Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 09, 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 | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 3,715,404 | |
Trading Symbol | BURG | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 1,091,519 | $ 272,976 |
Restricted cash | 6,085 | 165,517 |
Accounts and other receivables, net | 365,030 | 475,988 |
Inventories | 407,611 | 460,756 |
Prepaid expenses and other current assets | 316,835 | 324,324 |
Assets held for sale, net | 100,000 | |
TOTAL CURRENT ASSETS | 2,187,080 | 1,799,561 |
Property and equipment, net | 9,532,367 | 8,548,592 |
Goodwill | 11,334,910 | 12,647,806 |
Intangible assets, net | 5,462,733 | 5,896,732 |
Investment, at cost | 800,000 | 800,000 |
Deposits and other assets | 449,310 | 490,328 |
TOTAL ASSETS | 29,766,400 | 30,183,019 |
Current liabilities: | ||
Accounts payable and accrued expenses | 7,110,982 | 5,797,252 |
Current maturities of long-term debt and notes payable net of unamortized discount and deferred financing costs of $293,347 and $1,173,190, respectively | 6,333,132 | 5,741,911 |
Current maturities of convertible notes payable | 3,000,000 | 3,000,000 |
Due to related parties | 191,226 | 191,850 |
TOTAL CURRENT LIABILITIES | 16,635,340 | 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 $182,610 and $208,697, respectively | 666,216 | 640,129 |
Deferred rent | 2,102,071 | 2,156,378 |
Deferred tax liabilities | 779,359 | |
Deferred revenue | 1,195,216 | 175,000 |
TOTAL LIABILITIES | 20,598,843 | 18,694,135 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock: $0.0001 par value; authorized 45,000,000 shares; issued and outstanding 3,706,563 and 3,045,809 shares, respectively | 372 | 305 |
Additional paid-in capital | 63,217,471 | 60,750,330 |
Accumulated other comprehensive loss | (140,678) | (934,901) |
Accumulated deficit | (54,831,438) | (49,109,303) |
Total Chanticleer Holdings, Inc. Stockholders' Equity | 8,245,727 | 10,706,431 |
Non-controlling interests | 921,830 | 782,453 |
TOTAL STOCKHOLDERS' EQUITY | 9,167,557 | 11,488,884 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 29,766,400 | $ 30,183,019 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Unamortized deferred finance costs | $ 293,347 | $ 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 | $ 182,610 | $ 208,697 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 3,706,563 | 3,045,809 |
Common stock, shares outstanding | 3,706,563 | 3,045,809 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Revenue: | |||||
Total revenue | $ 10,098,400 | $ 10,725,363 | $ 30,493,839 | $ 31,350,678 | |
Expenses: | |||||
Restaurant cost of sales | 3,259,223 | 3,605,213 | 9,912,091 | 10,376,160 | |
Restaurant operating expenses | 5,781,284 | 6,119,561 | 17,008,047 | 17,649,532 | |
Restaurant pre-opening and closing expenses | 113,000 | 34,349 | 312,652 | 139,545 | |
General and administrative expenses | 1,092,529 | 952,959 | 3,407,612 | 3,413,001 | |
Asset impairment charge | 838,928 | 1,731,267 | 1,472,890 | ||
Depreciation and amortization | 523,680 | 572,798 | 1,594,673 | 1,768,837 | |
Total operating expenses | 10,769,716 | 12,123,808 | 33,966,342 | 34,819,965 | |
Operating loss | [1] | (671,316) | (1,398,445) | (3,472,503) | (3,469,287) |
Other (expense) income | |||||
Interest expense | (630,223) | (462,870) | (1,895,162) | (1,946,712) | |
Loss on debt refinancing | (95,310) | ||||
Other income (expense) | (223,439) | 37,838 | (217,949) | 50,050 | |
Total other expense | (853,662) | (425,032) | (2,113,111) | (1,991,972) | |
Loss from continuing operations before income taxes | (1,524,978) | (1,823,477) | (5,585,614) | (5,461,259) | |
Income tax benefit (expense) | 206,366 | (56,070) | 779,361 | (169,398) | |
Consolidated net loss | (1,318,612) | (1,879,547) | (4,806,253) | (5,630,657) | |
Less net loss attributable to non-controlling interest: | 80,737 | 168,772 | 210,484 | 245,943 | |
Net loss attributable to Chanticleer Holdings, Inc. | (1,237,895) | (1,710,775) | (4,595,769) | (5,384,714) | |
Dividends on redeemable preferred stock | (28,219) | (28,219) | (84,020) | (79,988) | |
Net loss attributable to common shareholders of Chanticleer Holdings, Inc. | $ (1,266,094) | $ (1,738,994) | $ (4,679,789) | $ (5,464,702) | |
Net loss attributable to Chanticleer Holdings, Inc. per common share, basic and diluted: | $ (0.34) | $ (0.70) | $ (1.35) | $ (2.42) | |
Weighted average shares outstanding, basic and diluted | 3,704,800 | 2,501,534 | 3,457,145 | 2,258,013 | |
Restaurant Sales, Net [Member] | |||||
Revenue: | |||||
Total revenue | $ 9,848,302 | $ 10,479,274 | $ 29,802,969 | $ 30,657,215 | |
Gaming Income, Net [Member] | |||||
Revenue: | |||||
Total revenue | 111,301 | 115,267 | 285,578 | 328,855 | |
Management Fee Income [Member] | |||||
Revenue: | |||||
Total revenue | 24,999 | 24,999 | 74,997 | 74,982 | |
Franchise Income [Member] | |||||
Revenue: | |||||
Total revenue | $ 113,798 | $ 105,823 | $ 330,295 | $ 289,626 | |
[1] | Note that Operating Income (Loss) includes non-cash impairment charges of $1.7 million and $1.5 for the nine months ended September 30, 2018 and 2017, respectively and $0 and $0.8 million for the three months ended September 30, 2018 and 2017, respectively. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net loss attributable to Chanticleer Holdings, Inc. | $ (1,237,895) | $ (1,710,775) | $ (4,595,769) | $ (5,384,714) |
Foreign currency translation gain (loss) | (30,718) | 142,339 | 794,223 | 189,170 |
Comprehensive loss | $ (1,268,593) | $ (1,568,436) | $ (3,801,546) | $ (5,195,544) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (4,806,253) | $ (5,630,657) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 1,594,673 | 1,768,837 |
Loss on extinguishment of debt | 95,310 | |
Asset impairment charge | 1,731,267 | 1,472,890 |
Loss on investments | 45,932 | |
Common stock and warrants issued for services | 129,767 | 217,816 |
Amortization of debt discount | 893,873 | 501,126 |
Change in assets and liabilities: | ||
Accounts and other receivables | 114,007 | 249,255 |
Prepaid and other assets | 2,767 | 50,667 |
Inventory | 72,802 | 23,872 |
Accounts payable and accrued liabilities | 1,346,910 | 1,048,468 |
Related party payables | (624) | |
Deferred revenue | (22,130) | |
Deferred income taxes | (779,359) | 105,729 |
Deferred rent | (54,307) | 109,219 |
Net cash provided by operating activities | 269,325 | 12,532 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (1,698,747) | (1,323,066) |
Cash paid for acquisitions, net of cash acquired | (30,000) | |
Net cash used in investing activities | (1,728,747) | (1,323,066) |
Cash flows from financing activities: | ||
Proceeds from sale of common stock and warrants | 1,687,184 | |
Proceeds from sale of preferred stock | 591,651 | |
Payments related to sale of preferred stock | (243,480) | |
Loan proceeds | 6,594,535 | |
Payment of deferred financing costs | (293,294) | |
Loan repayments | (270,579) | (5,706,774) |
Capital lease payments | (20,916) | |
Distributions to non-controlling interest | (101,163) | |
Contributions of non-controlling interest | 800,000 | 675,000 |
Net cash provided by financing activities | 2,115,442 | 1,596,722 |
Effect of exchange rate changes on cash | 3,091 | (8,440) |
Net increase in cash and restricted cash | 659,111 | 277,748 |
Cash and restricted cash, beginning of period | 438,493 | 268,575 |
Cash and restricted cash, end of period | 1,097,604 | 546,323 |
Supplemental cash flow information: | ||
Interest | 407,573 | 601,972 |
Income taxes | 88,748 | 6,532 |
Non-cash investing and financing activities: | ||
Convertible debt settled through issuance of common stock | 200,000 | 625,000 |
Accrued interest settled through issuance of convertible debt | 95,107 | |
Preferred stock dividends paid through issuance of common stock | 57,933 | 34,377 |
Common stock issued in connection with working capital adjustment | 27,018 | |
Purchases of businesses: | ||
Current assets excluding cash | 9,580 | |
Property and equipment | 30,000 | |
Note payable | (9,580) | |
Cash paid for acquisitions | $ 30,000 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 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 50 % 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 Columbia, LLC MD, 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 50 % 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 % 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 U.S. 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 nine-month periods ended September 30, 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 generally accepted accounting principles of the United States (“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 September 30, 2018, our cash balance was $1.1 million, our working capital was negative $14.3 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 seven to ten additional company owned stores as well as growing our franchising businesses at Little Big Burger and BGR. We have contractual commitments related to current store construction of approximately $0.7 million, of which we expect approximately $0.2 million to be funded by private investors and approximately $0.5 million will be funded internally by the Company. We also have $9.3 million of debt obligations due on demand or within the next 3 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 $1.3 million could potentially be assessed. We expect to be able to extend or refinance our current debt obligations and are also exploring the sale of certain assets to reduce debt. In May 2018, 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. In January 2018, the Company received net proceeds of $290,000 from the exercise of 100,000 common stock warrants. During the first nine months of 2018, the Company also received $0.8 million in contributions from non-controlling interests for new store construction. However, we cannot provide assurance that we will be able to refinance our long-term debt, sell assets or raise additional capital. 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 | 9 Months Ended |
Sep. 30, 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 US GAAP 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 revenue 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 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 obligations (such as providing assistance during the opening of a restaurant) are combined with the license and were determined to be a single performance obligation. Accordingly, the total transaction price (comprised of the restaurant opening and territory fees) is 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 are 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 three and nine-month periods ended September 30, 2018 under ASC-606 and revenue that would have been recognized had ASC-605 been applied is as follows: Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 As reported under ASC-606 If reported under ASC-605 Increase As reported under ASC-606 If reported under ASC-605 Increase Restaurant sales, net $ 9,848,302 $ 9,848,302 $ - $ 29,802,969 $ 29,802,969 $ - Gaming income, net 111,301 111,301 - 285,578 285,578 - Management fee income 24,999 24,999 - 74,997 74,997 - Franchise income 113,798 93,088 20,710 330,295 268,165 62,130 Total Revenue $ 10,098,400 $ 10,077,690 $ 20,710 $ 30,493,839 $ 30,431,709 $ 62,130 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 with the adoption of ASC 606, such initial fees are deferred and recognized over the franchise license term. 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 and convertible notes payable as of September 30, 2018 and 2017 that have been excluded from the calculation of diluted net loss per common share since the effect would be antidilutive. September 30, 2018 September 30, 2017 Warrants 2,571,829 1,862,758 Convertible notes 300,000 366,667 Total 2,871,829 2,229,425 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) is 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 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 and $62 thousand in franchise income for the three months and nine months ended September 30, 2018, respectively, 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 accumulating and analyzing the leases to be 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 being 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. In August 2018, the Securities and Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification,” amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The final rule is effective for all filings made on and after November 5, 2018. Given the effective date and proximity to most filers’ quarterly reports, the SEC is not objecting to filers deferring the presentation of changes in stockholders’ equity in their quarterly reports on Forms 10-Q until the quarter that begins after November 5, 2018. The Company anticipates its first presentation of changes in stockholders’ equity will be included in its quarterly report on Form 10-Q for the quarter ended March 31, 2019. 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 September 30, 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 | 9 Months Ended |
Sep. 30, 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 closed on the purchase of the Annapolis, MD location in the first quarter of 2018 and the results of that store are included in the accompanying condensed consolidated financial statements. The Company closed on the Colombia, MD location as of October 1, 2018, subsequent to the date of the accompanying condensed consolidated financial statements. Total consideration consisted of $30,000 in cash paid and a seller note of $9,580 upon the closing of the first location (reflected in the accompanying condensed consolidated financial statements) and $20,000 in cash and a seller note of $186,767 upon closing of the second location in October (not reflected in the accompanying condensed consolidated financial statements as of September 30, 2018). The Company allocates the purchase price as of the date of acquisition based on the estimated fair value of the acquired assets and assumed liabilities. The purchase accounting for the Annapolis location was considered preliminary as of September 30, 2018 and is expected to be finalized in the fourth quarter in connection with completion of the transaction to purchase the Colombia location. No proforma information was included as the proforma impact of the acquisition is not material to the condensed consolidated financial statements as of September 30, 2018. |
Assets Held for Sale
Assets Held for Sale | 9 Months Ended |
Sep. 30, 2018 | |
Assets Held-for-sale, Not Part of Disposal Group [Abstract] | |
Assets Held for Sale | 4. ASSETS HELD FOR SALE The Company entered into Letters of Intent for the sale of its Hooters Nottingham and Hooters Tacoma locations in the first quarter of 2018 and the assets of those operations were reclassified to Assets Held for Sale with impairment charges recognized totaling $1.7 million recognized in the first six months of 2018. The impairment charges primarily consisted of impairment of goodwill and reversal of approximately $720 thousand of foreign exchange losses previously classified in Other Comprehensive loss. As of September 30, 2018, the letters of intent for Hooters Nottingham and Hooters Tacoma have expired. Management is continuing to explore potential to sell both locations, however there is not a specific program underway currently to locate a buyer or that would otherwise indicate that a disposal is imminent. Accordingly, as of September 30, 2018, management determined that it was appropriate to reclassify those locations from held for sale to operating assets. Management believes that the carrying amount of the assets, following the $1.7 million impairment charge recorded during the nine months ended September 30, 2018, continues to reflect the net realizable value of the properties and that no additional impairment adjustment is warranted at this time. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. PROPERTY AND EQUIPMENT Property and equipment consists of the following: September 30, 2018 December 31, 2017 Leasehold improvements $ 10,882,067 $ 9,941,223 Restaurant furniture and equipment 6,346,556 5,952,934 Construction in progress 1,063,462 176,939 Office furntiture and equipment 148,451 148,451 18,440,536 16,219,547 Accumulated depreciation and amortization (8,908,169 ) (7,670,955 ) $ 9,532,367 $ 8,548,592 Depreciation and amortization expense was $0.4 million and $1.2 million for the three and nine months ended September 30, 2018 and $0.6 million and $1.6 million for the three and nine months ended September 30, 2017, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 9 Months Ended |
Sep. 30, 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: September 30, 2018 December 31, 2017 Hooters Full Service $ 3,390,307 $ 4,703,203 Better Burgers Fast Casual 7,448,848 7,448,848 Just Fresh Fast Casual 495,755 495,755 $ 11,334,910 $ 12,647,806 September 30, 2018 December 31, 2017 Beginning Balance $ 12,647,806 $ 12,405,770 Acquisitions - - Adjustments (1,280,661 ) - Foreign currency translation (loss) gain (32,235 ) 242,036 Ending Balance $ 11,334,910 $ 12,647,806 Other intangible assets, consisting of franchise costs, trademarks and tradenames, is summarized by location as follows: Estimated Useful Life September 30, 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 239,528 273,194 Hooters Pacific NW 20 years 89,507 74,507 Hooters UK 5 years - 13,158 329,035 360,859 Total Intangibles at cost 7,161,965 7,193,789 Accumulated amortization (1,699,232 ) (1,297,057 ) Intangible assets, net $ 5,462,733 $ 5,896,732 Amortization expense was $0.4 million and $0.2 million for the nine months ended September 30, 2018 and 2017, respectively. |
Long-Term Debt and Notes Payabl
Long-Term Debt and Notes Payable | 9 Months Ended |
Sep. 30, 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: September 30, 2018 December 31, 2017 Notes Payable, due December 31, 2018, net of discount of $293,347 and $1,173,390, respectively (a) $ 5,706,653 $ 4,826,610 Notes Payable Paragon Bank (b) 374,424 572,276 Note Payable (c) 75,000 75,000 Note Payable, due March 2019 4,847 - Receivables financing facilities (d) 48,788 76,109 Bank overdraft facilities, South Africa, annual renewal 117,737 164,619 Equipment financing arrangements, South Africa 5,683 27,297 Total long-term debt $ 6,333,132 $ 5,741,911 Current portion of long-term debt 6,333,132 5,741,911 Long-term debt, less current portion $ - $ - For the nine months ended September 30, 2018 and 2017 amortization of debt discount was $0.9 million and $0.5 million 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 $6 million debentures are due and payable on December 31, 2018. The Company is in discussions with its lenders regarding the terms of an extension or new debenture to replace the expiring debenture. Those discussions are continuing and are expected to be final by the end of the year. Management cannot provide any assurance that it will be successful in negotiating an extension or a new loan or provide any assurance as to the terms and conditions of any new or extended debentures. b) The Company has two term loans with Paragon Bank (previously three loans, one of which was paid in full in September 2018), 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 % $ - $ - Note 2 5/10/2019 5.50 % 102,099 11,532 Note 3 8/10/2021 5.50 % 272,325 8,500 $ 374,424 $ 20,032 c) The Company has a promissory note payable on demand in the amount of $75,000 with 800 shares of restricted Company common stock to be paid to the lender each month while the note is outstanding. d) During February 2017, in consideration for proceeds of $330,000, the Company agreed to make payments of $1,965 per day for 210 days. As of October 2017, the daily payment amount was modified to $1,200 per day and the term was extended to February 2018, with total remittance over the life of the loan unchanged. Also, during March 2017 in consideration for proceeds of $150,000, the Company agreed to make payments of $856 per day for 240 days. The Company granted a security interest in the credit card receivables of the specified restaurants in connection with the Receivables Financing Agreements As of September 30, 2018, the Company has $49 thousand outstanding under these facilities. 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 judgment. While the Company has not been notified by its lenders of any specific asserted defaults, management concluded that conditions exist that represent events of technical default under one or more of its note or convertible note obligations. The existence of a technical default in one loan agreement would also trigger cross default provisions applicable to other loan agreements. Management quantified the potential penalties and default interest that could be assessed in the event the loans were deemed by its lenders to be in default. Accordingly, the Company recorded a liability for potential default interest and penalties of $1.3 million as accrued interest in the accompanying consolidated financial statements of September 30, 2018. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | 8. cONVERTIBLE NOTEs PAYABLE Convertible notes payable are summarized as follows: September 30, 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 were to 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 Company entered into a letter of intent for the sale of the Hooters Nottingham facility from which the Company planned to settle a portion of the convertible note. However, the letter of intent has expired. Management is evaluating other alternatives to market the property for sale. (See Note 4 - Assets Held for sale). Principal and interest under the convertible notes are payable on demand following the maturity on June 30, 2018 are classified as current liabilities on the accompanying condensed consolidated balance sheets. As of November 13, 2018, the lenders have not demanded payment of principal or unpaid interest, asserted defaults or indicated any imminent action for collection. Management is in discussions with the lenders and intends to enter into an extension or new agreement, but cannot provide assurance that it will be successful in negotiating an extension or new loan or the terms of any new or extended debt. (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 Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 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: September 30, 2018 December 31, 2017 Accounts payable and accrued expenses $ 2,521,918 $ 3,334,089 Accrued taxes (VAT, Sales, Payroll) 2,731,086 1,170,906 Accrued income taxes 71,046 83,878 Accrued interest 1,786,932 1,208,379 $ 7,110,982 $ 5,797,252 To date, approximately $1.6 million of employee and employer taxes have been accrued but not remitted to certain taxing authorities by the Company for cash compensation paid. As a result, the Company is liable for such payroll taxes and any related penalties and interest. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity The Company has 45,000,000 shares of its $0.0001 par value common stock authorized at both September 30, 2018 and December 31, 2017. The Company had 3,706,563 and 3,045,809 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively. The Company has 5,000,000 shares of its no par value preferred stock authorized at both September 30, 2018 and December 31, 2017. The Company had 62,876 shares issued and outstanding at September 30, 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, 400,000 shares have been approved for grant. As of September 30, 2018, the Company had issued 91,029 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 293,971 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 6.2 Granted 403,214 4.50 Exercised (100,000 ) 3.50 Forfeited (94,000 ) 48.40 Outstanding September 30, 2018 2,571,829 $ 13.81 5.7 Exercisable September 30, 2018 2,571,829 $ 13.81 5.7 Exercise Price Outstanding Number of Warrants Weighted Average Remaining Life in Years Exercisable Number of Warrants > $40.00 400,518 0.3 400,518 $30.00-$39.99 39,990 1.2 39,990 $20.00-$29.99 77,950 1.3 77,950 $10.00-$19.99 50,300 2.7 50,300 $0.00-$9.99 2,003,071 7.1 2,003,071 2,571,829 5.7 2,571,829 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 the Company’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. 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, which has been completed. The warrants are exercisable for cash in full commencing six months after the issuance date. The warrants qualified for equity accounting. Larry Spitcaufsky, a director of the Company and greater than 5% shareholder, subscribed for 70,000 Shares and received an equal number of Warrants in the transaction. Michael D. Pruitt, the company’s chairman and Chief Executive Officer also participated in the offering. On October 1, 2018, the maturity dates for warrants covering 201,974 shares of common stock with strike prices ranging from $55.00 to $70.00 per share were extended from October 1, 2018 to October 1, 2020. 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 less than $2,500. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 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, LLC, a related party, in the amount of $191,226 and $191,580 as of September 30, 2018 and December 31, 2017, respectively. 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 for $2 million of the Company’s $6 million in notes payable due December 31, 2018. In connection with this note, the Company made payments of interest to the board member and related entities as required under the notes for the three and nine months ended September 30, 2018 of $40,000 and $120,000, respectively, and $0 during the same periods of 2017. 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 additional franchise rights in southern California. The Company received royalties of $2,762 and $6,486 during the three and nine months ended September 30, 2018, respectively, and $0 in the same periods of 2017. The Company also received franchise fees of $0 during the three and nine months ended September 30, 2018 and $60,000 for the three and nine month periods of 2017. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 12. SEGMENT INFORMATION The Company is in the business of operating restaurants and its operations are organized by geographic region and by brand within each region. Further, each restaurant location produces monthly financial statements at the individual store level. The Company’s chief operating decision maker reviews revenues and profitability at the 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 Nine Months Ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Revenue: Hooters Full Service $ 3,392,300 $ 3,619,510 $ 10,436,597 $ 10,147,738 Better Burgers Fast Casual 5,692,004 5,850,061 16,854,025 17,176,891 Just Fresh Fast Casual 989,097 1,230,795 3,128,220 3,951,069 Corporate and Other 24,999 24,997 74,997 74,980 $ 10,098,400 $ 10,725,363 $ 30,493,839 $ 31,350,678 Operating Income (Loss): (1) Hooters Full Service $ 87,444 $ (485,844 ) $ (1,174,320 ) $ (1,075,460 ) Better Burgers Fast Casual (133,466 ) (399,256 ) (253,997 ) (457,878 ) Just Fresh Fast Casual (21,280 ) (28,301 ) (64,057 ) (74,185 ) Corporate and Other (604,014 ) (485,044 ) (1,980,129 ) (1,861,764 ) $ (671,316 ) $ (1,398,445 ) $ (3,472,503 ) $ (3,469,287 ) Depreciation and Amortization Hooters Full Service $ 95,509 $ 128,857 $ 303,682 $ 407,795 Better Burgers Fast Casual 382,802 387,621 1,154,885 1,143,584 Just Fresh Fast Casual 44,525 55,476 133,575 214,928 Corporate and Other 844 844 2,531 2,530 $ 523,680 $ 572,798 $ 1,594,673 $ 1,768,837 (1) Note that Operating Income (Loss) includes non-cash impairment charges of $1.7 million and $1.5 for the nine months ended September 30, 2018 and 2017, respectively and $0 and $0.8 million for the three months ended September 30, 2018 and 2017, respectively. 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 Nine Months Ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Revenue: United States $ 8,038,545 $ 8,353,053 $ 23,984,963 $ 24,863,979 South Africa 1,352,340 1,502,349 4,321,668 4,369,122 Europe 707,515 869,961 2,187,208 2,117,577 $ 10,098,400 $ 10,725,363 $ 30,493,839 $ 31,350,678 Operating Income (Loss): (1) United States $ (711,846 ) $ (767,659 ) $ (2,179,967 ) $ (2,832,502 ) South Africa 29,485 (684,022 ) 50,680 (769,536 ) Europe 11,045 53,236 (1,343,215 ) 132,751 $ (671,316 ) $ (1,398,445 ) $ (3,472,503 ) $ (3,469,287 ) Non-current Assets: September 30, 2018 December 31, 2017 United States $ 24,771,692 $ 24,630,101 South Africa 957,143 1,203,610 Europe 1,850,485 2,549,747 $ 27,579,320 $ 28,383,458 (1) Note that Operating Income (Loss) includes non-cash impairment charges of $1.7 million and $1.5 for the nine months ended September 30, 2018 and 2017, respectively and $0 and $0.8 million for the three months ended September 30, 2018 and 2017, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 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 September 30, 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 $0.7 million, of which we expect approximately $0.2 million to be funded by private investors and approximately $0.5 million will be funded internally by the Company. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | USE OF ESTIMATES The preparation of financial statements in conformity with US GAAP 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 revenue 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 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 obligations (such as providing assistance during the opening of a restaurant) are combined with the license and were determined to be a single performance obligation. Accordingly, the total transaction price (comprised of the restaurant opening and territory fees) is 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 are 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 three and nine-month periods ended September 30, 2018 under ASC-606 and revenue that would have been recognized had ASC-605 been applied is as follows: Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 As reported under ASC-606 If reported under ASC-605 Increase As reported under ASC-606 If reported under ASC-605 Increase Restaurant sales, net $ 9,848,302 $ 9,848,302 $ - $ 29,802,969 $ 29,802,969 $ - Gaming income, net 111,301 111,301 - 285,578 285,578 - Management fee income 24,999 24,999 - 74,997 74,997 - Franchise income 113,798 93,088 20,710 330,295 268,165 62,130 Total Revenue $ 10,098,400 $ 10,077,690 $ 20,710 $ 30,493,839 $ 30,431,709 $ 62,130 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 with the adoption of ASC 606, such initial fees are deferred and recognized over the franchise license term. |
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 and convertible notes payable as of September 30, 2018 and 2017 that have been excluded from the calculation of diluted net loss per common share since the effect would be antidilutive. September 30, 2018 September 30, 2017 Warrants 2,571,829 1,862,758 Convertible notes 300,000 366,667 Total 2,871,829 2,229,425 |
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) is 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 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 and $62 thousand in franchise income for the three months and nine months ended September 30, 2018, respectively, 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 accumulating and analyzing the leases to be 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 being 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. In August 2018, the Securities and Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification,” amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The final rule is effective for all filings made on and after November 5, 2018. Given the effective date and proximity to most filers’ quarterly reports, the SEC is not objecting to filers deferring the presentation of changes in stockholders’ equity in their quarterly reports on Forms 10-Q until the quarter that begins after November 5, 2018. The Company anticipates its first presentation of changes in stockholders’ equity will be included in its quarterly report on Form 10-Q for the quarter ended March 31, 2019. 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 September 30, 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) | 9 Months Ended |
Sep. 30, 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 50 % 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 Columbia, LLC MD, 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 50 % 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 % |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Revenue Recognized | Revenue recognized for the three and nine-month periods ended September 30, 2018 under ASC-606 and revenue that would have been recognized had ASC-605 been applied is as follows: Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 As reported under ASC-606 If reported under ASC-605 Increase As reported under ASC-606 If reported under ASC-605 Increase Restaurant sales, net $ 9,848,302 $ 9,848,302 $ - $ 29,802,969 $ 29,802,969 $ - Gaming income, net 111,301 111,301 - 285,578 285,578 - Management fee income 24,999 24,999 - 74,997 74,997 - Franchise income 113,798 93,088 20,710 330,295 268,165 62,130 Total Revenue $ 10,098,400 $ 10,077,690 $ 20,710 $ 30,493,839 $ 30,431,709 $ 62,130 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the number of common shares potentially issuable upon the exercise of certain warrants and convertible notes payable as of September 30, 2018 and 2017 that have been excluded from the calculation of diluted net loss per common share since the effect would be antidilutive. September 30, 2018 September 30, 2017 Warrants 2,571,829 1,862,758 Convertible notes 300,000 366,667 Total 2,871,829 2,229,425 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property and equipment consists of the following: September 30, 2018 December 31, 2017 Leasehold improvements $ 10,882,067 $ 9,941,223 Restaurant furniture and equipment 6,346,556 5,952,934 Construction in progress 1,063,462 176,939 Office furntiture and equipment 148,451 148,451 18,440,536 16,219,547 Accumulated depreciation and amortization (8,908,169 ) (7,670,955 ) $ 9,532,367 $ 8,548,592 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill consists of the following: September 30, 2018 December 31, 2017 Hooters Full Service $ 3,390,307 $ 4,703,203 Better Burgers Fast Casual 7,448,848 7,448,848 Just Fresh Fast Casual 495,755 495,755 $ 11,334,910 $ 12,647,806 September 30, 2018 December 31, 2017 Beginning Balance $ 12,647,806 $ 12,405,770 Acquisitions - - Adjustments (1,280,661 ) - Foreign currency translation (loss) gain (32,235 ) 242,036 Ending Balance $ 11,334,910 $ 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 September 30, 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 239,528 273,194 Hooters Pacific NW 20 years 89,507 74,507 Hooters UK 5 years - 13,158 329,035 360,859 Total Intangibles at cost 7,161,965 7,193,789 Accumulated amortization (1,699,232 ) (1,297,057 ) Intangible assets, net $ 5,462,733 $ 5,896,732 |
Long-Term Debt and Notes Paya_2
Long-Term Debt and Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt and Notes Payable | Long-term debt and notes payable are summarized as follows: September 30, 2018 December 31, 2017 Notes Payable, due December 31, 2018, net of discount of $293,347 and $1,173,390, respectively (a) $ 5,706,653 $ 4,826,610 Notes Payable Paragon Bank (b) 374,424 572,276 Note Payable (c) 75,000 75,000 Note Payable, due March 2019 4,847 - Receivables financing facilities (d) 48,788 76,109 Bank overdraft facilities, South Africa, annual renewal 117,737 164,619 Equipment financing arrangements, South Africa 5,683 27,297 Total long-term debt $ 6,333,132 $ 5,741,911 Current portion of long-term debt 6,333,132 5,741,911 Long-term debt, less current portion $ - $ - For the nine months ended September 30, 2018 and 2017 amortization of debt discount was $0.9 million and $0.5 million 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 $6 million debentures are due and payable on December 31, 2018. The Company is in discussions with its lenders regarding the terms of an extension or new debenture to replace the expiring debenture. Those discussions are continuing and are expected to be final by the end of the year. Management cannot provide any assurance that it will be successful in negotiating an extension or a new loan or provide any assurance as to the terms and conditions of any new or extended debentures. b) The Company has two term loans with Paragon Bank (previously three loans, one of which was paid in full in September 2018), 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 % $ - $ - Note 2 5/10/2019 5.50 % 102,099 11,532 Note 3 8/10/2021 5.50 % 272,325 8,500 $ 374,424 $ 20,032 c) The Company has a promissory note payable on demand in the amount of $75,000 with 800 shares of restricted Company common stock to be paid to the lender each month while the note is outstanding. d) During February 2017, in consideration for proceeds of $330,000, the Company agreed to make payments of $1,965 per day for 210 days. As of October 2017, the daily payment amount was modified to $1,200 per day and the term was extended to February 2018, with total remittance over the life of the loan unchanged. Also, during March 2017 in consideration for proceeds of $150,000, the Company agreed to make payments of $856 per day for 240 days. The Company granted a security interest in the credit card receivables of the specified restaurants in connection with the Receivables Financing Agreements |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | Convertible notes payable are summarized as follows: September 30, 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 were to 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 Company entered into a letter of intent for the sale of the Hooters Nottingham facility from which the Company planned to settle a portion of the convertible note. However, the letter of intent has expired. Management is evaluating other alternatives to market the property for sale. (See Note 4 - Assets Held for sale). Principal and interest under the convertible notes are payable on demand following the maturity on June 30, 2018 are classified as current liabilities on the accompanying condensed consolidated balance sheets. As of November 13, 2018, the lenders have not demanded payment of principal or unpaid interest, asserted defaults or indicated any imminent action for collection. Management is in discussions with the lenders and intends to enter into an extension or new agreement, but cannot provide assurance that it will be successful in negotiating an extension or new loan or the terms of any new or extended debt. (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 _2
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are summarized as follows: September 30, 2018 December 31, 2017 Accounts payable and accrued expenses $ 2,521,918 $ 3,334,089 Accrued taxes (VAT, Sales, Payroll) 2,731,086 1,170,906 Accrued income taxes 71,046 83,878 Accrued interest 1,786,932 1,208,379 $ 7,110,982 $ 5,797,252 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 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 6.2 Granted 403,214 4.50 Exercised (100,000 ) 3.50 Forfeited (94,000 ) 48.40 Outstanding September 30, 2018 2,571,829 $ 13.81 5.7 Exercisable September 30, 2018 2,571,829 $ 13.81 5.7 |
Schedule of Warrants Outstanding | Exercise Price Outstanding Number of Warrants Weighted Average Remaining Life in Years Exercisable Number of Warrants > $40.00 400,518 0.3 400,518 $30.00-$39.99 39,990 1.2 39,990 $20.00-$29.99 77,950 1.3 77,950 $10.00-$19.99 50,300 2.7 50,300 $0.00-$9.99 2,003,071 7.1 2,003,071 2,571,829 5.7 2,571,829 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 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 Nine Months Ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Revenue: Hooters Full Service $ 3,392,300 $ 3,619,510 $ 10,436,597 $ 10,147,738 Better Burgers Fast Casual 5,692,004 5,850,061 16,854,025 17,176,891 Just Fresh Fast Casual 989,097 1,230,795 3,128,220 3,951,069 Corporate and Other 24,999 24,997 74,997 74,980 $ 10,098,400 $ 10,725,363 $ 30,493,839 $ 31,350,678 Operating Income (Loss): (1) Hooters Full Service $ 87,444 $ (485,844 ) $ (1,174,320 ) $ (1,075,460 ) Better Burgers Fast Casual (133,466 ) (399,256 ) (253,997 ) (457,878 ) Just Fresh Fast Casual (21,280 ) (28,301 ) (64,057 ) (74,185 ) Corporate and Other (604,014 ) (485,044 ) (1,980,129 ) (1,861,764 ) $ (671,316 ) $ (1,398,445 ) $ (3,472,503 ) $ (3,469,287 ) Depreciation and Amortization Hooters Full Service $ 95,509 $ 128,857 $ 303,682 $ 407,795 Better Burgers Fast Casual 382,802 387,621 1,154,885 1,143,584 Just Fresh Fast Casual 44,525 55,476 133,575 214,928 Corporate and Other 844 844 2,531 2,530 $ 523,680 $ 572,798 $ 1,594,673 $ 1,768,837 (1) Note that Operating Income (Loss) includes non-cash impairment charges of $1.7 million and $1.5 for the nine months ended September 30, 2018 and 2017, respectively and $0 and $0.8 million for the three months ended September 30, 2018 and 2017, respectively. |
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 Nine Months Ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Revenue: United States $ 8,038,545 $ 8,353,053 $ 23,984,963 $ 24,863,979 South Africa 1,352,340 1,502,349 4,321,668 4,369,122 Europe 707,515 869,961 2,187,208 2,117,577 $ 10,098,400 $ 10,725,363 $ 30,493,839 $ 31,350,678 Operating Income (Loss): (1) United States $ (711,846 ) $ (767,659 ) $ (2,179,967 ) $ (2,832,502 ) South Africa 29,485 (684,022 ) 50,680 (769,536 ) Europe 11,045 53,236 (1,343,215 ) 132,751 $ (671,316 ) $ (1,398,445 ) $ (3,472,503 ) $ (3,469,287 ) Non-current Assets: September 30, 2018 December 31, 2017 United States $ 24,771,692 $ 24,630,101 South Africa 957,143 1,203,610 Europe 1,850,485 2,549,747 $ 27,579,320 $ 28,383,458 (1) Note that Operating Income (Loss) includes non-cash impairment charges of $1.7 million and $1.5 for the nine months ended September 30, 2018 and 2017, respectively and $0 and $0.8 million for the three months ended September 30, 2018 and 2017, respectively. |
Nature of Business (Details Nar
Nature of Business (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||
May 31, 2018 | Jan. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Cash and cash balance | $ 1,091,519 | $ 272,976 | |||
Working capital deficit | 14,300,000 | ||||
Construction cost | 700,000 | ||||
Debt obligations due | 9,300,000 | ||||
Interest and penalties | 1,300,000 | ||||
Sale of common stock | 403,214 | ||||
Sale of stock, price per share | $ 3.50 | ||||
Proceeds from sale | $ 1,400,000 | ||||
Proceeds form exercise warrant | $ 290,000 | ||||
Exercise of common stock warrant | $ 100,000 | ||||
Contribution of non-controlling interest | 800,000 | $ 675,000 | |||
Private Investors [Member] | |||||
Construction cost | 200,000 | ||||
Company [Member] | |||||
Construction cost | $ 500,000 |
Nature of Business - Schedule o
Nature of Business - Schedule of Subsidiaries (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Chanticleer Holdings Inc [Member] | |
Company name | CHANTICLEER HOLDINGS, INC. |
Jurisdiction of Incorporation | DE,USA |
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 | 50.00% |
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 LLC [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 Columbia, LLC [Member] | |
Company name | BGR Columbia, LLC |
Jurisdiction of Incorporation | MD, 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 | BT’s Burgerjoint Rivergate LLC |
Jurisdiction of Incorporation | NC, USA |
Percent Owned | 100.00% |
Burger Business [Member] | BT's Burgerjoint Sun Valley, LLC [Member] | |
Company name | BT’s 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 | 50.00% |
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 Owl’s 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 Umhlanga (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% |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Jan. 02, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||||
Accumulated deficit | $ (54,831,438) | $ (54,831,438) | $ 1,100,000 | $ (49,109,303) |
Deferred revenue | $ 1,100,000 | |||
Franchise income | $ 21,000 | $ 62,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Revenue Recognized (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | $ 10,098,400 | $ 10,725,363 | $ 30,493,839 | $ 31,350,678 |
Increase [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 20,710 | 62,130 | ||
Reported under ASC-606 [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 10,098,400 | 30,493,839 | ||
Reported under ASC-605 [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 10,077,690 | 30,431,709 | ||
Restaurant Sales, Net [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 9,848,302 | 10,479,274 | 29,802,969 | 30,657,215 |
Restaurant Sales, Net [Member] | Increase [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | ||||
Restaurant Sales, Net [Member] | Reported under ASC-606 [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 9,848,302 | 29,802,969 | ||
Restaurant Sales, Net [Member] | Reported under ASC-605 [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 9,848,302 | 29,802,969 | ||
Gaming Income, Net [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 111,301 | 115,267 | 285,578 | 328,855 |
Gaming Income, Net [Member] | Increase [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | ||||
Gaming Income, Net [Member] | Reported under ASC-606 [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 111,301 | 285,578 | ||
Gaming Income, Net [Member] | Reported under ASC-605 [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 111,301 | 285,578 | ||
Management Fee Income [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 24,999 | 24,999 | 74,997 | 74,982 |
Management Fee Income [Member] | Increase [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | ||||
Management Fee Income [Member] | Reported under ASC-606 [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 24,999 | 74,997 | ||
Management Fee Income [Member] | Reported under ASC-605 [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 24,999 | 74,997 | ||
Franchise Income [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 113,798 | $ 105,823 | 330,295 | $ 289,626 |
Franchise Income [Member] | Increase [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 20,710 | 62,130 | ||
Franchise Income [Member] | Reported under ASC-606 [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | 113,798 | 330,295 | ||
Franchise Income [Member] | Reported under ASC-605 [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total Revenue | $ 93,088 | $ 268,165 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 2,871,829 | 2,229,425 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 2,571,829 | 1,862,758 |
Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 300,000 | 366,667 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) | Mar. 07, 2018USD ($) |
First Location [Member] | |
Purchase consideration | $ 30,000 |
Note principal amount | 9,580 |
Second Location [Member] | |
Purchase consideration | 0 |
Note principal amount | $ 186,767 |
Assets Held for Sale (Details N
Assets Held for Sale (Details Narrative) - USD ($) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2018 | Sep. 30, 2018 | |
Assets Held-for-sale, Not Part of Disposal Group [Abstract] | ||
Impairment charge | $ 1,700,000 | $ 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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense | $ 523,680 | $ 572,798 | $ 1,594,673 | $ 1,768,837 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 18,440,536 | $ 16,219,547 |
Accumulated depreciation and amortization | (8,908,169) | (7,670,955) |
Property and equipment, net | 9,532,367 | 8,548,592 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 10,882,067 | 9,941,223 |
Restaurant Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 6,346,556 | 5,952,934 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,063,462 | 176,939 |
Office Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 148,451 | $ 148,451 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 400,000 | $ 200,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Schedule of Goodwill (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||
Goodwill | $ 12,647,806 | $ 12,647,806 |
Beginning Balance | 12,647,806 | 12,405,770 |
Acquisitions | ||
Adjustments | (1,280,661) | |
Foreign currency translation (loss) gain | (32,235) | 242,036 |
Ending Balance | 11,334,910 | 12,647,806 |
Hooters Full Service [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 4,703,203 | 4,703,203 |
Beginning Balance | 4,703,203 | |
Ending Balance | 3,390,307 | 4,703,203 |
Better Burgers Fast Casual [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 7,448,848 | 7,448,848 |
Beginning Balance | 7,448,848 | |
Ending Balance | 7,448,848 | 7,448,848 |
Just Fresh Fast Casual [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 495,755 | 495,755 |
Beginning Balance | 495,755 | |
Ending Balance | $ 495,755 | $ 495,755 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, Net - Schedule of Other Intangible Assets (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 7,161,965 | $ 7,193,789 |
Accumulated amortization | (1,699,232) | (1,297,057) |
Intangible assets, net | 5,462,733 | 5,896,732 |
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 Burger [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 | $ 329,035 | 360,859 |
Franchise License Fees [Member] | Hooters South Africa [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 239,528 | 273,194 |
Estimated useful Life | 20 years | |
Franchise License Fees [Member] | Hooters Pacific NW [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible cost | $ 89,507 | 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 Paya_3
Long-Term Debt and Notes Payable (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Disclosure [Abstract] | ||
Amortization of debt discount | $ 900,000 | $ 500,000 |
Debt outstanding | 49,000 | |
Accrued interest | $ 1,300,000 |
Long-Term Debt and Notes Paya_4
Long-Term Debt and Notes Payable - Summary of Long-Term Debt and Notes Payable (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | |
Short-term Debt [Line Items] | |||
Total Long-term Debt | $ 6,333,132 | $ 5,741,911 | |
Current portion of long-term debt | 6,333,132 | 5,741,911 | |
Long-term debt, less current portion | |||
Notes Payable, Due December 31, 2018 [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | [1] | 5,706,653 | 4,826,610 |
Notes Payable Paragon Bank [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | [2] | 374,424 | 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 | 4,847 | ||
Receivables Financing Facilities [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | 48,788 | 76,109 | |
Bank Overdraft Facilities, South Africa, Annual Renewal [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | 117,737 | 164,619 | |
Equipment Financing Arrangements, South Africa [Member] | |||
Short-term Debt [Line Items] | |||
Total Long-term Debt | $ 5,683 | $ 27,297 | |
[1] | On May 4, 2017, pursuant to a Securities Purchase Agreement, the Company issued 8% non-convertible secured debentures in the principal amount of $6,000,000 and warrants to purchase 1,200,000 shares of common stock (as adjusted for the Company’s subsequent one-for-ten reverse stock split) to accredited investors. The debentures bear interest at a rate of 8% per annum, payable in cash quarterly in arrears. The debentures mature on December 31, 2018 and contain customary financial and other covenants, including a requirement to maintain positive 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 $6 million debentures are due and payable on December 31, 2018. The Company is in discussions with its lenders regarding the terms of an extension or new debenture to replace the expiring debenture. Those discussions are continuing and are expected to be final by the end of the year. Management cannot provide any assurance that it will be successful in negotiating an extension or a new loan or provide any assurance as to the terms and conditions of any new or extended debentures. | ||
[2] | The Company has two term loans with Paragon Bank (previously three loans, one of which was paid in full in September 2018), 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 % $ - $ - Note 2 5/10/2019 5.50% 102,099 11,532 Note 3 8/10/2021 5.50% 272,325 8,500 $374,424 $20,032 |
Long-Term Debt and Notes Paya_5
Long-Term Debt and Notes Payable - Summary of Long-Term Debt and Notes Payable (Details) (Parenthetical) - USD ($) | Feb. 22, 2018 | May 04, 2017 | May 04, 2017 | Oct. 31, 2017 | Mar. 31, 2017 | Feb. 28, 2017 | Sep. 30, 2018 | Dec. 31, 2017 |
Convertible secured debentures principal balance | $ 200,000 | |||||||
Warrant exercise price per share | $ 4.50 | |||||||
Number of restricted shares issued | 66,667 | |||||||
Proceeds from consideration | $ 150,000 | $ 330,000 | ||||||
Payments agreed to pay | $ 1,200 | $ 856 | $ 1,965 | |||||
Lender [Member] | ||||||||
Number of restricted shares issued | 800 | |||||||
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 | ||||||||
Note payable maturity date | Sep. 10, 2018 | Sep. 10, 2018 | ||||||
Debt periodic payment | ||||||||
Note Two [Member] | ||||||||
Debt instruments bears interest rate | 5.50% | 5.50% | ||||||
Convertible secured debentures principal balance | $ 102,099 | $ 102,099 | ||||||
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 | 5.50% | 5.50% | ||||||
Convertible secured debentures principal balance | $ 272,325 | $ 272,325 | ||||||
Note payable maturity date | Aug. 10, 2021 | Aug. 10, 2021 | ||||||
Debt periodic payment | $ 8,500 | $ 8,500 | ||||||
Note [Member] | ||||||||
Convertible secured debentures principal balance | 374,424 | 374,424 | ||||||
Debt periodic payment | 20,032 | 20,032 | ||||||
Promissory Note Payable [Member] | ||||||||
Notes payable | 75,000 | |||||||
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% | |||||||
Notes Payable, Due December 31, 2018 [Member] | ||||||||
Notes payable discount | $ 293,347 | $ 1,173,390 | ||||||
Note Payable, Due March 2019 [Member] | ||||||||
Note payable maturity date | Mar. 31, 2019 | Mar. 31, 2019 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | Sep. 30, 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] | |||
Total Convertible notes payable | [1] | 3,000,000 | 3,000,000 |
8% Convertible Notes Payable Due March 2019 [Member] | |||
Convertible Notes Payable [Line Items] | |||
Total Convertible notes payable | [2] | 200,000 | |
Premium on Above Convertible Note [Member] | |||
Convertible Notes Payable [Line Items] | |||
Total Convertible notes payable | 12,256 | ||
Convertible Notes Payable [Member] | |||
Convertible Notes Payable [Line Items] | |||
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 | ||
[1] | 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 were to 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 Company entered into a letter of intent for the sale of the Hooters Nottingham facility from which the Company planned to settle a portion of the convertible note. However, the letter of intent has expired. Management is continuing discussions and evaluating other alternatives to market the property for sale. Principal and interest under the convertible notes are payable on demand following the maturity on June 30, 2018 are a classified as current liabilities on the accompanying condensed consolidated balance sheets. As of September 30, 2018, the lenders have not demanded payment of principal or unpaid interest, asserted defaults or indicated any imminent action for collection. Management is in discussions with the lenders and intends to enter into an extension or new agreement, but cannot provide assurance that it will be successful in negotiating an extension or new loan or the terms of any new or extended debt. | ||
[2] | On February 22, 2018, $200,000 of the Company's convertible debt was converted into 66,667 shares of Company common stock in accordance with the terms of the convertible debt agreements. |
Convertible Notes Payable - S_2
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) - USD ($) | 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 percentage | 6.00% | |
Convertible debt | $ 3,000,000 | |
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 _3
Accounts Payable and Accrued Expenses (Details Narrative)) | Sep. 30, 2018USD ($) |
Payables and Accruals [Abstract] | |
Accrued employee and employer taxes | $ 1,600,000 |
Accounts Payable and Accrued _4
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $ 2,521,918 | $ 3,334,089 |
Accrued taxes (VAT, Sales, Payroll) | 2,731,086 | 1,170,906 |
Accrued income taxes | 71,046 | 83,878 |
Accrued interest | 1,786,932 | 1,208,379 |
Accounts payable and accrued expenses | $ 7,110,982 | $ 5,797,252 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | May 03, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Sep. 30, 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 issued | 3,706,563 | 3,045,809 | ||||
Common stock, shares outstanding | 3,706,563 | 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 | ||||
Warrants to purchase common stock | 403,214 | |||||
Warrants exercise price | $ 4.50 | |||||
7% Gross Proceeds [Member] | Oak Ridge Financial Services Group, Inc [Member] | ||||||
Stockholder's Equity [Line Items] | ||||||
Commission expenses | $ 36,767 | |||||
7% Gross Proceeds [Member] | Oak Ridge Financial Services Group, Inc [Member] | Maximum [Member] | ||||||
Stockholder's Equity [Line Items] | ||||||
Legal expenses | $ 2,500 | |||||
Michael D. Pruitt [Member] | 5% Shareholder [Member] | ||||||
Stockholder's Equity [Line Items] | ||||||
Number of shares subscribed | 70,000 | |||||
Securities Purchase Agreement [Member] | ||||||
Stockholder's Equity [Line Items] | ||||||
Number of shares purchased | 403,214 | |||||
Share purchase price | $ 3.50 | |||||
Gross purchase price | $ 1,411,249 | |||||
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 | 400,000 | |||||
Number of shares issued | 91,029 | |||||
Number of shares available for issuance | 293,971 | |||||
October 1, 2018 [Member] | ||||||
Stockholder's Equity [Line Items] | ||||||
Warrants to purchase common stock | 201,974 | |||||
Warrants maturity date, description | October 1, 2018 to October 4, 2020. | |||||
October 1, 2018 [Member] | Maximum [Member] | ||||||
Stockholder's Equity [Line Items] | ||||||
Warrants exercise price | $ 70 | |||||
October 1, 2018 [Member] | Minimum [Member] | ||||||
Stockholder's Equity [Line Items] | ||||||
Warrants exercise price | $ 55 | |||||
Preferred Stock [Member] | ||||||
Stockholder's Equity [Line Items] | ||||||
Cumulative dividends rate | 9.00% | 9.00% | 9.00% | |||
Warrant term | 7 years | 7 years | 7 years | |||
Common stock issued dividend percentage | 10.00% | |||||
Preferred stock, liquidation preference | $ 13.50 | |||||
Unpaid dividend maturity, description | Unpaid dividends upon maturity in 2023 | |||||
Preferred Stock [Member] | December 31, 2018 [Member] | ||||||
Stockholder's Equity [Line Items] | ||||||
Cumulative dividends rate | 9.00% | |||||
Warrant term | 7 years |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrants Activity (Details) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Equity [Abstract] | |
Number of Warrants Outstanding, beginning balance | shares | 2,362,615 |
Number of Warrants Outstanding, Granted | shares | 403,214 |
Number of Warrants Outstanding, Exercised | shares | (100,000) |
Number of Warrants Outstanding, Forfeited | shares | (94,000) |
Number of Warrants Outstanding, ending balance | shares | 2,571,829 |
Number of Warrants Outstanding, Exercisable | shares | 2,571,829 |
Weighted-average exercise price, Outstanding beginning balance | $ / shares | $ 16.34 |
Weighted-average exercise price, Granted | $ / shares | 4.50 |
Weighted-average exercise price, Exercised | $ / shares | 3.50 |
Weighted-average exercise price, Forfeited | $ / shares | 48.40 |
Weighted-average exercise price, Outstanding ending balance | $ / shares | 13.81 |
Weighted-average exercise price, Exercisable | $ / shares | $ 13.81 |
Weighted Average Remaining Life In Years, Outstanding beginning balance | 6 years 2 months 12 days |
Weighted Average Remaining Life, Granted | 0 years |
Weighted Average Remaining Life, Exercised | 0 years |
Weighted Average Remaining Life, Forfeited | 0 years |
Weighted Average Remaining Life, Outstanding ending balance | 5 years 8 months 12 days |
Weighted Average Remaining Life, Exercisable | 5 years 8 months 12 days |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Warrants Outstanding (Details) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 6 years 2 months 12 days |
Warrant [Member] | |
Number of warrants, outstanding | 2,571,829 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 5 years 8 months 12 days |
Number of warrants exercisable | 2,571,829 |
Range 1 [Member] | Warrant [Member] | |
Range of exercise prices, lower limit | $ / shares | $ 40 |
Number of warrants, outstanding | 400,518 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 3 months 19 days |
Number of warrants exercisable | 400,518 |
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 | 39,990 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 1 year 2 months 12 days |
Number of warrants exercisable | 39,990 |
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 3 months 19 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) | 2 years 8 months 12 days |
Number of warrants exercisable | 50,300 |
Range 5 [Member] | Warrant [Member] | |
Range of exercise prices, lower limit | $ / shares | $ 0 |
Range of exercise prices, upper limit | $ / shares | $ 9.99 |
Number of warrants, outstanding | 2,003,071 |
Warrants outstanding, Weighted-average remaining contractual life ( in years) | 7 years 1 month 6 days |
Number of warrants exercisable | 2,003,071 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 191,226 | $ 191,226 | $ 191,850 | ||
Chanticleer Investors, LCC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 191,226 | 191,226 | $ 191,850 | ||
Larry Spitcaufsky [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 2,000,000 | 2,000,000 | |||
Notes payable | 6,000,000 | $ 6,000,000 | |||
Note payable maturity date | Dec. 31, 2018 | ||||
Payments of interest | 40,000 | $ 0 | $ 120,000 | $ 0 | |
Royalties received | 2,762 | 0 | 6,486 | 0 | |
Proceeds from franchise fee | $ 0 | $ 60,000 | $ 0 | $ 60,000 |
Segment Information - Schedule
Segment Information - Schedule of Revenues and Operating Income (loss) by Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Revenue | $ 10,098,400 | $ 10,725,363 | $ 30,493,839 | $ 31,350,678 | |
Operating Income (Loss): | [1] | (671,316) | (1,398,445) | (3,472,503) | (3,469,287) |
Depreciation and Amortization | 523,680 | 572,798 | 1,594,673 | 1,768,837 | |
Operating Segments [Member] | |||||
Revenue | 10,098,400 | 10,725,363 | 30,493,839 | 31,350,678 | |
Operating Income (Loss): | [1] | (671,316) | (1,398,445) | (3,472,503) | (3,469,287) |
Depreciation and Amortization | 523,680 | 572,798 | 1,594,673 | 1,768,837 | |
Operating Segments [Member] | Hooters Full Service [Member] | |||||
Revenue | 3,392,300 | 3,619,510 | 10,436,597 | 10,147,738 | |
Operating Income (Loss): | [1] | 87,444 | (485,844) | (1,174,320) | (1,075,460) |
Depreciation and Amortization | 95,509 | 128,857 | 303,682 | 407,795 | |
Operating Segments [Member] | Better Burgers Fast Casual [Member] | |||||
Revenue | 5,692,004 | 5,850,061 | 16,854,025 | 17,176,891 | |
Operating Income (Loss): | [1] | (133,466) | (399,256) | (253,997) | (457,878) |
Depreciation and Amortization | 382,802 | 387,621 | 1,154,885 | 1,143,584 | |
Operating Segments [Member] | Just Fresh Fast Casual [Member] | |||||
Revenue | 989,097 | 1,230,795 | 3,128,220 | 3,951,069 | |
Operating Income (Loss): | [1] | (21,280) | (28,301) | (64,057) | (74,185) |
Depreciation and Amortization | 44,525 | 55,476 | 133,575 | 214,928 | |
Operating Segments [Member] | Corporate and Other [Member] | |||||
Revenue | 24,999 | 24,997 | 74,997 | 74,980 | |
Operating Income (Loss): | [1] | (604,014) | (485,044) | (1,980,129) | (1,861,764) |
Depreciation and Amortization | $ 844 | $ 844 | $ 2,531 | $ 2,530 | |
[1] | Note that Operating Income (Loss) includes non-cash impairment charges of $1.7 million and $1.5 for the nine months ended September 30, 2018 and 2017, respectively and $0 and $0.8 million for the three months ended September 30, 2018 and 2017, respectively. |
Segment Information - Schedul_2
Segment Information - Schedule of Revenues and Operating Income (loss) by Segment (Details) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting [Abstract] | ||||
Non-cash impairment charges | $ 0 | $ 800,000 | $ 1,700,000 | $ 1,500,000 |
Segment Information - Summary o
Segment Information - Summary of Revenues, Operating Loss, Long-Lived Assets By Geographic Area (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | ||
Segment Reporting Information [Line Items] | ||||||
Revenue: | $ 10,098,400 | $ 10,725,363 | $ 30,493,839 | $ 31,350,678 | ||
Operating Income (Loss): | [1] | (671,316) | (1,398,445) | (3,472,503) | (3,469,287) | |
Non-current Assets: | 27,579,320 | 27,579,320 | $ 28,383,458 | |||
United States [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue: | 8,038,545 | 8,353,053 | 23,984,963 | 24,863,979 | ||
Operating Income (Loss): | [1] | (711,846) | (767,659) | (2,179,967) | (2,832,502) | |
Non-current Assets: | 24,771,692 | 24,771,692 | 24,630,101 | |||
South Africa [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue: | 1,352,340 | 1,502,349 | 4,321,668 | 4,369,122 | ||
Operating Income (Loss): | [1] | 29,485 | (684,022) | 50,680 | (769,536) | |
Non-current Assets: | 957,143 | 957,143 | 1,203,610 | |||
Europe [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue: | 707,515 | 869,961 | 2,187,208 | 2,117,577 | ||
Operating Income (Loss): | [1] | 11,045 | $ 53,236 | (1,343,215) | $ 132,751 | |
Non-current Assets: | $ 1,850,485 | $ 1,850,485 | $ 2,549,747 | |||
[1] | Note that Operating Income (Loss) includes non-cash impairment charges of $1.7 million and $1.5 for the nine months ended September 30, 2018 and 2017, respectively and $0 and $0.8 million for the three months ended September 30, 2018 and 2017, respectively. |
Segment Information - Summary_2
Segment Information - Summary of Revenues, Operating Loss, Long-Lived Assets By Geographic Area (Details) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting [Abstract] | ||||
Non-cash impairment charges | $ 0 | $ 800,000 | $ 1,700,000 | $ 1,500,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 9 Months Ended |
Sep. 30, 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 | 700,000 |
Private Investors [Member] | |
Commitments and Contingencies Disclosure [Line Items] | |
Construction cost | 200,000 |
Company [Member] | |
Commitments and Contingencies Disclosure [Line Items] | |
Construction cost | $ 500,000 |