Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Apr. 19, 2021 | Jun. 30, 2020 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | BurgerFi International, Inc. | ||
Entity Central Index Key | 0001723580 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Common Stock, Shares Outstanding | 17,888,476 | ||
Entity Public Float | $ 69,972,352 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes | ||
Entity File Number | 001-38417 | ||
Entity Tax Identification Number | 82-2418815 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 105 U.S. Highway 1 | ||
Entity Address, City or Town | North Palm Beach | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33408 | ||
City Area Code | (561) | ||
Local Phone Number | 844-5528 | ||
Common Stock Par Value 0.0001 Per Share 2 [Member] | |||
Document Information [Line Items] | |||
Trading Symbol | BFI | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Security Exchange Name | NASDAQ | ||
Redeemable Warrants Each Exercisable For One Share Of Common Stock At An Exercise Price of 11.50 per share 1 [Member] | |||
Document Information [Line Items] | |||
Trading Symbol | BFIIW | ||
Title of 12(b) Security | Redeemable warrants, each exercisable for one share of common stock at an exercise price of $11.50 per share | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash, including Variable interest entities of $0 and $3, respectively | $ 36,720,000 | $ 1,690,000 |
Cash - restricted - Note 2 | 3,663,000 | 727,000 |
Accounts receivable, net - Note 1 | 718,000 | 517,000 |
Inventory | 268,000 | 249,000 |
Deferred income taxes | 713,000 | |
Asset held for sale | 732,000 | |
Other current assets | 1,607,000 | 416,000 |
TOTAL CURRENT ASSETS | 44,421,000 | 3,599,000 |
PROPERTY & EQUIPMENT, net - Note 3 – including variable interest entities of $0 and $853, respectively | 8,004,000 | 6,301,000 |
DUE FROM RELATED COMPANIES - Note 6 | 74,000 | 3,611,000 |
GOODWILL – including variable interest entities of $0 and $398, respectively | 119,542,000 | 398,000 |
INTANGIBLE ASSETS | 116,824,000 | 235,000 |
OTHER ASSETS | 251,000 | 238,000 |
TOTAL ASSETS | 289,116,000 | 14,382,000 |
CURRENT LIABILITIES | ||
Accounts payable - trade | 1,678,000 | 1,265,000 |
Accrued expense | 1,203,000 | 545,000 |
Gift card liability | 430,000 | 586,000 |
Revolving line of credit | 3,012,000 | 2,317,000 |
Notes payable - current – variable interest entities – no recourse to general credit of the Company | 1,438,000 | 1,207,000 |
Notes payable - current | 1,438,000 | |
Current portion deferred initial franchise fees - Note 1 | 490,000 | 438,000 |
Other deposit | 907,000 | |
TOTAL CURRENT LIABILITIES | 9,158,000 | 6,358,000 |
NON-CURRENT LIABILITIES | ||
Deferred initial franchise fees, net of current portion - Note 1 | 2,816,000 | 4,250,000 |
Due to related companies - Note 6 | 271,000 | |
Deferred rent | 29,000 | 996,000 |
Derivative warrant liability | 16,516,000 | |
Notes Payable | 1,522,000 | 0 |
TOTAL LIABILITIES | 30,041,000 | 11,875,000 |
COMMITMENTS AND CONTINGENCIES - Note 9 | ||
Stockholders'/Members' equity | ||
MEMBERS’ EQUITY - Before non-controlling interest, including variable interest entities of $47 as of December 31, 2019 | 2,492,000 | |
MEMBERS’ EQUITY - Non-controlling interest | 15,000 | |
Common stock (Successor), $0.0001 par value, 100,000,000 shares authorized, 17,541,838 shares issued and outstanding as of December 31, 2020 | 2,000 | |
Additional paid-in capital (Successor) | 261,298,000 | |
Retained deficit (Successor) | (2,225,000) | |
TOTAL STOCKHOLDERS' EQUITY | 259,075,000 | 2,507,000 |
TOTAL LIABILITIES AND STOCKHOLDERS'/MEMBERS’ EQUITY | $ 289,116,000 | $ 14,382,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) $ in Thousands | Dec. 31, 2019USD ($) |
Cash | $ 1,690 |
Property & equipment, net | 6,301 |
Goodwill | 398 |
Variable Interest Entity, Primary Beneficiary | |
Cash | 3 |
Property & equipment, net | 853 |
Goodwill | 398 |
Members’ equity - before non-controlling interest | $ 47 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 15, 2020 | Dec. 31, 2019 | |
REVENUE | |||
TOTAL REVENUE | $ 1,704,000 | $ 32,578,000 | $ 33,555,000 |
Restaurant level operating expenses: | |||
Food, beverage and paper costs | 370,000 | 6,567,000 | 6,316,000 |
Labor and related expenses | 321,000 | 6,269,000 | 7,167,000 |
Other operating expenses | 323,000 | 6,007,000 | 5,271,000 |
Occupancy and related expenses | 33,000 | 2,707,000 | 2,149,000 |
General and administrative expenses | 857,000 | 6,925,000 | 7,230,000 |
Share-based compensation expense | 818,000 | ||
Depreciation and amortization expense | 348,000 | 1,062,000 | 825,000 |
Brand development and co-op advertising expense | 34,000 | 2,283,000 | 1,732,000 |
Gain on disposal of property and equipment | (2,000) | (184,000) | |
TOTAL OPERATING EXPENSES | 3,104,000 | 31,818,000 | 30,506,000 |
OPERATING (LOSS) INCOME | (1,400,000) | 760,000 | 3,049,000 |
Gain on extinguishment of debt | 791,000 | ||
Gain on change in value of warrant liability | 5,597,000 | ||
Interest expense | (6,000) | (125,000) | (79,000) |
Income before income taxes | 4,982,000 | 635,000 | 2,970,000 |
Income tax benefit | (366,000) | ||
Net Income | 5,348,000 | 635,000 | 2,970,000 |
Net Income Attributable to Non-Controlling Interests (predecessor) | 20,000 | 35,000 | |
Net Income Attributable to common shareholders (successor) and Controlling Interests (predecessor) | $ 5,348,000 | 615,000 | 2,935,000 |
Weighted average common shares outstanding | |||
Basic | 17,541,838 | ||
Diluted | 21,426,115 | ||
Net (loss) income per common share | |||
Basic | $ 0.30 | ||
Diluted | $ (0.01) | ||
Restaurant Sales [Member] | |||
REVENUE | |||
TOTAL REVENUE | $ 1,350,000 | 23,966,000 | 23,183,000 |
Royalty and Other Fees [Member] | |||
REVENUE | |||
TOTAL REVENUE | 255,000 | 6,116,000 | 7,369,000 |
Terminated Franchise Fees [Member] | |||
REVENUE | |||
TOTAL REVENUE | 693,000 | 825,000 | |
Royalty - Brand Development and Co-op [Member] | |||
REVENUE | |||
TOTAL REVENUE | 74,000 | 1,441,000 | 1,720,000 |
Initial Franchise Fees [Member] | |||
REVENUE | |||
TOTAL REVENUE | $ 25,000 | $ 362,000 | $ 458,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders'/Members' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjusted Balance | Controlling Interest | Controlling InterestCumulative Effect, Period of Adoption, Adjusted Balance | Noncontrolling Interest | Noncontrolling InterestCumulative Effect, Period of Adoption, Adjusted Balance | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) |
Balances at beginning at Dec. 31, 2018 | $ 4,808 | $ 3,606 | $ 4,828 | $ 3,626 | $ (20) | $ (20) | |||
Balances at beginning (ASC 606 [Member]) at Dec. 31, 2018 | (1,202) | (1,202) | |||||||
Net Income | 2,970 | 2,935 | 35 | ||||||
Contributions | 594 | 594 | |||||||
Distributions | (4,663) | (4,663) | |||||||
Balances at ending at Dec. 31, 2019 | 2,507 | 2,492 | 15 | ||||||
Net Income | 635 | 615 | 20 | ||||||
Distributions | (6,007) | (5,972) | $ (35) | ||||||
Balances at ending at Dec. 15, 2020 | (2,865) | $ (2,865) | |||||||
Balances at ending at Dec. 15, 2020 | 46,022 | $ 1 | $ 53,594 | $ (7,573) | |||||
Net Income | 5,348 | 5,348 | |||||||
Share-based compensation | 818 | 818 | |||||||
Stock issued in acquisition of BurgerFi | 103,680 | 1 | 103,679 | ||||||
Contingent consideration in acquisition of BurgerFi | 103,207 | 103,207 | |||||||
Balances at ending at Dec. 31, 2020 | $ 259,075 | $ 2 | $ 261,298 | $ (2,225) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 15, 2020 | Dec. 31, 2019 | |
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES | |||
Net Income | $ 5,348,000 | $ 635,000 | $ 2,970,000 |
Adjustments to reconcile net income to net cash (used in) provided by - | |||
Provision for bad debts | 133,000 | 87,000 | |
Depreciation and amortization | 348,000 | 1,062,000 | 825,000 |
Deferred income taxes | (370,000) | ||
Share-based compensation expense | 818,000 | ||
Forfeited franchise deposits | (693,000) | (825,000) | |
Gain on extinguishment of debt | (791,000) | ||
Gain on disposal of property and equipment | (2,000) | (184,000) | |
Gain on change in value of warrant liability | (5,597,000) | ||
Changes in operating assets and liabilities, net of acquisitions | |||
Accounts receivable | (339,000) | 6,000 | (128,000) |
Inventory | (8,000) | (10,000) | (127,000) |
Other assets | (552,000) | 121,000 | (191,000) |
Accounts payable - trade | (275,000) | 751,000 | (380,000) |
Accrued expenses and gift card liability | 284,000 | 218,000 | (155,000) |
Deferred franchise fees | 253,000 | 51,000 | 376,000 |
Other liabilities | (57,000) | 422,000 | 260,000 |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (938,000) | 2,696,000 | 2,528,000 |
NET CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of restaurant from franchisee | (27,210,000) | (385,000) | |
Deposit on sale | 907,000 | ||
Proceeds from deposit on potential sale of franchise/corporate owned store | 938,000 | ||
Purchase of property and equipment | (265,000) | (3,244,000) | (2,437,000) |
Advances to related companies | (74,000) | (7,863,000) | (10,601,000) |
Repayments from related companies | 11,205,000 | 11,575,000 | |
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | (27,549,000) | 620,000 | (525,000) |
NET CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds on revolving line of credit | 2,987,000 | 2,317,000 | |
Payments on revolving line of credit | (2,290,000) | ||
Note payable proceeds | 2,406,000 | ||
Payments on notes payable | (39,000) | (86,000) | |
Members’ distributions | (6,007,000) | (4,663,000) | |
Members’ contributions | 594,000 | ||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (2,943,000) | (1,838,000) | |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (28,487,000) | 373,000 | 165,000 |
CASH AND CASH EQUIVALENTS, beginning of period | 2,790,000 | 2,417,000 | 2,252,000 |
CASH AND CASH EQUIVALENTS, end of period | $ 40,383,000 | $ 2,790,000 | $ 2,417,000 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | 1. Organization On December 16, 2020 ( Basis of presentation The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). As a result of the Business Combination, the Company is the acquirer for accounting purposes and BurgerFi is the acquiree and accounting predecessor. The Company’s financial statement presentation distinguishes the Company’s financial performance into two distinct periods, the period up to the Closing Date (labeled “Predecessor”) and the period including and after that date (labeled “Successor”). The Business Combination was accounted for using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting that is based on the fair value of the net assets acquired. Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. See Note 5 – Business Combinations for a discussion of the estimated fair values of assets and liabilities recorded in connection with the Company’s acquisition of BURGERFI. As a result of the application of the acquisition method of accounting as of the Closing Date of the Business Combination, the accompanying Consolidated Financial Statements include a black line division which indicates that the Predecessor and Successor reporting entities shown are presented on a different basis and are therefore, not comparable. The historical financial information of Opes Acquisition Corp. prior to the Business Combination (a special purpose acquisition company, or “SPAC”) has not been reflected in the Predecessor financial statements as these historical amounts have been determined to be not useful information to a user of the financial statements. SPACs deposit the proceeds from their initial public offerings into a segregated trust account until a business combination occurs, where such funds are then used to pay consideration for the acquiree and/or to pay stockholders who elect to redeem their shares of common stock in connection with the business combination. The operations of a SPAC, until the closing of a business combination, other than income from the trust account investments and transaction expenses, are nominal. Accordingly, no other activity in the Company was reported for periods prior to December 16, 2020 besides BURGERFI’s operations as Predecessor. Reclassifications Certain reclassifications have been made to the prior year presentation to conform to the current year presentation. Nature of operations The Company, through its wholly owned subsidiary BurgerFi International, LLC, (a Delaware limited liability company) and additional Subsidiaries (collectively, “BurgerFi”) is the exclusive franchisor of the BurgerFi concept. The BurgerFi concept is a quick service restaurant offering handcrafted natural Angus gourmet burgers, hot dogs, chicken, fresh cut fries, craft beers, wine and freshly prepared custards in an urban environment. Franchises are sold in restricted geographical territories. BurgerFi has prepared its Franchise Disclosure Document as required by the United States Federal Trade Commission and has registered or will register in those states where required in order to legally sell its franchises. It is currently the BurgerFi’s plan to offer franchises for sale in those states where demographics of the population represent a demand for the services. BurgerFi grants franchises to independent operators who in turn pay an initial franchise fee, royalties and other fees as stated in the franchise agreement. Store activity for the years ended December 31, 2020 and 2019 is as follows: Successor Predecessor 2020 2019 Franchised stores, beginning of year 117 109 Stores opened during the year 9 15 Stores transferred/sold to the Company (2 ) 0 Stores closed during the year (22 ) (7 ) Franchised stores, end of year 102 117 Successor Predecessor 2020 2019 Company-owned stores, beginning of year 13 11 Stores opened during the year 2 3 Stores transferred/sold to the Company 2 0 Stores closed during the year - (1 ) Company-owned stores, end of year 17 13 End of year store totals included two and five international stores at December 31, 2020 and 2019, respectively. Liquidity and COVID-19 Our primary sources of liquidity are cash from operations, cash and cash equivalents on hand. As of December 31, 2020, we maintained a cash and cash equivalents balance of approximately $40 million. Our primary requirements for liquidity are to fund our working capital needs, operating and finance lease obligations, capital expenditures and general corporate needs. Our requirements for working capital are generally not significant because our guests pay for their food and beverage purchases in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payment is due to the supplier of such items. Our ongoing capital expenditures are principally related to opening new BurgerFis, existing BurgerFi capital investments (both for remodels and maintenance), as well as investments in our digital and corporate infrastructure. We believe our existing cash and cash equivalents, combined with the actions we have taken in response to COVID-19, will be sufficient to fund our operating and finance lease obligations, capital expenditures, and working capital needs for at least the next 12 months and the foreseeable future. On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was signed into law. From May 4, 2020 to May 11, 2020, the Company has applied for and has received approximately $2.2 million from stimulus loans under the SBA Paycheck Protection Program of the CARES Act. The application for these funds requires the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further requires the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of these funds, and the forgiveness of the loan attendant to these funds, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on our future adherence to the forgiveness criteria. The Company intends to apply to the lender for forgiveness of the stimulus loan. The Company’s eligibility for the stimulus loan, expenditures that qualify toward forgiveness, and the final balance of the stimulus loan that may be forgiven are subject to audit and final approval by the SBA. While the Company believes the loan was properly obtained, there can be no assurance regarding the outcome of an SBA review. The stimulus loans are being accounted for under ASC 470, Debt, Principles of Consolidation The Successor Consolidated Financial Statements include all amounts of the Company and its subsidiaries. The Predecessor Consolidated Financial Statements include all amounts of BURGERFI and its subsidiaries. All intercompany balances and transactions have been eliminated. We also consider for consolidation entities in which we have 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 consolidated financial statements present the consolidated financial position, results from operations and cash flows of BurgerFi International, Inc., and its wholly owned subsidiaries. All material balances and transactions between the entities have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting year. Actual results could differ from those estimates. Segment Reporting The Company owns and operates BurgerFi restaurants in the United States, and also have domestic and international franchisees. The chief operating decision makers (the “CODMs”) are the Company’s President, Chief Operating Officer and Chief Financial Officer. As the CODMs review financial performance and allocate resources at a consolidated level on a recurring basis, the Company has one operating reporting segment and one reportable segment. Variable Interest Entities For VIE(s), the Company assesses whether the Company is the primary beneficiary as prescribed by the accounting guidance on the consolidation of VIE. The primary beneficiary of a VIE is the party that has the power to direct the activities that most significantly impact the performance of the entity and the obligation to absorb the losses or the right to receive the benefits that could potentially be significant to the entity. The Company has evaluated its business relationships with franchisees to identify potential VIEs. While the Company holds a variable interest in some of the franchised restaurants owned by an affiliated entity, the Company is not the primary beneficiary since it does not have the power to direct the activities of these franchised restaurants. As a result, the Company does not consolidate those VIEs. At December 31, 2020, the Company is a guarantor for six operating leases for those entities, BF Secaucus, LLC; BF Tallahassee, LLC; BF Fort Myers, LLC; BF NY82, LLC; BF Naples Tamiami, LLC; and BF Naples Immokalee. Additionally, the Company is a guarantor for a lease for The Burger Bunch, LLC, an unrelated party. The Company may become responsible for the payments under its guarantee. The Company has determined that its maximum exposure to loss on the VIEs that it is not the primary beneficiary on results from the lease guarantees amounts to approximately $6,200,000. Additionally, on April 23, 2018 (the “Takeover Date”), the Company entered into an asset purchase and management agreement (the “APM”) with a multiple unit franchisee. The APM allowed the Company to acquire the assets of two of the franchisee’s restaurants for the consideration of the Company making the monthly principal and interest payments on the franchisee’s three bank loans through 2027. The closing on asset purchase would occur only when the debt was paid in full. The outstanding principal on the loans was approximately $1,291,000 on the Takeover Date. The APM allowed the Company to take over the management and operation of the two restaurants with full control over all operational decision making. Under the APM, the Company provided all capital for all of the restaurants’ expenditures it deemed appropriate, and paid all costs and expenses associated with the operations. All cash flow and profits or losses derived from the operations after the Takeover Date belong to the Company. The Company had evaluated the franchisee which is a party to the APM for VIE accounting under ASC 810 “Consolidation” and had determined that the franchisee under the APM was a VIE and that the Company was the primary beneficiary, effective on the Takeover Date until December 31, 2020. During 2020 BurgerFi negotiated a release of the lien from the banks on the equipment in these restaurants. Also, during 2020, BurgerFi was able to have the leases on the restaurants assigned to BurgerFi. On December 31, 2020, BurgerFi had discontinued the management of the two restaurants by termination of the APM and the franchise agreements. As a result of the discontinuation of the termination the franchisee was deconsolidated on December 31, 2020 which resulted in $791,000 gain on extinguishment of debt. The acquisition was accounted for as a business combination under the acquisition method as of the Takeover Date, and accordingly, the results of its operations are included in the Company’s consolidated financial statements from that date until December 31, 2020 as noted above . Net sales for the consolidated VIE for the Successor period from December 16, 2020 to December 31, 2020 and for the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019 were $ 200,000 , $ and $ , respectively. Net income (loss) for the consolidated VIE for the Successor period from December 16, 2020 to December 31, 2020 and for the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019 was $ 50,000 , $ and ( $ ) , respectively . The consideration was the fair value of the three loans at the Takeover Date and the assets are recorded based on the fair values of the assets acquired, net of current liabilities as of the Takeover Date as follows (in thousands): Cash $ 39 Accounts Receivable 1 Inventory 28 Other current assets 24 Property & equipment 1,126 Other assets 4 Current liabilities (330 ) Net tangible and identifiable intangible assets acquired 892 Goodwill 397 Net assets acquired $ 1,289 Included in the consolidated financial statements are the following from variable interest entities for which the Company was the primary beneficiary (in thousands): Predecessor December 31, 2019 Cash $ 3 Property and equipment 853 Goodwill 398 Total Assets $ 1,254 Current notes payable $ 1,207 Notes payable – net of current portion — Total liabilities 1,207 Total members’ equity 47 Total Liabilities and Members’ Equity $ 1,254 The three loans were collateralized by the VIEs’ assets and the creditors of the loans did not have recourse to the general credit of the Company. The carrying value of the VIEs assets which had collateralized the loans are noted above. Cash and Cash Equivalents The Company considers highly liquid investments with maturities of three months or less as cash equivalents. Cash and cash equivalents also include approximately $11,000 and $339,000 as of December 31, 2020 and 2019, respectively, of amounts due from commercial credit card companies, such as Visa, MasterCard, Discover, and American Express, which are generally received within a few days of the related transactions. At times, the balances in the cash and cash equivalents accounts may exceed federal insured limits. The Federal Deposit Insurance Corporation insures eligible accounts up to $250,000 per depositor at each financial institution. The Company limits uninsured balances to only large, well-known financial institutions and believes that it is not exposed to significant credit risk on cash and cash equivalents. Restricted Cash Restricted cash consists of (i) cash collected (net of redemptions) from gift cards, (ii) cash balances for the advertising co-op, (iii) Level-up loyalty program cash collections, (iii) cash held in escrow in an amount equal to the PPP loans as required by the SBA upon a change of control, and (iii) initial franchise deposits in escrow. The Company is the custodian of these account balances, but these accounts are in place for specific, restricted purposes, which typically are resolved within twelve months. The Company classifies the restricted cash accounts as current assets. Accounts Receivable Accounts receivable consist of amounts due from franchisees for training and royalties and are stated at the amount invoiced. Accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. Management provides for probable uncollectible amounts through a charge to earnings and a credit to allowance for uncollectible accounts based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for uncollectible accounts and a credit to accounts receivable. The allowance for uncollectible accounts was approximately $0 at December 31, 2020 and $65,000 at December 31, 2019. Inventories Inventories primarily consist of food and beverages. Inventories are accounted for at lower of cost or net realizable value using the first-in, first-out (FIFO) method. Spoilage is expensed as incurred. Property and Equipment Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is provided by the straight-line method over an estimated useful life. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful life of the asset (generally up to ten years) or the term of the related lease. The estimated lives for machinery and equipment, computer equipment, furniture and fixtures, and vehicles range from five to seven years. Maintenance and repairs which are not considered to extend the useful lives of the assets are charged to operations as incurred. Expenditures for additions and improvements are capitalized. Expenditures for renewals and betterments, which materially extend the useful lives of assets or increase their productivity, are capitalized. The Company capitalizes construction costs during construction of the restaurant and will begin to depreciate them once the restaurant is placed in service. Wage costs directly related to and incurred during a restaurant’s construction period are capitalized. Interest costs incurred during a restaurant’s construction period are capitalized. Upon sale or retirement, the cost of assets and related accumulated depreciation and amortization are removed from the accounts and any resulting gains or losses are included in operating expense. Impairment of Long-Lived Assets Our long-lived assets include the Company-operated restaurant assets and related definite-lived intangible assets, which include franchise agreements and tradenames and trademarks. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the carrying amount of the asset group to future undiscounted net cash flows expected to be generated by our individual Company-operated restaurants. If the carrying amount of the long-lived asset group is not recoverable on an undiscounted cash flow basis, then impairment is recognized to the extent that the carrying amount exceeds its fair value and is included in “Impairment of long-lived assets.” Our estimates in this review process include the anticipated future cash flows from Company-operated restaurants, which is used in assessing the recoverability of the respective long-lived assets. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we used, we may be required to recognize additional impairment charges in future years. Other Intangible Assets Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: 1 to 5 years 7 to 10 years The Company reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Indefinite-lived intangible assets are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. Our annual impairment test for indefinite-lived intangible assets may be completed through a qualitative assessment to determine if the fair value of the indefinite-lived intangible assets is more likely than not greater than the carrying amount. If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value exceeds the fair value, we test for impairment using a quantitative process. If the Company determines that impairment of its intangible assets may exist, the amount of impairment loss is measured as the excess of carrying value over fair value. Our estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenue of Company-operated and franchised restaurants and the resulting cash flows. Goodwill As of December 31, 2020 and 2019, in connection with the Business Combination with BurgerFi and the APM described above, the Company has a balance of approximately $119,542,000 and $398,000, respectively, of goodwill on its consolidated balance sheet. The Company accounts for goodwill in accordance with FASB ASC No. 350, Intangibles—Goodwill and Other (“ASC 350”). ASC 350 requires goodwill to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment. The Company evaluates goodwill in the fourth quarter or more frequently if management believes indicators of impairment exist. Such indicators could include but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management conducts a quantitative goodwill impairment test. This impairment test involves comparing the fair value of the reporting unit with its carrying value (including goodwill). The Company estimates the fair values of its reporting unit using a combination of the income, or discounted cash flows approach and the market approach, which utilizes comparable companies’ data. If the estimated fair value of the reporting unit is less than its carrying value, a goodwill impairment exists for the reporting unit and an impairment loss is recorded. There were no impairments of goodwill recognized for the years ended December 31, 2020 and 2019. Share-Based Compensation The Company has granted share-based compensation awards to certain employees under the 2020 Omnibus Equity Incentive Plan (the “Plan”). The Company measures the cost of employee services received in exchange for an equity award, which may include grants of employee stock options and restricted shares, based on the fair value of the award at the date of grant. The Company recognizes share-based compensation expense over the requisite service period unless the awards are subject to performance conditions, in which case we recognize compensation expense over the requisite service period to the extent performance conditions are considered probable. The Company will determine the grant date fair value of stock options using a Black-Scholes-Merton option pricing model (the “Black-Scholes Model”). The grant date fair value of restricted share awards (“RSAs”) and performance-based awards are determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document, unless the awards are subject to market conditions, in which case we use a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. Warrant Liability The private placement warrants, consisting of the warrants exercisable under the PIPE transaction (3,000,000 shares), the private placement warrants (445,000 shares) and the working capital warrants (150,000 shares), include provisions that affect the settlement amount. Such variables are outside of those used to determine the fair value of a fixed-for-fixed instrument, and as such, the warrants are accounted for as liabilities in accordance with ASC 815-40, with changes in fair value included in the consolidated statement of operations. The liability classified warrants were priced using a Dynamic Black Scholes model. This process relies upon inputs such as shares outstanding, estimated stock prices, strike price, risk free interest rate and volatility assumptions. The warrant liability was $22,113,000 on December 16, 2020 and $16,516,000 on December 31, 2020. The change in value of warrant liability between the two measurement dates was $5,597,000 and is recognized in the consolidated statement of operations for the period from December 16, 2020 to December 31, 2020. There were no warrants outstanding in the Predecessor periods. The public warrants (11,500,000 shares) and the UPO warrants (750,000) contain no such provisions and are classified in equity. Fair Value Measurements – Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy is required to prioritize the inputs used to measure fair value. The three levels of the fair value hierarchy are described as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Restaurant Acquisitions and Dispositions The Company accounts for the acquisition of restaurants from franchisees using the acquisition method of accounting for business combinations. The acquisition method of accounting involves the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed. This allocation process requires the use of estimates and assumptions to derive fair values and to complete the allocation. The excess of the purchase price over the fair values of the assets acquired and liabilities assumed represents goodwill derived from the acquisition. Net Income per Common Share Net income per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. The Company has considered the effect of (1) warrants outstanding to purchase 15,095,000 shares of common stock and (2) 750,000 shares of common stock and warrants to purchase 750,000 shares of common stock in the unit purchase option, and (3) 1,300,000 shares of restricted stock grants in the calculation of income per share. The historical partnership equity structure of BurgerFi did not include outstanding member units and as such, earnings per share information is omitted for the Predecessor periods. Reconciliation of Net Income per Common Share B asic and diluted income (loss) per common share is calculated as follows: Successor December 16, 2020 through December 31, 2020 Numerator: Net income available to common shareholders $ 5,348,000 Reversal of Gain on change in value of warrant liability (5,597,000 ) Net loss available to common shareholders - diluted $ (249,000 ) Denominator: Weighted-average shares outstanding 17,541,838 Effect of dilutive securities Restricted stock grants and warrants 3,468,872 UPOs 415,405 Diluted weighted-average shares outstanding 21,426,115 Basic net income per common share $ 0.30 Diluted net loss per common share $ (0.01 ) Concentration of Risk BurgerFi had no customers which accounted for 10% or more of consolidated revenue for the Successor period from December 16, 2020 to December 31, 2020 and for the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019. As of December 31, 2020, BurgerFi had one main in-line distributor of food, packaging and beverage products, excluding breads, that provided approximately 95% of BurgerFi restaurants purchasing in the U.S. and four additional in-line distributors of Coca-Cola products and beer, wine and liquor that, in the aggregate, provided approximately 5% of the BurgerFi restaurant purchasing in the U.S. We believe that our vulnerability to risk concentrations related to significant vendors and sources of our raw materials is mitigated as we believe that there are other vendors who would be able to service our requirements. However, if a disruption of service from any of our main in-line distributors was to occur, we could experience short-term increases in our costs while distribution channels were adjusted. BurgerFi restaurants are principally located throughout the United States. BurgerFi has company owned and franchise owned locations in 23 states, with the largest number in Florida. We believe the risk of geographic concentration is not significant. We could be adversely affected by changing consumer preferences resulting from concerns over nutritional or safety aspects of beef, chicken, french fries or other products we sell or the effects of food safety events or disease outbreaks. The Company is subject to credit risk through its accounts receivable consisting primarily of amounts due from franchisees for royalties and franchise fees. This concentration of credit risk is mitigated, in part, by the number of franchisees and the short-term nature of the franchise receivables. New Accounting Standards Adopted Fair Value Measurement In August 2018, the FASB issued new guidance on disclosure requirements for fair value measurements. The objective of the new guidance is to provide additional information about assets and liabilities measured at fair value in the statement of financial position or disclosed in the notes to financial statements. New incremental disclosure requirements include the amount of fair value hierarchy level 3 changes in unrealized gains and losses and the range and weighted average used to develop significant unobservable inputs for level 3 fair value measurements. The Company adopted this guidance during the 2020. The adoption of this guidance did not have a material impact on our consolidated financial statements. Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers On January 1, 2019, the Company adopted ASC 606, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2019. The Company elected a practical expedient to aggregate the effect of all contract modifications that occurred before the adoption date, which did not have a material impact to the consolidated financial statements. Results for reporting periods beginning on or after January 1, 2019 are presented under ASC 606. Upon transition, on January 1, 2019, we recorded a decrease to opening members’ equity of $1,201,546, with a corresponding decrease of $348,730 in current deferred initial franchise fees liability, and an increase of $1,550,276 in long-term deferred initial franchise fee liabilities. Revenue Recognition Revenue consists of restaurant sales and franchise licensing revenue. Generally, revenue is recognized as performance obligations tr |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2020 | |
Restricted Cash And Cash Equivalents [Abstract] | |
Restricted Cash | 2. Restricted cash consisted of the following as of (in thousands): Successor Predecessor 2020 2019 PPP amount held in escrow $ 2,237 $ — Cash proceeds from Business Combination held back for working capital reconciliation 996 - Gift cards purchased 415 505 Advertising co-op funds — 159 LevelUp loyalty program 15 63 Total Restricted Cash $ 3,663 $ 727 |
Property & Equipment
Property & Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Property & Equipment | 3. Property and equipment consisted of the following (in thousands): Successor Predecessor 2020 2019 Leasehold improvements $ 5,477 $ 5,724 Machinery & equipment 1,360 2,821 Computer equipment 208 560 Furniture & fixtures 792 1,278 Vehicles 215 50 8,052 10,433 Less: Accumulated depreciation and amortization (48 ) (4,132 ) Property and equipment – net $ 8,004 $ 6,301 Depreciation expense for the Successor period from December 16, 2020 to December 31, 2020 was $48,000. Depreciation expense for the Predecessor period from January 1, 2020 to December 15, 2020 and for the twelve-month period ended December 31, 2019, was $1,025,000 and $795,000, respectively. In conjunction with the Business Combination, the basis of all property and equipment was recognized at fair value in purchase accounting. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 4. Intangible Assets The following is a summary of the components of intangible assets and the related amortization expense: . Successor December 31, 2020 Predecessor December 31, 2019 Intangible Assets at December 31, 2020 (in thousands) Amount Accumulated Amortization Net Carrying Value Amount Accumulated Amortization Net Carrying Value Franchise agreements $ 24,839 $ 147 $ 24,692 $ — $ — $ — Trade names / trademarks 83,033 115 82,918 25 — 25 Liquor license 235 — 235 210 — 210 Reef Kitchens license agreement 8,882 37 8,845 — — — VegeFi product 135 1 134 — — — $ 117,124 $ 300 $ 116,824 $ 235 $ — $ 235 Liquor license is considered to have an indefinite life and is reviewed for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. No impairments were recognized for the years ended December 31, 2020 and 2019 Amortization expense for the Successor period from December 16, 2020 to December 31, 2020 was $300,000. The intangible assets for the Predecessor period were determined to be indefinite life intangibles. As such, no amortization expense was recognized for the period from January 1, 2020 to December 15, 2020 and for the twelve-month period ended December 31, 2019. The estimated aggregate amortization expense for intangible assets over the next five years ending December 31 and thereafter is as follows: (in thousands): Successor 2021 $ 7,218 2022 7,218 2023 7,218 2024 7,218 2025 7,218 Thereafter 80,499 Total 116,589 |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combinations / Acquisitions | 5. Business Combinations December 16, 2020 Acquisition of BurgerFi International, LLC On December 16, 2020, the Company consummated the Business Combination. This acquisition qualified as a business combination under ASC 805. Accordingly, the Company recorded all assets acquired and liabilities assumed at their acquisition-date fair values, with any excess recognized as goodwill. The aggregate value of the consideration paid by OPES in the Business Combination was approximately $236.9 million. Consideration Paid (in thousands) Cash $ 30,000 Stock 103,680 Contingent consideration 103,207 Total Consideration $ 236,887 Total consideration of $236,887,000 is represented in the above table for the acquisition of BurgerFi. The total consideration includes a) a cash payment of $30,000,000, b) the issuance of 6,603,773 common stock shares valued at approximately $103,680,000, c) contingent earnout consideration (Contingent Consideration) valued at approximately $103,207,000. Contingent Consideration The members of BurgerFi may be entitled to an additional 9,356,459 shares of Successor common stock if certain stock price targets are met by the Successor Company following the Business Combination (“Earnout Share Consideration”) on a pro-rata basis based on their pre-closing ownership percentages in BurgerFi International, LLC, subject to the Company achieving certain share price targets in each of the following post-Closing periods (each an “Earnout Tranche”), as follows: a. If prior to the second anniversary of the Closing, the last reported closing price of Post-Combination Company common stock in any 20 trading days within any consecutive 30 trading day period is greater than or equal to $19.00 per share, the Post-Combination Company shall issue to Members 3,947,368 shares of common stock, based on a deemed price of $19.00 per share; b. If prior to the third anniversary of the Closing, the last reported closing price of Post-Combination Company common stock in any 20 trading days within any consecutive 30 trading day period is greater than or equal to $22.00 per share, the Post-Combination Company shall issue to Members 3,409,091 shares of common stock, based on a deemed price of $22.00 per share; and c. If prior to the third anniversary of the Closing, the last reported closing price of Post-Combination Company common stock in any 20 trading days within any consecutive 30 trading day prior is greater than or equal to $25.00 per share, the Post-Combination Company shall issue to Members 2,000,000 shares of common stock, based on a deemed price of $25.00 per share. The fair values of the Contingent Consideration were determined using the trading price of the Company’s common stock at Closing Date and using a Monte Carlo simulation model. The contingent consideration is assessed to be non-compensatory and recorded in additional paid-in capital as reflected in the consolidated statement of changes in stockholders’ / members’ equity. The input variables are noted in the table below: Successor 2020 Risk-free interest rate 0.37 % Expected life in years 3 Expected volatility 60 % Expected dividend yield (a) 0 % (a) The Monte Carlo method assumes a reinvestment of dividends. The Monte Carlo simulation model utilized multiple input variables to estimate the probability that the stock price targets Based on the features of the earnout, a Monte-Carlo Simulation was used to value the Contingent Consideration. The traded price of the common stock was simulated in each trial using Geometric Brownian Motion, and the simulated path was then analyzed to determine which, if any, earnout tranches would be payable within the given trial. The estimated payments were calculated by multiplying the shares earned for a given tranche by the simulated price as of the date that the earnout tranche was earned. The result was present valued using the risk-free rate. The average of all trials resulted in the valuation conclusion, which was determined to be approximately $ . The following table is preliminary and represents the allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition-date fair values. (in thousands) Fair Value December 16, 2020 Cash $ 2,179 Cash - restricted 611 Accounts receivable 378 Inventory 260 Other current assets 1,235 Property and equipment 8,520 Intangible assets 117,124 Other assets 199 Accounts payable - trade (1,952 ) Accrued expenses (1,057 ) Gift card liability (292 ) Revolving line of credit (3,012 ) Current portion of deferred franchise fees (521 ) Other deposit (907 ) Deferred initial franchise fees, net of current portion (2,531 ) Notes payable (2,889 ) Fair Value of Tangible and Identifiable Intangible assets and liabilities assumed $ 117,345 Consideration paid 236,887 Goodwill $ 119,542 The assessment of fair value is preliminary and is based on information that was available to management and through the end of the fiscal year. If additional information of events or circumstances that existed at the acquisition date becomes available to management related to assets acquired or liabilities assumed subsequent to this preliminary assessment of fair value but not later than one year after the date of the acquisition, measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date. Goodwill is recognized as the excess of consideration over the net assets acquired of BurgerFi and represents the value derived by BurgerFi’s market share and expected growth in the market. Acquired personal property assets consist of leasehold improvements, kitchen equipment, and restaurant furniture and fixtures, computer and point of sale systems, audio and video equipment (“Personal Property”), which were valued on in-use basis. The Company enlisted a third-party consultant to assist in the valuation of the Personal Property (the “Valuation”). Identifiable intangible assets acquired consist of customer relationships of franchise agreements, Tradenames and trademarks, Liquor licenses, Reef Kitchens license agreements and the VegeFi product. The above were valued using the multi-period excess earnings method. Identifiable intangible assets acquired consist of customer relationships of $24,839,000, trade names of $83,033,000 and Reef Kitchens license agreements of $8,882,000. The customer relationships were valued using the multi-period excess earnings method. The Company determined the useful life of the customer relationships to be 7 years. This is based on the average remaining terms of our franchise agreements with our franchisees. The trade names were valued using the relief-from-royalty method. The Company determined the useful life of the trade names to be 30 years. The Reef Kitchens license agreements and the customer relationships were valued using the multi-period excess earnings method. The Company determined the useful life of the Reef Kitchens license agreements to be 10 years. The identifiable intangible assets are amortized using the straight-line method over their respective useful lives. The accounting for this Business Combination is considered provisional because we have not finalized certain aspects of the purchase price allocation including the valuation of certain acquired customer-related intangible assets. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 6. Related Party Transactions The Company is affiliated with various entities through common control and ownership. The accompanying consolidated balance sheets reflect amounts related to periodic advances between the Company and these entities for working capital and other needs as due from related companies or due to related companies, as appropriate. The amounts due from related companies are not expected to be repaid within one year and accordingly, are classified as non-current assets in the accompanying consolidated balance sheets. These advances are unsecured and non-interest bearing. There were approximately $74,000 and $3,611,000 included as due from related companies, and $0 and $271,000 included as due to related companies in the consolidated balance sheets as of December 31, 2020 and 2019, respectively For the Successor period from December 16, 2020 to December 31, 2020 and the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019, the Company received royalty revenue from franchisees related through common control and ownership totaling approximately $17,000, and $322,000 and $1,182,000, respectively. The Company pays certain payroll and administrative fees on behalf of the entities under common ownership. A management fee is then billed to the respective entities to cover these costs. Management fees are included as reductions to the related operating expenses. For the Successor period from December 16, 2020 to December 31, 2020 and the Predecessor period from January 1, 2020 to December 15, 2020, these fees were included in the royalty revenue charged to these entities. For the twelve-month period ended December 31, 2019, the Company billed approximately $60,000 of management fees. The Company leases building space for its corporate office from an entity under common ownership with a significant shareholder. This lease has a 36 month term, effective January 1, 2020. For the Successor period from December 16, 2020 to December 31, 2020 and the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019, rent expense was approximately $1,000, $159,000 and $160,000, respectively. |
Acquisitions - Franchisee_Store
Acquisitions - Franchisee/Stores | 12 Months Ended |
Dec. 31, 2020 | |
Business Acquisition [Line Items] | |
Business Combinations / Acquisitions | 5. Business Combinations December 16, 2020 Acquisition of BurgerFi International, LLC On December 16, 2020, the Company consummated the Business Combination. This acquisition qualified as a business combination under ASC 805. Accordingly, the Company recorded all assets acquired and liabilities assumed at their acquisition-date fair values, with any excess recognized as goodwill. The aggregate value of the consideration paid by OPES in the Business Combination was approximately $236.9 million. Consideration Paid (in thousands) Cash $ 30,000 Stock 103,680 Contingent consideration 103,207 Total Consideration $ 236,887 Total consideration of $236,887,000 is represented in the above table for the acquisition of BurgerFi. The total consideration includes a) a cash payment of $30,000,000, b) the issuance of 6,603,773 common stock shares valued at approximately $103,680,000, c) contingent earnout consideration (Contingent Consideration) valued at approximately $103,207,000. Contingent Consideration The members of BurgerFi may be entitled to an additional 9,356,459 shares of Successor common stock if certain stock price targets are met by the Successor Company following the Business Combination (“Earnout Share Consideration”) on a pro-rata basis based on their pre-closing ownership percentages in BurgerFi International, LLC, subject to the Company achieving certain share price targets in each of the following post-Closing periods (each an “Earnout Tranche”), as follows: a. If prior to the second anniversary of the Closing, the last reported closing price of Post-Combination Company common stock in any 20 trading days within any consecutive 30 trading day period is greater than or equal to $19.00 per share, the Post-Combination Company shall issue to Members 3,947,368 shares of common stock, based on a deemed price of $19.00 per share; b. If prior to the third anniversary of the Closing, the last reported closing price of Post-Combination Company common stock in any 20 trading days within any consecutive 30 trading day period is greater than or equal to $22.00 per share, the Post-Combination Company shall issue to Members 3,409,091 shares of common stock, based on a deemed price of $22.00 per share; and c. If prior to the third anniversary of the Closing, the last reported closing price of Post-Combination Company common stock in any 20 trading days within any consecutive 30 trading day prior is greater than or equal to $25.00 per share, the Post-Combination Company shall issue to Members 2,000,000 shares of common stock, based on a deemed price of $25.00 per share. The fair values of the Contingent Consideration were determined using the trading price of the Company’s common stock at Closing Date and using a Monte Carlo simulation model. The contingent consideration is assessed to be non-compensatory and recorded in additional paid-in capital as reflected in the consolidated statement of changes in stockholders’ / members’ equity. The input variables are noted in the table below: Successor 2020 Risk-free interest rate 0.37 % Expected life in years 3 Expected volatility 60 % Expected dividend yield (a) 0 % (a) The Monte Carlo method assumes a reinvestment of dividends. The Monte Carlo simulation model utilized multiple input variables to estimate the probability that the stock price targets Based on the features of the earnout, a Monte-Carlo Simulation was used to value the Contingent Consideration. The traded price of the common stock was simulated in each trial using Geometric Brownian Motion, and the simulated path was then analyzed to determine which, if any, earnout tranches would be payable within the given trial. The estimated payments were calculated by multiplying the shares earned for a given tranche by the simulated price as of the date that the earnout tranche was earned. The result was present valued using the risk-free rate. The average of all trials resulted in the valuation conclusion, which was determined to be approximately $ . The following table is preliminary and represents the allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition-date fair values. (in thousands) Fair Value December 16, 2020 Cash $ 2,179 Cash - restricted 611 Accounts receivable 378 Inventory 260 Other current assets 1,235 Property and equipment 8,520 Intangible assets 117,124 Other assets 199 Accounts payable - trade (1,952 ) Accrued expenses (1,057 ) Gift card liability (292 ) Revolving line of credit (3,012 ) Current portion of deferred franchise fees (521 ) Other deposit (907 ) Deferred initial franchise fees, net of current portion (2,531 ) Notes payable (2,889 ) Fair Value of Tangible and Identifiable Intangible assets and liabilities assumed $ 117,345 Consideration paid 236,887 Goodwill $ 119,542 The assessment of fair value is preliminary and is based on information that was available to management and through the end of the fiscal year. If additional information of events or circumstances that existed at the acquisition date becomes available to management related to assets acquired or liabilities assumed subsequent to this preliminary assessment of fair value but not later than one year after the date of the acquisition, measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date. Goodwill is recognized as the excess of consideration over the net assets acquired of BurgerFi and represents the value derived by BurgerFi’s market share and expected growth in the market. Acquired personal property assets consist of leasehold improvements, kitchen equipment, and restaurant furniture and fixtures, computer and point of sale systems, audio and video equipment (“Personal Property”), which were valued on in-use basis. The Company enlisted a third-party consultant to assist in the valuation of the Personal Property (the “Valuation”). Identifiable intangible assets acquired consist of customer relationships of franchise agreements, Tradenames and trademarks, Liquor licenses, Reef Kitchens license agreements and the VegeFi product. The above were valued using the multi-period excess earnings method. Identifiable intangible assets acquired consist of customer relationships of $24,839,000, trade names of $83,033,000 and Reef Kitchens license agreements of $8,882,000. The customer relationships were valued using the multi-period excess earnings method. The Company determined the useful life of the customer relationships to be 7 years. This is based on the average remaining terms of our franchise agreements with our franchisees. The trade names were valued using the relief-from-royalty method. The Company determined the useful life of the trade names to be 30 years. The Reef Kitchens license agreements and the customer relationships were valued using the multi-period excess earnings method. The Company determined the useful life of the Reef Kitchens license agreements to be 10 years. The identifiable intangible assets are amortized using the straight-line method over their respective useful lives. The accounting for this Business Combination is considered provisional because we have not finalized certain aspects of the purchase price allocation including the valuation of certain acquired customer-related intangible assets. |
Franchisee/Stores [Member] | |
Business Acquisition [Line Items] | |
Business Combinations / Acquisitions | 7. In April 2020, the Company entered into an asset purchase agreement with a franchisee to purchase substantially all of the assets of a franchised store for an aggregate purchase price of $1,250,000. This purchase price consisted of: (a) $650,000 cash paid at closing and (b) a $600,000 promissory note to the franchisee (in thousands) Predecessor Inventory $ 15 Property & equipment 250 Net tangible and identifiable intangible assets acquired 265 Goodwill 985 Net assets acquired $ 1,250 |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets [Abstract] | |
Other Assets | 8 . Other Assets Other assets consisted of the following (in thousands): Successor Predecessor December 31, 2020 2019 Lease Acquisition Costs, net of accumulated amortization $ 18 $ 48 Deposits and other non-current assets 233 190 Other assets $ 251 $ 238 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Leases The Company has entered into various operating leases for each of the restaurants owned and operated by BFRM and for its corporate headquarters. For the Successor period from December 16, 2020 to December 31, 2020 and the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019, rent expense was approximately $40,000, $2,819,000 and $2,281,000, respectively. These lease agreements expire on various dates through 2026 and have renewal options. Approximate future minimum payments on these operating leases for the years ended December 31 are as follows (in thousands): 2021 $ 3,029 2022 3,329 2023 3,369 2024 3,047 2025 3,071 Thereafter 25,506 Sale Commitment In February 2020, the Company entered into an asset purchase agreement with an unrelated third party for the sale of substantially all of the assets used in connection with the operation of BF Dania Beach, LLC for an aggregate purchase price of $1,299,000. During January to April 2020, the Company received three cash deposits totaling $906,500 in connection with this transaction. The closing of this transaction has been delayed due additional negotiation that has been on-going through the report date of April 28, 2021.In the event the transaction is terminated, the Company will keep operating the restaurant, and return the $906,500 to the unrelated third-party purchaser. Assets used in the operations of BF Dania Beach, LLC totaling $732,000 have been classified as held for sale in the December 31, 2020 balance sheet. Contingencies BurgerFi International, LLC filed a lawsuit against a franchisee and its principals seeking declaratory judgments and damages in an amount to be proven at trial for various breaches of the applicable franchise agreements resulting from the defendants’ closure of a restaurant, their failure to open a second restaurant, and their operational defaults at the closed restaurant. In April 2016, the defendants filed a counterclaim, asserting that they had no responsibility for their losses, and instead, alleged that the Company engaged in breach of contract, fraud, misrepresentation, conversion in connection with the operation of the restaurant, and various other allegations, seeking damages of over $5 million. The case is pending before the court. On December 30, 2016, the court stayed the case pending the resolution of bankruptcy filings made by some of the defendants. No further action has occurred. A franchisee filed a suit against BFI seeking unspecified damages in connection with plaintiff’s execution of franchise agreements for the development of 11 BurgerFi restaurants in certain specified trade areas in New York and Connecticut. Plaintiff alleges that BFI fraudulently induced the franchisee to enter into these agreements, On December 1, 2019, a complaint was filed by a former officer of the Company (“Plaintiff”) against BurgerFi International, LLC for certain alleged breaches of an employment agreement. BurgerFi International, LLC filed a motion to dismiss the complaint on February 13, 2020. On May 20, 2020, the motion to dismiss was heard being granted in part and denied in part. The portion of the complaint not dismissed was answered by BurgerFi International, LLC with affirmative defenses raised on July 7, 2020.The plaintiff served various discovery requests (including notices of non-party subpoenas) on July 9, 2020 as well as a motion to strike BurgerFi International, LLC’s affirmative defenses on July 16, 2020. BurgerFi International, LLC filed objections to the non-party subpoenas on July 20, 2020. defenses on July 16, 2020. BurgerFi International, LLC filed objections to the non-party subpoenas on July 20, 2020. On September 11, 2020, a Motion to Dismiss was heard by the Court and certain claims were dismissed. The Complaint now involves claims for alleged Breach of Contract (Count I) and alleged Action for Equitable Relief Including an Accounting and Constructive Lien (Count II). On July 8, 2020, the Company received a letter from an attorney hired on behalf of a former employee of the Company. This former employee was terminated for cause on May 5, 2020. This letter claims that the former employee was terminated wrongfully by the Company. The Company is of the opinion that allegations in this letter lack merit. We have reported the claim to our insurance carrier and outside counsel has been retained. Our counsel sent a letter to this former employee’s attorney lawyer denying all claims and the parties met for mediation on September 4, 2020 but were unable to resolve this matter We feel that all claims are meritless, and we plan to vigorously defend these allegations. On February 22, 2021, the Company received correspondence from an attorney hired on behalf of a former officer of the Company claiming that the Company wrongfully terminated the employee in violation of the Florida Whistleblower statute. The Company does not believe the claim has any merit and has retained counsel to represent them. The parties are discussing a possible settlement and mediation. On March 3, 2021, the Company received a letter from an attorney representing the franchisee that is in the process of purchasing a BurgerFi restaurant. The letter was sent in response to the Company’s demand letter to the franchisee requesting that he pays the balance of the purchase price and execute the franchise agreement that permits the operation of the restaurant. The franchisee has refused to do both and is now claiming that the purchase price was verbally lowered. In addition, the franchisee attorney’s letter claims that the Company owes his client monies resulting from the franchisee’s purchase of equipment in reliance on the Company’s supposed verbal representation to use the franchisee’s marketing services. Both of the franchisee’s claims are false and the Company expects to vigorously defend such allegations. Management is unable to determine the likelihood of a loss or range of loss, if any, which may result from the cases described above, therefore, no contingent liability has been recorded as of December 31, 2020. The Company is subject to other legal proceedings and claims that arise during the normal course of business. Management believes that any liability, in excess of applicable insurance coverages or accruals, which may result from these claims, would not be significant to the Company’s financial position or results of operations. |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Line of Credit | 10. Line of Credit Effective July 13, 2018, the Company entered into a $2,000,000 revolving line of credit agreement (“LOC”) with a bank. The LOC’s original maturity date was July 13, 2020 and has been extended to July 13, 2021. On October 31, 2019, the LOC was amended to increase the amount available under the LOC from $2,000,000 to $5,000,000. The Company has an outstanding balance on the revolving line credit of $3,012,000 and $2,317,000 as of December 31, 2020 and 2019, respectively. Prior to December 16, 2020, the majority member of the Company and his Family Trust were guarantors of, and the Family Trust were the pledger of collateral, for the Company’s obligations to the bank under the line of credit agreement. The annual interest on advances under the LOC is equal to the LIBOR Daily Floating rate plus 0.75%. See Note 16. |
Notes payable
Notes payable | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | 1 1 . Notes Payable Notes Payable (in thousands) Successor Predecessor December 31, 2020 December 31, 2019 On May 11, 2020 the Company received loan proceeds in the amount of $2,237 under the Paycheck Protection Program (“PPP”). The loans and accrued interest are forgivable after eight weeks, as long as, the Company uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintain its payroll levels. The amount of loan forgiveness will be reduced if the Company terminates employees or reduces salaries during the eight-week period. The unforgiven portion of the PPP loans are payable over two years at an interest rate of 1%, with a deferral of payments for the first seven months. $ 2,237 $ — Installment note payable to an individual, issued in connection with the Company’s April 2020 acquisition, monthly payments of $9, over a seven-year amortization including 7% interest, with a maturity date of June 1, 2024. $ 555 $ — Installment note payable to bank, monthly payments of $9, including interest at 7.75%, principal and interest due at the earlier of, September 23, 2024 or the date of the Company’s termination of the APM (see Note 1).This note is secured by equipment, and is guaranteed by the franchisee under the APM, its members and their affiliates. As of December 31, 2019, this note was in default and classified as current. The Company elected not to continue payment while negotiating with the banks to release the lien on the restaurant assets which the Company was managing under the APM. No recourse to the general credit of the Company. $ — $ 468 Installment note payable to bank, monthly payments of $4, including interest at 5.3%, principal and interest due at the earlier of May 17, 2027 or the date of the Company’s termination of the APM (see Note 1). This note was secured by equipment, guaranteed by the franchisee under the APM, its members and their affiliates. As of December 31, 2019, this note is in default and classified as current. The Company elected not to continue payment while negotiating with the banks to release the lien on the restaurant assets which the Company was managing under the APM. No recourse to the general credit of the Company. — 258 Installment note payable to bank, monthly payments of $3, including interest at 5.0%, principal and interest due the earlier of August 4, 2026 or the date of the Company’s termination of the APM (see Note 1). This note is secured by equipment, guaranteed by the franchisee under the APM, its members and their affiliates. As of December 31, 2019, this note was in default and classified as current. No recourse to the general credit of the Company. — 409 Other notes payable No recourse to the general credit of the Company. 168 72 Total notes payable $ 2,960 $ 1,207 Less: current portion (1,438 ) (1,207 ) Total notes payable - long-term portion $ 1,522 $ — |
Supplemental Disclosure of Nonc
Supplemental Disclosure of Noncash Activities | 12 Months Ended |
Dec. 31, 2020 | |
Noncash Or Part Noncash Acquisition Net Nonmonetary Assets Acquired Liabilities Assumed [Abstract] | |
Supplemental Disclosure of Noncash Activities | 1 2 . Supplemental Disclosure of Noncash Activities As described in Note 1, on April 1, 2020, the Company acquired a restaurant from a franchisee, with financing on a note payable of $600,000. As described in Note 5, consideration issued in the business combination included shares of stock valued at $103,680,000, and contingent consideration valued at $103,207,000. |
Income Taxes (Successor)
Income Taxes (Successor) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes (Successor) | 13. The provision for (benefit) from income taxes is set forth below (in thousands): Successor December 16, 2020 Through December 31, 2020 Current: U.S. Federal $ 4 State - Foreign - Current tax provision 4 Deferred: U.S. Federal (314 ) State (56 ) Foreign - Deferred tax provision (benefit) (370 ) Income tax provision (benefit) $ (366 ) Deferred tax assets (liabilities) are set forth below (in thousands): Year Ended December 31, 2020 Deferred tax assets: Allowance for doubtful accounts $ 33 Fixed assets (1,876 ) Intangible assets (87 ) Goodwill (20 ) Deferred franchise fees 752 Deferred rent 7 Stock compensation 203 Accrued expenses — Accrued paid time off 21 Unrealized gain/loss on disposal of assets 3 Transaction costs 127 Net operating losses 1,550 Total net Deferred Tax Assets $ 713 The Company has determined that no valuation allowance on any of its deferred tax assets was necessary as of December 31, 2020 As of December 31, 2020, the Company’s federal net operating loss carryforwards for income tax purposes was $6,944,000 which can be carried forward indefinitely. The current portion of refundable income taxes was $215 as of December 31, 2020. There were no long-term refundable income taxes as of December 31, 2020. The reconciliation of income tax computed at the U.S. federal statutory rate of 21% to reported income tax is set forth below: Successor December 16, 2020 Through December 31, 2020 Income tax provision at the U.S. federal statutory rate $ 1,046 Permanent differences (181 ) Change in derivative liability (1,175 ) State taxes (tax effected) (56 ) Total tax expense (benefit) $ (366 ) |
Stockholders' Equity (Successor
Stockholders' Equity (Successor) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity (Successor) | 14 . STOCKHOLDERS’ EQUITY (Successor) In conjunction with the Business Combination, all membership interests that were in existence for the Predecessor were acquired by the Successor on December 16, 2020. The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the Company’s common stock are entitled to one vote for each share. • • • The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. At December 31, 2020 and 2019, there were no shares of preferred stock issued or outstanding. The Company exchanged 675,000 UPO units for 283,670 common shares in a cashless exercise in February 2021. Warrants The Public Warrants became exercisable 30 days after the completion of the Business Combination; provided that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● at any time during the exercise period; ● upon a minimum of 30 days’ prior written notice of redemption; and ● if, and only if, the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders. ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. The Placement Warrants are identical to the Public Warrants, except that the Placement Warrants and the common stock issuable upon the exercise of the Placement Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Private Warrants are identical to the Public Warrants, except that the Private Warrants and the common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants may be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Due to this provision, the Private Warrants are accounted for as liabilities. The Working Capital Warrants are identical to the Public Warrants, except that the Working Capital Warrants and the common stock issuable upon the exercise of the Working Capital Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Working Capital Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Working Capital Warrants are held by someone other than the initial purchasers or their permitted transferees, the Working Capital Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Unit Purchase Option The Company has an outstanding Unit Purchase Option Agreement with EarlyBirdCapital (and its designees), up to 750,000 Units (Units include 1 common share and 1 warrant per Unit) exercisable at $10.00 per Unit. The unit purchase option may be exercised for cash or on a cashless basis, at the holder’s option, and expires on March 17, 2023. The option grants to holders demand and “piggyback” rights for periods of five and seven years, respectively, from March 13, 2018 with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. The Company will bear all fees and expenses attendant to registering the securities, other than underwriting commissions which will be paid for by the holders themselves. The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the event of a stock dividend, or the Company’s recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted for issuances of common stock at a price below its exercise price. The Company exchanged 675,000 UPO units (which included a cashless conversion of the warrants to common shares, as a part of the unit) for 283,670 common shares in a cashless exercise in February 2021. BurgerFi Acquisition Shares The Company issued 6,603,774 common shares to the former members’ of BurgerFi as part of the Acquisition Agreement. This is included in the consideration as discussed in Note 5. Share-Based Compensation The Company has the ability to grant stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and performance compensation awards to current or prospective employees, directors, officers, consultants or advisors. During 2020, the Company approved the 2020 Omnibus Equity Incentive Plan (the “Plan”). The Plan was established to benefit the Company and its stockholders, by assisting the Company to attract, retain and provide incentives to key management employees, directors, and consultants of the Company, and to align the interests of such service providers with those of the Company’s stockholders. Accordingly, the Plan provides for the granting of Non-qualified Stock Options, Incentive Stock Options, Restricted Stock Awards, Restricted Stock Unit Awards, Stock Appreciation Rights, Performance Stock Awards, Performance Unit Awards, Unrestricted Stock Awards, Distribution Equivalent Rights or any combination of the foregoing. The date the Plan became effective. common stock As of December 31, 2020, there were approximately 700,000 shares of common stock available for future grants under the 2020 Plan. Restricted Shares The Company grants RSAs with service, performance and market conditions. The RSAs granted with service conditions generally vest over 4 years. The market conditions include an index to the market value of the stock price of BurgerFi, and the performance conditions are based on key performance indicators, as identified in the employment agreements. The fair value of Restricted Shares granted is determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document. The following table summarizes activity of Restricted Shares during 2020 (there was no activity prior to December 16, 2020): Number of Restricted Shares Weighted Average Grant Date Fair Value Granted on December 16, 2020 1,300,000 $ 15.30 Vested (50,000 ) 15.70 Forfeited — — Non-vested at December 31, 2020 1,250,000 $ 15.28 The total fair value of Restricted Shares that vested in 2020 was $785,000. As of December 31, 2020, there was approximately $19,000,000 of total unrecognized compensation cost related to unvested restricted stock or performance stock awards to be recognized over a weighted average period of 4-5 years. The unrecognized portion of share-based compensation for unvested Market Condition shares (included in above) is approximately $927,000 over 2.96 years. As detailed below, the fair value of the Market Condition shares was determined using a Monte Carlo simulation model. Performance Shares The Company grants performance-based awards (restricted shares) to certain officers and key employees. The vesting of these awards is contingent upon meeting one or more defined operational or financial goals (a performance condition) or common stock share prices (a market condition). The fair values of the performance condition awards granted for the Successor period from December 16, 2020 to December 31, 2020 were determined using the fair market value of the Company’s common stock on the date of grant. Share-based compensation expense recorded for performance condition awards is reevaluated at each reporting period based on the probability of the achievement of the goal. The achievement of this goal was not probable as of December 31, 2020 and therefore no expense was recognized. The fair value of market condition awards granted for the Successor period from December 16, 2020 to December 31, 2020 were estimated using the Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that the market conditions will be achieved and is applied to the trading price of our common stock on the date of grant. The input variables are noted in the table below: Successor 2020 Risk-free interest rate 0.18 % Expected life in years 3 Expected volatility 65.9 % Expected dividend yield (a) 0 % (a)The Monte Carlo method assumes a reinvestment of dividends. Share-based compensation expense is recorded ratably for market condition awards during the requisite service period and is not reversed, except for forfeitures, at the vesting date regardless of whether the market condition is met. During the Successor period, $33,000, representing a fair value of $10.45 per share, was recognized ratably as share-based compensation expense for the market condition awards. Service Condition Shares The Company grants service-based awards (restricted shares) to certain officers and key employees. The vesting of these awards is contingent upon meeting the requisite service period. The fair value of restricted stock awards is determined using the publicly-traded price of our common stock on the grant date. The fair value of option awards is calculated using the Black-Scholes option-pricing model. The Black-Scholes model requires us to make assumptions and judgments about the variables used in the calculation, including the expected term, expected volatility, risk-free interest rate, dividend rate and service period. The following table summarizes activity of the restricted shares during 2020 (there was no activity prior to December 16, 2020): Performance Condition Service Condition Market Condition Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Granted 950,000 $ 15.70 250,000 $ 15.70 100,000 $ 10.45 Vested — — (50,000 ) 15.70 — — Forfeited — — — — — — Non-vested at December 31, 2020 950,000 $ 15.70 200,000 $ 15.70 100,000 $ 10.45 Share-based Compensation Total share-based compensation and the related income tax benefit recognized in the Company’s consolidated statements of operations were as follows: Successor (in thousands) Year Ended December 31, 2020 Performance condition awards $ — Service condition awards 785 Market condition awards 33 Share-based compensation 818 Less: Income tax benefit — Share-based compensation, net of income tax benefit $ 818 Warrant Liability The private placement warrants, consisting of the warrants exercisable under the PIPE transaction (3,000,000 shares), the private placement warrants (445,000 shares) and the working capital warrants (150,000 shares), include provisions that affect the settlement amount. Such variables are outside of those used to determine the fair value of a fixed-for-fixed instrument, and as such, the warrants are accounted for as liabilities in accordance with ASC 815-40, with changes in fair value included in the consolidated statement of operations. The liability classified warrants were priced using a Dynamic Black Scholes model. This process relies upon inputs such as shares outstanding, estimated stock prices, strike price, risk free interest rate and volatility assumptions. The warrant liability was $22,113,000 on December 16, 2020 and $16,516,000 on December 31, 2020. The change in value of warrant liability between the two measurement dates was $5,597,000 and is recognized in the consolidated statement of operations for the period from December 16, 2020 to December 31, 2020. There were no warrants outstanding in the Predecessor periods. The public warrants (11,500,000 shares) and the UPO warrants (750,000) contain no such provisions and are classified in equity. The following is an analysis of changes in the derivative liability: Level 3 (Black Scholes) Liability at 12-16-2020 $ 22,113,000 Gain from 12-16-2020 to 12-31-2020 $ (5,597,000) Liability at 12-31-2020 $ 16,516,000 The fair value of the private warrant and working capital warrants are determined using the publicly-traded price of our common stock on the valuation dates of $15.70 on December 16, 2020 and $13.69 on December 31, 2020. The fair value is calculated using the Black-Scholes option-pricing model. The Black-Scholes model requires us to make assumptions and judgments about the variables used in the calculation, including the expected term, expected volatility, risk-free interest rate, dividend rate and service period. The fair value of private share warrants for the Successor period from December 16, 2020 to December 31, 2020 were estimated using a Dynamic Black Sholes model. This process relies upon inputs such as shares outstanding, estimated stock prices, strike price, risk free interest rate and volatility assumptions. The calculated warrant price for private warrants was $6.15 and $4.60 on December 16, 2020 and December 31, 2020, respectively. The input variables for the Black Scholes are noted in the table below: Successor 2020 Risk-free interest rate 0.36 % Expected life in years 5 Expected volatility 30.0 % Expected dividend yield 0 % |
Geographical Information
Geographical Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Geographical Information | 15. Geographic Information Revenue by geographic area for the Successor period from December 16, 2020 to December 31, 2020 and the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019 is as follows: Successor Predecessor (in thousands) December 16, 2020 through December 31, 2020 January 1, 2020 through December 15, 2020 Year Ended December 31, 2019 United States $ 1,702 $ 32,520 $ 33,428 Other Countries 2 58 127 Total $ 1,704 $ 32,578 $ 33,555 Revenue is shown based on the geographic location of our franchisees. Our long-lived assets are primarily located in the United States. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. The Company has evaluated events and transactions that occurred between December 31, 2020 through April 28, 2021, which is the date that the consolidated financial statements were available to be issued for possible recognition or disclosure in the consolidated financial statements. In January 2021, the Company paid its revolving line of credit to Bank of America. The balance at the time of payoff was $3,012,000. The Company has begun the process of applying for PPP loan forgiveness in February of 2021, however, there is no assurance that the PPP loans will be forgiven. |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization | Organization On December 16, 2020 ( |
Basis of presentation | Basis of presentation The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). As a result of the Business Combination, the Company is the acquirer for accounting purposes and BurgerFi is the acquiree and accounting predecessor. The Company’s financial statement presentation distinguishes the Company’s financial performance into two distinct periods, the period up to the Closing Date (labeled “Predecessor”) and the period including and after that date (labeled “Successor”). The Business Combination was accounted for using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting that is based on the fair value of the net assets acquired. Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. See Note 5 – Business Combinations for a discussion of the estimated fair values of assets and liabilities recorded in connection with the Company’s acquisition of BURGERFI. As a result of the application of the acquisition method of accounting as of the Closing Date of the Business Combination, the accompanying Consolidated Financial Statements include a black line division which indicates that the Predecessor and Successor reporting entities shown are presented on a different basis and are therefore, not comparable. The historical financial information of Opes Acquisition Corp. prior to the Business Combination (a special purpose acquisition company, or “SPAC”) has not been reflected in the Predecessor financial statements as these historical amounts have been determined to be not useful information to a user of the financial statements. SPACs deposit the proceeds from their initial public offerings into a segregated trust account until a business combination occurs, where such funds are then used to pay consideration for the acquiree and/or to pay stockholders who elect to redeem their shares of common stock in connection with the business combination. The operations of a SPAC, until the closing of a business combination, other than income from the trust account investments and transaction expenses, are nominal. Accordingly, no other activity in the Company was reported for periods prior to December 16, 2020 besides BURGERFI’s operations as Predecessor. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior year presentation to conform to the current year presentation. |
Nature of operations | Nature of operations The Company, through its wholly owned subsidiary BurgerFi International, LLC, (a Delaware limited liability company) and additional Subsidiaries (collectively, “BurgerFi”) is the exclusive franchisor of the BurgerFi concept. The BurgerFi concept is a quick service restaurant offering handcrafted natural Angus gourmet burgers, hot dogs, chicken, fresh cut fries, craft beers, wine and freshly prepared custards in an urban environment. Franchises are sold in restricted geographical territories. BurgerFi has prepared its Franchise Disclosure Document as required by the United States Federal Trade Commission and has registered or will register in those states where required in order to legally sell its franchises. It is currently the BurgerFi’s plan to offer franchises for sale in those states where demographics of the population represent a demand for the services. BurgerFi grants franchises to independent operators who in turn pay an initial franchise fee, royalties and other fees as stated in the franchise agreement. Store activity for the years ended December 31, 2020 and 2019 is as follows: Successor Predecessor 2020 2019 Franchised stores, beginning of year 117 109 Stores opened during the year 9 15 Stores transferred/sold to the Company (2 ) 0 Stores closed during the year (22 ) (7 ) Franchised stores, end of year 102 117 Successor Predecessor 2020 2019 Company-owned stores, beginning of year 13 11 Stores opened during the year 2 3 Stores transferred/sold to the Company 2 0 Stores closed during the year - (1 ) Company-owned stores, end of year 17 13 End of year store totals included two and five international stores at December 31, 2020 and 2019, respectively. |
Liquidity and COVID-19 | Liquidity and COVID-19 Our primary sources of liquidity are cash from operations, cash and cash equivalents on hand. As of December 31, 2020, we maintained a cash and cash equivalents balance of approximately $40 million. Our primary requirements for liquidity are to fund our working capital needs, operating and finance lease obligations, capital expenditures and general corporate needs. Our requirements for working capital are generally not significant because our guests pay for their food and beverage purchases in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payment is due to the supplier of such items. Our ongoing capital expenditures are principally related to opening new BurgerFis, existing BurgerFi capital investments (both for remodels and maintenance), as well as investments in our digital and corporate infrastructure. We believe our existing cash and cash equivalents, combined with the actions we have taken in response to COVID-19, will be sufficient to fund our operating and finance lease obligations, capital expenditures, and working capital needs for at least the next 12 months and the foreseeable future. On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was signed into law. From May 4, 2020 to May 11, 2020, the Company has applied for and has received approximately $2.2 million from stimulus loans under the SBA Paycheck Protection Program of the CARES Act. The application for these funds requires the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further requires the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of these funds, and the forgiveness of the loan attendant to these funds, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on our future adherence to the forgiveness criteria. The Company intends to apply to the lender for forgiveness of the stimulus loan. The Company’s eligibility for the stimulus loan, expenditures that qualify toward forgiveness, and the final balance of the stimulus loan that may be forgiven are subject to audit and final approval by the SBA. While the Company believes the loan was properly obtained, there can be no assurance regarding the outcome of an SBA review. The stimulus loans are being accounted for under ASC 470, Debt, |
Principles of Consolidation | Principles of Consolidation The Successor Consolidated Financial Statements include all amounts of the Company and its subsidiaries. The Predecessor Consolidated Financial Statements include all amounts of BURGERFI and its subsidiaries. All intercompany balances and transactions have been eliminated. We also consider for consolidation entities in which we have 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 consolidated financial statements present the consolidated financial position, results from operations and cash flows of BurgerFi International, Inc., and its wholly owned subsidiaries. All material balances and transactions between the entities have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting year. Actual results could differ from those estimates. |
Segment Reporting | Segment Reporting The Company owns and operates BurgerFi restaurants in the United States, and also have domestic and international franchisees. The chief operating decision makers (the “CODMs”) are the Company’s President, Chief Operating Officer and Chief Financial Officer. As the CODMs review financial performance and allocate resources at a consolidated level on a recurring basis, the Company has one operating reporting segment and one reportable segment. |
Variable Interest Entities | Variable Interest Entities For VIE(s), the Company assesses whether the Company is the primary beneficiary as prescribed by the accounting guidance on the consolidation of VIE. The primary beneficiary of a VIE is the party that has the power to direct the activities that most significantly impact the performance of the entity and the obligation to absorb the losses or the right to receive the benefits that could potentially be significant to the entity. The Company has evaluated its business relationships with franchisees to identify potential VIEs. While the Company holds a variable interest in some of the franchised restaurants owned by an affiliated entity, the Company is not the primary beneficiary since it does not have the power to direct the activities of these franchised restaurants. As a result, the Company does not consolidate those VIEs. At December 31, 2020, the Company is a guarantor for six operating leases for those entities, BF Secaucus, LLC; BF Tallahassee, LLC; BF Fort Myers, LLC; BF NY82, LLC; BF Naples Tamiami, LLC; and BF Naples Immokalee. Additionally, the Company is a guarantor for a lease for The Burger Bunch, LLC, an unrelated party. The Company may become responsible for the payments under its guarantee. The Company has determined that its maximum exposure to loss on the VIEs that it is not the primary beneficiary on results from the lease guarantees amounts to approximately $6,200,000. Additionally, on April 23, 2018 (the “Takeover Date”), the Company entered into an asset purchase and management agreement (the “APM”) with a multiple unit franchisee. The APM allowed the Company to acquire the assets of two of the franchisee’s restaurants for the consideration of the Company making the monthly principal and interest payments on the franchisee’s three bank loans through 2027. The closing on asset purchase would occur only when the debt was paid in full. The outstanding principal on the loans was approximately $1,291,000 on the Takeover Date. The APM allowed the Company to take over the management and operation of the two restaurants with full control over all operational decision making. Under the APM, the Company provided all capital for all of the restaurants’ expenditures it deemed appropriate, and paid all costs and expenses associated with the operations. All cash flow and profits or losses derived from the operations after the Takeover Date belong to the Company. The Company had evaluated the franchisee which is a party to the APM for VIE accounting under ASC 810 “Consolidation” and had determined that the franchisee under the APM was a VIE and that the Company was the primary beneficiary, effective on the Takeover Date until December 31, 2020. During 2020 BurgerFi negotiated a release of the lien from the banks on the equipment in these restaurants. Also, during 2020, BurgerFi was able to have the leases on the restaurants assigned to BurgerFi. On December 31, 2020, BurgerFi had discontinued the management of the two restaurants by termination of the APM and the franchise agreements. As a result of the discontinuation of the termination the franchisee was deconsolidated on December 31, 2020 which resulted in $791,000 gain on extinguishment of debt. The acquisition was accounted for as a business combination under the acquisition method as of the Takeover Date, and accordingly, the results of its operations are included in the Company’s consolidated financial statements from that date until December 31, 2020 as noted above . Net sales for the consolidated VIE for the Successor period from December 16, 2020 to December 31, 2020 and for the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019 were $ 200,000 , $ and $ , respectively. Net income (loss) for the consolidated VIE for the Successor period from December 16, 2020 to December 31, 2020 and for the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019 was $ 50,000 , $ and ( $ ) , respectively . The consideration was the fair value of the three loans at the Takeover Date and the assets are recorded based on the fair values of the assets acquired, net of current liabilities as of the Takeover Date as follows (in thousands): Cash $ 39 Accounts Receivable 1 Inventory 28 Other current assets 24 Property & equipment 1,126 Other assets 4 Current liabilities (330 ) Net tangible and identifiable intangible assets acquired 892 Goodwill 397 Net assets acquired $ 1,289 Included in the consolidated financial statements are the following from variable interest entities for which the Company was the primary beneficiary (in thousands): Predecessor December 31, 2019 Cash $ 3 Property and equipment 853 Goodwill 398 Total Assets $ 1,254 Current notes payable $ 1,207 Notes payable – net of current portion — Total liabilities 1,207 Total members’ equity 47 Total Liabilities and Members’ Equity $ 1,254 The three loans were collateralized by the VIEs’ assets and the creditors of the loans did not have recourse to the general credit of the Company. The carrying value of the VIEs assets which had collateralized the loans are noted above. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers highly liquid investments with maturities of three months or less as cash equivalents. Cash and cash equivalents also include approximately $11,000 and $339,000 as of December 31, 2020 and 2019, respectively, of amounts due from commercial credit card companies, such as Visa, MasterCard, Discover, and American Express, which are generally received within a few days of the related transactions. At times, the balances in the cash and cash equivalents accounts may exceed federal insured limits. The Federal Deposit Insurance Corporation insures eligible accounts up to $250,000 per depositor at each financial institution. The Company limits uninsured balances to only large, well-known financial institutions and believes that it is not exposed to significant credit risk on cash and cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash consists of (i) cash collected (net of redemptions) from gift cards, (ii) cash balances for the advertising co-op, (iii) Level-up loyalty program cash collections, (iii) cash held in escrow in an amount equal to the PPP loans as required by the SBA upon a change of control, and (iii) initial franchise deposits in escrow. The Company is the custodian of these account balances, but these accounts are in place for specific, restricted purposes, which typically are resolved within twelve months. The Company classifies the restricted cash accounts as current assets. |
Accounts receivable | Accounts Receivable Accounts receivable consist of amounts due from franchisees for training and royalties and are stated at the amount invoiced. Accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. Management provides for probable uncollectible amounts through a charge to earnings and a credit to allowance for uncollectible accounts based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for uncollectible accounts and a credit to accounts receivable. The allowance for uncollectible accounts was approximately $0 at December 31, 2020 and $65,000 at December 31, 2019. |
Inventories | Inventories Inventories primarily consist of food and beverages. Inventories are accounted for at lower of cost or net realizable value using the first-in, first-out (FIFO) method. Spoilage is expensed as incurred. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is provided by the straight-line method over an estimated useful life. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful life of the asset (generally up to ten years) or the term of the related lease. The estimated lives for machinery and equipment, computer equipment, furniture and fixtures, and vehicles range from five to seven years. Maintenance and repairs which are not considered to extend the useful lives of the assets are charged to operations as incurred. Expenditures for additions and improvements are capitalized. Expenditures for renewals and betterments, which materially extend the useful lives of assets or increase their productivity, are capitalized. The Company capitalizes construction costs during construction of the restaurant and will begin to depreciate them once the restaurant is placed in service. Wage costs directly related to and incurred during a restaurant’s construction period are capitalized. Interest costs incurred during a restaurant’s construction period are capitalized. Upon sale or retirement, the cost of assets and related accumulated depreciation and amortization are removed from the accounts and any resulting gains or losses are included in operating expense. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Our long-lived assets include the Company-operated restaurant assets and related definite-lived intangible assets, which include franchise agreements and tradenames and trademarks. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the carrying amount of the asset group to future undiscounted net cash flows expected to be generated by our individual Company-operated restaurants. If the carrying amount of the long-lived asset group is not recoverable on an undiscounted cash flow basis, then impairment is recognized to the extent that the carrying amount exceeds its fair value and is included in “Impairment of long-lived assets.” Our estimates in this review process include the anticipated future cash flows from Company-operated restaurants, which is used in assessing the recoverability of the respective long-lived assets. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we used, we may be required to recognize additional impairment charges in future years. |
Other Intangible Assets | Other Intangible Assets Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: 1 to 5 years 7 to 10 years The Company reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Indefinite-lived intangible assets are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. Our annual impairment test for indefinite-lived intangible assets may be completed through a qualitative assessment to determine if the fair value of the indefinite-lived intangible assets is more likely than not greater than the carrying amount. If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value exceeds the fair value, we test for impairment using a quantitative process. If the Company determines that impairment of its intangible assets may exist, the amount of impairment loss is measured as the excess of carrying value over fair value. Our estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenue of Company-operated and franchised restaurants and the resulting cash flows. |
Goodwill | Goodwill As of December 31, 2020 and 2019, in connection with the Business Combination with BurgerFi and the APM described above, the Company has a balance of approximately $119,542,000 and $398,000, respectively, of goodwill on its consolidated balance sheet. The Company accounts for goodwill in accordance with FASB ASC No. 350, Intangibles—Goodwill and Other (“ASC 350”). ASC 350 requires goodwill to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment. The Company evaluates goodwill in the fourth quarter or more frequently if management believes indicators of impairment exist. Such indicators could include but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management conducts a quantitative goodwill impairment test. This impairment test involves comparing the fair value of the reporting unit with its carrying value (including goodwill). The Company estimates the fair values of its reporting unit using a combination of the income, or discounted cash flows approach and the market approach, which utilizes comparable companies’ data. If the estimated fair value of the reporting unit is less than its carrying value, a goodwill impairment exists for the reporting unit and an impairment loss is recorded. There were no impairments of goodwill recognized for the years ended December 31, 2020 and 2019. |
Share-Based Compensation | Share-Based Compensation The Company has granted share-based compensation awards to certain employees under the 2020 Omnibus Equity Incentive Plan (the “Plan”). The Company measures the cost of employee services received in exchange for an equity award, which may include grants of employee stock options and restricted shares, based on the fair value of the award at the date of grant. The Company recognizes share-based compensation expense over the requisite service period unless the awards are subject to performance conditions, in which case we recognize compensation expense over the requisite service period to the extent performance conditions are considered probable. The Company will determine the grant date fair value of stock options using a Black-Scholes-Merton option pricing model (the “Black-Scholes Model”). The grant date fair value of restricted share awards (“RSAs”) and performance-based awards are determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document, unless the awards are subject to market conditions, in which case we use a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. |
Warrant Liability | Warrant Liability The private placement warrants, consisting of the warrants exercisable under the PIPE transaction (3,000,000 shares), the private placement warrants (445,000 shares) and the working capital warrants (150,000 shares), include provisions that affect the settlement amount. Such variables are outside of those used to determine the fair value of a fixed-for-fixed instrument, and as such, the warrants are accounted for as liabilities in accordance with ASC 815-40, with changes in fair value included in the consolidated statement of operations. The liability classified warrants were priced using a Dynamic Black Scholes model. This process relies upon inputs such as shares outstanding, estimated stock prices, strike price, risk free interest rate and volatility assumptions. The warrant liability was $22,113,000 on December 16, 2020 and $16,516,000 on December 31, 2020. The change in value of warrant liability between the two measurement dates was $5,597,000 and is recognized in the consolidated statement of operations for the period from December 16, 2020 to December 31, 2020. There were no warrants outstanding in the Predecessor periods. The public warrants (11,500,000 shares) and the UPO warrants (750,000) contain no such provisions and are classified in equity. |
Fair Value Measurements | Fair Value Measurements – Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy is required to prioritize the inputs used to measure fair value. The three levels of the fair value hierarchy are described as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
Restaurant Acquisitions and Dispositions | Restaurant Acquisitions and Dispositions The Company accounts for the acquisition of restaurants from franchisees using the acquisition method of accounting for business combinations. The acquisition method of accounting involves the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed. This allocation process requires the use of estimates and assumptions to derive fair values and to complete the allocation. The excess of the purchase price over the fair values of the assets acquired and liabilities assumed represents goodwill derived from the acquisition. |
Net Income per Common Share | Net Income per Common Share Net income per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. The Company has considered the effect of (1) warrants outstanding to purchase 15,095,000 shares of common stock and (2) 750,000 shares of common stock and warrants to purchase 750,000 shares of common stock in the unit purchase option, and (3) 1,300,000 shares of restricted stock grants in the calculation of income per share. The historical partnership equity structure of BurgerFi did not include outstanding member units and as such, earnings per share information is omitted for the Predecessor periods. |
Reconciliation of Net Income Per Common Share | Reconciliation of Net Income per Common Share B asic and diluted income (loss) per common share is calculated as follows: Successor December 16, 2020 through December 31, 2020 Numerator: Net income available to common shareholders $ 5,348,000 Reversal of Gain on change in value of warrant liability (5,597,000 ) Net loss available to common shareholders - diluted $ (249,000 ) Denominator: Weighted-average shares outstanding 17,541,838 Effect of dilutive securities Restricted stock grants and warrants 3,468,872 UPOs 415,405 Diluted weighted-average shares outstanding 21,426,115 Basic net income per common share $ 0.30 Diluted net loss per common share $ (0.01 ) |
Concentration of Risk | Concentration of Risk BurgerFi had no customers which accounted for 10% or more of consolidated revenue for the Successor period from December 16, 2020 to December 31, 2020 and for the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019. As of December 31, 2020, BurgerFi had one main in-line distributor of food, packaging and beverage products, excluding breads, that provided approximately 95% of BurgerFi restaurants purchasing in the U.S. and four additional in-line distributors of Coca-Cola products and beer, wine and liquor that, in the aggregate, provided approximately 5% of the BurgerFi restaurant purchasing in the U.S. We believe that our vulnerability to risk concentrations related to significant vendors and sources of our raw materials is mitigated as we believe that there are other vendors who would be able to service our requirements. However, if a disruption of service from any of our main in-line distributors was to occur, we could experience short-term increases in our costs while distribution channels were adjusted. BurgerFi restaurants are principally located throughout the United States. BurgerFi has company owned and franchise owned locations in 23 states, with the largest number in Florida. We believe the risk of geographic concentration is not significant. We could be adversely affected by changing consumer preferences resulting from concerns over nutritional or safety aspects of beef, chicken, french fries or other products we sell or the effects of food safety events or disease outbreaks. The Company is subject to credit risk through its accounts receivable consisting primarily of amounts due from franchisees for royalties and franchise fees. This concentration of credit risk is mitigated, in part, by the number of franchisees and the short-term nature of the franchise receivables. |
New Accounting Standards Adopted | New Accounting Standards Adopted Fair Value Measurement In August 2018, the FASB issued new guidance on disclosure requirements for fair value measurements. The objective of the new guidance is to provide additional information about assets and liabilities measured at fair value in the statement of financial position or disclosed in the notes to financial statements. New incremental disclosure requirements include the amount of fair value hierarchy level 3 changes in unrealized gains and losses and the range and weighted average used to develop significant unobservable inputs for level 3 fair value measurements. The Company adopted this guidance during the 2020. The adoption of this guidance did not have a material impact on our consolidated financial statements. |
Revenue Recognition\Revenue from Contracts with Customers | Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers On January 1, 2019, the Company adopted ASC 606, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2019. The Company elected a practical expedient to aggregate the effect of all contract modifications that occurred before the adoption date, which did not have a material impact to the consolidated financial statements. Results for reporting periods beginning on or after January 1, 2019 are presented under ASC 606. Upon transition, on January 1, 2019, we recorded a decrease to opening members’ equity of $1,201,546, with a corresponding decrease of $348,730 in current deferred initial franchise fees liability, and an increase of $1,550,276 in long-term deferred initial franchise fee liabilities. Revenue Recognition Revenue consists of restaurant sales and franchise licensing revenue. Generally, revenue is recognized as performance obligations transfer to the customer in an amount that reflects the consideration we expect to be entitled in exchange for those goods or services. |
Restaurant Revenue | Restaurant Revenue Revenue from restaurant sales is presented net of discounts and recognized when food, beverage and retail products are sold. Sales tax collected from customers is excluded from restaurant sales and the obligation is included in sales tax payable until the taxes are remitted to the appropriate taxing authorities. Sales from our gift cards are deferred and recognized upon redemption for goods or services. Revenue is reported gross on the accompanying consolidated statements of operations with employee complimentary meals recorded as a component of labor expenses. Revenue from restaurant sales is generally paid at the time of sale. Credit cards and delivery service partners sales are generally collected shortly after the sale occurs. The revenue from electronic gift cards is deferred when purchased by the customer and revenue is recognized when the gift cards are redeemed. The Company is a Delaware limited liability company and is subject to Delaware escheatment laws. Delaware escheatment laws state that gift cards are presumed to be abandoned after five years and the balance remitted should represent the maximum cost to the issuer of merchandise. BurgerFi contracts with delivery service partners for delivery of goods and services to customers. The Company has determined that the delivery service partners are agents, and the Company is the principal. Therefore, restaurant sales through delivery services are recognized at gross sales and delivery service revenue is recorded as expense. |
Prior Period Revision | Prior Period Revision During the preparation of the consolidated financial statements for the successor period from December 16, 2020 to December 31, 2020 and predecessor period from January 1, 2020 to December 15, 2020, the Company identified certain immaterial errors related to the classification of the other restaurant sales discounts. The Company previously presented these other sales discounts as part of Labor and Related Expenses and Other Operating Expenses instead of as a reduction of Restaurant Sales in its unaudited consolidated statements of operations for the six-month periods ended June 30, 2020 and 2019, and nine-month periods ended September 30, 2020 and 2019, and its consolidated statement of operations for the year ended December 31, 2019, which resulted in overstatements of restaurant sales, labor and related expenses, and other operating expenses in certain of those periods . In accordance with SAB No.99, “Materiality”, and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the errors and determined that the related impact was not material to the Company’s financial statements for any prior annual or interim period. Accordingly, the Company revised the unaudited consolidated statements of operations for the six-month periods ended June 30, 2020 and 2019, and for the nine-month periods ended September 30, 2020 and 2019, and the consolidated statement of operations for the year ended December 31, 2019, including the related notes presented herein, as applicable. The errors did not impact operating income (loss), or net income in the consolidated statements of operations, or the consolidated balance sheets or consolidated statements of cash flows for any of those periods. A summary of the revisions to previously reported financial information is as follows: Revised Consolidated Statement of Operations Data for the six months ended June 30, 2020 (Unaudited) As Reported Adjustment As Revised Restaurant Sales $ 12,097 $ (315 ) $ 11,782 Total Revenue $ 15,864 $ (315 ) $ 15,549 Labor and Related Expenses $ 3,463 $ (315 ) $ 3,148 Total Operating Expenses $ 14,930 $ (315 ) $ 14,615 Revised Consolidated Statement of Operations Data for the nine months ended September 30, 2020 (Unaudited) As Reported Adjustment As Revised Restaurant Sales $ 18,892 $ (441 ) $ 18,451 Total Revenue $ 24,939 $ (441 ) $ 24,498 Labor and Related Expenses $ 5,482 $ (409 ) $ 5,073 Other Operating Expenses $ 4,575 $ (32 ) $ 4,543 Total Operating Expenses $ 24,832 $ (441 ) $ 24,391 Revised Consolidated Statement of Operations Data for the six months ended June 30, 2019 (Unaudited) As Reported Adjustment As Revised Restaurant Sales $ 11,977 $ (294 ) $ 11,683 Total Revenue $ 17,518 $ (294 ) $ 17,224 Labor and Related Expenses $ 3,880 $ (294 ) $ 3,586 Total Operating Expenses $ 15,021 $ (294 ) $ 14,727 Revised Consolidated Statement of Operations Data for the nine months ended September 30, 2019 (Unaudited) Restaurant Sales $ 17,641 $ (477 ) $ 17,164 Total Revenue $ 25,336 $ (477 ) $ 24,859 Labor and Related Expenses $ 5,784 $ (477 ) $ 5,307 Total Operating Expenses $ 23,181 $ (477 ) $ 22,704 Revised Consolidated Statement of Operations Data for the year ended December 31, 2019 Restaurant Sales $ 23,855 $ (672 ) $ 23,183 Total Revenue $ 34,227 $ (672 ) $ 33,555 Labor and Related Expenses $ 7,839 $ (672 ) $ 7,167 Total Operating Expenses $ 31,178 $ (672 ) $ 30,506 |
Revenue from BF Commissary | The Company’s wholly owned subsidiary, BF Commissary, LLC (“BF Commissary”), which commenced operations in 2019, produces and sells BurgerFi’s vegetable burgers to a distributer based on agreed-upon cost plus freight cost. The Company recognizes revenue upon pick-up of orders at the designated pick up points or when the distributor obtains control of the products. For the years ended December 31, 2020 and 2019, the Company recognized revenue of $851,000 and $710,000, respectively, from BF Commissary and is presented as part of restaurant sales in the consolidated statements of operations. |
Franchise Revenue | Franchise Revenue The franchise agreements require the franchisee to pay an initial, non-refundable fee of $37,500 and continuing fees based upon a percentage of sales. Owners can make a deposit equal to 50% of the total franchise fee to reserve the right to open additional locations. The remaining balance of the franchise fee is due upon signing by the franchisee of the applicable location’s lease or mortgage. Franchise agreements and deposit agreements outline a schedule for store openings. Failure to meet the schedule can result in forfeiture of deposits made. Franchise revenue is comprised of certain initial franchise fees and ongoing sales-based royalty fees from a franchised BurgerFi restaurant. Generally, the licenses granted to develop, open and operate each BurgerFi franchise in a specified territory are the predominant performance obligations transferred to the licensee in our contracts, and represent symbolic intellectual property. Ancillary promised services, such as training and assistance during the initial opening of a BurgerFi restaurant are typically combined with the licenses and considered as one performance obligation per BurgerFi franchise. Certain initial services such as site selection and lease review are considered distinct services that are recognized at a point in time when the performance obligations have been provided, generally when the BurgerFi has been opened. We determine the transaction price for each contract and allocate it to the distinct services based on their standalone selling price based on the costs to provide the service and a profit margin. The remainder of the transaction price is recognized over the remaining term of the franchise agreement once the BurgerFi restaurant has been opened. Because we are transferring licenses to access our intellectual property during a contractual term, revenue is recognized on a straight-line basis over the license term. Generally, payment for the initial franchise fee is received upon execution of the licensing agreement These payments are initially deferred and recognized as revenue as the performance obligations are satisfied. Franchise deposits received in advance for locations not expected to open within one year are classified as long-term liabilities. Forfeiture of deposits is recognized as other revenue once contracts have been terminated for failure to comply. All terminations are communicated to the franchisee in writing using formal termination letters. Revenue from sales-based royalties (i.e. royalty and other fees, brand development and advertising co-op royalty) is recognized as the related sales occur. The sales-based royalties are invoiced and collected from the franchisees on a weekly basis. Rebates from vendors received on franchisee’s sales are also recognized as revenue from sales-based royalties. The Company’s contract liabilities consist of initial franchise fees and the related direct costs, which we refer to as deferred initial franchise fees, are deferred until the franchisee begins operations. Revenue recognized during the Successor period from December 16, 2020 to December 31, 2020 and for the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019 disaggregated by type is as follows: Successor Predecessor December 16, 2020 through December 31, 2020 January 1, 2020 through December 15, 2020 Year Ended December 31, 2019 Restaurant sales $ 1,326 $ 23,139 $ 22,473 BF Commissary sales 24 827 710 Franchising revenue: Sales-based royalties 255 5,366 6,805 Rebate royalties — 750 564 Brand development and advertising co-op royalties 74 1,441 1,720 Initial franchise fees 17 272 254 Initial distinct services 8 90 204 Other revenue - terminations of franchises — 693 825 Total revenue $ 1,704 $ 32,578 $ 33,555 The following table shows the Company’s revenue disaggregated according to the timing of transfer of goods or services: Successor Predecessor December 16, 2020 through December 31, 2020 January 1, 2020 through December 15, 2020 Year Ended December 31, 2019 Revenue recognized at a point in time Restaurant revenue $ 1,326 $ 23,139 $ 22,473 BF Commissary sales 24 827 710 Royalty and other fees 255 6,116 7,369 Terminated franchise fees — 693 825 Brand development and advertising co-op royalties 74 1,441 1,720 Franchising revenue – distinct initial services 8 90 204 Total revenue recognized at a point in time $ 1,687 $ 32,306 $ 33,301 Revenue recognized over time Franchising fees 17 272 254 Total revenue recognized over time 17 272 254 Total Revenue $ 1,704 $ 32,578 $ 33,555 The aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2020 and 2019 is $3,306,000 and $4,688,000, respectively. The Company expects to recognize this amount as revenue evenly over the 10-year |
Contract Balances | Contract Balances Opening and closing balances of contract liabilities and receivables from contracts with customers for the years ended December 31, 2020 and 2019 are as follows (in thousands): Successor Predecessor 2020 2019 Franchising receivables $ 480 $ 369 Advertising co-op funds — 159 Gift card liability 430 586 Deferred revenue, current 490 438 Deferred revenue, long-term 2,816 4,250 |
Franchise Revenue | Franchise Revenue Revenue recognized during the period ended which were included in the balance of deferred franchise revenue at the beginning of the period are as follow: Successor Predecessor December 16, 2020 through December 31, 2020 January 1, 2020 through December 15, 2020 Year Ended December 31, 2019 Franchise Fees $ 41 $ 1,023 $ 1,283 An analysis of deferred revenue is as follows: Successor Predecessor Predecessor December 31, 2020 December 15, 2020 December 31, 2019 Balance, beginning of period $ 3,053 $ 4,688 $ 3,935 Initial franchise fees received 278 413 2,036 Revenue recognized for stores opened during period (25 ) (362 ) (458 ) Revenue recognized related to franchise agreement Default — (693 ) (825 ) Balance, end of period $ 3,306 $ 4,046 $ 4,688 |
Presentation of Sales Taxes | Presentation of Sales Taxes The Company collects sales tax from customers and remits the entire amount to the respective states. The Company’s accounting policy is to exclude the tax collected and remitted from revenue and cost of sales. Sales tax payable amounted to approximately $172,000 and $142,000 at December 31, 2020 and 2019, respectively, and is presented in accrued expenses and other current liabilities in the accompanying consolidated balance sheets. On June 21, 2018, the U.S. Supreme Court issued a landmark decision in South Dakota v. Wayfair. The Company has assessed the current guidance surrounding the court case and does not believe the Wayfair decision materially impacts its sales and use tax process. The Company continues to monitor changes resulting from the Wayfair decision. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash. The Company places its temporary cash investments with financial institutions and during 2020 and 2019, there were amounts on deposit in excess of federal insurance limits. |
Advertising Expenses | Advertising Expenses Advertising costs are expensed as incurred. Advertising expense for the Successor period from December 16, 2020 to December 31, 2020 was $23,000. Advertising expense for the Predecessor period from January 1, 2020 to December 15, 2020 and for the twelve-month period ended December 31, 2019 were $454,000 and $554,000, respectively. |
Brand Development Fund | Brand Development Fund The Company’s franchise agreements provide for franchisee contributions of a percentage of gross restaurant sales to a brand development fund administered by the Company. Amounts collected are required to be segregated and used for advertising and related costs, including reasonable costs of administering the fund. Contributed amounts are recognized as restricted cash. For the Successor period from December 16, 2020 to December 31, 2020, the Company had revenue of approximately $55,000 of contributions which are included in the brand development and advertising co-op royalties and approximately $35,000 of expenses incurred which are included in the brand development and Co-op advertising expenses. For the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019, the Company had approximately $1,156,000 and $1,455,000, respectively, of contributions which are included in the brand development and advertising co-op royalties and approximately $1,636,000 and $1,506,000, respectively of expenses incurred which are included in the brand development and co-op advertising expenses. |
Advertising Co-Op Fund | Advertising Co-Op Fund During 2017, the Company established an advertising co-op fund in which several of the South Florida franchises participate. The members of the co-op elect to contribute a percentage of gross restaurant sales to a fund administered by the Company. Amounts collected are required to be segregated and used for local advertising and related costs, including reasonable costs of administering the fund. Consequently, contributed amounts, net of expended funds is recognized as restricted cash. For the Successor period from December 16, 2020 to December 31, 2020, the Company had revenue of approximately $19,000 of contributions and approximately $0 of expenses incurred which are included in the brand development and co-op royalties and brand development and co-op advertising expenses, respectively. For the Predecessor period from January 1, 2020 to December 15, 2020 and for the twelve-month period ended December 31, 2019, the Company had approximately $285,000 and $265,000, respectively, of contributions and approximately $648,000 and $226,000, respectively of expenses incurred which are included in the brand development and co-op royalties and brand development and co-op advertising expenses, respectively. |
Pre-opening Costs | Pre-opening Costs The Company follows ASC Topic 720-15, “Start-up Costs”, which provides guidance on the financial reporting of start-up costs and organization costs. In accordance with this ASC Topic, costs of pre-opening activities and organization costs are expensed as incurred. Pre-opening costs expensed for the Successor period from December 16, 2020 to December 31, 2020 was $24,000. Pre-opening costs expensed for the Predecessor period from January 1, 2020 to December 15, 2020 and for the twelve-month period ended December 31, 2019 were $189,000 and $425,000, respectively. |
Deferred Rent | Deferred Rent Rent expense on non-cancelable leases containing known future scheduled rent increases or free rent periods is recorded on a straight-line basis over the respective lease term. The lease term begins when the Company has the right to control the use of the leased property and includes the initial non-cancelable lease term plus any periods covered by renewal options that the Company is reasonably assured of exercising. The difference between rent expense and rent paid is accounted for as deferred rent and is amortized over the lease term. |
Operating Leases | Operating Leases The Company leases restaurant locations that have terms expiring between December 2020 March 2035 Certain lease agreements contain one or more of the following: tenant improvement allowances, rent holidays, rent escalation clauses and/or contingent rent provisions. The Company includes scheduled rent escalation clauses for the purpose of recognizing straight-line rent. Certain of these leases require the payment of contingent rentals based on a percentage of gross revenue, as defined, and certain other rent escalation clauses are based on the change in the Consumer Price Index. The Company received cash incentives from certain landlords for specified leasehold improvements which are deferred and accreted on a straight-line basis over the related lease term as a reduction of rent expense. |
Income Taxes | Income Taxes Prior to the Business Combination, the Company, with the consent of its members, had elected to be taxed as a partnership under the provisions of the Internal Revenue code and similar state provisions. Partnerships are generally not subject to federal and state income taxes, the partners reflect their respective share of the Company’s taxable income or loss on their individual tax returns, Therefore, there was no federal income tax recorded by the Company for the year ended December 31, 2019 and the period from January 1, 2020 through December 16, 2020. The Successor company is being taxed as a corporation. The Predecessor and Successor companies were subject to state income taxes during these periods. The Company accounts for income taxes under the asset and liability method. A deferred tax asset or liability is recognized whenever there are (1) future tax effects from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (2) operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the years in which those differences are expected to be recovered or settled. Deferred tax assets are recognized to the extent the Company believes these assets will more likely than not be realized. In evaluating the realizability of deferred tax assets, the Company considers all available positive and negative evidence, including the interaction and the timing of future reversals of existing temporary differences, projected future taxable income, recent operating results and tax-planning strategies. When considered necessary, a valuation allowance is recorded to reduce the carrying amount of the deferred tax assets to their anticipated realizable value. The Company records uncertain tax positions on the basis of a two-step process whereby we first determine if it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured for purposes of financial statement recognition as the largest amount of benefit that is greater than 50% likely of being realized upon being effectively settled. Interest accrued for uncertain tax positions, if any, is charged to “Interest expense.” Penalties accrued for uncertain tax positions are charged to “General and administrative.” |
New Accounting Pronouncements | New Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”) which requires lessees to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months and disclose certain information about the leasing arrangements. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. As an emerging growth company, this guidance will be effective for our fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of the adoption of the new standard on the consolidated financial statements. The FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“Topic 326”) in June 2016, subsequently amended by various standard updates. This guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information when determining credit loss estimates and requires financial assets to be measured net of expected credit losses at the time of initial recognition. As an emerging growth company, this guidance will be effective for our fiscal years beginning after December 15, 202 2 . In December 2019, the FASB issued ASU 2019-12, Income Taxes (“Topic 740”) as part of its Simplification Initiative. This guidance provides amendments to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for annual and interim reporting periods beginning after December 15, 2020, and early adoption is permitted. The Company is currently evaluating the full impact this guidance will have on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (“Topic 848”) In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), an amendment that simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The amendment simplifies accounting for convertible instruments by removing major separation models required under current accounting guidance. In addition, the amendment removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception, and also simplifies the diluted earnings per share calculation in certain areas. The amendment is effective beginning after December 15, 2023 for smaller reporting companies. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Store Activity | Store activity for the years ended December 31, 2020 and 2019 is as follows: Successor Predecessor 2020 2019 Franchised stores, beginning of year 117 109 Stores opened during the year 9 15 Stores transferred/sold to the Company (2 ) 0 Stores closed during the year (22 ) (7 ) Franchised stores, end of year 102 117 Successor Predecessor 2020 2019 Company-owned stores, beginning of year 13 11 Stores opened during the year 2 3 Stores transferred/sold to the Company 2 0 Stores closed during the year - (1 ) Company-owned stores, end of year 17 13 |
Summary of Fair Values of Assets Acquired Net of Current Liabilities | The consideration was the fair value of the three loans at the Takeover Date and the assets are recorded based on the fair values of the assets acquired, net of current liabilities as of the Takeover Date as follows (in thousands): Cash $ 39 Accounts Receivable 1 Inventory 28 Other current assets 24 Property & equipment 1,126 Other assets 4 Current liabilities (330 ) Net tangible and identifiable intangible assets acquired 892 Goodwill 397 Net assets acquired $ 1,289 (in thousands) Fair Value December 16, 2020 Cash $ 2,179 Cash - restricted 611 Accounts receivable 378 Inventory 260 Other current assets 1,235 Property and equipment 8,520 Intangible assets 117,124 Other assets 199 Accounts payable - trade (1,952 ) Accrued expenses (1,057 ) Gift card liability (292 ) Revolving line of credit (3,012 ) Current portion of deferred franchise fees (521 ) Other deposit (907 ) Deferred initial franchise fees, net of current portion (2,531 ) Notes payable (2,889 ) Fair Value of Tangible and Identifiable Intangible assets and liabilities assumed $ 117,345 Consideration paid 236,887 Goodwill $ 119,542 |
Summary of Consolidated Financial Statements from Variable Interest Entities | Included in the consolidated financial statements are the following from variable interest entities for which the Company was the primary beneficiary (in thousands): Predecessor December 31, 2019 Cash $ 3 Property and equipment 853 Goodwill 398 Total Assets $ 1,254 Current notes payable $ 1,207 Notes payable – net of current portion — Total liabilities 1,207 Total members’ equity 47 Total Liabilities and Members’ Equity $ 1,254 |
Summary of Calculation of Basic and Diluted Income (Loss) Per Common Share | B asic and diluted income (loss) per common share is calculated as follows: Successor December 16, 2020 through December 31, 2020 Numerator: Net income available to common shareholders $ 5,348,000 Reversal of Gain on change in value of warrant liability (5,597,000 ) Net loss available to common shareholders - diluted $ (249,000 ) Denominator: Weighted-average shares outstanding 17,541,838 Effect of dilutive securities Restricted stock grants and warrants 3,468,872 UPOs 415,405 Diluted weighted-average shares outstanding 21,426,115 Basic net income per common share $ 0.30 Diluted net loss per common share $ (0.01 ) |
Summary of Revisions to Previously Reported Financial Information | A summary of the revisions to previously reported financial information is as follows: Revised Consolidated Statement of Operations Data for the six months ended June 30, 2020 (Unaudited) As Reported Adjustment As Revised Restaurant Sales $ 12,097 $ (315 ) $ 11,782 Total Revenue $ 15,864 $ (315 ) $ 15,549 Labor and Related Expenses $ 3,463 $ (315 ) $ 3,148 Total Operating Expenses $ 14,930 $ (315 ) $ 14,615 Revised Consolidated Statement of Operations Data for the nine months ended September 30, 2020 (Unaudited) As Reported Adjustment As Revised Restaurant Sales $ 18,892 $ (441 ) $ 18,451 Total Revenue $ 24,939 $ (441 ) $ 24,498 Labor and Related Expenses $ 5,482 $ (409 ) $ 5,073 Other Operating Expenses $ 4,575 $ (32 ) $ 4,543 Total Operating Expenses $ 24,832 $ (441 ) $ 24,391 Revised Consolidated Statement of Operations Data for the six months ended June 30, 2019 (Unaudited) As Reported Adjustment As Revised Restaurant Sales $ 11,977 $ (294 ) $ 11,683 Total Revenue $ 17,518 $ (294 ) $ 17,224 Labor and Related Expenses $ 3,880 $ (294 ) $ 3,586 Total Operating Expenses $ 15,021 $ (294 ) $ 14,727 Revised Consolidated Statement of Operations Data for the nine months ended September 30, 2019 (Unaudited) Restaurant Sales $ 17,641 $ (477 ) $ 17,164 Total Revenue $ 25,336 $ (477 ) $ 24,859 Labor and Related Expenses $ 5,784 $ (477 ) $ 5,307 Total Operating Expenses $ 23,181 $ (477 ) $ 22,704 Revised Consolidated Statement of Operations Data for the year ended December 31, 2019 Restaurant Sales $ 23,855 $ (672 ) $ 23,183 Total Revenue $ 34,227 $ (672 ) $ 33,555 Labor and Related Expenses $ 7,839 $ (672 ) $ 7,167 Total Operating Expenses $ 31,178 $ (672 ) $ 30,506 |
Summary of Revenue Recognized | Revenue recognized during the Successor period from December 16, 2020 to December 31, 2020 and for the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019 disaggregated by type is as follows: Successor Predecessor December 16, 2020 through December 31, 2020 January 1, 2020 through December 15, 2020 Year Ended December 31, 2019 Restaurant sales $ 1,326 $ 23,139 $ 22,473 BF Commissary sales 24 827 710 Franchising revenue: Sales-based royalties 255 5,366 6,805 Rebate royalties — 750 564 Brand development and advertising co-op royalties 74 1,441 1,720 Initial franchise fees 17 272 254 Initial distinct services 8 90 204 Other revenue - terminations of franchises — 693 825 Total revenue $ 1,704 $ 32,578 $ 33,555 |
Summary of Revenue Disaggregated According to Timing of Transfer of Goods or Services | The following table shows the Company’s revenue disaggregated according to the timing of transfer of goods or services: Successor Predecessor December 16, 2020 through December 31, 2020 January 1, 2020 through December 15, 2020 Year Ended December 31, 2019 Revenue recognized at a point in time Restaurant revenue $ 1,326 $ 23,139 $ 22,473 BF Commissary sales 24 827 710 Royalty and other fees 255 6,116 7,369 Terminated franchise fees — 693 825 Brand development and advertising co-op royalties 74 1,441 1,720 Franchising revenue – distinct initial services 8 90 204 Total revenue recognized at a point in time $ 1,687 $ 32,306 $ 33,301 Revenue recognized over time Franchising fees 17 272 254 Total revenue recognized over time 17 272 254 Total Revenue $ 1,704 $ 32,578 $ 33,555 |
Summary of Contract Balances | Opening and closing balances of contract liabilities and receivables from contracts with customers for the years ended December 31, 2020 and 2019 are as follows (in thousands): Successor Predecessor 2020 2019 Franchising receivables $ 480 $ 369 Advertising co-op funds — 159 Gift card liability 430 586 Deferred revenue, current 490 438 Deferred revenue, long-term 2,816 4,250 |
Summary of Franchise Revenue | Revenue recognized during the period ended which were included in the balance of deferred franchise revenue at the beginning of the period are as follow: Successor Predecessor December 16, 2020 through December 31, 2020 January 1, 2020 through December 15, 2020 Year Ended December 31, 2019 Franchise Fees $ 41 $ 1,023 $ 1,283 |
Analysis of Deferred Revenue | An analysis of deferred revenue is as follows: Successor Predecessor Predecessor December 31, 2020 December 15, 2020 December 31, 2019 Balance, beginning of period $ 3,053 $ 4,688 $ 3,935 Initial franchise fees received 278 413 2,036 Revenue recognized for stores opened during period (25 ) (362 ) (458 ) Revenue recognized related to franchise agreement Default — (693 ) (825 ) Balance, end of period $ 3,306 $ 4,046 $ 4,688 |
Restricted Cash (Tables)
Restricted Cash (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restricted Cash And Cash Equivalents [Abstract] | |
Summary of Restricted Cash | Restricted cash consisted of the following as of (in thousands): Successor Predecessor 2020 2019 PPP amount held in escrow $ 2,237 $ — Cash proceeds from Business Combination held back for working capital reconciliation 996 - Gift cards purchased 415 505 Advertising co-op funds — 159 LevelUp loyalty program 15 63 Total Restricted Cash $ 3,663 $ 727 |
Property & Equipment (Tables)
Property & Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of the following (in thousands): Successor Predecessor 2020 2019 Leasehold improvements $ 5,477 $ 5,724 Machinery & equipment 1,360 2,821 Computer equipment 208 560 Furniture & fixtures 792 1,278 Vehicles 215 50 8,052 10,433 Less: Accumulated depreciation and amortization (48 ) (4,132 ) Property and equipment – net $ 8,004 $ 6,301 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Components of Intangible Assets | The following is a summary of the components of intangible assets and the related amortization expense: Successor December 31, 2020 Predecessor December 31, 2019 Intangible Assets at December 31, 2020 (in thousands) Amount Accumulated Amortization Net Carrying Value Amount Accumulated Amortization Net Carrying Value Franchise agreements $ 24,839 $ 147 $ 24,692 $ — $ — $ — Trade names / trademarks 83,033 115 82,918 25 — 25 Liquor license 235 — 235 210 — 210 Reef Kitchens license agreement 8,882 37 8,845 — — — VegeFi product 135 1 134 — — — $ 117,124 $ 300 $ 116,824 $ 235 $ — $ 235 |
Summary of Components of Related Amortization Expense | (in thousands): Successor 2021 $ 7,218 2022 7,218 2023 7,218 2024 7,218 2025 7,218 Thereafter 80,499 Total 116,589 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Consideration Paid | Consideration Paid (in thousands) Cash $ 30,000 Stock 103,680 Contingent consideration 103,207 Total Consideration $ 236,887 |
Summary of Input Variables | The input variables are noted in the table below: Successor 2020 Risk-free interest rate 0.37 % Expected life in years 3 Expected volatility 60 % Expected dividend yield (a) 0 % (a) The Monte Carlo method assumes a reinvestment of dividends. The input variables are noted in the table below: Successor 2020 Risk-free interest rate 0.18 % Expected life in years 3 Expected volatility 65.9 % Expected dividend yield (a) 0 % (a)The Monte Carlo method assumes a reinvestment of dividends. The input variables for the Black Scholes are noted in the table below: Successor 2020 Risk-free interest rate 0.36 % Expected life in years 5 Expected volatility 30.0 % Expected dividend yield 0 % |
Summary of Fair Values of Assets Acquired Net of Current Liabilities | The consideration was the fair value of the three loans at the Takeover Date and the assets are recorded based on the fair values of the assets acquired, net of current liabilities as of the Takeover Date as follows (in thousands): Cash $ 39 Accounts Receivable 1 Inventory 28 Other current assets 24 Property & equipment 1,126 Other assets 4 Current liabilities (330 ) Net tangible and identifiable intangible assets acquired 892 Goodwill 397 Net assets acquired $ 1,289 (in thousands) Fair Value December 16, 2020 Cash $ 2,179 Cash - restricted 611 Accounts receivable 378 Inventory 260 Other current assets 1,235 Property and equipment 8,520 Intangible assets 117,124 Other assets 199 Accounts payable - trade (1,952 ) Accrued expenses (1,057 ) Gift card liability (292 ) Revolving line of credit (3,012 ) Current portion of deferred franchise fees (521 ) Other deposit (907 ) Deferred initial franchise fees, net of current portion (2,531 ) Notes payable (2,889 ) Fair Value of Tangible and Identifiable Intangible assets and liabilities assumed $ 117,345 Consideration paid 236,887 Goodwill $ 119,542 |
Acquisitions - Franchisee_Sto_2
Acquisitions - Franchisee/Stores (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Acquisition [Line Items] | |
Summary of Fair Values of Assets Acquired Net of Current Liabilities | The consideration was the fair value of the three loans at the Takeover Date and the assets are recorded based on the fair values of the assets acquired, net of current liabilities as of the Takeover Date as follows (in thousands): Cash $ 39 Accounts Receivable 1 Inventory 28 Other current assets 24 Property & equipment 1,126 Other assets 4 Current liabilities (330 ) Net tangible and identifiable intangible assets acquired 892 Goodwill 397 Net assets acquired $ 1,289 (in thousands) Fair Value December 16, 2020 Cash $ 2,179 Cash - restricted 611 Accounts receivable 378 Inventory 260 Other current assets 1,235 Property and equipment 8,520 Intangible assets 117,124 Other assets 199 Accounts payable - trade (1,952 ) Accrued expenses (1,057 ) Gift card liability (292 ) Revolving line of credit (3,012 ) Current portion of deferred franchise fees (521 ) Other deposit (907 ) Deferred initial franchise fees, net of current portion (2,531 ) Notes payable (2,889 ) Fair Value of Tangible and Identifiable Intangible assets and liabilities assumed $ 117,345 Consideration paid 236,887 Goodwill $ 119,542 |
Franchisee/Stores [Member] | |
Business Acquisition [Line Items] | |
Summary of Fair Values of Assets Acquired Net of Current Liabilities | Predecessor Inventory $ 15 Property & equipment 250 Net tangible and identifiable intangible assets acquired 265 Goodwill 985 Net assets acquired $ 1,250 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets [Abstract] | |
Summary of Other Assets | Other assets consisted of the following (in thousands): Successor Predecessor December 31, 2020 2019 Lease Acquisition Costs, net of accumulated amortization $ 18 $ 48 Deposits and other non-current assets 233 190 Other assets $ 251 $ 238 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments on Operating Leases | Approximate future minimum payments on these operating leases for the years ended December 31 are as follows (in thousands): 2021 $ 3,029 2022 3,329 2023 3,369 2024 3,047 2025 3,071 Thereafter 25,506 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Notes Payable | Notes Payable (in thousands) Successor Predecessor December 31, 2020 December 31, 2019 On May 11, 2020 the Company received loan proceeds in the amount of $2,237 under the Paycheck Protection Program (“PPP”). The loans and accrued interest are forgivable after eight weeks, as long as, the Company uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintain its payroll levels. The amount of loan forgiveness will be reduced if the Company terminates employees or reduces salaries during the eight-week period. The unforgiven portion of the PPP loans are payable over two years at an interest rate of 1%, with a deferral of payments for the first seven months. $ 2,237 $ — Installment note payable to an individual, issued in connection with the Company’s April 2020 acquisition, monthly payments of $9, over a seven-year amortization including 7% interest, with a maturity date of June 1, 2024. $ 555 $ — Installment note payable to bank, monthly payments of $9, including interest at 7.75%, principal and interest due at the earlier of, September 23, 2024 or the date of the Company’s termination of the APM (see Note 1).This note is secured by equipment, and is guaranteed by the franchisee under the APM, its members and their affiliates. As of December 31, 2019, this note was in default and classified as current. The Company elected not to continue payment while negotiating with the banks to release the lien on the restaurant assets which the Company was managing under the APM. No recourse to the general credit of the Company. $ — $ 468 Installment note payable to bank, monthly payments of $4, including interest at 5.3%, principal and interest due at the earlier of May 17, 2027 or the date of the Company’s termination of the APM (see Note 1). This note was secured by equipment, guaranteed by the franchisee under the APM, its members and their affiliates. As of December 31, 2019, this note is in default and classified as current. The Company elected not to continue payment while negotiating with the banks to release the lien on the restaurant assets which the Company was managing under the APM. No recourse to the general credit of the Company. — 258 Installment note payable to bank, monthly payments of $3, including interest at 5.0%, principal and interest due the earlier of August 4, 2026 or the date of the Company’s termination of the APM (see Note 1). This note is secured by equipment, guaranteed by the franchisee under the APM, its members and their affiliates. As of December 31, 2019, this note was in default and classified as current. No recourse to the general credit of the Company. — 409 Other notes payable No recourse to the general credit of the Company. 168 72 Total notes payable $ 2,960 $ 1,207 Less: current portion (1,438 ) (1,207 ) Total notes payable - long-term portion $ 1,522 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for (Benefit) From Income Taxes | The provision for (benefit) from income taxes is set forth below (in thousands): Successor December 16, 2020 Through December 31, 2020 Current: U.S. Federal $ 4 State - Foreign - Current tax provision 4 Deferred: U.S. Federal (314 ) State (56 ) Foreign - Deferred tax provision (benefit) (370 ) Income tax provision (benefit) $ (366 ) |
Schedule of Deferred Tax Assets (Liabilities) | Deferred tax assets (liabilities) are set forth below (in thousands): Year Ended December 31, 2020 Deferred tax assets: Allowance for doubtful accounts $ 33 Fixed assets (1,876 ) Intangible assets (87 ) Goodwill (20 ) Deferred franchise fees 752 Deferred rent 7 Stock compensation 203 Accrued expenses — Accrued paid time off 21 Unrealized gain/loss on disposal of assets 3 Transaction costs 127 Net operating losses 1,550 Total net Deferred Tax Assets $ 713 |
Schedule of Reconciliation of Income Tax Rate | The reconciliation of income tax computed at the U.S. federal statutory rate of 21% to reported income tax is set forth below: Successor December 16, 2020 Through December 31, 2020 Income tax provision at the U.S. federal statutory rate $ 1,046 Permanent differences (181 ) Change in derivative liability (1,175 ) State taxes (tax effected) (56 ) Total tax expense (benefit) $ (366 ) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Input Variables | The input variables are noted in the table below: Successor 2020 Risk-free interest rate 0.37 % Expected life in years 3 Expected volatility 60 % Expected dividend yield (a) 0 % (a) The Monte Carlo method assumes a reinvestment of dividends. The input variables are noted in the table below: Successor 2020 Risk-free interest rate 0.18 % Expected life in years 3 Expected volatility 65.9 % Expected dividend yield (a) 0 % (a)The Monte Carlo method assumes a reinvestment of dividends. The input variables for the Black Scholes are noted in the table below: Successor 2020 Risk-free interest rate 0.36 % Expected life in years 5 Expected volatility 30.0 % Expected dividend yield 0 % |
Summary of Share-based Compensation and Tax Benefit Recognized | Total share-based compensation and the related income tax benefit recognized in the Company’s consolidated statements of operations were as follows: Successor (in thousands) Year Ended December 31, 2020 Performance condition awards $ — Service condition awards 785 Market condition awards 33 Share-based compensation 818 Less: Income tax benefit — Share-based compensation, net of income tax benefit $ 818 |
Summary of Analysis of Changes in Derivative Liability | The following is an analysis of changes in the derivative liability: Level 3 (Black Scholes) Liability at 12-16-2020 $ 22,113,000 Gain from 12-16-2020 to 12-31-2020 $ (5,597,000) Liability at 12-31-2020 $ 16,516,000 |
Restricted Shares [Member] | |
Summary of Activity of Restricted Shares | The following table summarizes activity of Restricted Shares during 2020 (there was no activity prior to December 16, 2020): Number of Restricted Shares Weighted Average Grant Date Fair Value Granted on December 16, 2020 1,300,000 $ 15.30 Vested (50,000 ) 15.70 Forfeited — — Non-vested at December 31, 2020 1,250,000 $ 15.28 |
Service Condition Shares [Member] | |
Summary of Activity of Restricted Shares | The following table summarizes activity of the restricted shares during 2020 (there was no activity prior to December 16, 2020): Performance Condition Service Condition Market Condition Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Granted 950,000 $ 15.70 250,000 $ 15.70 100,000 $ 10.45 Vested — — (50,000 ) 15.70 — — Forfeited — — — — — — Non-vested at December 31, 2020 950,000 $ 15.70 200,000 $ 15.70 100,000 $ 10.45 |
Geographical Information (Table
Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of revenue by geographic area | Revenue by geographic area for the Successor period from December 16, 2020 to December 31, 2020 and the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019 is as follows: Successor Predecessor (in thousands) December 16, 2020 through December 31, 2020 January 1, 2020 through December 15, 2020 Year Ended December 31, 2019 United States $ 1,702 $ 32,520 $ 33,428 Other Countries 2 58 127 Total $ 1,704 $ 32,578 $ 33,555 |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies - Summary of Store Activity (Details) - Store | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Franchised Stores [Member] | ||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||
Stores, beginning of year | 117 | 109 |
Stores opened during the year | 9 | 15 |
Stores transferred/sold to the Company | (2) | 0 |
Stores closed during the year | (22) | (7) |
Stores, end of year | 102 | 117 |
Company-owned Stores [Member] | ||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||
Stores, beginning of year | 13 | 11 |
Stores opened during the year | 2 | 3 |
Stores transferred/sold to the Company | 2 | 0 |
Stores closed during the year | (1) | |
Stores, end of year | 17 | 13 |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies (Details) | May 11, 2020USD ($) | Apr. 23, 2018USD ($) | Dec. 31, 2020USD ($)Store | Dec. 31, 2020USD ($)Store | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 15, 2020USD ($)shares | Dec. 31, 2020USD ($)StoreSegmentLoanin-linedistributorRenewal_timeshares | Dec. 31, 2019USD ($)Store | Dec. 31, 2018USD ($) | Dec. 31, 2021shares | Dec. 17, 2020USD ($) | Dec. 16, 2020USD ($)shares | Jan. 01, 2020 |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Cash and cash equivalents | $ 40,383,000 | $ 40,383,000 | $ 2,790,000 | $ 40,383,000 | $ 2,417,000 | $ 2,252,000 | $ 68,870,000 | |||||||||
Estimate capital expenditures | 265,000 | 3,244,000 | 2,437,000 | |||||||||||||
Number of operating reporting segment | Segment | 1 | |||||||||||||||
Number of reportable segment | Segment | 1 | |||||||||||||||
Takeover date | Apr. 23, 2018 | |||||||||||||||
Gain on extinguishment of debt | 791,000 | |||||||||||||||
Net sales | 1,704,000 | 32,578,000 | 33,555,000 | |||||||||||||
Net income (loss) | 5,348,000 | $ 615,000 | 2,935,000 | |||||||||||||
Number of loans collateralized by VIEs assets and creditors | Loan | 3 | |||||||||||||||
Cash and cash equivalents | 36,720,000 | 36,720,000 | $ 36,720,000 | 1,690,000 | ||||||||||||
Allowance for uncollectible accounts | 0 | 0 | 0 | 65,000,000 | ||||||||||||
Goodwill | $ 397,000 | 119,542,000 | 119,542,000 | 119,542,000 | 398,000 | $ 119,542,000 | ||||||||||
Impairments of goodwill | 0 | 0 | ||||||||||||||
Warrants outstanding | shares | 0 | 15,095,000 | ||||||||||||||
Derivative warrant liability | $ 16,516,000 | 16,516,000 | 16,516,000 | $ 22,113,000 | ||||||||||||
Gain on change in value of warrant liability | $ 5,597,000 | |||||||||||||||
Decrease in members equity | 1,201,546 | |||||||||||||||
Increase (decrease) In current deferred initial franchise fee liability | 348,730 | |||||||||||||||
Increase (decrease) In long term deferred initial franchise fee liability | $ 1,550,276 | |||||||||||||||
Initial franchise fees | $ 37,500 | |||||||||||||||
Percentage of franchise fee to reserve the right to open additional locations | 50.00% | 50.00% | 50.00% | |||||||||||||
Sales tax payable | $ 172,000 | $ 172,000 | $ 172,000 | 142,000 | ||||||||||||
Advertising expenses | 23,000 | $ 454,000 | 554,000 | |||||||||||||
Revenues | 1,704,000 | $ 15,549,000 | $ 17,224,000 | $ 24,498,000 | $ 24,859,000 | 32,578,000 | 33,555,000 | |||||||||
Pre-opening costs expensed | $ 24,000 | 189,000 | 425,000 | |||||||||||||
Operating lease description | The Company leases restaurant locations that have terms expiring between December 2020 and March 2035. The initial obligation period is generally 10 years. The restaurant facilities primarily have renewal clauses for two 5-year period or one 10-year period, exercisable at the option of the Company. The Company includes one 5-year renewal option in its lease term. | |||||||||||||||
Operating lease initial obligation period | 10 years | 10 years | 10 years | 36 months | ||||||||||||
Operating lease number of renewal time | Renewal_time | 1 | |||||||||||||||
Lease term renewal option | 5 years | |||||||||||||||
Federal income tax | $ 0 | $ 0 | ||||||||||||||
Lease Renewal Clause One [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Operating lease number of renewal time | Renewal_time | 2 | |||||||||||||||
Operating lease renewal period | 5 years | 5 years | 5 years | |||||||||||||
Lease Renewal Clause Two [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Operating lease number of renewal time | Renewal_time | 1 | |||||||||||||||
Operating lease renewal period | 10 years | 10 years | 10 years | |||||||||||||
Revenues [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Concentration risk, Customer | no customers which accounted for 10% or more | no customers which accounted for 10% or more | no customers which accounted for 10% or more | |||||||||||||
Common Stock | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Antidilutive securities excluded from computation of earnings per share | shares | 15,095,000 | |||||||||||||||
Common Stock | Unit Purchase Option [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Antidilutive securities excluded from computation of earnings per share | shares | 750,000 | |||||||||||||||
Warrant [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Antidilutive securities excluded from computation of earnings per share | shares | 750,000 | |||||||||||||||
Restricted Shares [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Antidilutive securities excluded from computation of earnings per share | shares | 1,300,000 | |||||||||||||||
Private Warrants [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Warrants outstanding | shares | 3,000,000 | 445,000 | ||||||||||||||
Private Placement Warrants [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Warrants outstanding | shares | 445,000 | 3,000,000 | ||||||||||||||
Working Capital Warrants [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Warrants outstanding | shares | 150,000 | 150,000 | ||||||||||||||
Public Warrants [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Warrants outstanding | shares | 11,500,000 | |||||||||||||||
UPO Warrants [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Warrants outstanding | shares | 750,000 | |||||||||||||||
Asset Purchase and Management Agreement [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Goodwill | $ 119,542,000 | $ 119,542,000 | $ 119,542,000 | $ 398,000 | ||||||||||||
Trademarks [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of intangible assets | 30 years | |||||||||||||||
Maximum [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Federal Deposit Insurance Corporation insured amount | 250,000 | 250,000 | $ 250,000 | |||||||||||||
Lease expiration date | Mar. 31, 2035 | |||||||||||||||
Maximum [Member] | Computer Software [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of intangible assets | 5 years | |||||||||||||||
Maximum [Member] | Franchise Agreements [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of intangible assets | 10 years | |||||||||||||||
Maximum [Member] | Leasehold Improvements [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of property and equipment | 10 years | |||||||||||||||
Maximum [Member] | Machinery and Equipment [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of property and equipment | 7 years | |||||||||||||||
Maximum [Member] | Computer Equipment [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of property and equipment | 7 years | |||||||||||||||
Maximum [Member] | Furniture and Fixtures [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of property and equipment | 7 years | |||||||||||||||
Maximum [Member] | Vehicles [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of property and equipment | 7 years | |||||||||||||||
Minimum [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Lease expiration date | Dec. 31, 2020 | |||||||||||||||
Percentage of tax benefit realized upon ultimate settlement with taxing authority | 50.00% | |||||||||||||||
Minimum [Member] | Computer Software [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of intangible assets | 1 year | |||||||||||||||
Minimum [Member] | Franchise Agreements [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of intangible assets | 7 years | |||||||||||||||
Minimum [Member] | Machinery and Equipment [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of property and equipment | 5 years | |||||||||||||||
Minimum [Member] | Computer Equipment [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of property and equipment | 5 years | |||||||||||||||
Minimum [Member] | Furniture and Fixtures [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of property and equipment | 5 years | |||||||||||||||
Minimum [Member] | Vehicles [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful life of property and equipment | 5 years | |||||||||||||||
Amount Due from Commercial Credit Card Companies [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Cash and cash equivalents | 11,000 | 11,000 | $ 11,000 | 339,000 | ||||||||||||
Franchise Revenue [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Gain on extinguishment of debt | $ 791,000 | |||||||||||||||
Food, Packaging and Beverage Products, Excluding Breads [Member] | Supplier Concentration Risk [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Number of main in-line distributors | in-linedistributor | 1 | |||||||||||||||
Concentration Risk, Percentage | 95.00% | |||||||||||||||
Coca-Cola Products and Beer, Wine and Liquor [Member] | Supplier Concentration Risk [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Concentration Risk, Percentage | 5.00% | |||||||||||||||
Number of additional in-line distributors | in-linedistributor | 4 | |||||||||||||||
Restaurant Sales [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Net sales | 1,326,000 | $ 23,139,000 | 22,473,000 | |||||||||||||
Recognized revenue | $ 851,000 | 710,000 | ||||||||||||||
Revenues | 1,350,000 | $ 11,782,000 | $ 11,683,000 | $ 18,451,000 | $ 17,164,000 | 23,966,000 | 23,183,000 | |||||||||
Brand Development and Advertising Co-op Royalties [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Revenues | 55,000 | 1,156,000 | 1,455,000 | |||||||||||||
Brand Development and Co-op Advertising Expenses [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Advertising expenses | 35,000 | 1,636,000 | 1,506,000 | |||||||||||||
Asset Purchase and Management Agreement [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Outstanding principal on loans | $ 1,291,000 | |||||||||||||||
VIE, Not Primary Beneficiary [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Lease guarantees amounts | 6,200,000 | 6,200,000 | 6,200,000 | |||||||||||||
Variable Interest Entity, Primary Beneficiary | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Net sales | 200,000 | 3,700,000 | 3,900,000 | |||||||||||||
Net income (loss) | 50,000 | 10,000 | (75,000) | |||||||||||||
Cash and cash equivalents | 0 | 0 | 0 | 3,000 | ||||||||||||
Goodwill | $ 0 | $ 0 | 0 | $ 398,000 | ||||||||||||
SBA Paycheck Protection Program [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Stimulus loans | $ 2,200,000 | |||||||||||||||
Assumed stimulus loan principal balance forgiven | $ 0 | |||||||||||||||
International [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Number of stores | Store | 2 | 2 | 2 | 5 | ||||||||||||
Revenues | $ 2,000 | 58,000 | $ 127,000 | |||||||||||||
South Florida [Member] | Brand Development and Advertising Co-op Royalties [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Revenues | 19,000 | 285,000 | 265,000 | |||||||||||||
South Florida [Member] | Brand Development and Co-op Advertising Expenses [Member] | ||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Advertising expenses | $ 0 | $ 648,000 | $ 226,000 |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies - Summary of Fair Values of Assets Acquired Net of Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 17, 2020 | Dec. 31, 2019 | Apr. 23, 2018 |
Business Combination Recognized Identifiable Assets Acquired Goodwill And Liabilities Assumed Net [Abstract] | ||||
Cash | $ 2,179 | $ 39 | ||
Accounts Receivable | 378 | 1 | ||
Inventory | 260 | 28 | ||
Other current assets | 1,235 | 24 | ||
Property & equipment | 8,520 | 1,126 | ||
Other assets | 199 | 4 | ||
Current liabilities | (330) | |||
Net tangible and identifiable intangible assets acquired | 117,345 | 892 | ||
Goodwill | $ 119,542 | $ 119,542 | $ 398 | 397 |
Net assets acquired | $ 1,289 |
Nature of Operations and Summ_7
Nature of Operations and Summary of Significant Accounting Policies - Summary of Consolidated Financial Statements from Variable Interest Entities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 17, 2020 | Dec. 31, 2019 | Apr. 23, 2018 |
Variable Interest Entity [Line Items] | ||||
Cash | $ 36,720 | $ 1,690 | ||
Property and equipment | 8,004 | 6,301 | ||
Goodwill | 119,542 | $ 119,542 | 398 | $ 397 |
TOTAL ASSETS | 289,116 | 14,382 | ||
Current notes payable | 1,438 | 1,207 | ||
Notes payable – net of current portion | 1,522 | 0 | ||
TOTAL LIABILITIES | 30,041 | 11,875 | ||
MEMBERS’ EQUITY - Before non-controlling interest, including variable interest entities of $47 as of December 31, 2019 | 2,492 | |||
TOTAL LIABILITIES AND STOCKHOLDERS'/MEMBERS’ EQUITY | 289,116 | 14,382 | ||
Variable Interest Entity, Primary Beneficiary | ||||
Variable Interest Entity [Line Items] | ||||
Cash | 0 | 3 | ||
Property and equipment | 0 | 853 | ||
Goodwill | $ 0 | 398 | ||
TOTAL ASSETS | 1,254 | |||
Current notes payable | 1,207 | |||
TOTAL LIABILITIES | 1,207 | |||
MEMBERS’ EQUITY - Before non-controlling interest, including variable interest entities of $47 as of December 31, 2019 | 47 | |||
TOTAL LIABILITIES AND STOCKHOLDERS'/MEMBERS’ EQUITY | $ 1,254 |
Nature of Operations and Summ_8
Nature of Operations and Summary of Significant Accounting Policies - Summary of Calculation of Basic and Diluted Income (Loss) Per Common Share (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 15, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Net income available to common shareholders | $ 5,348,000 | $ 615,000 | $ 2,935,000 |
Reversal of Gain on change in value of warrant liability | (5,597,000) | ||
Net loss available to common shareholders - diluted | $ (249,000,000) | ||
Basic | 17,541,838 | ||
Restricted stock grants and warrants | 3,468,872 | ||
UPOs | 415,405 | ||
Diluted weighted-average shares outstanding | 21,426,115 | ||
Basic net income per common share | $ 0.30 | ||
Diluted net loss per common share | $ (0.01) |
Nature of Operations and Summ_9
Nature of Operations and Summary of Significant Accounting Policies - Summary of Revisions to Previously Reported Financial Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 15, 2020 | Dec. 31, 2019 | |
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||||||
TOTAL REVENUE | $ 1,704 | $ 15,549 | $ 17,224 | $ 24,498 | $ 24,859 | $ 32,578 | $ 33,555 |
Labor and related expenses | 321 | 3,148 | 3,586 | 5,073 | 5,307 | 6,269 | 7,167 |
Total Operating Expenses | 3,104 | 14,615 | 14,727 | 24,391 | 22,704 | 31,818 | 30,506 |
Other operating expenses | 323 | 4,543 | 6,007 | 5,271 | |||
Restaurant Sales [Member] | |||||||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||||||
TOTAL REVENUE | $ 1,350 | 11,782 | 11,683 | 18,451 | 17,164 | $ 23,966 | 23,183 |
As Reported [Member] | |||||||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||||||
TOTAL REVENUE | 15,864 | 17,518 | 24,939 | 25,336 | 34,227 | ||
Labor and related expenses | 3,463 | 3,880 | 5,482 | 5,784 | 7,839 | ||
Total Operating Expenses | 14,930 | 15,021 | 24,832 | 23,181 | 31,178 | ||
Other operating expenses | 4,575 | ||||||
As Reported [Member] | Restaurant Sales [Member] | |||||||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||||||
TOTAL REVENUE | 12,097 | 11,977 | 18,892 | 17,641 | 23,855 | ||
Adjustment [Member] | |||||||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||||||
TOTAL REVENUE | (315) | (294) | (441) | (477) | (672) | ||
Labor and related expenses | (315) | (294) | (409) | (477) | (672) | ||
Total Operating Expenses | (315) | (294) | (441) | (477) | (672) | ||
Other operating expenses | (32) | ||||||
Adjustment [Member] | Restaurant Sales [Member] | |||||||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||||||
TOTAL REVENUE | $ (315) | $ (294) | $ (441) | $ (477) | $ (672) |
Nature of Operations and Sum_10
Nature of Operations and Summary of Significant Accounting Policies - Summary of Revenue Recognized Disaggregated by Type (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 15, 2020 | Dec. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | |||
Net sales | $ 1,704 | $ 32,578 | $ 33,555 |
Restaurant Sales [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 1,326 | 23,139 | 22,473 |
BF Commissary Sales [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 24 | 827 | 710 |
Sales-based Royalties [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 255 | 5,366 | 6,805 |
Rebate Royalties [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 750 | 564 | |
Royalty - Brand Development and Co-op [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 74 | 1,441 | 1,720 |
Initial Franchise Fees [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 17 | 272 | 254 |
Initial Distinct Services [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | $ 8 | 90 | 204 |
Other Revenue - Terminations of Franchises [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | $ 693 | $ 825 |
Nature of Operations and Sum_11
Nature of Operations and Summary of Significant Accounting Policies - Summary of Revenue Disaggregated According to Timing of Transfer of Goods or Services (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 15, 2020 | Dec. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | |||
Net sales | $ 1,704 | $ 32,578 | $ 33,555 |
Restaurant Sales [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 1,326 | 23,139 | 22,473 |
BF Commissary Sales [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 24 | 827 | 710 |
Royalty - Brand Development and Co-op [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 74 | 1,441 | 1,720 |
Initial Distinct Services [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 8 | 90 | 204 |
Initial Franchise Fees [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 17 | 272 | 254 |
Revenue Recognized at a Point in Time [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 1,687 | 32,306 | 33,301 |
Revenue Recognized at a Point in Time [Member] | Restaurant Sales [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 1,326 | 23,139 | 22,473 |
Revenue Recognized at a Point in Time [Member] | BF Commissary Sales [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 24 | 827 | 710 |
Revenue Recognized at a Point in Time [Member] | Royalty and Other Fees [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 255 | 6,116 | 7,369 |
Revenue Recognized at a Point in Time [Member] | Terminated Franchise Fees [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 693 | 825 | |
Revenue Recognized at a Point in Time [Member] | Royalty - Brand Development and Co-op [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 74 | 1,441 | 1,720 |
Revenue Recognized at a Point in Time [Member] | Initial Distinct Services [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 8 | 90 | 204 |
Revenue Recognized over Time [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | 17 | 272 | 254 |
Revenue Recognized over Time [Member] | Initial Franchise Fees [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Net sales | $ 17 | $ 272 | $ 254 |
Nature of Operations and Sum_12
Nature of Operations and Summary of Significant Accounting Policies (Details1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Transaction price allocated to performance obligations | $ 4,688,000 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 10 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Transaction price allocated to performance obligations | $ 3,306,000 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 10 years |
Nature of Operations and Sum_13
Nature of Operations and Summary of Significant Accounting Policies - Summary of Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Franchising Receivables [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Recognized revenue | $ 480 | $ 369 |
Advertising Co Op Funds [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Recognized revenue | 159 | |
Gift Card Liability [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Recognized revenue | 430 | 586 |
Deferred Revenue, Current [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Recognized revenue | 490 | 438 |
Deferred Revenue, Long-term [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Recognized revenue | $ 2,816 | $ 4,250 |
Nature of Operations and Sum_14
Nature of Operations and Summary of Significant Accounting Policies - Summary of Franchise Revenue (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 15, 2020 | Dec. 31, 2019 | |
Franchise Fees [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Recognized revenue | $ 41 | $ 1,023 | $ 1,283 |
Nature of Operations and Sum_15
Nature of Operations and Summary of Significant Accounting Policies - Analysis of Deferred Revenue (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 15, 2020 | Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |||
Balance, beginning of period | $ 3,053 | $ 4,688 | $ 3,935 |
Initial franchise fees received | 278 | 413 | 2,036 |
Revenue recognized for stores opened during period | (25) | (362) | (458) |
Revenue recognized related to franchise agreement Default | (693) | (825) | |
Balance, end of period | $ 3,306 | $ 4,046 | $ 4,688 |
Restricted Cash (Details) - Sum
Restricted Cash (Details) - Summary of Restricted Cash - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Restricted Cash And Cash Equivalents Items [Line Items] | ||
Total Restricted Cash | $ 3,663 | $ 727 |
PPP Amount Held in Escrow [Member] | ||
Restricted Cash And Cash Equivalents Items [Line Items] | ||
Total Restricted Cash | 2,237 | |
'Cash Proceeds From Business Combination Held Back for Working Capital Reconciliation [Member] | ||
Restricted Cash And Cash Equivalents Items [Line Items] | ||
Total Restricted Cash | 996 | |
Gift Cards Purchased [Member] | ||
Restricted Cash And Cash Equivalents Items [Line Items] | ||
Total Restricted Cash | 415 | 505 |
Advertising Co-op Funds [Member] | ||
Restricted Cash And Cash Equivalents Items [Line Items] | ||
Total Restricted Cash | 159 | |
LevelUp Loyalty Program [Member] | ||
Restricted Cash And Cash Equivalents Items [Line Items] | ||
Total Restricted Cash | $ 15 | $ 63 |
Property & Equipment - Summary
Property & Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | $ 8,052 | $ 10,433 |
Less: Accumulated depreciation and amortization | (48) | (4,132) |
Property and equipment – net | 8,004 | 6,301 |
Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 5,477 | 5,724 |
Machinery and Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 1,360 | 2,821 |
Computer Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 208 | 560 |
Furniture and Fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 792 | 1,278 |
Vehicles [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | $ 215 | $ 50 |
Property & Equipment (Details)
Property & Equipment (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 15, 2020 | Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 48,000 | $ 1,025,000 | $ 795,000 |
Intangible Assets - Summary of
Intangible Assets - Summary of Components of Intangible Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 15, 2020 | Dec. 31, 2019 |
Finite Lived Intangible Assets [Line Items] | |||
Amount | $ 117,124,000 | $ 235,000 | |
Accumulated Amortization | 300,000 | $ 0 | 0 |
Net Carrying Value | 116,824,000 | 235,000 | |
Franchise Agreements [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amount | 24,839,000 | ||
Accumulated Amortization | 147,000 | ||
Net Carrying Value | 24,692,000 | ||
Trade names / Trademarks [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amount | 83,033,000 | 25,000 | |
Accumulated Amortization | 115,000 | ||
Net Carrying Value | 82,918,000 | 25,000 | |
Liquor License [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amount | 235,000 | 210,000 | |
Net Carrying Value | 235,000 | $ 210,000 | |
Reef Kitchens License Agreement [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amount | 8,882,000 | ||
Accumulated Amortization | 37,000 | ||
Net Carrying Value | 8,845,000 | ||
VegeFi Product [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amount | 135,000 | ||
Accumulated Amortization | 1,000 | ||
Net Carrying Value | $ 134,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 15, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Impairments of intangible assets | $ 0 | $ 0 | |
Amortization expense | $ 300,000 | $ 0 | $ 0 |
Intangible Assets - Summary o_2
Intangible Assets - Summary of Components of Related Amortization Expense (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2021 | $ 7,218 |
2022 | 7,218 |
2023 | 7,218 |
2024 | 7,218 |
2025 | 7,218 |
Thereafter | 80,499 |
Total | $ 116,589 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) | Dec. 17, 2020 | Jun. 29, 2020 | Dec. 31, 2020 | Dec. 15, 2020 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||
Total consideration | $ 236,887,000 | ||||
Cash payment | $ 27,210,000 | $ 385,000 | |||
Issuance of common stock | 17,541,838 | 17,541,838 | |||
Customer Relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Identifiable intangible assets acquired | $ 24,839,000 | ||||
Useful Life | 7 years | ||||
Reef Kitchens License Agreement [Member] | |||||
Business Acquisition [Line Items] | |||||
Identifiable intangible assets acquired | $ 8,882,000 | ||||
Useful Life | 10 years | ||||
Trade Names [Member] | |||||
Business Acquisition [Line Items] | |||||
Identifiable intangible assets acquired | $ 83,033,000 | ||||
Useful Life | 30 years | ||||
BurgerFi Holdings, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Total consideration | 236,887,000 | ||||
Cash payment | $ 30,000,000 | ||||
Issuance of common stock | 6,603,773 | ||||
Shares issued to acquire business | $ 103,680,000 | ||||
Contingent consideration | $ 103,207,000 | ||||
Additional common stock issued | 9,356,459 | ||||
Share-based compensation arrangement by share-based payment award, fair value assumptions average amount | $ 103,207,000 | ||||
BurgerFi Holdings, LLC [Member] | Prior to Second Anniversary of Closing, Price is Greater Than or Equal to $19.00 Per Share [Member] | |||||
Business Acquisition [Line Items] | |||||
Additional common stock issued | 3,947,368 | ||||
Shares issued, price per share | $ 19 | ||||
BurgerFi Holdings, LLC [Member] | Prior to Second Anniversary of Closing, Price is Greater Than or Equal to $22.00 Per Share [Member] | |||||
Business Acquisition [Line Items] | |||||
Additional common stock issued | 3,409,091 | ||||
Shares issued, price per share | $ 22 | ||||
BurgerFi Holdings, LLC [Member] | Prior to Second Anniversary of Closing, Price is Greater Than or Equal to $25.00 Per Share [Member] | |||||
Business Acquisition [Line Items] | |||||
Additional common stock issued | 2,000,000 | ||||
Shares issued, price per share | $ 25 |
Business Combinations - Schedul
Business Combinations - Schedule of Consideration Paid (Details) - USD ($) | Dec. 17, 2020 | Dec. 31, 2020 | Dec. 15, 2020 |
Consideration paid | |||
Cash | $ 27,210,000 | $ 385,000 | |
Total Consideration | $ 236,887,000 | ||
BurgerFi Holdings, LLC [Member] | |||
Consideration paid | |||
Cash | 30,000,000 | ||
Stock | 103,680,000 | ||
Contingent consideration | 103,207,000 | ||
Total Consideration | $ 236,887,000 |
Business Combinations - Summary
Business Combinations - Summary of Input Variables (Details) | 1 Months Ended | |
Dec. 31, 2020 | ||
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions And Methodology [Abstract] | ||
Risk-free interest rate | 0.37% | |
Expected life in years | 3 years | |
Expected volatility | 60.00% | |
Expected dividend yield | 0.00% | [1] |
[1] | The Monte Carlo method assumes a reinvestment of dividends. |
Business Combinations - Sched_2
Business Combinations - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 17, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 23, 2018 |
Business Combinations [Abstract] | ||||
Cash | $ 2,179 | $ 39 | ||
Cash - restricted | 611 | |||
Accounts Receivable | 378 | 1 | ||
Inventory | 260 | 28 | ||
Other current assets | 1,235 | 24 | ||
Property & equipment | 8,520 | 1,126 | ||
Intangible assets | 117,124 | |||
Other assets | 199 | 4 | ||
Accounts payable - trade | (1,952) | |||
Accrued expenses | (1,057) | |||
Gift card liability | (292) | |||
Revolving line of credit | (3,012) | |||
Current portion of deferred franchise fees | (521) | |||
Other deposit | (907) | |||
Deferred initial franchise fees, net of current portion | (2,531) | |||
Notes payable | (2,889) | |||
Net tangible and identifiable intangible assets acquired | 117,345 | 892 | ||
Consideration paid | 236,887 | |||
Goodwill | $ 119,542 | $ 119,542 | $ 398 | $ 397 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 15, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2020 | |
Related Party Transaction [Line Items] | |||||
Amounts due from related parties repayment period, description | not expected to be repaid within one year | ||||
Due from related companies | $ 74,000 | $ 74,000 | $ 3,611,000 | ||
Due to related companies | $ 0 | $ 0 | 271,000 | ||
Management fee | 60,000 | ||||
Lease term | 10 years | 10 years | 36 months | ||
Rent expense | $ 1,000 | $ 159,000 | 160,000 | ||
Royalty [Member] | |||||
Related Party Transaction [Line Items] | |||||
Royalty revenue received from franchisees | $ 17,000 | $ 322,000 | $ 1,182,000 |
Acquisitions - Franchisee_Sto_3
Acquisitions - Franchisee/Stores (Details) - USD ($) | Apr. 01, 2020 | Dec. 31, 2020 | Apr. 30, 2020 | Dec. 15, 2020 |
Business Acquisition [Line Items] | ||||
Cash | $ 27,210,000 | $ 385,000 | ||
Purchase price in promissory note | $ 600,000 | |||
Franchisee/Stores [Member] | ||||
Business Acquisition [Line Items] | ||||
Aggregate purchase price | $ 1,250,000 | |||
Cash | 650,000 | |||
Purchase price in promissory note | $ 600,000 |
Acquisitions - Franchisee_Sto_4
Acquisitions - Franchisee/Stores - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 17, 2020 | Apr. 30, 2020 | Dec. 31, 2019 | Apr. 23, 2018 |
Business Acquisition [Line Items] | |||||
Inventory | $ 260 | $ 28 | |||
Property & equipment | 8,520 | 1,126 | |||
Net tangible and identifiable intangible assets acquired | 117,345 | 892 | |||
Goodwill | $ 119,542 | $ 119,542 | $ 398 | 397 | |
Net assets acquired | $ 1,289 | ||||
Franchisee/Stores [Member] | |||||
Business Acquisition [Line Items] | |||||
Inventory | $ 15 | ||||
Property & equipment | 250 | ||||
Net tangible and identifiable intangible assets acquired | 265 | ||||
Goodwill | 985 | ||||
Net assets acquired | $ 1,250 |
Other Assets (Details) - Summar
Other Assets (Details) - Summary of Other Assets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other Assets [Abstract] | ||
Lease Acquisition Costs, net of accumulated amortization | $ 18 | $ 48 |
Deposits and other non-current assets | 233 | 190 |
Other assets | $ 251 | $ 238 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 1 Months Ended | 4 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2020USD ($) | Feb. 29, 2020USD ($) | Apr. 30, 2020USD ($)Deposit | Dec. 15, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Commitments And Contingencies [Line Items] | ||||||
Operating leases, rent expense | $ 40,000 | $ 2,819,000 | $ 2,281,000 | |||
Asset held for sale | 732,000 | $ 732,000 | ||||
Loss contingency, allegations | A franchisee filed a suit against BFI seeking unspecified damages in connection with plaintiff’s execution of franchise agreements for the development of 11 BurgerFi restaurants in certain specified trade areas in New York and Connecticut. | |||||
Contingent liability | 0 | $ 0 | ||||
BF Dania Beach, LLC [Member] | ||||||
Commitments And Contingencies [Line Items] | ||||||
Aggregate purchase price | $ 1,299,000 | |||||
Number of cash deposits | Deposit | 3 | |||||
Cash deposits received | $ 906,500 | |||||
Cash deposits returned to unrelated third-party purchaser | $ 906,500 | |||||
Asset held for sale | $ 732,000 | 732,000 | ||||
Franchise Agreement Case [Member] | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, damages sought value | $ 5,000,000 | |||||
Loss contingency, lawsuit filing date | April 2016 | |||||
Employment Agreement Breach Case [Member] | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, lawsuit filing date | December 1, 2019 | |||||
Loss contingency motion to dismiss lawsuit filing date | February 13, 2020 | |||||
Employee Termination Case [Member] | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, lawsuit filing date | July 8, 2020 | |||||
Loss contingency, allegations | the former employee was terminated wrongfully by the Company |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of Future Minimum Payments on Operating Leases $ in Thousands | Dec. 31, 2020USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
2021 | $ 3,029 |
2022 | 3,329 |
2023 | 3,369 |
2024 | 3,047 |
2025 | 3,071 |
Thereafter | $ 25,506 |
Line of Credit (Details)
Line of Credit (Details) - USD ($) | Oct. 31, 2019 | Jul. 13, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
LIBOR [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Description of annual interest rate | LIBOR Daily Floating | |||
Floating interest rate percentage | 0.75% | |||
Revolving Line of Credit Agreement [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit | $ 2,000,000 | $ 3,012,000 | $ 2,317,000 | |
Line of credit, maturity date | Jul. 13, 2020 | |||
Revolving Line of Credit Amendment [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit | $ 5,000,000 | |||
Line of credit, maturity date | Jul. 13, 2021 |
Notes Payable - Summary of Note
Notes Payable - Summary of Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Total notes payable | $ 2,960 | $ 1,207 |
Less: current portion | (1,438) | (1,207) |
Notes Payable | 1,522 | 0 |
Note Payable to Bank [Member] | 7% Notes Payable Due June 1, 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable | 555 | 0 |
Note Payable to Bank [Member] | Paycheck Protection Program [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable | 2,237 | 0 |
Note Payable to Bank [Member] | 7.75% Notes Payable Due September 23, 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable | 0 | 468 |
Note Payable to Bank [Member] | 5.3% Notes Payable Due May 17, 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable | 0 | 258 |
Note Payable to Bank [Member] | 5.0% Notes Payable Due August 4, 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable | 0 | 409 |
Other Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Other notes payable No recourse to the general credit of the Company. | $ 168 | $ 72 |
Notes Payable - Summary of No_2
Notes Payable - Summary of Notes Payable (Parenthetical) (Details) - Note Payable to Bank [Member] - USD ($) $ in Thousands | May 11, 2020 | Dec. 31, 2020 |
Paycheck Protection Program [Member] | ||
Debt Instrument [Line Items] | ||
Loan proceeds received | $ 2,237 | |
Interest rate on note payable to bank | 1.00% | |
7.75% Notes Payable Due September 23, 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate on note payable to bank | 7.75% | |
Note payable to bank | $ 9 | |
7% Notes Payable Due June 1, 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate on note payable to bank | 7.00% | |
Note payable to bank | $ 9 | |
Note payable to bank, maturity date | Jun. 1, 2024 | |
5.3% Notes Payable Due May 17, 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate on note payable to bank | 5.30% | |
Note payable to bank | $ 4 | |
5.0% Notes Payable Due August 4, 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate on note payable to bank | 5.00% | |
Note payable to bank | $ 3 |
Supplemental Disclosure of No_2
Supplemental Disclosure of Noncash Activities (Details) - USD ($) | Apr. 01, 2020 | Dec. 31, 2020 |
Noncash Or Part Noncash Acquisition Net Nonmonetary Assets Acquired Liabilities Assumed [Line Items] | ||
Note payable | $ 600,000 | |
Stock issued in acquisition, value | $ 103,680,000 | |
Contingent consideration in acquisition, value | $ 103,207,000 | |
BurgerFi Holdings, LLC [Member] | ||
Noncash Or Part Noncash Acquisition Net Nonmonetary Assets Acquired Liabilities Assumed [Line Items] | ||
Stock issued in acquisition, value | 103,680,000 | |
Contingent consideration in acquisition, value | $ 103,207,000 |
Income Taxes (Successor) - Sche
Income Taxes (Successor) - Schedule of Provision for (Benefit) From Income Taxes (Details) $ in Thousands | 1 Months Ended |
Dec. 31, 2020USD ($) | |
Current: | |
U.S. Federal | $ 4 |
Current tax provision | 4 |
Deferred: | |
U.S. Federal | (314) |
State | (56) |
Deferred tax provision (benefit) | (370) |
Income tax provision (benefit) | $ (366) |
Income Taxes (Successor) - Sc_2
Income Taxes (Successor) - Schedule of Deferred Tax Assets (Liabilities) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Deferred tax assets: | |
Allowance for doubtful accounts | $ 33 |
Fixed assets | (1,876) |
Intangible assets | (87) |
Goodwill | (20) |
Deferred franchise fees | 752 |
Deferred rent | 7 |
Stock compensation | 203 |
Accrued paid time off | 21 |
Unrealized gain/loss on disposal of assets | 3 |
Transaction costs | 127 |
Net operating losses | 1,550 |
Total net Deferred Tax Assets | $ 713 |
Income Taxes (Successor) (Detai
Income Taxes (Successor) (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Income Tax Textual [Line Items] | |
Valuation allowance | $ 0 |
Income taxes current refundable amount | 215,000 |
Income taxes long-term refundable amount | $ 0 |
U.S. federal statutory rate | 21.00% |
Federal [Member] | |
Income Tax Textual [Line Items] | |
Federal net operating loss carryforwards | $ 6,944,000 |
Income Taxes (Successor) - Sc_3
Income Taxes (Successor) - Schedule of Reconciliation of Income Tax Rate (Details) $ in Thousands | 1 Months Ended |
Dec. 31, 2020USD ($) | |
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract] | |
Income tax provision at the U.S. federal statutory rate | $ 1,046 |
Permanent differences | (181) |
Change in derivative liability | (1,175) |
State taxes (tax effected) | (56) |
Income tax provision (benefit) | $ (366) |
Stockholders' Equity (Success_2
Stockholders' Equity (Successor) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Feb. 28, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 16, 2021 | Dec. 16, 2020 | Dec. 15, 2020 | Dec. 31, 2019 | |
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Common stock, authorized | 100,000,000 | 100,000,000 | ||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Common stock, issued | 17,541,838 | 17,541,838 | ||||||
Common stock, outstanding | 17,541,838 | 17,541,838 | ||||||
Warrants outstanding | 15,095,000 | 0 | ||||||
Warrants exercise price | $ 11.50 | $ 11.50 | $ 11.50 | |||||
UPO units that are exercisable | 750,000 | |||||||
Number of Shares that warrants exercisable for | 1 | 1 | ||||||
Preferred stock, authorized | 10,000,000 | 10,000,000 | ||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Preferred stock issued | 0 | 0 | 0 | |||||
Preferred stock outstanding | 0 | 0 | 0 | |||||
Warrants exercisable period | 30 days | |||||||
Share Price (in Dollars per share) | $ 13.69 | $ 13.69 | $ 15.70 | |||||
Number of shares issued under purchase option | 750,000 | |||||||
Number of common shares included in purchase of units | 1 | |||||||
Number of warrant included in purchase of units | 1 | |||||||
Shares purchase price, per share (in Dollars per share) | $ 10 | $ 10 | ||||||
Option expiry date | Mar. 17, 2023 | |||||||
Option grants to holders demand and “piggyback” rights periods one | 5 years | |||||||
Option grants to holders demand and “piggyback” rights periods two | 7 years | |||||||
Share-based compensation expense | $ 818,000 | |||||||
Derivative warrant liability | $ 16,516,000 | $ 16,516,000 | $ 22,113,000 | |||||
Change in value of warrant liability | $ 5,597,000 | |||||||
2020 Omnibus Equity Incentive Plan [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Aggregate number of shares to be issued under stock incentive plan | 2,000,000 | |||||||
Stock option expiration period | 10 years | |||||||
Annual increase in number of shares available for issuance | 5.00% | |||||||
Common shares available for future grants | 700,000 | 700,000 | ||||||
Restricted Shares [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Vesting period | 4 years | |||||||
Total fair value of shares vested | $ 785,000,000 | |||||||
Unrecognized compensation cost | $ 19,000,000 | 19,000,000 | ||||||
Market Condition Awards [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Unrecognized compensation cost | 927,000 | $ 927,000 | ||||||
Unrecognized stock-based compensation expense, weighted-average recognition period | 2 years 11 months 15 days | |||||||
Share-based compensation expense | $ 33,000 | $ 33,000 | ||||||
Share-based compensation fair value per share | $ 10.45 | |||||||
Performance Shares [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Share-based compensation expense | $ 0 | |||||||
Minimum [Member] | Restricted Shares [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Unrecognized stock-based compensation expense, weighted-average recognition period | 4 years | |||||||
Maximum [Member] | Restricted Shares [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Unrecognized stock-based compensation expense, weighted-average recognition period | 5 years | |||||||
Subsequent Event [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Number of UPO units exchanged | 675,000 | |||||||
Number of shares in exchange for UPO units | 283,670 | |||||||
UPO Units Exercise Price One [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Number of Shares that UPO units are exercisable for | 1 | |||||||
UPO units exercise price | $ 10 | |||||||
Public Warrants [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Warrants outstanding | 11,500,000 | |||||||
Private Placement Warrants [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Warrants outstanding | 445,000 | 3,000,000 | ||||||
Private Placement Warrants [Member] | Dynamic Black Scholes Model [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Warrants outstanding | 445,000 | |||||||
Private Warrants [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Warrants outstanding | 3,000,000 | 445,000 | ||||||
Warrants exercise price | 4.60 | 4.60 | $ 6.15 | |||||
Working Capital Warrants [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Warrants outstanding | 150,000 | 150,000 | ||||||
Working Capital Warrants [Member] | Dynamic Black Scholes Model [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Warrants outstanding | 150,000 | |||||||
Warrant [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Warrants exercise price | 0.01 | $ 0.01 | ||||||
Shorter trading days | 20 days | |||||||
Trading days | 30 days | |||||||
Description of sale price of common stock | The Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● at any time during the exercise period; ● upon a minimum of 30 days’ prior written notice of redemption; and ● if, and only if, the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders. ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants. | |||||||
Warrant [Member] | Minimum [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Minimum of period prior written notice of redemption | 30 days | |||||||
Share Price (in Dollars per share) | $ 18 | $ 18 | ||||||
Former Members’ of BurgerFi [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Common shares issued as part of acquisition | 6,603,774 | |||||||
Private Warrants [Member] | Dynamic Black Scholes Model [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Warrants outstanding | 3,000,000 | |||||||
UPO Warrants [Member] | ||||||||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||
Warrants outstanding | 750,000 |
Stockholders' Equity (Success_3
Stockholders' Equity (Successor) - Summary of Activity of Restricted Shares (Details) | 1 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Restricted Shares [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Restricted Shares, Granted | shares | 1,300,000 |
Number of Restricted Shares, Vested | shares | (50,000) |
Number of Restricted Shares, Ending balance | shares | 1,250,000 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 15.30 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 15.70 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 15.28 |
Performance Condition Awards [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares, Granted | shares | 950,000 |
Shares, Non-vested Ending balance | shares | 950,000 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 15.70 |
Weighted Average Grant Date Fair Value, Non-vested Ending balance | $ / shares | $ 15.70 |
Service Condition Awards [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares, Granted | shares | 250,000 |
Shares, Vested | shares | (50,000) |
Shares, Non-vested Ending balance | shares | 200,000 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 15.70 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 15.70 |
Weighted Average Grant Date Fair Value, Non-vested Ending balance | $ / shares | $ 15.70 |
Market Condition Awards [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares, Granted | shares | 100,000 |
Shares, Non-vested Ending balance | shares | 100,000 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 10.45 |
Weighted Average Grant Date Fair Value, Non-vested Ending balance | $ / shares | $ 10.45 |
Stockholders' Equity (Success_4
Stockholders' Equity (Successor) - Summary of Input Variables (Details) | 1 Months Ended | |
Dec. 31, 2020 | ||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||
Risk-free interest rate | 0.37% | |
Expected life in years | 3 years | |
Expected volatility | 60.00% | |
Expected dividend yield | 0.00% | [1] |
Derivative Warrant Liability [Member] | ||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||
Risk-free interest rate | 0.36% | |
Expected life in years | 3 years | |
Expected volatility | 30.00% | |
Expected dividend yield | 0.00% | |
Performance Shares [Member] | ||
STOCKHOLDERS' EQUITY (Details) [Line Items] | ||
Risk-free interest rate | 0.18% | |
Expected life in years | 3 years | |
Expected volatility | 65.90% | |
Expected dividend yield | 0.00% | [1] |
[1] | The Monte Carlo method assumes a reinvestment of dividends. |
Stockholders' Equity (Success_5
Stockholders' Equity (Successor) - Summary of Share- Based Compensation and Tax Benefit Recognized (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 31, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation | $ 818,000 | |
Share-based compensation, net of income tax benefit | 818,000 | |
Service Condition Awards [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation | 785,000 | |
Market Condition Awards [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation | $ 33,000 | $ 33,000 |
Stockholders' Equity (Success_6
Stockholders' Equity (Successor) - Summary of Analysis of Changes in Derivative Liability (Details) | 1 Months Ended |
Dec. 31, 2020USD ($) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Gain on change in value of warrant liability | $ (5,597,000) |
Derivative liability, Ending balance | 16,516,000 |
Level 3 Black Scholes [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Derivative liability, Beginning balance | 22,113,000 |
Gain on change in value of warrant liability | (5,597,000) |
Derivative liability, Ending balance | $ 16,516,000 |
Geographic Information (Details
Geographic Information (Details) - Summary of revenue by geographic area - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 15, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||||
Revenues | $ 1,704 | $ 15,549 | $ 17,224 | $ 24,498 | $ 24,859 | $ 32,578 | $ 33,555 |
United States [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 1,702 | 32,520 | 33,428 | ||||
Other Countries [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | $ 2 | $ 58 | $ 127 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Jan. 31, 2021USD ($) |
Bank of America [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Revolving line of credit paid | $ 3,012,000 |