Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Jun. 14, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-56160 | ||
Entity Registrant Name | AMERGENT HOSPITALITY GROUP INC. | ||
Entity Central Index Key | 0001805024 | ||
Entity Tax Identification Number | 84-4842958 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 7529 Red Oak Lane | ||
Entity Address, City or Town | Charlotte | ||
Entity Address, State or Province | NC | ||
Entity Address, Postal Zip Code | 28226 | ||
City Area Code | (704) | ||
Local Phone Number | 366-5122 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,032,411 | ||
Entity Common Stock, Shares Outstanding | 16,833,666 | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Firm ID | 677 | ||
Auditor Name | Cherry Bekaert LLP | ||
Auditor Location | Charlotte, North Carolina |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 375 | $ 646 |
Restricted cash | 1,672 | |
Investments | 12 | 50 |
Accounts and other receivables | 869 | 865 |
Inventories | 158 | 182 |
Prepaid expenses and other current assets | 222 | 360 |
TOTAL CURRENT ASSETS | 1,636 | 3,775 |
Property and equipment, net | 2,338 | 3,115 |
Operating lease assets | 4,976 | 8,021 |
Intangible assets, net | 2,309 | 3,129 |
Goodwill | 7,810 | 7,810 |
Investments | 16 | 16 |
Deposits and other assets | 100 | 352 |
TOTAL ASSETS | 19,185 | 26,218 |
Current liabilities: | ||
Accounts payable and accrued expenses | 9,245 | 6,844 |
Current portion of long-term debt and notes payable | 3,329 | 3,264 |
Current portion of operating lease liabilities | 5,395 | 4,599 |
Deferred grant income | 1,545 | |
TOTAL CURRENT LIABILITIES | 17,969 | 16,252 |
Operating lease liabilities, net of current portion | 5,868 | 8,644 |
Contract liabilities | 67 | 757 |
Deferred tax liabilities | 192 | 150 |
Long-term debt and notes payable, net of current portion (includes debt measured at fair value of $599 at December 31, 2021) | 4,335 | 6,593 |
TOTAL LIABILITIES | 28,431 | 32,396 |
Commitments and contingencies (see Note 13) | ||
Convertible Preferred Stock: Series 2: $1,000 stated value; authorized 1,500 shares; 100 issued and outstanding at both December 31, 2022 and December 31, 2021 | 58 | 58 |
Stockholders’ Deficit: | ||
Common stock: $0.0001 par value; authorized 50,000,000 shares; 15,706,736 shares issued and outstanding at both December 31, 2022 and December 31, 2021 | 2 | 2 |
Additional paid-in-capital | 93,160 | 92,882 |
Accumulated deficit | (100,976) | (97,963) |
Total Amergent Hospitality Group, Inc. Stockholders’ Deficit | (7,814) | (5,079) |
Non-controlling interests | (1,490) | (1,157) |
TOTAL STOCKHOLDERS’ DEFICIT | (9,304) | (6,236) |
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | $ 19,185 | $ 26,218 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Notes payable fair value disclosure | $ 599 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 15,706,736 | 15,706,736 |
Common stock, shares outstanding | 15,706,736 | 15,706,736 |
Convertible Preferred Stock Series 2 [Member] | ||
Convertible preferred stock, par value | $ 1,000 | $ 1,000 |
Convertible preferred stock, shares authorized | 1,500 | 1,500 |
Convertible preferred stock, shares issued | 100 | 100 |
Convertible preferred stock, shares outstanding | 100 | 100 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue: | ||
Total revenue | $ 21,294 | $ 20,652 |
Expenses: | ||
Restaurant cost of sales | 6,377 | 6,172 |
Restaurant operating expenses | 15,089 | 13,262 |
Restaurant pre-opening and closing expenses | 8 | |
General and administrative expenses | 5,584 | 5,210 |
Asset impairment charges | 3,208 | 1,456 |
Depreciation and amortization | 693 | 1,047 |
Employee retention credit and other grant income | (2,208) | (3,009) |
Total expenses | 28,743 | 24,146 |
Operating loss | (7,449) | (3,494) |
Other income (expense): | ||
Interest expense | (886) | (656) |
Change in fair value of derivative liabilities | 119 | |
Change in fair value of investment | (38) | (244) |
Change in fair value of convertible promissory note | 99 | 95 |
Gain on sale of subsidiary | 58 | |
Gain on extinguished/settled lease liabilities | 256 | 412 |
Gain on extinguished trade payable | 161 | |
Gain on forgiveness of Paycheck Protection Program loans | 4,201 | |
Other income | 354 | 310 |
Total other income | 4,147 | 94 |
Loss before income taxes | (3,303) | (3,400) |
Income tax expense | (42) | (118) |
Consolidated net loss | (3,346) | (3,518) |
Less: Net loss attributable to non-controlling interests | 333 | 142 |
Net loss attributable to Amergent Hospitality Group Inc. | $ (3,013) | $ (3,376) |
Net loss attributable to Amergent Hospitality Group Inc. per common share, basic | $ (0.19) | $ (0.22) |
Net loss attributable to Amergent Hospitality Group Inc. per common share, diluted | $ (0.19) | $ (0.22) |
Weighted average shares outstanding, basic | 15,706,736 | 15,303,558 |
Weighted average shares outstanding, diluted | 15,706,736 | 15,303,558 |
Restaurant Sales Net [Member] | ||
Revenue: | ||
Total revenue | $ 19,678 | $ 19,797 |
Gaming Income Net [Member] | ||
Revenue: | ||
Total revenue | 493 | 403 |
Franchise Income [Member] | ||
Revenue: | ||
Total revenue | $ 1,123 | $ 452 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Net loss attributable to Amergent Hospitality Group Inc. | $ (3,013) | $ (3,376) |
Foreign currency translation gain | 26 | |
Comprehensive loss | $ (3,013) | $ (3,350) |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preferred Stock and Stockholders' Deficit - USD ($) $ in Thousands | (Temporary equity) Preferred Series 2 Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 460 | $ 1 | $ 92,433 | $ (94,587) | $ (26) | $ (970) | $ (3,149) |
Beginning balance, shares at Dec. 31, 2020 | 787 | 14,282,736 | |||||
Conversion of preferred stock into common stock | $ (402) | $ 1 | 401 | 402 | |||
Conversion of preferred stock into common stock, shares | (687) | 1,374,000 | |||||
Common stock issued for compensation | 27 | 27 | |||||
Common stock issued for compensation, shares | 50,000 | ||||||
Share-based compensation expense | 21 | 21 | |||||
Foreign currency translation | 26 | 26 | |||||
Non-controlling interest distribution | (45) | (45) | |||||
Net loss | (3,376) | (142) | (3,518) | ||||
Ending balance, value at Dec. 31, 2021 | $ 58 | $ 2 | 92,882 | (97,963) | (1,157) | (6,236) | |
Ending balance, shares at Dec. 31, 2021 | 100 | 15,706,736 | |||||
Share-based compensation expense | 15 | 15 | |||||
Net loss | (3,013) | (333) | (3,346) | ||||
Issuance of warrants | 263 | 263 | |||||
Ending balance, value at Dec. 31, 2022 | $ 58 | $ 2 | $ 93,160 | $ (100,976) | $ (1,490) | $ (9,304) | |
Ending balance, shares at Dec. 31, 2022 | 100 | 15,706,736 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (3,346) | $ (3,518) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation and amortization | 693 | 1,047 |
Amortization of operating lease assets | 1,261 | 1,011 |
Asset impairment charges | 3,208 | 1,456 |
Gain on extinguished/settled lease liabilities | (256) | (412) |
Gain on sale of subsidiary | (58) | |
Gain on extinguished trade payable | (161) | |
Share-based compensation | 15 | 48 |
Change in fair value of investment | 38 | 244 |
Change in fair value of convertible promissory note | (99) | (95) |
Amortization of debt discount | 195 | 186 |
Change in fair value of derivative liabilities | (119) | |
Gain on loan forgiveness | (4,201) | |
Change in operating assets and liabilities: | ||
Accounts and other receivables | (4) | (555) |
Inventories | 24 | (46) |
Prepaid expenses and other assets | 390 | (22) |
Accounts payable and accrued expenses | 2,450 | (1,592) |
Deferred tax liabilities | 42 | 41 |
Deferred grant income | (1,545) | (455) |
Operating lease liabilities | (1,724) | (1,495) |
Contract liabilities | (691) | (74) |
Derivative liability | (66) | |
Net cash flows used in operating activities | (3,711) | (4,474) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (315) | (129) |
Cash and restricted cash acquired in connection with acquisition | 2,071 | |
Net proceeds from sale of subsidiary | 568 | |
Proceeds from sale of investments | 468 | |
Net cash flows (used in) provided by investing activities | (315) | 2,978 |
Cash flows from financing activities: | ||
Proceeds from long-term debt and notes payable | 2,428 | 2,000 |
Payments of long-term debt and notes payable | (309) | (53) |
Payment of financing costs | (36) | |
Distributions to non-controlling interest | (45) | |
Net cash flows provided by financing activities | 2,083 | 1,902 |
Effect of exchange rate changes on cash | (16) | |
Net (decrease) increase in cash and restricted cash | (1,943) | 390 |
Cash and restricted cash, beginning of period | 2,318 | 1,928 |
Cash and restricted cash, end of period | 375 | 2,318 |
Supplemental cash flow information: | ||
Interest | 676 | 402 |
Income taxes | 23 | 76 |
Non-cash operating, investing and financing activities: | ||
Conversion of Preferred Series 2 stock to common stock | 402 | |
Change in operating lease assets and liabilities due to new and amended leases | 45 | 404 |
Issuance of warrants in connection with convertible promissory notes | 263 | |
Purchases of property and equipment included in accounts payable and accrued expenses | 203 | |
Issuance of convertible promissory note as consideration for acquisition | 1,194 | |
Details of end of period cash and restricted cash: | ||
Cash | 375 | 646 |
Restricted cash | 1,672 | |
Total cash and restricted cash | $ 375 | $ 2,318 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS | 1. NATURE OF BUSINESS BASIS OF PRESENTATION Amergent Hospitality Group, Inc. (“Amergent”) was incorporated on February 18, 2020 as a wholly owned subsidiary of Chanticleer Holdings, Inc. (“Chanticleer”) for the purpose of conducting the business of Chanticleer and its subsidiaries after completion of the spin-off of Amergent to the shareholders of Chanticleer (the “Spin-Off”). The Spin-Off transaction was completed on April 1, 2020 in connection with Chanticleer’s completion of its merger transaction (the “Merger”) with Sonnet BioTherapeutics, Inc. (“Sonnet”). Amergent is in the business of owning, operating and franchising fast casual dining concepts. During 2021, the Company purchased all of the outstanding membership interests in Pie Squared Holdings LLC and its wholly owned subsidiaries (“Pie Squared Holdings”) (see Note 3). The accompanying consolidated financial statements include the accounts of Amergent and its subsidiaries along with Chanticleer and its subsidiaries (collectively “we,” “us,” “our,” or the “Company”). All intercompany and inter-entity balances have been eliminated in consolidation. The consolidated financial statements include the accounts of Amergent and its subsidiaries presented below: SCHEDULE OF CONSOLIDATED AND COMBINED FINANCIAL STATEMENT Amergent Hospitality Group, Inc. Jurisdiction of Incorporation Percent owned American Roadside Burgers, Inc DE, USA American Burger Ally, LLC NC, USA 100 % American Burger Morehead, LLC NC, USA 100 % American Burger Prosperity, LLC NC, USA 50 % American Roadside Burgers Smithtown, Inc DE, USA 100 % BGR Acquisition, LLC NC, USA 100 % BGR Franchising, LLC VA, USA 100 % BGR Operations, LLC VA, USA 100 % BGR Acquisition 1, LLC NC, USA 100 % BGR Annapolis, LLC MD, USA 100 % BGR Arlington, LLC VA, USA 46 % BGR Columbia, LLC MD, USA 100 % BGR Michigan Ave, LLC DC, USA 100 % BGR Mosaic, LLC VA, USA 100 % BGR Old Keene Mill, LLC VA, USA 100 % BGR Washingtonian, LLC MD, USA 46 % Capitol Burger, LLC MD, USA 100 % BT Burger Acquisition, LLC NC, USA 100 % BT’s Burgerjoint Rivergate LLC NC, USA 100 % BT’s Burgerjoint Sun Valley, LLC NC, USA 100 % LBB Acquisition, LLC NC, USA 100 % Cuarto LLC OR, USA 100 % LBB Acquisition 1 LLC OR, USA 100 % LBB Hassalo LLC OR, USA 80 % LBB Platform LLC OR, USA 80 % LBB Capitol Hill LLC WA, USA 50 % LBB Franchising LLC NC, USA 100 % LBB Green Lake LLC OR, USA 50 % LBB Lake Oswego LLC OR, USA 100 % LBB Magnolia Plaza LLC NC, USA 50 % LBB Multnomah Village LLC OR, USA 50 % LBB Progress Ridge LLC OR, USA 50 % LBB Rea Farms LLC NC, USA 50 % LBB Wallingford LLC WA, USA 50 % LBB Downtown PDX LLC WA, USA 100 % Noveno LLC OR, USA 100 % Octavo LLC OR, USA 100 % Primero LLC OR, USA 100 % Quinto LLC OR, USA 100 % Segundo LLC OR, USA 100 % Septimo LLC OR, USA 100 % Sexto LLC OR, USA 100 % LBB University of Oregon LLC OR, USA 100 % Jantzen Beach Wings, LLC OR, USA 100 % Oregon Owl’s Nest, LLC OR, USA 100 % West End Wings LTD (sold in 2021) United Kingdom 100 % Pie Squared Holdings LLC DE, USA 100 % PizzaRev Franchising LLC DE, USA 100 % Pie Squared Pizza LLC CA, USA 100 % Pie Squared Austin LLC DE, USA 100 % PizzaRev IP Holdings LLC DE, USA 100 % LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN As of December 31, 2022, the Company’s cash balance was $ 0.4 16.3 ● our ability to access the capital and debt markets to satisfy current obligations and operate the business; ● our ability to qualify for and access financial stimulus programs available through federal and state government programs; ● our ability to refinance or otherwise extend maturities of current debt obligations; ● our ability to manage our operating expenses and maintain gross margins; ● popularity of and demand for our fast-casual dining concepts; and ● general economic conditions and changes in consumer discretionary income. We have typically funded our operating costs, acquisition activities, working capital requirements and capital expenditures with proceeds from the issuances of our common stock and other financing arrangements, including convertible debt, lines of credit, notes payable, capital leases, government stimulus funds and other forms of external financing. The Company expects to have to seek additional debt or equity funding to support operations and there can be no assurances that such funding would be available at commercially reasonable terms, if at all. As Amergent executes its business plan over the next 12 months, it intends to carefully monitor its working capital needs and cash balances relative to the availability of cost-effective debt and equity financing. In the event that capital is not available, Amergent may then have to scale back or freeze its growth plans, sell assets on less than favorable terms, reduce expenses, and/or curtail future acquisition plans to manage its liquidity and capital resources. The Company’s current operating losses, combined with its working capital deficit, raise substantial doubt about its ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). The consolidated financial statements include accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been updated to conform to the current year presentation. The Company has opted to present the financial information on the consolidated balance sheets and consolidated statements of operations, comprehensive loss, stockholders’ deficit and cash flows in thousands. USE OF ESTIMATES The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include the valuation of derivatives, options, warrants and convertible notes payable and analysis of the recoverability of goodwill and long-lived assets. Actual results could differ from those estimates. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures and records certain financial assets and liabilities at fair value on a recurring basis. U.S. GAAP provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority, referred to as Level 1, to quoted prices in active markets for identical assets and liabilities. The next priority, referred to as Level 2, is given to quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active; that is, markets in which there are few transactions for the asset or liability. The lowest priority, referred to as Level 3, is given to unobservable inputs. The Company is required to disclose fair value information about financial instruments when it is practicable to estimate that value. The carrying amounts of the Company’s cash, restricted cash, accounts receivable, other receivables, accounts payable, other current liabilities, convertible notes payable (other than the convertible note payable discussed above) and notes payable approximate fair value due to the short-term maturities of these financial instruments and/or because related interest rates offered to the Company approximate current rates. SEGMENTS Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company operates under four brands but views its operations and manages its business in one segment – fast casual dining. CASH Cash consists of deposits held at financial institutions and is stated at fair value. The Company limits its credit risk associated with cash by maintaining its bank accounts at major financial institutions. RESTRICTED CASH As of December 31, 2022 and 2021, the Company maintained restricted cash of nil 1.7 ACCOUNTS AND OTHER RECEIVABLES The Company monitors its exposure for credit losses on its receivable balances and the credit worthiness of its receivables on an ongoing basis and records related allowances for doubtful accounts. Allowances are estimated based upon specific customer and other balances where a risk of default has been identified, and also include a provision for non-customer specific defaults based upon historical experience. The majority of the Company’s accounts are from customer credit card transactions with minimal historical credit risk. As of December 31, 2022 and 2021, the Company has not recorded an allowance for doubtful accounts. If circumstances related to specific customers change, estimates of the recoverability of receivables could also change. INVENTORIES Inventories are recorded at the lower of cost (first-in, first-out method) or net realizable value, and consist primarily of restaurant food items, supplies, beverages and merchandise. PROPERTY AND EQUIPMENT Property and equipment are stated at cost, less accumulated depreciation. Depreciation and amortization are recorded generally using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over the lesser of the expected lease term or the estimated useful lives of the related assets using the straight-line method. Maintenance and repairs that do not improve or extend the useful lives of the assets are not considered assets and are charged to expense when incurred. The estimated useful lives used to compute depreciation and amortization are as follows: SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIVES Leasehold improvements 5 15 Restaurant furnishings and equipment 3 10 Furniture and fixtures 3 10 Office and computer equipment 3 7 INTANGIBLE ASSETS Trademark//Tradenames Certain of the Company’s trademark/tradenames have been determined to have a definite life and are being amortized on a straight-line basis over estimated useful lives of 10 long-lived assets During the first quarter of 2023, as a result of recent store closures, the Company reassessed the useful lives of the indefinite-lived trademark/tradenames intangible assets, which had an aggregate carrying value of $ 2.3 Franchise Rights As of December 31, 2021, we had intangible assets related to initial franchise fees for our PizzaRev restaurants, which were amortized over the five The Company also has intangible assets representing the acquisition date fair value of customer contracts acquired in connection with BGR’s franchise business, which are amortized over the weighted average life of the underlying franchise agreements, which is the estimated useful life. LONG-LIVED ASSETS Long-lived assets, such as property and equipment, operating lease assets, and purchased intangible assets subject to depreciation and amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Some of the events or changes in circumstances that would trigger an impairment test include, but are not limited to: ● significant under-performance relative to expected and/or historical results (negative comparable sales growth or operating cash flows for two consecutive years); ● significant negative industry or economic trends; ● knowledge of transactions involving the sale of similar property at amounts below the Company’s carrying value; or ● the Company’s expectation to dispose of long-lived assets before the end of their estimated useful lives, even though the assets do not meet the criteria to be classified as “Held for Sale.” If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. During 2021, primarily as a result of the COVID-19 outbreak, the Company determined that triggering events occurred requiring management to review certain long-lived assets for impairment and determined that the carrying value of the Company’s trademark/tradenames intangible asset, property and equipment and operating lease assets were impaired. As a result, an aggregate impairment charge was recognized of $ 1.5 3.2 GOODWILL Goodwill, which is not subject to amortization, is evaluated for impairment annually as of the end of the Company’s year-end, or more frequently if an event occurs or circumstances change, such as material deterioration in performance or a significant number of store closures, that would indicate an impairment may exist. Goodwill is tested for impairment at a level of reporting referred to as a reporting unit. Management determined that the Company has one reporting unit. When evaluating goodwill for impairment, the Company may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If the Company does not perform a qualitative assessment or determines that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, a quantitative assessment is performed to calculate the estimated fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. The Company’s decision to perform a qualitative impairment assessment is influenced by a number of factors, including the significance of the excess of the reporting unit’s estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments, and the price of our common stock. Step one of the impairment test is based upon a comparison of the carrying value of net assets, including goodwill balances, to the fair value of net assets. Due to the impact of the COVID-19 pandemic during 2021, the Company performed quarterly quantitative impairment assessments at each quarter end and determined that goodwill was not impaired due to the excess fair value of the reporting unit over its carrying value based on the best judgement of management on information known at the time of the assessment. Additionally, due to changing consumer habits, macroeconomic trends and poor performance and the ultimate closure of certain stores, management performed quarterly qualitative impairment analyses of goodwill during 2022 and a quantitative analysis as of December 31, 2022, the result of the analysis was that due to the negative carrying value of the reporting unit no impairment was recorded at December 31, 2022. CONVERTIBLE NOTES PAYABLE The Company analyzes its convertible debt instruments for embedded attributes that may require bifurcation from the host and accounting as derivatives. At the inception of each instrument, the Company performs an analysis of the embedded features requiring bifurcation and may elect, if eligible, to account for the entire debt instrument at fair value. If the fair value option were to be elected, any changes in fair value would be recognized in the accompanying statements of operations until the instrument is settled. The Company elected to account for its convertible note payable issued in 2021 in connection with the PizzaRev acquisition (see Note 3) at fair value and, as such, has recognized the change in fair value in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021. See Note 5. FOREIGN CURRENCY TRANSLATION Assets and liabilities denominated in local currency are translated to U.S. dollars using the exchange rates as in effect at the balance sheet date. Results of operations are translated using average exchange rates prevailing throughout the period. Adjustments resulting from the process of translating foreign currency financial statements from functional currency into U.S. dollars are included in accumulated other comprehensive loss within stockholders’ equity. Foreign currency transaction gains and losses are included in current earnings. The Company has determined that local currency was the functional currency for its foreign operations. The foreign subsidiary was sold in 2021, and there are no foreign assets held at December 31, 2022. REVENUE RECOGNITION The Company generates revenues from the following sources: (i) restaurant sales; (ii) gaming income; and (iii) franchise income, consisting of royalties based on a percentage of sales reported by franchise restaurants and initial signing fees. Restaurant Sales, Net The Company records revenue from restaurant sales at the time of sale, net of discounts, coupons, employee meals, and complimentary meals. Sales tax and value added tax (“VAT”) collected from customers and remitted to governmental authorities are presented on a net basis within revenue in the consolidated statements of operations. Gaming Income The Company receives revenue from operating a gaming facility adjacent to its restaurant in Jantzen Beach, Oregon. Revenue from gaming is recognized as earned from gaming activities, net of payouts to customers, taxes and government fees. These fees are recognized as they are earned based on the terms of the agreements. Franchise Income The Company grants franchises to operators in exchange for initial franchise license fees and continuing royalty payments. The license granted for each restaurant or area is considered a performance obligation. All other obligations (such as providing assistance during the opening of a restaurant) are combined with the license and were determined to be a single performance obligation. Accordingly, the total transaction price (comprised of the restaurant opening and territory fees) is allocated to each restaurant expected to be opened by the licensee under the contract. There are significant judgments regarding the estimated total transaction price, including the number of stores expected to be opened. We recognize the fee allocated to each restaurant as revenue on a straight-line basis over the restaurant’s license term, which generally begins upon the signing of the contract for area development agreements and upon the signing of a store lease for franchise agreements. The payments for these upfront fees are generally received upon contract execution. Continuing fees, which are based upon a percentage of franchisee revenues and are not subject to any constraints, are recognized on the accrual basis as those sales occur. The payments for these continuing fees are generally made on a weekly basis. Contract Liabilities Contract liabilities consist of deferred revenue resulting from initial and renewal franchise license fees paid by franchisees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement, as well as upfront development fees paid by franchisees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement once it is executed. The recognition of initial and renewal license fees is accelerated if the development agreement is terminated. During the year ended December 31, 2022, the Company recognized $ 0.7 0.1 RESTAURANT PRE-OPENING AND CLOSING EXPENSES Restaurant pre-opening expenses consist of the costs of hiring and training the initial hourly work force for each new restaurant, travel, the cost of food and supplies used in training, grand opening promotional costs, the cost of the initial stocking of operating supplies and other direct costs related to the opening of a restaurant, including rent during the construction and in-restaurant training period. Restaurant opening expenses are expensed as incurred. Restaurant closing expenses consist of costs related to closing a restaurant location and include, among other things lease termination costs and franchise breakage fees directly related to the closure. Impairment charges associated with closed locations are recorded as a component of asset impairment charges. The derecognition of lease liabilities due to the Company negotiating the cancellation of its obligations under certain lease agreements is recorded as gain on extinguished lease liabilities. Restaurant closing costs are expensed as incurred. LIQUOR LICENSES The costs of obtaining non-transferable liquor licenses that are directly issued by local government agencies for nominal fees are expensed as incurred. The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets and included in other assets. Liquor licenses are reviewed for impairment annually or when events or changes in circumstances indicate that the carrying amount may not be recoverable. Annual liquor license renewal fees are expensed over the renewal term. ADVERTISING Advertising costs are expensed as incurred. Advertising expenses, which are included in restaurant operating expenses and general and administrative expenses in the accompanying consolidated statements of operations, totaled approximately $ 0.2 0.2 LEASES We determine if a contract contains a lease at inception. Our material operating leases consist of restaurant locations and office space. Our leases have remaining terms of up to approximately 11 include options to extend the leases for additional 5-year periods Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the reasonably certain lease term. We estimated this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. If the estimate of our incremental borrowing rate was changed, our operating lease assets and liabilities could differ materially. In April 2020, the FASB staff issued a question-and-answer document (“FASB Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease guidance, the Company would have to determine, on a lease-by-lease basis, if a lease concession was the result of a new arrangement reached with the tenant or if a lease concession was under the enforceable rights and obligations within the existing lease agreement. The FASB Q&A allows the Company, if certain criteria have been met, to bypass the lease-by-lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. The Company elected to apply such relief and availed itself of the election to avoid performing a lease-by-lease analysis for the lease concessions received as the concessions granted as relief were due to the COVID-19 pandemic and result in the cash flows to the landlord remaining substantially the same or less. The Company received COVID-19-related lease concessions during 2021; however, none were received during 2022. SHARE-BASED COMPENSATION The Company measures and recognizes share-based compensation expense for both employee and nonemployee awards based on the grant date fair value of the awards. The Company recognizes share-based compensation expense on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. The Company recognizes forfeitures as they occur. The Company estimates the fair value of employee and non-employee stock awards as of the date of grant using the Black-Scholes option pricing model. Management estimates the expected share price volatility based on the historical volatility of the Company. The expected term of the Company’s stock awards has been determined utilizing the “simplified” method for awards that qualify as “plain vanilla” stock awards. The risk-free interest rate is determined by reference to the yield curve of a zero-coupon U.S. Treasury bond on the date of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future. INCOME TAXES Deferred income taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Based on the rules of the Internal Revenue Code (“IRC”), Amergent has determined that it has approximately $ 23.7 7.2 The Company has provided a valuation allowance for the full amount of the deferred tax assets in the accompanying consolidated financial statements. As of December 31, 2022 and 2021, the Company had no accrued interest or penalties relating to any income tax obligations. The Company currently has no federal or state examinations in progress, nor has it had any federal or state tax examinations since its inception. The last three years of the Company’s tax years are subject to federal and state tax examination. LOSS PER COMMON SHARE The Company computes net loss per share using the weighted-average number of common shares outstanding during the period. Basic and diluted net loss per share is the same because the conversion, exercise or issuance of all potential common stock equivalents, which comprise the entire amount of the Company’s outstanding warrants, as described in Note 12, the potential conversion of the convertible debt instruments, as described in Note 9, and share-based compensation awards as described in Note 14, would be anti-dilutive. COMPREHENSIVE INCOME OR LOSS Standards for reporting and displaying comprehensive income or loss and its components (revenues, expenses, gains and losses) in a full set of general-purpose financial statements requires that all items that are required to be recognized under accounting standards as components of comprehensive income or loss be reported in a financial statement that is displayed with the same prominence as other financial statements. We are required to (a) classify items of other comprehensive income or loss by their nature in financial statements, and (b) display the accumulated balance of other comprehensive income or loss separately in the equity section of the balance sheet for all periods presented. Other comprehensive income or loss represents foreign currency translation adjustments. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2021, the FASB issued ASU 2021-04, Earnings per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges or Freestanding Equity-Classified Written Call Options In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic ASC 832): Disclosures by Business Entities about Government Assistance We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to the consolidated financial statements. |
ACQUISITION
ACQUISITION | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION | 3. ACQUISITION On August 30, 2021, the Company purchased all of the outstanding membership interests in Pie Squared Holdings pursuant to a Unit Purchase Agreement (“Purchase Agreement”). Pie Squared Holdings, directly and through its four wholly owned subsidiaries, owns, operates and franchises pizza restaurants operating under the tradename PizzaRev. The PizzaRev stores consist of three company owned stores and nine franchised locations. The purchase price is an 8 1.0 1.2 0.2 0.1 The assets acquired, and liabilities assumed as of the acquisition date consists of the following: SCHEDULE OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED Assets acquired: Cash $ 71 Restricted cash 2,000 Property and equipment 348 Right of use asset 1,391 Tradename/trademark intangible 410 Franchise rights intangible 410 Goodwill 51 Security deposits and other assets 126 Total assets acquired $ 4,807 Liabilities assumed Gift card liability $ 139 Deferred revenue 36 Deferred grant income 2,000 Right of use liability 1,438 Total liabilities assumed $ 3,613 Net purchase price $ 1,194 Interest on the Note is due at maturity on August 30, 2023 4.99 30 15 0.50 2.00 1.2 SCHEDULE OF ESTIMATED FAIR VALUE ASSUMPTIONS Volatility 90.00 % Risk free rate 0.08 0.20 % Stock price $ 0.52 Credit spread 6.35 % In 2021, and prior to the acquisition, Pie Squared Holdings received a grant under the U.S. SBA’s Restaurant Revitalization Fund for approximately $ 10.0 2.0 Restricted cash and a deferred grant income liability has been recorded on the opening balance sheet for the unused proceeds from the Restaurant Revitalization Fund, and the liability is being reduced as the restricted cash is used for eligible costs incurred under the Restaurant Revitalization Fund post acquisition. As the Company acquired all the outstanding membership interests in Pie Squared Holdings, the Company assumed all the rights and obligations of Pie Squared Holdings that arose from transactions of Pie Squared Holdings prior to the sale event, both stated rights and obligations as well as those that are contingent, including Pie Squared Holdings’ grant from the U.S. SBA under the Restaurant Revitalization Fund, as further described in Note 4. |
EMPLOYEE RETENTION CREDIT AND R
EMPLOYEE RETENTION CREDIT AND RESTAURANT REVITALIZATION FUND | 12 Months Ended |
Dec. 31, 2022 | |
Employee Retention Credit And Restaurant Revitalization Fund | |
EMPLOYEE RETENTION CREDIT AND RESTAURANT REVITALIZATION FUND | 4. EMPLOYEE RETENTION CREDIT AND RESTAURANT REVITALIZATION FUND Employee Retention Credit The Employee Retention Credit (“ERC”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) is a refundable tax credit which encouraged businesses to keep employees on the payroll during the COVID-19 pandemic. Although the program ended on January 1, 2022, the Company performed an analysis during the current period and determined that it was eligible for additional credits related to 2021 wages. As of each of December 31, 2022 and December 31, 2021, approximately $ 0.8 0.7 2.5 In addition to the ERC, the Company received credits under other government/government agency programs of approximately $ 128,000 for the year ended December 31, 2021, of which approximately $ 84,000 were recorded as an offset to restaurant operating expenses and $ 44,000 Restaurant Revitalization Fund The American Rescue Plan Act established the Restaurant Revitalization Fund (“RRF”) to provide funding to help restaurants and other eligible businesses keep their doors open. This program provided restaurants with funding equal to their pandemic-related revenue loss up to $10.0 million per business and no more than $5.0 million per physical location 10.0 2.0 nil 1.7 1.5 0.5 As the Company acquired all the outstanding membership interests in Pie Squared Holdings, the Company is now responsible that the grant proceeds were, in fact, properly obtained and disbursed for “eligible uses.” If it is determined that Pie Squared Holdings obtained the grant improperly or that disbursements of such grant monies were not “eligible uses,” then the Company would be responsible for the ramifications of such actions, including repayment of the approximately $ 10.0 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 5. FAIR VALUE OF FINANCIAL INSTRUMENTS The tables below reflect the level of the inputs used in the Company’s fair value calculations: SCHEDULE OF FAIR VALUE MEASUREMENTS, RECURRING AND NONRECURRING (in thousands) Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2022 Assets (Note 6) Common stock of Sonnet $ 12 $ — $ — $ 12 Liabilities (Note 9) Convertible note payable $ — $ — $ 1,000 $ 1,000 (in thousands) Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2021 Assets (Note 6) Common stock of Sonnet $ 50 $ — $ — $ 50 Liabilities (Note 9) Convertible note payable $ — $ — $ 1,099 $ 1,099 The Company evaluated the convertible note payable issued in connection with the acquisition of Pie Squared Holdings (see Note 9) in accordance with ASC Topic 815, Derivatives and Hedging The reconciliation of the convertible note payable measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows: SCHEDULE OF FAIR VALUE LIABILITIES MEASURED ON RECURRING BASIS Year Ended (in thousands) December 31, 2022 December 31, 2021 Beginning balance $ 1,099 $ — Fair value at issuance date — 1,194 Change in fair value (99 ) (95 ) Ending balance $ 1,000 $ 1,099 |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Investments, All Other Investments [Abstract] | |
INVESTMENTS | 6. INVESTMENTS Investments consist of the following: SCHEDULE OF INVESTMENT (in thousands) December 31, 2022 December 31, 2021 Common stock of Sonnet, at fair value (a) $ 12 $ 50 Chanticleer Investors, LLC, at cost (b) 16 16 Total $ 28 $ 66 (a) Represents the fair value of the common stock of Sonnet held by the Company after its exercise of warrants received in connection with the Merger. As of December 31, 2022, 8,718 0.1 (b) Represents the Company’s investment in Chanticleer Investors, LLC, which holds an interest in Hooters of America, the operator and franchisor of the Hooters Brand worldwide. As of the dates presented, the Company’s effective economic interest in Hooters of America was less than 1% 0.1 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (in thousands) December 31, 2022 December 31, 2021 Leasehold improvements $ 4,675 $ 5,511 Restaurant furniture and equipment 1,893 2,768 Construction in progress — 20 Office and computer equipment 7 33 Office furniture and fixtures 54 57 Property,plant and equipment, gross 6,629 8,389 Accumulated depreciation and amortization (4,291 ) (5,274 ) Property, plant and equipment, net $ 2,338 $ 3,115 During 2022, as a result of changing consumer habits resulting in poor performance and the ultimate closure of certain stores, the Company determined that triggering events occurred requiring management to review certain long-lived assets for impairment and determined that the carrying value of the Company’s property and equipment were impaired. As a result, an impairment charge of approximately $ 0.8 asset impairment charges During 2021, primarily as a result of the COVID-19 outbreak that had a significant impact throughout the hospitality industry, the Company determined that triggering events occurred requiring management to review certain long-lived assets for impairment and determined that the carrying value of the Company’s property and equipment were impaired. As a result, an impairment charge of approximately $ 0.4 asset impairment charges We recognized depreciation expense of $ 0.5 0.6 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | 8. INTANGIBLE ASSETS, NET Goodwill A roll forward of goodwill is as follows: SCHEDULE OF GOODWILL (in thousands) December 31, 2022 December 31, 2021 Year Ended (in thousands) December 31, 2022 December 31, 2021 Beginning balance $ 7,810 $ 8,591 Acquisition of Pie Squared Holdings — 51 Sale of Hooters UK — (820 ) Foreign currency translation loss — (12 ) Ending balance $ 7,810 $ 7,810 On October 8, 2021, the Company, through its wholly owned subsidiary, Chanticleer UK Group Limited, sold West End Wings LTD, the Company’s Hooters restaurant located in Nottingham, England, to Hard Four Consultancy Limited (UK) for the final purchase price of £ 0.4 0.6 0.1 Other Intangible Assets Franchise and trademark/tradename intangible assets consist of the following: SCHEDULE OF FINITE - LIVED INTANGIBLE ASSETS (in thousands) December 31, 2022 December 31, 2021 Trademark, Tradenames: American Roadside Burger 10 $ 561 $ 561 BGR: The Burger Joint Indefinite * 739 739 Little Big Burger Indefinite * 1,550 1,550 PizzaRev 5 — 410 2,850 3,260 Acquired Franchise Rights: BGR: The Burger Joint 7 828 828 PizzaRev 5 — 410 828 1,238 Total intangibles at cost 3,678 4,498 Accumulated amortization (1,369 ) (1,369 ) Intangible assets, net $ 2,309 $ 3,129 * See Note 2; the Company is re-designating these to 5-year useful lives in the first quarter of 2023. Based on an analysis of the recoverability of the carrying value at each quarter end during 2022, including December 31, 2022, an impairment charge of approximately $ 0.3 0.3 Based on an analysis of the recoverability of the carrying value at each quarter end during 2021, including December 31, 2021, an impairment charge of approximately $ 0.3 Amortization of intangible assets was $ 0.2 0.4 Amortization expense for the next five years is as follows (in thousands). The amounts below reflect the Company’s change in estimate relating to the useful lives of the formerly indefinite-lived trademark/tradename intangible assets. For additional information, see Note 2 . SUMMARY OF AMORTIZATION EXPENSE Year ending December 31: 2023 $ 343 2024 458 2025 458 2026 458 2027 458 Thereafter 134 Total $ 2,309 |
LONG-TERM DEBT AND NOTES PAYABL
LONG-TERM DEBT AND NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND NOTES PAYABLE | 9. LONG-TERM DEBT AND NOTES PAYABLE Long-term debt and notes payable are summarized as follows: SCHEDULE OF DEBT AND NOTES PAYABLE (in thousands) December 31, 2022 December 31, 2021 10% convertible debt ( a $ 4,038 $ 4,038 8% convertible debt ( b 1,350 — Convertible promissory note (measured at fair value) ( c 1,000 1,099 PPP loans ( d — 4,109 EIDL loans ( e 300 300 Contractor note ( f 348 348 Notes payable ( g 144 — Related party note (h) 625 — Total Debt 7,805 9,894 Less: discount on convertible debt (a) (b) (141 ) (37 ) Total Debt, net of discount $ 7,664 $ 9,857 Current portion of long-term debt and notes payable $ 3,329 $ 3,264 Long-term debt and notes payable, less current portion $ 4,335 $ 6,593 (a) In connection with and prior to the Spin-Off and Merger, on April 1, 2020, pursuant to an agreement among Chanticleer, Oz Rey, LLC (“Oz Rey”), a related party, and certain original holders of the 8 10 8 10 4.0 2,925,200 0.125 2,462,600 0.50 462,500 10 The 10% Convertible Debt was previously amended to fix the conversion rate into common stock at $ 0.10 2.4 23,700,000 The Company recorded a debt discount of approximately $ 0.4 In connection with the 8% Convertible Debt transaction described in (b) below, the maturity date of the 10% Convertible Debt was extended to April 1, 2024 and Oz Rey agreed to subordinate payment of its 10% Convertible Debt to payment of the 8% Convertible Debt, which has been accounted for as a loan modification. In addition, Oz Rey received a fee equal to 2.0% of the principal amount of the 8% Convertible Debt issued in the transaction, which has been recorded as a debt discount and is being amortized over the two-year term of the related debt. (b) In March 2022, the Company commenced a private placement of up to $ 3.0 3,000,000 1.35 The 8% Convertible Debt matures on September 1, 2023 and is subject to acceleration in the event of customary events of default. Interest is payable quarterly in cash. The 8% Convertible Debt may be converted by the holders at any time at a fixed conversion price of $ 0.40 0.50 Both the notes and the warrants include a beneficial ownership blocker of 4.99% and contain customary provisions preventing dilution and providing the holders rights in the event of fundamental transactions. Upon the earlier of the maturity date or the one-year anniversary of conversion of the 8% Convertible Debt, holders of 51% of the registerable securities may request the Company to file a registration statement for the securities. five years 3,375,000 The Company analyzed the 8% Convertible Debt and did not identify any embedded features that require bifurcation from the host and accounting as derivatives. However, as the convertible notes payable were issued with warrants, the net proceeds from the issuance were allocated to the 8% Convertible Debt and the warrants based on their relative fair values, resulting in an allocation of $ 1.0 0.3 0.3 (c) On August 30, 2021, the Company purchased all of the outstanding membership interests in Pie Squared Holdings. The purchase price was funded through the issuance of an 8% secured, convertible promissory note with a face value of $ 1.0 1.2 4.99 15 0.50 2.00 2,000,000 Interest on the convertible promissory note is due on August 30, 2023 , the maturity date. The Company elected to measure the convertible promissory note at fair value, with changes in the fair value recorded within change in fair value of convertible promissory note in the consolidated statements of operations. See Note 5 for additional information on the valuation of the convertible promissory note as of December 31, 2022. (d) On April 27, 2020, Amergent received a Paycheck Protection Program (“PPP”) loan of approximately $ 2.1 1 April 2022 0.1 2.0 1 February 25, 2026 45,000 (e) On August 4, 2020, the Company obtained two loans under the Economic Injury Disaster Loan (“EIDL”) assistance program from the U.S. SBA in light of the impact of the COVID-19 pandemic on the Company’s business. The principal amount of the loans is $ 0.3 3.75 1,462 (f) The Company entered into a promissory note to repay a contractor for the build-out of a new Little Big Burger location. The note bears interest at 12 0.4 0.1 (g) In February and March 2022, eight company-owned stores entered into notes payable to Toast Capital Loans. The terms of the notes require payment of 13.2 270 15 In August 2022, the Company entered into a Future Revenue Sales Agreement with Sprout Funding which is being treated as a note payable. The Company received a net $ 0.2 180 1,359 80 (h) In August 2022 through December 2022, the Company received advances from a related party in aggregate of $ 0.6 1 June 30, 2023 The Company’s various loan agreements contain financial and non-financial covenants and provisions providing for cross-default. The evaluation of compliance with these provisions is subject to interpretation and the exercise of judgment. Oz Rey has provided a waiver of certain financial covenants through December 31, 2023. Maturities of our debt as of December 31, 2022 are presented below (in thousands): SCHEDULE OF FUTURE MINIMUM PAYMENTS Year ending December 31: 2023 $ 3,329 2024 4,185 2025 7 2026 7 2027 7 Thereafter 270 Total debt maturities 7,805 Less: discount on convertible debt (141 ) Total debt $ 7,664 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 10 ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses are summarized as follows: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (in thousands) December 31, 2022 December 31, 2021 Accounts payable $ 3,240 $ 2,544 Accrued expenses 3,385 1,955 Accrued taxes (sales, payroll, etc.) 2,214 2,149 Accrued interest 406 196 Accounts payable and accrued expenses, total $ 9,245 $ 6,844 As of December 31, 2022 and December 31, 2021, approximately $ 2.1 2.0 0.3 0.9 As of December 31, 2022 and December 31, 2021, the Company had no |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 11. INCOME TAXES The income tax expense consists of the following: SCHEDULE OF INCOME TAX EXPENSE (in thousands) December 31, 2022 December 31, 2021 Foreign Current $ — $ 38 Deferred — 36 Change in valuation allowance — (36 ) U.S. Federal Current — — Deferred (1,656 ) 575 Change in valuation allowance 1,616 (627 ) State and local Current — — Deferred (355 ) 61 Change in valuation allowance 437 71 Income tax expense $ 42 $ 118 The income tax expense using the statutory U.S. federal tax rate of 21% is reconciled to the Company’s effective tax rate as follows: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (in thousands) December 31, 2022 December 31, 2021 Computed “expected” income tax benefit $ (479 ) $ (580 ) Change in valuation allowance 2,238 (593 ) Permanent items (1,295 ) 25 State income taxes, net of federal benefit (399 ) 61 Prior year true-ups and other deferred tax balances (116 ) 1,329 Rate change 74 (169 ) Other 19 45 Income tax expense $ 42 $ 118 Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for tax purposes. Major components of deferred tax assets at December 31, 2022 and 2021 were: SUMMARY OF MAJOR COMPONENTS OF DEFERRED TAX ASSETS (in thousands) December 31, 2022 December 31, 2021 Net operating loss carryforwards $ 8,033 $ 6,582 Accrued expenses 1,049 733 Section 163(j) limitation 923 848 Fixed assets and intangibles 809 750 ROU asset/liability 464 — Capital loss carryforwards 394 387 Restaurant start-up expenses 74 77 Contract liabilities 17 198 Deferred occupancy liabilities 8 — Charitable contribution carryforwards 4 7 Credits 176 153 Total deferred tax assets 11,951 9,735 Investments (382 ) (323 ) Deferred occupancy liabilities — (21 ) Other — (18 ) Total deferred tax liabilities (382 ) (362 ) Net deferred tax assets 11,569 9,373 Valuation allowance (11,761 ) (9,523 ) Total $ (192 ) $ (150 ) As of December 31, 2022, the Company has U.S. federal and state net operating loss carryovers of approximately $ 31.0 expire at various dates beginning in 2031 through 2036 7.2 In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the years ended December 31, 2022 and 2021, the change in valuation allowance was approximately $ 2.2 0.6 The Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in the financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the company has taken or expects to take in its return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between two positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits”. A liability is recognized for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing-authority for a tax position that was not recognized as a result of applying the provisions of ASC 740. Interest related to uncertain tax positions are required to be calculated, if applicable, and would be classified as “interest expense” in the consolidated statements of operations. Penalties would be recognized as a component of “general and administrative expenses.” For the years ended December 31, 2022 and 2021, no interest or penalties were required to be reported. The Company previously did not record a provision for taxes on undistributed foreign earnings, based on an intention and ability to permanently reinvest the earnings of its foreign subsidiaries in those operations. Under the TCJA, the Company has re-assessed its strategies by evaluating the impact of the TCJA on its operations. As a result of the TCJA, the Company analyzed if a liability needed to be recorded for the deemed repatriation of undistributed earnings. It was determined that there is no outstanding liability associated with this based on overall negative undistributed earnings (accumulated deficit) in the consolidated foreign group. During the 2018 fiscal year, numerous provisions of the TCJA went into effect. The Company evaluated these provisions and incorporated the estimated impact in the 2018 income tax expense. These provisions include, but are not limited to, reductions in the corporate income tax rate with regard to current income taxes, limitations with regard to interest expense under IRC §163(j) that disallows a portion of interest expense but is carried forward with no future expiration, changes to the deductibility of meals and entertainment, changes to bonus depreciation and a reduced tax rate on foreign export sales. An additional provision of the TJCA is the implementation of the Global Intangible-Low Taxed Income Tax, or “GILTI”. The Company has elected to account for the impact of GILTI in the period in which the tax actually applies to the Company. During fiscal 2019, the Company incurred $0.2 million of additional taxable income as a result of this provision. This increase of taxable income was incorporated into the overall net operating loss and valuation. Due to foreign losses in 2021, and with no foreign activity in 2022, the impact of GILTI on taxable income is nil. |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ DEFICIT | 12. STOCKHOLDERS’ DEFICIT 2020 Bridge Financing Pursuant to a Securities Purchase Agreement dated February 7, 2020, the Company sold 1,500 713 The shareholders of Chanticleer common stock received shares of Amergent on a 1 for 1 basis (spin-off shares) and received 1 share of Sonnet common stock for 26 shares of Chanticleer common stock held at the time of the Merger During the year ended December 31, 2021, the investors converted 637 1,274,000 150 50 100,000 100 The Series 2 Preferred is classified in the accompanying consolidated balance sheets as temporary equity due to certain contingent redemption features which are outside the control of the Company. Designations, rights and preferences of Series 2 Preferred: Stated value: 1,000 True-Up Payment: 125% 0.1 The Company determined that the True-Up Payment constituted a “make-whole” provision as defined by U.S. GAAP that was required to be settled in cash and, as such, was bifurcated from the host instrument, the Series 2 Preferred. It was accounted for as a derivative liability prior to settlement, with changes in fair value recorded in change in fair value of derivative liabilities in the consolidated statement of operations. A $ 0.1 Redemption Conversion at option of holder/ beneficial ownership limitation: 1.00 0.50 4.99% 9.99% Liquidation preference: 125% Voting rights: Triggering events: Anti-dilution: Warrants At December 31, 2022, the outstanding warrants consisted of the following: SCHEDULE OF OUTSTANDING WARRANTS Date Issued Number of Warrants Exercise Price Expiration Date April 1, 2020 2,462,600 $ 0.125 April 1, 2030 April 1, 2020 462,600 $ 0.500 April 1, 2030 March 30, 2020 350,000 $ 1.250 March 30, 2025 August 17, 2020 134,000 $ 1.250 August 17, 2025 March 15, 2022 250,000 $ 0.500 March 15, 2027 March 21, 2022 250,000 $ 0.500 March 21, 2027 March 22, 2022 250,000 $ 0.500 March 22, 2027 March 24, 2022 600,000 $ 0.500 March 24, 2027 4,759,200 A summary of the warrant activity during the year ended December 31, 2022 is presented below: SUMMARY OF WARRANTS ACTIVITY Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Outstanding at January 1, 2022 3,409,200 $ 0.34 7.6 Granted 1,350,000 $ 0.50 5.0 Outstanding at December 31, 2022 4,759,200 $ 0.38 5.9 Exercisable at December 31, 2022 4,759,200 $ 0.38 5.9 As discussed in Note 9, 1,350,000 0.3 SUMMARY OF CHANGES IN FAIR VALUE WARRANTS Stock price per share $ 0.37 0.40 Term 5.0 Expected volatility 90.00 % Divided yield — Risk-free interest rate 2.10 2.39 % Strike price $ 0.50 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES Indemnification Agreement and Tail Policy On March 25, 2020, in connection with the Merger, Chanticleer, Sonnet and Amergent entered into an indemnification agreement (“Indemnification Agreement”) providing that Amergent will fully indemnify and hold harmless each of Chanticleer and Sonnet, and each of their respective directors, officers, stockholders and managers who assumes such role upon or following the closing of the Merger against all actual or threatened claims, losses, liabilities, damages, judgments, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements, incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, administrative, investigative or otherwise, related to the Spin-Off business prior to or in connection with its disposition to Amergent. The Indemnification Agreement expires on March 25, 2026. In addition, prior to closing of the Merger, the Spin-Off entity acquired a tail insurance policy in a coverage amount of $ 3.0 Legal Proceedings Litigation related to leased properties During 2022 and 2021, the Company was in arrears on rent due on several of its leases. As a result, the Company has pending litigation related to seven sites of which four have permanently closed. The outcome of this litigation could result in the permanent closure of additional restaurant locations as well as the possibility of the Company being required to pay interest and damages, modify certain leases on unfavorable terms and could result in material impairments to the Company’s assets. The Company has four judgements against it in the amount of $ 0.8 Leases No amounts in addition to contracted rent that is due have been accrued as of December 31, 2022 or 2021 in the accompanying consolidated balance sheets as management does not believe the outcome will result in additional liabilities to the Company; however, there can be no guarantees. During 2022, our LBB locations were notified by the Department of Labor (“DOL”) of an audit concerning tip pools at 15 of our LBB stores in and around Portland, OR metropolitan area. In January 2023, the DOL reported that its audit resulted in one significant finding, that the Company improperly permitted “supervisory” in-store employees to participate in the tip pool. DOL assessed a penalty of approximately $ 972,000 486,000 486,000 170,000 25,000 25,000 From time to time, the Company may be involved in other legal proceedings and claims that have arisen in the ordinary course of business are generally covered by insurance. As of December 31, 2022, the Company does not expect the amount of ultimate liability with respect to these matters to be material to the Company’s consolidated financial condition, results of operations or cash flows. Leases The Company’s leases typically contain rent escalations over the lease terms. The Company recognizes expense for these leases on a straight-line basis over the lease terms. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our right-of-use asset related to the leases. These incentives are amortized through the right-of-use asset as reductions of expense over the lease terms. Some of the Company’s leases include rent escalations based on inflation indexes and fair market value adjustments. Certain leases contain contingent rental provisions that include a fixed base rent plus an additional percentage of the restaurant’s sales in excess of stipulated amounts. Operating lease liabilities are calculated using the prevailing index or rate at lease commencement. Subsequent escalations in the index or rate and contingent rental payments are recognized as variable lease expenses. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As part of the lease agreements, the Company is also responsible for payments regarding non-lease components (common area maintenance, operating expenses, etc.) and percentage rent payments based on monthly or annual restaurant sales amounts which are considered variable costs and are not included as part of the lease liabilities. Related to the adoption of Leases Topic 842, our policy elections were as follows: Short-term policy The Company has elected the short-term lease recognition exemption for all applicable classes of underlying assets. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise, are not recorded on the balance sheet. Supplemental balance sheet information related to leases was as follows (in thousands): SCHEDULE OF OPERATING LEASE INFORMATION Operating Leases Classification December 31, 2022 December 31, 2021 Right-of-use assets Operating lease assets $ 4,976 $ 8,021 Current lease liabilities Current operating lease liabilities $ 5,395 $ 4,599 Non-current lease liabilities Long-term operating lease liabilities 5,868 8,644 $ 11,263 $ 13,243 Lease term and discount rate were as follows: December 31, 2022 December 31, 2021 Weighted average remaining lease term (years) 5.9 6.7 Weighted average discount rate 8.0 % 8.1 % As of December 31, 2022 and 2021, we performed an analysis of the recoverability of our right-of-use assets. Based on the analysis, we recorded an impairment of approximately $ 1.8 0.7 During the years ended December 31, 2022 and 2021, approximately $ 0.3 0.4 6.8 3.1 During the year ended December 31, 2022, the Company amended certain leases and changed its assumptions regarding the exercise of a renewal option, which have been accounted for as lease modifications. The operating lease assets and liabilities were remeasured at the modification dates, resulting in an increase of $ 0.6 Rent expense of approximately $ 2.6 2.4 0.1 Maturities of our operating lease liabilities as of December 31, 2022 are presented below (in thousands): SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES Year ending December 31: 2023 $ 2,645 2024 2,654 2025 2,501 2026 2,083 2027 1,626 Thereafter 2,799 Total remaining lease payments 14,308 Less: imputed interest (3,045 ) Total lease liabilities $ 11,263 Certain additional amounts of lease liabilities for leases in default have been presented as current liabilities. The above schedule reflects the original contractual maturities. PPP Loan As discussed in Note 9, the Company received two PPP loans totaling $ 4.1 Presently, the U.S. SBA and other governmental communications have indicated that all loans in excess of $ 2.0 RRF As discussed in Note 4, Pie Squared Holdings received an approximately $ 10.0 10.0 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Compensation Related Costs [Abstract] | |
SHARE-BASED COMPENSATION | 14. SHARE-BASED COMPENSATION In August 2021, the Company adopted the 2021 Inducement Plan (the “Plan”). Under the 2021 Inducement Plan, the Company can grant stock options and stock awards. There are 500,000 200,000 In November 2021, the Company adopted the 2021 Equity Incentive Plan (the “Incentive Plan”). Under the 2021 Incentive Plan, the Company can grant stock options and stock awards. The stockholders of the Company approved the Incentive Plan on December 30, 2021. There are 2,000,000 2,000,000 Share-based awards generally vest over a period of three years, and share-based awards that lapse or are forfeited are available to be granted again. The contractual life of all share-based awards is five years. The expiration date of the outstanding share-based awards is August 2026. The Company measures share-based awards at their grant-date fair value and records compensation expense on a straight-line basis over the service period of the awards. Share-based compensation is allocated to employees and consultants based on their respective departments. During the years ended December 31, 2022 and 2021, the Company recorded share-based compensation expense of approximately $ 0.02 0.05 The following table summarizes the share-based award activity for the periods presented: SCHEDULE OF STOCK OPTIONS ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Outstanding at January 1, 2022 450,000 $ 1.38 3.6 Forfeited (150,000 ) Outstanding at December 31, 2022 300,000 $ 1.57 3.6 Exercisable at December 31, 2022 300,000 $ 1.57 3.6 As of December 31, 2022, the Company had no |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 15. SUBSEQUENT EVENTS The Company has evaluated subsequent events from the balance sheet date through the date at which the consolidated financial statements were available to be issued, and there are no items requiring disclosure other than the following: In January 2023, the Company entered into an asset purchase agreement with Boudreaux’s Cajun Kitchen, Inc. to acquire the Houston, Texas based brand and its four restaurant locations 3.8 1.3 2.5 0.3 6.0% two years 1.3 0.50 In February 2023, the Company closed a $ 2.5 125 1,250,000 0.0001 10 years 1.00 The Series B Preferred is convertible into shares of common stock at the option of the investors at a conversion price of $ 0.50 12% annual basis, payable in cash or in shares of common stock based on 30-day volume-weighted average price of common stock on the trading market In April 2023, the Company received an advance of $ 0.4 In March 2023 and May 2023, the Company received advances of $ 0.04 0.07 In May 2023, the Company received an advance of $ 0.07 In March 2023, the Company entered into a Forward Purchase Agreement with Kapitus LLC which is being treated as a note payable. The Company received a net $ 0.1 52 payments 2,899 11% In May 2023, the Company entered into a Forward Purchase Agreement with Kapitus LLC which is being treated as a note payable. The Company received a net $ 0.1 52 payments 2,500 11% |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). The consolidated financial statements include accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been updated to conform to the current year presentation. The Company has opted to present the financial information on the consolidated balance sheets and consolidated statements of operations, comprehensive loss, stockholders’ deficit and cash flows in thousands. |
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 amounts reported in the financial statements and accompanying notes. Significant estimates include the valuation of derivatives, options, warrants and convertible notes payable and analysis of the recoverability of goodwill and long-lived assets. Actual results could differ from those estimates. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures and records certain financial assets and liabilities at fair value on a recurring basis. U.S. GAAP provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority, referred to as Level 1, to quoted prices in active markets for identical assets and liabilities. The next priority, referred to as Level 2, is given to quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active; that is, markets in which there are few transactions for the asset or liability. The lowest priority, referred to as Level 3, is given to unobservable inputs. The Company is required to disclose fair value information about financial instruments when it is practicable to estimate that value. The carrying amounts of the Company’s cash, restricted cash, accounts receivable, other receivables, accounts payable, other current liabilities, convertible notes payable (other than the convertible note payable discussed above) and notes payable approximate fair value due to the short-term maturities of these financial instruments and/or because related interest rates offered to the Company approximate current rates. |
SEGMENTS | SEGMENTS Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company operates under four brands but views its operations and manages its business in one segment – fast casual dining. |
CASH | CASH Cash consists of deposits held at financial institutions and is stated at fair value. The Company limits its credit risk associated with cash by maintaining its bank accounts at major financial institutions. |
RESTRICTED CASH | RESTRICTED CASH As of December 31, 2022 and 2021, the Company maintained restricted cash of nil 1.7 |
ACCOUNTS AND OTHER RECEIVABLES | ACCOUNTS AND OTHER RECEIVABLES The Company monitors its exposure for credit losses on its receivable balances and the credit worthiness of its receivables on an ongoing basis and records related allowances for doubtful accounts. Allowances are estimated based upon specific customer and other balances where a risk of default has been identified, and also include a provision for non-customer specific defaults based upon historical experience. The majority of the Company’s accounts are from customer credit card transactions with minimal historical credit risk. As of December 31, 2022 and 2021, the Company has not recorded an allowance for doubtful accounts. If circumstances related to specific customers change, estimates of the recoverability of receivables could also change. |
INVENTORIES | INVENTORIES Inventories are recorded at the lower of cost (first-in, first-out method) or net realizable value, and consist primarily of restaurant food items, supplies, beverages and merchandise. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment are stated at cost, less accumulated depreciation. Depreciation and amortization are recorded generally using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over the lesser of the expected lease term or the estimated useful lives of the related assets using the straight-line method. Maintenance and repairs that do not improve or extend the useful lives of the assets are not considered assets and are charged to expense when incurred. The estimated useful lives used to compute depreciation and amortization are as follows: SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIVES Leasehold improvements 5 15 Restaurant furnishings and equipment 3 10 Furniture and fixtures 3 10 Office and computer equipment 3 7 |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Trademark//Tradenames Certain of the Company’s trademark/tradenames have been determined to have a definite life and are being amortized on a straight-line basis over estimated useful lives of 10 long-lived assets During the first quarter of 2023, as a result of recent store closures, the Company reassessed the useful lives of the indefinite-lived trademark/tradenames intangible assets, which had an aggregate carrying value of $ 2.3 Franchise Rights As of December 31, 2021, we had intangible assets related to initial franchise fees for our PizzaRev restaurants, which were amortized over the five The Company also has intangible assets representing the acquisition date fair value of customer contracts acquired in connection with BGR’s franchise business, which are amortized over the weighted average life of the underlying franchise agreements, which is the estimated useful life. |
LONG-LIVED ASSETS | LONG-LIVED ASSETS Long-lived assets, such as property and equipment, operating lease assets, and purchased intangible assets subject to depreciation and amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Some of the events or changes in circumstances that would trigger an impairment test include, but are not limited to: ● significant under-performance relative to expected and/or historical results (negative comparable sales growth or operating cash flows for two consecutive years); ● significant negative industry or economic trends; ● knowledge of transactions involving the sale of similar property at amounts below the Company’s carrying value; or ● the Company’s expectation to dispose of long-lived assets before the end of their estimated useful lives, even though the assets do not meet the criteria to be classified as “Held for Sale.” If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. During 2021, primarily as a result of the COVID-19 outbreak, the Company determined that triggering events occurred requiring management to review certain long-lived assets for impairment and determined that the carrying value of the Company’s trademark/tradenames intangible asset, property and equipment and operating lease assets were impaired. As a result, an aggregate impairment charge was recognized of $ 1.5 3.2 |
GOODWILL | GOODWILL Goodwill, which is not subject to amortization, is evaluated for impairment annually as of the end of the Company’s year-end, or more frequently if an event occurs or circumstances change, such as material deterioration in performance or a significant number of store closures, that would indicate an impairment may exist. Goodwill is tested for impairment at a level of reporting referred to as a reporting unit. Management determined that the Company has one reporting unit. When evaluating goodwill for impairment, the Company may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If the Company does not perform a qualitative assessment or determines that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, a quantitative assessment is performed to calculate the estimated fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. The Company’s decision to perform a qualitative impairment assessment is influenced by a number of factors, including the significance of the excess of the reporting unit’s estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments, and the price of our common stock. Step one of the impairment test is based upon a comparison of the carrying value of net assets, including goodwill balances, to the fair value of net assets. Due to the impact of the COVID-19 pandemic during 2021, the Company performed quarterly quantitative impairment assessments at each quarter end and determined that goodwill was not impaired due to the excess fair value of the reporting unit over its carrying value based on the best judgement of management on information known at the time of the assessment. Additionally, due to changing consumer habits, macroeconomic trends and poor performance and the ultimate closure of certain stores, management performed quarterly qualitative impairment analyses of goodwill during 2022 and a quantitative analysis as of December 31, 2022, the result of the analysis was that due to the negative carrying value of the reporting unit no impairment was recorded at December 31, 2022. |
CONVERTIBLE NOTES PAYABLE | CONVERTIBLE NOTES PAYABLE The Company analyzes its convertible debt instruments for embedded attributes that may require bifurcation from the host and accounting as derivatives. At the inception of each instrument, the Company performs an analysis of the embedded features requiring bifurcation and may elect, if eligible, to account for the entire debt instrument at fair value. If the fair value option were to be elected, any changes in fair value would be recognized in the accompanying statements of operations until the instrument is settled. The Company elected to account for its convertible note payable issued in 2021 in connection with the PizzaRev acquisition (see Note 3) at fair value and, as such, has recognized the change in fair value in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021. See Note 5. |
FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION Assets and liabilities denominated in local currency are translated to U.S. dollars using the exchange rates as in effect at the balance sheet date. Results of operations are translated using average exchange rates prevailing throughout the period. Adjustments resulting from the process of translating foreign currency financial statements from functional currency into U.S. dollars are included in accumulated other comprehensive loss within stockholders’ equity. Foreign currency transaction gains and losses are included in current earnings. The Company has determined that local currency was the functional currency for its foreign operations. The foreign subsidiary was sold in 2021, and there are no foreign assets held at December 31, 2022. |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company generates revenues from the following sources: (i) restaurant sales; (ii) gaming income; and (iii) franchise income, consisting of royalties based on a percentage of sales reported by franchise restaurants and initial signing fees. Restaurant Sales, Net The Company records revenue from restaurant sales at the time of sale, net of discounts, coupons, employee meals, and complimentary meals. Sales tax and value added tax (“VAT”) collected from customers and remitted to governmental authorities are presented on a net basis within revenue in the consolidated statements of operations. Gaming Income The Company receives revenue from operating a gaming facility adjacent to its restaurant in Jantzen Beach, Oregon. Revenue from gaming is recognized as earned from gaming activities, net of payouts to customers, taxes and government fees. These fees are recognized as they are earned based on the terms of the agreements. Franchise Income The Company grants franchises to operators in exchange for initial franchise license fees and continuing royalty payments. The license granted for each restaurant or area is considered a performance obligation. All other obligations (such as providing assistance during the opening of a restaurant) are combined with the license and were determined to be a single performance obligation. Accordingly, the total transaction price (comprised of the restaurant opening and territory fees) is allocated to each restaurant expected to be opened by the licensee under the contract. There are significant judgments regarding the estimated total transaction price, including the number of stores expected to be opened. We recognize the fee allocated to each restaurant as revenue on a straight-line basis over the restaurant’s license term, which generally begins upon the signing of the contract for area development agreements and upon the signing of a store lease for franchise agreements. The payments for these upfront fees are generally received upon contract execution. Continuing fees, which are based upon a percentage of franchisee revenues and are not subject to any constraints, are recognized on the accrual basis as those sales occur. The payments for these continuing fees are generally made on a weekly basis. Contract Liabilities Contract liabilities consist of deferred revenue resulting from initial and renewal franchise license fees paid by franchisees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement, as well as upfront development fees paid by franchisees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement once it is executed. The recognition of initial and renewal license fees is accelerated if the development agreement is terminated. During the year ended December 31, 2022, the Company recognized $ 0.7 0.1 |
RESTAURANT PRE-OPENING AND CLOSING EXPENSES | RESTAURANT PRE-OPENING AND CLOSING EXPENSES Restaurant pre-opening expenses consist of the costs of hiring and training the initial hourly work force for each new restaurant, travel, the cost of food and supplies used in training, grand opening promotional costs, the cost of the initial stocking of operating supplies and other direct costs related to the opening of a restaurant, including rent during the construction and in-restaurant training period. Restaurant opening expenses are expensed as incurred. Restaurant closing expenses consist of costs related to closing a restaurant location and include, among other things lease termination costs and franchise breakage fees directly related to the closure. Impairment charges associated with closed locations are recorded as a component of asset impairment charges. The derecognition of lease liabilities due to the Company negotiating the cancellation of its obligations under certain lease agreements is recorded as gain on extinguished lease liabilities. Restaurant closing costs are expensed as incurred. |
LIQUOR LICENSES | LIQUOR LICENSES The costs of obtaining non-transferable liquor licenses that are directly issued by local government agencies for nominal fees are expensed as incurred. The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets and included in other assets. Liquor licenses are reviewed for impairment annually or when events or changes in circumstances indicate that the carrying amount may not be recoverable. Annual liquor license renewal fees are expensed over the renewal term. |
ADVERTISING | ADVERTISING Advertising costs are expensed as incurred. Advertising expenses, which are included in restaurant operating expenses and general and administrative expenses in the accompanying consolidated statements of operations, totaled approximately $ 0.2 0.2 |
LEASES | LEASES We determine if a contract contains a lease at inception. Our material operating leases consist of restaurant locations and office space. Our leases have remaining terms of up to approximately 11 include options to extend the leases for additional 5-year periods Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the reasonably certain lease term. We estimated this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. If the estimate of our incremental borrowing rate was changed, our operating lease assets and liabilities could differ materially. In April 2020, the FASB staff issued a question-and-answer document (“FASB Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease guidance, the Company would have to determine, on a lease-by-lease basis, if a lease concession was the result of a new arrangement reached with the tenant or if a lease concession was under the enforceable rights and obligations within the existing lease agreement. The FASB Q&A allows the Company, if certain criteria have been met, to bypass the lease-by-lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. The Company elected to apply such relief and availed itself of the election to avoid performing a lease-by-lease analysis for the lease concessions received as the concessions granted as relief were due to the COVID-19 pandemic and result in the cash flows to the landlord remaining substantially the same or less. The Company received COVID-19-related lease concessions during 2021; however, none were received during 2022. |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The Company measures and recognizes share-based compensation expense for both employee and nonemployee awards based on the grant date fair value of the awards. The Company recognizes share-based compensation expense on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. The Company recognizes forfeitures as they occur. The Company estimates the fair value of employee and non-employee stock awards as of the date of grant using the Black-Scholes option pricing model. Management estimates the expected share price volatility based on the historical volatility of the Company. The expected term of the Company’s stock awards has been determined utilizing the “simplified” method for awards that qualify as “plain vanilla” stock awards. The risk-free interest rate is determined by reference to the yield curve of a zero-coupon U.S. Treasury bond on the date of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future. |
INCOME TAXES | INCOME TAXES Deferred income taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Based on the rules of the Internal Revenue Code (“IRC”), Amergent has determined that it has approximately $ 23.7 7.2 The Company has provided a valuation allowance for the full amount of the deferred tax assets in the accompanying consolidated financial statements. As of December 31, 2022 and 2021, the Company had no accrued interest or penalties relating to any income tax obligations. The Company currently has no federal or state examinations in progress, nor has it had any federal or state tax examinations since its inception. The last three years of the Company’s tax years are subject to federal and state tax examination. |
LOSS PER COMMON SHARE | LOSS PER COMMON SHARE The Company computes net loss per share using the weighted-average number of common shares outstanding during the period. Basic and diluted net loss per share is the same because the conversion, exercise or issuance of all potential common stock equivalents, which comprise the entire amount of the Company’s outstanding warrants, as described in Note 12, the potential conversion of the convertible debt instruments, as described in Note 9, and share-based compensation awards as described in Note 14, would be anti-dilutive. |
COMPREHENSIVE INCOME OR LOSS | COMPREHENSIVE INCOME OR LOSS Standards for reporting and displaying comprehensive income or loss and its components (revenues, expenses, gains and losses) in a full set of general-purpose financial statements requires that all items that are required to be recognized under accounting standards as components of comprehensive income or loss be reported in a financial statement that is displayed with the same prominence as other financial statements. We are required to (a) classify items of other comprehensive income or loss by their nature in financial statements, and (b) display the accumulated balance of other comprehensive income or loss separately in the equity section of the balance sheet for all periods presented. Other comprehensive income or loss represents foreign currency translation adjustments. |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2021, the FASB issued ASU 2021-04, Earnings per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges or Freestanding Equity-Classified Written Call Options In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic ASC 832): Disclosures by Business Entities about Government Assistance We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to the consolidated financial statements. |
NATURE OF BUSINESS (Tables)
NATURE OF BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF CONSOLIDATED AND COMBINED FINANCIAL STATEMENT | The consolidated financial statements include the accounts of Amergent and its subsidiaries presented below: SCHEDULE OF CONSOLIDATED AND COMBINED FINANCIAL STATEMENT Amergent Hospitality Group, Inc. Jurisdiction of Incorporation Percent owned American Roadside Burgers, Inc DE, USA American Burger Ally, LLC NC, USA 100 % American Burger Morehead, LLC NC, USA 100 % American Burger Prosperity, LLC NC, USA 50 % American Roadside Burgers Smithtown, Inc DE, USA 100 % BGR Acquisition, LLC NC, USA 100 % BGR Franchising, LLC VA, USA 100 % BGR Operations, LLC VA, USA 100 % BGR Acquisition 1, LLC NC, USA 100 % BGR Annapolis, LLC MD, USA 100 % BGR Arlington, LLC VA, USA 46 % BGR Columbia, LLC MD, USA 100 % BGR Michigan Ave, LLC DC, USA 100 % BGR Mosaic, LLC VA, USA 100 % BGR Old Keene Mill, LLC VA, USA 100 % BGR Washingtonian, LLC MD, USA 46 % Capitol Burger, LLC MD, USA 100 % BT Burger Acquisition, LLC NC, USA 100 % BT’s Burgerjoint Rivergate LLC NC, USA 100 % BT’s Burgerjoint Sun Valley, LLC NC, USA 100 % LBB Acquisition, LLC NC, USA 100 % Cuarto LLC OR, USA 100 % LBB Acquisition 1 LLC OR, USA 100 % LBB Hassalo LLC OR, USA 80 % LBB Platform LLC OR, USA 80 % LBB Capitol Hill LLC WA, USA 50 % LBB Franchising LLC NC, USA 100 % LBB Green Lake LLC OR, USA 50 % LBB Lake Oswego LLC OR, USA 100 % LBB Magnolia Plaza LLC NC, USA 50 % LBB Multnomah Village LLC OR, USA 50 % LBB Progress Ridge LLC OR, USA 50 % LBB Rea Farms LLC NC, USA 50 % LBB Wallingford LLC WA, USA 50 % LBB Downtown PDX LLC WA, USA 100 % Noveno LLC OR, USA 100 % Octavo LLC OR, USA 100 % Primero LLC OR, USA 100 % Quinto LLC OR, USA 100 % Segundo LLC OR, USA 100 % Septimo LLC OR, USA 100 % Sexto LLC OR, USA 100 % LBB University of Oregon LLC OR, USA 100 % Jantzen Beach Wings, LLC OR, USA 100 % Oregon Owl’s Nest, LLC OR, USA 100 % West End Wings LTD (sold in 2021) United Kingdom 100 % Pie Squared Holdings LLC DE, USA 100 % PizzaRev Franchising LLC DE, USA 100 % Pie Squared Pizza LLC CA, USA 100 % Pie Squared Austin LLC DE, USA 100 % PizzaRev IP Holdings LLC DE, USA 100 % |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIVES | The estimated useful lives used to compute depreciation and amortization are as follows: SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIVES Leasehold improvements 5 15 Restaurant furnishings and equipment 3 10 Furniture and fixtures 3 10 Office and computer equipment 3 7 |
ACQUISITION (Tables)
ACQUISITION (Tables) - Pie Squared Holdings LLC [Member] | 12 Months Ended |
Dec. 31, 2022 | |
Business Acquisition [Line Items] | |
SCHEDULE OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED | The assets acquired, and liabilities assumed as of the acquisition date consists of the following: SCHEDULE OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED Assets acquired: Cash $ 71 Restricted cash 2,000 Property and equipment 348 Right of use asset 1,391 Tradename/trademark intangible 410 Franchise rights intangible 410 Goodwill 51 Security deposits and other assets 126 Total assets acquired $ 4,807 Liabilities assumed Gift card liability $ 139 Deferred revenue 36 Deferred grant income 2,000 Right of use liability 1,438 Total liabilities assumed $ 3,613 Net purchase price $ 1,194 |
SCHEDULE OF ESTIMATED FAIR VALUE ASSUMPTIONS | SCHEDULE OF ESTIMATED FAIR VALUE ASSUMPTIONS Volatility 90.00 % Risk free rate 0.08 0.20 % Stock price $ 0.52 Credit spread 6.35 % |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
SCHEDULE OF FAIR VALUE MEASUREMENTS, RECURRING AND NONRECURRING | The tables below reflect the level of the inputs used in the Company’s fair value calculations: SCHEDULE OF FAIR VALUE MEASUREMENTS, RECURRING AND NONRECURRING (in thousands) Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2022 Assets (Note 6) Common stock of Sonnet $ 12 $ — $ — $ 12 Liabilities (Note 9) Convertible note payable $ — $ — $ 1,000 $ 1,000 (in thousands) Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2021 Assets (Note 6) Common stock of Sonnet $ 50 $ — $ — $ 50 Liabilities (Note 9) Convertible note payable $ — $ — $ 1,099 $ 1,099 |
SCHEDULE OF FAIR VALUE LIABILITIES MEASURED ON RECURRING BASIS | The reconciliation of the convertible note payable measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows: SCHEDULE OF FAIR VALUE LIABILITIES MEASURED ON RECURRING BASIS Year Ended (in thousands) December 31, 2022 December 31, 2021 Beginning balance $ 1,099 $ — Fair value at issuance date — 1,194 Change in fair value (99 ) (95 ) Ending balance $ 1,000 $ 1,099 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, All Other Investments [Abstract] | |
SCHEDULE OF INVESTMENT | Investments consist of the following: SCHEDULE OF INVESTMENT (in thousands) December 31, 2022 December 31, 2021 Common stock of Sonnet, at fair value (a) $ 12 $ 50 Chanticleer Investors, LLC, at cost (b) 16 16 Total $ 28 $ 66 (a) Represents the fair value of the common stock of Sonnet held by the Company after its exercise of warrants received in connection with the Merger. As of December 31, 2022, 8,718 0.1 (b) Represents the Company’s investment in Chanticleer Investors, LLC, which holds an interest in Hooters of America, the operator and franchisor of the Hooters Brand worldwide. As of the dates presented, the Company’s effective economic interest in Hooters of America was less than 1% 0.1 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT | Property and equipment, net consists of the following: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (in thousands) December 31, 2022 December 31, 2021 Leasehold improvements $ 4,675 $ 5,511 Restaurant furniture and equipment 1,893 2,768 Construction in progress — 20 Office and computer equipment 7 33 Office furniture and fixtures 54 57 Property,plant and equipment, gross 6,629 8,389 Accumulated depreciation and amortization (4,291 ) (5,274 ) Property, plant and equipment, net $ 2,338 $ 3,115 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF GOODWILL | A roll forward of goodwill is as follows: SCHEDULE OF GOODWILL (in thousands) December 31, 2022 December 31, 2021 Year Ended (in thousands) December 31, 2022 December 31, 2021 Beginning balance $ 7,810 $ 8,591 Acquisition of Pie Squared Holdings — 51 Sale of Hooters UK — (820 ) Foreign currency translation loss — (12 ) Ending balance $ 7,810 $ 7,810 |
SCHEDULE OF FINITE - LIVED INTANGIBLE ASSETS | Franchise and trademark/tradename intangible assets consist of the following: SCHEDULE OF FINITE - LIVED INTANGIBLE ASSETS (in thousands) December 31, 2022 December 31, 2021 Trademark, Tradenames: American Roadside Burger 10 $ 561 $ 561 BGR: The Burger Joint Indefinite * 739 739 Little Big Burger Indefinite * 1,550 1,550 PizzaRev 5 — 410 2,850 3,260 Acquired Franchise Rights: BGR: The Burger Joint 7 828 828 PizzaRev 5 — 410 828 1,238 Total intangibles at cost 3,678 4,498 Accumulated amortization (1,369 ) (1,369 ) Intangible assets, net $ 2,309 $ 3,129 |
SUMMARY OF AMORTIZATION EXPENSE | SUMMARY OF AMORTIZATION EXPENSE Year ending December 31: 2023 $ 343 2024 458 2025 458 2026 458 2027 458 Thereafter 134 Total $ 2,309 |
LONG-TERM DEBT AND NOTES PAYA_2
LONG-TERM DEBT AND NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF DEBT AND NOTES PAYABLE | Long-term debt and notes payable are summarized as follows: SCHEDULE OF DEBT AND NOTES PAYABLE (in thousands) December 31, 2022 December 31, 2021 10% convertible debt ( a $ 4,038 $ 4,038 8% convertible debt ( b 1,350 — Convertible promissory note (measured at fair value) ( c 1,000 1,099 PPP loans ( d — 4,109 EIDL loans ( e 300 300 Contractor note ( f 348 348 Notes payable ( g 144 — Related party note (h) 625 — Total Debt 7,805 9,894 Less: discount on convertible debt (a) (b) (141 ) (37 ) Total Debt, net of discount $ 7,664 $ 9,857 Current portion of long-term debt and notes payable $ 3,329 $ 3,264 Long-term debt and notes payable, less current portion $ 4,335 $ 6,593 (a) In connection with and prior to the Spin-Off and Merger, on April 1, 2020, pursuant to an agreement among Chanticleer, Oz Rey, LLC (“Oz Rey”), a related party, and certain original holders of the 8 10 8 10 4.0 2,925,200 0.125 2,462,600 0.50 462,500 10 The 10% Convertible Debt was previously amended to fix the conversion rate into common stock at $ 0.10 2.4 23,700,000 The Company recorded a debt discount of approximately $ 0.4 In connection with the 8% Convertible Debt transaction described in (b) below, the maturity date of the 10% Convertible Debt was extended to April 1, 2024 and Oz Rey agreed to subordinate payment of its 10% Convertible Debt to payment of the 8% Convertible Debt, which has been accounted for as a loan modification. In addition, Oz Rey received a fee equal to 2.0% of the principal amount of the 8% Convertible Debt issued in the transaction, which has been recorded as a debt discount and is being amortized over the two-year term of the related debt. (b) In March 2022, the Company commenced a private placement of up to $ 3.0 3,000,000 1.35 The 8% Convertible Debt matures on September 1, 2023 and is subject to acceleration in the event of customary events of default. Interest is payable quarterly in cash. The 8% Convertible Debt may be converted by the holders at any time at a fixed conversion price of $ 0.40 0.50 Both the notes and the warrants include a beneficial ownership blocker of 4.99% and contain customary provisions preventing dilution and providing the holders rights in the event of fundamental transactions. Upon the earlier of the maturity date or the one-year anniversary of conversion of the 8% Convertible Debt, holders of 51% of the registerable securities may request the Company to file a registration statement for the securities. five years 3,375,000 The Company analyzed the 8% Convertible Debt and did not identify any embedded features that require bifurcation from the host and accounting as derivatives. However, as the convertible notes payable were issued with warrants, the net proceeds from the issuance were allocated to the 8% Convertible Debt and the warrants based on their relative fair values, resulting in an allocation of $ 1.0 0.3 0.3 (c) On August 30, 2021, the Company purchased all of the outstanding membership interests in Pie Squared Holdings. The purchase price was funded through the issuance of an 8% secured, convertible promissory note with a face value of $ 1.0 1.2 4.99 15 0.50 2.00 2,000,000 Interest on the convertible promissory note is due on August 30, 2023 , the maturity date. The Company elected to measure the convertible promissory note at fair value, with changes in the fair value recorded within change in fair value of convertible promissory note in the consolidated statements of operations. See Note 5 for additional information on the valuation of the convertible promissory note as of December 31, 2022. (d) On April 27, 2020, Amergent received a Paycheck Protection Program (“PPP”) loan of approximately $ 2.1 1 April 2022 0.1 2.0 1 February 25, 2026 45,000 (e) On August 4, 2020, the Company obtained two loans under the Economic Injury Disaster Loan (“EIDL”) assistance program from the U.S. SBA in light of the impact of the COVID-19 pandemic on the Company’s business. The principal amount of the loans is $ 0.3 3.75 1,462 (f) The Company entered into a promissory note to repay a contractor for the build-out of a new Little Big Burger location. The note bears interest at 12 0.4 0.1 (g) In February and March 2022, eight company-owned stores entered into notes payable to Toast Capital Loans. The terms of the notes require payment of 13.2 270 15 In August 2022, the Company entered into a Future Revenue Sales Agreement with Sprout Funding which is being treated as a note payable. The Company received a net $ 0.2 180 1,359 80 (h) In August 2022 through December 2022, the Company received advances from a related party in aggregate of $ 0.6 1 June 30, 2023 |
SCHEDULE OF FUTURE MINIMUM PAYMENTS | Maturities of our debt as of December 31, 2022 are presented below (in thousands): SCHEDULE OF FUTURE MINIMUM PAYMENTS Year ending December 31: 2023 $ 3,329 2024 4,185 2025 7 2026 7 2027 7 Thereafter 270 Total debt maturities 7,805 Less: discount on convertible debt (141 ) Total debt $ 7,664 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses are summarized as follows: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (in thousands) December 31, 2022 December 31, 2021 Accounts payable $ 3,240 $ 2,544 Accrued expenses 3,385 1,955 Accrued taxes (sales, payroll, etc.) 2,214 2,149 Accrued interest 406 196 Accounts payable and accrued expenses, total $ 9,245 $ 6,844 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAX EXPENSE | The income tax expense consists of the following: SCHEDULE OF INCOME TAX EXPENSE (in thousands) December 31, 2022 December 31, 2021 Foreign Current $ — $ 38 Deferred — 36 Change in valuation allowance — (36 ) U.S. Federal Current — — Deferred (1,656 ) 575 Change in valuation allowance 1,616 (627 ) State and local Current — — Deferred (355 ) 61 Change in valuation allowance 437 71 Income tax expense $ 42 $ 118 |
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION | The income tax expense using the statutory U.S. federal tax rate of 21% is reconciled to the Company’s effective tax rate as follows: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (in thousands) December 31, 2022 December 31, 2021 Computed “expected” income tax benefit $ (479 ) $ (580 ) Change in valuation allowance 2,238 (593 ) Permanent items (1,295 ) 25 State income taxes, net of federal benefit (399 ) 61 Prior year true-ups and other deferred tax balances (116 ) 1,329 Rate change 74 (169 ) Other 19 45 Income tax expense $ 42 $ 118 |
SUMMARY OF MAJOR COMPONENTS OF DEFERRED TAX ASSETS | SUMMARY OF MAJOR COMPONENTS OF DEFERRED TAX ASSETS (in thousands) December 31, 2022 December 31, 2021 Net operating loss carryforwards $ 8,033 $ 6,582 Accrued expenses 1,049 733 Section 163(j) limitation 923 848 Fixed assets and intangibles 809 750 ROU asset/liability 464 — Capital loss carryforwards 394 387 Restaurant start-up expenses 74 77 Contract liabilities 17 198 Deferred occupancy liabilities 8 — Charitable contribution carryforwards 4 7 Credits 176 153 Total deferred tax assets 11,951 9,735 Investments (382 ) (323 ) Deferred occupancy liabilities — (21 ) Other — (18 ) Total deferred tax liabilities (382 ) (362 ) Net deferred tax assets 11,569 9,373 Valuation allowance (11,761 ) (9,523 ) Total $ (192 ) $ (150 ) |
STOCKHOLDERS_ DEFICIT (Tables)
STOCKHOLDERS’ DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
SCHEDULE OF OUTSTANDING WARRANTS | At December 31, 2022, the outstanding warrants consisted of the following: SCHEDULE OF OUTSTANDING WARRANTS Date Issued Number of Warrants Exercise Price Expiration Date April 1, 2020 2,462,600 $ 0.125 April 1, 2030 April 1, 2020 462,600 $ 0.500 April 1, 2030 March 30, 2020 350,000 $ 1.250 March 30, 2025 August 17, 2020 134,000 $ 1.250 August 17, 2025 March 15, 2022 250,000 $ 0.500 March 15, 2027 March 21, 2022 250,000 $ 0.500 March 21, 2027 March 22, 2022 250,000 $ 0.500 March 22, 2027 March 24, 2022 600,000 $ 0.500 March 24, 2027 4,759,200 |
SUMMARY OF WARRANTS ACTIVITY | A summary of the warrant activity during the year ended December 31, 2022 is presented below: SUMMARY OF WARRANTS ACTIVITY Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Outstanding at January 1, 2022 3,409,200 $ 0.34 7.6 Granted 1,350,000 $ 0.50 5.0 Outstanding at December 31, 2022 4,759,200 $ 0.38 5.9 Exercisable at December 31, 2022 4,759,200 $ 0.38 5.9 |
SUMMARY OF CHANGES IN FAIR VALUE WARRANTS | SUMMARY OF CHANGES IN FAIR VALUE WARRANTS Stock price per share $ 0.37 0.40 Term 5.0 Expected volatility 90.00 % Divided yield — Risk-free interest rate 2.10 2.39 % Strike price $ 0.50 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF OPERATING LEASE INFORMATION | Supplemental balance sheet information related to leases was as follows (in thousands): SCHEDULE OF OPERATING LEASE INFORMATION Operating Leases Classification December 31, 2022 December 31, 2021 Right-of-use assets Operating lease assets $ 4,976 $ 8,021 Current lease liabilities Current operating lease liabilities $ 5,395 $ 4,599 Non-current lease liabilities Long-term operating lease liabilities 5,868 8,644 $ 11,263 $ 13,243 Lease term and discount rate were as follows: December 31, 2022 December 31, 2021 Weighted average remaining lease term (years) 5.9 6.7 Weighted average discount rate 8.0 % 8.1 % |
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES | Maturities of our operating lease liabilities as of December 31, 2022 are presented below (in thousands): SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES Year ending December 31: 2023 $ 2,645 2024 2,654 2025 2,501 2026 2,083 2027 1,626 Thereafter 2,799 Total remaining lease payments 14,308 Less: imputed interest (3,045 ) Total lease liabilities $ 11,263 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Compensation Related Costs [Abstract] | |
SCHEDULE OF STOCK OPTIONS ACTIVITY | The following table summarizes the share-based award activity for the periods presented: SCHEDULE OF STOCK OPTIONS ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Outstanding at January 1, 2022 450,000 $ 1.38 3.6 Forfeited (150,000 ) Outstanding at December 31, 2022 300,000 $ 1.57 3.6 Exercisable at December 31, 2022 300,000 $ 1.57 3.6 |
SCHEDULE OF CONSOLIDATED AND CO
SCHEDULE OF CONSOLIDATED AND COMBINED FINANCIAL STATEMENT (Details) | 12 Months Ended |
Dec. 31, 2022 | |
American Roadside Burgers, Inc. [Member] | |
Name of company | American Roadside Burgers, Inc |
Jurisdiction of incorporation | DE, USA |
American Burger Ally, LLC [Member] | |
Name of company | American Burger Ally, LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 100% |
American Burger Morehead, LLC [Member] | |
Name of company | American Burger Morehead, LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 100% |
American Burger Prosperity, LLC [Member] | |
Name of company | American Burger Prosperity, LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 50% |
American Roadside Burgers Smithtown, Inc. [Member] | |
Name of company | American Roadside Burgers Smithtown, Inc |
Jurisdiction of incorporation | DE, USA |
Percent owned | 100% |
BGR Acquisition, LLC [Member] | |
Name of company | BGR Acquisition, LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 100% |
BGR Franchising, LLC [Member] | |
Name of company | BGR Franchising, LLC |
Jurisdiction of incorporation | VA, USA |
Percent owned | 100% |
BGR Operations, LLC [Member] | |
Name of company | BGR Operations, LLC |
Jurisdiction of incorporation | VA, USA |
Percent owned | 100% |
BGR Acquisition 1, LLC [Member] | |
Name of company | BGR Acquisition 1, LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 100% |
BGR Annapolis, LLC [Member] | |
Name of company | BGR Annapolis, LLC |
Jurisdiction of incorporation | MD, USA |
Percent owned | 100% |
BGR Arlington, LLC [Member] | |
Name of company | BGR Arlington, LLC |
Jurisdiction of incorporation | VA, USA |
Percent owned | 46% |
BGR Columbia, LLC [Member] | |
Name of company | BGR Columbia, LLC |
Jurisdiction of incorporation | MD, USA |
Percent owned | 100% |
BGR Michigan Ave, LLC [Member] | |
Name of company | BGR Michigan Ave, LLC |
Jurisdiction of incorporation | DC, USA |
Percent owned | 100% |
BGR Mosaic, LLC [Member] | |
Name of company | BGR Mosaic, LLC |
Jurisdiction of incorporation | VA, USA |
Percent owned | 100% |
BGR Old Keene Mill, LLC [Member] | |
Name of company | BGR Old Keene Mill, LLC |
Jurisdiction of incorporation | VA, USA |
Percent owned | 100% |
BGR Washingtonian, LLC [Member] | |
Name of company | BGR Washingtonian, LLC |
Jurisdiction of incorporation | MD, USA |
Percent owned | 46% |
Capitol Burger, LLC [Member] | |
Name of company | Capitol Burger, LLC |
Jurisdiction of incorporation | MD, USA |
Percent owned | 100% |
BT Burger Acquisition, LLC [Member] | |
Name of company | BT Burger Acquisition, LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 100% |
BT's Burgerjoint Rivergate, LLC [Member] | |
Name of company | BT’s Burgerjoint Rivergate LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 100% |
BT's Burgerjoint Sun Valley, LLC [Member] | |
Name of company | BT’s Burgerjoint Sun Valley, LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 100% |
LBB Acquisition, LLC [Member] | |
Name of company | LBB Acquisition, LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 100% |
Cuarto LLC [Member] | |
Name of company | Cuarto LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
LBB Acquisition 1 LLC [Member] | |
Name of company | LBB Acquisition 1 LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
LBB Hassalo LLC [Member] | |
Name of company | LBB Hassalo LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 80% |
LBB Platform LLC [Member] | |
Name of company | LBB Platform LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 80% |
LBB Capitol Hill LLC [Member] | |
Name of company | LBB Capitol Hill LLC |
Jurisdiction of incorporation | WA, USA |
Percent owned | 50% |
LBB Franchising LLC [Member] | |
Name of company | LBB Franchising LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 100% |
LBB Green Lake LLC [Member] | |
Name of company | LBB Green Lake LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 50% |
LBB Lake Oswego LLC [Member] | |
Name of company | LBB Lake Oswego LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
LBB Magnolia Plaza LLC [Member] | |
Name of company | LBB Magnolia Plaza LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 50% |
LBB Multnomah Village LLC [Member] | |
Name of company | LBB Multnomah Village LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 50% |
LBB Progress Ridge LLC [Member] | |
Name of company | LBB Progress Ridge LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 50% |
LBB Rea Farms LLC [Member] | |
Name of company | LBB Rea Farms LLC |
Jurisdiction of incorporation | NC, USA |
Percent owned | 50% |
LBB Wallingford LLC [Member] | |
Name of company | LBB Wallingford LLC |
Jurisdiction of incorporation | WA, USA |
Percent owned | 50% |
LBB Downtown PDX LLC [Member] | |
Name of company | LBB Downtown PDX LLC |
Jurisdiction of incorporation | WA, USA |
Percent owned | 100% |
Noveno LLC [Member] | |
Name of company | Noveno LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
Octavo LLC [Member] | |
Name of company | Octavo LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
Primero LLC [Member] | |
Name of company | Primero LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
Quinto LLC [Member] | |
Name of company | Quinto LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
Segundo LLC [Member] | |
Name of company | Segundo LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
Septimo LLC [Member] | |
Name of company | Septimo LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
Sexto LLC [Member] | |
Name of company | Sexto LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
LBB University of Oregon LLC [Member] | |
Name of company | LBB University of Oregon LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
Jantzen Beach Wings, LLC [Member] | |
Name of company | Jantzen Beach Wings, LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
Oregon Owl's Nest, LLC [Member] | |
Name of company | Oregon Owl’s Nest, LLC |
Jurisdiction of incorporation | OR, USA |
Percent owned | 100% |
West End Wings LTD [Member] | |
Name of company | West End Wings LTD (sold in 2021) |
Jurisdiction of incorporation | United Kingdom |
Percent owned | 100% |
Pie Squared Holdings LLC [Member] | |
Name of company | Pie Squared Holdings LLC |
Jurisdiction of incorporation | DE, USA |
Percent owned | 100% |
PizzaRev Franchising LLC [Member] | |
Name of company | PizzaRev Franchising LLC |
Jurisdiction of incorporation | DE, USA |
Percent owned | 100% |
Pie Squared Pizza LLC [Member] | |
Name of company | Pie Squared Pizza LLC |
Jurisdiction of incorporation | CA, USA |
Percent owned | 100% |
Pie Squared Austin LLC [Member] | |
Name of company | Pie Squared Austin LLC |
Jurisdiction of incorporation | DE, USA |
Percent owned | 100% |
PizzaRev IP Holdings LLC [Member] | |
Name of company | PizzaRev IP Holdings LLC |
Jurisdiction of incorporation | DE, USA |
Percent owned | 100% |
NATURE OF BUSINESS (Details Nar
NATURE OF BUSINESS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash balance | $ 375 | $ 646 |
Working capital deficit | $ 16,300 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIVES (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Minimum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Office and computer equipment | 5 years |
Minimum [Member] | Restaurant Furnishings and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Office and computer equipment | 3 years |
Minimum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Office and computer equipment | 3 years |
Minimum [Member] | Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Office and computer equipment | 3 years |
Maximum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Office and computer equipment | 15 years |
Maximum [Member] | Restaurant Furnishings and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Office and computer equipment | 10 years |
Maximum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Office and computer equipment | 10 years |
Maximum [Member] | Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Office and computer equipment | 7 years |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Restricted cash | $ 1,672 | |
Aggregate carrying value | 2,309 | 3,129 |
Impairment charge | 3,208 | 1,456 |
Revenue related to contract liabilities | 700 | 100 |
Advertising expenses | $ 200 | 200 |
Operating lease, remaining lease term | 11 years | |
Operating lease, option to extend | include options to extend the leases for additional 5-year periods | |
Net operating loss carryforwards | $ 23,700 | |
IRC [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Net operating loss carryforwards | 7,200 | |
Long Lived Assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Impairment charge | $ 3,200 | $ 1,500 |
Franchise License Fees [Member] | Hooters Pacific NW [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets, estimated useful lives | 5 years | |
Trademarks and Trade Names [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets, estimated useful lives | 10 years |
SCHEDULE OF RECOGNIZED IDENTIFI
SCHEDULE OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED (Details) $ in Thousands | Aug. 30, 2021 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
Cash | $ 71 |
Restricted cash | 2,000 |
Property and equipment | 348 |
Right of use asset | 1,391 |
Tradename/trademark intangible | 410 |
Franchise rights intangible | 410 |
Goodwill | 51 |
Security deposits and other assets | 126 |
Total assets acquired | 4,807 |
Gift card liability | 139 |
Deferred revenue | 36 |
Deferred grant income | 2,000 |
Right of use liability | 1,438 |
Total liabilities assumed | 3,613 |
Net purchase price | $ 1,194 |
SCHEDULE OF ESTIMATED FAIR VALU
SCHEDULE OF ESTIMATED FAIR VALUE ASSUMPTIONS (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares | |
Volatility | 90% |
Stock price | $ 0.52 |
Credit spread | 6.35% |
Minimum [Member] | |
Risk free rate | 0.08% |
Maximum [Member] | |
Risk free rate | 0.20% |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Integer $ / shares | Dec. 31, 2021 USD ($) | Aug. 30, 2021 USD ($) | |
Business Acquisition [Line Items] | |||
General and administrative expenses | $ 5,584 | $ 5,210 | |
Pie Squared Holdings LLC [Member] | |||
Business Acquisition [Line Items] | |||
Proceeds from related party debt | 10,000 | ||
Escrow deposit | 2,000 | ||
Purchase Agreement [Member] | Pie Squared Holdings LLC [Member] | |||
Business Acquisition [Line Items] | |||
Secured debt, percentage | 8% | ||
Debt Instrument, Face Amount | $ 1,000 | ||
Debt instrument fair value | $ 1,200 | $ 1,200 | |
Debt instrument, convertible, conversion date | Aug. 30, 2023 | ||
Beneficial ownership, percentage | 4.99% | ||
Trading days | Integer | 30 | ||
Debt discount rate | 15% | ||
Purchase Agreement [Member] | Pie Squared Holdings LLC [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Debt instrument convertible conversion price | $ / shares | $ 0.50 | ||
Purchase Agreement [Member] | Pie Squared Holdings LLC [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Debt instrument convertible conversion price | $ / shares | $ 2 | ||
Purchase Agreement [Member] | Pie Squared Holdings LLC [Member] | Chief Financial Officer [Member] | |||
Business Acquisition [Line Items] | |||
General and administrative expenses | $ 200 | ||
Transaction costs | $ 100 |
EMPLOYEE RETENTION CREDIT AND_2
EMPLOYEE RETENTION CREDIT AND RESTAURANT REVITALIZATION FUND (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Government Assistance [Line Items] | ||
Accounts and other receivables | $ 869,000 | $ 865,000 |
Employee retention credit and other grant income | 2,208,000 | 3,009,000 |
Restricted cash | 1,672,000 | |
Employee Retention Credit [Member] | ||
Government Assistance [Line Items] | ||
Accounts and other receivables | 800,000 | 800,000 |
Employee retention credit and other grant income | 700,000 | 2,500,000 |
Proceeds from Lines of Credit | 128,000 | |
Other Operating Income (Expense), Net | 84,000 | |
Other income | 44,000 | |
Restaurant Revitalization Fund [Member] | ||
Government Assistance [Line Items] | ||
Employee retention credit and other grant income | $ 1,500,000 | 500,000 |
Revitalization fund description | The American Rescue Plan Act established the Restaurant Revitalization Fund (“RRF”) to provide funding to help restaurants and other eligible businesses keep their doors open. This program provided restaurants with funding equal to their pandemic-related revenue loss up to $10.0 million per business and no more than $5.0 million per physical location | |
Proceeds from repayment of debt | $ 10,000,000 | |
Escrow deposit | 2,000,000 | |
Restricted cash | $ 1,700,000 |
SCHEDULE OF FAIR VALUE MEASUREM
SCHEDULE OF FAIR VALUE MEASUREMENTS, RECURRING AND NONRECURRING (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Common stock of Sonnet | $ 12 | $ 50 |
Convertible note payable | 1,000 | 1,099 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Common stock of Sonnet | 12 | 50 |
Convertible note payable | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Common stock of Sonnet | ||
Convertible note payable | ||
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Common stock of Sonnet | ||
Convertible note payable | $ 1,000 | $ 1,099 |
SCHEDULE OF FAIR VALUE LIABILIT
SCHEDULE OF FAIR VALUE LIABILITIES MEASURED ON RECURRING BASIS (Details) - Pie Squared Holdings LLC [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance | $ 1,099 | |
Ending balance | 1,194 | |
Change in fair value | (99) | (95) |
Ending balance | $ 1,000 | $ 1,099 |
SCHEDULE OF INVESTMENT (Details
SCHEDULE OF INVESTMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Investments, All Other Investments [Abstract] | |||
Common stock of Sonnet, at fair value | [1] | $ 12 | $ 50 |
Chanticleer Investors, LLC, at cost | [2] | 16 | 16 |
Total | $ 28 | $ 66 | |
[1]Represents the fair value of the common stock of Sonnet held by the Company after its exercise of warrants received in connection with the Merger. As of December 31, 2022, 8,718 0.1 the Company’s effective economic interest in Hooters of America was less than 1% 0.1 |
SCHEDULE OF INVESTMENT (Detai_2
SCHEDULE OF INVESTMENT (Details) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investment description | the Company’s effective economic interest in Hooters of America was less than 1% | |
Accounts receivable net | $ 0.1 | |
Sonet [Member] | ||
Held shares | 8,718 | 0.1 |
SCHEDULE OF PROPERTY, PLANT AND
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 4,675 | $ 5,511 |
Restaurant furniture and equipment | 1,893 | 2,768 |
Construction in progress | 20 | |
Office and computer equipment | 7 | 33 |
Office furniture and fixtures | 54 | 57 |
Property,plant and equipment, gross | 6,629 | 8,389 |
Accumulated depreciation and amortization | (4,291) | (5,274) |
Property, plant and equipment, net | $ 2,338 | $ 3,115 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Impairment charge | $ 0.8 | $ 0.4 |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset impairment charges | Asset impairment charges |
Depreciation expense | $ 0.5 | $ 0.6 |
SCHEDULE OF GOODWILL (Details)
SCHEDULE OF GOODWILL (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning balance | $ 7,810 | $ 8,591 |
Acquisition of Pie Squared Holdings | 51 | |
Sale of Hooters UK | (820) | |
Foreign currency translation loss | (12) | |
Ending balance | $ 7,810 | $ 7,810 |
SCHEDULE OF FINITE - LIVED INTA
SCHEDULE OF FINITE - LIVED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Finite-Lived Intangible Assets [Line Items] | |||
Total intangibles at cost | $ 3,678 | $ 4,498 | |
Accumulated amortization | (1,369) | (1,369) | |
Intangible assets, net | 2,309 | 3,129 | |
Trademarks and Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total intangibles at cost | $ 2,850 | 3,260 | |
Trademarks and Trade Names [Member] | American Roadside Burger [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated life | 10 years | ||
Total intangibles at cost | $ 561 | 561 | |
Trademarks and Trade Names [Member] | The Burger Joint [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total intangibles at cost | $ 739 | 739 | |
Finite-Lived Intangible Assets, Intent or Ability to Renew or Extend Arrangement | [1] | Indefinite* | |
Trademarks and Trade Names [Member] | Little Big Burger [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total intangibles at cost | $ 1,550 | 1,550 | |
Finite-Lived Intangible Assets, Intent or Ability to Renew or Extend Arrangement | [1] | Indefinite* | |
Trademarks and Trade Names [Member] | PizzaRev [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated life | 5 years | ||
Total intangibles at cost | 410 | ||
Franchise Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total intangibles at cost | $ 828 | 1,238 | |
Franchise Rights [Member] | The Burger Joint [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated life | 7 years | ||
Total intangibles at cost | $ 828 | 828 | |
Franchise Rights [Member] | PizzaRev [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated life | 5 years | ||
Total intangibles at cost | $ 410 | ||
[1]See Note 2; the Company is re-designating these to 5-year useful lives in the first quarter of 2023. |
SUMMARY OF AMORTIZATION EXPENSE
SUMMARY OF AMORTIZATION EXPENSE (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 343 |
2024 | 458 |
2025 | 458 |
2026 | 458 |
2027 | 458 |
Thereafter | 134 |
Total | $ 2,309 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details Narrative) $ in Thousands, £ in Millions | 12 Months Ended | |||
Oct. 08, 2021 USD ($) | Oct. 08, 2021 GBP (£) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||||
Gain on sale of subsidiary | $ 58 | |||
Impairment of Intangible Assets, Finite-lived | 800 | 400 | ||
Trademarks and Trade Names [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of Intangible Assets, Finite-lived | 300 | 300 | ||
Amortization of intangible assets | $ 200 | 400 | ||
Hard Four Consultancy Limited [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill purchase price | $ 600 | £ 0.4 | ||
Gain on sale of subsidiary | $ 100 |
SCHEDULE OF DEBT AND NOTES PAYA
SCHEDULE OF DEBT AND NOTES PAYABLE (Details) - USD ($) $ in Thousands | Feb. 25, 2021 | Apr. 27, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | |||||
Total Debt | $ 7,805 | $ 9,894 | |||
Less: discount on convertible debt | [1] | (141) | (37) | ||
Total Debt, net of discount | 7,664 | 9,857 | |||
Current portion of long-term debt and notes payable | 3,329 | 3,264 | |||
Long-term debt and notes payable, less current portion | 4,335 | 6,593 | |||
Convertible Debt One [Member] | |||||
Short-Term Debt [Line Items] | |||||
Total Debt | [2] | 4,038 | 4,038 | ||
Convertible Debt Two [Member] | |||||
Short-Term Debt [Line Items] | |||||
Total Debt | [1] | 1,350 | |||
Convertible Promissory Note [Member] | |||||
Short-Term Debt [Line Items] | |||||
Total Debt | [3] | 1,000 | 1,099 | ||
PPP Loans [Member] | |||||
Short-Term Debt [Line Items] | |||||
Total Debt | [4] | 4,109 | |||
EIDL Loans [Member] | |||||
Short-Term Debt [Line Items] | |||||
Total Debt | [5] | 300 | 300 | ||
Contractor Note [Member] | |||||
Short-Term Debt [Line Items] | |||||
Total Debt | [6] | 348 | 348 | ||
Notes Payable [Member] | |||||
Short-Term Debt [Line Items] | |||||
Total Debt | [7] | 144 | |||
Related Party Note [Member] | |||||
Short-Term Debt [Line Items] | |||||
Total Debt | [8] | $ 625 | |||
PPP Loan [Member] | |||||
Short-Term Debt [Line Items] | |||||
Proceeds from Loans | $ 2,000 | $ 2,100 | |||
[1]In March 2022, the Company commenced a private placement of up to $ 3.0 3,000,000 1.35 8 10 8 10 4.0 2,925,200 0.125 2,462,600 0.50 462,500 10 1.0 1.2 4.99 15 0.50 2.00 2,000,000 2.1 1 April 2022 0.1 2.0 1 February 25, 2026 45,000 0.3 3.75 1,462 12 0.4 0.1 13.2 270 15 0.6 1 June 30, 2023 |
SCHEDULE OF DEBT AND NOTES PA_2
SCHEDULE OF DEBT AND NOTES PAYABLE (Details) (Parenthetical) - USD ($) | 1 Months Ended | 5 Months Ended | 12 Months Ended | |||||||||||
Jun. 25, 2022 | Aug. 30, 2021 | Aug. 30, 2021 | Feb. 25, 2021 | Aug. 04, 2020 | Apr. 27, 2020 | Apr. 01, 2020 | Aug. 31, 2022 | Mar. 31, 2022 | Feb. 28, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Short-Term Debt [Line Items] | ||||||||||||||
Expire years | 5 years | 5 years | ||||||||||||
Debt discount | [1] | $ 141,000 | $ 141,000 | $ 37,000 | ||||||||||
Common stock warrants | 4,759,200 | 4,759,200 | ||||||||||||
Pie Squared Holdings LLC [Member] | Purchase Agreement [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Conversion price | $ 0.50 | $ 0.50 | ||||||||||||
Debt conversion stock issued | 2,000,000 | |||||||||||||
Debt face amount | $ 1,000,000 | $ 1,000,000 | ||||||||||||
Fair value | $ 1,200,000 | $ 1,200,000 | ||||||||||||
Percentage of beneficial ownership holder | 4.99% | |||||||||||||
Discount rate | 15% | |||||||||||||
Capitalization rate | $ 2 | $ 2 | ||||||||||||
Unpaid and nonconverted amount debt maturity date | Aug. 30, 2023 | |||||||||||||
Warrant [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Allocation value, warrants | $ 300,000 | |||||||||||||
Non-Convertible Secured Debentures [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Interest rate | 8% | |||||||||||||
Secured Convertible Debentures [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Interest rate | 10% | |||||||||||||
Debt payments | $ 4,000,000 | |||||||||||||
8% Non-convertible Secured Debentures [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Debt to purchase common shares | 2,925,200 | |||||||||||||
Expire years | 10 years | |||||||||||||
8% Non-convertible Secured Debentures [Member] | Warrant One [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Exercise price | $ 0.125 | |||||||||||||
Number of securities called by each warrant or right | 2,462,600 | |||||||||||||
8% Non-convertible Secured Debentures [Member] | Warrant Two [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Exercise price | $ 0.50 | |||||||||||||
Number of securities called by each warrant or right | 462,500 | |||||||||||||
10% Secured Convertible Debenture [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Conversion price | $ 0.10 | |||||||||||||
Debt conversion, amount | $ 2,400,000 | |||||||||||||
Debt conversion stock issued | 23,700,000 | |||||||||||||
Debt discount | $ 400,000 | |||||||||||||
Debt instrument description | In connection with the 8% Convertible Debt transaction described in (b) below, the maturity date of the 10% Convertible Debt was extended to April 1, 2024 and Oz Rey agreed to subordinate payment of its 10% Convertible Debt to payment of the 8% Convertible Debt, which has been accounted for as a loan modification. In addition, Oz Rey received a fee equal to 2.0% of the principal amount of the 8% Convertible Debt issued in the transaction, which has been recorded as a debt discount and is being amortized over the two-year term of the related debt. | |||||||||||||
8% Convertible Debt [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Exercise price | $ 0.50 | |||||||||||||
Expire years | 5 years | |||||||||||||
Conversion price | $ 0.40 | |||||||||||||
Debt conversion stock issued | 3,375,000 | |||||||||||||
Debt discount | $ 300,000 | $ 300,000 | ||||||||||||
Debt instrument description | Both the notes and the warrants include a beneficial ownership blocker of 4.99% and contain customary provisions preventing dilution and providing the holders rights in the event of fundamental transactions. Upon the earlier of the maturity date or the one-year anniversary of conversion of the 8% Convertible Debt, holders of 51% of the registerable securities may request the Company to file a registration statement for the securities. | |||||||||||||
Private placement | $ 3,000,000 | |||||||||||||
Common stock warrants | 3,000,000 | |||||||||||||
Value of common stock issued | $ 1,350,000 | |||||||||||||
Allocation value, warrants | 1,000,000 | |||||||||||||
8% Convertible Debt [Member] | Warrant [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Allocation value, warrants | $ 300,000 | |||||||||||||
PPP Loan [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Interest rate | 1% | |||||||||||||
Debt payments | $ 45,000,000 | $ 100,000 | ||||||||||||
Debt maturity | 2022-04 | |||||||||||||
Proceeds from loan | $ 2,000,000 | $ 2,100,000 | ||||||||||||
Debt maturity | Feb. 25, 2026 | |||||||||||||
EIDL Loans [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Interest rate | 3.75% | |||||||||||||
Debt payments | $ 1,462,000 | |||||||||||||
Debt face amount | $ 300,000 | |||||||||||||
Promissory Note [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Interest rate | 12% | 12% | ||||||||||||
Loan defendant | $ 400,000 | $ 400,000 | ||||||||||||
Accounts payable and accrued expenses | $ 100,000 | $ 100,000 | $ 100,000 | |||||||||||
Notes Payable [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Interest rate | 13.20% | 13.20% | ||||||||||||
Debt payments | $ 1,359 | |||||||||||||
Debt instrument, term | 180 days | 270 days | 270 days | |||||||||||
Implied interest rate | 80% | 15% | 15% | |||||||||||
Proceeds from related party | $ 200,000 | |||||||||||||
Related Party Note [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Interest rate | 1% | |||||||||||||
Debt maturity | Jun. 30, 2023 | |||||||||||||
Proceeds from related party | $ 600,000 | |||||||||||||
[1]In March 2022, the Company commenced a private placement of up to $ 3.0 3,000,000 1.35 |
SCHEDULE OF FUTURE MINIMUM PAYM
SCHEDULE OF FUTURE MINIMUM PAYMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |||
2023 | $ 3,329 | ||
2024 | 4,185 | ||
2025 | 7 | ||
2026 | 7 | ||
2027 | 7 | ||
Thereafter | 270 | ||
Total debt maturities | 7,805 | ||
Less: discount on convertible debt | [1] | (141) | $ (37) |
Total debt | $ 7,664 | $ 9,857 | |
[1]In March 2022, the Company commenced a private placement of up to $ 3.0 3,000,000 1.35 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 3,240 | $ 2,544 |
Accrued expenses | 3,385 | 1,955 |
Accrued taxes (sales, payroll, etc.) | 2,214 | 2,149 |
Accrued interest | 406 | 196 |
Accounts payable and accrued expenses, total | $ 9,245 | $ 6,844 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | ||
Accrued payroll | $ 2,100,000 | $ 2,000,000 |
Accrual payroll taxes | 300,000 | |
Compensating balance amount | 900,000 | |
Accrued interest or penalties | $ 0 | $ 0 |
SCHEDULE OF INCOME TAX EXPENSE
SCHEDULE OF INCOME TAX EXPENSE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Current | $ 38 | |
Deferred | 36 | |
Change in valuation allowance | (36) | |
Current | ||
Deferred | (1,656) | 575 |
Change in valuation allowance | 1,616 | (627) |
Current | ||
Deferred | (355) | 61 |
Change in valuation allowance | 437 | 71 |
Income tax expense | $ 42 | $ 118 |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Computed “expected” income tax benefit | $ (479) | $ (580) |
Change in valuation allowance | 2,238 | (593) |
Permanent items | (1,295) | 25 |
State income taxes, net of federal benefit | (399) | 61 |
Prior year true-ups and other deferred tax balances | (116) | 1,329 |
Rate change | 74 | (169) |
Other | 19 | 45 |
Income tax expense | $ 42 | $ 118 |
SUMMARY OF MAJOR COMPONENTS OF
SUMMARY OF MAJOR COMPONENTS OF DEFERRED TAX ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 8,033 | $ 6,582 |
Accrued expenses | 1,049 | 733 |
Section 163(j) limitation | 923 | 848 |
Fixed assets and intangibles | 809 | 750 |
ROU asset/liability | 464 | |
Capital loss carryforwards | 394 | 387 |
Restaurant start-up expenses | 74 | 77 |
Contract liabilities | 17 | 198 |
Deferred occupancy liabilities | 8 | |
Charitable contribution carryforwards | 4 | 7 |
Credits | 176 | 153 |
Total deferred tax assets | 11,951 | 9,735 |
Investments | (382) | (323) |
Deferred occupancy liabilities | (21) | |
Other | (18) | |
Total deferred tax liabilities | (382) | (362) |
Net deferred tax assets | 11,569 | 9,373 |
Valuation allowance | (11,761) | (9,523) |
Total | $ (192) | $ (150) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 23.7 | |
Expiration date | expire at various dates beginning in 2031 through 2036 | |
Change in valuation allowance | $ 2.2 | $ (0.6) |
Change in valuation allowance | (2.2) | $ 0.6 |
Federal and State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 31 | |
IRC [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 7.2 |
SCHEDULE OF OUTSTANDING WARRANT
SCHEDULE OF OUTSTANDING WARRANTS (Details) | Dec. 31, 2022 $ / shares shares |
Class of Warrant or Right [Line Items] | |
Number of warrants | 4,759,200 |
Warrants Issued on April 1, 2020 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 2,462,600 |
Exercise price | $ / shares | $ 0.125 |
Expiration date | Apr. 01, 2030 |
Warrants Issued on April 1, 2020 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 462,600 |
Exercise price | $ / shares | $ 0.500 |
Expiration date | Apr. 01, 2030 |
Warrants Issued on March 30, 2020 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 350,000 |
Exercise price | $ / shares | $ 1.250 |
Expiration date | Mar. 30, 2025 |
Warrants Issued on August 17, 2020 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 134,000 |
Exercise price | $ / shares | $ 1.250 |
Expiration date | Aug. 17, 2025 |
Warrants Issued on March 15, 2022 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 250,000 |
Exercise price | $ / shares | $ 0.500 |
Expiration date | Mar. 15, 2027 |
Warrants Issued on March 21, 2022 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 250,000 |
Exercise price | $ / shares | $ 0.500 |
Expiration date | Mar. 21, 2027 |
Warrants Issued on March 22, 2022 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 250,000 |
Exercise price | $ / shares | $ 0.500 |
Expiration date | Mar. 22, 2027 |
Warrants Issued on March 24, 2022 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 600,000 |
Exercise price | $ / shares | $ 0.500 |
Expiration date | Mar. 24, 2027 |
SUMMARY OF WARRANTS ACTIVITY (D
SUMMARY OF WARRANTS ACTIVITY (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Equity [Abstract] | |
Number of warrants outstanding, beginning balance | shares | 3,409,200 |
Weighted average exercise price, beginning balance | $ / shares | $ 0.34 |
Weighted average remaining life, beginning balance | 7 years 7 months 6 days |
Number of warrants outstanding, granted | shares | 1,350,000 |
Weighted average exercise price, granted | $ / shares | $ 0.50 |
Weighted average remaining life, granted | 5 years |
Number of warrants outstanding, ending balance | shares | 4,759,200 |
Weighted average exercise price, ending balance | $ / shares | $ 0.38 |
Weighted average remaining life, ending balance | 5 years 10 months 24 days |
Number of warrants exercisable, ending balance | shares | 4,759,200 |
Weighted average exercise price, ending balance | $ / shares | $ 0.38 |
Weighted average remaining life, ending balance | 5 years 10 months 24 days |
SUMMARY OF CHANGES IN FAIR VALU
SUMMARY OF CHANGES IN FAIR VALUE WARRANTS (Details) | Dec. 31, 2022 $ / shares |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Term | 5 years |
Strike price | $ 0.52 |
Measurement Input, Share Price [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Strike price | $ 0.50 |
Measurement Input, Share Price [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.37 |
Measurement Input, Share Price [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.40 |
Measurement Input, Price Volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 90 |
Measurement Input Dividend Yield [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | |
Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 2.10 |
Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 2.39 |
STOCKHOLDERS_ DEFICIT (Details
STOCKHOLDERS’ DEFICIT (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Feb. 07, 2020 | Jul. 31, 2021 | May 31, 2021 | Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | |
Warrant [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of warrants outstanding, granted | 1,350,000 | ||||||
Warrant allocation | $ 0.3 | ||||||
Convertible Preferred Stock Series 2 [Member] | |||||||
Class of Stock [Line Items] | |||||||
Convertible preferred stock, shares outstanding | 100 | 100 | |||||
Convertible preferred stock, par value | $ 1,000 | $ 1,000 | |||||
Percentage of cash equal to dollar value | 125% | ||||||
Payment for incentive fee | $ 0.1 | ||||||
Change in fair value of Derivative net | $ 0.1 | ||||||
Conversion price | $ 1 | ||||||
Weighted average conversion price | $ 0.50 | ||||||
Beneficial ownership percentage limitation | 4.99% | ||||||
Percentage of limitation prior to merger | 9.99% | ||||||
Percentage of liquidation preference | 125% | ||||||
Convertible Preferred Stock Series 2 [Member] | Two Thousand and Twenty Bridge Financing [Member] | Securities Purchase Agreement [Member] | |||||||
Class of Stock [Line Items] | |||||||
Sale of stock, number of shares | 1,500 | 150 | |||||
Conversion of stock | 50 | 713 | 637 | ||||
Preferred stock description | The shareholders of Chanticleer common stock received shares of Amergent on a 1 for 1 basis (spin-off shares) and received 1 share of Sonnet common stock for 26 shares of Chanticleer common stock held at the time of the Merger | ||||||
Conversion of stock, shares issued | 100,000 | 1,274,000 |
SCHEDULE OF OPERATING LEASE INF
SCHEDULE OF OPERATING LEASE INFORMATION (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Right-of-use assets | $ 4,976 | $ 8,021 |
Current lease liabilities | 5,395 | 4,599 |
Non-current lease liabilities | 5,868 | 8,644 |
Total operating lease liability | $ 11,263 | $ 13,243 |
Weighted average remaining lease term (years) | 5 years 10 months 24 days | 6 years 8 months 12 days |
Weighted average discount rate | 8% | 8.10% |
SCHEDULE OF MATURITIES OF OPERA
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
2023 | $ 2,645 | |
2024 | 2,654 | |
2025 | 2,501 | |
2026 | 2,083 | |
2027 | 1,626 | |
Thereafter | 2,799 | |
Total remaining lease payments | 14,308 | |
Less: imputed interest | (3,045) | |
Total lease liabilities | $ 11,263 | $ 13,243 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 25, 2020 | Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Loss Contingencies [Line Items] | ||||
Coverage amount | $ 3,000,000 | |||
Legal settlement | $ 800,000 | |||
Impairment charge of right-of-use asset | 1,800,000 | $ 700,000 | ||
Unrecognized lease liabilities | 300,000 | 400,000 | ||
Related to abandoned leases liabilities | 6,800,000 | 3,100,000 | ||
Increase in right of use assets and liabilities | 600,000 | |||
Rent expenses | 2,600,000 | $ 2,400,000 | ||
Variable [Member] | ||||
Loss Contingencies [Line Items] | ||||
Rent expenses | 100,000 | |||
PPP Loan [Member] | ||||
Loss Contingencies [Line Items] | ||||
Debt instrument, face amount | 4,100,000 | |||
PPP Loan [Member] | Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Debt instrument, face amount | 2,000,000 | |||
Restaurant Revitalization Fund [Member] | ||||
Loss Contingencies [Line Items] | ||||
Debt instrument, face amount | 10,000,000 | |||
Repayment of ramifications grant | $ 10,000,000 | |||
Subsequent Event [Member] | ||||
Loss Contingencies [Line Items] | ||||
Legal proceedings, description | DOL assessed a penalty of approximately $972,000 (equal to $486,000 in inappropriately paid tips multiplied by two pursuant to the statute’s liquidated damages provision). DOL offered to reduce that number in half to $486,000. The Company has fought back against the finding, asserting that the alleged supervisors did not have sufficient supervisory responsibility to be deemed a “supervisor” under the statute. Currently, settlement discussions are in progress. DOL has reduced its amount to just under $170,000. The Company has offered $25,000 to resolve the matter. It is difficult to predict at what amount the case may resolve. If it does not resolve, DOL can choose to file the case in litigation or send right-to-sue letters to each impacted employee and former employee. Currently, we do not believe it is likely that DOL will pursue litigation, having indicated that they would be discussing that option and opting not to pursue anything at this time. If the case were to proceed to settle, we expect it would do so between the $25,000 and $170,000 amounts currently on the table. The Company has recorded a charge of $25,000 as management believes this is the most likely outcome. | |||
Penalty amount | $ 972,000 | |||
Damages provision | 486,000 | |||
Reduction in penalty | 170,000 | |||
Legal expense | $ 25,000 |
SCHEDULE OF STOCK OPTIONS ACTIV
SCHEDULE OF STOCK OPTIONS ACTIVITY (Details) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Compensation Related Costs [Abstract] | ||
Number of Options Outstanding, Beginning Balance | 450,000 | |
Weighted Average Exercise Price Per Share, Beginning Balance | $ 1.38 | |
Weighted Average Remaining Contractual Term, Outstanding | 3 years 7 months 6 days | 3 years 7 months 6 days |
Number of Options Forfeited | (150,000) | |
Number of Options Outstanding, Ending Balance | 300,000 | 450,000 |
Weighted Average Exercise Price Per Share, Ending Balance | $ 1.57 | $ 1.38 |
Number of Options Outstanding, Vested and Expected to Vest | 300,000 | |
Weighted Average Exercise Price Per Share, Exercisable | $ 1.57 | |
Weighted Average Remaining Contractual Term, Exercisable | 3 years 7 months 6 days |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Nov. 30, 2021 | Aug. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation | $ 15,000 | $ 48,000 | ||
Unrecognized compensation cost | 0 | |||
General and Administrative Expense [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation | $ 20,000 | $ 50,000 | ||
2021 Inducement Plan [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Common stock reserved for issuance under plan | 500,000 | |||
Remained number of shares available for future grants | 200,000 | |||
2021 Equity Incentive Plan [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Common stock reserved for issuance under plan | 2,000,000 | |||
Remained number of shares available for future grants | 2,000,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
May 31, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Jan. 31, 2023 | Dec. 31, 2021 | Apr. 30, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | |||||||
Principal balance | $ 9,894 | $ 7,805 | |||||
Conversion of convertible securities | $ 402 | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||||
Warrants and rights outstanding, term | 5 years | ||||||
Common Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Conversion of convertible securities | $ 1 | ||||||
Subsequent Event [Member] | Oz Rey LLC [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt Instrument, Face Amount | $ 70 | ||||||
Subsequent Event [Member] | MVA 916 LLC [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt Instrument, Face Amount | $ 400 | ||||||
Subsequent Event [Member] | MV Equity Partners Inc [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt Instrument, Face Amount | 70 | $ 40 | |||||
Subsequent Event [Member] | Kapitus LLC [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt Instrument, Face Amount | $ 100 | $ 100 | |||||
Interest rate | 11% | 11% | |||||
Frequency of periodic payments | 52 payments | 52 payments | |||||
Periodic payments | $ 2,500,000 | $ 2,899,000 | |||||
Subsequent Event [Member] | Series B Convertible Preferred Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Conversion price | $ 0.50 | ||||||
Dividend rate, percentage | 12% | ||||||
Preferred stock, dividend payment terms | annual basis, payable in cash or in shares of common stock based on 30-day volume-weighted average price of common stock on the trading market | ||||||
Subsequent Event [Member] | Series B Convertible Preferred Stock [Member] | Oz Rey LLC [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Conversion of convertible securities | $ 2,500 | ||||||
Subsequent Event [Member] | Series B Preferred and Warrants [Member] | Oz Rey LLC [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares issued | 125 | ||||||
Subsequent Event [Member] | Series B Preferred and Warrants [Member] | Oz Rey LLC [Member] | Common Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares issued | 1,250,000 | ||||||
Common stock, par value | $ 0.0001 | ||||||
Subsequent Event [Member] | Series B Preferred and Warrants [Member] | Oz Rey LLC [Member] | Warrant [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Warrants and rights outstanding, term | 10 years | ||||||
Exercise price of warrants | $ 1 | ||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Boudreauxs Cajun Kitchen Inc [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Description of acquired entity | four restaurant locations | ||||||
Aggregate purchase price | $ 3,800 | ||||||
Cash consideration | 1,300 | ||||||
Debt Instrument, Face Amount | 2,500 | ||||||
Aggregate fee | $ 300 | ||||||
Interest rate | 6% | ||||||
Debt instrument term | 2 years | ||||||
Principal balance | $ 1,300 | ||||||
Conversion price | $ 0.50 |