
Weighted Average Remaining Life In Years, Exercisable | 1 year 10 months 25 days |
Stockholders' Equity - Schedu51
Stockholders' Equity - Schedule of Warrants Outstanding (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 2 years 2 months 12 days |
Warrant [Member] | |
Number of warrants, outstanding | 2,262,615 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 1 year 10 months 25 days |
Number of warrants exercisable | 2,262,615 |
Range 1 [Member] | Warrant [Member] | |
Range of exercise prices, upper limit | $ / shares | $ 40 |
Number of warrants, outstanding | 484,518 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 8 months 12 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) | 1 year 4 months 24 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) | 1 year 9 months 18 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 |
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 | 1,599,857 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 8 years 1 month 6 days |
Number of warrants exercisable | 1,599,857 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Due to related parties | $ 191,850 | $ 191,850 | |
Chanticleer Investors, LCC [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 191,850 | $ 191,850 | |
Larry Spitcaufsky [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 2,000,000 | ||
Notes payable | $ 6,000,000 | ||
Note payable maturity date | Dec. 31, 2018 | ||
Payments of interest | $ 40,889 | $ 0 | |
Royalties received | $ 739 | $ 0 |
Segment Information - Schedule
Segment Information - Schedule of Revenues and Operating Income (loss) by Segment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | ||
Revenue | $ 9,995,516 | $ 9,859,997 | $ 41,702,001 | |
Operating Income (Loss): | [1] | (2,380,841) | (989,388) | $ (2,619,888) |
Depreciation and Amortization | 540,679 | 593,380 | ||
Operating Segments [Member] | ||||
Revenue | 9,995,516 | 9,859,997 | ||
Operating Income (Loss): | [1] | (2,380,841) | (989,388) | |
Depreciation and Amortization | 540,679 | 593,380 | ||
Operating Segments [Member] | Hooters Full Service [Member] | ||||
Revenue | 3,531,074 | 3,135,463 | ||
Operating Income (Loss): | [1] | (1,335,554) | (42,846) | |
Depreciation and Amortization | 106,028 | 136,180 | ||
Operating Segments [Member] | Better Burgers Fast Casual [Member] | ||||
Revenue | 5,360,522 | 5,316,287 | ||
Operating Income (Loss): | [1] | (211,834) | (169,110) | |
Depreciation and Amortization | 389,282 | 376,631 | ||
Operating Segments [Member] | Just Fresh Fast Casual [Member] | ||||
Revenue | 1,078,920 | 1,383,257 | ||
Operating Income (Loss): | [1] | (43,414) | 63,640 | |
Depreciation and Amortization | 44,525 | 79,726 | ||
Operating Segments [Member] | Corporate and Other [Member] | ||||
Revenue | 25,000 | 24,990 | ||
Operating Income (Loss): | [1] | (790,039) | (841,072) | |
Depreciation and Amortization | $ 844 | $ 843 | ||
[1] | Note that Operating Income (Loss) includes $1.7 million of non-cash impairment charges for the three months ended March 31, 2018 |
Segment Information - Schedul54
Segment Information - Schedule of Revenues and Operating Income (loss) by Segment (Details) (Parenthetical) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Segment Reporting [Abstract] | |
Non-cash impairment charges | $ 1,700,000 |
Segment Information - Summary o
Segment Information - Summary of Revenues, Operating Loss, Long-Lived Assets By Geographic Area (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | ||
Segment Reporting Information [Line Items] | |||||
Revenue: | $ 9,995,516 | $ 9,859,997 | $ 41,702,001 | ||
Operating Income (Loss): | [1] | (2,380,841) | (989,388) | $ (2,619,888) | |
Non-current Assets: | 25,381,130 | $ 28,383,458 | |||
United States [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue: | 7,782,401 | 7,912,094 | |||
Operating Income (Loss): | [1] | (963,012) | (941,072) | ||
Non-current Assets: | 24,163,653 | 24,630,101 | |||
South Africa [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue: | 1,501,419 | 1,384,394 | |||
Operating Income (Loss): | [1] | 10,546 | (57,061) | ||
Non-current Assets: | 1,217,477 | 1,203,610 | |||
Europe [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue: | 711,696 | 563,509 | |||
Operating Income (Loss): | [1] | (1,428,375) | $ 8,745 | ||
Non-current Assets: | $ 2,549,747 | ||||
[1] | Note that Operating Income (Loss) includes $1.7 million of non-cash impairment charges for the three months ended March 31, 2018 |
Segment Information - Summary56
Segment Information - Summary of Revenues, Operating Loss, Long-Lived Assets By Geographic Area (Details) (Parenthetical) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Segment Reporting [Abstract] | |
Non-cash impairment charges | $ 1,700,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Commitments and Contingencies Disclosure [Line Items] | |
Loss contingency, estimated recovery from third party | Rolalor and Labyrinth, be wound up in satisfaction of an alleged debt owed in the total amount of R4,082,636 (approximately $480,000). |
Debt owned amount | $ 480,000 |
Construction cost | 1,500,000 |
Private Investors [Member] | |
Commitments and Contingencies Disclosure [Line Items] | |
Construction cost | 1,000,000 |
Company [Member] | |
Commitments and Contingencies Disclosure [Line Items] | |
Construction cost | $ 500,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | May 03, 2018 | Mar. 31, 2018 |
Commission fee | $ 36,767 | |
Maximum [Member] | ||
Legal expenses | $ 2,500 | |
Larry Spitcaufsky [Member] | ||
Shares subscribed | 70,000 | |
Subscribed amount percentage | 7.00% | |
Securities Purchase Agreement [Member] | ||
Proceeds of Common stock, shares | 403,214 | |
Purchase price, per share | $ 3.50 | |
Total gross purchase price | $ 1,411,249 | |
Securities Purchase Agreement [Member] | Warrant [Member] | ||
Warrant term | 5 years 6 months | |
Warrants to purchase common stock | 403,214 |