Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 26, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | ONE Group Hospitality, Inc. | ||
Entity Central Index Key | 0001399520 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 30,813,909 | ||
Trading Symbol | STKS | ||
Entity Common Stock, Shares Outstanding | 28,626,880 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,592 | $ 1,548 |
Accounts receivable | 7,029 | 5,514 |
Inventory | 1,404 | 1,402 |
Other current assets | 1,471 | 1,299 |
Due from related parties, net | 45 | 0 |
Total current assets | 11,541 | 9,763 |
Property and equipment, net | 39,347 | 37,811 |
Investments | 2,684 | 2,957 |
Deferred tax assets, net | 38 | 69 |
Other assets | 349 | 384 |
Security deposits | 2,020 | 2,031 |
Total assets | 55,979 | 53,015 |
Current liabilities: | ||
Accounts payable | 5,408 | 5,329 |
Accrued expenses | 8,093 | 6,987 |
Deferred license revenue | 171 | 115 |
Deferred gift card revenue and other | 947 | 999 |
Due to related parties, net | 0 | 256 |
Current portion of long-term debt | 3,201 | 3,241 |
Total current liabilities | 17,820 | 16,927 |
Deferred license revenue, long-term | 1,008 | 1,222 |
Due to related parties, long-term | 1,197 | 1,197 |
Deferred rent and tenant improvement allowances | 16,774 | 17,001 |
Long-term debt, net of current portion | 7,118 | 10,115 |
Total liabilities | 43,917 | 46,462 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value, 75,000,000 shares authorized; 28,313,017 and 27,152,101 shares issued and outstanding at December 31, 2018 and 2017, respectively | 3 | 3 |
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2018 and 2017 | 0 | 0 |
Additional paid-in capital | 43,543 | 41,007 |
Accumulated deficit | (28,722) | (31,979) |
Accumulated other comprehensive loss | (2,310) | (1,556) |
Total stockholders' equity | 12,514 | 7,475 |
Noncontrolling interests | (452) | (922) |
Total equity | 12,062 | 6,553 |
Total liabilities and equity | $ 55,979 | $ 53,015 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 28,313,017 | 27,152,101 |
Common stock, shares outstanding | 28,313,017 | 27,152,101 |
Preferred stock, par value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
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 OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||
Owned restaurant net revenues | $ 65,896 | $ 58,654 |
Owned food, beverage and other net revenues | 8,137 | 10,227 |
Total owned revenue | 74,033 | 68,881 |
Management, license and incentive fee revenue | 11,568 | 10,779 |
Total revenues | 85,601 | 79,660 |
Owned restaurants: | ||
Owned restaurant cost of sales | 17,220 | 15,544 |
Owned restaurant operating expenses | 39,599 | 37,076 |
Total owned restaurant expenses | 56,819 | 52,620 |
Owned food, beverage and other expenses | 7,865 | 9,400 |
Total owned operating expenses | 64,684 | 62,020 |
General and administrative (including stock-based compensation of $1,313 and $1,052, respectively) | 11,119 | 11,893 |
Settlements | 0 | 1,245 |
Depreciation and amortization | 2,824 | 3,051 |
Lease termination expense and asset write-offs | 213 | 2,225 |
Pre-opening expenses | 1,365 | 1,595 |
Transaction costs | 0 | 421 |
Equity in income of investee companies | (182) | (168) |
Other expense (income), net | (235) | 36 |
Total costs and expenses | 79,788 | 82,318 |
Operating income (loss) | 5,813 | (2,658) |
Other expenses, net: | ||
Interest expense, net of interest income | 1,193 | 1,167 |
Total other expenses, net | 1,193 | 1,167 |
Income (loss) from continuing operations before provision for income taxes | 4,620 | (3,825) |
Provision for income taxes | 713 | 600 |
Income (loss) from continuing operations | 3,907 | (4,425) |
Income from discontinued operations | 0 | 397 |
Net income (loss) | 3,907 | (4,028) |
Less: net income attributable to noncontrolling interest | 633 | 188 |
Net income (loss) attributable to The ONE Group Hospitality, Inc. | 3,274 | (4,216) |
Currency translation adjustment | (754) | (12) |
Comprehensive income (loss) | $ 2,520 | $ (4,228) |
Net income (loss) attributable to The ONE Group Hospitality, Inc. per share: | ||
Basic net income (loss) from continuing operations per share | $ 0.12 | $ (0.18) |
Basic net income from discontinued operations per share | 0 | 0.02 |
Basic net income (loss) per share | 0.12 | (0.17) |
Diluted net income (loss) from continuing operations per share | 0.12 | (0.18) |
Diluted net income from discontinued operations per share | 0 | 0.02 |
Diluted net income (loss) per share | $ 0.12 | $ (0.17) |
Shares used in computing basic earnings (loss) per share | 27,653,827 | 25,402,330 |
Shares used in computing diluted earnings (loss) per share | 28,122,445 | 25,402,330 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Share-based Compensation | $ 1,313 | $ 1,052 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income (loss) | Stockholders' equity | Noncontrolling Interests |
Balance at Dec. 31, 2016 | $ 7,379 | $ 3 | $ 37,384 | $ (27,763) | $ (1,544) | $ 8,080 | $ (701) |
Balance (in shares) at Dec. 31, 2016 | 25,050,628 | ||||||
Stock-based compensation | 1,052 | $ 0 | 1,052 | 0 | 0 | 1,052 | 0 |
Stock-based compensation (in shares) | 169,723 | ||||||
Issuance of stock | 2,183 | $ 0 | 2,183 | 0 | 0 | 2,183 | 0 |
Issuance of stock (in shares) | 1,750,000 | ||||||
Issuance of detachable warrants | 388 | $ 0 | 388 | 0 | 0 | 388 | 0 |
Vesting of restricted shares (in shares) | 181,750 | ||||||
Distributions to noncontrolling interests | (409) | $ 0 | 0 | 0 | 0 | 0 | (409) |
Loss on foreign currency translation, net | (12) | 0 | 0 | 0 | (12) | (12) | 0 |
Net income | (4,028) | 0 | 0 | (4,216) | 0 | (4,216) | 188 |
Balance at Dec. 31, 2017 | 6,553 | $ 3 | 41,007 | (31,979) | (1,556) | 7,475 | (922) |
Balance (in shares) at Dec. 31, 2017 | 27,152,101 | ||||||
Adoption of ASC 606 "Revenue from contracts with customers" | (17) | $ 0 | 0 | (17) | 0 | (17) | 0 |
Stock-based compensation | 1,313 | $ 0 | 1,313 | 0 | 0 | 1,313 | 0 |
Stock-based compensation (in shares) | 49,179 | ||||||
Exercise of warrants | 1,223 | $ 0 | 1,223 | 0 | 0 | 1,223 | 0 |
Exercise of warrants (in shares) | 750,000 | ||||||
Vesting of restricted shares (in shares) | 361,737 | ||||||
Distributions to noncontrolling interests | (163) | $ 0 | 0 | 0 | 0 | 0 | (163) |
Loss on foreign currency translation, net | (754) | 0 | 0 | 0 | (754) | (754) | 0 |
Net income | 3,907 | 0 | 0 | 3,274 | 0 | 3,274 | 633 |
Balance at Dec. 31, 2018 | $ 12,062 | $ 3 | $ 43,543 | $ (28,722) | $ (2,310) | $ 12,514 | $ (452) |
Balance (in shares) at Dec. 31, 2018 | 28,313,017 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities: | ||
Net income (loss) | $ 3,907 | $ (4,028) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 2,824 | 3,051 |
Amortization of discount on warrants | 207 | 197 |
Deferred rent | 193 | 830 |
Deferred taxes | 31 | (25) |
Income from equity method investments | (182) | (168) |
Gain on disposition of cost method investment | (185) | 0 |
Stock-based compensation | 1,313 | 1,052 |
Impairments | 0 | 559 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,209) | (684) |
Inventory | (2) | (94) |
Other current assets | (430) | 443 |
Due to related parties, net | (301) | 662 |
Security deposits | 11 | 169 |
Other assets | 35 | 262 |
Accounts payable | 79 | 1,627 |
Accrued expenses | 911 | 1,631 |
Deferred revenue | (758) | 503 |
Net cash provided by operating activities | 6,444 | 5,987 |
Investing activities: | ||
Purchase of property and equipment | (4,102) | (4,610) |
Distribution from equity investment | 40 | 276 |
Proceeds from disposition of costs method investment | 600 | 0 |
Net cash used in investing activities | (3,462) | (4,334) |
Financing activities: | ||
Proceeds from business loan and security agreement | 0 | 1,000 |
Repayment of term loan | (2,828) | (2,828) |
Repayment of equipment financing agreement | (354) | (334) |
Repayment of business loan and security agreement | (62) | (938) |
Issuance of common stock | 1,223 | 2,183 |
Issuance of warrants | 0 | 388 |
Distributions to non-controlling interests | (163) | (409) |
Net cash (used in) provided by financing activities | (2,184) | (938) |
Effect of exchange rate changes on cash | (754) | (85) |
Net increase in cash and cash equivalents | 44 | 630 |
Cash and cash equivalents, beginning of year | 1,548 | 918 |
Cash and cash equivalents, end of year | 1,592 | 1,548 |
Supplemental disclosure of cash flow data: | ||
Interest paid | 996 | 1,180 |
Income taxes paid | 797 | 99 |
Non-cash amortization of debt issuance costs | $ 19 | $ 35 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2018 | |
Business Combination, Description [Abstract] | |
Description of Business | Note 1 – Description of Business The ONE Group Hospitality, Inc. and its subsidiaries (collectively, the “Company”) is a global hospitality company that develops, owns and operates, or licenses upscale, high-energy restaurants and lounges and provides turn-key food and beverage (“F&B”) services for hospitality venues including hotels, casinos and other high-end locations globally. Turn-key F&B services are food and beverage services that can be scaled, customized and implemented by the Company at a particular hospitality venue and customized for the client. The Company’s primary restaurant brand is STK, a multi-unit steakhouse concept that combines a high-energy, social atmosphere with the quality and service of a traditional upscale steakhouse. As of December 31, 2018, we owned, operated, managed or licensed 27 venues including 17 STKs in major metropolitan cities in North America, Europe and the Middle East and including F&B services provided to four hotels and casinos in the United States and Europe. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. The Company consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation an entity in which it has certain interests, where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. The Company evaluates its equity method investments for impairment whenever an event or change in circumstances occurs that may have a significant adverse impact on the fair value of the investment. If a loss in value has occurred and is deemed to be other than temporary, an impairment loss is recorded. Several factors are reviewed to determine whether a loss has occurred that is other than temporary, including the absence of an ability to recover the carrying amount of the investment, the length and extent of the fair value decline, and the financial condition and future prospects of the investee. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions for the reporting period and as of the reporting date. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingencies. Actual results could differ from those estimates. Fair Value Measurements Fair value represents the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities are valued based upon observable and non-observable inputs. Valuations using Level 1 inputs are based on unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 inputs utilize significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly. Valuations using Level 3 inputs are based on significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. There were no significant transfers between levels during any period presented. Cash and Cash Equivalents Cash and cash equivalents are defined as cash on hand and highly liquid instruments with original maturities of three months or less when purchased. The Company’s cash and cash equivalents consist of cash in banks and at the restaurants as of December 31, 2018 and 2017. Accounts Receivable The majority of the Company’s receivables arise primarily from credit cards, management agreements, trade customers and other reimbursable amounts due from hotel operators where the Company operates a food and beverage service. The Company determines an allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss and payment history, the customer’s current ability to pay its obligation to the Company and the condition of the general economy and industry as a whole. The Company has not reserved any trade receivables as of December 31, 2018 and 2017. Inventory Inventories, which consist of food, liquor and other beverages, are stated at the lower of cost or net realizable value. Cost is determined by the first in, first out method. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs to sell. The Company has not reserved any inventory as of December 31, 2018 and 2017. Property and Equipment Additions to property and equipment, including leasehold improvements, are recorded at cost. Costs incurred to repair and maintain the Company’s operations and equipment are expensed as incurred. Restaurant smallwares are capitalized during the initial year of operation of a particular restaurant. All restaurant supplies purchased subsequent to the first year are expensed as incurred. When assets are retired or otherwise disposed of, the cost of the assets and the related accumulated depreciation are removed from the accounts, and any gain or loss on retirements is reflected in operating income in the year of disposition. After the asset has been placed into service, depreciation is based on the estimated useful life of the asset using the straight-line method for financial statement purposes. Computer and equipment as well as furniture and fixtures are depreciated over their useful lives from five seven Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying values of these assets may not be fully recoverable. The impairment evaluation is generally performed at the individual venue asset group level. Recoverability of restaurant assets is measured by a comparison of the carrying amount of an individual restaurant’s assets to the estimated identifiable undiscounted future cash flows expected to be generated by those restaurant assets. If the carrying amount of an individual restaurant’s assets exceeds its estimated, identifiable, undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset’s exceed its fair value. Fair value is determined by discounting a restaurant’s identifiable future cash flows. For the year ended December 31, 2018, the Company did not identify any event or changes in circumstances that indicated that the carrying values of its restaurant assets were impaired. For the year ended December 31, 2017, the Company recorded impairments, net of related liabilities, of $0.6 million. Debt Issuance Costs Debt issuance costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense based on the term of the related debt agreement using the straight-line method, which approximates the effective interest method. The Company has recorded debt issuance costs as an offset to long-term debt, net of current portion on the consolidated balance sheets. Income Taxes The Company computes income taxes using the asset and liability method. Under this method, deferred income taxes are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes, using the enacted statutory rate in effect for the year these differences are expected to be taxable or refunded. Deferred income tax expenses or credits are based on the changes in the asset or liability, respectively, from period to period. A deferred tax asset or liability is recognized whenever there are future tax effects from existing temporary differences and operating loss and tax credit carry forwards. If the Company determines that a deferred tax asset or liability could be realized in a greater or lesser amount than recorded, the deferred tax asset or liability is adjusted and a corresponding adjustment is made to the provision for income taxes in the consolidated statements of operations and comprehensive income (loss) in the period during which the determination is made. The Company reduces its deferred tax assets by a valuation allowance if it determines that it is more likely than not that some portion or all of these tax assets will not be realized. In making this determination, the Company considers various qualitative and quantitative factors, such as: · the level of historical taxable income; · the projection of future taxable income over periods in which the deferred tax assets would be deductible; · events within the restaurant industry; · the health of the economy; and, · historical trending. As of December 31, 2018 and 2017, the Company had a valuation allowance of $11.6 million, respectively, established against its deferred tax assets. The Company recognizes the tax benefit from an uncertain tax position when it determines that it is more-likely-than-not that the position would be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. If the Company derecognizes an uncertain tax position, the Company’s policy is to record any applicable interest and penalties within the provision for income taxes in the consolidated statements of operations and comprehensive income (loss). Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606 – “Revenue from Contracts with Customers” (“ASC 606”), using the modified retrospective method. Results for the year ended December 31, 2018 are presented under the new revenue recognition standard, while the prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior periods. Refer to Note 11 for additional details related to the impact of adopting ASC 606. Revenue is derived from restaurant sales, management services and license related operations. The Company recognizes restaurant revenues, net of discounts, when goods and services are provided. Sales tax amounts collected from customers that are remitted to governmental authorities are excluded from net revenue. The Company’s management agreements typically call for a management fee based on a percentage of revenue, a monthly marketing fee based on a percentage of revenues and an incentive fee based on a managed venue’s net profits. Similarly, royalties from the licensee in license agreements are generally based on a percentage of the licensed restaurant’s revenue. These management, license and incentive fees are recognized as revenue in the period the restaurant’s sales occur. The Company also recognizes revenue for initial license fees and upfront fees related to its management and license agreements. For the year ended December 31, 2018, initial license fees and upfront fees were recognized straight-line over the term of the related agreement. For the year ended December 31, 2017, prior to the adoption of ASC 606, initial license fees were recognized when the related services had been provided, which was generally upon the opening of the restaurant, and upfront fees were recognized on a pro-rata basis as restaurants under the development agreement were opened. Gift Certificates Proceeds from the sale of gift certificates are recorded as deferred revenue and recognized as revenue when redeemed by the holder. There are no expiration dates on the Company’s gift certificates and the Company does not charge any service fees that would result in a decrease to a customer’s available balance. Although the Company will continue to honor all gift certificates presented for payment, it may determine the likelihood of redemption to be remote for certain gift certificates due to, among other things, long periods of inactivity. In these circumstances, to the extent the Company determines there is no requirement for remitting balances to government agencies under unclaimed property laws, outstanding gift certificate balances may then be recognized as breakage in the consolidated statements of operations and comprehensive income (loss) as a component of owned food, beverage and other net revenues. For the year ended December 31, 2018, the Company recognized $0.2 31, 2017. Pre-opening Costs Pre-opening costs for Company owned restaurants are expensed as incurred prior to a restaurant opening for business. Pre-opening costs for the years ended December 31, 2018 and 2017 were $1.3 million and $1.6 million, respectively. Advertising Costs The Company expenses the cost of advertising and promotions as incurred. Advertising expense amounted to $2.2 million and $3.6 million in 2018 and 2017, respectively. Leases and Deferred Rent The Company leases all of its restaurant locations under leases classified as operating leases. The Company also leases equipment under operating leases. Minimum base rent for the Company’s operating leases, which generally have escalating rentals over the term of the lease, is recorded on a straight-line basis over the lease term. As such, an equal amount of rent expense is attributed to each period during the term of the lease regardless of when actual payments occur. The difference between rent expense and actual cash payments is recorded as deferred rent in the Company’s consolidated balance sheets. Lease terms begin on the date the Company takes possession under the lease and includes option periods where failure to exercise such options would result in an economic penalty. Certain of the Company’s leases also provide for contingent rent, which is determined as a percentage of sales in excess of specified, minimum sales targets. The Company recognizes contingent rent expense prior to the achievement of the specified sales target provided achievement of the sales target is considered probable. Incentive payments received from landlords, generally in the form of tenant improvement allowances, are recorded as an increase to deferred rent in the Company’s consolidated balance sheet and are amortized on a straight-line basis over the lease term as a reduction to rent expense. As of December 31, 2018 and 2017, the Company had $16.8 million and $17.0 million, respectively, of long-term deferred rent and tenant improvement allowances on the consolidated balance sheets. Stock-Based Compensation The Company maintains an equity incentive compensation plan under which it may grant options, warrants, restricted stock or other stock-based awards to directors, officers, key employees and other key individuals performing services to the Company. Restricted stock and restricted stock units (“RSUs”) are valued using the closing stock price on the date of grant. The fair value of an option award or warrant is determined using the Black-Scholes option pricing model. The Black-Scholes model requires estimates of the expected term of the option, the risk-free interest rate, future volatility and dividend yield. The Company’s assumptions are as follows: · Expected Term – The expected term of options is based upon evaluations of historical and expected future exercise behavior with consideration of both the vesting period and contractual terms of the instruments. · Risk Free Interest Rate – The risk-free interest rate is based on U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at the grant date. · Implied Volatility – Implied volatility is based upon an average of the volatilities of an industry peer group who are publicly traded. · Dividend Yield – The Company has historically not paid dividends and does not plan to do so in the foreseeable future. Under the plan, vesting of awards can either be based on the passage of time or on the achievement of performance goals. For awards that vest on the passage of time, compensation cost is recognized over the vesting period. For performance-based awards, the Company recognizes compensation costs over the requisite service period when conditions for achievement become probable. The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ or are expected to differ. These estimates, which are currently at 10%, are based on historical forfeiture behavior exhibited by employees of the Company. Earnings (Loss) per Share Basic earnings (loss) per share is computed using the weighted average number of common shares outstanding during the period and income available to common stockholders. Diluted earnings (loss) per share is computed using the weighted average number of common shares outstanding during the period plus the dilutive effect of all potential shares of common stock including common stock issuable pursuant to stock options, warrants, and RSUs. Earnings (loss) per share for continuing operations and discontinued operations are computed independently. As a result, the sum of per share amount may not equal the total. Refer to Note 13 for the calculations of basic and diluted earnings (loss) per share. Concentrations of Credit Risk The Company maintains cash and cash equivalent balances with financial institutions that, at times, may exceed federally insured limits. As of December 31, 2018 and 2017, the Company had $1.1 million and $1.6 million, respectively, of cash deposited that is in excess of federally insured limits. The Company has not experienced any losses related to these balances and management believes its credit risk to be minimal. The Company’s accounts receivable balance includes credit card receivables. Management believes that concentrations of credit risk with respect to these credit card receivables are limited. Credit card receivables are anticipated to be collected within three business days of the transaction. Segment Reporting The Company operates in three segments: owned restaurants, owned food, beverage and other operations and managed and licensed operations. These reportable segments are supported by the Company’s corporate unit. The Company’s owned restaurant segment consists of leased restaurant locations that compete in the full-service dining industry and have similar investment criteria and economic and operating characteristics. The Company’s owned food, beverage and other operations segment includes entities where the Company leases a restaurant and provides additional ancillary food and beverage services, such as managing pool bars and providing full hospitality services for a hotel. The Company’s managed and licensed operations 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 the Company refers to as managed locations, and license agreements in which the Company has licensed the use of one of the Company’s brands. Revenues within the managed and licensed operations segment are generated from management fees based on the net revenue at each location, incentive fees based on profitability at each location and license fees. Information regarding the revenues and costs for each business segment has been reported in Note 20 for the years ended December 31, 2018 and 2017. Foreign Currency Translation Assets and liabilities of foreign operations are translated into U.S. dollars at the balance sheet date. Revenues and expenses are translated at average monthly exchange rates. Gains or losses resulting from the translation of foreign subsidiaries represent other comprehensive income (loss) and are accumulated as a separate component of stockholders’ equity. Currency translation gains or (losses) are recorded in accumulated other comprehensive loss within stockholders' equity and amounted to approximately ($0.8) million and ($12.0) thousand during the years ended December 31, 2018 and 2017, respectively. Comprehensive Income (Loss) Comprehensive income (loss) consists of two components: net income (loss) and other comprehensive income (loss). The Company’s other comprehens ive income (loss) is comprised of foreign currency translation adjustments. All of the Company’s foreign currency translation adjustments relate to wholly-owned subsidiaries of the Company. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Updated (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 has been subsequently modified with various amendments, clarifications, and scope improvements. ASU 2016-02 requires a lessee to recognize most leases, with the exception of leases with terms of less than one year, on the balance sheet as a right-of-use asset and liability. ASU 2016-02 also requires certain disclosures about the amount, timing and uncertainty of cash flows arising from leases. The Company will adopt the requirements of ASU 2016 - 02 effective January 1 , 2019 using the optional transition method. The optional transition method allows entities to record the cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption and does not require application of the standard to the comparative periods presented in the financial statements. The Company has also elected to adopt the practical expedient transition package, which eliminates the requirements to reassess lease identification, lease classification and initial direct costs. Additionally, the Company has elected the practical expedients that permit the accounting policy election to account for each separate lease component of a contract and its associated non-lease components as a single lease component. The Company has also elected the accounting policy for short-term lease exceptions, and therefore the Company will not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less). The Company has not elected the hindsight practical expedient, which permits the use of hindsight when determining the lease term and impairment of right-of-use assets, or the portfolio approach practical expedient, which permits applying the standard to a portfolio of leases with similar characteristics. The adoption of ASU 2016-02 will have a significant impact to the consolidated balance sheets with the recording of material assets and obligations related to the Company’s restaurants which operate under lease agreements. These restaurant leases comprise the majority of the Company’s material lease agreements. Although the Company is finalizing its evaluation of the effect on its consolidated financial statements and disclosures, the Company expects to record operating lease liabilities as of January 1, 2019 ranging from approximately $61.0 million to $70.0 million based on the present value of the remaining minimum rental payments. Additionally, the Company expects to record corresponding right-of-use assets ranging from approximately $44.0 million to $53.0 million based on the operating lease liabilities adjusted for deferred rent and lease incentives existing as of the effective date. This estimate may change as the Company enters into new lease agreements and completes its implementation, including finalizing the evaluation of potential embedded leases. The Company does not expect a material impact on its consolidated results of operations or its consolidated statements of cash flows. The Company is finalizing the impact of ASU 2016-02 on its accounting policies and processes, potential embedded leases, and internal control over financial reporting. The Company expects expanded qualitative and quantitative financial statement disclosures regarding the Company’s leasing arrangements. In June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 simplifies the accounting and reporting for share-based payments issued to non-employees by expanding the scope of Accounting Standard Codification 718, “Compensation – Stock Compensation”, which currently only includes share-based compensation to employees, to also include share-based payments to nonemployees for goods and services. The amendments in ASU 2018-07 are effective for annual and interim periods beginning after December 15, 2018. The Company is evaluating the effect of this standard on its consolidated financial statements but does not expect the adoption of ASU 2018-07 to be material. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates, modifies and adds disclosure requirements for fair value measurements. The amendments in ASU 2018-13 are effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the effects of ASU 2018-13 on its consolidated financial statements but does not expect the adoption of ASU 2018-13 to be material. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company is evaluating the effects of this pronouncement on its consolidated financial statements. In October 2018, the FASB issued ASU No. 2018-17, “Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities” (“ASU 2018-17”). ASU 2018-17 states that indirect interests held through related parties in common control arrangements should be considered on a proportional basis to determine whether fees paid to decision makers and service providers are variable interests. This is consistent with how indirect interests held through related parties under common control are considered for determining whether a reporting entity must consolidate a variable interest entity. ASU 2018-17 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. Entities are required to adopt the new guidance retrospectively with a cumulative adjustment to retained earnings at the beginning of the earliest period presented. The Company is evaluating the effects of this pronouncement on its consolidated financial statements. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3 - Inventory Inventory consists of the following (in thousands): December 31, 2018 2017 Food $ 300 $ 246 Beverages 1,104 1,156 Total $ 1,404 $ 1,402 |
Other Current Assets
Other Current Assets | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | Note 4 – Other Current Assets Other current assets consist of the following (in thousands): December 31, 2018 2017 Prepaid taxes $ 503 $ 255 Landlord receivable 195 258 Prepaid expenses 680 421 Other 93 365 Total $ 1,471 $ 1,299 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Note 5 - Property and Equipment, net Property and equipment, net consist of the following (in thousands): December 31, 2018 2017 Furniture, fixtures and equipment $ 10,425 $ 10,073 Leasehold improvements 43,890 41,261 Less: accumulated depreciation and amortization (16,969 ) (18,832 ) Subtotal 37,346 32,502 Construction in progress 336 3,828 Restaurant supplies 1,665 1,481 Total $ 39,347 $ 37,811 Depreciation and amortization related to property and equipment amounted to $2.8 million and $3.1 million for the years ended December 31, 2018 and 2017, respectively. The Company does not depreciate construction in progress, assets not yet put into service or restaurant supplies. As of December 31, 2017, furniture, fixtures and equipment included $1.4 million of assets not yet put into service or classified as held for sale. For the year ended December 31, 2018, the Company did not identify any event or changes in circumstances that indicated that the carrying values of its restaurant assets were impaired. For the year ended December 31, 2017, the Company recorded impairments, net of related liabilities, of $0.6 million. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Accrued [Abstract] | |
Accrued Expenses | Note 6 – Accrued Expenses Accrued expenses consist of the following (in thousands): December 31, 2018 2017 Payroll and related $ 1,794 847 Rent, including disputed amounts 1,766 1,471 VAT and sales taxes 1,028 $ 739 Legal, professional and other services 645 1,007 Income taxes 685 610 Due to hotels 203 1,168 Insurance 212 103 Other 1,760 1,042 Total $ 8,093 $ 6,987 |
Long Term Debt
Long Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long Term Debt | Note 7 - Long Term Debt Long-term debt consists of the following (in thousands): December 31, 2018 2017 Term loan agreements $ 3,828 $ 6,657 Promissory notes 6,250 6,250 Equipment financing agreements 752 1,094 Business loan and security agreement — 62 Total long-term debt 10,830 14,063 Less: current portion of long-term debt (3,201 ) (3,241 ) Less: discounts on warrants, net (479 ) (654 ) Less: debt issuance costs (32 ) (53 ) Total long-term debt, net of current portion $ 7,118 $ 10,115 Future minimum loan payments: 2019 $ 3,201 2020 1,272 2021 6,357 2022 — 2023 — Total $ 10,830 Bank United Term Loans On December 17, 2014, the Company entered into a term loan agreement with BankUnited in the amount of $7.5 million (the “First Term Loan Agreement”), of which the proceeds were used to repay existing debt and fund additional Company growth and working capital needs. The First Term Loan Agreement, which matures on December 1, 2019, bears interest at an annual rate of 5.0%. Beginning on January 1, 2015, the Company is required to make sixty consecutive monthly installment payments of $124,583 plus accrued interest towards the First Term Loan Agreement. On June 2, 2015, the Company entered into a second term loan agreement with BankUnited, under which BankUnited agreed to make multiple advances to the Company in the aggregate principal amount of up to $6.0 million (the "Second Term Loan Agreement"). The Second Term Loan Agreement, which matures on September 1, 2020, bears interest at an annual rate of 5.0%. Beginning on April 1, 2016, the Company is required to make fifty-four consecutive monthly installments, with each installment to be in the principal amount of the lesser of $111,111 or the quotient of (x) the outstanding principal amount of all advances on March 31, 2016, divided by (y) fifty-four (54); provided, however, that the final principal installment shall be in an amount equal to the aggregate principal amount of all advances outstanding on September 1, 2020, or such earlier date on which all outstanding advances shall become due and payable, whether by acceleration or otherwise. The First Term Loan Agreement and the Second Term Loan Agreement are secured by substantially of the Company’s assets. The First Term Loan Agreement and the Second Term Loan Agreement contain certain affirmative and negative covenants that limit or restrict, among other things, liens and encumbrances, indebtedness, mergers, asset sales, investments, assumptions and guaranties of indebtedness of other persons, change in nature of operations, changes in fiscal year and other matters customarily restricted in such agreements. The financial covenants contained in these agreements require the borrowers to maintain a certain adjusted tangible net worth and a debt service coverage ratio. As of December 31, 2018, the Company is in compliance with all of its financial covenants under the First Term Loan Agreement and the Second Term Loan Agreement. At December 31, 2018, the outstanding balance under the First Term Loan Agreement and the Second Term Loan Agreement was $1.5 million and $2.3 million, respectively. Promissory Notes 2235570 Ontario Limited On June 27, 2016 the Company entered into a $1.0 million loan agreement with 2235570 Ontario Limited (“Ontario Noteholder”) through an unsecured promissory note (the “Ontario Note”). The Ontario Note bears interest at a rate of 10.0% per annum, payable in quarterly installments beginning September 30, 2016. The entire balance of the Ontario Note is due on its maturity date of June 27, 2021. In connection with the issuance of the Ontario Note, the Company issued warrants to the Ontario Noteholder with a fair value of $0.1 million (refer to Note 14), which was recorded by the Company as a reduction to the principal balance of the Ontario Note and is being amortized to interest expense over the term of the Ontario Note. As of December 31, 2018, the amount outstanding under the Ontario Note was $1.0 million and the unamortized discount related to the Ontario Warrant was $62.5 thousand. Anson Investments Master Fund LP On August 11, 2016 the Company entered into a $3.0 million loan agreement with Anson Investments Master Fund LP (“Anson”) through an unsecured promissory note (the “Anson August Note”). The Anson August Note bears interest at a rate of 10% per annum, payable in quarterly installments beginning September 30, 2016. The entire balance of the Anson August Note is due on its maturity date of August 11, 2021. In connection with the issuance of the Anson August note, the Company issued warrants to Anson with a fair value of $0.4 million (refer to Note 14), which was recorded as a reduction to the principal balance of the Anson August Note and is being amortized to interest expense over the term of the Anson August Note. As of December 31, 2018, the amount outstanding under the Anson August Note was $3.0 million and the unamortized discount related to the Anson August Warrant was $196.3 thousand. On October 24, 2016, the Company entered into a $2.25 million loan agreement with Anson through an unsecured promissory note (the “Anson October Note”). The Anson October Note bears interest at a rate of 10% per annum, payable in quarterly installments beginning December 31, 2016. The entire balance of the Anson October Note is due on its maturity date of October 24, 2021. In connection with the issuance of the Anson October Note, the Company issued warrants to Anson with a fair value of $0.4 million (refer to Note 14), which was recorded as a reduction to the principal balance of the Anson October Note and is being amortized to interest expense over the term of the Anson October Note. As of December 31, 2018, the amount outstanding under the Anson October Note was $2.25 million and the unamortized discount related to the Anson October Warrant was $220.0 thousand Equipment Financing Agreements On June 5, 2015, the Company entered into a $1.0 million financing agreement with Sterling National Bank (“Sterling”) to purchase equipment for the STKs in Orlando and Chicago (the “First Sterling Agreement”). The First Sterling Agreement bears interest at a rate of 5% per annum, payable in equal monthly installments of $19,686 plus accrued interest beginning on July 1, 2015. The First Sterling Agreement is secured by the equipment purchased with the proceeds of the First Sterling Agreement. As of December 31, 2018, the amount outstanding under the First Sterling Agreement was approximately $0.3 million. On August 16, 2016, the Company entered into a $0.7 million financing agreement with Sterling to purchase equipment for STKs in San Diego, Denver and Orlando (the "Second Sterling Agreement"). The Second Sterling Agreement bears interest at a rate of 5% per annum, payable in equal monthly installments of $13,769 plus accrued interest beginning on September 1, 2016. The Second Sterling Agreement is secured by the equipment purchased with the proceeds of the Second Sterling Agreement. As of December 31, 2018, the amount outstanding under the Second Sterling Agreement was approximately $0.4 million. Business Loan and Security Agreement On February 17, 2017, the Company entered into a financing agreement with American Express Bank, FSB (“American Express”) in the amount of $1.0 million (the “AMEX Agreement”). In consideration of the loan amount, the Company granted American Express a security interest in certain accounts receivable, as defined in the AMEX Agreement. Pursuant to the terms of the AMEX Agreement, the Company has agreed to pay a loan fee equal to 3.5% of the original principal balance of the loan amount and a repayment rate of 6% of daily American Express credit card receipts pursuant to a repayment schedule as defined in the AMEX Agreement. The loan is subordinate to the agreements with BankUnited. During 2018, the entire balance of the loan amount was paid. Interest expense for all the Company’s debt arrangements, excluding the amortization of debt issuance costs and other discounts and fees, was approximately $1.0 million for each of the years ended December 31, 2018 and 2017. Additionally, the Company capitalized interest of $0.2 million for the year ended December 31, 2017. No interest was capitalized for the year ended December 31, 2018. As of December 31, 2018, the Company had $1.3 million in letters of credit outstanding for certain restaurants. These letters of credit, which are cash collateralized, are recorded as a component of security deposits on the consolidated balance sheet for December 31, 2018. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 8 - Fair Value of Financial Instruments Cash and cash equivalents, accounts receivable, inventory, accounts payable and accrued expenses are carried at cost, which approximates fair value due to their short maturities. Long-lived assets are measured and disclosed at fair value on a nonrecurring basis if an impairment is identified. There were no long-lived assets measured at fair value as of December 31, 2018. The Company’s long-term debt, including the current portion, is carried at cost on the consolidated balance sheets. Fair value of long-term debt, including the current portion, is estimated based on Level 2 inputs. Fair value is determined by discounting future cash flows using interest rates available for issues with similar terms and maturities. The estimated fair values of long-term debt, for which carrying values do not approximate fair value, are as follows: December 31, 2018 2017 Carrying amount of long-term debt, including current portion (1) $ 10,830 14,063 Fair value of long-term debt, including current portion 7,648 6,801 (1) Excludes the discounts on warrants, net and debt issuance costs |
Nonconsolidated Variable Intere
Nonconsolidated Variable Interest Entities | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Nonconsolidated Variable Interest Entities | Note 9 - Nonconsolidated Variable Interest Entities As of December 31, 2018 and 2017, the Company owned interests in the following companies, which directly or indirectly operate restaurants: · 31.24 · 51.13 · 10.00 Bagatelle Investors is a holding company that has an interest in Bagatelle NY. Both entities were formed in 2011. The Company accounts for its investments in these entities under the equity method of accounting based on management’s assessment that although it is not the primary beneficiary of these entities because it does not have the power to direct their day to day activities, the Company is able to exercise influence over these entities. The Company has provided no additional types of support to these entities than what is contractually required. One 29 Park, formed in 2009, operates a restaurant and manages the rooftop of a hotel located in New York, NY. Until the fourth quarter of 2017, the Company accounted for its investment in One 29 Park under the equity method of accounting based on management’s assessment that the Company had significant influence over One 29 Park’s operations. In the fourth quarter of 2017, the majority ownership of One 29 Park changed. As a result of this ownership change, the Company believed that it no longer had significant influence over the operations of On e 29 Park, and subsequently began accounting for its investment in One 29 Park under the cost method of accounting. In March 2018, the Company sold its 10% interest in One 29 Park to the new ownership group for $0.6 million and recorded a gain of $0.2 million on the sale as a component of “other expenses, net” on the consolidated statement of operations and comprehensive income (loss). As of December 31, 2018 and 2017, the carrying values of these investments were (in thousands): December 31, 2018 2017 Bagatelle Investors $ 56 $ 33 Bagatelle NY 2,628 2,509 One 29 Park — 415 Total $ 2,684 $ 2,957 For the each of the years ended December 31, 2018 and 2017, the equity in income of investee companies for the equity method investments discussed above was $0.2 million. Additionally, the Company has entered into a management agreement with Bagatelle NY. Under this agreement, the Company recorded management fee revenue of $0.3 million and $0.2 million for the years ended December 31, 2018 and 2017 The Company also receives rental income from Bagatelle NY for restaurant space that it subl eases to Bagatelle NY. Rental income of $0.6 million and $0.5 million was recorded from this entity for the year ended December 31, 2018 and 2017, respectively. The Company had also entered into a management agreement with One 29 Park. Under this agreement, the Company recorded management fee revenue of $0.3 million and $0.5 million for the year ended December 31, 2018 and 2017, respectively. The management agreement with One 29 Park terminated on September 30, 2018. Net receivables from the Bagatelle Entities included in due from related parties, net were approximately $0.1 million for each of the years ended December 31, 2018 and 2017. These receivables, combined with the Company’s equity in each of these investments, represent the Company’s maximum exposure to loss. Summarized financial data for these investments is presented below (in thousands): For the year ended December 31, 2018 Bagatelle Investors Bagatelle NY Revenues $ — $ 10,927 Gross profit — 8,229 Income (loss) from continuing operations 74 346 Net income (loss) $ 74 $ 346 For the year ended December 31, 2017 Bagatelle Investors Bagatelle NY One 29 Park (1) Revenues $ — $ 13,641 $ 5,093 Gross profit — 9,826 3,969 Income (loss) from continuing operations 85 504 (875 ) Net income (loss) $ 85 $ 504 $ (875 ) (1) For the nine months ended September 30, 2017. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 - Related Party Transactions Net amounts due to related parties were $1.2 million and $1.5 million as of December 31, 2018 and 2017, respectively. Additionally, during the year ended December 31, 2017, the Company wrote off related party receivables of $0.4 million. The Company has not reserved any related party receivables as of December 31, 2018 and 2017. For the years ended December 31, 2018 and 2017, the Company incurred approximately $51.0 thousand and $0.5 million, respectively, of legal fees to The Giannuzzi Group, a law firm owned by a former director of the Company who resigned in 2017. The Company also receives rental income for office space subleased to this entity. Rental income of approximately $0.2 million was recorded from this entity for each of the years ended December 31, 2018, and 2017. Amounts due from related parties, net as of December 31, 2018 included approximately $0.1 $0.3 The Company incurred approximately $0.3 million and $1.7 million for the years ended December 31, 2018 and 2017, respectively, for construction services to an entity owned by family members of one of the Company’s stockholders, who is also a former employee of the Company. As of December 31, 2017, approximately $27.0 thousand was included in due to related parties, net related to construction services provided by this entity. There was no balance remaining as of December 31, 2018. Additionally, in 2016, the Company incurred approximately $57.0 thousand for design services by an entity owned by one of the Company’s stockholders. As of December 31, 2017, approximately $9.5 thousand was included in due to related parties, net related to the design services provided by this entity. There was no balance remaining as of December 31, 2018. During the fourth quarter of 2016, the Company received approximately $1.2 million in cash advances from the TOG Liquidation Trust (the “Liquidation Trust”). The TOG Liquidation Trust is a trust that was set up in connection with a 2013 merger transaction to hold previously issued and outstanding warrants held by members of the predecessor company. Amounts due to the trust are non-interest bear ing and are repayable in 2021 when the trust expires. For each of the years ended December 31, 2018 and 2017, the balance due to the Liquidation Trust included in due to related parties, long-term was approximately $1.2 million. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11 - Income Taxes The components of income (loss) from continuing operations before provision for income taxes for the periods were as follows (in thousands): For the years ended December 31, 2018 2017 Domestic $ 2,089 $ (6,532 ) Foreign 2,531 2,707 Total $ 4,620 $ (3,825 ) The components of the Company’s provision for income taxes were as follows (in thousands): For the years ended December 31, 2018 2017 Current: Federal $ — $ — State and local 52 38 Foreign 630 580 Total current provision for income taxes 682 618 Deferred: Federal — — State and local — — Foreign 31 (18 ) Total deferred provision for income taxes 31 (18 ) Total provision for income taxes $ 713 $ 600 The Company’s effective tax rate differs from the statutory rates as follows: For the years ended December 31, 2018 2017 Income tax benefit at federal statutory rate 21.0 % 34.0 % State and local taxes – current 0.9 % (0.6 )% State and local taxes – deferred 10.3 % 13.4 % FICA tip credit (17.1 )% 16.9 % Foreign rate differential 0.3 % 8.6 % Change in valuation allowance (15.5 )% (87.4 )% Global intangible low-taxed income (“GILTI”) 9.2 % — % Other items, net 6.3 % (0.6 )% Total income tax expense 15.4 % (15.7 )% The income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows (in thousands): For the years ended December 31, 2018 2017 Deferred tax assets: Deferred rent liabilities $ 2,524 $ 2,637 Lease incentives 1,577 1,484 Stock compensation 417 458 FICA tip credit carryforward 4,255 3,224 Net operating loss 3,705 5,129 Goodwill 1,652 1,839 Inventory 12 13 Charitable contributions carryforward 39 37 Foreign tax credit carryforward 336 566 Deferred revenue 335 383 State and local tax credit carryforward 445 346 Expenses not deductible until paid 283 — Total deferred tax assets 15,580 16,116 Deferred tax liabilities: Depreciation and amortization (4,031 ) (3,661 ) Basis in LLC interest (526 ) (592 ) ASC 740-10 liability (190 ) (233 ) Total deferred tax liabilities (4,747 ) (4,486 ) Valuation allowance (10,795 ) (11,561 ) Net deferred tax assets $ 38 $ 69 As of December 31, 2018, the Company has federal net operating loss (“NOL”) carryforwards of $13.6 Uncertain tax positions The following table summarizes the activity related to the Company’s uncertain tax positions (in thousands): For the years ended December 31, 2018 2017 Balance, beginning of year $ 685 $ 674 Increase related to prior period positions — — Increase related to current year positions 219 203 Decrease related to prior period positions (97 ) (192 ) Balance, end of year $ 807 $ 685 The Company is subject to income taxes in the U.S. federal jurisdiction, and the various states and local jurisdictions in which it operates. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company’s federal tax filings remain subject to examination for federal tax years 2015 through 2017. The IRS conducted an examination into tax year 2015 and did not proposed any changes. The Company’s state and local tax filings remain subject to examination for tax years 2015 through 2017. NOL carryforwards are subject to examination regardless of whether the tax year in which they are generated has been closed by statute. The amount subject to disallowance is limited to the NOL utilized. Accordingly, the Company may be subject to examination for prior NOL’s generated as such NOL’s are utilized. The Company’s foreign income tax returns prior to fiscal year 2015 are closed and management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. 2017 Tax Act In December 2017, the President signed The Tax Cuts and Jobs Act (the “TCJA”), which includes a broad range of provisions. Changes in tax law are accounted for in the period of enactment, and as a result, the 2017 consolidated financial statements reflect the immediate tax effect of the TCJA. The TCJA contains several key provisions including: · A one-time tax on the mandatory deemed repatriation of post-1986 untaxed foreign earnings and profits (“E&P”); · A reduction in the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017; · The introduction of a new U.S. tax on certain off-shore earnings referred to as Global Intangible Low-Taxed Income (“GILTI”) at an effective tax rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) partially offset by foreign tax credits; and · Introduction of a territorial tax system beginning in 2018 by providing for a 100% dividend received deduction on certain qualified dividends from foreign subsidiaries. The TCJA imposes a one-time mandatory transition tax on accumulated foreign earnings and eliminates U.S. taxes on foreign subsidiary distributions. As a result, earnings in foreign jurisdictions are available for distribution to the U.S. without incremental U.S. taxes. The Company intends to repatriate these earnings from time to time and it estimates that it will not incur significant additional taxes related to such amounts, however the estimates are provisional and subject to further analysis. Due to the complexities involved in accounting for the enactment of the TCJA, SAB 118 allowed companies to record provisional estimates of the impacts of the TCJA during a measurement period of up to one year from the enactment date. In order to estimate the impact of the one-time transition tax on accumulated foreign earnings, we used the retained earnings of our foreign subsidiaries as a proxy to calculate E&P for the tax provision for the year ended December 31, 2017. In 2018, we conducted an earnings and profit study to calculate the exact amount of deemed repatriation which was included in our 2017 income tax filing. The adjustment between the estimated and the actual amount was included as an adjustment to the tax provision for the year ended December 31, 2018. The adjustment was fully absorbed by our net operating loss carryforward. |
Revenue from contracts with cus
Revenue from contracts with customers | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | Note 12 – Revenue from contracts with customers On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606 – “Revenue from Contracts with Customers” (“ASC 606”), using the modified retrospective method. Results for the year ended December 31, 2018 are presented under the new revenue recognition standard, while the prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior periods. The Company recorded a net increase to opening accumulated deficit of approximately $17.0 thousand as of January 1, 2018 due to the cumulative impact of adopting ASC 606, with the impact primarily related to the licensing of our restaurants and the amortization of fees associated with license agreements. The changes were as follows (in thousands): December 31, 2017 ASC 606 Adjustments January 1, 2018 (1) Assets Accounts receivable $ 5,514 $ 306 $ 5,820 Liabilities Deferred license revenue $ 115 $ 273 $ 388 Deferred license revenue, long-term $ 1,222 $ 50 $ 1,272 Equity Accumulated deficit $ (31,979 ) $ (17 ) $ (31,996 ) Under ASC 606, the Company has determined that the services it provides under its licensing agreements are primarily the rights to access and derive benefit from our symbolic intellectual property. As a result, the initial license fees and upfront fees are recognized on a straight-line basis over the term of the license agreement. Under previous guidance, initial license fees were recognized when the related services had been provided, which was generally upon the opening of the restaurant, and upfront fees were recognized on a pro-rata basis as restaurants under the development agreement were opened. These fees will continue to be recorded as a component of management, license and incentive fee revenue on the consolidated statement of operations and comprehensive income (loss). ASC 606 requires sales-based royalties to continue to be recognized as licensee restaurant sales occur. The impact of adopting ASC 606 as compared to the previous recognition guidance on the Company’s consolidated statement of operations and comprehensive income (loss) was as follows (in thousands): For the year ended December 31, 2018 As Reported Balances without ASC 606 Adoption Adoption Impact of ASC 606 Revenues Management, license and incentive fee revenue $ 11,568 $ 11,873 $ (305 ) Net income (loss) $ 3,907 $ 4,212 $ (305 ) Contract Balances The following table provides information about receivables and contract liabilities (deferred license revenue) from contracts with customers (in thousands): December 31, 2018 Receivables (1) $ 174 Deferred license revenue (2) 1,179 Deferred gift certificate revenue (3) $ 491 (1) Receivables are included in accounts receivable on the consolidated balance sheets. (2) Includes the current and long-term portion of deferred license revenue. (3) Deferred gift card revenue is included in deferred gift card revenue and other on the consolidated balance sheets. Significant changes in deferred license revenue for the year ended December 31, 2018 are as follows (in thousands): Deferred license revenue, as of January 1, 2018 (1) $ 1,660 Additions to deferred license revenue 538 Revenue recognized during the period (1,019 ) Deferred license revenue, as of December 31, 2018 $ 1,179 (1) Includes the cumulative effect of adopting ASC 606. As of December 31, 2018, the estimated deferred license revenue to be recognized in the future related to performance obligations that are unsatisfied as of December 31, 2018 were as follows for each year ending (in thousands): 2019 $ 171 2020 154 2021 154 2022 154 2023 154 Thereafter 392 Total future estimated deferred license revenue $ 1,179 Significant changes in deferred gift certificate revenue for the year ended December 31, 2018 are as follows (in thousands): Deferred gift certificates revenue, as of January 1, 2018 (1) $ 757 Additions to deferred certificates revenue 983 Revenue recognized during the period related to redemptions (1,047 ) Revenue recognized during the period related to breakage (202 ) Deferred gift certificate revenue, as of December 31, 2018 $ 491 (1) There was no cumulative effect of adopting ASC 606 for deferred gift certificates. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 - Commitments and Contingencies Operating leases The Company leases office space, restaurant space and certain equipment under operating leases having terms that expire at various dates through 2036. The restaurant leases have renewal clauses of 1 to 5 years at the Company’s option. Some of the Company’s leases also have provisions for contingent rent based upon a percentage of gross sales, as defined in the leases. Rent expense for the years ended December 31, 2018 and 2017 was $8.2 million and $9.5 million, which was inclusive of contingent rent of $1.5 million and $1.2 million, respectively. As of December 31, 2018, future minimum lease payments for each year ending were as follows (in thousands): 2019 $ 6,432 2020 6,852 2021 6,866 2022 6,521 2023 6,688 Thereafter 69,487 Total future minimum lease payments $ 102,846 The Company subleases a portion of its office space to a related party on leases where it does not need the entire space for its operations (refer to Note 9). As of December 31, 2018, minimum sublease rentals to be received in the future under non-cancelable subleases were $1.6 million. The Company’s sublease income, which was recorded as an offset to rent expense, was $0.8 million and $0.7 million for the years ended December 31, 2018 and 2017. |
Earnings (loss) per share
Earnings (loss) per share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 14 – Earnings (loss) per share Basic earnings (loss) per share is computed using the weighted average number of common shares outstanding during the period and income available to common stockholders. Diluted earnings (loss) per share is computed using the weighted average number of common shares outstanding during the period plus the dilutive effect of all potential shares of common stock including common stock issuable pursuant to stock options, warrants, and RSUs. Earnings (loss) per share for continuing operations and discontinued operations are computed independently. As a result, the sum of per share amount may not equal the total. For the years ended December 31, 2018 and 2017, the earnings (loss) per share was calculated as follows (in thousands, except earnings (loss) per share and related share data): Years ended December 31, 2018 2017 Net income (loss) attributable to The ONE Group Hospitality, Inc. $ 3,274 $ (4,216 ) Basic weighted average shares outstanding 27,653,827 25,402,330 Dilutive effect of stock options, warrants and restricted share units 468,617 - Diluted weighted average shares outstanding 28,122,445 25,402,330 Net income (loss) available to common stockholders per share - Basic 0.12 (0.17 ) Net income (loss) income available to common stockholders per share - Diluted $ 0.12 $ (0.17 ) For the year ended December 31, 2018, 1.4 million stock options, warrants and restricted share units were determined to be anti-dilutive and were therefore excluded from the calculation of diluted earnings per share. For the year ended December 31, 2017, all equivalent shares underlying options, warrants and restricted share units were excluded from the calculation of diluted earnings per share because the Company was in a net loss position. Basic and diluted earnings (loss) per share for continuing operations and discontinued operations was ($0.18) and $0.02 for the year ended December 31, 2017. There was no activity from discontinued operations for the year ended December 31, 2018. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 15 - Discontinued Operations Prior to 2015, the Company decided to cease operations for six of its locations, which were 100% owned. Winding down of operations for these locations was completed in 2017. The following table shows the components of assets and liabilities that are related to discontinued operations in the Company's consolidated balance sheets as of December 31, 2017 (in thousands): December 31, 2017 Other current assets $ 108 Security deposits — Accounts payable and accrued liabilities (48 ) Net assets $ 60 The Company’s discontinued operations did not generate revenue for year ended December 31, 2017. Income from discontinued operations, net of taxes, for the year ended December 31, 2017 was $0.4 million. |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Note 16 - Litigation The Company is party to claims in lawsuits incidental to its 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. In November 2015, certain employees filed a class action lawsuit against two of the Company's subsidiaries and Bagatelle La Cienega, LLC., an entity minority-owned by the Company which has since ceased operations, (collectively, the “LA Defendants”) alleging that the LA Defendants neglected to conform to California state and local rest and meal period requirements and making other employment-related allegations. In April 2017, the LA Defendants agreed with the plaintiffs to propose court approval of a class action settlement to avoid the uncertainty and risk associated with continued litigation, which agreement was preliminarily approved by the court. Accordingly, based on the probability of this matter reaching final approval, in the second quarter of 2017, the Company recorded $0.2 million of its share in these costs as settlements on the consolidated statement of operations and comprehensive income (loss). In addition, through Bagatelle Investors, the Company recognized its equity in Bagatelle LA's share of the settlement costs. Final judgment by the court of this settlement agreement was entered on September 26, 2017 and the settlement payment of $0.2 million was made by the Company in October 2017. In May 2016, certain employees filed a class action lawsuit against two of the Company's subsidiaries and Bagatelle NY, an entity majority-owned by the Company, (collectively, the “NY Defendants”), alleging that the NY Defendants improperly took tip credits due to those employees, and making other employment-related allegations. In May 2017, to avoid the uncertainty, risks and cost associated with continued litigation, the NY Defendants reached a settlement agreement with the plaintiffs. Such settlement agreement was preliminarily approved by the court. Accordingly, based on the probability of this matter reaching final approval, in the second quarter of 2017, the Company recorded $0.5 million of its share in these costs as settlements on the consolidated statement of operations and comprehensive (income) loss. In addition, through Bagatelle Investors, the Company recognized its equity in Bagatelle NY’s share of the settlement costs (approximately $0.3 million). Final judgment by the court of this settlement agreement was entered on November 26, 2017. The first installment payment of $0.3 million was paid on December 14, 2017, with the second and final payment of $0.2 million paid on March 1, 2018. In September 2017, the Company recorded a $0.5 million charge related to an arrangement with a management agreement partner to resolve a dispute. This charge was recorded as a component of settlements on the consolidated statement of operations and comprehensive income (loss). |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 17 - Stockholders’ Equity Common Stock The Company is authorized by its amended and restated certificate of incorporation to issue up to 75.0 million shares of common stock, par value $0.0001 per share. As of December 31, 2018 and 2017, there are 28.3 million and 27.2 million shares of common stock outstanding, respectively. In November 2017, the Company entered into a Securities Purchase Agreement with certain investors pursuant to which the Company issued and sold in a registered direct offering an aggregate of 1.75 million shares of common stock, at an offering price of $1.50 per share for gross proceeds of approximately $2.6 million before deducting expenses associated with the offering. In a concurrent private placement, the Company issued warrants to purchase an aggregate of 875,000 shares of common stock to the investors who participated in the registered direct offering. During the third quarter of 2018, an investor exercised 750,000 warrants to purchase shares of common stock at an exercise price of $1.63 per share, resulting in proceeds received from the issuance of common stock of approximately $1.2 million (refer to Note 14). The issuance of a dividend is dependent on a variety of factors, including but not limited to, available cash and the overall financial condition of the Company. The issuance of a dividend is also subject to legal restrictions and the terms of the Company’s credit agreements with BankUnited. The Company did not issue dividends related to its common stock in 2018 or 2017. Preferred Stock The Company is authorized by its amended and restated certificate of incorporation to issue 10.0 million shares of preferred stock, par value $0.0001 per share. The Company’s Board may designate the rights, powers and preferences of the preferred stock, which may have superior rights to common shareholders in terms of liquidation and dividend preference, voting and other rights. As of December 31, 2018 and 2017, the Board had not designated the rights of the preferred stock and there were no outstanding shares of preferred stock. |
Outstanding Warrants
Outstanding Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | |
Outstanding Warrants | Note 18 - Outstanding Warrants On June 27, 2016, the Company entered into the Ontario Note (refer to Note 7). In consideration of the loan amount, the Ontario Noteholder received a warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $2.61 (the “Ontario Warrant”). Using the Black-Scholes option pricing model, the fair value of the Ontario Warrant was determined to be $0.1 million. The Ontario Warrant is exercisable at any time through June 27, 2026, in whole or in part. As of December 31, 2018, there are 100,000 shares still available for purchase under the Ontario Warrant. On August 11, 2016, the Company entered into the Anson August Note (refer to Note 7). In consideration of the loan amount, Anson received a warrant to purchase 300,000 shares of the Company’s common stock at an exercise price of $2.61 (the “Anson August Warrant”). Using the Black-Scholes option pricing model, the fair value of the Anson August Warrant was determined to be $0.4 million. The Anson August Warrant is exercisable at any time through August 11, 2026, in whole or in part. As of December 31, 2018, there are 300,000 shares still available for purchase under the Anson August Warrant. On October 24, 2016, the Company entered into the Anson October Note (refer to Note 7). In consideration of the loan amount, Anson received a warrant to purchase 340,000 shares of the Company’s common stock at an exercise price of $2.39 per share (the “Anson October Warrant”). Using the Black-Scholes option price model, the fair value of the Anson October Warrant was determined to be $0.4 million. The Anson October Warrant is exercisable at any time through October 24, 2026, in whole or in part. The Anson October Warrant contains limitations that prevent Anson from acquiring shares of the Company’s common stock upon exercise of the Anson October Warrant that would result in the number of shares beneficially owned by Anson and to exceed 9.99% of the total number of shares of the Company’s common stock then issued and outstanding. As of December 31, 2018, there are 340,000 shares still available for purchase under the Anson October Warrant. On November 15, 2017, the Company entered into a Securities Purchase Agreement (refer to Note 17) with certain investors pursuant to which such investors were issued warrants to purchase an aggregate of 875,000 shares of the Company’s common stock at an exercise price of $1.63 per share (the “SPA Warrants”). Each SPA Warrant is exercisable commencing on the sixth month anniversary of the date of issuance and will expire on the fifth anniversary of the date that it became exercisable. Using the Black-Scholes option price model, the fair value of the SPA Warrants was determined to be $0.4 million. During the third quarter of 2018, an investor exercised 750,000 warrants to purchase shares of common stock at an exercise price of $1.63 per share, resulting in proceeds received from the issuance of common stock of approximately $1.2 million. As of December 31, 2018, there are 125,000 shares still available for purchase under the SPA Warrants. The fair values of warrants issued during 2017 were estimated on the date of issuance using the Black-Scholes option pricing model with the following assumptions by year: 2017 Warrants Expected life, in years 5 years Risk-free interest rate 2.04 % Volatility 38.1 % Dividend yield 0.0 % There were no warrants issued during the year ended December 31, 2018. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | Note 19 - Stock-based Compensation In October 2013, the Board approved the 2013 Employee, Director and Consultant Equity Incentive Plan (the “2013 Equity Plan”). The 2013 Equity Plan provides for the granting of stock options, warrants, restricted stock or other stock-based awards to directors, officers, key employees and other key individuals performing services for the Company. All awards are required to be approved by the Board or a designated committee of the Board. The 2013 Equity Plan will terminate automatically in October 2023, unless terminated by the Board at an earlier date. The Board has the authority to amend, modify or terminate the 2013 Equity Plan, subject to any required approval by the Company’s stockholders under applicable law or upon advice of counsel. No such action would affect any options previously granted under the 2013 Equity Plan without the consent of the holders. The 2013 Equity Plan provides for the issuance of up to 4,773,992 shares of common stock. Options are generally granted with an exercise price equal to fair market value on the date of grant and expire after ten years. Vesting of options and restricted stock can either be based on the passage of time or on the achievement of performance goals. As of December 31, 2018, there were 596,951 shares remaining available for issuance under the 2013 Equity Plan. Stock Based Compensation Cost Stock-based compensation cost for the years ended December 31, 2018 and 2017 was $1.3 million and $1.1 million, respectively, and is included in general and administrative expenses in the consolidated statement of operations and comprehensive income (loss). Included in stock-based compensation cost was $0.1 million and $0.2 million of unrestricted stock granted to directors for years ended December 31, 2018 and 2017, respectively. Such grants were awarded consistent with the Board’s compensation practices. The fair value of options granted during 2017 and 2016 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions by grant year: 2017 Stock options Expected life, in years 6.5 years Risk-free interest rate 1.86% - 2.00 % Volatility 37.0 % Dividend yield 0.0 % The weighted average fair value of stock options issued was $0.77 for the year ended December 31, 2017. There were no stock options granted in the year ended December 31, 2018. Stock Option Activity Changes in outstanding stock options during the years ended December 31, 2018 and 2017 were as follows: Shares Weighted average exercise price Weighted average remaining contractual life Intrinsic value (thousands) Outstanding at December 31, 2016 1,857,012 $ 4.28 Granted 1,260,000 1.96 Exercised — — Cancelled, expired or forfeited (801,977 ) 3.14 Outstanding at December 31, 2017 2,315,035 $ 3.41 7.25 years $ 498 Exercisable at December 31, 2017 890,384 $ 4.84 4.67 years $ — Granted — — Exercised — — Cancelled, expired or forfeited (314,027 ) 4.21 Outstanding at December 31, 2018 2,001,008 $ 3.29 6.60 $ 1,225 Exercisable at December 31, 2018 1,074,508 $ 4.16 5.65 $ 318 A summary of the status of the Company’s non-vested stock options as of December 31, 2018 and 2017 and changes during the years then ended, is presented below: Shares Weighted average grant date fair value Non-vested stock options at December 31, 2016 1,180,030 $ 1.56 Granted 1,260,000 0.79 Vested (245,402 ) 1.76 Cancelled, expired or forfeited (769,977 ) 1.28 Non-vested stock options at December 31, 2017 1,424,651 0.99 Granted — — Vested (427,651 ) 1.16 Cancelled, expired or forfeited (70,500 ) 1.10 Non-vested stock options at December 31, 2018 926,500 $ 0.91 The fair value of options that vested in the years ended December 31, 2018 and 2017 were $0.5 579,402 As of December 31, 2018, there is approximately $0.6 million of total unrecognized compensation cost related to non-vested awards, which will be recognized over a weighted-average period of 2.8 years. Restricted Stock Award Activity The Company issues restricted stock awards under the 2013 Equity Plan. The fair value of these awards is determined based upon the closing fair market value of the Company’s common stock on the grant date. A summary of the status of restricted stock awards and changes during the years ended December 31, 2018 and 2017 are presented below: Shares Weighted average grant date fair value Non-vested restricted stock at December 31, 2016 716,250 $ 2.73 Granted 710,000 1.83 Vested (181,750 ) 2.01 Cancelled, expired or forfeited (259,500 ) 2.56 Non-vested restricted stock at December 31, 2017 985,000 $ 2.26 Granted 195,938 2.81 Vested (361,737 ) 1.90 Cancelled, expired or forfeited (55,000 ) 2.74 Non-vested stock options at December 31, 2018 764,201 $ 2.54 As of December 31, 2018, 150,000 restricted shares subject to performance-based vesting were still outstanding. As of December 31, 2018, the Company had approximately $1.2 million of total unrecognized compensation costs related to restricted stock awards, which will be recognized over a weighted average period of 3.1 years. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Retirement Plan | Note 20 - Retirement Plan The Company sponsors a qualified defined contribution retirement plan (the “401(k) Plan”) covering all eligible employees, as defined in the 401(k) Plan. The 401(k) Plan allows participating employees to defer the receipt of a portion of their compensation, on a pre-tax basis, and contribute such amount to one or more investment options. Employer contributions to the plan are at the discretion of the Company. The Company did not accrue or make any employer contributions in 2018 and 2017. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 21 - Segment Reporting The Company operates in three segments: “Owned restaurants,” “Owned food, beverage and other,” and “Managed and Licensed operations.” The Owned restaurants segment consists of leased restaurant locations and competes in the full-service dining industry. The Owned food, beverage and other segment consists of hybrid operations, such as where the Company has a leased restaurant location and also has a food and beverage agreement at the same location, typically a hotel, and offsite banquet offerings. The Managed and Licensed operations segment includes all operations for which a management, incentive or license fee is received. Management agreements generate management fees on net revenue and incentive fees on operating profit as defined in the applicable management agreement. License agreements generate revenue primarily through royalties earned on net revenue at each location. Revenues associated with developmental support for licensed locations are also included within this segment. The Company’s Chief Executive Officer (“CEO”), who began serving as the Company’s CEO on October 30, 2017 and has been deemed the Company’s Chief Operating Decision Maker, manages the business and allocates resources via a combination of restaurant sales reports and segment profit information (which is defined as revenues less operating expenses) related to the Company’s three segments, or sources of revenues, which are presented in their entirety within the consolidated statements of operations and comprehensive income (loss). The following tables show our operating results by segment for the periods indicated (in thousands): For the year ended December 31, 2018 Owned restaurants Owned food, beverage and other Managed and licensed operations Total Revenues: Owned net revenues $ 65,896 $ 8,137 $ — $ 74,033 Management, license and incentive fee revenue — — 11,568 11,568 Total revenues 65,896 8,137 11,568 85,601 Cost and expenses: Owned operating expenses: Cost of sales 17,220 — — 17,220 Other operating expenses 39,599 — — 39,599 Owned food, beverage and other expenses — 7,865 — 7,865 Total owned operating expenses 56,819 7,865 — 64,684 Segment income $ 9,077 $ 272 $ 11,568 $ 20,917 General and administrative 11,119 Depreciation and amortization 2,824 Interest expense, net of interest income 1,193 Equity in income of investee companies (182 ) Other 1,343 Income from continuing operations before provision for income taxes $ 4,620 For the year ended December 31, 2017 Owned restaurants Owned food, beverage and other Managed and licensed operations Total Revenues: Owned net revenues $ 58,654 $ 10,227 $ — $ 68,881 Management, license and incentive fee revenue — — 10,779 10,779 Total revenues 58,654 10,227 10,779 79,660 Cost and expenses: Owned operating expenses: Cost of sales 15,544 — — 15,544 Other operating expenses 37,076 — — 37,076 Owned food, beverage and other expenses — 9,400 — 9,400 Total owned operating expenses 52,620 9,400 — 62,020 Segment income $ 6,034 $ 827 $ 10,779 $ 17,640 General and administrative 11,893 Depreciation and amortization 3,051 Interest expense, net of interest income 1,167 Equity in income of investee companies (168 ) Other 5,522 Loss from continuing operations before provision for income taxes $ (3,825 ) The following tables show our total assets and capital asset additions by segment for the periods indicated (in thousands): For the years ended December 31, 2018 2017 Total assets: Owned restaurants $ 42,971 $ 40,570 Owned food, beverage and other operations (1) 7,274 7,385 Managed and licensed operations 5,734 5,060 Total $ 55,979 $ 53,015 (1) Includes corporate assets For the years ended December 31, 2018 2017 Capital assets additions: Owned restaurants $ 3,297 $ 3,955 Owned food, beverage and other operations (1) 805 655 Managed and licensed operations — — Total $ 4,102 $ 4,610 (1) Includes corporate capital asset additions |
Geographic Information
Geographic Information | 12 Months Ended |
Dec. 31, 2018 | |
Geographic Information [Abstract] | |
Geographic Information | Note 22 - Geographic Information The following table contains certain financial information by geographic location for the years ended December 31, 2018 and 2017 (in thousands): Revenues For the years ended December 31, 2018 2017 Domestic: Owned restaurants $ 65,896 $ 58,654 Owned food, beverage and other operations 8,137 10,227 Managed and licensed operations 6,214 5,723 Total domestic revenues $ 80,247 $ 74,604 International: Owned restaurants — — Owned food, beverage and other operations — — Managed and licensed operations 5,354 5,056 Total international revenues $ 5,354 $ 5,056 Total revenues $ 85,601 $ 79,660 Long-lived assets For the years ended December 31, 2018 2017 Domestic: Owned restaurants $ 38,958 $ 37,907 Owned food, beverage and other operations 5,375 5,088 Managed and licensed operations 67 109 Total domestic long-lived assets $ 44,400 $ 43,104 International: Owned restaurants — — Owned food, beverage and other operations — — Managed and licensed operations 38 148 Total international long-lived assets $ 38 $ 148 Total long-lived assets $ 44,438 $ 43,252 |
Liquidity
Liquidity | 12 Months Ended |
Dec. 31, 2018 | |
Liquidity [Abstract] | |
Liquidity | Note 23 - Liquidity During the year ended December 31, 2018, the Company had net income of $3.9 million and had a working capital deficit of $6.2 million. As of December 31, 2018, the Company's accumulated deficit was $28.7 million. Additionally, as of December 31, 2018, the Company's cash and cash equivalents was $1.6 unfavorable. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. The Company consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation an entity in which it has certain interests, where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. The Company evaluates its equity method investments for impairment whenever an event or change in circumstances occurs that may have a significant adverse impact on the fair value of the investment. If a loss in value has occurred and is deemed to be other than temporary, an impairment loss is recorded. Several factors are reviewed to determine whether a loss has occurred that is other than temporary, including the absence of an ability to recover the carrying amount of the investment, the length and extent of the fair value decline, and the financial condition and future prospects of the investee. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions for the reporting period and as of the reporting date. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingencies. Actual results could differ from those estimates. |
Fair Value Measurements | Fair Value Measurements Fair value represents the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities are valued based upon observable and non-observable inputs. Valuations using Level 1 inputs are based on unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 inputs utilize significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly. Valuations using Level 3 inputs are based on significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. There were no significant transfers between levels during any period presented. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are defined as cash on hand and highly liquid instruments with original maturities of three months or less when purchased. The Company’s cash and cash equivalents consist of cash in banks and at the restaurants as of December 31, 2018 and 2017. |
Accounts Receivable | Accounts Receivable The majority of the Company’s receivables arise primarily from credit cards, management agreements, trade customers and other reimbursable amounts due from hotel operators where the Company operates a food and beverage service. The Company determines an allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss and payment history, the customer’s current ability to pay its obligation to the Company and the condition of the general economy and industry as a whole. The Company has not reserved any trade receivables as of December 31, 2018 and 2017. |
Inventory | Inventory Inventories, which consist of food, liquor and other beverages, are stated at the lower of cost or net realizable value. Cost is determined by the first in, first out method. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs to sell. The Company has not reserved any inventory as of December 31, 2018 and 2017. |
Property and Equipment | Property and Equipment Additions to property and equipment, including leasehold improvements, are recorded at cost. Costs incurred to repair and maintain the Company’s operations and equipment are expensed as incurred. Restaurant smallwares are capitalized during the initial year of operation of a particular restaurant. All restaurant supplies purchased subsequent to the first year are expensed as incurred. When assets are retired or otherwise disposed of, the cost of the assets and the related accumulated depreciation are removed from the accounts, and any gain or loss on retirements is reflected in operating income in the year of disposition. After the asset has been placed into service, depreciation is based on the estimated useful life of the asset using the straight-line method for financial statement purposes. Computer and equipment as well as furniture and fixtures are depreciated over their useful lives from five seven |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying values of these assets may not be fully recoverable. The impairment evaluation is generally performed at the individual venue asset group level. Recoverability of restaurant assets is measured by a comparison of the carrying amount of an individual restaurant’s assets to the estimated identifiable undiscounted future cash flows expected to be generated by those restaurant assets. If the carrying amount of an individual restaurant’s assets exceeds its estimated, identifiable, undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset’s exceed its fair value. Fair value is determined by discounting a restaurant’s identifiable future cash flows. For the year ended December 31, 2018, the Company did not identify any event or changes in circumstances that indicated that the carrying values of its restaurant assets were impaired. For the year ended December 31, 2017, the Company recorded impairments, net of related liabilities, of $0.6 million. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense based on the term of the related debt agreement using the straight-line method, which approximates the effective interest method. The Company has recorded debt issuance costs as an offset to long-term debt, net of current portion on the consolidated balance sheets. |
Income Taxes | Income Taxes The Company computes income taxes using the asset and liability method. Under this method, deferred income taxes are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes, using the enacted statutory rate in effect for the year these differences are expected to be taxable or refunded. Deferred income tax expenses or credits are based on the changes in the asset or liability, respectively, from period to period. A deferred tax asset or liability is recognized whenever there are future tax effects from existing temporary differences and operating loss and tax credit carry forwards. If the Company determines that a deferred tax asset or liability could be realized in a greater or lesser amount than recorded, the deferred tax asset or liability is adjusted and a corresponding adjustment is made to the provision for income taxes in the consolidated statements of operations and comprehensive income (loss) in the period during which the determination is made. The Company reduces its deferred tax assets by a valuation allowance if it determines that it is more likely than not that some portion or all of these tax assets will not be realized. In making this determination, the Company considers various qualitative and quantitative factors, such as: · the level of historical taxable income; · the projection of future taxable income over periods in which the deferred tax assets would be deductible; · events within the restaurant industry; · the health of the economy; and, · historical trending. As of December 31, 2018 and 2017, the Company had a valuation allowance of $11.6 million, respectively, established against its deferred tax assets. The Company recognizes the tax benefit from an uncertain tax position when it determines that it is more-likely-than-not that the position would be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. If the Company derecognizes an uncertain tax position, the Company’s policy is to record any applicable interest and penalties within the provision for income taxes in the consolidated statements of operations and comprehensive income (loss). |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606 – “Revenue from Contracts with Customers” (“ASC 606”), using the modified retrospective method. Results for the year ended December 31, 2018 are presented under the new revenue recognition standard, while the prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior periods. Refer to Note 11 for additional details related to the impact of adopting ASC 606. Revenue is derived from restaurant sales, management services and license related operations. The Company recognizes restaurant revenues, net of discounts, when goods and services are provided. Sales tax amounts collected from customers that are remitted to governmental authorities are excluded from net revenue. The Company’s management agreements typically call for a management fee based on a percentage of revenue, a monthly marketing fee based on a percentage of revenues and an incentive fee based on a managed venue’s net profits. Similarly, royalties from the licensee in license agreements are generally based on a percentage of the licensed restaurant’s revenue. These management, license and incentive fees are recognized as revenue in the period the restaurant’s sales occur. The Company also recognizes revenue for initial license fees and upfront fees related to its management and license agreements. For the year ended December 31, 2018, initial license fees and upfront fees were recognized straight-line over the term of the related agreement. For the year ended December 31, 2017, prior to the adoption of ASC 606, initial license fees were recognized when the related services had been provided, which was generally upon the opening of the restaurant, and upfront fees were recognized on a pro-rata basis as restaurants under the development agreement were opened. |
Gift Certificates | Gift Certificates Proceeds from the sale of gift certificates are recorded as deferred revenue and recognized as revenue when redeemed by the holder. There are no expiration dates on the Company’s gift certificates and the Company does not charge any service fees that would result in a decrease to a customer’s available balance. Although the Company will continue to honor all gift certificates presented for payment, it may determine the likelihood of redemption to be remote for certain gift certificates due to, among other things, long periods of inactivity. In these circumstances, to the extent the Company determines there is no requirement for remitting balances to government agencies under unclaimed property laws, outstanding gift certificate balances may then be recognized as breakage in the consolidated statements of operations and comprehensive income (loss) as a component of owned food, beverage and other net revenues. For the year ended December 31, 2018, the Company recognized $0.2 31, 2017. |
Pre-opening Costs | Pre-opening Costs Pre-opening costs for Company owned restaurants are expensed as incurred prior to a restaurant opening for business. Pre-opening costs for the years ended December 31, 2018 and 2017 were $1.3 million and $1.6 million, respectively. |
Advertising Costs | Advertising Costs The Company expenses the cost of advertising and promotions as incurred. Advertising expense amounted to $2.2 million and $3.6 million in 2018 and 2017, respectively. |
Leases and Deferred Rent | Leases and Deferred Rent The Company leases all of its restaurant locations under leases classified as operating leases. The Company also leases equipment under operating leases. Minimum base rent for the Company’s operating leases, which generally have escalating rentals over the term of the lease, is recorded on a straight-line basis over the lease term. As such, an equal amount of rent expense is attributed to each period during the term of the lease regardless of when actual payments occur. The difference between rent expense and actual cash payments is recorded as deferred rent in the Company’s consolidated balance sheets. Lease terms begin on the date the Company takes possession under the lease and includes option periods where failure to exercise such options would result in an economic penalty. Certain of the Company’s leases also provide for contingent rent, which is determined as a percentage of sales in excess of specified, minimum sales targets. The Company recognizes contingent rent expense prior to the achievement of the specified sales target provided achievement of the sales target is considered probable. Incentive payments received from landlords, generally in the form of tenant improvement allowances, are recorded as an increase to deferred rent in the Company’s consolidated balance sheet and are amortized on a straight-line basis over the lease term as a reduction to rent expense. As of December 31, 2018 and 2017, the Company had $16.8 million and $17.0 million, respectively, of long-term deferred rent and tenant improvement allowances on the consolidated balance sheets. |
Stock-Based Compensation | Stock-Based Compensation The Company maintains an equity incentive compensation plan under which it may grant options, warrants, restricted stock or other stock-based awards to directors, officers, key employees and other key individuals performing services to the Company. Restricted stock and restricted stock units (“RSUs”) are valued using the closing stock price on the date of grant. The fair value of an option award or warrant is determined using the Black-Scholes option pricing model. The Black-Scholes model requires estimates of the expected term of the option, the risk-free interest rate, future volatility and dividend yield. The Company’s assumptions are as follows: · Expected Term – The expected term of options is based upon evaluations of historical and expected future exercise behavior with consideration of both the vesting period and contractual terms of the instruments. · Risk Free Interest Rate – The risk-free interest rate is based on U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at the grant date. · Implied Volatility – Implied volatility is based upon an average of the volatilities of an industry peer group who are publicly traded. · Dividend Yield – The Company has historically not paid dividends and does not plan to do so in the foreseeable future. Under the plan, vesting of awards can either be based on the passage of time or on the achievement of performance goals. For awards that vest on the passage of time, compensation cost is recognized over the vesting period. For performance-based awards, the Company recognizes compensation costs over the requisite service period when conditions for achievement become probable. The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ or are expected to differ. These estimates, which are currently at 10%, are based on historical forfeiture behavior exhibited by employees of the Company. |
Net Income (Loss) Per Common Share | Earnings (Loss) per Share Basic earnings (loss) per share is computed using the weighted average number of common shares outstanding during the period and income available to common stockholders. Diluted earnings (loss) per share is computed using the weighted average number of common shares outstanding during the period plus the dilutive effect of all potential shares of common stock including common stock issuable pursuant to stock options, warrants, and RSUs. Earnings (loss) per share for continuing operations and discontinued operations are computed independently. As a result, the sum of per share amount may not equal the total. Refer to Note 13 for the calculations of basic and diluted earnings (loss) per share. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company maintains cash and cash equivalent balances with financial institutions that, at times, may exceed federally insured limits. As of December 31, 2018 and 2017, the Company had $1.1 million and $1.6 million, respectively, of cash deposited that is in excess of federally insured limits. The Company has not experienced any losses related to these balances and management believes its credit risk to be minimal. The Company’s accounts receivable balance includes credit card receivables. Management believes that concentrations of credit risk with respect to these credit card receivables are limited. Credit card receivables are anticipated to be collected within three business days of the transaction. |
Segment Reporting | Segment Reporting The Company operates in three segments: owned restaurants, owned food, beverage and other operations and managed and licensed operations. These reportable segments are supported by the Company’s corporate unit. The Company’s owned restaurant segment consists of leased restaurant locations that compete in the full-service dining industry and have similar investment criteria and economic and operating characteristics. The Company’s owned food, beverage and other operations segment includes entities where the Company leases a restaurant and provides additional ancillary food and beverage services, such as managing pool bars and providing full hospitality services for a hotel. The Company’s managed and licensed operations 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 the Company refers to as managed locations, and license agreements in which the Company has licensed the use of one of the Company’s brands. Revenues within the managed and licensed operations segment are generated from management fees based on the net revenue at each location, incentive fees based on profitability at each location and license fees. Information regarding the revenues and costs for each business segment has been reported in Note 20 for the years ended December 31, 2018 and 2017. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities of foreign operations are translated into U.S. dollars at the balance sheet date. Revenues and expenses are translated at average monthly exchange rates. Gains or losses resulting from the translation of foreign subsidiaries represent other comprehensive income (loss) and are accumulated as a separate component of stockholders’ equity. Currency translation gains or (losses) are recorded in accumulated other comprehensive loss within stockholders' equity and amounted to approximately ($0.8) million and ($12.0) thousand during the years ended December 31, 2018 and 2017, respectively. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of two components: net income (loss) and other comprehensive income (loss). The Company’s other comprehens ive income (loss) is comprised of foreign currency translation adjustments. All of the Company’s foreign currency translation adjustments relate to wholly-owned subsidiaries of the Company. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Updated (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 has been subsequently modified with various amendments, clarifications, and scope improvements. ASU 2016-02 requires a lessee to recognize most leases, with the exception of leases with terms of less than one year, on the balance sheet as a right-of-use asset and liability. ASU 2016-02 also requires certain disclosures about the amount, timing and uncertainty of cash flows arising from leases. The Company will adopt the requirements of ASU 2016 - 02 effective January 1 , 2019 using the optional transition method. The optional transition method allows entities to record the cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption and does not require application of the standard to the comparative periods presented in the financial statements. The Company has also elected to adopt the practical expedient transition package, which eliminates the requirements to reassess lease identification, lease classification and initial direct costs. Additionally, the Company has elected the practical expedients that permit the accounting policy election to account for each separate lease component of a contract and its associated non-lease components as a single lease component. The Company has also elected the accounting policy for short-term lease exceptions, and therefore the Company will not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less). The Company has not elected the hindsight practical expedient, which permits the use of hindsight when determining the lease term and impairment of right-of-use assets, or the portfolio approach practical expedient, which permits applying the standard to a portfolio of leases with similar characteristics. The adoption of ASU 2016-02 will have a significant impact to the consolidated balance sheets with the recording of material assets and obligations related to the Company’s restaurants which operate under lease agreements. These restaurant leases comprise the majority of the Company’s material lease agreements. Although the Company is finalizing its evaluation of the effect on its consolidated financial statements and disclosures, the Company expects to record operating lease liabilities as of January 1, 2019 ranging from approximately $61.0 million to $70.0 million based on the present value of the remaining minimum rental payments. Additionally, the Company expects to record corresponding right-of-use assets ranging from approximately $44.0 million to $53.0 million based on the operating lease liabilities adjusted for deferred rent and lease incentives existing as of the effective date. This estimate may change as the Company enters into new lease agreements and completes its implementation, including finalizing the evaluation of potential embedded leases. The Company does not expect a material impact on its consolidated results of operations or its consolidated statements of cash flows. The Company is finalizing the impact of ASU 2016-02 on its accounting policies and processes, potential embedded leases, and internal control over financial reporting. The Company expects expanded qualitative and quantitative financial statement disclosures regarding the Company’s leasing arrangements. In June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 simplifies the accounting and reporting for share-based payments issued to non-employees by expanding the scope of Accounting Standard Codification 718, “Compensation – Stock Compensation”, which currently only includes share-based compensation to employees, to also include share-based payments to nonemployees for goods and services. The amendments in ASU 2018-07 are effective for annual and interim periods beginning after December 15, 2018. The Company is evaluating the effect of this standard on its consolidated financial statements but does not expect the adoption of ASU 2018-07 to be material. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates, modifies and adds disclosure requirements for fair value measurements. The amendments in ASU 2018-13 are effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the effects of ASU 2018-13 on its consolidated financial statements but does not expect the adoption of ASU 2018-13 to be material. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company is evaluating the effects of this pronouncement on its consolidated financial statements. In October 2018, the FASB issued ASU No. 2018-17, “Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities” (“ASU 2018-17”). ASU 2018-17 states that indirect interests held through related parties in common control arrangements should be considered on a proportional basis to determine whether fees paid to decision makers and service providers are variable interests. This is consistent with how indirect interests held through related parties under common control are considered for determining whether a reporting entity must consolidate a variable interest entity. ASU 2018-17 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. Entities are required to adopt the new guidance retrospectively with a cumulative adjustment to retained earnings at the beginning of the earliest period presented. The Company is evaluating the effects of this pronouncement on its consolidated financial statements. |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consists of the following (in thousands): December 31, 2018 2017 Food $ 300 $ 246 Beverages 1,104 1,156 Total $ 1,404 $ 1,402 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other current assets | Other current assets consist of the following (in thousands): December 31, 2018 2017 Prepaid taxes $ 503 $ 255 Landlord receivable 195 258 Prepaid expenses 680 421 Other 93 365 Total $ 1,471 $ 1,299 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Property and equipment, net consist of the following (in thousands): December 31, 2018 2017 Furniture, fixtures and equipment $ 10,425 $ 10,073 Leasehold improvements 43,890 41,261 Less: accumulated depreciation and amortization (16,969 ) (18,832 ) Subtotal 37,346 32,502 Construction in progress 336 3,828 Restaurant supplies 1,665 1,481 Total $ 39,347 $ 37,811 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued [Abstract] | |
Schedule of accrued expenses | Accrued expenses consist of the following (in thousands): December 31, 2018 2017 Payroll and related $ 1,794 847 Rent, including disputed amounts 1,766 1,471 VAT and sales taxes 1,028 $ 739 Legal, professional and other services 645 1,007 Income taxes 685 610 Due to hotels 203 1,168 Insurance 212 103 Other 1,760 1,042 Total $ 8,093 $ 6,987 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | Long-term debt consists of the following (in thousands): December 31, 2018 2017 Term loan agreements $ 3,828 $ 6,657 Promissory notes 6,250 6,250 Equipment financing agreements 752 1,094 Business loan and security agreement — 62 Total long-term debt 10,830 14,063 Less: current portion of long-term debt (3,201 ) (3,241 ) Less: discounts on warrants, net (479 ) (654 ) Less: debt issuance costs (32 ) (53 ) Total long-term debt, net of current portion $ 7,118 $ 10,115 Future minimum loan payments: 2019 $ 3,201 2020 1,272 2021 6,357 2022 — 2023 — Total $ 10,830 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Financial Instruments | The estimated fair values of long-term debt, for which carrying values do not approximate fair value, are as follows: December 31, 2018 2017 Carrying amount of long-term debt, including current portion (1) $ 10,830 14,063 Fair value of long-term debt, including current portion 7,648 6,801 (1) Excludes the discounts on warrants, net and debt issuance costs |
Nonconsolidated Variable Inte_2
Nonconsolidated Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Equity Investments | As of December 31, 2018 and 2017, the carrying values of these investments were (in thousands): December 31, 2018 2017 Bagatelle Investors $ 56 $ 33 Bagatelle NY 2,628 2,509 One 29 Park — 415 Total $ 2,684 $ 2,957 |
Schedule of financial data of investments | Summarized financial data for these investments is presented below (in thousands): For the year ended December 31, 2018 Bagatelle Investors Bagatelle NY Revenues $ — $ 10,927 Gross profit — 8,229 Income (loss) from continuing operations 74 346 Net income (loss) $ 74 $ 346 For the year ended December 31, 2017 Bagatelle Investors Bagatelle NY One 29 Park (1) Revenues $ — $ 13,641 $ 5,093 Gross profit — 9,826 3,969 Income (loss) from continuing operations 85 504 (875 ) Net income (loss) $ 85 $ 504 $ (875 ) (1) For the nine months ended September 30, 2017. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of loss before income taxes | The components of income (loss) from continuing operations before provision for income taxes for the periods were as follows (in thousands): For the years ended December 31, 2018 2017 Domestic $ 2,089 $ (6,532 ) Foreign 2,531 2,707 Total $ 4,620 $ (3,825 ) |
Schedule of components of income tax provision | The components of the Company’s provision for income taxes were as follows (in thousands): For the years ended December 31, 2018 2017 Current: Federal $ — $ — State and local 52 38 Foreign 630 580 Total current provision for income taxes 682 618 Deferred: Federal — — State and local — — Foreign 31 (18 ) Total deferred provision for income taxes 31 (18 ) Total provision for income taxes $ 713 $ 600 |
Schedule of effective tax rate differs from the statutory rates | The Company’s effective tax rate differs from the statutory rates as follows: For the years ended December 31, 2018 2017 Income tax benefit at federal statutory rate 21.0 % 34.0 % State and local taxes – current 0.9 % (0.6 )% State and local taxes – deferred 10.3 % 13.4 % FICA tip credit (17.1 )% 16.9 % Foreign rate differential 0.3 % 8.6 % Change in valuation allowance (15.5 )% (87.4 )% Global intangible low-taxed income (“GILTI”) 9.2 % — % Other items, net 6.3 % (0.6 )% Total income tax expense 15.4 % (15.7 )% |
Schedule of income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities | The income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows (in thousands): For the years ended December 31, 2018 2017 Deferred tax assets: Deferred rent liabilities $ 2,524 $ 2,637 Lease incentives 1,577 1,484 Stock compensation 417 458 FICA tip credit carryforward 4,255 3,224 Net operating loss 3,705 5,129 Goodwill 1,652 1,839 Inventory 12 13 Charitable contributions carryforward 39 37 Foreign tax credit carryforward 336 566 Deferred revenue 335 383 State and local tax credit carryforward 445 346 Expenses not deductible until paid 283 — Total deferred tax assets 15,580 16,116 Deferred tax liabilities: Depreciation and amortization (4,031 ) (3,661 ) Basis in LLC interest (526 ) (592 ) ASC 740-10 liability (190 ) (233 ) Total deferred tax liabilities (4,747 ) (4,486 ) Valuation allowance (10,795 ) (11,561 ) Net deferred tax assets $ 38 $ 69 |
Schedule of activity of uncertain tax positions | The following table summarizes the activity related to the Company’s uncertain tax positions (in thousands): For the years ended December 31, 2018 2017 Balance, beginning of year $ 685 $ 674 Increase related to prior period positions — — Increase related to current year positions 219 203 Decrease related to prior period positions (97 ) (192 ) Balance, end of year $ 807 $ 685 |
Revenue from contracts with c_2
Revenue from contracts with customers (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Prospective Adoption of New Accounting Pronouncements | The changes were as follows (in thousands): December 31, 2017 ASC 606 Adjustments January 1, 2018 (1) Assets Accounts receivable $ 5,514 $ 306 $ 5,820 Liabilities Deferred license revenue $ 115 $ 273 $ 388 Deferred license revenue, long-term $ 1,222 $ 50 $ 1,272 Equity Accumulated deficit $ (31,979 ) $ (17 ) $ (31,996 ) The impact of adopting ASC 606 as compared to the previous recognition guidance on the Company’s consolidated statement of operations and comprehensive income (loss) was as follows (in thousands): For the year ended December 31, 2018 As Reported Balances without ASC 606 Adoption Adoption Impact of ASC 606 Revenues Management, license and incentive fee revenue $ 11,568 $ 11,873 $ (305 ) Net income (loss) $ 3,907 $ 4,212 $ (305 ) |
Receivables And Contract Liabilities | The following table provides information about receivables and contract liabilities (deferred license revenue) from contracts with customers (in thousands): December 31, 2018 Receivables (1) $ 174 Deferred license revenue (2) 1,179 Deferred gift certificate revenue (3) $ 491 (1) Receivables are included in accounts receivable on the consolidated balance sheets. (2) Includes the current and long-term portion of deferred license revenue. (3) Deferred gift card revenue is included in deferred gift card revenue and other on the consolidated balance sheets. |
Contract with Customer, Asset and Liability | Significant changes in deferred license revenue for the year ended December 31, 2018 are as follows (in thousands): Deferred license revenue, as of January 1, 2018 (1) $ 1,660 Additions to deferred license revenue 538 Revenue recognized during the period (1,019 ) Deferred license revenue, as of December 31, 2018 $ 1,179 (1) Includes the cumulative effect of adopting ASC 606. |
Revenue Remaining Performance Obligations Expected Timing Of Satisfaction | As of December 31, 2018, the estimated deferred license revenue to be recognized in the future related to performance obligations that are unsatisfied as of December 31, 2018 were as follows for each year ending (in thousands): 2019 $ 171 2020 154 2021 154 2022 154 2023 154 Thereafter 392 Total future estimated deferred license revenue $ 1,179 |
Schedule of Deferred Revenue, by Arrangement | Significant changes in deferred gift certificate revenue for the year ended December 31, 2018 are as follows (in thousands): Deferred gift certificates revenue, as of January 1, 2018 (1) $ 757 Additions to deferred certificates revenue 983 Revenue recognized during the period related to redemptions (1,047 ) Revenue recognized during the period related to breakage (202 ) Deferred gift certificate revenue, as of December 31, 2018 $ 491 (1) There was no cumulative effect of adopting ASC 606 for deferred gift certificates. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments under operating leases | As of December 31, 2018, future minimum lease payments for each year ending were as follows (in thousands): 2019 $ 6,432 2020 6,852 2021 6,866 2022 6,521 2023 6,688 Thereafter 69,487 Total future minimum lease payments $ 102,846 |
Earnings (loss) per share (Tabl
Earnings (loss) per share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | For the years ended December 31, 2018 and 2017, the earnings (loss) per share was calculated as follows (in thousands, except earnings (loss) per share and related share data): Years ended December 31, 2018 2017 Net income (loss) attributable to The ONE Group Hospitality, Inc. $ 3,274 $ (4,216 ) Basic weighted average shares outstanding 27,653,827 25,402,330 Dilutive effect of stock options, warrants and restricted share units 468,617 - Diluted weighted average shares outstanding 28,122,445 25,402,330 Net income (loss) available to common stockholders per share - Basic 0.12 (0.17 ) Net income (loss) income available to common stockholders per share - Diluted $ 0.12 $ (0.17 ) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of components of assets and liabilities that are related to discontinued operations | The following table shows the components of assets and liabilities that are related to discontinued operations in the Company's consolidated balance sheets as of December 31, 2017 (in thousands): December 31, 2017 Other current assets $ 108 Security deposits — Accounts payable and accrued liabilities (48 ) Net assets $ 60 |
Outstanding Warrants (Tables)
Outstanding Warrants (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of fair values of warrants issued | The fair values of warrants issued during 2017 were estimated on the date of issuance using the Black-Scholes option pricing model with the following assumptions by year: 2017 Warrants Expected life, in years 5 years Risk-free interest rate 2.04 % Volatility 38.1 % Dividend yield 0.0 % |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of fair value of options granted | The fair value of options granted during 2017 and 2016 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions by grant year: 2017 Stock options Expected life, in years 6.5 years Risk-free interest rate 1.86% - 2.00 % Volatility 37.0 % Dividend yield 0.0 % |
Schedule of stock option activity | Changes in outstanding stock options during the years ended December 31, 2018 and 2017 were as follows: Shares Weighted average exercise price Weighted average remaining contractual life Intrinsic value (thousands) Outstanding at December 31, 2016 1,857,012 $ 4.28 Granted 1,260,000 1.96 Exercised — — Cancelled, expired or forfeited (801,977 ) 3.14 Outstanding at December 31, 2017 2,315,035 $ 3.41 7.25 years $ 498 Exercisable at December 31, 2017 890,384 $ 4.84 4.67 years $ — Granted — — Exercised — — Cancelled, expired or forfeited (314,027 ) 4.21 Outstanding at December 31, 2018 2,001,008 $ 3.29 6.60 $ 1,225 Exercisable at December 31, 2018 1,074,508 $ 4.16 5.65 $ 318 |
Schedule of non-vested stock options | A summary of the status of the Company’s non-vested stock options as of December 31, 2018 and 2017 and changes during the years then ended, is presented below: Shares Weighted average grant date fair value Non-vested stock options at December 31, 2016 1,180,030 $ 1.56 Granted 1,260,000 0.79 Vested (245,402 ) 1.76 Cancelled, expired or forfeited (769,977 ) 1.28 Non-vested stock options at December 31, 2017 1,424,651 0.99 Granted — — Vested (427,651 ) 1.16 Cancelled, expired or forfeited (70,500 ) 1.10 Non-vested stock options at December 31, 2018 926,500 $ 0.91 |
Schedule of restricted stock awards and changes | A summary of the status of restricted stock awards and changes during the years ended December 31, 2018 and 2017 are presented below: Shares Weighted average grant date fair value Non-vested restricted stock at December 31, 2016 716,250 $ 2.73 Granted 710,000 1.83 Vested (181,750 ) 2.01 Cancelled, expired or forfeited (259,500 ) 2.56 Non-vested restricted stock at December 31, 2017 985,000 $ 2.26 Granted 195,938 2.81 Vested (361,737 ) 1.90 Cancelled, expired or forfeited (55,000 ) 2.74 Non-vested stock options at December 31, 2018 764,201 $ 2.54 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following tables show our operating results by segment for the periods indicated (in thousands): For the year ended December 31, 2018 Owned restaurants Owned food, beverage and other Managed and licensed operations Total Revenues: Owned net revenues $ 65,896 $ 8,137 $ — $ 74,033 Management, license and incentive fee revenue — — 11,568 11,568 Total revenues 65,896 8,137 11,568 85,601 Cost and expenses: Owned operating expenses: Cost of sales 17,220 — — 17,220 Other operating expenses 39,599 — — 39,599 Owned food, beverage and other expenses — 7,865 — 7,865 Total owned operating expenses 56,819 7,865 — 64,684 Segment income $ 9,077 $ 272 $ 11,568 $ 20,917 General and administrative 11,119 Depreciation and amortization 2,824 Interest expense, net of interest income 1,193 Equity in income of investee companies (182 ) Other 1,343 Income from continuing operations before provision for income taxes $ 4,620 For the year ended December 31, 2017 Owned restaurants Owned food, beverage and other Managed and licensed operations Total Revenues: Owned net revenues $ 58,654 $ 10,227 $ — $ 68,881 Management, license and incentive fee revenue — — 10,779 10,779 Total revenues 58,654 10,227 10,779 79,660 Cost and expenses: Owned operating expenses: Cost of sales 15,544 — — 15,544 Other operating expenses 37,076 — — 37,076 Owned food, beverage and other expenses — 9,400 — 9,400 Total owned operating expenses 52,620 9,400 — 62,020 Segment income $ 6,034 $ 827 $ 10,779 $ 17,640 General and administrative 11,893 Depreciation and amortization 3,051 Interest expense, net of interest income 1,167 Equity in income of investee companies (168 ) Other 5,522 Loss from continuing operations before provision for income taxes $ (3,825 ) The following tables show our total assets and capital asset additions by segment for the periods indicated (in thousands): For the years ended December 31, 2018 2017 Total assets: Owned restaurants $ 42,971 $ 40,570 Owned food, beverage and other operations (1) 7,274 7,385 Managed and licensed operations 5,734 5,060 Total $ 55,979 $ 53,015 (1) Includes corporate assets For the years ended December 31, 2018 2017 Capital assets additions: Owned restaurants $ 3,297 $ 3,955 Owned food, beverage and other operations (1) 805 655 Managed and licensed operations — — Total $ 4,102 $ 4,610 (1) Includes corporate capital asset additions |
Geographic Information (Tables)
Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Geographic Information [Abstract] | |
Schedule of revenues by geographic location | Revenues For the years ended December 31, 2018 2017 Domestic: Owned restaurants $ 65,896 $ 58,654 Owned food, beverage and other operations 8,137 10,227 Managed and licensed operations 6,214 5,723 Total domestic revenues $ 80,247 $ 74,604 International: Owned restaurants — — Owned food, beverage and other operations — — Managed and licensed operations 5,354 5,056 Total international revenues $ 5,354 $ 5,056 Total revenues $ 85,601 $ 79,660 |
Schedule of long-lived assets by geographic location | Long-lived assets For the years ended December 31, 2018 2017 Domestic: Owned restaurants $ 38,958 $ 37,907 Owned food, beverage and other operations 5,375 5,088 Managed and licensed operations 67 109 Total domestic long-lived assets $ 44,400 $ 43,104 International: Owned restaurants — — Owned food, beverage and other operations — — Managed and licensed operations 38 148 Total international long-lived assets $ 38 $ 148 Total long-lived assets $ 44,438 $ 43,252 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Impairments | $ 0 | $ 559 | |
Recognized uncertain tax position, Description | The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. | ||
Operating costs and expenses | $ 1,300 | 1,600 | |
Advertising Costs | 2,200 | 3,600 | |
Deferred rent payable | $ 16,774 | 17,001 | |
Estimated percentage of forfeitures | 10.00% | ||
Loss on foreign currency translation, net | $ (754) | (12) | |
Cash deposited in excess of federally insured limits | 1,100 | 1,600 | |
Revenue Recognized from Gift Card Breakage | 200 | 0 | |
Valuation allowance of deferred tax assets | $ 10,800 | $ 11,600 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment, Estimated Useful Lives | shorter of their estimated useful lives or the remaining term of the associated lease | ||
Maximum [Member] | Subsequent Event [Member] | Accounting Standards Update 2016-02 [Member] | |||
Operating Lease, Liability | $ 70,000 | ||
Operating Lease, Right-of-Use Asset | 53,000 | ||
Maximum [Member] | Computer and Equipment Furniture and Fixture [Member] | |||
Property, Plant and Equipment, Useful Life | 7 years | ||
Minimum [Member] | Subsequent Event [Member] | Accounting Standards Update 2016-02 [Member] | |||
Operating Lease, Liability | 61,000 | ||
Operating Lease, Right-of-Use Asset | $ 44,000 | ||
Minimum [Member] | Computer and Equipment Furniture and Fixture [Member] | |||
Property, Plant and Equipment, Useful Life | 5 years |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory [Line Items] | ||
Inventory | $ 1,404 | $ 1,402 |
Food | ||
Inventory [Line Items] | ||
Inventory | 300 | 246 |
Beverages | ||
Inventory [Line Items] | ||
Inventory | $ 1,104 | $ 1,156 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid taxes | $ 503 | $ 255 |
Landlord receivable | 195 | 258 |
Prepaid expenses | 680 | 421 |
Other | 93 | 365 |
Total | $ 1,471 | $ 1,299 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation and amortization | $ (16,969) | $ (18,832) |
Property and equipment, net | 39,347 | 37,811 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,425 | 10,073 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 43,890 | 41,261 |
Total amount net of accumulated depreciation and amortization | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 37,346 | 32,502 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 336 | 3,828 |
Restaurant supplies | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 1,665 | $ 1,481 |
Property and Equipment, net (_2
Property and Equipment, net (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization | $ 2.8 | $ 3.1 |
Impairment charge | 0.6 | |
Asset under construction | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 1.4 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued [Abstract] | ||
Payroll and related | $ 1,794 | $ 847 |
Rent, including disputed amounts | 1,766 | 1,471 |
VAT and Sales taxes | 1,028 | 739 |
Legal, professional and other services | 645 | 1,007 |
Income taxes | 685 | 610 |
Due to hotels | 203 | 1,168 |
Insurance | 212 | 103 |
Other | 1,760 | 1,042 |
Totals | $ 8,093 | $ 6,987 |
Long Term Debt - Debt and Matur
Long Term Debt - Debt and Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Long-term debt | [1] | $ 10,830 | $ 14,063 |
Less: current portion of long-term debt | (3,201) | (3,241) | |
Less: Discounts on warrants, net | (479) | (654) | |
Less: Debt Issuance Costs | (32) | (53) | |
Long-term debt, net of current portion | 7,118 | 10,115 | |
Future minimum loan payments: | |||
2019 | 3,201 | ||
2020 | 1,272 | ||
2021 | 6,357 | ||
2022 | 0 | ||
2023 | 0 | ||
Total | [1] | 10,830 | 14,063 |
Business Loan and Security Agreement | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | 62 | |
Future minimum loan payments: | |||
Total | 0 | 62 | |
Medium-term Notes | Term Loan Agreements | |||
Debt Instrument [Line Items] | |||
Long-term debt | 3,828 | 6,657 | |
Future minimum loan payments: | |||
Total | 3,828 | 6,657 | |
Construction Loans | Equipment Financing Agreements | |||
Debt Instrument [Line Items] | |||
Long-term debt | 752 | 1,094 | |
Future minimum loan payments: | |||
Total | 752 | 1,094 | |
Unsecured Debt | Promissory notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 6,250 | 6,250 | |
Future minimum loan payments: | |||
Total | $ 6,250 | $ 6,250 | |
[1] | Excludes the discounts on warrants, net and debt issuance costs |
Long Term Debt (Detail Textuals
Long Term Debt (Detail Textuals) - USD ($) | Aug. 11, 2016 | Jun. 05, 2015 | Jun. 02, 2015 | Feb. 17, 2017 | Oct. 24, 2016 | Aug. 16, 2016 | Jun. 27, 2016 | Dec. 17, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||||||||||
Number of periodic payments (in installments) | 60 months | ||||||||||
Debt interest rate | 10.00% | 5.00% | 5.00% | 10.00% | 5.00% | 10.00% | |||||
Long-term debt | [1] | $ 10,830,000 | $ 14,063,000 | ||||||||
Unamortized discount | 479,000 | 654,000 | |||||||||
Interest expense | 1,000,000 | 1,000,000 | |||||||||
Interest costs capitalized | 200,000 | ||||||||||
Letters of credit outstanding | 1,300,000 | ||||||||||
2235570 Ontario Limited | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Fair value of warrant | $ 100,000 | ||||||||||
AMEX Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt | 0 | 62,000 | |||||||||
Medium-term Notes | First Term Loan Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face value of debt | $ 7,500,000 | ||||||||||
Periodic principal payments | $ 124,583 | ||||||||||
Debt interest rate | 5.00% | ||||||||||
Long-term debt | 1,500,000 | ||||||||||
Medium-term Notes | Second Term Loan Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face value of debt | $ 6 | ||||||||||
Number of periodic payments (in installments) | 0 days | ||||||||||
Periodic principal payments | $ 111,111 | ||||||||||
Long-term debt | 2,300,000 | ||||||||||
Construction Loans | First Sterling Agreement | Sterling National Bank | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face value of debt | $ 1,000,000 | ||||||||||
Periodic principal payments | 19,686 | ||||||||||
Amount outstanding | $ 300,000 | ||||||||||
Construction Loans | Second Sterling Agreement | Sterling National Bank | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face value of debt | $ 700,000 | ||||||||||
Periodic principal payments | 13,769 | ||||||||||
Amount outstanding | $ 400,000 | ||||||||||
Unsecured Debt | Promissory notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt | 6,250,000 | $ 6,250,000 | |||||||||
Unsecured Debt | Promissory notes | 2235570 Ontario Limited | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face value of debt | 1,000,000 | ||||||||||
Amount outstanding | 1,000,000 | ||||||||||
Fair value of warrant | $ 100,000 | ||||||||||
Unamortized discount | 62,500 | ||||||||||
Unsecured Debt | Anson August Note | Anson Investments Master Fund LP | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face value of debt | $ 3,000,000 | ||||||||||
Amount outstanding | 3,000,000 | ||||||||||
Fair value of warrant | $ 400,000 | ||||||||||
Unamortized discount | 196,300 | ||||||||||
Unsecured Debt | Anson October Note | Anson Investments Master Fund LP | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face value of debt | $ 2,250,000 | ||||||||||
Amount outstanding | 2,250,000 | ||||||||||
Fair value of warrant | $ 400,000 | ||||||||||
Unamortized discount | $ 220,000 | ||||||||||
American Express Bank, FSB | AMEX Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face value of debt | $ 1,000,000 | ||||||||||
Loan fee | 3.50% | ||||||||||
Repayment rate | 6.00% | ||||||||||
Debt instrument, term | 365 days | ||||||||||
[1] | Excludes the discounts on warrants, net and debt issuance costs |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Long-term Debt | [1] | $ 10,830 | $ 14,063 |
Fair Value, Inputs, Level 2 [Member] | |||
Long-term Debt, Fair Value | $ 7,648 | $ 6,801 | |
[1] | Excludes the discounts on warrants, net and debt issuance costs |
Nonconsolidated Variable Inte_3
Nonconsolidated Variable Interest Entities - Information of Equity Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 2,684 | $ 600 | $ 2,957 |
Bagatelle Investors | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | 56 | 33 | |
Bagatelle NY | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | 2,628 | 2,509 | |
One 29 Park | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 0 | $ 415 |
Nonconsolidated Variable Inte_4
Nonconsolidated Variable Interest Entities - Summary of financial data (Detail 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Bagatelle Investors | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenues | $ 0 | $ 0 | |
Gross profit | 0 | 0 | |
Income (loss) from continuing operations | 74 | 85 | |
Net income (loss) | 74 | 85 | |
Bagatelle NY | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenues | 10,927 | 13,641 | |
Gross profit | 8,229 | 9,826 | |
Income (loss) from continuing operations | 346 | 504 | |
Net income (loss) | $ 346 | 504 | |
One 29 Park | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenues | [1] | 5,093 | |
Gross profit | [1] | 3,969 | |
Income (loss) from continuing operations | [1] | (875) | |
Net income (loss) | [1] | $ (875) | |
[1] | For the nine months ended September 30, 2017. |
Nonconsolidated Variable Inte_5
Nonconsolidated Variable Interest Entities (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 2,684 | $ 2,957 | $ 600 |
Due from related parties, net | 45 | 0 | |
Equity Method Investment, Ownership Percentage | 10.00% | ||
Income (Loss) from Equity Method Investments | 182 | 168 | |
Bagatelle NY LA Investors, LLC (Bagatelle Investors) | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 56 | $ 33 | |
Equity Method Investment, Ownership Percentage | 31.24% | 31.24% | |
Bagatelle Little West 12th, LLC (Bagatelle NY) | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 2,628 | $ 2,509 | |
Management fee revenue | 300 | 200 | |
Rental income | $ 600 | $ 500 | |
Equity Method Investment, Ownership Percentage | 51.13% | 51.13% | |
One 29 Park, LLC (One 29 Park) | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 0 | $ 415 | |
Management fee revenue | 300 | $ 500 | |
Gain (Loss) on Sale of Investments | $ 200 | ||
Equity Method Investment, Ownership Percentage | 10.00% | 10.00% | |
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure | |||
Schedule of Equity Method Investments [Line Items] | |||
Due from related parties, net | $ 100 | $ 100 |
Related Party Transactions (Det
Related Party Transactions (Detail Textuals) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Due to related parties | $ 1,200,000 | $ 1,500,000 | |
Wrote off related party receivables | 400,000 | ||
Entity Owned by Stockholder | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 100,000 | 300,000 | |
TOG Liquidation Trust | |||
Related Party Transaction [Line Items] | |||
Proceeds from cash advances from TOG Liquidation Trust | 1,200,000 | 1,200,000 | |
Cash Advances | |||
Related Party Transaction [Line Items] | |||
Due to related parties | $ 1,200,000 | ||
Legal Fees | |||
Related Party Transaction [Line Items] | |||
Incurred expenses with related parties | 51,000,000 | 500,000 | |
Rental Income | |||
Related Party Transaction [Line Items] | |||
Revenues from related parties | 200,000 | 200,000 | |
Construction Services | |||
Related Party Transaction [Line Items] | |||
Incurred expenses with related parties | $ 300,000 | 1,700,000 | |
Due to related parties | 27,000 | ||
Design services | Entity Owned by Stockholder | |||
Related Party Transaction [Line Items] | |||
Incurred expenses with related parties | $ 57,000 | ||
Due to related parties | $ 9,500 |
Income Taxes - Summary of incom
Income Taxes - Summary of income (loss) before taxes from continuing operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Loss from continuing operations before provision for income taxes | ||
Domestic | $ 2,089 | $ (6,532) |
Foreign | 2,531 | 2,707 |
Income (loss) from continuing operations before provision for income taxes | $ 4,620 | $ (3,825) |
Income Taxes - Summary of provi
Income Taxes - Summary of provision for income tax expense (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current | ||
Federal | $ 0 | $ 0 |
State and local | 52 | 38 |
Foreign | 630 | 580 |
Total current income tax provision | 682 | 618 |
Deferred | ||
Federal | 0 | 0 |
State and local | 0 | 0 |
Foreign | 31 | (18) |
Total deferred tax provision | 31 | (18) |
Total income tax provision | $ 713 | $ 600 |
Income Taxes - Summary of effec
Income Taxes - Summary of effective statutory federal income tax rate (Details 2) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Income tax benefit at federal statutory rate | 21.00% | 34.00% |
State and local taxes - current | 0.90% | (0.60%) |
State and local taxes - deferred | 10.30% | 13.40% |
FICA tip credit | (17.10%) | 16.90% |
Foreign rate differential | 0.30% | 8.60% |
Change in valuation allowance | (15.50%) | (87.40%) |
Global intangible low-taxed income ("GILTI") | 9.20% | 0.00% |
Other items, net | 6.30% | (0.60%) |
Total income tax expense | 15.40% | (15.70%) |
Income Taxes - Summary of defer
Income Taxes - Summary of deferred tax assets and liabilities (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Deferred rent liabilities | $ 2,524 | $ 2,637 |
Lease incentives | 1,577 | 1,484 |
Stock compensation | 417 | 458 |
FICA tip credit carryforward | 4,255 | 3,224 |
Net operating loss | 3,705 | 5,129 |
Goodwill | 1,652 | 1,839 |
Inventory | 12 | 13 |
Charitable contributions carryforward | 39 | 37 |
Foreign tax credit carryforward | 336 | 566 |
Deferred revenue | 335 | 383 |
State and local tax credit carryforward | 445 | 346 |
Expenses not deductible until paid | 283 | 0 |
Total deferred tax assets | 15,580 | 16,116 |
Deferred tax liabilities: | ||
Depreciation and amortization | (4,031) | (3,661) |
Basis in LLC interest | (526) | (592) |
ASC 740-10 liability | (190) | (233) |
Total deferred tax liabilities | (4,747) | (4,486) |
Valuation allowance | (10,795) | (11,561) |
Net deferred tax assets | $ 38 | $ 69 |
Income Taxes - Summary of uncer
Income Taxes - Summary of uncertain tax positions (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance, beginning of year | $ 685 | $ 674 |
Increase related to prior period positions | 0 | 0 |
Increase related to current year positions | 219 | 203 |
Decrease related to prior period positions | (97) | (192) |
Balance, end of year | $ 807 | $ 685 |
Income Taxes (Detail Textuals)
Income Taxes (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||
Federal statutory tax rate | 35.00% | |
U.S. tax on certain off-shore earnings of effective tax rate | 0.30% | 8.60% |
Territorial tax system beginning in 2018 by dividend received | 100.00% | |
Future federal statutory tax rate | 21.00% | |
Tax year 2017 | ||
Operating Loss Carryforwards [Line Items] | ||
U.S. tax on certain off-shore earnings of effective tax rate | 10.50% | |
Tax year 2025 | ||
Operating Loss Carryforwards [Line Items] | ||
U.S. tax on certain off-shore earnings of effective tax rate | 13.125% | |
Federal income tax | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss | $ 13.6 | |
Federal income tax | Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss, expiration date | Dec. 31, 2033 | |
Federal income tax | Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss, expiration date | Dec. 31, 2037 | |
State income tax | Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss, expiration date | Dec. 31, 2033 | |
State income tax | Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss, expiration date | Dec. 31, 2037 |
Revenue from contracts with c_3
Revenue from contracts with customers (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Liabilities | |||
Deferred license revenue | $ 171 | $ 115 | |
Deferred license revenue, long-term | 1,008 | 1,222 | |
Equity | |||
Retained Earnings (Accumulated Deficit) | (28,722) | (31,979) | |
Revenues | |||
Management, license and incentive fee revenue | 11,568 | 10,779 | |
Net (loss) income | 3,907 | (4,028) | |
Adoption Of ASC 606 [Member] | |||
Equity | |||
Retained Earnings (Accumulated Deficit) | $ 17,000 | ||
Revenues | |||
Management, license and incentive fee revenue | 11,873 | ||
Net (loss) income | 4,212 | ||
ASC 606 Adjustments [Member] | |||
Assets | |||
Accounts Receivable, Net | 306 | ||
Liabilities | |||
Deferred license revenue | 273 | ||
Deferred license revenue, long-term | 50 | ||
Equity | |||
Retained Earnings (Accumulated Deficit) | (17) | ||
Revenues | |||
Management, license and incentive fee revenue | (305) | ||
Net (loss) income | (305) | ||
Previously Reported [Member] | |||
Assets | |||
Accounts Receivable, Net | 5,514 | ||
Liabilities | |||
Deferred license revenue | 115 | ||
Deferred license revenue, long-term | 1,222 | ||
Equity | |||
Retained Earnings (Accumulated Deficit) | $ (31,979) | ||
Revenues | |||
Management, license and incentive fee revenue | 11,568 | ||
Net (loss) income | $ 3,907 | ||
Restatement Adjustment [Member] | |||
Assets | |||
Accounts Receivable, Net | 5,820 | ||
Liabilities | |||
Deferred license revenue | 388 | ||
Deferred license revenue, long-term | 1,272 | ||
Equity | |||
Retained Earnings (Accumulated Deficit) | $ (31,996) |
Revenue from contracts with c_4
Revenue from contracts with customers (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |||
License [Member] | |||||
Receivables | [1] | $ 174 | |||
Deferred revenue | 1,179 | [2] | $ 1,660 | [3] | |
Gift Certificate Revenue [Member] | |||||
Deferred revenue | $ 491 | [4] | $ 757 | [5] | |
[1] | Receivables are included in accounts receivable on the consolidated balance sheets. | ||||
[2] | Includes the current and long-term portion of deferred license revenue. | ||||
[3] | Includes the cumulative effect of adopting ASC 606. | ||||
[4] | Deferred gift card revenue is included in deferred gift card revenue and other on the consolidated balance sheets. | ||||
[5] | There was no cumulative effect of adopting ASC 606 for deferred gift certificates. |
Revenue from contracts with c_5
Revenue from contracts with customers (Details 2) - License [Member] $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($) | ||
Deferred revenue, as of January 1, 2018 | $ 1,660 | [1] |
Additions to deferred license revenue | 538 | |
Revenue recognized during the period | (1,019) | [2] |
Deferred revenue, as of December 31, 2018 | $ 1,179 | [3] |
[1] | Includes the cumulative effect of adopting ASC 606. | |
[2] | Receivables are included in accounts receivable on the December 31, 2018 consolidated balance sheet. | |
[3] | Includes the current and long-term portion of deferred license revenue. |
Revenue from contracts with c_6
Revenue from contracts with customers (Details 3) - License [Member] $ in Thousands | Dec. 31, 2018USD ($) |
2019 | $ 171 |
2020 | 154 |
2021 | 154 |
2022 | 154 |
2023 | 154 |
Thereafter | 392 |
Total future estimated deferred license revenue | $ 1,179 |
Revenue from contracts with c_7
Revenue from contracts with customers (Details 4) - Gift Certificate Revenue [Member] $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($) | ||
Deferred revenue, as of January 1, 2018 | $ 757 | [1] |
Additions to deferred certificates revenue | 983 | |
Revenue recognized during the period related to redemptions | (1,047) | |
Revenue recognized during the period related to breakage | (202) | |
Deferred revenue, as of December 31, 2018 | $ 491 | [2] |
[1] | There was no cumulative effect of adopting ASC 606 for deferred gift certificates. | |
[2] | Deferred gift card revenue is included in deferred gift card revenue and other on the consolidated balance sheets. |
Revenue from contracts with c_8
Revenue from contracts with customers (Details textual) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Retained Earnings (Accumulated Deficit) | $ (28,722) | $ (31,979) | |
Adoption Of ASC 606 [Member] | |||
Retained Earnings (Accumulated Deficit) | $ 17,000 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Payments | |
2019 | $ 6,432 |
2020 | 6,852 |
2021 | 6,866 |
2022 | 6,521 |
2023 | 6,688 |
Thereafter | 69,487 |
Total | $ 102,846 |
Commitments and Contingencies_2
Commitments and Contingencies (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Rent expense | $ 8.2 | $ 9.5 |
Contingent rent expense | 1.5 | 1.2 |
Rental income related to subleases | 0.8 | $ 0.7 |
Minimum sublease rentals under non-cancelable subleases | $ 1.6 | |
Maximum [Member] | ||
Lessee, Operating Lease, Renewal Term | 5 years | |
Minimum [Member] | ||
Lessee, Operating Lease, Renewal Term | 1 year |
Earnings (loss) per share (Deta
Earnings (loss) per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net income (loss) attributable to The ONE Group Hospitality, Inc. | $ 3,274 | $ (4,216) |
Basic weighted average shares outstanding | 27,653,827 | 25,402,330 |
Dilutive effect of stock options, warrants and restricted share units | 468,617 | 0 |
Diluted weighted average shares outstanding | 28,122,445 | 25,402,330 |
Net income (loss) available to common stockholders per share - Basic | $ 0.12 | $ (0.17) |
Net income (loss) income available to common stockholders per share - Diluted | $ 0.12 | $ (0.17) |
Earnings (loss) per share (De_2
Earnings (loss) per share (Details Textual) - $ / shares shares in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share, Basic and Diluted | $ 0.18 | $ 0.02 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1.4 |
Discontinued Operations (Detail
Discontinued Operations (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract] | |
Other current assets | $ 108 |
Security deposits | 0 |
Accounts payable and accrued liabilities | (48) |
Net assets | $ 60 |
Discontinued Operations (Deta_2
Discontinued Operations (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Percentage of ownership in discontinued operations | 100.00% | |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ 0 | $ 397 |
Litigation (Detail Textuals)
Litigation (Detail Textuals) - USD ($) $ in Thousands | Dec. 14, 2017 | Oct. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | ||||||
Charge related to an arrangement | $ 0 | $ 1,245 | ||||
First installment payment paid on December 14, 2017 | 300 | |||||
General and Administrative Expense | Local Rest and Meal Period Requirements | ||||||
Loss Contingencies [Line Items] | ||||||
Loss contingency accrual, provision | $ 200 | |||||
General and Administrative Expense | Tip Credits | ||||||
Loss Contingencies [Line Items] | ||||||
Loss contingency accrual, provision | $ 500 | |||||
Bagatelle - Los Angeles | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement payment | $ 200 | |||||
Bagatelle - New York | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement payment | $ 300 | |||||
Charge related to an arrangement | $ 500 | |||||
Second and final payment payment due on March 1, 2018 | $ 200 |
Stockholders' Equity (Detail Te
Stockholders' Equity (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Nov. 15, 2017 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
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) | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||
Preferred stock, par value per share (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Common stock, shares outstanding | 28,313,017 | 27,152,101 | ||
Preferred stock, shares outstanding | 0 | 0 | ||
Issuance of common stock | $ 1,223 | $ 2,183 | ||
Number of shares exchanged for warrants exercised (in shares) | 125,000 | |||
Exercise price of warrants (in dollars per share) | $ 1.63 | |||
Proceeds from Stock Options Exercised | $ 1,200 | |||
NumberOfWarrantExercised | 750,000 | |||
Securities purchase agreement | ||||
Class of Stock [Line Items] | ||||
Issuance of common stock | $ 2,600 | |||
Issuance of stock (in shares) | 1,750,000 | |||
Registered direct offering price per share | $ 1.50 | |||
Number of shares exchanged for warrants exercised (in shares) | 875,000 | |||
Exercise price of warrants (in dollars per share) | $ 1.63 |
Outstanding Warrants (Details)
Outstanding Warrants (Details) | Dec. 31, 2018 |
Measurement Input, Expected Term [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants and Rights Outstanding, Term | 5 years |
Measurement Input, Price Volatility [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 38.1 |
Measurement Input, Risk Free Interest Rate [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 2.04 |
Measurement Input, Expected Dividend Rate [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 0 |
Outstanding Warrants (Detail Te
Outstanding Warrants (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | Aug. 11, 2016 | Nov. 15, 2017 | Oct. 24, 2016 | Jun. 27, 2016 | Sep. 30, 2018 | Dec. 31, 2018 |
Class of Warrant or Right [Line Items] | ||||||
Number of shares exchanged for warrants exercised (in shares) | 125,000 | |||||
Exercise price of warrants (in dollars per share) | $ 1.63 | |||||
Stock Issued During Period Shares Warrants Exercised | 750,000 | |||||
Stock Issued During Period Value Warrants Exercised | $ 1,200 | $ 1,223 | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 125,000 | |||||
Securities purchase agreement | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of shares exchanged for warrants exercised (in shares) | 875,000 | |||||
Exercise price of warrants (in dollars per share) | $ 1.63 | |||||
Fair value of warrant | $ 400 | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 875,000 | |||||
Ontario | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of shares exchanged for warrants exercised (in shares) | 100,000 | |||||
Exercise price of warrants (in dollars per share) | $ 2.61 | |||||
Fair value of warrant | $ 100 | |||||
Number of warrants available for grant | 100,000 | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 100,000 | |||||
Anson | August Note | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of shares exchanged for warrants exercised (in shares) | 300,000 | |||||
Exercise price of warrants (in dollars per share) | $ 2.61 | |||||
Fair value of warrant | $ 400 | |||||
Number of warrants available for grant | 300,000 | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 300,000 | |||||
Anson | October Note | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of shares exchanged for warrants exercised (in shares) | 340,000 | |||||
Exercise price of warrants (in dollars per share) | $ 2.39 | |||||
Fair value of warrant | $ 400 | |||||
Number of warrants available for grant | 340,000 | |||||
Class of warrant percentage of common stock issued and outstanding | 9.99% | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 340,000 |
Stock-based Compensation - Valu
Stock-based Compensation - Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (in years) | 6 years 6 months | 6 years 6 months |
Volatility | 37.00% | 37.00% |
Dividend yield | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.86% | 1.86% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.00% | 2.00% |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Status of Company's Stock Option Activity (Detail 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | ||
Outstanding at December 31, 2017 (in shares) | 2,315,035 | 1,857,012 |
2017 Grants | 0 | 1,260,000 |
Exercised (in shares) | 0 | 0 |
Cancelled, expired or forfeited (in shares) | (314,027) | (801,977) |
Outstanding at December 31, 2018 (in shares) | 2,001,008 | 2,315,035 |
Exercisable (in shares) | 1,074,508 | 890,384 |
Weighted Average Exercise Price | ||
Outstanding at December 31, 2017 (in dollars per share) | $ 3.41 | $ 4.28 |
Granted (in dollars per share) | 0 | 1.96 |
Exercised (in dollars per share) | 0 | 0 |
Cancelled, expired or forfeited (in dollars per share) | 4.21 | 3.14 |
Outstanding at December 31, 2018 (in dollars per share) | 3.29 | 3.41 |
Exercisable (in dollars per share) | $ 4.16 | $ 4.84 |
Weighted Average Remaining Contractual Life (Years) | ||
Weighted Average Remaining Contractual Life at December 31, 2018 | 6 years 7 months 6 days | 7 years 3 months |
Exercisable Weighted Average Remaining Contractual Life at December 31, 2018 | 5 years 7 months 24 days | 4 years 8 months 1 day |
Intrinsic Value | ||
Intrinsic Value Outstanding at December 31, 2017 | $ 1,225 | $ 498 |
Intrinsic Value Exercisable at December 31, 2017 | $ 318 | $ 0 |
Stock-based Compensation - Su_2
Stock-based Compensation - Summary of non-vested stock options (Details 2) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | ||
Non-vested shares at December 31, 2017 (in shares) | 1,424,651 | 1,180,030 |
Granted | 0 | 1,260,000 |
Vested (in shares) | (427,651) | (245,402) |
Cancelled, expired or forfeited (in shares) | (70,500) | (769,977) |
Non-vested shares at December 31, 2018 (in shares) | 926,500 | 1,424,651 |
Weighted Average Grant Date Fair Value | ||
Non-vested shares at December 31, 2016 (in dollars per share) | $ 0.99 | $ 1.56 |
Granted (in dollars per share) | 0 | 0.79 |
Vested (in dollars per share) | 1.16 | 1.76 |
Cancelled, expired or forfeited (in dollars per share) | 1.10 | 1.28 |
Non-vested shares at December 31, 2017 (in dollars per share) | $ 0.91 | $ 0.99 |
Stock-based Compensation - Su_3
Stock-based Compensation - Summary of Status of Company's Restricted Stock Option Activity (Detail 3) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | ||
Non-vested stock options at December 31, 2017 (in shares) | 985,000 | 716,250 |
Granted (in shares) | 195,938 | 710,000 |
Vested (in shares) | (361,737) | (181,750) |
Cancelled, expired or forfeited (in shares) | (55,000) | (259,500) |
Non-vested stock options at December 31, 2018 (in shares) | 764,201 | 985,000 |
Weighted Average Grant Date FairValue | ||
Non-vested stock options at December 31, 2017 (in dollars per share) | $ 2.26 | $ 2.73 |
Granted (in dollars per share) | 2.81 | 1.83 |
Vested (in dollars per share) | 1.90 | 2.01 |
Cancelled, expired or forfeited (in dollars per share) | 2.74 | 2.56 |
Non-vested stock options at December 31, 2018 (in dollars per share) | $ 2.54 | $ 2.26 |
Stock-based Compensation (Detai
Stock-based Compensation (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2013 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 1,313 | $ 1,052 | ||
Weighted-average fair value of stock options issued | $ 0 | $ 0.77 | ||
Options outstanding (in shares) | 2,001,008 | 2,315,035 | 1,857,012 | |
General and Administrative Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 1,300 | $ 1,100 | ||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost related to non-vested awards | $ 1,200 | |||
Unrecognized compensation cost, recognition period | 3 years 1 month 6 days | |||
Restricted shares outstanding | 150,000 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of options vested | $ 500 | 400 | ||
Options outstanding (in shares) | 579,402 | |||
Unrecognized compensation cost related to non-vested awards | $ 600 | |||
Unrecognized compensation cost, recognition period | 2 years 9 months 18 days | |||
The 2013 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Authorized shares (in shares) | 4,773,992 | |||
Contractual term | 10 years | |||
Shares remaining available for issuance (in shares) | 596,951 | |||
Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 100 | $ 200 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||
Management, license and incentive fee revenue | $ 11,568 | $ 10,779 |
Total revenues | 85,601 | 79,660 |
Owned operating expenses: | ||
Cost of sales | 17,220 | 15,544 |
Owned Food Beverage And Other Expenses | 7,865 | 9,400 |
Total owned operating expenses | 64,684 | 62,020 |
General and administrative | 11,119 | 11,893 |
Depreciation and amortization | 2,824 | 3,051 |
Interest expense, net of interest income | 1,193 | 1,167 |
Equity in income of investee companies | (182) | (168) |
Other | (235) | 36 |
Income from continuing operations before provision for income taxes | 4,620 | (3,825) |
Operating segment | ||
Revenues: | ||
Owned net revenues | 74,033 | 68,881 |
Management, license and incentive fee revenue | 11,568 | 10,779 |
Total revenues | 85,601 | 79,660 |
Owned operating expenses: | ||
Cost of sales | 17,220 | 15,544 |
Other operating expenses | 39,599 | 37,076 |
Owned Food Beverage And Other Expenses | 7,865 | 9,400 |
Total owned operating expenses | 64,684 | 62,020 |
Segment income | 20,917 | 17,640 |
General and administrative | 11,119 | 11,893 |
Depreciation and amortization | 2,824 | 3,051 |
Interest expense, net of interest income | 1,193 | 1,167 |
Equity in income of investee companies | (182) | (168) |
Other | 1,343 | 5,522 |
Income from continuing operations before provision for income taxes | 4,620 | (3,825) |
Operating segment | Owned restaurants | ||
Revenues: | ||
Owned net revenues | 65,896 | 58,654 |
Management, license and incentive fee revenue | 0 | 0 |
Total revenues | 65,896 | 58,654 |
Owned operating expenses: | ||
Cost of sales | 17,220 | 15,544 |
Other operating expenses | 39,599 | 37,076 |
Owned Food Beverage And Other Expenses | 0 | 0 |
Total owned operating expenses | 56,819 | 52,620 |
Segment income | 9,077 | 6,034 |
Operating segment | Owned food, beverage and other operations | ||
Revenues: | ||
Owned net revenues | 8,137 | 10,227 |
Management, license and incentive fee revenue | 0 | 0 |
Total revenues | 8,137 | 10,227 |
Owned operating expenses: | ||
Cost of sales | 0 | 0 |
Other operating expenses | 0 | 0 |
Owned Food Beverage And Other Expenses | 7,865 | 9,400 |
Total owned operating expenses | 7,865 | 9,400 |
Segment income | 272 | 827 |
Operating segment | Managed and licensed operations | ||
Revenues: | ||
Owned net revenues | 0 | 0 |
Management, license and incentive fee revenue | 11,568 | 10,779 |
Total revenues | 11,568 | 10,779 |
Owned operating expenses: | ||
Cost of sales | 0 | 0 |
Other operating expenses | 0 | 0 |
Owned Food Beverage And Other Expenses | 0 | 0 |
Total owned operating expenses | 0 | 0 |
Segment income | $ 11,568 | $ 10,779 |
Segment Reporting (Details 1)
Segment Reporting (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment reporting | |||
Total assets | $ 55,979 | $ 53,015 | |
Operating segment | |||
Segment reporting | |||
Total assets | 55,979 | 53,015 | |
Total capital asset additions | 4,102 | 4,610 | |
Operating segment | Owned restaurants | |||
Segment reporting | |||
Total assets | 42,971 | 40,570 | |
Total capital asset additions | 3,297 | 3,955 | |
Operating segment | Owned food, beverage and other operations | |||
Segment reporting | |||
Total assets | [1] | 7,274 | 7,385 |
Total capital asset additions | [2] | 805 | 655 |
Operating segment | Managed and licensed operations | |||
Segment reporting | |||
Total assets | 5,734 | 5,060 | |
Total capital asset additions | $ 0 | $ 0 | |
[1] | Includes corporate assets | ||
[2] | Includes corporate capital asset additions |
Geographic Information (Details
Geographic Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 85,601 | $ 79,660 |
Long-lived Assets | 44,438 | 43,252 |
Domestic [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 80,247 | 74,604 |
Long-lived Assets | 44,400 | 43,104 |
Domestic [Member] | Owned restaurants | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 65,896 | 58,654 |
Long-lived Assets | 38,958 | 37,907 |
Domestic [Member] | Owned food, beverage and other operations | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 8,137 | 10,227 |
Long-lived Assets | 5,375 | 5,088 |
Domestic [Member] | Managed and licensed operations | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 6,214 | 5,723 |
Long-lived Assets | 67 | 109 |
International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 5,354 | 5,056 |
Long-lived Assets | 38 | 148 |
International [Member] | Owned restaurants | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 0 | 0 |
Long-lived Assets | 0 | 0 |
International [Member] | Owned food, beverage and other operations | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 0 | 0 |
Long-lived Assets | 0 | 0 |
International [Member] | Managed and licensed operations | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 5,354 | 5,056 |
Long-lived Assets | $ 38 | $ 148 |
Liquidity (Detail Textuals)
Liquidity (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Liquidity [Abstract] | |||
Net (loss) income | $ 3,907 | $ (4,028) | |
Working capital deficit | 6,200 | ||
Accumulated deficit | 28,722 | 31,979 | |
Cash and cash equivalents | 1,592 | 1,548 | $ 918 |
Net Cash Provided by (Used in) Operating Activities | $ 6,444 | $ 5,987 |