Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 13, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Entity Registrant Name | 'ONE Group Hospitality, Inc. | ' |
Entity Central Index Key | '0001399520 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 24,940,195 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents (including restricted cash of $1,159,049) | $8,369,894 | $11,681,086 |
Accounts receivable, net | 3,729,176 | 2,923,754 |
Inventory | 944,684 | 978,392 |
Other current assets | 569,513 | 832,951 |
Due from related parties | 286,793 | 245,280 |
Total current assets | 13,900,060 | 16,661,463 |
Property & equipment, net | 16,903,821 | 13,445,413 |
Investments | 2,625,515 | 2,539,272 |
Deferred tax assets | 92,361 | 232,694 |
Other assets | 1,351,465 | 1,333,432 |
Security deposits | 875,457 | 984,657 |
Total assets | 35,748,679 | 35,196,931 |
Current liabilities: | ' | ' |
Cash overdraft | 699,358 | 256,843 |
Notes payable, current portion | ' | 15,000 |
Line of credit | 6,127,253 | 4,316,865 |
Accounts payable | 1,287,858 | 2,706,027 |
Accrued expenses | 1,723,465 | 3,137,207 |
Due to related parties | 9,005 | 27,979 |
Deferred revenue | 111,490 | 27,527 |
Total current liabilities | 9,958,429 | 10,487,448 |
Other long-term liabilities | 39,750 | 39,750 |
Derivative liability | 8,298,000 | 10,095,000 |
Deferred rent payable | 6,637,372 | 6,348,097 |
Total liabilities | 24,933,551 | 26,970,295 |
Stockholders' equity: | ' | ' |
Common stock, $0.0001 par value, 75,000,000 shares authorized; 24,940,195 and 24,946,739 shares issued and outstanding at September 30, 2014 (unaudited) and December 31, 2013, respectively | 2,494 | 2,495 |
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2014 (unaudited) and December 31, 2013, respectively | ' | ' |
Additional paid-in capital | 30,754,410 | 30,502,656 |
Accumulated deficit | -19,596,739 | -22,635,560 |
Accumulated other comprehensive income | 15,447 | 49,402 |
Total stockholders' equity | 11,175,612 | 7,918,993 |
Noncontrolling interest | -360,484 | 307,643 |
Total stockholders' equity including noncontrolling interest | 10,815,128 | 8,226,636 |
Total Liabilities and Stockholders' Equity | $35,748,679 | $35,196,931 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ' | ' |
Restricted cash | $1,159,049 | ' |
Common stock, par value per share (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 24,940,195 | 24,946,739 |
Common stock, shares outstanding | 24,940,195 | 24,946,739 |
Preferred stock, par value per share (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenues: | ' | ' | ' | ' |
Owned unit net revenues | $10,444,821 | $8,948,532 | $28,722,921 | $27,463,562 |
Management and incentive fee revenue | 1,945,363 | 2,137,086 | 6,207,523 | 5,585,556 |
Total revenue | 12,390,184 | 11,085,618 | 34,930,444 | 33,049,118 |
Owned operating expenses: | ' | ' | ' | ' |
Food and beverage costs | 2,811,806 | 2,382,470 | 7,482,382 | 7,212,356 |
Unit operating expenses | 6,245,617 | 5,818,234 | 17,661,544 | 16,886,934 |
General and administrative | 1,922,482 | 1,080,686 | 6,024,364 | 2,973,313 |
Depreciation and amortization | 327,810 | 341,529 | 1,000,464 | 1,197,431 |
Management and royalty fees | -35,214 | 18,331 | 60,324 | 58,640 |
Pre-opening expenses | 315,905 | -161,064 | 1,149,078 | 211,330 |
Transaction costs | ' | 1,026,416 | ' | 1,026,416 |
Equity in income of investee companies | -268,660 | -163,375 | -588,996 | -563,583 |
Derivative expense (income) | 991,588 | ' | -1,793,124 | ' |
Interest expense, net of interest income | -6,268 | 235,507 | 52,220 | 614,642 |
Other (income)expense | -1,227,698 | 90,605 | -1,157,067 | 279,918 |
Total costs and expenses | 11,077,368 | 10,669,339 | 29,891,189 | 29,897,396 |
Income from continuing operations before provision for income taxes | 1,312,816 | 416,279 | 5,039,255 | 3,151,722 |
Provision for income taxes | 462,898 | 78,457 | 813,580 | 142,794 |
Income from continuing operations | 849,918 | 337,822 | 4,225,675 | 3,008,928 |
(Income) loss from discontinued operations, net of taxes | -177,050 | 2,346,651 | 1,094,376 | 5,705,458 |
Net Income (loss) | 1,026,968 | -2,008,859 | 3,131,299 | -2,696,530 |
Less: net income (loss) attributable to noncontrolling interest | 279,542 | 285,515 | 92,478 | -69,198 |
Net income (loss) attributable to The ONE Group Hospitality, Inc. | 747,426 | -2,294,344 | 3,038,821 | -2,627,332 |
Other comprehensive income | ' | ' | ' | ' |
Currency translation adjustment | -78,177 | 42,725 | -33,955 | 105,711 |
Comprehensive income (loss) | $669,249 | ($2,251,619) | $3,004,866 | ($2,521,621) |
Basic and diluted income (loss) per share: | ' | ' | ' | ' |
Continuing operations (basic) | $0.04 | $0.04 | $0.17 | $0.27 |
Continuing operations (diluted) | $0.04 | $0.04 | $0.17 | $0.27 |
Discontinued operations (basic and diluted) | $0.01 | ($0.20) | ($0.04) | ($0.49) |
Net income (loss) attributable to The ONE Group Hospitality, Inc. | $0.03 | ($0.20) | $0.13 | ($0.23) |
Shares used in computing basic income (loss) per share | 24,940,195 | 11,631,400 | 24,942,328 | 11,631,400 |
Shares used in computing diluted income (loss) per share | 24,940,195 | 11,631,400 | 25,942,328 | 11,631,400 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Additional paid-in capital [Member] | Accumulated deficit [Member] | Accumulated other comprehensive (loss) income [Member] | Total Stockholders' Equity [Member] | Noncontrolling Interest [Member] |
Balance at Dec. 31, 2013 | $8,226,636 | $2,495 | $30,502,656 | ($22,635,560) | $49,402 | $7,918,993 | $307,643 |
Balance, shares at Dec. 31, 2013 | 24,946,739 | 24,946,739 | ' | ' | ' | ' | ' |
Adjustment to escrow shares for excess liabilities | ' | -1 | 1 | ' | ' | ' | ' |
Adjustment to escrow shares for excess liabilities, shares | ' | -6,544 | ' | ' | ' | ' | ' |
Issuance of stock-based compensation | 326,753 | ' | 326,753 | ' | ' | 326,753 | ' |
Purchase of noncontrolling interest | ' | ' | -75,000 | ' | ' | -75,000 | ' |
Member distributions | -760,605 | ' | ' | ' | ' | ' | -760,605 |
Gain on foreign currency translation, net | -33,955 | ' | ' | ' | -33,955 | -33,955 | ' |
Net income (loss) | 3,131,299 | ' | ' | 3,038,821 | ' | 3,038,821 | 92,478 |
Balance at Sep. 30, 2014 | $10,815,128 | $2,494 | $30,754,410 | ($19,596,739) | $15,447 | $11,175,612 | ($360,484) |
Balance, shares at Sep. 30, 2014 | 24,940,195 | 24,940,195 | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Operating activities: | ' | ' |
Net income (loss) | $3,131,299 | ($2,696,530) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ' | ' |
Depreciation and amortization | 1,129,064 | 1,717,406 |
Deferred rent payable | 289,275 | 41,553 |
Deferred taxes | 140,333 | 42,426 |
Accrued interest on member loans | ' | 349,705 |
(Income) loss on equity method investments | -588,996 | -563,583 |
Derivative expense | -1,793,124 | ' |
Stock-based compensation | 326,753 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -805,422 | 347,715 |
Inventory | 33,708 | 415,569 |
Prepaid expenses and other current assets | 263,438 | -526,033 |
Other intangibles | ' | ' |
Security deposits | 109,200 | -10,789 |
Other assets | -43,109 | -20,948 |
Accounts payable | -1,418,169 | -566,782 |
Accrued expenses | -1,413,582 | 423,160 |
Deferred revenue | 83,963 | -38,798 |
Net cash provided by (used in) operating activities | -559,245 | -1,085,929 |
Investing activities: | ' | ' |
Purchase of property and equipment | -4,562,397 | -1,424,476 |
Purchase of minority interest | -75,000 | ' |
Investment | 502,753 | 218,125 |
Due from related parties | -60,487 | -984,876 |
Net cash used in investing activities | -4,195,131 | -2,191,227 |
Financing activities: | ' | ' |
Cash overdraft | 442,515 | -105,664 |
Proceeds from line of credit | 6,897,940 | 5,950,000 |
Repayment of line of credit | -5,087,551 | -3,522,222 |
Repayment of notes payable | -15,000 | -15,000 |
Proceeds from member loans | ' | 2,000,000 |
Contributions from members | ' | 520,000 |
Distributions to members | -760,605 | -1,383,407 |
Net cash provided by financing activities | 1,477,299 | 3,443,707 |
Effect of exchange rate changes on cash | -34,115 | 105,711 |
Net (decrease) increase in cash | -3,311,192 | 272,262 |
Cash and cash equivalents, beginning of year | 11,681,086 | 1,043,730 |
Cash and cash equivalents, end of year | 8,369,894 | 1,315,992 |
Supplemental disclosure of cash flow data: | ' | ' |
Interest paid | 107,070 | 237,433 |
Income taxes paid | $217,172 | $453,180 |
Merger
Merger | 9 Months Ended |
Sep. 30, 2014 | |
Merger [Abstract] | ' |
Merger | ' |
Note 1 - Merger: | |
On October 16, 2013, The ONE Group Hospitality, Inc. (the “Company”) closed a merger transaction (the “Merger”) with The ONE Group, LLC , a privately held Delaware limited liability company (“ One Group”), pursuant to an Agreement and Plan of Merger, dated as of October 16, 2013 (the “Merger Agreement”), by and among Committed Capital Acquisition Corporation, CCAC Acquisition Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of Committed Capital Acquisition Corporation (“Merger Sub”), One Group and Samuel Goldfinger as One Group Representative. Pursuant to the Merger Agreement, One Group became a wholly-owned subsidiary of Committed Capital Acquisition Corporation through a merger of Merger Sub with and into One Group, and the former members of One Group received shares of Committed Capital Acquisition Corporation that constituted a majority of the outstanding shares of Committed Capital Acquisition Corporation. | |
At the closing of the Merger, the Company issued to the former holders of One Group membership interests (the “TOG Members”) and to a liquidating trust (the “Liquidating Trust”) established for the benefit of TOG Members and holders of warrants to acquire membership interests of One Group (“TOG Warrant Owners”) an aggregate of 12,631,400 shares of the Company's common stock, par value $0.0001 per share (the “Common Stock”) and paid to such TOG Members an aggregate of $11,750,000 in cash (collectively, the “Merger Consideration”). As part of the Merger Consideration, the Company issued to Jonathan Segal, the former Managing Member of One Group and currently our Chief Executive Officer and a Director, 1,000,000 shares of Common Stock as a control premium. The foregoing shares are in addition to the 7,680,666 shares issued to Mr. Segal and related entities in respect of his pro rata portion of shares of Common Stock issued to all TOG Members. Of the 12,631,400 shares of Common Stock issued as part of the Merger Consideration, 2,000,000 shares (the “Escrow Shares”) were deposited into an escrow account (the “Escrow Account”) at Continental Stock Transfer & Trust Company, as escrow agent (the “Escrow Agent”) to secure certain potential adjustments to the Merger Consideration as described below and certain potential indemnification obligations. | |
In addition, the Merger Agreement provided for up to an additional $14,100,000 of payments to the TOG Members and the Liquidating Trust based on a formula as described in the Merger Agreement and which is contingent upon the exercise of outstanding Company warrants to purchase 5,750,000 shares of Common Stock at an exercise price of $5.00 per share (the “Parent Warrants”). The Company is required to make these payments on a monthly basis. Additionally, certain One Group employees are entitled to receive a contingent sign-on bonus of an aggregate of approximately $900,000 upon the exercise of the Parent Warrants. Any Parent Warrants that are unexercised will expire on the date that is the earlier of (i) February 27, 2016 or (ii) the forty-fifth (45th) day following the date that the Company's Common Stock closes at or above $6.25 per share for 20 out of 30 trading days commencing on February 27, 2014. | |
The Common Stock portion of the Merger Consideration is subject to adjustment to reflect working capital shortfalls and excess liabilities compared to the amounts that were set forth in a closing statement delivered by One Group within 90 days following the Closing of the Merger. Working capital shortfalls did not exceed by $100,000 the ordinary working capital and therefore no payment was required. Adjustment liabilities exceeded excess liabilities by $12,721 greater than $20,000 in the aggregate, which caused the TOG Members and the Liquidating Trust, on a pro rated basis, to be liable to the Company for an amount equal to the sum of any excess liabilities and working capital shortfall which equaled $32,721. The payment required to be made with respect to the foregoing was made by a reduction of the Escrow Shares. | |
The Merger was accounted for as a reverse-merger and recapitalization in accordance with GAAP, whereby the Company is the accounting acquiree and One Group is the accounting acquirer. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger are those of One Group, and the consolidated financial statements after completion of the Merger include the assets and liabilities of the Company and One Group, historical operations of One Group and operations of the Company from the effective date of the Merger. Membership interests and the corresponding capital amounts of One Group pre-Merger have been retroactively restated as shares of common stock reflecting the 8.09 to one exchange ratio in the Merger. All references in this Report to equity securities and all equity-related historical financial measurements, including weighted average shares outstanding, earnings per share, par value of Common Stock, additional paid in capital, option exercise prices and warrant exercise prices, have been retroactively restated to reflect the Merger exchange ratio. | |
On June 5, 2014, the Company changed its corporate name from Committed Capital Acquisition Corporation to The ONE Group Hospitality, Inc. |
Business_and_basis_of_presenta
Business and basis of presentation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Business and basis of presentation [Abstract] | ' | ||||||||||||||||
Business and basis of presentation | ' | ||||||||||||||||
Note 2 - Business and basis of presentation: | |||||||||||||||||
Principles of consolidation: | |||||||||||||||||
The accompanying consolidated financial statements of The ONE Group Hospitality, Inc. and Subsidiaries include the accounts of One Group and its subsidiaries, Little West 12 th LLC (“Little West 12 th”), One-LA, L.P. (“One LA”), Bridge Hospitality, LLC (“Bridge”), STK-LA, LLC (“STK-LA”), WSATOG (Miami), LLC (“WSATOG”), STK Miami Service, LLC (“Miami Services”), STK Miami, LLC (“STK Miami”), Basement Manager, LLC (“Basement Manager”), JEC II, LLC (“JEC II”), One TCI Ltd. (“One TCI”), One Marks, LLC (“One Marks”), MPD Space Events LLC (“MPD”), One 29 Park Management, LLC (“One 29 Park Management”), STK-Midtown Holdings, LLC (“Midtown Holdings”), STK Midtown, LLC (“STK Midtown”), STKout Midtown, LLC (“STKOUT Midtown”), STK Atlanta, LLC (“STK Atlanta”), STK-Las Vegas, LLC (“STK Vegas”), One Atlantic City, LLC (“One Atlantic City”), Asellina Marks LLC (“Asellina Marks”), Heraea Vegas, LLC (“Heraea”), Xi Shi Las Vegas, LLC (“Xi Shi Las Vegas”), T.O.G (UK) Limited (“TOG UK”), Hip Hospitality Limited (“Hip Hospitality UK”), T.O.G (Aldwych) Limited (“TOG Aldwych”), CA (Aldwych) Limited (“CA Aldwych”), BBCLV, LLC (“BBCLV”), STK DC, LLC (“STK DC”), STK Orlando, LLC (“STK Orlando”), STK Chicago, LLC (“STK Chicago”), TOG Biscayne, LLC (“TOG Biscayne”), STK Westwood, LLC (“STK Westwood”) and STK Denver LLC (“STK Denver”). The entities are collectively referred to herein as the “Company” or “Companies,” as appropriate, and are consolidated on the basis of common ownership and control. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||
Net Income (Loss) Per Common Share | |||||||||||||||||
Basic net income (loss) per common share is based upon the weighted-average common shares outstanding during the period. Diluted net income (loss) per common share reflects the potential dilution that would occur if common stock equivalent securities or other contracts to issue common stock were exercised or converted into common stock. | |||||||||||||||||
A reconciliation between the denominator of basic and diluted net income (loss) per common share is as follows: | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Weighted-average common shares outstanding | 24,940,195 | 11,631,400 | 24,942,328 | 11,631,400 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Stock options | - | - | - | - | |||||||||||||
Weighted-average common shares and potential common | |||||||||||||||||
shares outstanding | 24,940,195 | 11,631,400 | 24,942,328 | 11,631,400 | |||||||||||||
100,000 stock options for both the three months ended September 30, 2014 and 2013 and 100,000 stock options for both the nine months ended September 30, 2014 and 2013 respectively, were not included in the net income (loss) per diluted share calculation because the exercise price of these options was greater than the average market price of the Company's common stock during these periods or their inclusion would have been anti-dilutive. | |||||||||||||||||
Fair value measurements | |||||||||||||||||
The carrying amount of the Company's accounts receivable, short-term debt, accounts payable and accrued expenses approximate fair value because of the short term nature of the financial instruments. | |||||||||||||||||
Nature of business: | |||||||||||||||||
The Company is a hospitality company that develops and operates upscale, high-energy restaurants and lounges and provides turn-key food and beverage services for hospitality venues including boutique hotels, casinos and other high-end locations in the United States and the United Kingdom. As of September 30, 2014, the Company owned and operated 8 and managed 8 restaurants and lounges, including seven STKs throughout the United States and one in London. Eight of our locations are operated under our five food and beverage hospitality management agreements, in which we provide comprehensive food and beverage services for our hospitality clients. | |||||||||||||||||
WSATOG is an LLC formed on October 18, 2007 under the laws of the State of Delaware. WSATOG is a holding company that owns 100% of Miami Services and STK Miami. As per the LLC Operating Agreement of WSATOG, such LLC is set to exist in perpetuity. As of December 31, 2012, One Group had a 60% interest in this entity. On October 23, 2013 One Group executed a Transfer Agreement in which it purchased the remaining 40% interest in WSATOG from the previous minority shareholder for $1,800,000. As of September 30, 2014 and December 31, 2013 One Group has a 100% interest in this entity. | |||||||||||||||||
Basement Manager is an LLC formed on January 12, 2006 under the laws of the State of New York. Basement Manager, which commenced operations on August 25, 2006, operates a nightclub known as Tenjune located in New York, New York. As per the LLC Operating Agreement of Basement Manager, such LLC is set to expire on December 31, 2099. As of September 30, 2014 Little West 12 th has a 65.8% interest in this entity and at December 31, 2013, Little West 12 th has a 63.4% interest in this entity. Tenjune ceased operations on February 15, 2014. On July 25, 2014 Little West 12 th entered into a Transfer and Release Agreement to purchase the minority interest of Basement Manager for $75,000. As a result, Little West 12 th currently has a 100% interest in this entity. | |||||||||||||||||
Midtown Holdings is an LLC formed on February 9, 2010 under the laws of the State of New York. Midtown Holdings owns 100% of STK Midtown and STKOUT Midtown. As per the LLC Operating Agreement of Midtown Holdings, such LLC is set to expire on December 31, 2099. One Group purchased all of the minority interest of Midtown Holdings during 2013 for $3,834,000. As of September 30, 2014 and December 31, 2013 One Group has a 100% interest in this entity. | |||||||||||||||||
STKOUT Midtown, which is wholly-owned by Midtown Holdings, is an LLC formed on December 30, 2009 under the laws of the State of New York. STKOUT Midtown commenced operations on March 28, 2012 and operated a kiosk known as STKOUT in New York, New York. STKOUT Midtown ceased operations in 2013. | |||||||||||||||||
Heraea, which is wholly-owned by One Group, is an LLC formed on May 1, 2012 under the laws of the State of Nevada. Heraea commenced operations in February 2013 and operated a restaurant in Las Vegas, Nevada. Heraea ceased operations on September 24, 2013. | |||||||||||||||||
Xi Shi Las Vegas, which is wholly-owned by One Group, is an LLC formed on August 14, 2012 under the laws of the State of Nevada. Xi Shi Las Vegas was originally expected to commence operations in 2013 in Las Vegas, Nevada, but a determination was made in 2013 to not open Xi Shi. | |||||||||||||||||
TOG UK was formed on July 6, 2010 under the laws of the United Kingdom. TOG UK is a holding company that owns 100% of TOG Aldwych, CA Aldwych and Hip Hospitality UK. On October 10, 2013 One Group executed a Transfer Agreement in which it purchased the remaining 49.99% interest in TOG UK from the previous minority shareholder in exchange for membership interest in One Group. As of September 30, 2014 and December 31, 2013 One Group has a 100% interest in this entity. | |||||||||||||||||
Hip Hospitality UK was formed on May 13, 2010 under the laws of the United Kingdom. Hip Hospitality UK is a management company that manages and operates the food and beverage operations in the Hippodrome Casino in London. Operations in the casino commenced in 2012. On August 1, 2013 TOG UK executed a transfer agreement in which it purchased the remaining 30.00% interest in Hip Hospitality UK from the previous minority shareholder in exchange for membership interest in TOG UK. As of September 30, 2014 and December 31, 2013 TOG UK has a 100% interest in this entity. | |||||||||||||||||
CA Aldwych, which is wholly-owned by TOG UK, was formed on July 4, 2012 under the laws of the United Kingdom. CA Aldwych is a management company that manages and operates a restaurant known as Cucina Asellina in the ME Hotel in London. Operations at the restaurant commenced in 2013. | |||||||||||||||||
BBCLV is an LLC formed on March 8, 2012 under the laws of the State of Nevada. BBCLV commenced operations on October 31, 2012 and operated a restaurant known as Bagatelle in Las Vegas, Nevada. As of September 30. 2014 and December 31, 2013, One Group has a 86.06% interest in this entity. In July 2013, BBCLV ceased operations. | |||||||||||||||||
STK DC, which is wholly-owned by One Group, is an LLC formed on November 20, 2012 under the laws of the State of Delaware. STK DC will operate a restaurant known as STK in Washington, DC. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 and December 31, 2013, One Group has a 93.5% interest in this entity. | |||||||||||||||||
STK Orlando, which is wholly-owned by One Group, is an LLC formed on October 3, 2013 under the laws of the State of Florida. STK Orlando will operate a restaurant known as STK in Orlando, Florida. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 One Group has a 100% interest in this entity. | |||||||||||||||||
STK Chicago, which is wholly-owned by One Group, is an LLC formed on June 3, 2014 under the laws of the State of Illinois. STK Chicago will operate a restaurant known as STK in Chicago, Illinois. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 One Group has a 100% interest in this entity. | |||||||||||||||||
TOG Biscayne, which is wholly-owned by One Group, is an LLC formed on January 3, 2014 under the laws of the State of Florida. TOG Biscayne is a management company that will manage and operate the food and beverage operations of a hotel in Florida. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 One Group has a 100% interest in this entity. | |||||||||||||||||
STK Westwood, which is wholly-owned by One Group, is an LLC formed on August 20, 2014 under the laws of the State of California. STK Westwood will operate a restaurant known as STK in Los Angeles, California. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 One Group has a 100% interest in this entity. | |||||||||||||||||
STK Denver, which is wholly-owned by One Group, is an LLC formed on October 20 , 2014 under the laws of the State of Colorado. STK Denver will operate a restaurant known as STK in Denver, Colorado. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 One Group has a 100% interest in this entity. | |||||||||||||||||
Unaudited interim financial information: | |||||||||||||||||
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or for any other interim period or other future year. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and notes for the fiscal year ended December 31, 2013 included in the Company's Annual Report filed on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2014. | |||||||||||||||||
Recent_accounting_pronouncemen
Recent accounting pronouncements | 9 Months Ended |
Sep. 30, 2014 | |
Recent accounting pronouncements [Abstract] | ' |
Recent accounting pronouncements | ' |
Note 3 – Recent accounting pronouncements: | |
In July 2013, the FASB issued amendments to FASB ASC Topic 740 "Income Taxes." The amendments provide further guidance to the balance sheet presentation of unrecognized tax benefits when a net operating loss or similar tax loss carryforwards, or tax credit carryforwards exist. The amendments became effective for public entities for annual periods beginning after December 15, 2013. The Company has reviewed the implications of this amendment and it does not have a material impact on the consolidated results of operations or on the financial position. | |
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU 2014-08 ”). ASU 2014-08 limits the requirement to report discontinued operations to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity's operations and financial result. The amendments also require expanded disclosures concerning discontinued operations and disclosures of certain financial results attributable to a disposal of a significant component of an entity that does not qualify for discontinued operations reporting. The amendments in this ASU are effective prospectively for reporting periods beginning on or after December 15, 2014, with early adoption permitted. The impact on the Company's Financial Statements of adopting ASU 2014-08 is currently being assessed by management. | |
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606). ASU 2014-09 addresses the reporting of revenue by most entities and will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. This update is effective in fiscal periods beginning after December 15, 2016. Early application is not permitted. The impact on our financial statements of adopting ASU 2014-09 is currently being assessed by management. | |
In August 2014, the FASB issued ASU No. 2014-15 “Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern”, which provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern. The update is effective for annual periods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The impact on our financial statements of adopting ASU 2014-15 is currently being assessed by management. |
Inventory
Inventory | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory [Abstract] | ' | ||||||||
Inventory | ' | ||||||||
Note 4 - Inventory: | |||||||||
Inventory consisted of the following: | |||||||||
At September 30, | At December 31, | ||||||||
2014 | 2013 | ||||||||
Food | $ | 143,918 | $ | 79,773 | |||||
Beverages | 800,766 | 898,619 | |||||||
Totals | $ | 944,684 | $ | 978,392 | |||||
Property_and_equipment_net
Property and equipment, net | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property and equipment, net [Abstract] | ' | ||||||||
Property and equipment, net | ' | ||||||||
Note 5 - Property and equipment, net: | |||||||||
Property and equipment, net consisted of the following: | |||||||||
At September 30, | At December 31, | ||||||||
2014 | 2013 | ||||||||
Furniture, fixtures and equipment | $ | 7,562,498 | $ | 6,382,710 | |||||
Leasehold improvements | 21,439,786 | 17,897,561 | |||||||
Construction in progress | 1,518,950 | 826,065 | |||||||
Restaurant supplies | 713,622 | 602,261 | |||||||
31,234,856 | 25,708,597 | ||||||||
Less accumulated depreciation and amortization | 14,331,035 | 12,263,184 | |||||||
Total | $ | 16,903,821 | $ | 13,445,413 | |||||
Depreciation and amortization related to property and equipment included in continuing operations amounted to $1,000,464 and $1,151,982 in the nine months ended September 30, 2014 and 2013, respectively. |
Accrued_expenses
Accrued expenses | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accrued expenses [Abstract] | ' | ||||||||
Accrued expenses | ' | ||||||||
Note 6 – Accrued expenses: | |||||||||
Accrued expenses consisted of the following: | |||||||||
At September 30, | At December 31, | ||||||||
2014 | 2013 | ||||||||
Sales tax payable | $ | 578,975 | $ | 493,886 | |||||
Payroll and related | 244,953 | 498,228 | |||||||
Termination costs(1) | - | 1,375,341 | |||||||
Income taxes payable | 685,612 | - | |||||||
Due to hotels | 200,000 | 200,000 | |||||||
Other | 13,925 | 569,752 | |||||||
Totals | $ | 1,723,465 | $ | 3,137,207 | |||||
-1 | Includes the costs associated with the termination of two leases and one management agreement in fiscal 2013 for discontinued operations. These termination costs were paid in the second quarter of 2014. |
Notes_payable
Notes payable | 9 Months Ended |
Sep. 30, 2014 | |
Notes payable [Abstract] | ' |
Notes payable | ' |
Note 7 - Notes payable: | |
On October 1, 2009, One Group purchased the following membership units from a former member: 10.14% in JEC II, 6.55% in One Marks, 5.19% in Little West 12 th and 4.63% in One LA. The Company paid $400,000, of which $300,000 was paid in cash and $100,000 in the form of a note and issued warrants to purchase up to 10,090 membership units of the Company at an exercise price of $22.94 per membership unit which were cancelled in connection with the Merger. Commencing in December 2009, quarterly payments of principal and interest in the amount of $5,656 are to accrue at an interest at a rate of 5% through September 2014. At September 30, 2014 and December 31, 2013, $0 and $15,000 remained outstanding under this note, respectively. | |
On June 3, 2014 the Company entered into Amendment No. 3 to the Credit Agreement with BankUnited, N.A., or BankUnited (formerly Herald National Bank) dated October 31, 2011, as amended on January 24, 2013 and October 15, 2013 (as amended, the Credit Agreement), to adjust the commitment termination date to October 31, 2014 and the maturity date of the Credit Agreement to October 31, 2015. | |
On August 6, 2014, the Company entered into Amendment No. 4 and Addendum to the Credit Agreement with BankUnited to, among other things, increase its credit facility for up to $9.1 million, as well as update certain definitions, add additional subsidiaries as borrowers, remove the advance ratio covenant and add a debt service coverage ratio calculation. The covenant calculations were effective for the period ending September 30, 2014 and the Company was in compliance with all of the new covenants as of September 30, 2014. | |
At September 30, 2014, the Credit Agreement accrues interest at a rate equal to the greater of prime plus 0.75% or 4% (4% at September 30, 2014 and 5% at September 30, 2013, respectively). Our tangible net worth, calculated pursuant to the Credit Agreement, was $19,223,128 and $ 8,226,636 at September 30, 2014 and December 31, 2013, respectively. | |
At September 30, 2014 and December 31, 2013, $ 6,127,253 and $4,316,865 remained outstanding under the Credit Agreement, respectively. | |
Minimum future payments on the notes payable in each of the years subsequent to September 30, 2014 are $0 in 2014 and $6,127,253 in 2015. | |
Interest expense recognized related to these notes amounted to $72,892 and $132,964 for the nine months ended September 30, 2014 and 2013, respectively and $0 and $58,688 for the three months ended September 30, 2014 and 2013, respectively. |
Nonconsolidated_variable_inter
Nonconsolidated variable interest entities | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Nonconsolidated variable interest entities [Abstract] | ' | ||||||||
Nonconsolidated variable interest entities | ' | ||||||||
Note 8 - Nonconsolidated variable interest entities: | |||||||||
Accounting principles generally accepted in the United States of America provide a framework for identifying variable interest entities (VIEs) and determining when a company should include the assets, liabilities, noncontrolling interests, and results of activities of a VIE in its consolidated financial statements. In general, a VIE is a corporation, partnership, limited-liability corporation, trust, or any other legal structure used to conduct activities or hold assets that (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to direct the activities of the entity that most significantly impact its economic performance, or (3) has a group of equity owners that do not have the obligation to absorb losses of the entity or the right to receive returns of the entity. A VIE should be consolidated if a party with an ownership, contractual, or other financial interest in the VIE that is considered a variable interest (a variable interest holder) has the power to direct the VIE's most significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE's assets, liabilities, and noncontrolling interests at fair value and subsequently account for the VIE as if it were consolidated based on majority voting interest. At September 30, 2014 and December 31, 2013, the Company held investments that were evaluated against the criteria for consolidation and determined that it is not the primary beneficiary of the investments because the Company lacks the power to direct the activities of the variable interest entities that most significantly impacts their economic performance. Therefore consolidation in the Company's financial statements is not required. At September 30, 2014 and December 31, 2013, the Company held the following investments: | |||||||||
At September 30, | At December 31, | ||||||||
2014 | 2013 | ||||||||
Bagatelle NY LA Investors, LLC ("Bagatelle Investors") | $ | 544,726 | $ | 840,614 | |||||
Bagatelle Little West 12 th , LLC ( "Bagatelle NY") | 1,528,182 | 1,192,363 | |||||||
Bagatelle La Cienega, LLC ("Bagatelle LA") | - | - | |||||||
Totals | $ | 2,072,908 | $ | 2,032,977 | |||||
Bagatelle Investors is a holding company that has interests in two operating restaurant companies, Bagatelle NY and Bagatelle LA. All three entities were formed in 2011. The Company holds interests in all three entities. See Note 9 for condensed financial information related to these entities. | |||||||||
During the periods ended September 30, 2014 and 2013, the Company provided no explicit or implicit financial or other support to these VIEs that were not previously contractually required. | |||||||||
The amounts presented above represent maximum exposure to loss. |
Investments
Investments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Investments [Abstract] | ' | ||||||||||||||||
Investments | ' | ||||||||||||||||
Note 9 - Investments: | |||||||||||||||||
The Company has investments in Bagatelle Investors, Bagatelle NY and Bagatelle LA as reflected in Note 8. In addition, the Company has an investment in One 29 Park, LLC (“One 29 Park”) with a carrying amount of $506,000 at September 30, 2014 and December 31, 2013, respectively. These investments have been accounted for under the equity method. Included in due to/from related parties at September 30, 2014 and December 31, 2013 are net amounts due to/(from) these entities of $(60,630) and $29,123, respectively. Included in accounts receivable are management fees due at September 30, 2014 and December 31, 2013 from these entities for $411,839 and $415,371, respectively. | |||||||||||||||||
Condensed financial information for Bagatelle Investors, Bagatelle NY, Bagatelle LA and One 29 Park as of, and for the periods ended September 30, 2014 and December 31, 2013 are as follows: | |||||||||||||||||
September 30, 2014: | |||||||||||||||||
Bagatelle | Bagatelle | Bagatelle | One 29 | ||||||||||||||
Investors | NY | LA | Park | ||||||||||||||
Company ownership | 31.24 | % | 5.23 | -1% | 5.23 | -2% | 10 | % | |||||||||
Current assets | $ | 150,988 | $ | 508,272 | $ | 75,917 | $ | 1,698,565 | |||||||||
Noncurrent assets | 2,007,891 | 2,546,310 | 530,351 | 1,173,548 | |||||||||||||
Current liabilities | (3,406 | ) | 419,273 | (1,332,034 | ) | (358,963 | ) | ||||||||||
Noncurrent liabilities | - | (194,991 | ) | (26,543 | ) | (4,051,990 | ) | ||||||||||
Equity | $ | 2,155,473 | $ | 2,440,318 | $ | (752,309 | ) | $ | (1,538,840 | ) | |||||||
Three months ended September 30, 2014: | |||||||||||||||||
Revenues | - | 5,913,430 | 997,033 | 4,591,161 | |||||||||||||
Operating income (loss) | 109,780 | 803,508 | (123,162 | ) | (132,150 | ) | |||||||||||
Net income (loss) | 109,780 | 701,424 | (132,906 | ) | (135,150 | ) | |||||||||||
Nine months ended September 30, 2014: | |||||||||||||||||
Revenues | $ | - | $ | 9,025,968 | $ | 1,359,169 | $ | 5,679,178 | |||||||||
Operating income (loss) | 214,986 | 1,,395,717 | (204,230 | ) | (72,347 | ) | |||||||||||
Net income (loss) | 212,686 | 1,281,395 | (217,082 | ) | (75,346 | ) | |||||||||||
December 31, 2013: | |||||||||||||||||
Bagatelle | Bagatelle | Bagatelle | One 29 | ||||||||||||||
Investors | NY | LA | Park | ||||||||||||||
Company ownership | 31.24 | % | 5.23 | -1% | 5.23 | -2% | 10 | % | |||||||||
Current assets | $ | 164,662 | $ | 1,628,639 | $ | 94,634 | $ | 2,136,179 | |||||||||
Noncurrent assets | 2,944,785 | 2,708,504 | 587,861 | 1,182,845 | |||||||||||||
Current liabilities | (1,471 | ) | (707,324 | ) | (1,187,803 | ) | (750,430 | ) | |||||||||
Noncurrent liabilities | - | (171,996 | ) | (26,771 | ) | - | |||||||||||
Equity | $ | 3,107,976 | $ | 3,457,823 | $ | (532,079 | ) | $ | 2,568,594 | ||||||||
Three months ended September 30, 2013 | |||||||||||||||||
Revenues | - | 5,807,888 | 971,084 | 4,967,447 | |||||||||||||
Operating income (loss) | 112,740 | 1,456,247 | (193,458 | ) | (38,767 | ) | |||||||||||
Net income (loss) | 110,891 | 827,817 | (293,054 | ) | (41,767 | ) | |||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||
Revenues | $ | - | $ | 8,747,933 | $ | 1,236,199 | $ | 7,242,579 | |||||||||
Operating income (loss) | 143,513 | 1,283,943 | (518,716 | ) | (203,,448) | ||||||||||||
Net income (loss) | 140,954 | 1,207,760 | (537,865 | ) | (206,488 | ) | |||||||||||
-1 | This reflects the Company's direct ownership of 5.23% in Bagatelle NY. In addition, the Company has indirect ownership through Bagatelle Investors as well as one of its subsidiaries of 45.90% for a total effective ownership of 51.13%. | ||||||||||||||||
-2 | This reflects the Company's direct ownership of 5.23% in Bagatelle LA. In addition, the Company has indirect ownership through Bagatelle Investors as well as one of its subsidiaries of 38.10% for a total effective ownership of 43.33%. | ||||||||||||||||
The Company has accounted for its investments in Bagatelle LA and One 29 Park under the equity method due to its ability to exercise significant influence over such entities. |
Related_party_transactions
Related party transactions | 9 Months Ended |
Sep. 30, 2014 | |
Related party transactions [Abstract] | ' |
Related party transactions | ' |
Note 10 - Related party transactions: | |
Due from related parties consists of amounts related to the Company and its related entities which arose from noninterest bearing cash advances and are expected to be repaid within the next twelve months. Included in other assets are noninterest bearing cash advances made to related parties that are not expected to be repaid within the next twelve months. As of September 30, 2014 and December 31, 2013, these advances aggregated to a total of $1,017,799 and $1,107,220 respectively. | |
The Company incurred approximately $385,000 and $848,000 for the nine months ended September 30, 2014 and 2013 for legal fees to an entity owned by one of the Company's shareholders. Included in accounts payable and accrued expenses at September 30, 2014 and December 31, 2013 is a balance due to this entity of approximately $43,022 and $417,000 respectively. | |
The Company incurred approximately $3,107,000 and $1,288,000 for the nine months ended September 30, 2014 and 2013, respectively, for construction services to an entity owned by one of the Company's shareholders. Included in accounts payable at September 30, 2014 and December 31, 2013 is a balance due to this entity of $0 and $15,900, respectively. |
Derivative_liability
Derivative liability | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Derivative liability [Abstract] | ' | ||||||||
Derivative liability | ' | ||||||||
Note 11 – Derivative liability: | |||||||||
On October 16, 2013, the Merger provided for up to an additional $14,100,000 of payments to the TOG Members and the Liquidating Trust based on a formula as described in the Merger Agreement and which is contingent upon the exercise of outstanding Company warrants to purchase 5,750,000 shares of Common Stock at an exercise price of $5.00 per share (the “Parent Warrants”). The Company is required to make any payments on a monthly basis. Additionally, certain One Group employees are entitled to receive a contingent sign-on bonus of an aggregate of approximately $900,000 upon the exercise of the Parent Warrants. Any Parent Warrants that are unexercised will expire on the date that is the earlier of (i) February 27, 2016 or (ii) the forty-fifth (45th) day following the date that the Company's common stock closes at or above $6.25 per share for 20 out of 30 trading days commencing on February 27, 2014. | |||||||||
The Company estimates the fair value of the derivative liability using the Monte Carlo method, which is comprised of the $14,100,000 in payments and the $900,000 in contingent sign-on bonus for a total of $15,000,000. The fair value of the derivative liability is initially measured on October 16, 2013 and is re-measured at the end of every reporting period with the change in value over the period reported in the statement of operations as a derivative income. In applying the Monte Carlo method, the Company uses the following key inputs and assumptions; the stock price on the valuation date, the exercise price of the warrants of $5.00, the trigger price of $6.25, the expected volatility which is based on an analysis of comparable companies historical stock price volatilities for a period comparable to the term of the warrants, the expected months until effective registration statement, the term based on the period from the valuation date until the two-year period following the expected date of the effective registration, the risk-free rate based on the rate of US treasury securities with the same term and the discount rate based on the aggregate of the expected short-term margin and the risk-free rate. | |||||||||
The following tables summarize the components of derivative liabilities: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Fair value of derivative liability | $ | 8,298,000 | $ | 10,095,000 | |||||
Significant assumptions (or ranges): | |||||||||
Trading market values (1) | $ | 5.3 | $ | 5.75 | |||||
Term (years) (2) | 1.41 | 2.08 | |||||||
Expected volatility (1) | 33.1 | % | 41.4 | % | |||||
Risk-free rate (2) | 0.31 | % | 0.38 | % | |||||
Discount rate (3) | 1.18 | % | 1.24 | % | |||||
Effective Exercise price (2) | $ | 5 | $ | 5 | |||||
Trigger price (2) | $ | 6.25 | $ | 6.25 | |||||
Expected months until effective registration (3) | 0 | 2 | |||||||
Fair value hierarchy: | |||||||||
-1 | Level 1 inputs are quoted prices in active markets for identical assets and liabilities, or derived therefrom. | ||||||||
-2 | Level 2 inputs are inputs other than quoted prices that are observable. | ||||||||
-3 | Level 3 inputs are unobservable inputs. Inputs for which any parts are level 3 inputs are classified as level 3 in their entirety. | ||||||||
The Company recorded $1,793,142 of income on the adjustment of the derivative liability balance for the nine months ended September 30, 2014. |
Commitments_and_contingencies
Commitments and contingencies | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Commitments and contingencies [Abstract] | ' | ||||||||||||||
Commitments and contingencies | ' | ||||||||||||||
Note 12 - Commitments and contingencies: | |||||||||||||||
Operating leases: | |||||||||||||||
The Company is obligated under several operating leases for the restaurants, equipment and office space, expiring in various years through 2031, which provide for minimum annual rentals, escalations, percentage rent, common area expenses or increases in real estate taxes. | |||||||||||||||
Future minimum rental commitments under the leases and minimum future rental income per the sublease in five years subsequent to September 30, 2014 and thereafter are as follows: | |||||||||||||||
Year Ending | Net | ||||||||||||||
December 31, | Expense | Income | Amount | ||||||||||||
2014 | $ | 2,160,984 | $ | (790,390 | ) | $ | 1,370,594 | ||||||||
2015 | 5,980,402 | (1,075,083 | ) | 4,905,319 | |||||||||||
2016 | 6,703,216 | (1,063,785 | ) | 5,639,431 | |||||||||||
2017 | 6,457,831 | (844,061 | ) | 5,613,770 | |||||||||||
2018 | 6,562,366 | (864,156 | ) | 5,698,210 | |||||||||||
Thereafter | 92,974,777 | (3,626,551 | ) | 89,348,226 | |||||||||||
Total | $ | 120,839,576 | $ | (8,264,026 | ) | $ | 112,575,550 | ||||||||
Rent expense (including percentage rent of $329,545 and $272,730),the nine months ended September 30, 2014 and 2013, respectively and $101,936 and $10,509 for the three months ended September 30, 2014 and 2013, respectively), included in continued operations, amounted to $2,802,466 and $2,321,141 for the nine months ended September 30, 2014 and 2013, respectively and $779,164 and $718,147 for the three months ended September 30, 2014 and 2013, respectively. Rent expense included in continuing operations has been reported in the consolidated statements of operations and comprehensive loss net of rental income of $600,099 and $469,591 for the nine months ended September 30, 2014 and 2013, respectively, and $188,480 and $ 181,544 for the three months ended September 30, 2014 and 2013, respectively related to subleases with related and unrelated parties which expires through 2025. | |||||||||||||||
License and management fees: | |||||||||||||||
Pursuant to its amended and restated operating agreement executed in June 2007, Bridge Hospitality, LLC is obligated to pay management fees equal to 2% of revenues to a shareholder for the life of the lease. Management fees amounted to $60,324 and $58,640 for the nine months ended September 30, 2014 and 2013, respectively. Included in accounts payable at September 30, 2014 and December 31, 2013 are amounts due for management fees of $27,365 and $39,514, respectively. | |||||||||||||||
Basement Manager, pursuant to its operating agreement, is obligated to pay management fees to the two managers of the nightclub. The Company terminated the management services for these two managers in February 2013. Management fees amounted to $60,989 for the nine months ended September 30, 2013. | |||||||||||||||
In January 2010, STK Vegas entered into a management agreement with a third party for a term of ten years, with two five-year option periods. Under this agreement, STK Vegas shall receive a management fee equal to 5% of gross sales, as defined (“gross sales fee”) plus 20% of net profits prior to the investment breakeven point date and 43% of net profits thereafter (“incentive fee”). In addition, STK Vegas is entitled to receive a development fee equal to $200,000. The Company has elected to receive a credit against a portion of its obligation (estimated at approximately $387,000) to fund the build-out in lieu of receiving the $200,000. Management fees amounted to $3,604,433 and $3,136,342 for the nine months ended September 30, 2014 and 2013, respectively. | |||||||||||||||
In July 2009, One 29 Park Management entered into an agreement with a third party. Under this agreement, One 29 Park Management shall receive a management fee equal to 5% of gross revenues, as defined, from the restaurant, banquets, room service and rooftop sales and 50% of the base beverage fee, as defined, for the life of the management agreement which expires in 2025. Management fees amounted to $462,313 and $481,638 for the nine months ended September 30, 2014 and 2013, respectively. | |||||||||||||||
In July 2010, Hip Hospitality UK entered into a management agreement with a third party to manage and operate the food and beverage operations in the Hippodrome Casino in London. Under this agreement, Hip Hospitality UK shall receive a management fee equal to 5.5% of total revenue, as defined, as well as an incentive fee if certain conditions are met, for the life of the management agreement which expires in 2022. Management fees amounted to $554,039 and $402,590 for the nine months ended September 30, 2014 and 2013, respectively. Included in accounts receivable and other assets at September 30, 2014 and December 31, 2013 are amounts due for management fees and reimbursable expenses of $890,176 and $870,158, respectively. | |||||||||||||||
In December 2011, TOG Aldwych entered into a management agreement with a third party to operate a restaurant, bar and lounges in the ME Hotel in London. Under this agreement, TOG Aldwych shall receive a management fee equal to 5% of receipts received from food and beverages operations. In addition, TOG Aldwych is entitled to receive a monthly marketing fee equal to 1.5% of receipts received from food and beverages operations and an additional fee equal to 65% of net operating profits, as defined, for the life of the management agreement which expires in 2032. Management fee amounted to $1,129,341 and $1,273,948 for the three months ended September 30, 2014 and 2013, respectively. Included in accounts receivable at September 30, 2014 and December 31, 2013 are amounts due for management fees of $877,244 and $143,474, respectively. | |||||||||||||||
In May 2012, Heraea entered into a management agreement with a third party for a term of ten years, with two five-year option periods. Under this agreement, Heraea was to receive a management fee equal to 5% of gross revenues, as defined, and a profit share of gross operating profit, as defined. In 2013, the Company made a decision to discontinue this operation and on May 30, 2014 the Company entered into a termination, mutual release and settlement agreement with the third party to terminate the management agreement. The results of operations and estimated termination costs are included in Discontinued Operations. |
Discontinued_operations
Discontinued operations | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations [Abstract] | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 13 - Discontinued operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Management decided to cease operations for the following entities: One Atlantic City (2012), STKOUT Midtown (2013), BBCLV (2013), Heraea (2013) and Tenjune (2014). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
On May 1, 2014 the Company entered into a settlement agreement and mutual general release with the landlord of the Bagatelle in Las Vegas location, which closed in 2013. In connection with this release, the Company agreed to make certain payments to the landlord and on May 22 nd made a payment for the remaining balance on an operating lease for certain equipment that was at the location. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
On May 30, 2014 the Company entered into a termination, mutual release and settlement agreement with a third party in Las Vegas (“Owners”) for the management agreement for the Heraea property and the lease agreement for the Xi Shi property in Las Vegas. In connection with this release, the Company agreed to make certain payments to the Owners. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table shows the components of assets and liabilities that are classified as discontinued operations in the Company's consolidated balance sheets as of September 30, 2014 and December 31, 2013: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 9,709 | $ | 3,318 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | 11,092 | 130,527 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | 43,903 | 100,855 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 77,511 | 244,816 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets of discontinued operations - current | 142,214 | 479,516 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment, net | 1,567,058 | 1,322,698 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Security deposits | 84,904 | 181,571 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets of discontinued operations - long term | 1,651,962 | 1,504,269 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | 409,573 | 1,022,031 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Due to related parties | 2,489,146 | 2,500,960 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities of discontinued operations - current | 2,898,718 | 3,522,991 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred rent payable | 686,503 | 661,709 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets | $ | (1,791,045 | ) | $ | (2,200,915 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized operating results related to these entities are included in discontinued operations in the accompanying consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2014 and 2013: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | $ | - | $ | 580,981 | $ | 102,330 | $ | 3,475,429 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs and Expenses | (177,050 | ) | 2,927,632 | 1,196,706 | 9,180,887 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) from discontinued operations | $ | 177,050 | $ | (2,346,651 | ) | $ | (1,094,376 | ) | $ | (5,705,458 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2014 | |
Litigation [Abstract] | ' |
Litigation | ' |
Note 14 - Litigation: | |
The Company is party to claims in lawsuits incidental to its business. In the opinion of management, the ultimate outcome of such matters, individually or in the aggregate, will not have a material adverse effect on the Company's consolidated financial position or results of operations. |
Stockholders_equity
Stockholders' equity | 9 Months Ended |
Sep. 30, 2014 | |
Stockholders' equity [Abstract] | ' |
Stockholders' equity | ' |
Note 15 - Stockholders' equity: | |
The Company is authorized by its amended and restated certificate of incorporation to issue up to 75,000,000 shares of Common Stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. As of September 30, 2014 and December 31, 2013, there were 24,940,195 and 24,946,739, respectively, outstanding shares of Common Stock and no outstanding shares of preferred stock. |
Stockbased_compensation
Stock-based compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Stock-based compensation [Abstract] | ' | ||||||||||||||||
Stock-based compensation | ' | ||||||||||||||||
Note 16 - Stock-based compensation: | |||||||||||||||||
In October 2013, the board of directors approved the 2013 Employee, Director and Consultant Equity Incentive Plan (the “2013 Plan”) pursuant to which the Company may issue options, warrants, restricted stock or other stock-based awards to directors, officers, key employees and other key individuals performing services for the Company. The 2013 Plan has reserved 4,773,992 shares of common stock for issuance. All awards will be approved by the board of directors or a committee of the board of directors to be established for such purpose. | |||||||||||||||||
The Company's outstanding stock options have maximum contractual terms of up to ten years, principally vest on a quarterly basis ratably over five years and were granted at exercise prices equal to the market price of the Company's common stock on the date of grant. The Company's outstanding stock options are exercisable into shares of the Company's common stock. The Company measures the cost of employee services received in exchange for an award of equity instruments, including grants of employee stock options and restricted stock awards, based on the fair value of the award at the date of grant in accordance with the modified prospective method. The Company uses the Black-Scholes model for purposes of determining the fair value of stock options granted and recognizes compensation costs ratably over the requisite service period, net of estimated forfeitures. For restricted stock awards, the grant-date fair value is the quoted market price of the stock. | |||||||||||||||||
In February 2014, the Company granted options to purchase shares of common stock at an exercise price of $6.00 per share. Of these options, 50% vest over time and 50% will vest based on the achievement of targeted annual milestones which have been set by the board of directors. | |||||||||||||||||
In June 2014, the Company granted options to purchase shares of common stock at an exercise price of $4.85 per share. These options will vest over five years. | |||||||||||||||||
In August 2014, the Company granted options to purchase shares of common stock at an exercise price of $5.00 per share. These options vest over five years. | |||||||||||||||||
As of September 30, 2014, 632,268 shares were excluded from the calculation of dilutive earnings per share as their effect would have been anti-dilutive. | |||||||||||||||||
For the three and nine months ended September 30, 2014, the Company recognized $159,385 and $326,753 of non-cash stock-based compensation expense, respectively, in general and administrative expense in the consolidated statements of operations. | |||||||||||||||||
As of September 30, 2014, there was approximately $4,629,636 of total unrecognized compensation cost related to unvested share-based compensation grants, which is expected to be amortized over a weighted-average period of 4.9 years. | |||||||||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes model with the following weighted-average assumptions: | |||||||||||||||||
Three months ended | |||||||||||||||||
30-Sep-14 | |||||||||||||||||
Expected life (in years) | 6.5 | ||||||||||||||||
Risk-free interest rate | 1.37 | % | |||||||||||||||
Volatility | 37 | % | |||||||||||||||
Dividend yield | 0 | % | |||||||||||||||
A summary of the status of stock option awards and changes during the three months ended September 30, 2014 are presented below: | |||||||||||||||||
Weighted | |||||||||||||||||
Weighted | Average | ||||||||||||||||
Average | Remaining | ||||||||||||||||
Exercise | Contractual | Intrinsic | |||||||||||||||
Shares | Price | Life (Years) | Value | ||||||||||||||
Outstanding at December 31, 2013 | 766,578 | $ | 5 | ||||||||||||||
Granted | 100,000 | $ | 6 | ||||||||||||||
Granted | 790,000 | $ | 4.85 | ||||||||||||||
Granted | 275,000 | $ | 5 | ||||||||||||||
Exercised | - | - | |||||||||||||||
Cancelled, expired, or forfeited | - | - | |||||||||||||||
Outstanding at September 30, 2014 | 1,931,578 | $ | 5 | 9.42 | $ | 103,500 | |||||||||||
Exercisable at September 30, 2014 | 125,454 | $ | 5.03 | 9.42 | $ | 6,635 | |||||||||||
The weighted-average grant-date fair value of option awards granted, vested and non-vested during the three months ended September 30, 2014 was $1.86. |
Segment_reporting
Segment reporting | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Segment reporting [Abstract] | ' | ||||||||||||||||||||||||
Segment reporting | ' | ||||||||||||||||||||||||
Note 17 - Segment reporting: | |||||||||||||||||||||||||
The Company operates in three segments: owned STK units ("STKs"), food and beverage hospitality management agreements ("F&B") and Other concepts ("Other"). We believe STKs, F&B and Other to be our reportable segments as they do not have similar economic or other characteristics to be aggregated into a single reportable segment. Our STK segment consists of leased restaurant locations and competes in the full service dining industry. Our F&B segment consists of management agreements in which the Company operates the food and beverage services in hotels or casinos and could include an STK, which we refer to as managed STK units. We refer to owned STK units and managed STK units together as “STK units”. These management agreements generate management and incentive fees on net revenue at each location. Our Other segment includes owned non-STK leased locations. | |||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
STKs | $ | 10,375,136 | $ | 8,695,667 | $ | 27,807,365 | $ | 26,732,173 | |||||||||||||||||
F&B | 1,945,363 | 2,137,086 | 6,207,523 | 5,585,556 | |||||||||||||||||||||
Other | 69,685 | 252,865 | 915,556 | 731,389 | |||||||||||||||||||||
$ | 12,390,184 | $ | 11,085,618 | $ | 34,930,444 | $ | 33,049,118 | ||||||||||||||||||
Segment Profits: | |||||||||||||||||||||||||
STKs | $ | 1,564,275 | $ | 871,410 | $ | 3,488,507 | $ | 3,803,113 | |||||||||||||||||
F&B | 1,945,363 | 2,137,086 | 6,207,523 | 5,585,556 | |||||||||||||||||||||
Other | (176,877 | ) | (123,582 | ) | (90,488 | ) | (438,840 | ) | |||||||||||||||||
Total segment profit | 3,332,761 | 2,884,914 | 9,786,518 | 8,949,829 | |||||||||||||||||||||
General and administrative, net | 1,922,482 | 1,080,686 | 6,024,364 | 2,973,313 | |||||||||||||||||||||
Depreciation and amortization | 327,810 | 341,529 | 1,000,464 | 1,197,431 | |||||||||||||||||||||
Interest expense, net of interest income | (6,268 | ) | 235,507 | 52,220 | 614,642 | ||||||||||||||||||||
Other | (224,079 | ) | 810,913 | (2,329,785 | ) | 1,012,720 | |||||||||||||||||||
Income (loss) from continuing operations before provision for income taxes | $ | 1,312,816 | $ | 416,279 | $ | 5,039,255 | $ | 3,151,723 | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Property & equipment, net | |||||||||||||||||||||||||
STKs | $ | 15,103,170 | $ | 11,893,554 | |||||||||||||||||||||
F&B | 160,012 | 145,364 | |||||||||||||||||||||||
Other | 1,640,639 | 1,406,495 | |||||||||||||||||||||||
Total | $ | 16,903,821 | $ | 13,445,413 |
Geographic_information
Geographic information | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Geographic information [Abstract] | ' | ||||||||
Geographic information | ' | ||||||||
Note 18 - Geographic information: | |||||||||
The following table contains certain financial information by geographic location for the nine months ended September 30, 2014 and 2013: | |||||||||
Nine months ended September 30, | |||||||||
2014 | 2013 | ||||||||
United States: | |||||||||
Revenues - owned units | $ | 18,264,189 | $ | 18,459,970 | |||||
Management, incentive and royalty fee revenue | 2,400,754 | 2,299,487 | |||||||
Foreign: | |||||||||
Revenues - owned units | $ | 13,911 | $ | 55,060 | |||||
Management and development fee revenue | 1,861,407 | 1,148,984 | |||||||
The following table contains certain financial information by geographic location at September 30, 2014 and December 31, 2013: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
United States: | |||||||||
Net assets | $ | 9,523,135 | $ | 7,572,058 | |||||
Foreign: | |||||||||
Net assets | $ | 1,291,994 | $ | 654,579 | |||||
Subsequent_events
Subsequent events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent events [Abstract] | ' |
Subsequent events | ' |
Note 19 - Subsequent events: | |
On October 22, 2014, The ONE Group, LLC, JEC II, LLC and One Marks, LLC entered into a settlement agreement effective as of September 30, 2014 regarding the “ONE” trademark. The parties have amicably resolved their differences over the use and registration of such trademark for certain services and settled the litigation for $600,000 which was paid to The ONE Group, LLC in October 2014. | |
On November 3, 2014, STK Denver LLC, a wholly-owned subsidiary of One Group, entered into a lease agreement with 16M, LLC to open an STK Rebel restaurant in Denver, Colorado in 2015. |
Business_and_basis_of_presenta1
Business and basis of presentation (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Business and basis of presentation [Abstract] | ' | ||||||||||||||||
Principles of consolidation | ' | ||||||||||||||||
Principles of consolidation: | |||||||||||||||||
The accompanying consolidated financial statements of The ONE Group Hospitality, Inc. and Subsidiaries include the accounts of One Group and its subsidiaries, Little West 12 th LLC (“Little West 12 th”), One-LA, L.P. (“One LA”), Bridge Hospitality, LLC (“Bridge”), STK-LA, LLC (“STK-LA”), WSATOG (Miami), LLC (“WSATOG”), STK Miami Service, LLC (“Miami Services”), STK Miami, LLC (“STK Miami”), Basement Manager, LLC (“Basement Manager”), JEC II, LLC (“JEC II”), One TCI Ltd. (“One TCI”), One Marks, LLC (“One Marks”), MPD Space Events LLC (“MPD”), One 29 Park Management, LLC (“One 29 Park Management”), STK-Midtown Holdings, LLC (“Midtown Holdings”), STK Midtown, LLC (“STK Midtown”), STKout Midtown, LLC (“STKOUT Midtown”), STK Atlanta, LLC (“STK Atlanta”), STK-Las Vegas, LLC (“STK Vegas”), One Atlantic City, LLC (“One Atlantic City”), Asellina Marks LLC (“Asellina Marks”), Heraea Vegas, LLC (“Heraea”), Xi Shi Las Vegas, LLC (“Xi Shi Las Vegas”), T.O.G (UK) Limited (“TOG UK”), Hip Hospitality Limited (“Hip Hospitality UK”), T.O.G (Aldwych) Limited (“TOG Aldwych”), CA (Aldwych) Limited (“CA Aldwych”), BBCLV, LLC (“BBCLV”), STK DC, LLC (“STK DC”), STK Orlando, LLC (“STK Orlando”), STK Chicago, LLC (“STK Chicago”), TOG Biscayne, LLC (“TOG Biscayne”), STK Westwood, LLC (“STK Westwood”) and STK Denver LLC (“STK Denver”). The entities are collectively referred to herein as the “Company” or “Companies,” as appropriate, and are consolidated on the basis of common ownership and control. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||
Net Income (Loss) Per Common Share | ' | ||||||||||||||||
Net Income (Loss) Per Common Share | |||||||||||||||||
Basic net income (loss) per common share is based upon the weighted-average common shares outstanding during the period. Diluted net income (loss) per common share reflects the potential dilution that would occur if common stock equivalent securities or other contracts to issue common stock were exercised or converted into common stock. | |||||||||||||||||
A reconciliation between the denominator of basic and diluted net income (loss) per common share is as follows: | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Weighted-average common shares outstanding | 24,940,195 | 11,631,400 | 24,942,328 | 11,631,400 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Stock options | - | - | - | - | |||||||||||||
Weighted-average common shares and potential common | |||||||||||||||||
shares outstanding | 24,940,195 | 11,631,400 | 24,942,328 | 11,631,400 | |||||||||||||
100,000 stock options for both the three months ended September 30, 2014 and 2013 and 100,000 stock options for both the nine months ended September 30, 2014 and 2013 respectively, were not included in the net income (loss) per diluted share calculation because the exercise price of these options was greater than the average market price of the Company's common stock during these periods or their inclusion would have been anti-dilutive. | |||||||||||||||||
Fair value measurements | ' | ||||||||||||||||
Fair value measurements | |||||||||||||||||
The carrying amount of the Company's accounts receivable, short-term debt, accounts payable and accrued expenses approximate fair value because of the short term nature of the financial instruments. | |||||||||||||||||
Nature of business: | ' | ||||||||||||||||
Nature of business: | |||||||||||||||||
The Company is a hospitality company that develops and operates upscale, high-energy restaurants and lounges and provides turn-key food and beverage services for hospitality venues including boutique hotels, casinos and other high-end locations in the United States and the United Kingdom. As of September 30, 2014, the Company owned and operated 8 and managed 8 restaurants and lounges, including seven STKs throughout the United States and one in London. Eight of our locations are operated under our five food and beverage hospitality management agreements, in which we provide comprehensive food and beverage services for our hospitality clients. | |||||||||||||||||
WSATOG is an LLC formed on October 18, 2007 under the laws of the State of Delaware. WSATOG is a holding company that owns 100% of Miami Services and STK Miami. As per the LLC Operating Agreement of WSATOG, such LLC is set to exist in perpetuity. As of December 31, 2012, One Group had a 60% interest in this entity. On October 23, 2013 One Group executed a Transfer Agreement in which it purchased the remaining 40% interest in WSATOG from the previous minority shareholder for $1,800,000. As of September 30, 2014 and December 31, 2013 One Group has a 100% interest in this entity. | |||||||||||||||||
Basement Manager is an LLC formed on January 12, 2006 under the laws of the State of New York. Basement Manager, which commenced operations on August 25, 2006, operates a nightclub known as Tenjune located in New York, New York. As per the LLC Operating Agreement of Basement Manager, such LLC is set to expire on December 31, 2099. As of September 30, 2014 Little West 12 th has a 65.8% interest in this entity and at December 31, 2013, Little West 12 th has a 63.4% interest in this entity. Tenjune ceased operations on February 15, 2014. On July 25, 2014 Little West 12 th entered into a Transfer and Release Agreement to purchase the minority interest of Basement Manager for $75,000. As a result, Little West 12 th currently has a 100% interest in this entity. | |||||||||||||||||
Midtown Holdings is an LLC formed on February 9, 2010 under the laws of the State of New York. Midtown Holdings owns 100% of STK Midtown and STKOUT Midtown. As per the LLC Operating Agreement of Midtown Holdings, such LLC is set to expire on December 31, 2099. One Group purchased all of the minority interest of Midtown Holdings during 2013 for $3,834,000. As of September 30, 2014 and December 31, 2013 One Group has a 100% interest in this entity. | |||||||||||||||||
STKOUT Midtown, which is wholly-owned by Midtown Holdings, is an LLC formed on December 30, 2009 under the laws of the State of New York. STKOUT Midtown commenced operations on March 28, 2012 and operated a kiosk known as STKOUT in New York, New York. STKOUT Midtown ceased operations in 2013. | |||||||||||||||||
Heraea, which is wholly-owned by One Group, is an LLC formed on May 1, 2012 under the laws of the State of Nevada. Heraea commenced operations in February 2013 and operated a restaurant in Las Vegas, Nevada. Heraea ceased operations on September 24, 2013. | |||||||||||||||||
Xi Shi Las Vegas, which is wholly-owned by One Group, is an LLC formed on August 14, 2012 under the laws of the State of Nevada. Xi Shi Las Vegas was originally expected to commence operations in 2013 in Las Vegas, Nevada, but a determination was made in 2013 to not open Xi Shi. | |||||||||||||||||
TOG UK was formed on July 6, 2010 under the laws of the United Kingdom. TOG UK is a holding company that owns 100% of TOG Aldwych, CA Aldwych and Hip Hospitality UK. On October 10, 2013 One Group executed a Transfer Agreement in which it purchased the remaining 49.99% interest in TOG UK from the previous minority shareholder in exchange for membership interest in One Group. As of September 30, 2014 and December 31, 2013 One Group has a 100% interest in this entity. | |||||||||||||||||
Hip Hospitality UK was formed on May 13, 2010 under the laws of the United Kingdom. Hip Hospitality UK is a management company that manages and operates the food and beverage operations in the Hippodrome Casino in London. Operations in the casino commenced in 2012. On August 1, 2013 TOG UK executed a transfer agreement in which it purchased the remaining 30.00% interest in Hip Hospitality UK from the previous minority shareholder in exchange for membership interest in TOG UK. As of September 30, 2014 and December 31, 2013 TOG UK has a 100% interest in this entity. | |||||||||||||||||
CA Aldwych, which is wholly-owned by TOG UK, was formed on July 4, 2012 under the laws of the United Kingdom. CA Aldwych is a management company that manages and operates a restaurant known as Cucina Asellina in the ME Hotel in London. Operations at the restaurant commenced in 2013. | |||||||||||||||||
BBCLV is an LLC formed on March 8, 2012 under the laws of the State of Nevada. BBCLV commenced operations on October 31, 2012 and operated a restaurant known as Bagatelle in Las Vegas, Nevada. As of September 30. 2014 and December 31, 2013, One Group has a 86.06% interest in this entity. In July 2013, BBCLV ceased operations. | |||||||||||||||||
STK DC, which is wholly-owned by One Group, is an LLC formed on November 20, 2012 under the laws of the State of Delaware. STK DC will operate a restaurant known as STK in Washington, DC. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 and December 31, 2013, One Group has a 93.5% interest in this entity. | |||||||||||||||||
STK Orlando, which is wholly-owned by One Group, is an LLC formed on October 3, 2013 under the laws of the State of Florida. STK Orlando will operate a restaurant known as STK in Orlando, Florida. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 One Group has a 100% interest in this entity. | |||||||||||||||||
STK Chicago, which is wholly-owned by One Group, is an LLC formed on June 3, 2014 under the laws of the State of Illinois. STK Chicago will operate a restaurant known as STK in Chicago, Illinois. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 One Group has a 100% interest in this entity. | |||||||||||||||||
TOG Biscayne, which is wholly-owned by One Group, is an LLC formed on January 3, 2014 under the laws of the State of Florida. TOG Biscayne is a management company that will manage and operate the food and beverage operations of a hotel in Florida. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 One Group has a 100% interest in this entity. | |||||||||||||||||
STK Westwood, which is wholly-owned by One Group, is an LLC formed on August 20, 2014 under the laws of the State of California. STK Westwood will operate a restaurant known as STK in Los Angeles, California. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 One Group has a 100% interest in this entity. | |||||||||||||||||
STK Denver, which is wholly-owned by One Group, is an LLC formed on October 20 , 2014 under the laws of the State of Colorado. STK Denver will operate a restaurant known as STK in Denver, Colorado. It is management's intent that such LLC will continue in existence in perpetuity. As of September 30, 2014 One Group has a 100% interest in this entity. | |||||||||||||||||
Unaudited interim financial information | ' | ||||||||||||||||
Unaudited interim financial information: | |||||||||||||||||
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or for any other interim period or other future year. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and notes for the fiscal year ended December 31, 2013 included in the Company's Annual Report filed on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2014. |
Business_and_basis_of_presenta2
Business and basis of presentation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Business and basis of presentation [Abstract] | ' | ||||||||||||||||
Schedule of reconciliation between the denominator of basic and diluted net income (loss) per common share | ' | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Weighted-average common shares outstanding | 24,940,195 | 11,631,400 | 24,942,328 | 11,631,400 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Stock options | - | - | - | - | |||||||||||||
Weighted-average common shares and potential common | |||||||||||||||||
shares outstanding | 24,940,195 | 11,631,400 | 24,942,328 | 11,631,400 | |||||||||||||
Inventory_Tables
Inventory (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory [Abstract] | ' | ||||||||
Schedule of Inventory | ' | ||||||||
Inventory consisted of the following: | |||||||||
At September 30, | At December 31, | ||||||||
2014 | 2013 | ||||||||
Food | $ | 143,918 | $ | 79,773 | |||||
Beverages | 800,766 | 898,619 | |||||||
Totals | $ | 944,684 | $ | 978,392 | |||||
Property_and_equipment_net_Tab
Property and equipment, net (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property and equipment, net [Abstract] | ' | ||||||||
Schedule of Property and Equipment | ' | ||||||||
Property and equipment, net consisted of the following: | |||||||||
At September 30, | At December 31, | ||||||||
2014 | 2013 | ||||||||
Furniture, fixtures and equipment | $ | 7,562,498 | $ | 6,382,710 | |||||
Leasehold improvements | 21,439,786 | 17,897,561 | |||||||
Construction in progress | 1,518,950 | 826,065 | |||||||
Restaurant supplies | 713,622 | 602,261 | |||||||
31,234,856 | 25,708,597 | ||||||||
Less accumulated depreciation and amortization | 14,331,035 | 12,263,184 | |||||||
Total | $ | 16,903,821 | $ | 13,445,413 | |||||
Accrued_expenses_Tables
Accrued expenses (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accrued expenses [Abstract] | ' | ||||||||
Schedule of Accrued Expenses | ' | ||||||||
Accrued expenses consisted of the following: | |||||||||
At September 30, | At December 31, | ||||||||
2014 | 2013 | ||||||||
Sales tax payable | $ | 578,975 | $ | 493,886 | |||||
Payroll and related | 244,953 | 498,228 | |||||||
Termination costs(1) | - | 1,375,341 | |||||||
Income taxes payable | 685,612 | - | |||||||
Due to hotels | 200,000 | 200,000 | |||||||
Other | 13,925 | 569,752 | |||||||
Totals | $ | 1,723,465 | $ | 3,137,207 | |||||
-1 | Includes the costs associated with the termination of two leases and one management agreement in fiscal 2013 for discontinued operations. These termination costs were paid in the second quarter of 2014. |
Nonconsolidated_variable_inter1
Nonconsolidated variable interest entities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Nonconsolidated variable interest entities [Abstract] | ' | ||||||||
Schedule of Nonconsolidated Variable Interest Entities | ' | ||||||||
At September 30, | At December 31, | ||||||||
2014 | 2013 | ||||||||
Bagatelle NY LA Investors, LLC ("Bagatelle Investors") | $ | 544,726 | $ | 840,614 | |||||
Bagatelle Little West 12 th , LLC ( "Bagatelle NY") | 1,528,182 | 1,192,363 | |||||||
Bagatelle La Cienega, LLC ("Bagatelle LA") | - | - | |||||||
Totals | $ | 2,072,908 | $ | 2,032,977 |
Investments_Tables
Investments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Investments [Abstract] | ' | ||||||||||||||||
Schedule of Equity Method Investments | ' | ||||||||||||||||
Condensed financial information for Bagatelle Investors, Bagatelle NY, Bagatelle LA and One 29 Park as of, and for the periods ended September 30, 2014 and December 31, 2013 are as follows: | |||||||||||||||||
September 30, 2014: | |||||||||||||||||
Bagatelle | Bagatelle | Bagatelle | One 29 | ||||||||||||||
Investors | NY | LA | Park | ||||||||||||||
Company ownership | 31.24 | % | 5.23 | -1% | 5.23 | -2% | 10 | % | |||||||||
Current assets | $ | 150,988 | $ | 508,272 | $ | 75,917 | $ | 1,698,565 | |||||||||
Noncurrent assets | 2,007,891 | 2,546,310 | 530,351 | 1,173,548 | |||||||||||||
Current liabilities | (3,406 | ) | 419,273 | (1,332,034 | ) | (358,963 | ) | ||||||||||
Noncurrent liabilities | - | (194,991 | ) | (26,543 | ) | (4,051,990 | ) | ||||||||||
Equity | $ | 2,155,473 | $ | 2,440,318 | $ | (752,309 | ) | $ | (1,538,840 | ) | |||||||
Three months ended September 30, 2014: | |||||||||||||||||
Revenues | - | 5,913,430 | 997,033 | 4,591,161 | |||||||||||||
Operating income (loss) | 109,780 | 803,508 | (123,162 | ) | (132,150 | ) | |||||||||||
Net income (loss) | 109,780 | 701,424 | (132,906 | ) | (135,150 | ) | |||||||||||
Nine months ended September 30, 2014: | |||||||||||||||||
Revenues | $ | - | $ | 9,025,968 | $ | 1,359,169 | $ | 5,679,178 | |||||||||
Operating income (loss) | 214,986 | 1,,395,717 | (204,230 | ) | (72,347 | ) | |||||||||||
Net income (loss) | 212,686 | 1,281,395 | (217,082 | ) | (75,346 | ) | |||||||||||
December 31, 2013: | |||||||||||||||||
Bagatelle | Bagatelle | Bagatelle | One 29 | ||||||||||||||
Investors | NY | LA | Park | ||||||||||||||
Company ownership | 31.24 | % | 5.23 | -1% | 5.23 | -2% | 10 | % | |||||||||
Current assets | $ | 164,662 | $ | 1,628,639 | $ | 94,634 | $ | 2,136,179 | |||||||||
Noncurrent assets | 2,944,785 | 2,708,504 | 587,861 | 1,182,845 | |||||||||||||
Current liabilities | (1,471 | ) | (707,324 | ) | (1,187,803 | ) | (750,430 | ) | |||||||||
Noncurrent liabilities | - | (171,996 | ) | (26,771 | ) | - | |||||||||||
Equity | $ | 3,107,976 | $ | 3,457,823 | $ | (532,079 | ) | $ | 2,568,594 | ||||||||
Three months ended September 30, 2013 | |||||||||||||||||
Revenues | - | 5,807,888 | 971,084 | 4,967,447 | |||||||||||||
Operating income (loss) | 112,740 | 1,456,247 | (193,458 | ) | (38,767 | ) | |||||||||||
Net income (loss) | 110,891 | 827,817 | (293,054 | ) | (41,767 | ) | |||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||
Revenues | $ | - | $ | 8,747,933 | $ | 1,236,199 | $ | 7,242,579 | |||||||||
Operating income (loss) | 143,513 | 1,283,943 | (518,716 | ) | (203,,448) | ||||||||||||
Net income (loss) | 140,954 | 1,207,760 | (537,865 | ) | (206,488 | ) | |||||||||||
-1 | This reflects the Company's direct ownership of 5.23% in Bagatelle NY. In addition, the Company has indirect ownership through Bagatelle Investors as well as one of its subsidiaries of 45.90% for a total effective ownership of 51.13%. | ||||||||||||||||
-2 | This reflects the Company's direct ownership of 5.23% in Bagatelle LA. In addition, the Company has indirect ownership through Bagatelle Investors as well as one of its subsidiaries of 38.10% for a total effective ownership of 43.33%. |
Derivative_liability_Tables
Derivative liability (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Derivative liability [Abstract] | ' | ||||||||
Schedule of Components of Derivative Liabilities | ' | ||||||||
The following tables summarize the components of derivative liabilities: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Fair value of derivative liability | $ | 8,298,000 | $ | 10,095,000 | |||||
Significant assumptions (or ranges): | |||||||||
Trading market values (1) | $ | 5.3 | $ | 5.75 | |||||
Term (years) (2) | 1.41 | 2.08 | |||||||
Expected volatility (1) | 33.1 | % | 41.4 | % | |||||
Risk-free rate (2) | 0.31 | % | 0.38 | % | |||||
Discount rate (3) | 1.18 | % | 1.24 | % | |||||
Effective Exercise price (2) | $ | 5 | $ | 5 | |||||
Trigger price (2) | $ | 6.25 | $ | 6.25 | |||||
Expected months until effective registration (3) | 0 | 2 | |||||||
Fair value hierarchy: | |||||||||
-1 | Level 1 inputs are quoted prices in active markets for identical assets and liabilities, or derived therefrom. | ||||||||
-2 | Level 2 inputs are inputs other than quoted prices that are observable. | ||||||||
-3 | Level 3 inputs are unobservable inputs. Inputs for which any parts are level 3 inputs are classified as level 3 in their entirety. | ||||||||
Commitments_and_contingencies_
Commitments and contingencies (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Commitments and contingencies [Abstract] | ' | ||||||||||||||
Schedule of Future Minimum Rental Payments | ' | ||||||||||||||
Future minimum rental commitments under the leases and minimum future rental income per the sublease in five years subsequent to September 30, 2014 and thereafter are as follows: | |||||||||||||||
Year Ending | Net | ||||||||||||||
December 31, | Expense | Income | Amount | ||||||||||||
2014 | $ | 2,160,984 | $ | (790,390 | ) | $ | 1,370,594 | ||||||||
2015 | 5,980,402 | (1,075,083 | ) | 4,905,319 | |||||||||||
2016 | 6,703,216 | (1,063,785 | ) | 5,639,431 | |||||||||||
2017 | 6,457,831 | (844,061 | ) | 5,613,770 | |||||||||||
2018 | 6,562,366 | (864,156 | ) | 5,698,210 | |||||||||||
Thereafter | 92,974,777 | (3,626,551 | ) | 89,348,226 | |||||||||||
Total | $ | 120,839,576 | $ | (8,264,026 | ) | $ | 112,575,550 | ||||||||
Discontinued_operations_Tables
Discontinued operations (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations [Abstract] | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of assets and liabilities that are classified as discontinued operations | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table shows the components of assets and liabilities that are classified as discontinued operations in the Company's consolidated balance sheets as of September 30, 2014 and December 31, 2013: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 9,709 | $ | 3,318 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | 11,092 | 130,527 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | 43,903 | 100,855 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 77,511 | 244,816 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets of discontinued operations - current | 142,214 | 479,516 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment, net | 1,567,058 | 1,322,698 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Security deposits | 84,904 | 181,571 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets of discontinued operations - long term | 1,651,962 | 1,504,269 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | 409,573 | 1,022,031 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Due to related parties | 2,489,146 | 2,500,960 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities of discontinued operations - current | 2,898,718 | 3,522,991 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred rent payable | 686,503 | 661,709 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets | $ | (1,791,045 | ) | $ | (2,200,915 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized operating results related to these entities are included in discontinued operations in the accompanying consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2014 and 2013: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | $ | - | $ | 580,981 | $ | 102,330 | $ | 3,475,429 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs and Expenses | (177,050 | ) | 2,927,632 | 1,196,706 | 9,180,887 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) from discontinued operations | $ | 177,050 | $ | (2,346,651 | ) | $ | (1,094,376 | ) | $ | (5,705,458 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockbased_compensation_Tables
Stock-based compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Stock-based compensation [Abstract] | ' | ||||||||||||||||
Schedule of Assumptions Used to Estimate Fair Value of Stock Option Award Using Black-Scholes Valuation Model | ' | ||||||||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes model with the following weighted-average assumptions: | |||||||||||||||||
Three months ended | |||||||||||||||||
30-Sep-14 | |||||||||||||||||
Expected life (in years) | 6.5 | ||||||||||||||||
Risk-free interest rate | 1.37 | % | |||||||||||||||
Volatility | 37 | % | |||||||||||||||
Dividend yield | 0 | % | |||||||||||||||
Summary of Stock Option Activity Under Stock Option and Incentive Plans | ' | ||||||||||||||||
A summary of the status of stock option awards and changes during the three months ended September 30, 2014 are presented below: | |||||||||||||||||
Weighted | |||||||||||||||||
Weighted | Average | ||||||||||||||||
Average | Remaining | ||||||||||||||||
Exercise | Contractual | Intrinsic | |||||||||||||||
Shares | Price | Life (Years) | Value | ||||||||||||||
Outstanding at December 31, 2013 | 766,578 | $ | 5 | ||||||||||||||
Granted | 100,000 | $ | 6 | ||||||||||||||
Granted | 790,000 | $ | 4.85 | ||||||||||||||
Granted | 275,000 | $ | 5 | ||||||||||||||
Exercised | - | - | |||||||||||||||
Cancelled, expired, or forfeited | - | - | |||||||||||||||
Outstanding at September 30, 2014 | 1,931,578 | $ | 5 | 9.42 | $ | 103,500 | |||||||||||
Exercisable at September 30, 2014 | 125,454 | $ | 5.03 | 9.42 | $ | 6,635 | |||||||||||
Segment_reporting_Tables
Segment reporting (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Segment reporting [Abstract] | ' | ||||||||||||||||||||||||
Schedule of segment information | ' | ||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
STKs | $ | 10,375,136 | $ | 8,695,667 | $ | 27,807,365 | $ | 26,732,173 | |||||||||||||||||
F&B | 1,945,363 | 2,137,086 | 6,207,523 | 5,585,556 | |||||||||||||||||||||
Other | 69,685 | 252,865 | 915,556 | 731,389 | |||||||||||||||||||||
$ | 12,390,184 | $ | 11,085,618 | $ | 34,930,444 | $ | 33,049,118 | ||||||||||||||||||
Segment Profits: | |||||||||||||||||||||||||
STKs | $ | 1,564,275 | $ | 871,410 | $ | 3,488,507 | $ | 3,803,113 | |||||||||||||||||
F&B | 1,945,363 | 2,137,086 | 6,207,523 | 5,585,556 | |||||||||||||||||||||
Other | (176,877 | ) | (123,582 | ) | (90,488 | ) | (438,840 | ) | |||||||||||||||||
Total segment profit | 3,332,761 | 2,884,914 | 9,786,518 | 8,949,829 | |||||||||||||||||||||
General and administrative, net | 1,922,482 | 1,080,686 | 6,024,364 | 2,973,313 | |||||||||||||||||||||
Depreciation and amortization | 327,810 | 341,529 | 1,000,464 | 1,197,431 | |||||||||||||||||||||
Interest expense, net of interest income | (6,268 | ) | 235,507 | 52,220 | 614,642 | ||||||||||||||||||||
Other | (224,079 | ) | 810,913 | (2,329,785 | ) | 1,012,720 | |||||||||||||||||||
Income (loss) from continuing operations before provision for income taxes | $ | 1,312,816 | $ | 416,279 | $ | 5,039,255 | $ | 3,151,723 | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Property & equipment, net | |||||||||||||||||||||||||
STKs | $ | 15,103,170 | $ | 11,893,554 | |||||||||||||||||||||
F&B | 160,012 | 145,364 | |||||||||||||||||||||||
Other | 1,640,639 | 1,406,495 | |||||||||||||||||||||||
Total | $ | 16,903,821 | $ | 13,445,413 |
Geographic_information_Tables
Geographic information (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Geographic information [Abstract] | ' | ||||||||
Summary of Financial Information by Geographic Location | ' | ||||||||
The following table contains certain financial information by geographic location for the nine months ended September 30, 2014 and 2013: | |||||||||
Nine months ended September 30, | |||||||||
2014 | 2013 | ||||||||
United States: | |||||||||
Revenues - owned units | $ | 18,264,189 | $ | 18,459,970 | |||||
Management, incentive and royalty fee revenue | 2,400,754 | 2,299,487 | |||||||
Foreign: | |||||||||
Revenues - owned units | $ | 13,911 | $ | 55,060 | |||||
Management and development fee revenue | 1,861,407 | 1,148,984 | |||||||
The following table contains certain financial information by geographic location at September 30, 2014 and December 31, 2013: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
United States: | |||||||||
Net assets | $ | 9,523,135 | $ | 7,572,058 | |||||
Foreign: | |||||||||
Net assets | $ | 1,291,994 | $ | 654,579 | |||||
Merger_Details
Merger (Details) (The One Group [Member], USD $) | 0 Months Ended |
Oct. 16, 2013 | |
The One Group [Member] | ' |
Business Acquisition [Line Items] | ' |
Shares issued in business acquisition | 12,631,400 |
Par value of stock in business acquisition | $0.00 |
Payment to acquire member interest | $11,750,000 |
Shares issued to CEO and director as a control premium | 1,000,000 |
Shares issued to CEO and related entities, pro rata portion | 7,680,666 |
Escrow shares | 2,000,000 |
Additional payments to TOG Members | 14,100,000 |
Shares required for additional payments to TOG Members | 5,750,000 |
Shares issued price per share | $5 |
Exercise price of warrants | $5 |
Aggregate contingent sign-on bonus | 900,000 |
Minimum price per share per agreement | $6.25 |
Amount in excess of $20,000 of excess liabilities | 12,721 |
Excess liabilities and working capital shortfall | $32,721 |
Merger exchange ratio | '8.09 to one |
Business_and_basis_of_presenta3
Business and basis of presentation (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jul. 25, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Little West 12th [Member] | Little West 12th [Member] | Little West 12th [Member] | WSATOG [Member] | WSATOG [Member] | WSATOG [Member] | WSATOG [Member] | WSATOG [Member] | Midtown Holdings [Member] | Midtown Holdings [Member] | Midtown Holdings [Member] | Midtown Holdings [Member] | TOG UK [Member] | TOG UK [Member] | TOG UK [Member] | TOG UK [Member] | TOG UK [Member] | BBCLV [Member] | BBCLV [Member] | STK DC [Member] | STK DC [Member] | STK Orlando [Member] | STK Chicago [Member] | TOG Biscayne [Member] | STK Westwood [Member] | STK Denver [Member] | |||||
Bridge [Member] | Bridge [Member] | Bridge [Member] | Miami Services and STK Miami [Member] | STK Midtown and STKout Midtown [Member] | Miami Services and STK Miami [Member] | STK Midtown and STKout Midtown [Member] | TOG Aldwych and CA Aldwych [Member] | Hip Hospitality UK [Member] | Hip Hospitality UK [Member] | |||||||||||||||||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average common shares outstanding | 24,940,195 | 11,631,400 | 24,942,328 | 11,631,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effect of dilutive securities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average common shares and potential common shares outstanding | 24,940,195 | 11,631,400 | 25,942,328 | 11,631,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options excluded from net income per diluted share calculation | 100,000 | 100,000 | 100,000 | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership interest in subsidiary | ' | ' | ' | ' | 100.00% | 65.80% | 63.40% | 100.00% | 100.00% | 60.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 86.06% | 86.06% | 93.50% | 93.50% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
Purchase price for additional interest | ' | ' | ' | ' | $75,000 | ' | ' | ' | $1,800,000 | ' | ' | ' | ' | $3,834,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional interest purchased in WSATOG | ' | ' | ' | ' | ' | ' | ' | ' | 40.00% | ' | ' | ' | ' | ' | ' | ' | ' | 49.99% | ' | ' | 30.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Inventory_Details
Inventory (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Inventory [Line Items] | ' | ' |
Inventory | $944,684 | $978,392 |
Food [Member] | ' | ' |
Inventory [Line Items] | ' | ' |
Inventory | 143,918 | 79,773 |
Beverages [Member] | ' | ' |
Inventory [Line Items] | ' | ' |
Inventory | $800,766 | $898,619 |
Property_and_equipment_net_Det
Property and equipment, net (Details) (USD $) | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | $31,234,856 | ' | $25,708,597 |
Less accumulated depreciation and amortization | 14,331,035 | ' | 12,263,184 |
Total | 16,903,821 | ' | 13,445,413 |
Depreciation and amortization | 1,000,464 | 1,151,982 | ' |
Furniture and fixtures [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | 7,562,498 | ' | 6,382,710 |
Leasehold improvements [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | 21,439,786 | ' | 17,897,561 |
Construction in progress [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | 1,518,950 | ' | 826,065 |
Restaurant supplies [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | $713,622 | ' | $602,261 |
Accrued_expenses_Details
Accrued expenses (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
Accrued expenses [Abstract] | ' | ' | ||
Sales tax payable | $578,975 | $493,886 | ||
Payroll and related | 244,953 | 498,228 | ||
Termination costs | ' | [1] | 1,375,341 | [1] |
Income taxes payable | 685,612 | ' | ||
Due to hotels | 200,000 | 200,000 | ||
Other | 13,925 | 569,752 | ||
Totals | $1,723,465 | $3,137,207 | ||
[1] | Includes the costs associated with the termination of two leases and one management agreement in fiscal 2013 for discontinued operations. These termination costs were paid in the second quarter of 2014. |
Notes_payable_Details
Notes payable (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Oct. 31, 2009 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 31, 2009 | Oct. 31, 2009 | Oct. 31, 2009 | Oct. 31, 2009 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Aug. 06, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Note Payable [Member] | Note Payable [Member] | Note Payable [Member] | Note Payable [Member] | Note Payable [Member] | Note Payable [Member] | Note Payable [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | |||||
JECII [Member] | One Marks [Member] | Little West 12th [Member] | One LA [Member] | Subsequent Event [Member] | Minimum [Member] | Maximum [Member] | |||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan interest rate | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Membership units purchased by THE ONE GROUP | ' | ' | ' | ' | ' | ' | ' | 10.14% | 6.55% | 5.19% | 4.63% | ' | ' | ' | ' | ' | ' |
Face value of debt | ' | ' | ' | ' | $100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment for purchase of membership units | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment to acquire membership units, cash portion | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of units called by warrants | ' | ' | ' | ' | 10,090 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants | ' | ' | ' | ' | $22.94 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Frequency of note payment | ' | ' | ' | ' | 'Quarterly | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quarterly payments | ' | ' | ' | ' | 5,656 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note payable, amount outstanding | ' | ' | ' | ' | ' | 0 | 15,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense on notes | 0 | 58,688 | 72,892 | 132,964 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of credit facility extended by BCM | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,100,000 | ' | ' |
Interest rate, additional rate over prime | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% | 5.00% | ' | ' | 0.75% | 4.00% |
Credit facility, amount outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,127,253 | ' | 4,316,865 | ' | ' | ' |
Tangible net worth | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,223,128 | ' | 8,226,636 | ' | ' | ' |
Minimum future payments on the notes payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | 0 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | $6,127,253 | ' | $6,127,253 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Nonconsolidated_variable_inter2
Nonconsolidated variable interest entities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Variable Interest Entity [Line Items] | ' | ' |
Investments | $2,072,908 | $2,032,977 |
Bagatelle NY LA Investors, LLC [Member] | ' | ' |
Variable Interest Entity [Line Items] | ' | ' |
Investments | 544,726 | 840,614 |
Bagatelle Little West 12th Street, LLC [Member] | ' | ' |
Variable Interest Entity [Line Items] | ' | ' |
Investments | 1,528,182 | 1,192,363 |
Bagatelle La Cienega, LLC [Member] | ' | ' |
Variable Interest Entity [Line Items] | ' | ' |
Investments | ' | ' |
Investments_Details
Investments (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | ||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | |||
Investments | $2,072,908 | ' | $2,072,908 | ' | $2,032,977 | |||
Due to related parties | 9,005 | ' | 9,005 | ' | 27,979 | |||
Due from related parties | 286,793 | ' | 286,793 | ' | 245,280 | |||
Accounts receivable, net | 3,729,176 | ' | 3,729,176 | ' | 2,923,754 | |||
Bagtelle Investors [Member] | ' | ' | ' | ' | ' | |||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | |||
Ownership percentage | 31.24% | ' | 31.24% | ' | 31.24% | |||
Current assets | 150,988 | ' | 150,988 | ' | 164,662 | |||
Non-current assets | 2,007,891 | ' | 2,007,891 | ' | 2,944,785 | |||
Current liabilities | -3,406 | ' | -3,406 | ' | -1,471 | |||
Non-current liabilities | ' | ' | ' | ' | ' | |||
Equity | 2,155,473 | ' | 2,155,473 | ' | 3,107,976 | |||
Revenues | ' | ' | ' | ' | ' | |||
Operating income (loss) | 109,780 | 112,740 | 214,986 | 143,513 | ' | |||
Net income (loss) | 109,780 | 110,891 | 212,686 | 140,954 | ' | |||
Bagatelle NY [Member] | ' | ' | ' | ' | ' | |||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | |||
Ownership percentage | 5.23% | [1] | ' | 5.23% | [1] | ' | 5.23% | [1] |
Indirect ownership percentage | ' | ' | 45.90% | ' | ' | |||
Effective ownership percentage | ' | ' | 51.13% | ' | ' | |||
Current assets | 508,272 | ' | 508,272 | ' | 1,628,639 | |||
Non-current assets | 2,546,310 | ' | 2,546,310 | ' | 2,708,504 | |||
Current liabilities | 419,273 | ' | 419,273 | ' | -707,324 | |||
Non-current liabilities | -194,991 | ' | -194,991 | ' | -171,996 | |||
Equity | 2,440,318 | ' | 2,440,318 | ' | 3,457,823 | |||
Revenues | 5,913,430 | 5,807,888 | 9,025,968 | 8,747,933 | ' | |||
Operating income (loss) | 803,508 | 1,456,247 | 1,395,717 | 1,283,943 | ' | |||
Net income (loss) | 701,424 | 827,817 | 1,281,395 | 1,207,760 | ' | |||
Bagatelle LA [Member] | ' | ' | ' | ' | ' | |||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | |||
Ownership percentage | 5.23% | [2] | ' | 5.23% | [2] | ' | 5.23% | [2] |
Indirect ownership percentage | ' | ' | 38.10% | ' | ' | |||
Effective ownership percentage | ' | ' | 43.33% | ' | ' | |||
Current assets | 75,917 | ' | 75,917 | ' | 94,634 | |||
Non-current assets | 530,351 | ' | 530,351 | ' | 587,861 | |||
Current liabilities | -1,332,034 | ' | -1,332,034 | ' | -1,187,803 | |||
Non-current liabilities | -26,543 | ' | -26,543 | ' | -26,771 | |||
Equity | -752,309 | ' | -752,309 | ' | -532,079 | |||
Revenues | 997,033 | 971,084 | 1,359,169 | 1,236,199 | ' | |||
Operating income (loss) | -123,162 | -193,458 | -204,230 | -518,716 | ' | |||
Net income (loss) | -132,906 | -293,054 | -217,082 | -537,865 | ' | |||
One29 Park [Member] | ' | ' | ' | ' | ' | |||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | |||
Ownership percentage | 10.00% | ' | 10.00% | ' | 10.00% | |||
Current assets | 1,698,565 | ' | 1,698,565 | ' | 2,136,179 | |||
Non-current assets | 1,173,548 | ' | 1,173,548 | ' | 1,182,845 | |||
Current liabilities | -358,963 | ' | -358,963 | ' | -750,430 | |||
Non-current liabilities | -4,051,990 | ' | -4,051,990 | ' | ' | |||
Equity | -1,538,840 | ' | -1,538,840 | ' | 2,568,594 | |||
Revenues | 4,591,161 | 4,967,447 | 5,679,178 | 7,242,579 | ' | |||
Operating income (loss) | -132,150 | -38,767 | -72,347 | -203,448 | ' | |||
Net income (loss) | -135,150 | -41,767 | -75,346 | -206,488 | ' | |||
Investments | 506,000 | ' | 506,000 | ' | ' | |||
Equity Method Investments [Member] | ' | ' | ' | ' | ' | |||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | |||
Due to related parties | ' | ' | ' | ' | 29,123 | |||
Due from related parties | -60,630 | ' | -60,630 | ' | ' | |||
Accounts receivable, net | $411,839 | ' | $411,839 | ' | $415,371 | |||
[1] | This reflects the Company's direct ownership of 5.23% in Bagatelle NY. In addition, the Company has indirect ownership through Bagatelle Investors as well as one of its subsidiaries of 45.90% for a total effective ownership of 51.13%. | |||||||
[2] | This reflects the Company's direct ownership of 5.23% in Bagatelle LA. In addition, the Company has indirect ownership through Bagatelle Investors as well as one of its subsidiaries of 38.10% for a total effective ownership of 43.33%. |
Related_party_transactions_Det
Related party transactions (Details) (USD $) | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ' | ' | ' |
Due to related parties | $9,005 | ' | $27,979 |
Other assets | 1,351,465 | ' | 1,333,432 |
Non-Interest Bearing Cash Advances [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Other assets | 1,017,799 | ' | 1,107,220 |
Design Services [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Due to related parties | ' | ' | ' |
Legal Fees [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Due to related parties | 43,022 | ' | 417,000 |
Incurred expenses | 385,000 | 848,000 | ' |
Construction Serivces [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Due to related parties | ' | ' | 15,900 |
Incurred expenses | $3,107,000 | $1,288,000 | ' |
Derivative_liability_Details
Derivative liability (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Oct. 16, 2013 | ||||
The One Group [Member] | |||||||||
Fair Value Measurements [Line Items] | ' | ' | ' | ' | ' | ' | |||
Fair value of derivative liability | $8,298,000 | ' | $8,298,000 | ' | $10,095,000 | $15,000,000 | |||
Trading market values (1) | ' | ' | $5.30 | [1] | ' | $5.75 | [1] | ' | |
Term (years) (2) | ' | ' | '1 year 4 months 28 days | [2] | ' | '2 years 29 days | [2] | ' | |
Expected volatility (1) | ' | ' | 33.10% | [1] | ' | 41.40% | [1] | ' | |
Risk-free rate (2) | ' | ' | 0.31% | [2] | ' | 0.38% | [2] | ' | |
Discount rate (3) | ' | ' | 1.18% | [3] | ' | 1.24% | [3] | ' | |
Effective Exercise price (2) | $5 | [2] | ' | $5 | [2] | ' | $5 | [2] | ' |
Trigger price (2) | ' | ' | $6.25 | [2] | ' | $6.25 | [2] | ' | |
Expected months until effective registration (3) | ' | ' | '0 months | [3] | ' | '2 months | [3] | ' | |
Income on the adjustment of the derivative liability balance | -991,588 | ' | 1,793,124 | ' | ' | ' | |||
Additional payments to TOG Members | ' | ' | ' | ' | ' | 14,100,000 | |||
Shares required for additional payments to TOG Members | ' | ' | ' | ' | ' | 5,750,000 | |||
Exercise price of warrants | ' | ' | ' | ' | ' | $5 | |||
Aggregate contingent sign-on bonus | ' | ' | ' | ' | ' | $900,000 | |||
Minimum price per share per agreement | ' | ' | ' | ' | ' | $6.25 | |||
[1] | Level 1 inputs are quoted prices in active markets for identical assets and liabilities, or derived therefrom. | ||||||||
[2] | Level 2 inputs are inputs other than quoted prices that are observable. | ||||||||
[3] | Level 3 inputs are unobservable inputs. Inputs for which any parts are level 3 inputs are classified as level 3 in their entirety. |
Commitments_and_contingencies_1
Commitments and contingencies (Operating Leases) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Rental Expense | ' | ' | ' | ' |
2014 | $2,160,984 | ' | $2,160,984 | ' |
2015 | 5,980,402 | ' | 5,980,402 | ' |
2016 | 6,703,216 | ' | 6,703,216 | ' |
2017 | 6,457,831 | ' | 6,457,831 | ' |
2018 | 6,562,366 | ' | 6,562,366 | ' |
Thereafter | 92,974,777 | ' | 92,974,777 | ' |
Total | 120,839,576 | ' | 120,839,576 | ' |
Rental Income | ' | ' | ' | ' |
2014 | -790,390 | ' | -790,390 | ' |
2015 | -1,075,083 | ' | -1,075,083 | ' |
2016 | -1,063,785 | ' | -1,063,785 | ' |
2017 | -844,061 | ' | -844,061 | ' |
2018 | -864,156 | ' | -864,156 | ' |
Thereafter | -3,626,551 | ' | -3,626,551 | ' |
Total | -8,264,026 | ' | -8,264,026 | ' |
Net Amount | ' | ' | ' | ' |
2014 | 1,370,594 | ' | 1,370,594 | ' |
2015 | 4,905,319 | ' | 4,905,319 | ' |
2016 | 5,639,431 | ' | 5,639,431 | ' |
2017 | 5,613,770 | ' | 5,613,770 | ' |
2018 | 5,698,210 | ' | 5,698,210 | ' |
Thereafter | 89,348,226 | ' | 89,348,226 | ' |
Total | 112,575,550 | ' | 112,575,550 | ' |
Rent expense | 779,164 | 718,147 | 2,802,466 | 2,321,141 |
Percentage rent | 101,936 | 10,509 | 329,545 | 272,730 |
Rental income related to subleases | $188,480 | $181,544 | $600,099 | $469,591 |
Commitments_and_contingencies_2
Commitments and contingencies (License and Management Fees) (Details) (USD $) | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Bridge [Member] | Bridge [Member] | Bridge [Member] | Basement Manager [Member] | STK-Vegas [Member] | STK-Vegas [Member] | One 29 Park [Member] | One 29 Park [Member] | Hip Hospitality UK [Member] | Hip Hospitality UK [Member] | Hip Hospitality UK [Member] | TOG Aldwych [Member] | TOG Aldwych [Member] | TOG Aldwych [Member] | TOG Aldwych [Member] | Heraea [Member] | |
item | item | |||||||||||||||
License and Management Fees [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Agreement date | '2007-06 | ' | ' | ' | '2010-01 | ' | '2009-07 | ' | '2010-07 | ' | ' | ' | ' | '2011-12 | ' | '2012-05 |
Management fees | $60,324 | $58,640 | ' | $60,989 | $3,604,433 | $3,136,342 | $462,313 | $481,638 | $554,039 | $402,590 | ' | $1,129,341 | $1,273,948 | ' | ' | ' |
Management fee payable | 27,365 | ' | 39,514 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Management fee payable, percent of gross revenue | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Management agreement term | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years |
Management fees receivable | ' | ' | ' | ' | ' | ' | ' | ' | 890,176 | ' | 870,158 | 877,244 | ' | 877,244 | 143,474 | ' |
Management fee receivable, percent of gross sales | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Management fee receivable, percent of revenue | ' | ' | ' | ' | ' | ' | 5.00% | ' | 5.50% | ' | ' | ' | ' | ' | ' | 5.00% |
Management fee receivable, percent of receipts | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' |
Percentage of base beverage fees | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Incentive fee, description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
20% of net profits prior to the investment breakeven point date and 43% of net profits thereafter | ||||||||||||||||
Development fee | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit against obligation | ' | ' | ' | ' | $387,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Marketing fee, percent of food and beverage receipts | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.50% | ' | ' |
Additional fee, percent of operating profits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 65.00% | ' | ' |
Number of five year option periods | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 |
Discontinued_operations_Detail
Discontinued operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Discontinued operations [Abstract] | ' | ' | ' | ' | ' |
Cash and cash equivalents | $9,709 | ' | $9,709 | ' | $3,318 |
Accounts receivable | 11,092 | ' | 11,092 | ' | 130,527 |
Inventory | 43,903 | ' | 43,903 | ' | 100,855 |
Prepaid expenses and other current assets | 77,511 | ' | 77,511 | ' | 244,816 |
Assets of discontinued operations - current | 142,214 | ' | 142,214 | ' | 479,516 |
Property and equipment, net | 1,567,058 | ' | 1,567,058 | ' | 1,322,698 |
Security deposits | 84,904 | ' | 84,904 | ' | 181,571 |
Assets of discontinued operations - long term | 1,651,962 | ' | 1,651,962 | ' | 1,504,269 |
Accounts payable and accrued liabilities | 409,573 | ' | 409,573 | ' | 1,022,031 |
Due to related parties | 2,489,146 | ' | 2,489,146 | ' | 2,500,960 |
Liabilities of discontinued operations - current | 2,898,718 | ' | 2,898,718 | ' | 3,522,991 |
Deferred rent payable | 686,503 | ' | 686,503 | ' | 661,709 |
Net assets | -1,791,045 | ' | -1,791,045 | ' | -2,200,915 |
Revenues | ' | 580,981 | 102,330 | 3,475,429 | ' |
Costs and Expenses | -177,050 | 2,927,632 | 1,196,706 | 9,180,887 | ' |
Net income (loss) from discontinued operations | ($177,050) | $2,346,651 | $1,094,376 | $5,705,458 | ' |
Stockholders_equity_Details
Stockholders' equity (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ' | ' |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, par value per share (in dollars per share) | $0.00 | $0.00 |
Common stock, shares outstanding | 24,940,195 | 24,946,739 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value per share (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares outstanding | 0 | 0 |
Stockbased_compensation_Narrat
Stock-based compensation (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Aug. 31, 2014 | Jun. 30, 2014 | Feb. 28, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Authorized shares | ' | ' | ' | ' | ' | ' | ' | 4,773,992 | 4,773,992 |
Stock-based compensation | ' | ' | $326,753 | ' | ' | ' | ' | $159,385 | $326,753 |
Expected life in years | ' | ' | ' | ' | ' | ' | ' | '6 years 6 months | ' |
Dividend rate | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' |
Risk free interest rate | ' | ' | ' | ' | ' | ' | ' | 1.37% | ' |
Volatility | ' | ' | ' | ' | ' | ' | ' | 37.00% | ' |
Options granted, weighted-average grant date fair value | ' | ' | ' | ' | ' | ' | ' | $1.86 | ' |
Exercise price | ' | ' | ' | ' | $5 | $4.85 | $6 | ' | ' |
Option vesting period | ' | ' | ' | ' | '5 years | '5 years | ' | ' | ' |
Vesting rate | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' |
Option vesting terms | ' | ' | ' | ' | ' | ' | ' | ' | ' |
50% will vest based on the achievement of targeted annual milestones which have been set by the board of directors. | |||||||||
Antidilutive securities excluded from computation of dilutive earnings per share (in shares) | 100,000 | 100,000 | 100,000 | 100,000 | ' | ' | ' | ' | 632,268 |
Unrecognized compensation cost related to unvested stock-based awards | ' | ' | ' | ' | ' | ' | ' | $4,629,636 | $4,629,636 |
Unrecognized compensation cost, recognition period | ' | ' | ' | ' | ' | ' | ' | ' | '4 years 10 months 24 days |
Stockbased_compensation_Summar
Stock-based compensation (Summary of Status of Company's Stock Option Activity) (Details) (Employee Stock Option [Member], USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Shares | ' |
Outstanding at December 31, 2013 | 766,578 |
Exercised | ' |
Cancelled, expired, or forfeited | ' |
Outstanding at September 30, 2014 | 1,931,578 |
Exercisable at September 30, 2014 | 125,454 |
Weighted-Average Exercise Price | ' |
Outstanding at December 31, 2013 | $5 |
Exercised | ' |
Cancelled, expired, or forfeited | ' |
Outstanding at September 30, 2014 | $5 |
Exercisable at September 30, 2014 | $5.03 |
Weighted-Average Remaining Contractual Term | ' |
Outstanding at September 30, 2014 | '9 years 7 months 2 days |
Exercisable at September 30, 2014 | '9 years 7 months 2 days |
Aggregate Intrinsic Value | ' |
Outstanding at September 30, 2014 | $103,500 |
Exercisable at September 30, 2014 | $6,635 |
Exercise price of $6.00 per share | ' |
Shares | ' |
Granted | 100,000 |
Weighted-Average Exercise Price | ' |
Granted | $6 |
Exercise price of $4.85 per share | ' |
Shares | ' |
Granted | 790,000 |
Weighted-Average Exercise Price | ' |
Granted | $4.85 |
Exercise price of $5.00 per share | ' |
Shares | ' |
Granted | 275,000 |
Weighted-Average Exercise Price | ' |
Granted | $5 |
Segment_reporting_Details
Segment reporting (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
item | |||||
Segment reporting [Abstract] | ' | ' | ' | ' | ' |
Number of reportable segments | ' | ' | 3 | ' | ' |
Segment reporting | ' | ' | ' | ' | ' |
Revenues | $12,390,184 | $11,085,618 | $34,930,444 | $33,049,118 | ' |
General and administrative, net | 1,922,482 | 1,080,686 | 6,024,364 | 2,973,313 | ' |
Depreciation and amortization | ' | ' | 1,129,064 | 1,717,406 | ' |
Interest expense, net of interest income | -6,268 | 235,507 | 52,220 | 614,642 | ' |
Income (loss) from continuing operations before provision for income taxes | 1,312,816 | 416,279 | 5,039,255 | 3,151,722 | ' |
Assets | 35,748,679 | ' | 35,748,679 | ' | 35,196,931 |
Operating segment | ' | ' | ' | ' | ' |
Segment reporting | ' | ' | ' | ' | ' |
Revenues | 12,390,184 | 11,085,618 | 34,930,444 | 33,049,118 | ' |
Total segment profit | 3,332,761 | 2,884,914 | 9,786,518 | 8,949,829 | ' |
General and administrative, net | 1,922,482 | 1,080,686 | 6,024,364 | 2,973,313 | ' |
Depreciation and amortization | 327,810 | 341,529 | 1,000,464 | 1,197,431 | ' |
Interest expense, net of interest income | -6,268 | 235,507 | 52,220 | 614,642 | ' |
Other | -224,079 | 810,913 | -2,329,785 | 1,012,720 | ' |
Income (loss) from continuing operations before provision for income taxes | 1,312,816 | 416,279 | 5,039,255 | 3,151,723 | ' |
Assets | 16,903,821 | ' | 16,903,821 | ' | 13,445,413 |
STKs | Operating segment | ' | ' | ' | ' | ' |
Segment reporting | ' | ' | ' | ' | ' |
Revenues | 10,375,136 | 8,695,667 | 27,807,365 | 26,732,173 | ' |
Total segment profit | 1,564,275 | 871,410 | 3,488,507 | 3,803,113 | ' |
Assets | 15,103,170 | ' | 15,103,170 | ' | 11,893,554 |
F&B | Operating segment | ' | ' | ' | ' | ' |
Segment reporting | ' | ' | ' | ' | ' |
Revenues | 1,945,363 | 2,137,086 | 6,207,523 | 5,585,556 | ' |
Total segment profit | 1,945,363 | 2,137,086 | 6,207,523 | 5,585,556 | ' |
Assets | 160,012 | ' | 160,012 | ' | 145,364 |
Other | Operating segment | ' | ' | ' | ' | ' |
Segment reporting | ' | ' | ' | ' | ' |
Revenues | 69,685 | 252,865 | 915,556 | 731,389 | ' |
Total segment profit | -176,877 | -123,582 | -90,488 | -438,840 | ' |
Assets | $1,640,639 | ' | $1,640,639 | ' | $1,406,495 |
Geographic_information_Details
Geographic information (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
United States [Member] | United States [Member] | United States [Member] | Foreign [Member] | Foreign [Member] | Foreign [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues - owned units | $10,444,821 | $8,948,532 | $28,722,921 | $27,463,562 | $18,264,189 | $18,459,970 | ' | $13,911 | $55,060 | ' |
Management, incentive and royalty fee revenue | 1,945,363 | 2,137,086 | 6,207,523 | 5,585,556 | 2,400,754 | 2,299,487 | ' | 1,861,407 | 1,148,984 | ' |
Net assets (liabilities) | ' | ' | ' | ' | $9,523,135 | ' | $7,572,058 | $1,291,994 | ' | $654,579 |
Subsequent_events_Details
Subsequent events (Details) (Subsequent Event [Member], The ONE Group LLC [Member], Settlement Agreement [Member], USD $) | 1 Months Ended |
Oct. 31, 2014 | |
Subsequent Event [Member] | The ONE Group LLC [Member] | Settlement Agreement [Member] | ' |
Subsequent events | ' |
Litigation settlement amount received under the terms of agreement | $600,000 |