| Subsequent Events | NOTE 3 - SUBSEQUENT EVENTS Issuance of Common Stock On October 19, 2017, the Company conducted
a forward split of its common stock, par value $0.0001, which increased shares held by FCCG to 8,000,000 shares. On October 20,
2017, the Company completed its initial public offering and issued 2,000,000 additional shares of its common stock at an offering
price of $12.00 per share, for an aggregate amount of $24,000,000 (the “ Offering The Reorganization Transactions In connection with the closing of the Offering,
the Company completed the following transactions, which are referred to collectively as the “Reorganization Transactions”: Effective October 20, 2017, FCCG contributed
two of its operating subsidiaries, Fatburger North America Inc. (“Fatburger”) and Buffalo’s Franchise Concepts
Inc., (“Buffalo’s”) to the Company in exchange for an unsecured promissory note with a principal balance of $30,000,000,
bearing interest at a rate of 10.0% per annum, and maturing in five years (the “Related Party Debt”). The contribution
was consummated pursuant to a Contribution Agreement between the Company and FCCG. Approximately $9,500,000 of the net proceeds
from the Offering was used to repay a portion of Related Party Debt owed to FCCG. FCCG agreed in March 2017 to acquire Homestyle
Dining LLC from Metromedia Company and its affiliate (“Metromedia”) pursuant to a Membership Interest Purchase Agreement,
as amended, which provided for a cash purchase price of $10,550,000 to be paid at closing. Effective October 20, 2017, the Company
provided approximately $10,550,000 of the net proceeds from the Offering to FCCG to consummate the acquisition of Homestyle Dining
LLC. In exchange, the Company received full ownership in the Homestyle Dining operating subsidiaries: Ponderosa Franchising Company,
Bonanza Restaurant Company, Ponderosa International Development, Inc. and Puerto Rico Ponderosa, Inc. (collectively, “ Ponderosa Effective October 20, 2017, the Company entered
into a Tax Sharing Agreement with FCCG that provides that FCCG will, to the extent permitted by applicable law, file consolidated
federal, California and Oregon (and possibly other jurisdictions where revenue is generated, at FCCG’s election) income tax
returns with the Company and its subsidiaries. The Company will pay FCCG the amount that its tax liability would have been had
it filed a separate return. To the extent the Company’s required payment exceeds its share of the actual combined income
tax liability (which may occur, for example, due to the application of FCCG’s net operating loss carryforwards), the Company
will be permitted, in the discretion of a committee of its board of directors comprised solely of directors not affiliated with
or interested in FCCG, to pay such excess to FCCG by issuing an equivalent amount of its common stock in lieu of cash, valued at
the fair market value at the time of the payment. In addition, an inter-company receivable of approximately $13,175,000 due from
FCCG to Fatburger and Buffalo’s will be applied first to reduce such excess income tax payment obligation to FCCG under the
Tax Sharing Agreement. On October 20, 2017, the Company granted stock
options to purchase 367,500 shares under the 2017 Omnibus Equity Incentive Plan to directors and employees, each with an exercise
price equal to $12.00 per share and subject to a three-year vesting requirement. Agreement to Purchase Hurricane Grill &
Wings On November 14, 2017, the Company entered
into a Membership Interest Purchase Agreement (the “Agreement”) to purchase all of the right, title and interest in
and to the membership interests of Hurricane AMT, LLC, a Florida limited liability corporation (“Hurricane”) for a
purchase price of $12,500,000. Hurricane is the franchisor of Hurricane Grill & Wings and Hurricane BTW Restaurants. The original
Hurricane Grill & Wings opened in Fort Pierce, Florida in 1995 and has expanded to over 60 restaurant locations in Alabama,
Arizona, Colorado, Florida, Georgia, Kansas, New York, and Texas. |
