Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 14, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ARC Group, Inc. | |
Entity Central Index Key | 1,452,872 | |
Trading Symbol | arck | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 6,524,427 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 57,084 | $ 145,346 |
Accounts receivable, net | 98,007 | 166,987 |
Accounts receivable, net - related party | 891 | 1,505 |
Ad funds receivable, net | 11,274 | 36,837 |
Ad funds receivable, net - related party | 1,761 | 2,280 |
Other receivables | 370,312 | |
Prepaid expenses | 44,037 | |
Inventory | 139,634 | 45,417 |
Notes receivable, net | 9,412 | 28,522 |
Deposits | 14,695 | 21,189 |
Other current assets | 3,011 | 5,923 |
Total current assets | 750,118 | 454,006 |
Notes receivable, net of current portion | 3,191 | 5,106 |
Intangible assets | 844,840 | |
Property and equipment, net | 12,498,305 | 99,114 |
Total assets | 14,096,454 | 558,226 |
Liabilities and stockholders' deficit | ||
Accounts payable and accrued expenses | 1,317,984 | 467,264 |
Accounts payable and accrued expenses - related party | 100,892 | 94,150 |
Accrued interest | 19,499 | 13,472 |
Settlement agreements payable | 273,428 | 264,997 |
Accrued legal contingency | 161,790 | 155,935 |
Contingent consideration | 55,356 | 199,682 |
Deferred franchise fees | 26,803 | |
Capital lease obligation | 171,411 | |
Deferred compensation liability | 312,000 | |
Notes payable - related party | 523,777 | 30,503 |
Gift card liabilities | 91,805 | 9,147 |
Total current liabilities | 3,054,745 | 1,235,150 |
Deferred franchise fees, net of current portion | 124,411 | |
Capital lease obligation, net of current portion | 11,241,915 | |
Total liabilities | 14,421,071 | 1,235,150 |
Stockholders' equity deficit: | ||
Class A common stock - $0.01 par value: 100,000,000 shares authorized, 6,524,427 and 6,950,869 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 65,245 | 69,509 |
Series A convertible preferred stock - $0.01 par value: 1,000,000 shares authorized, 449,581 and -0- outstanding at September 30, 2018 and December 31, 2017, respectively | 4,496 | |
Additional paid-in capital | 4,190,559 | 3,995,306 |
Stock subscriptions payable | 290,603 | 26,853 |
Accumulated deficit | (4,875,520) | (4,768,592) |
Total stockholders' deficit | (324,617) | (676,924) |
Total liabilities and stockholders' deficit | $ 14,096,454 | $ 558,226 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Class A common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Class A common stock, shares authorized | 100,000,000 | 100,000,000 |
Class A common stock, shares issued | 6,524,427 | 6,950,869 |
Class A common stock, shares outstanding | 6,524,427 | 6,950,869 |
Series A convertible preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Series A convertible preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Series A convertible preferred stock, shares outstanding | 449,581 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue: | ||||
Total revenue | $ 2,452,702 | $ 1,047,404 | $ 4,868,193 | $ 3,228,054 |
Restaurant operating costs: | ||||
Labor | 624,848 | 293,035 | 1,222,554 | 857,933 |
Other operating expenses | 474,165 | 198,354 | 911,356 | 555,664 |
Professional fees | 366,956 | 67,975 | 614,123 | 351,185 |
Employee compensation expense | 163,512 | 91,033 | 414,924 | 250,626 |
General and administrative expenses | 418,301 | 50,991 | 720,033 | 82,437 |
Total operating expenses | 2,916,504 | 1,068,963 | 5,414,567 | 3,154,709 |
(Loss) / income from operations | (463,802) | (21,559) | (546,374) | 73,345 |
Other income: | ||||
Interest expense | (74,258) | (6,506) | (85,131) | (22,730) |
Gain on sale of investment in Paradise on Wings - related party | 24,000 | 24,000 | ||
Gain on bargain purchase option | 625,193 | 625,193 | ||
Other income | 10,334 | 3,976 | 95,862 | 13,060 |
Total other income | 561,269 | 21,470 | 635,924 | 14,330 |
Net income / (loss) | $ 97,467 | $ (89) | $ 89,550 | $ 87,675 |
Net income / (loss) per share - basic (in dollars per share) | $ 0.01 | $ 0 | $ 0.01 | $ 0.01 |
Net income / (loss) per share - fully diluted (in dollars per share) | $ 0.01 | $ 0 | $ 0.01 | $ 0.01 |
Weighted average number of shares outstanding - basic (in shares) | 6,524,427 | 6,773,041 | 6,795,644 | 6,768,839 |
Weighted average number of shares outstanding - fully diluted (in shares) | 6,554,427 | 6,773,041 | 6,810,809 | 6,768,839 |
Restaurant sales | ||||
Revenue: | ||||
Total revenue | $ 2,197,463 | $ 841,214 | $ 4,076,307 | $ 2,595,679 |
Franchise and other revenue | ||||
Revenue: | ||||
Total revenue | 231,983 | 165,905 | 690,892 | 509,032 |
Franchise and other revenue - related party | ||||
Revenue: | ||||
Total revenue | 23,256 | 40,285 | 100,994 | 123,343 |
Cost of sales | ||||
Restaurant operating costs: | ||||
Restaurant operating cost of sales and Occupancy | 811,009 | 274,846 | 1,360,529 | 869,600 |
Occupancy | ||||
Restaurant operating costs: | ||||
Restaurant operating cost of sales and Occupancy | $ 57,713 | $ 92,729 | $ 171,048 | $ 187,264 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | ||
Net income | $ 89,550 | $ 87,675 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 68,688 | 11,902 |
Amortization of debt discount | 2,596 | |
Stock-based compensation expense | 303,503 | 233,740 |
Stock-based payment for consulting fees due | 30,000 | |
Gain on sale of investment in Paradise on Wings - related party | (24,000) | |
Gain on bargain purchase | (625,193) | |
Changes in operating activities, net of the acquisition of the Fat Patty's franchise: | ||
Restricted cash | (13,076) | |
Accounts receivable | 68,980 | 18,424 |
Accounts receivable - related party | 614 | 11,512 |
Ad fund receivable | 25,563 | (37,093) |
Ad fund receivable - related party | 519 | (2,601) |
Other receivables | (370,312) | (24,000) |
Prepaid expenses | (44,037) | |
Inventory | (2,793) | 4,383 |
Other assets | 9,406 | (14,067) |
Accounts payable and accrued liabilities | 730,747 | (31,522) |
Accrued liabilities - related party | 6,742 | (41,910) |
Advertising fund liabilities | 13,076 | |
Settlement agreements payable | 8,431 | 8,431 |
Accrued legal contingency | 5,855 | 5,856 |
Deferred franchise fees | (45,264) | |
Gift card liabilities | 2,192 | 5,889 |
Net cash provided by operating activities | 235,787 | 242,619 |
Cash flows from investing activities | ||
Repayments of notes receivable | 21,025 | 54,741 |
Contingent consideration | (144,326) | |
Sale of investment in Paradise on Wings | 24,000 | |
Cash acquired in business acquisition | 7,100 | |
Purchases of fixed assets | (227,584) | (33,055) |
Net cash (used) / provided by investing activities | (343,785) | 45,686 |
Cash flows from financing activities | ||
Proceeds from issuance of notes payable - related party | 106,410 | |
Payments on capital lease obligation | (86,674) | |
Repayments of notes payable - related party | (206,324) | |
Net cash provided / (used) by financing activities | 19,736 | (206,324) |
Net (decrease) / increase in cash and cash equivalents | (88,262) | 81,981 |
Cash and cash equivalents, beginning of period | 145,346 | 50,923 |
Cash and cash equivalents, end of period | 57,084 | 132,904 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | $ 0 |
Schedule of non-cash financing activities | ||
Preferred stock issued in exchange for common stock | 4,496 | |
Property and equipment acquired through accounts payable | 126,000 | |
Acquisition of Fat Patty's franchise with note payable and deferred compensation liability | 852,000 | |
Property and equipment acquired with capital lease | $ 11,500,000 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2018 | |
Description Of Business [Abstract] | |
Description of Business | Note 1. Description of Business ARC Group, Inc., a Nevada corporation (the “Company”), was incorporated in April 2000. The Company’s business is focused on the development of the Dick’s Wings ® Fat Patty’s ® Dick’s Wings & Grill ® On December 19, 2016, the Company acquired all of the issued and outstanding membership interests of Seediv, LLC, a Louisiana limited liability company (“Seediv”), for $600,000 and an earn-out payment. Seediv is the owner and operator of the Dick’s Wings & Grill restaurant located at 100 Marketside Avenue, Suite 301, in the Nocatee development in Ponte Vedra, Florida 32081 (the “Nocatee Restaurant”) and the Dick’s Wings & Grill restaurant located at 6055 Youngerman Circle in Argyle Village in Jacksonville, Florida 32244 (the “Youngerman Circle Restaurant”; together with the Nocatee Restaurant, the “Nocatee and Youngerman Restaurants”). A description of the Company’s acquisition of Seediv is set forth herein under Note 5 – Acquisition of Seediv On August 30, 2018, the Company closed upon an asset purchase agreement for the Fat Patty’s franchise (“Fat Patty’s”). Fat Patty’s is comprised of four company-owned restaurants located at 1442 Winchester Avenue, Ashland, Kentucky 41101, 5156 WV 34, Hurricane, West Virginia 25526, 3401 Rt. 60 East, Barboursville, West Virginia 25504, and 1935 Third Avenue, Huntington, West Virginia 25702 (collectively, the “Fat Patty’s Restaurants”). A description of the Company’s acquisition of Seediv is set forth herein under Note 6 – Acquisition of Fat Patty’s. At September 30, 2018, the Company had 21 Dick’s Wings restaurants and three Dick’s Wings concession stands. Of the 21 restaurants, 16 were located in Florida and five were located in Georgia. The Company’s concession stands were also located in Florida. Two of the Company’s restaurants were owned by the Company, and the remaining 19 restaurants were owned and operated by franchisees. The Company’s concession stands were also owned by the Company. In addition, the Company had four Fat Patty’s restaurants at September 30, 2018. Of the four restaurants, three were located in West Virginia and one was located in Kentucky. All four of the restaurants were owned by the Company. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Note 2. Basis of Presentation and Significant Accounting Policies Interim Financial Information The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Seediv, LLC. All intercompany accounts and transactions were eliminated in consolidation. The accompanying The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K. Information presented as of December 31, 2017 is derived from the audited consolidated financial statements. The results of operations for the three- and nine-month periods ended September 30, 2018 are not necessarily indicative of the results that the Company will have for any subsequent quarter or full fiscal year. This summary of significant accounting policies is provided to assist the reader in understanding the Company’s financial statements. The financial statements and notes thereto are representations of the Company’s management. The Company’s management is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and have been consistently applied in the preparation of the financial statements. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Going Concern Prior to December 31, 2017, certain facts about the Company’s financial results created an uncertainty about the Company’s ability to continue as a going concern. Segment Disclosure The Company has both Company-owned restaurants and franchised restaurants Segment Reporting Revenue Recognition On January 1, 2018, the Company adopted the provisions of FASB ASC 606, Revenue From Contracts With Customers provides a single framework in which revenue is required to be recognized to depict the transfer of goods or services to customers in amounts that reflect the consideration to which a company expects to be entitled in exchange for those goods or services. The Company adopted this new guidance effective the first day of fiscal year 2018, using the . Under this method, the cumulative effect of initially adopting the guidance was recognized as an adjustment to the opening balance of equity at January 1, 2018. Therefore, the comparative period has not been adjusted and continues to be reported under the previous revenue recognition guidance. The details of the significant changes and quantitative impact of the changes are discussed below. Franchise Fees ASC 606 impacted the timing of recognition of franchise fees. Under previous guidance, these fees were typically recognized upon the opening of restaurants. Under ASC 606, the fees are deferred and recognized as revenue over the term of the individual franchise agreements. The effect of the required deferral of fees received in a given year will be mitigated by the recognition of revenue from fees retrospectively deferred from prior years. As a result of the adoption of ASC 606, the Company recognized deferred franchise fees in the amount of $196,478 on its condensed consolidated balance sheets as of January 1, 2018 and an increase in its accumulated deficit by the same amount on that date. Advertising Funds ASC 606 also impacted the accounting for transactions related to the Company’s general advertising fund. Under previous guidance, franchisee contributions to and expenditures by the fund were not included in the Company’s condensed consolidated financial statements. Under ASC 606, the Company records contributions to and expenditures by the fund as revenue and expenses within the Company’s condensed consolidated financial statements. The Company recognized contributions to and expenditures by the fund of $46,816 and $145,076 during the three- and nine-month periods ended September 30, 2018. Gift Card Funds Additionally, ASC 606 impacted the accounting for transactions related to the Company’s gift card program. Under previous guidance, estimated breakage income on gift cards was deferred until it was deemed remote that the unused gift card balance would be redeemed. Under ASC 606, breakage income on gift cards is recognized as gift cards are utilized. This effect of this change on the Company’s financial statements was negligible. Impact on Financial Statements The following table summarizes the impacts of adopting the revenue recognition standard on the Company’s condensed consolidated financial statements as of and for the three- and nine-month periods ended September 30, 2018: Adjustments As Franchise Fees Advertising Funds Balances Condensed Consolidated Balance Sheets Deferred franchise fees $ 26,803 $ (26,803 ) $ — $ — Total current liabilities 3,054,745 (26,803 ) — 3,027,942 Deferred franchise fees, net of current portion 124,411 (124,411 ) — — Total liabilities 14,421,071 (124,411 ) — 14,296,660 Accumulated deficit (4,875,520 ) 151,214 — (4,724,306 ) Total stockholders’ deficit (324,617 ) 151,214 — (173,403 ) Condensed Consolidated Statements of Operations – Three-Month Period Ended September 30, 2018 Franchise and other revenue $ 231,983 $ (6,500 ) $ (42,806 ) $ 182,677 Franchise and other revenue – related party 23,256 (750 ) (4,010 ) 18,496 Total revenue 2,452,702 (7,250 ) (46,816 ) 2,398,636 General and administrative expenses 418,301 — (46,816 ) 371,485 Total operating expenses 2,916,504 — (46,816 ) 2,869,688 Loss from operations (463,802 ) (7,250 ) — (471,052 ) Net income 97,467 (7,250 ) — 90,217 Condensed Consolidated Statements of Operations – Nine-Month Period Ended September 30, 2018 Franchise and other revenue $ 690,892 $ (19,250 ) $ (125,958 ) $ 545,684 Franchise and other revenue – related party 100,994 (26,014 ) (19,118 ) 55,862 Total revenue 4,868,193 (45,264 ) (145,076 ) 4,677,853 General and administrative expenses 720,033 — (145,076 ) 574,957 Total operating expenses 5,414,567 — (145,076 ) 5,269,491 Loss from operations (546,374 ) (45,264 ) — (591,638 ) Net income 89,550 (45,264 ) — 44,286 Condensed Consolidated Statement of Cash Flows Cash flows from operating activities: Net income $ 89,550 $ (45,264 ) $ — $ 44,286 Changes in operating assets and liabilities: Deferred franchise fees (45,264 ) 45,264 — — Disaggregation of Revenue The following table disaggregate revenue by primary geographical market and source: Three Months Ended September 30, Nine Months September 30, Primary geographic markets Florida $ 1,377,676 $ 3,694,208 Georgia 47,050 146,009 Kentucky 232,744 232,744 West Virginia 795,232 795,232 Total revenue $ 2,452,702 $ 4,868,193 Sources of revenue Restaurant sales $ 2,197,463 $ 4,076,307 Royalties 197,369 591,847 Franchise fees 7,250 45,264 Advertising fund fees 46,816 145,077 Other revenue 3,804 9,698 Total revenue $ 2,452,702 $ 4,868,193 Contract Balances The following table presents changes in deferred franchise fees as of and for the nine-month period ended September 30, 2018: Total Deferred franchise fees at January 1, 2018 $ 196,478 Revenue recognized during the period (45,264 ) New deferrals due to cash received — Deferred franchise fees at September 30, 2018 $ 151,214 Anticipated Future Recognition of Deferred Franchise Fees The following table presents the estimated franchise fees to be recognized in the future related to performance obligations that were unsatisfied at September 30, 2018: Year Franchise 2018 $ 7,250 2019 25,719 2020 24,000 2021 22,923 2022 21,000 Thereafter 50,322 Total $ 151,214 The estimated franchise fees for 2018 represent the fees to be recognized during the remainder of the 2018 fiscal year. Other Receivables and Payables Other receivables was comprised primarily of receipts from credit card sales by Company-owned Fat Patty’s restaurants that occurred after the Company completed the acquisition of Fat Patty’s that were held by the former owner of Fat Patty’s, all of which are expected to be collected in full by the Company during the next 12 months. Other payables included within accounts payable and accrued expenses consisted of $243,261 of accounts payable owed to the former owner of Fat Patty’s for alcohol and other items purchase by the former owner of Fat Patty’s in connection with the operation of the franchise. Intangible Assets The Company acquired various intangible assets in connection with the acquisition of Fat Patty’s. Intangible assets include a tradename, an assembled workforce and a non-compete agreement. The Company amortizes the assembled workforce and non-compete agreement on a straight-line basis over the expected period of benefit, which is three and five years, respectively. The tradename has an indefinite life and is not subject to amortization but tested for impairment on an annual basis. The amount of amortization recognized for the assembled workforce and non-compete agreement was $759 during the three- and nine-month periods ended September 30, 2018. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740) The Company reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to the Company’s operations or that no material effect is expected on the Company’s financial statements as a result of future adoption. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 3. Net Income Per Share The Company calculates basic and diluted net income per share in accordance with ASC Topic 260, Earnings per Share The following table sets forth the computation of basic and diluted net income / (loss) per share: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Numerator Net income / (loss) $ 97,467 $ (89 ) $ 89,550 $ 87,675 Denominator Weighted average shares outstanding — basic 6,524,427 6,773,041 6,795,644 6,768,839 Dilutive effect of potential shares of common stock 30,000 -0- 15,165 -0- Weighted average shares outstanding – basic 6,554,427 6,773,041 6,810,809 6,768,839 Basic net income / (loss) per share $ 0.01 $ (0.00 ) $ 0.01 $ 0.01 Fully diluted net income / (loss) per share $ 0.01 $ (0.00 ) $ 0.01 $ 0.01 |
Investment in Paradise on Wings
Investment in Paradise on Wings | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Paradise on Wings | Note 4. Investment in Paradise on Wings On January 20, 2014, the Company entered into a contribution agreement with Paradise on Wings Franchise Group, LLC, a Utah limited liability company that is the franchisor of the Wing Nutz ® On September 30, 2017, the Company sold its 50% ownership interest in Paradise on Wings to Seenu G. Kasturi, the Company’s President, Chief Financial Officer and Chairman of the Board of Directors, for $24,000. The Company performed a review of its investment in Paradise on Wings at the end of its 2016 fiscal year and determined that an “other-than-temporary” decline in the value of the investment had occurred and that a loss on impairment equal to its then carrying amount of $348,143 should be recognized. Accordingly, the carrying amount of the Company’s investment in Paradise on Wings was zero at December 31, 2017 and 2016. In addition, because the carrying amount of the Company’s investment in Paradise on Wings was zero at December 31, 2017 and 2016, the amount of the Company’s share of net loss incurred by Paradise on Wings that was recognized by the Company during the three- and nine-month periods ended September 30, 2017 was zero. Set forth below is a summary of the unaudited income statement of Paradise on Wings for the three- and nine-month periods ended September 30, 2017 provided to the Company by Paradise on Wings Statement of Operations Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Revenue $ 74,831 $ 226,273 Operating expenses (234,525 ) (484,436 ) Loss from operations (159,694 ) (258,163 ) Other expense (104,203 ) (182,398 ) Net loss $ (263,897 ) $ (440,561 ) Company’s share of net loss $ (131,949 ) $ (220,281 ) Set forth below is a summary of the unaudited balance sheet of Paradise on Wings at September 30, 2017 provided to the Company by Paradise on Wings: Balance Sheet September 30, Current assets $ 119,837 Equity investment -0- Total assets $ 119,837 Total liabilities $ 110,120 Equity 9,717 Total liabilities and equity $ 119,837 |
Acquisition of Seediv
Acquisition of Seediv | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition of Seediv | Note 5. Acquisition of Seediv On December 19, 2016, the Company entered into a membership interest purchase agreement with Seenu G. Kasturi pursuant to which the Company agreed to acquire all of the issued and outstanding membership interests of Seediv from Mr. Kasturi. Seediv is the owner and operator of the Nocatee and Youngerman Restaurants. The closing of the acquisition occurred simultaneously with the execution of the membership interest purchase agreement by the Company and Mr. Kasturi on December 19, 2016. In connection with the acquisition of Seediv, the Company agreed to make an earnout payment to Mr. Kasturi and recorded $20,897 of contingent consideration as the estimated initial fair value of the earnout payment. A description of the manner by which the earnout payment was valued is set forth herein under Note 10. Fair Value Measurements |
Acquisition of Fat Patty's
Acquisition of Fat Patty's | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations Of Fat Patty [Abstract] | |
Acquisition of Fat Patty's | Note 6. Acquisition of Fat Patty’s On August 3, 2018, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with CSA, Inc., a West Virginia corporation (“CSA”), CSA Investments, LLC, a West Virginia limited liability company (“CSA Investments”), CSA of Teays Valley, Inc., a West Virginia corporation (“CSA Teays Valley”), CSA, Inc. of Ashland, a Kentucky corporation (“CSA Ashland”), Fat Patty’s, LLC, a West Virginia limited liability company (“FPLLC”), and Clint Artrip, an individual (“Artrip”; together with CSA, CSA Investments, CSA Teays Valley, and CSA Ashland, FPLLC, the “Sellers”), pursuant to which the Company agreed to acquire all of the assets associated with Fat Patty’s (the “Fat Patty’s Acquisition”). The Company agreed to pay the Sellers $12,352,000 for the assets, of which $12,000,000 was to be paid to the Sellers at closing, $40,000 was to be paid to the Sellers within 10 days after the closing and the remaining $312,000 will be paid to the Sellers on the first anniversary of the closing. The closing of the Fat Patty’s Acquisition occurred on August 30, 2018, however, as discussed below, the Company entered into a separate related agreement with a third party that resulted in a direct transfer of the Properties (as defined below) from the Sellers to the third party. Accordingly, in substance, the Company only acquired the net assets detailed below for a purchase price of $852,000. In connection with the Fat Patty’s Acquisition, the Company entered into a secured convertible promissory note with Seenu G. Kasturi on August 30, 2018 pursuant to which the Company borrowed $622,929 from Mr. Kasturi to help finance the Fat Patty’s Acquisition. All principal and accrued but unpaid interest is due and payable by the Company in full on the earlier of (i) the fifth (5 th Also on August 3, 2018, In connection with the Property Acquisition, the Company entered into a master lease agreement (the “Master Lease”) with Store Capital on August 30, 2018 pursuant to which the Company leased each of the Properties from Store Capital. The initial term of the lease expires on August 31, 2038. The Company has the option to extend the term of the lease for four additional successive periods of five years each. The aggregate base annual rent is $876,875 and is subject to annual increases commencing September 1, 2019 in an amount equal to the lesser of: (i) 1.75%, or (ii) 1.25 times the change in the Consumer Price Index. The Company is responsible for all costs and obligations relating to the Properties. The acquisition of Fat Patty’s was accounted for as a business combination using the acquisition method of accounting in accordance with Accounting Standard Codification (“ASC”) 805, Business Combinations For purposes of measuring the estimated fair value, where applicable, of the assets acquired and the liabilities assumed as reflected in the , the guidance in ASC 820, Fair Value Measurements and Disclosures The assets acquired and liabilities assumed were comprised of the following: Cash $ 7,100 Inventory 91,424 Intangible assets 844,840 Equipment 614,295 Total assets acquired 1,557,659 Gift card liabilities (80,466 ) Total liabilities assumed (80,466 ) Gain on bargain purchase option (625,193 ) Net assets acquired with note payable and deferred compensation liability $ 852,000 The purchase price allocation is preliminary as of September 30, 2018. The preliminary estimates of fair values recorded are Level 3 inputs that have been determined by management based upon various market and income analyses and recent asset appraisals. The purchase price allocation will remain preliminary until the Company finalizes a third-party valuation, determines the fair values of assets acquired and liabilities assumed, and determines the actual transaction costs incurred. The final amounts allocated to assets acquired and liabilities assumed and the transaction costs incurred could differ from the preliminary recorded amounts. The fair value of the identifiable assets acquired and liabilities assumed of $1,477,193 exceeded the purchase price of Fat Patty’s by $625,193. Consequently, the Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed and concluded that the valuation procedures and resulting measures were appropriate. As a result, the Company recognized a gain of $625,193 during the three- and nine-month periods ended September 30, 2018 in connection with the acquisition. The gain was recorded in the other income in the accompanying condensed consolidated statements of operations. The following table summarizes certain financial information for the three- and nine-month periods ended September 30, 2018 contained in the accompanying certain unaudited pro forma financial information for the three- and nine-month periods ended September 30, 2018 and 2017 as if the acquisition of Fat Patty’s had occurred on January 1, 2017: Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Revenue $ 4,415,657 $ 12,720,014 $ 3,964,788 $ 11,980,207 Income from continuing operations (13,051 ) 1,256,629 168,493 149,061 Net income 548,218 1,892,553 186,352 646,998 Net income per share – basic $ 0.08 $ 0.28 $ 0.03 $ 0.10 Net income per share – fully diluted $ 0.08 $ 0.28 $ 0.03 $ 0.10 The results of operations for Fat Patty’s were included in the Company's results of operations beginning August 30, 2018. The actual amounts of revenue and net income for Fat Patty’s that are included in the Company’s condensed consolidated statements of operations for the three- and nine-month periods ended September 30, 2018 were $1,027,976 and $52,077, respectively. The unaudited pro forma financial information has been presented for informational purposes only and is not necessarily indicative of the actual results that would have occurred had the acquisition been consummated on January 1, 2017 or of the future results of the combined entities |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 7. Inventory Inventory was comprised of the following at September 30, 2018 and December 31, 2017, respectively: September 30, December 31, Food $ 89,334 $ 23,987 Beverages 50,300 21,430 Total $ 139,634 $ 45,417 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Note 8. Property and Equipment, Net Property and equipment, including capital lease assets, were comprised of the following at September 30, 2018 and December 31, 2017, respectively: September 30, December 31, Land, buildings and improvements $ 11,500,000 $ -0- Leasehold improvements 295,133 69,472 Furniture, fixtures and equipment 823,282 78,621 Subtotal 12,618,415 148,093 Less: accumulated depreciation (120,110 ) (48,979 ) Total $ 12,498,305 $ 99,114 The land, buildings and improvements of $11,500,000 at September 30, 2018 consisted of gross assets acquired on the capital lease with related depreciation expense and accumulated depreciation of $24,000. Depreciation expense was $49,481 and $68,688 as $4,571 and $11,902 during the three- and nine-month periods ended September 30, 2017 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible Assets | Note 9. Intangible Assets The Company acquired various intangible assets in connection with the acquisition of Fat Patty’s. Intangible assets include a tradename valued at $810,000, an assembled workforce valued at $15,556 and a non-compete agreement valued at $18,526 at September 30, 2018. The Company did not have any intangible assets at December 31, 2017. The Company amortizes the assembled workforce and non-compete agreement on a straight-line basis over the expected period of benefit, which is three and five years, respectively. The tradename has an indefinite life and is not subject to amortization but tested for impairment on an annual basis. The amount of amortization recognized for the assembled workforce and non-compete agreement was $759 during the three- and nine-month periods ended September 30, 2018. The following table presents the future amortization expense to be recognized from the Company’s intangible assets at September 30, 2018: Year Amortization Expense to be Recognized 2018 $ 2,275 2019 9,101 2020 9,101 2021 7,324 2022 3,768 Thereafter 2,512 Total $ 34,081 The amortization expense to be recognized for 2018 represent the expenses to be recognized during the remainder of the 2018 fiscal year. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10. Fair Value Measurements On January 20, 2014, the Company purchased a 50% ownership interest in Paradise on Wings. On December 19, 2016, the Company acquired all of the issued and outstanding membership interests of Seediv. A description of the investment in Paradise on Wings and the acquisition of Seediv is set forth herein under Note 4. Investment in Paradise on Wings Note 5. Acquisition of Seediv On September 30, 2017, the Company sold its 50% ownership interest in Paradise on Wings to Seenu G. Kasturi for $24,000. Paradise on Wings incurred a loss of $440,561 during the period beginning January 1, 2017 and ending September 30, 2017. As a result, the carrying amount of the Company’s investment in Paradise on Wings was zero at September 30, 2017. In connection with the acquisition of Seediv, the Company agreed to pay contingent consideration in the form of an earn-out payment. The Company determined that the fair value of the liability for the contingent consideration was estimated to be $20,897 at the acquisition date. The Company determined the fair value of the contingent consideration based on a probability-weighted approach derived from earn-out criteria estimates and a probability assessment with respect to the likelihood of achieving the earn-out criteria. The measurement was based upon significant inputs not observable in the market, including internal projections and an analysis of the target markets. The resultant probability-weighted contingent consideration was discounted using a discount rate based upon the weighted-average cost of capital. At each reporting date, the Company revalues the contingent consideration to the reporting date fair value and records increases and decreases in the fair value as income or expense under general and administrative expenses in the Company’s condensed consolidated statements of operations. Increases or decreases in the fair value of the contingent consideration may result from, among other things, changes in discount periods and rates, changes in the timing and amount of earn-out criteria, and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria. As of December 31, 2017, the Company calculated the earnout payment in accordance with the provisions of the membership interest purchase agreement and determined that the earnout payment was $199,682. The Company recognized additional Seediv compensation expense in the amount of $178,785 in connection with the earnout payment and the liability for the contingent consideration was increased by $178,785 to $199,682 at December 31, 2017. The Company made payments in the amount of $144,326 to Mr. Kasturi with respect to the earnout payment during the nine-month period ended September 30, 2018. Accordingly, the outstanding balance of contingent consideration was $55,356 and $199,682 at September 30, 2018 and December 31, 2017, respectively. The following table presents the contingent consideration recorded by the Company in connection with the acquisition of Seediv within the fair value hierarchy utilized to measure fair value on a recurring basis at September 30, 2018 and December 31, 2017, respectively: Level 1 Level 2 Level 3 September 30, 2018 $ -0- $ 55,356 $ -0- December 31, 2017 $ -0- $ 199,682 $ -0- The earnout payment was to be calculated based on the earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the Nocatee and Youngerman Restaurants during the year ended December 31, 2017. As of December 31, 2017, the EBITDA for the Nocatee and Youngerman Circle Restaurants was utilized to compute the ending contingent consideration liability. As a result, the fair value measurement of the contingent consideration represented a Level 2 fair value measurement at September 30, 2018 and December 31, 2017 because it was based on other significant observable inputs. The Company’s other financial instruments consist of cash and cash equivalents, accounts and ad fund receivables, notes receivable, capital lease assets and liabilities, accounts payable, accrued expenses and notes payable. The estimated fair values of the cash and cash equivalents, accounts and ad fund receivables, notes receivable, accounts payable, accrued expenses and notes payable (and the related beneficial conversion feature associated with the notes payable) approximate their respective carrying amounts due to the short-term maturities of these instruments. The estimated fair value of the capital lease obligation approximated its carrying amount as the interest rate is implicit in the underlying lease. |
Notes Receivable
Notes Receivable | 9 Months Ended |
Sep. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Notes Receivable | Note 11. Notes Receivable In September 2014, the Company made a loan to one of its franchisees in the aggregate original principal amount of $6,329. The loan was for a term of three years, was payable in monthly installments, and did not require the payment of any interest. A total of $25 of principal was outstanding under the loan at December 31, 2017. The loan was paid off in full during the nine-month period ended September 30, 2018. In June 2016, the Company made a loan to one of its franchisees under a promissory note in the aggregate original principal amount of $25,000. In July 2016, the Company made an additional loan to the same franchisee under a line of credit agreement for an aggregate original principal amount of up to $28,136. In September 2016, the Company made an additional loan to the same franchisee under a second line of credit agreement for an aggregate original principal amount of up to $25,000. The loan under the promissory note is for a term of two years, is payable in monthly installments beginning January 1, 2017, and accrues interest at a rate of 5% per annum beginning September 1, 2016. The loan under the $28,136 line of credit agreement was for a term of two years, was payable in monthly installments beginning January 1, 2017, and did not require the payment of any interest. The loan was repaid in full during the year ended December 31, 2017. The loan under the $25,000 line of credit agreement is for a term of two years, is payable in monthly installments beginning January 1, 2017 and accrues interest at a rate of 5% per annum beginning October 1, 2016. A total of $6,858 and $25,944 of principal was outstanding under the loans at September 30, 2018 and December 31, 2017, respectively. Interest in the aggregate amount of $139 and $657 accrued and was paid in full under the loans during the three- and nine-month periods ended September 30, 2018, respectively. Interest in the aggregate amount of $425 and $1,515 accrued under the loans during the three- and nine-month periods ended September 30, 2017, respectively, and payments of interest in the aggregate amount of $425 and $2,354 were made under the loans during the three- and nine-month periods ended September 30, 2017. In October 2017, the Company made a loan to one of its franchisees in the aggregate original principal amount of $7,659. The loan is due and payable in full on December 1, 2020, is payable in monthly installments beginning January 1, 2018, and does not require the payment of any interest. The full amount of the loan was outstanding on December 31, 2017. A total of $5,745 and $7,659 of principal was outstanding under the loan at September 30, 2018 and December 31, 2017, respectively . The carrying value of the Company’s outstanding notes receivable was $12,603 and $33,628 at September 30, 2018 and December 31, 2017, respectively, all of which was due from unrelated third parties. Of these amounts, $9,412 and $3,191 were classified as short-term and long-term notes receivable, respectively, at September 30, 2018, and $28,522 and $5,106 were classified as short-term and long-term notes receivable, respectively, at December 31, 2017. The Company generated interest income of $425 and $1,515 generated interest income of $543 and $1,931 during the three- and nine-month periods ended September 30, 2017 |
Debt Obligations
Debt Obligations | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Note 12. Debt Obligations As of December 31, 2016, the Company had principal in the amount of $16,103 outstanding under its credit facility with Blue Victory Holdings, Inc., a Nevada corporation (“Blue Victory”), and repaid $824,250 under the credit facility. During the year ended December 31, 2017, the Company borrowed $61,721 under the credit facility and repaid $77,824 to Blue Victory under the credit facility. The Company did not borrow any funds under the credit facility during the nine-month period ended September 30, 2018. Accordingly, there was no principal outstanding under the credit facility at September 30, 2018 or December 31, 2017. During the year ended December 31, 2017, the Company borrowed $372,049 from Blue Victory and repaid $341,546 to Blue Victory under a separate loan. The loan accrues interest at a rate of 6% per annum and is payable on demand On August 30, 2018, the Company entered into a secured convertible promissory note with Seenu G. Kasturi pursuant to which the Company borrowed $622,929 to help finance the Fat Patty’s Acquisition. All principal and accrued but unpaid interest is due and payable by the Company in full on the earlier of (i) the fifth (5 th The carrying value of the Company’s outstanding promissory notes, net of unamortized discount of $153,136 and excluding capital lease obligations, was $523,777 and $30,503 at September 30, 2018 and December 31, 2017, respectively. |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders Equity Note [Abstract] | |
Capital Stock | Note 13. Capital Stock The Company’s authorized capital consisted of 100,000,000 shares of Class A common stock, par value $0.01 per share, at September 30, 2018 and December 31, 2017, of which 6,524,427 and 6,950,869 shares of common stock were outstanding at September 30, 2018 and December 31, 2017, respectively, and consisted of 1,000,000 and -0- shares of Series A convertible preferred stock, par value $0.01 per share, at September 30, 2018 and December 31, 2017, respectively, of which 449,581 and -0- shares were On January 1, 2018, Mr. Kasturi earned 9,337 shares of the Company’s common stock pursuant to the terms of his employment agreement with the Company. The Company recognized $147 of stock compensation expense during the nine-month period ended September 30, 2018 in connection with the vesting of the shares of common stock earned by Mr. Kasturi on January 1, 2018. The Company also recognized $13,500 of stock compensation expense during the nine-month period ended September 30, 2018, respectively, in connection with the vesting of 9,660 shares of common stock earned by Mr. Kasturi on April 1, 2018 pursuant to the terms of his employment agreement with the Company, and recognized $148 and $13,500 of stock compensation expense during the three- and nine-month periods ended September 30, 2018, respectively, in connection with the vesting of 7,064 shares of common stock to be earned by Mr. Kasturi on July 1, 2018 pursuant to the terms of his employment agreement with the Company. in connection with the vesting of 7,414 shares of common stock earned by Mr. Kasturi on October 1, 2018. In January 2018, the Company issued a total of 5,625 shares of its common stock to certain of its franchisees as incentive compensation. . In June 2018, the Company’s Board of Directors created Series A convertible preferred stock and authorized 1,000,000 shares of Series A convertible preferred stock, par value $0.01 per share, for issuance. Each share of Series A convertible preferred stock is entitled to 100 votes per share and is convertible into one share of the Company’s common stock at a conversion price of $0.75 per share of common stock. The conversion price may be paid in cash, through a reduction in the number of shares of common stock received, or by other methods approved by the Board of Directors. In the event any shares of the Series A convertible preferred stock are transferred by the holder thereof, such shares immediately and automatically convert into shares of common stock with the conversion price being paid by the recipient through a reduction in the number of shares of common stock received. The Series A convertible preferred stock is treated pari passu In May 2018, the In May 2018, the Company provided an employee with the right to receive $33,000 in cash or 20,000 shares of shares of the Company’s common stock on May 15, 2021. The shares were valued at a price per share equal to the closing price of the Company’s common stock on the OTCQB on the date of grant and remeasured as of September 30, 2018. In accordance with Compensation – Stock Compensation , as the employee is able to settle the right in either cash or common stock, the Company recognized $2,501 and $3,752 of stock compensation expense in connection therewith during the three- and nine-month periods ended September 30, 2018 and recorded a corresponding liability which has been recorded in accounts payable and accrued expenses within the Company’s condensed consolidated balance sheets . In June 2018, the Company entered into a securities purchase agreement with Seenu G. Kasturi pursuant to which the Company issued Mr. Kasturi 449,581 shares of Series A convertible preferred stock in exchange for 449,581 shares of common stock held by Mr. Kasturi. Upon receipt of the shares of common stock from Mr. Kasturi, the shares were retired and restored to the status of authorized and unissued shares of common stock. Accordingly, the number of shares of common stock outstanding immediately after the transaction was completed decreased from 6,974,008 shares to 6,524,427 shares. No expense was recognized by the Company during the nine-month period ended September 30, 2018 in connection with the transaction. In August 2018, the Company entered into an agreement with a firm to provide investor relations services to the Company. Under the terms of the agreement, the Company agreed to pay the firm $12,250 and issue 3,500 shares of common stock to the firm upon the execution of the agreement as compensation for services to be performed during the months of August and September 2018. The Company agreed to pay the firm $7,000 and issue 3,500 shares of common stock each month thereafter during the remainder of the term of the agreement. The Company recognized $5,250 of stock compensation expense during the three- and nine-months periods ended September 30, 2018 in connection with the issuance of the shares 3,500 shares. In September 2018, the Company entered into an agreement with Maxim Group LLC (“Maxim”) to provide investment banking and mergers and acquisition services to the Company for a term of one year. Under the terms of the agreement, the Company agreed to pay Maxim $7,500 per month during the term of the agreement and issue 125,000 shares of common stock to Maxim upon the execution of the agreement. The Company recognized $240,625 of stock compensation expense during the three- and nine-months periods ended September 30, 2018 in connection with the issuance of the shares. The Company recognized a total of $265,629 and $303,503 for stock compensation expense during the three- and nine-month periods ended September 30, 2018, respectively, and recognized a total of $26,889 and $233,740 |
Stock Options and Warrants
Stock Options and Warrants | 9 Months Ended |
Sep. 30, 2018 | |
Stock Options and Warrants [Abstract] | |
Stock Options and Warrants | Note 14. Stock Options and Warrants The Company issued one stock option during the nine-month period ended September 30, 2018. The stock option is exercisable into 30,000 shares of common stock at an exercise price of $1.49 and vests in three equal annual installments commencing on the first anniversary of the date of issuance. The shares were valued on the date of grant by using the Black-Scholes pricing model in accordance with the provisions of ASC Topic 718, Compensation – Stock Compensation The Company did not issue any stock options or warrants exercisable into shares of the Company’s common stock during the three- and nine-month periods ended September 30, 2017, and no stock options or warrants were exercised during the three- and nine-month periods ended September 30, 2017. There were no stock options or warrants outstanding at September 30, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15. Commitments and Contingencies Operating Leases Company Headquarters In January 2015, the Company entered into a lease with Crescent Hill Office Park for its corporate headquarters located at 6327-4 Argyle Forest Boulevard, Jacksonville, Florida pursuant to which the Company leases approximately In January 2018, the Company entered into a new lease with Crescent Hill Office Park for its corporate headquarters located at 6327-4 Argyle Forest Boulevard, Jacksonville, Florida pursuant to which the Company leases approximately Nocatee Restaurant In October 2013, On April 1, 2017, DWG Acquisitions, Seediv and NTC-REG entered into an assignment and assumption & first modification to lease agreement for the Nocatee Restaurant. Under the agreement, DWG Acquisitions assigned all of its right, title, interest and claim in and to the Nocatee Lease, and Seediv assumed the payment and performance of all obligations, liabilities and covenants of DWG Acquisitions under the lease for the Nocatee Restaurant. In addition, the parties amended certain terms of the lease to state that the lease covers approximately 3,400 square feet of space, to extend the term of the lease for a 60-month period commencing on April 1, 2018 and expiring March 31, 2023, and to change the rent payments to an initial monthly rent payment of $6,830 without an additional annual rent payment. Youngerman Circle Restaurant In May 2014, On December 20, 2016, Seediv entered into a new triple net lease with Raceland QSR for the Youngerman Circle Restaurant. The lease provides for rent payments to be made by the Company for each of 13 rent periods per year, with each rent period comprised of four weeks. The lease provides for an initial base rent payment equal to the greater of: (i) $10,000 per rent period, or (ii) 7.5% of the Youngerman Circle Restaurant’s net sales for the applicable rent period. Commencing on the fifth (5 th Rent expense under the Company’s operating leases was $57,713 and $182,293 during the three- and nine-month periods ended September 30, 2018, respectively, and was $98,748 and $205,220 during the three- and nine-month periods ended September 30, 2017, respectively. Capital Leases On August 30, 2018, the Company entered into the Master Lease. The initial term of the lease expires on August 31, 2038. The Company has the option to extend the term of the lease for four additional successive periods of five years each. The aggregate base annual rent is $876,875 and is subject to annual increases commencing September 1, 2019 in an amount equal to the lesser of: (i) 1.75%, or (ii) 1.25 times the change in the Consumer Price Index. The Company is responsible for all costs and obligations relating to the Properties. The Company determined that the Master Lease is a capital lease. The Company recorded a capital lease asset and capital lease obligation of $11,500,000 in its condensed consolidated balance sheets that was equal to the present value of the Company’s future minimum leaseback payments. The outstanding balance of the capital lease obligation was . The following table presents the future annual minimum lease payments to be recognized under the capital lease at September 30, 2018: Year Future Minimum Lease Payments 2018 $ 146,146 2019 881,990 2020 897,425 2021 913,130 2022 929,110 Thereafter 16,869,402 Total 20,637,203 Less: portion representing interest (9,223,877 ) Present value of lease payments $ 11,413,326 The future annual minimum lease payments to be recognized for 2018 represent the payments to be recognized during the remainder of the 2018 fiscal year. The following table presents the future obligations under the capital lease at September 30, 2018: Year Lease 2018 $ 27,416 2019 175,764 2020 202,944 2021 232,148 2022 263,512 Thereafter 10,511,542 Total $ 11,413,326 The capital lease obligation for 2018 represents the obligation to be recognized during the remainder of the 2018 fiscal year. The land, buildings and improvements of $11,500,000 included within property and equipment in Note 8. Property and Equipment, Net The gross amount of all future payments under the lease was $20,637,203 at September 30, 2018, of which $9,223,877 was for interest. Depreciation expense and accumulated depreciation were approximately $24,000 during the three- and nine-month periods ended September 30, 3018. Interest expense was $59,471 during the three- and nine-month periods ended September 30, 2018. No depreciation or interest expense was recognized during three- and nine-month periods ended September 30, 2017. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Note 16. Related-Party Transactions During the year ended December 31, 2017, the Company borrowed $372,049 from Blue Victory and repaid $341,546 to Blue Victory under a separate loan. The loan accrues interest at a rate of 6% per annum and is payable on demand The Company generated a total of $23,256 and $100,994 in royalties and franchise fees through its franchise agreements with DWG Acquisitions during the three- and nine-month periods ended September 30, 2018, respectively, and generated a total of $40,285 and $123,343 The Company had a total of $891 and $1,505 of accounts receivable outstanding from DWG Acquisitions at September 30, 2018 and December 31, 2017, respectively, and had a total of $1,761 and $2,280 of ad funds receivable outstanding from DWG Acquisitions at September 30, 2018 and December 31, 2017, respectively. The Company had a total of $100,892 and $94,150 for accounts payable and accrued expenses outstanding from DWG Acquisitions and certain of its employees at September 30, 2018 and December 31, 2017, respectively. The outstanding amounts were primarily for rent owed to DWG Acquisitions and other expenses owed to the employees. |
Judgments in Legal Proceedings
Judgments in Legal Proceedings | 9 Months Ended |
Sep. 30, 2018 | |
Judgment In Legal Proceedings [Abstract] | |
Judgments in Legal Proceedings | Note 17. Judgments in Legal Proceedings In October 2009, the Company initiated a legal proceeding entitled American Restaurant Concepts, Inc. vs. Cala, et al Cala v. Rosenberger et al. In August 2016, the Company entered into a full and final settlement and release agreement with Cala. Under the terms of the agreement, the Company and Cala agreed to release each other from all claims related to the ARC & Cala Proceedings, any and all other lawsuits that may have been filed by one party against the other, the 2010 Settlement Agreement, and any other matters, causes of action or claims either party may have had against the other. In consideration for the releases, the Company agreed to pay $15,000 to Cala and issue 35,000 shares of its common stock to Cala. The Company recognized a non-cash gain on settlement of liabilities of $175,449 in connection therewith during the year ended December 31, 2016. The remaining balance of $210,000 outstanding under the 2010 Settlement Agreement was debited to settlement agreements payable. On February 25, 2011, a legal proceeding entitled Duval Station Investment, LLC vs. Hot Wing Concepts, Inc. d/b/a Dick’s Wings and Grill, and American Restaurant Concepts, Inc. In January 2015, Santander Bank filed a complaint against the Company in the Circuit Court, Fourth Judicial Circuit in and for Duval County, Florida, seeking damages of $194,181 plus interest, costs and attorney’s fees for breach of a guaranty of certain obligations of Ritz Aviation, LLC (“Ritz Aviation”) under a promissory note executed by Ritz Aviation in July 2005. During the Company’s fourth fiscal quarter of 2016, Santander Bank informed the Company that certain assets of Ritz Aviation had been sold for $82,642 and that the proceeds from the sale were applied towards the balance of the damages being sought, resulting in an outstanding balance of damages sought of $111,539. A total of $39,665 and $33,809 of accrued interest, and $10,586 of other expenses, were outstanding at September 30, 2018 and December 31, 2017, respectively, resulting in an aggregate potential loss of $161,790 and $155,935 at September 30, 2018 and December 31, 2017, respectively. The potential losses of $161,790 and $155,935 were reflected in accrued legal contingency at September 30, 2018 and December 31, 2017, respectively. This case is currently pending. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18. Subsequent Events On October 1, 2018, Seenu G. Kasturi earned 7,414 shares of the Company’s common stock pursuant to the terms of his employment agreement with the Company. On October 30, 2018, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with SDA Holdings, LLC, a Louisiana limited liability company (“SDA”), and Fred D. Alexander, an individual, pursuant to which the Company agreed to acquire all of the issued and outstanding membership interests in SDA for $10.00. SDA is the owner of the Tilted Kilt Pub & Eatery ® The closing of the Tilted Kilt Acquisition is conditioned upon SDA, Trustee Services Group (the “Custodian”), Seenu G. Kasturi, Let’s Eat Incorporated (“Let’s Eat”), the Reilly Group, LLC (the “Reilly Group”) and John Reynauld (Mr. Reynauld, together with the Custodian, Mr. Kasturi, Let’s Eat, the Reilly Group, the “Parties”) entering into an amendment to that certain Custodian Agreement, dated June 7, 2018, by an among the Parties to add SDA as a party to the agreement and remove Mr. Kasturi as a party to the agreement, in which event SDA will be required to deliver to the Custodian a certificate evidencing 718,563 shares of the Company’s common stock. The closing of the Tilted Kilt Acquisition is also conditioned upon the Company raising gross proceeds of at least $2,000,000 through the sale of debt or equity securities, as well as other customary closing conditions. The closing of the Tilted Kilt Acquisition will occur once all of the closing conditions have been satisfied. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Interim Financial Information | Interim Financial Information The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Seediv, LLC. All intercompany accounts and transactions were eliminated in consolidation. The accompanying The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K. Information presented as of December 31, 2017 is derived from the audited consolidated financial statements. The results of operations for the three- and nine-month periods ended September 30, 2018 are not necessarily indicative of the results that the Company will have for any subsequent quarter or full fiscal year. This summary of significant accounting policies is provided to assist the reader in understanding the Company’s financial statements. The financial statements and notes thereto are representations of the Company’s management. The Company’s management is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and have been consistently applied in the preparation of the financial statements. |
Estimates | Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Going Concern | Going Concern Prior to December 31, 2017, certain facts about the Company’s financial results created an uncertainty about the Company’s ability to continue as a going concern. |
Segment Disclosure | Segment Disclosure The Company has both Company-owned restaurants and franchised restaurants Segment Reporting |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted the provisions of FASB ASC 606, Revenue From Contracts With Customers provides a single framework in which revenue is required to be recognized to depict the transfer of goods or services to customers in amounts that reflect the consideration to which a company expects to be entitled in exchange for those goods or services. The Company adopted this new guidance effective the first day of fiscal year 2018, using the . Under this method, the cumulative effect of initially adopting the guidance was recognized as an adjustment to the opening balance of equity at January 1, 2018. Therefore, the comparative period has not been adjusted and continues to be reported under the previous revenue recognition guidance. The details of the significant changes and quantitative impact of the changes are discussed below. Franchise Fees ASC 606 impacted the timing of recognition of franchise fees. Under previous guidance, these fees were typically recognized upon the opening of restaurants. Under ASC 606, the fees are deferred and recognized as revenue over the term of the individual franchise agreements. The effect of the required deferral of fees received in a given year will be mitigated by the recognition of revenue from fees retrospectively deferred from prior years. As a result of the adoption of ASC 606, the Company recognized deferred franchise fees in the amount of $196,478 on its condensed consolidated balance sheets as of January 1, 2018 and an increase in its accumulated deficit by the same amount on that date. Advertising Funds ASC 606 also impacted the accounting for transactions related to the Company’s general advertising fund. Under previous guidance, franchisee contributions to and expenditures by the fund were not included in the Company’s condensed consolidated financial statements. Under ASC 606, the Company records contributions to and expenditures by the fund as revenue and expenses within the Company’s condensed consolidated financial statements. The Company recognized contributions to and expenditures by the fund of $46,816 and $145,076 during the three- and nine-month periods ended September 30, 2018. Gift Card Funds Additionally, ASC 606 impacted the accounting for transactions related to the Company’s gift card program. Under previous guidance, estimated breakage income on gift cards was deferred until it was deemed remote that the unused gift card balance would be redeemed. Under ASC 606, breakage income on gift cards is recognized as gift cards are utilized. This effect of this change on the Company’s financial statements was negligible. Impact on Financial Statements The following table summarizes the impacts of adopting the revenue recognition standard on the Company’s condensed consolidated financial statements as of and for the three- and nine-month periods ended September 30, 2018: Adjustments As Franchise Fees Advertising Funds Balances Condensed Consolidated Balance Sheets Deferred franchise fees $ 26,803 $ (26,803 ) $ — $ — Total current liabilities 3,054,745 (26,803 ) — 3,027,942 Deferred franchise fees, net of current portion 124,411 (124,411 ) — — Total liabilities 14,421,071 (124,411 ) — 14,296,660 Accumulated deficit (4,875,520 ) 151,214 — (4,724,306 ) Total stockholders’ deficit (324,617 ) 151,214 — (173,403 ) Condensed Consolidated Statements of Operations – Three-Month Period Ended September 30, 2018 Franchise and other revenue $ 231,983 $ (6,500 ) $ (42,806 ) $ 182,677 Franchise and other revenue – related party 23,256 (750 ) (4,010 ) 18,496 Total revenue 2,452,702 (7,250 ) (46,816 ) 2,398,636 General and administrative expenses 418,301 — (46,816 ) 371,485 Total operating expenses 2,916,504 — (46,816 ) 2,869,688 Loss from operations (463,802 ) (7,250 ) — (471,052 ) Net income 97,467 (7,250 ) — 90,217 Condensed Consolidated Statements of Operations – Nine-Month Period Ended September 30, 2018 Franchise and other revenue $ 690,892 $ (19,250 ) $ (125,958 ) $ 545,684 Franchise and other revenue – related party 100,994 (26,014 ) (19,118 ) 55,862 Total revenue 4,868,193 (45,264 ) (145,076 ) 4,677,853 General and administrative expenses 720,033 — (145,076 ) 574,957 Total operating expenses 5,414,567 — (145,076 ) 5,269,491 Loss from operations (546,374 ) (45,264 ) — (591,638 ) Net income 89,550 (45,264 ) — 44,286 Condensed Consolidated Statement of Cash Flows Cash flows from operating activities: Net income $ 89,550 $ (45,264 ) $ — $ 44,286 Changes in operating assets and liabilities: Deferred franchise fees (45,264 ) 45,264 — — Disaggregation of Revenue The following table disaggregate revenue by primary geographical market and source: Three Months Ended September 30, Nine Months September 30, Primary geographic markets Florida $ 1,377,676 $ 3,694,208 Georgia 47,050 146,009 Kentucky 232,744 232,744 West Virginia 795,232 795,232 Total revenue $ 2,452,702 $ 4,868,193 Sources of revenue Restaurant sales $ 2,197,463 $ 4,076,307 Royalties 197,369 591,847 Franchise fees 7,250 45,264 Advertising fund fees 46,816 145,077 Other revenue 3,804 9,698 Total revenue $ 2,452,702 $ 4,868,193 Contract Balances The following table presents changes in deferred franchise fees as of and for the nine-month period ended September 30, 2018: Total Deferred franchise fees at January 1, 2018 $ 196,478 Revenue recognized during the period (45,264 ) New deferrals due to cash received — Deferred franchise fees at September 30, 2018 $ 151,214 Anticipated Future Recognition of Deferred Franchise Fees The following table presents the estimated franchise fees to be recognized in the future related to performance obligations that were unsatisfied at September 30, 2018: Year Franchise 2018 $ 7,250 2019 25,719 2020 24,000 2021 22,923 2022 21,000 Thereafter 50,322 Total $ 151,214 The estimated franchise fees for 2018 represent the fees to be recognized during the remainder of the 2018 fiscal year. |
Other Receivables and Payables | Other Receivables and Payables Other receivables was comprised primarily of receipts from credit card sales by Company-owned Fat Patty’s restaurants that occurred after the Company completed the acquisition of Fat Patty’s that were held by the former owner of Fat Patty’s, all of which are expected to be collected in full by the Company during the next 12 months. Other payables included within accounts payable and accrued expenses consisted of $243,261 of accounts payable owed to the former owner of Fat Patty’s for alcohol and other items purchase by the former owner of Fat Patty’s in connection with the operation of the franchise. |
Intangible Assets | Intangible Assets The Company acquired various intangible assets in connection with the acquisition of Fat Patty’s. Intangible assets include a tradename, an assembled workforce and a non-compete agreement. The Company amortizes the assembled workforce and non-compete agreement on a straight-line basis over the expected period of benefit, which is three and five years, respectively. The tradename has an indefinite life and is not subject to amortization but tested for impairment on an annual basis. The amount of amortization recognized for the assembled workforce and non-compete agreement was $759 during the three- and nine-month periods ended September 30, 2018. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740) The Company reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to the Company’s operations or that no material effect is expected on the Company’s financial statements as a result of future adoption. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of condensed consolidated financial statements | Adjustments As Franchise Fees Advertising Funds Balances Condensed Consolidated Balance Sheets Deferred franchise fees $ 26,803 $ (26,803 ) $ — $ — Total current liabilities 3,054,745 (26,803 ) — 3,027,942 Deferred franchise fees, net of current portion 124,411 (124,411 ) — — Total liabilities 14,421,071 (124,411 ) — 14,296,660 Accumulated deficit (4,875,520 ) 151,214 — (4,724,306 ) Total stockholders’ deficit (324,617 ) 151,214 — (173,403 ) Condensed Consolidated Statements of Operations – Three-Month Period Ended September 30, 2018 Franchise and other revenue $ 231,983 $ (6,500 ) $ (42,806 ) $ 182,677 Franchise and other revenue – related party 23,256 (750 ) (4,010 ) 18,496 Total revenue 2,452,702 (7,250 ) (46,816 ) 2,398,636 General and administrative expenses 418,301 — (46,816 ) 371,485 Total operating expenses 2,916,504 — (46,816 ) 2,869,688 Loss from operations (463,802 ) (7,250 ) — (471,052 ) Net income 97,467 (7,250 ) — 90,217 Condensed Consolidated Statements of Operations – Nine-Month Period Ended September 30, 2018 Franchise and other revenue $ 690,892 $ (19,250 ) $ (125,958 ) $ 545,684 Franchise and other revenue – related party 100,994 (26,014 ) (19,118 ) 55,862 Total revenue 4,868,193 (45,264 ) (145,076 ) 4,677,853 General and administrative expenses 720,033 — (145,076 ) 574,957 Total operating expenses 5,414,567 — (145,076 ) 5,269,491 Loss from operations (546,374 ) (45,264 ) — (591,638 ) Net income 89,550 (45,264 ) — 44,286 Condensed Consolidated Statement of Cash Flows Cash flows from operating activities: Net income $ 89,550 $ (45,264 ) $ — $ 44,286 Changes in operating assets and liabilities: Deferred franchise fees (45,264 ) 45,264 — — |
Schedule of disaggregation of revenue | Three Months Nine Months Primary geographic markets Florida $ 1,377,676 $ 3,694,208 Georgia 47,050 146,009 Kentucky 232,744 232,744 West Virginia 795,232 795,232 Total revenue $ 2,452,702 $ 4,868,193 Sources of revenue Restaurant sales $ 2,197,463 $ 4,076,307 Royalties 197,369 591,847 Franchise fees 7,250 45,264 Advertising fund fees 46,816 145,077 Other revenue 3,804 9,698 Total revenue $ 2,452,702 $ 4,868,193 |
Schedule of deferred franchise fees under contract balances | Total Liabilities Deferred franchise fees at January 1, 2018 $ 196,478 Revenue recognized during the period (45,264 ) New deferrals due to cash received — Deferred franchise fees at September 30, 2018 $ 151,214 |
Schedule of estimated franchise fees to be recognized in the future related to performance obligations | Year Franchise 2018 $ 7,250 2019 25,719 2020 24,000 2021 22,923 2022 21,000 Thereafter 50,322 Total $ 151,214 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net income / (loss) per share | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Numerator Net income / (loss) $ 97,467 $ (89 ) $ 89,550 $ 87,675 Denominator Weighted average shares outstanding — basic 6,524,427 6,773,041 6,795,644 6,768,839 Dilutive effect of potential shares of common stock 30,000 -0- 15,165 -0- Weighted average shares outstanding – basic 6,554,427 6,773,041 6,810,809 6,768,839 Basic net income / (loss) per share $ 0.01 $ (0.00 ) $ 0.01 $ 0.01 Fully diluted net income / (loss) per share $ 0.01 $ (0.00 ) $ 0.01 $ 0.01 |
Investment in Paradise on Win_2
Investment in Paradise on Wings (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of unaudited income statement of Paradise on Wings | Statement of Operations Three Months Nine Months Revenue $ 74,831 $ 226,273 Operating expenses (234,525 ) (484,436 ) Loss from operations (159,694 ) (258,163 ) Other expense (104,203 ) (182,398 ) Net loss $ (263,897 ) $ (440,561 ) Company’s share of net loss $ (131,949 ) $ (220,281 ) |
Schedule of unaudited balance sheet of Paradise on Wings | Balance Sheet September 30, Current assets $ 119,837 Equity investment -0- Total assets $ 119,837 Total liabilities $ 110,120 Equity 9,717 Total liabilities and equity $ 119,837 |
Acquisition of Fat Patty's (Tab
Acquisition of Fat Patty's (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations Of Fat Patty [Abstract] | |
Schedule of assets acquired and liabilities assumed | Cash $ 7,100 Inventory 91,424 Intangible assets 844,840 Equipment 614,295 Total assets acquired 1,557,659 Gift card liabilities (80,466 ) Total liabilities assumed (80,466 ) Gain on bargain purchase option (625,193 ) Net assets acquired with note payable and deferred compensation liability $ 852,000 |
Schedule of pro forma financial information | Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Revenue $ 4,415,657 $ 12,720,014 $ 3,964,788 $ 11,980,207 Income from continuing operations (13,051 ) 1,256,629 168,493 149,061 Net income 548,218 1,892,553 186,352 646,998 Net income per share – basic $ 0.08 $ 0.28 $ 0.03 $ 0.10 Net income per share – fully diluted $ 0.08 $ 0.28 $ 0.03 $ 0.10 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | September 30, December 31, Food $ 89,334 $ 23,987 Beverages 50,300 21,430 Total $ 139,634 $ 45,417 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | September 30, December 31, Land, buildings and improvements $ 11,500,000 $ -0- Leasehold improvements 295,133 69,472 Furniture, fixtures and equipment 823,282 78,621 Subtotal 12,618,415 148,093 Less: accumulated depreciation (120,110 ) (48,979 ) Total $ 12,498,305 $ 99,114 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Schedule of future amortization expense recognized from intangible assets | Year Amortization Expense to be Recognized 2018 $ 2,275 2019 9,101 2020 9,101 2021 7,324 2022 3,768 Thereafter 2,512 Total $ 34,081 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of equity investment in Seediv within the fair value hierarchy utilized to measure fair value on a recurring basis | Level 1 Level 2 Level 3 September 30, 2018 $ -0- $ 55,356 $ -0- December 31, 2017 $ -0- $ 199,682 $ -0- |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future annual minimum lease payments recognized under capital lease | Year Future Minimum Lease Payments 2018 $ 146,146 2019 881,990 2020 897,425 2021 913,130 2022 929,110 Thereafter 16,869,402 Total 20,637,203 Less: portion representing interest (9,223,877 ) Present value of lease payments $ 11,413,326 |
Schedule of future obligations under the capital lease | Year Lease 2018 $ 27,416 2019 175,764 2020 202,944 2021 232,148 2022 263,512 Thereafter 10,511,542 Total $ 11,413,326 |
Description of Business (Detail
Description of Business (Detail Textuals) | 1 Months Ended |
Dec. 19, 2016USD ($) | |
Acquisition of Seediv | |
Business Acquisition [Line Items] | |
Payment agreed for membership interests | $ 600,000 |
Description of Business (Deta_2
Description of Business (Detail Textuals 1) | Sep. 30, 2018Restaurant |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 21 |
Fat Patty | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 4 |
West Virginia | Fat Patty | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 3 |
Kentucky | Fat Patty | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 1 |
Florida | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 16 |
Georgia | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 5 |
Entity Operated Units | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 2 |
Entity Operated Units | Florida | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 3 |
Franchised Units | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 19 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Condensed Consolidated Balance Sheet | |||||
Deferred franchise fees | $ 26,803 | $ 26,803 | |||
Total current liabilities | 3,054,745 | 3,054,745 | $ 1,235,150 | ||
Deferred franchise fees, net of current portion | 124,411 | 124,411 | |||
Total liabilities | 14,421,071 | 14,421,071 | 1,235,150 | ||
Accumulated deficit | (4,875,520) | (4,875,520) | (4,768,592) | ||
Total stockholders' equity | (324,617) | (324,617) | (676,924) | ||
Condensed Consolidated Statement of Operations | |||||
Total revenue | 2,452,702 | $ 1,047,404 | 4,868,193 | $ 3,228,054 | |
General and administrative expenses | 418,301 | 50,991 | 720,033 | 82,437 | |
Total operating expenses | 2,916,504 | 1,068,963 | 5,414,567 | 3,154,709 | |
Loss from operations | (463,802) | (21,559) | (546,374) | 73,345 | |
Net income / (loss) | 97,467 | (89) | 89,550 | 87,675 | 344,740 |
Cash flows from operating activities: | |||||
Net income / (loss) | 97,467 | (89) | 89,550 | 87,675 | $ 344,740 |
Changes in operating assets and liabilities: | |||||
Deferred franchise fees | (45,264) | ||||
Franchise and other revenue | |||||
Condensed Consolidated Statement of Operations | |||||
Total revenue | 231,983 | 165,905 | 690,892 | 509,032 | |
Franchise and other revenue - related party | |||||
Condensed Consolidated Statement of Operations | |||||
Total revenue | 23,256 | $ 40,285 | 100,994 | $ 123,343 | |
Franchise Fees | |||||
Changes in operating assets and liabilities: | |||||
Deferred franchise fees | (45,264) | ||||
Adoption of revenue recognition standard | Adjustments | Franchise Fees | |||||
Condensed Consolidated Balance Sheet | |||||
Deferred franchise fees | (26,803) | (26,803) | |||
Total current liabilities | (26,803) | (26,803) | |||
Deferred franchise fees, net of current portion | (124,411) | (124,411) | |||
Total liabilities | (124,411) | (124,411) | |||
Accumulated deficit | 151,214 | 151,214 | |||
Total stockholders' equity | 151,214 | 151,214 | |||
Condensed Consolidated Statement of Operations | |||||
Total revenue | (7,250) | (45,264) | |||
General and administrative expenses | 0 | 0 | |||
Total operating expenses | 0 | 0 | |||
Loss from operations | (7,250) | (45,264) | |||
Net income / (loss) | (7,250) | (45,264) | |||
Cash flows from operating activities: | |||||
Net income / (loss) | (7,250) | (45,264) | |||
Changes in operating assets and liabilities: | |||||
Deferred franchise fees | 45,264 | ||||
Adoption of revenue recognition standard | Adjustments | Franchise Fees | Franchise and other revenue | |||||
Condensed Consolidated Statement of Operations | |||||
Total revenue | (6,500) | (19,250) | |||
Adoption of revenue recognition standard | Adjustments | Franchise Fees | Franchise and other revenue - related party | |||||
Condensed Consolidated Statement of Operations | |||||
Total revenue | (750) | (26,014) | |||
Adoption of revenue recognition standard | Adjustments | Advertising Funds | |||||
Condensed Consolidated Balance Sheet | |||||
Deferred franchise fees | 0 | 0 | |||
Total current liabilities | 0 | 0 | |||
Deferred franchise fees, net of current portion | 0 | 0 | |||
Total liabilities | 0 | 0 | |||
Accumulated deficit | 0 | 0 | |||
Total stockholders' equity | 0 | 0 | |||
Condensed Consolidated Statement of Operations | |||||
Total revenue | (46,816) | (145,076) | |||
General and administrative expenses | (46,816) | (145,076) | |||
Total operating expenses | (46,816) | (145,076) | |||
Loss from operations | 0 | 0 | |||
Net income / (loss) | 0 | 0 | |||
Cash flows from operating activities: | |||||
Net income / (loss) | 0 | 0 | |||
Changes in operating assets and liabilities: | |||||
Deferred franchise fees | 0 | ||||
Adoption of revenue recognition standard | Adjustments | Advertising Funds | Franchise and other revenue | |||||
Condensed Consolidated Statement of Operations | |||||
Total revenue | (42,806) | (125,958) | |||
Adoption of revenue recognition standard | Adjustments | Advertising Funds | Franchise and other revenue - related party | |||||
Condensed Consolidated Statement of Operations | |||||
Total revenue | (4,010) | (19,118) | |||
Adoption of revenue recognition standard | Balances Without Adoption | |||||
Condensed Consolidated Balance Sheet | |||||
Deferred franchise fees | 0 | 0 | |||
Total current liabilities | 3,027,942 | 3,027,942 | |||
Deferred franchise fees, net of current portion | 0 | 0 | |||
Total liabilities | 14,296,660 | 14,296,660 | |||
Accumulated deficit | (4,724,306) | (4,724,306) | |||
Total stockholders' equity | (173,403) | (173,403) | |||
Condensed Consolidated Statement of Operations | |||||
Total revenue | 2,398,636 | 4,677,853 | |||
General and administrative expenses | 371,485 | 574,957 | |||
Total operating expenses | 2,869,688 | 5,269,491 | |||
Loss from operations | (471,052) | (591,638) | |||
Net income / (loss) | 90,217 | 44,286 | |||
Cash flows from operating activities: | |||||
Net income / (loss) | 90,217 | 44,286 | |||
Changes in operating assets and liabilities: | |||||
Deferred franchise fees | 0 | ||||
Adoption of revenue recognition standard | Balances Without Adoption | Franchise and other revenue | |||||
Condensed Consolidated Statement of Operations | |||||
Total revenue | 182,677 | 545,684 | |||
Adoption of revenue recognition standard | Balances Without Adoption | Franchise and other revenue - related party | |||||
Condensed Consolidated Statement of Operations | |||||
Total revenue | $ 18,496 | $ 55,862 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 2,452,702 | $ 1,047,404 | $ 4,868,193 | $ 3,228,054 |
Florida | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,377,676 | 3,694,208 | ||
Georgia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 47,050 | 146,009 | ||
Kentucky | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 232,744 | 232,744 | ||
West Virginia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 795,232 | $ 795,232 |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Sources of revenue | ||||
Total revenue | $ 2,452,702 | $ 1,047,404 | $ 4,868,193 | $ 3,228,054 |
Restaurant sales | ||||
Sources of revenue | ||||
Total revenue | 2,197,463 | $ 841,214 | 4,076,307 | $ 2,595,679 |
Royalties | ||||
Sources of revenue | ||||
Total revenue | 197,369 | 591,847 | ||
Franchise Fees | ||||
Sources of revenue | ||||
Total revenue | 7,250 | 45,264 | ||
Advertising fund fees | ||||
Sources of revenue | ||||
Total revenue | 46,816 | 145,077 | ||
Other revenue | ||||
Sources of revenue | ||||
Total revenue | $ 3,804 | $ 9,698 |
Basis of Presentation and Sig_7
Basis of Presentation and Significant Accounting Policies (Details 3) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Changes in deferred franchise fees: | |
Deferred franchise fees at September 30, 2018 | $ 196,478 |
Deferred Franchise Fees | |
Changes in deferred franchise fees: | |
Deferred franchise fees at January 1, 2018 | 196,478 |
Revenue recognized during the period | (45,264) |
New deferrals due to cash received | 0 |
Deferred franchise fees at September 30, 2018 | $ 151,214 |
Basis of Presentation and Sig_8
Basis of Presentation and Significant Accounting Policies (Details 4) - Deferred Franchise Fees | Sep. 30, 2018USD ($) |
Anticipated Future Recognition of Deferred Franchise Fees | |
2,018 | $ 7,250 |
2,019 | 25,719 |
2,020 | 24,000 |
2,021 | 22,923 |
2,022 | 21,000 |
Thereafter | 50,322 |
Total | $ 151,214 |
Basis of Presentation and Sig_9
Basis of Presentation and Significant Accounting Policies (Detail Textuals) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Segment | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Accounting Policies [Line Items] | |||||
Net cash provided by operating activities | $ 235,787 | $ 242,619 | $ 248,345 | ||
(Loss) / income from operations | $ (463,802) | $ (21,559) | (546,374) | $ 73,345 | |
Deferred franchise fees | 26,803 | 26,803 | |||
Working capital deficit | 2,304,627 | $ 2,304,627 | |||
Number of reporting segments | Segment | 1 | ||||
Advertising fund fees | 46,816 | $ 145,076 | |||
Deferred franchise fees at January 1, 2018 | 196,478 | 196,478 | |||
Other payables included within accounts payable and accrued expenses | 1,317,984 | $ 1,317,984 | $ 467,264 | ||
Assembled workforce and non-compete agreement, amortization method | straight-line basis | ||||
Amortization recognized for the assembled workforce and non-compete agreement | 759 | $ 759 | |||
Minimum | |||||
Accounting Policies [Line Items] | |||||
Assembled workforce and non-compete agreement, expected period | 3 years | ||||
Maximum | |||||
Accounting Policies [Line Items] | |||||
Assembled workforce and non-compete agreement, expected period | 5 years | ||||
Fat Patty | |||||
Accounting Policies [Line Items] | |||||
Other payables included within accounts payable and accrued expenses | $ 243,261 | $ 243,261 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Numerator | |||||
Net income / (loss) | $ 97,467 | $ (89) | $ 89,550 | $ 87,675 | $ 344,740 |
Denominator | |||||
Weighted average shares outstanding - basic | 6,524,427 | 6,773,041 | 6,795,644 | 6,768,839 | |
Dilutive effect of potential shares of common stock | 30,000 | 0 | 15,165 | 0 | |
Weighted average shares outstanding - basic | 6,554,427 | 6,773,041 | 6,810,809 | 6,768,839 | |
Basic net income / (loss) per share | $ 0.01 | $ 0 | $ 0.01 | $ 0.01 | |
Fully diluted net income / (loss) per share | $ 0.01 | $ 0 | $ 0.01 | $ 0.01 |
Investment in Paradise on Win_3
Investment in Paradise on Wings - Summary of unaudited income statement of Paradise on Wings (Details) - Paradise on Wings Franchise Group, LLC - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||
Revenue | $ 74,831 | $ 226,273 |
Operating expenses | (234,525) | (484,436) |
Loss from operations | (159,694) | (258,163) |
Other expense | (104,203) | (182,398) |
Net loss | (263,897) | (440,561) |
Company's share of net loss | $ (131,949) | $ (220,281) |
Investment in Paradise on Win_4
Investment in Paradise on Wings - Summary of unaudited balance sheet of Paradise on Wings (Details 1) - Paradise on Wings Franchise Group, LLC | Sep. 30, 2017USD ($) |
Schedule of Equity Method Investments [Line Items] | |
Current assets | $ 119,837 |
Equity investment | 0 |
Total assets | 119,837 |
Total liabilities | 110,120 |
Equity | 9,717 |
Total liabilities and equity | $ 119,837 |
Investment in Paradise on Win_5
Investment in Paradise on Wings (Detail Textuals) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 20, 2014 | |
Schedule of Equity Method Investments [Line Items] | ||||||||
Loss on impairment of investment in Paradise on Wings | $ 348,143 | |||||||
Net income / (loss) | $ 97,467 | $ (89) | $ 89,550 | $ 87,675 | $ 344,740 | |||
Paradise on Wings Franchise Group, LLC | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Percentage of ownership interest | 50.00% | |||||||
Carrying amount of investment | $ 0 | $ 0 | ||||||
Net income / (loss) | $ 0 | $ 0 | ||||||
Paradise on Wings Franchise Group, LLC | Seenu G Kasturi | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Percentage of ownership interest | 50.00% | 50.00% | 50.00% | 50.00% | ||||
Purchase price | $ 24,000 |
Acquisition of Seediv (Detail T
Acquisition of Seediv (Detail Textuals) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 19, 2016 | |
Business Acquisition [Line Items] | |||
Contingent consideration | $ 55,356 | $ 199,682 | |
Seenu G Kasturi | Acquisition of Seediv | |||
Business Acquisition [Line Items] | |||
Contingent consideration | $ 20,897 | ||
Earnout payment | $ 144,326 | $ 199,682 |
Acquisition of Fat Patty's (Det
Acquisition of Fat Patty's (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Aug. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | |
Business Acquisition [Line Items] | |||
Gain on bargain purchase option | $ (625,193) | $ (625,193) | |
Acquisition of Fat Patty's | |||
Business Acquisition [Line Items] | |||
Cash | $ 7,100 | ||
Inventory | 91,424 | ||
Intangible assets | 844,840 | ||
Equipment | 614,295 | ||
Total assets acquired | 1,557,659 | ||
Gift card liabilities | (80,466) | ||
Total liabilities assumed | (80,466) | ||
Gain on bargain purchase option | (625,193) | $ (625,193) | |
Net assets acquired with note payable and deferred compensation liability | $ 852,000 |
Acquisition of Fat Patty's (D_2
Acquisition of Fat Patty's (Details 1) - Acquisition of Fat Patty's - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Business Acquisition [Line Items] | ||||
Revenue | $ 4,415,657 | $ 3,964,788 | $ 12,720,014 | $ 11,980,207 |
Income from continuing operations | (13,051) | 168,493 | 1,256,629 | 149,061 |
Net income | $ 548,218 | $ 186,352 | $ 1,892,553 | $ 646,998 |
Net income per share - basic | $ 0.08 | $ 0.03 | $ 0.28 | $ 0.1 |
Net income per share - fully diluted | $ 0.08 | $ 0.03 | $ 0.28 | $ 0.1 |
Acquisition of Fat Patty's (D_3
Acquisition of Fat Patty's (Detail Textuals) - USD ($) | Aug. 03, 2018 | Aug. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||||
Net income / (loss) | $ 97,467 | $ (89) | $ 89,550 | $ 87,675 | $ 344,740 | ||
Revenue | 2,452,702 | $ 1,047,404 | $ 4,868,193 | $ 3,228,054 | |||
Additional successive term of lease | 5 years | ||||||
Aggregate base annual rent | $ 876,875 | ||||||
Percentage of increase in additional rent | 1.75% | ||||||
Gain on bargain purchase option | (625,193) | $ (625,193) | |||||
Fair value of the identifiable assets acquired and liabilities assumed | 1,477,193 | 1,477,193 | |||||
Increase in purchase price of business | 625,193 | ||||||
Acquisition of Fat Patty's | |||||||
Business Acquisition [Line Items] | |||||||
Net income / (loss) | 52,077 | 52,077 | |||||
Revenue | 1,027,976 | 1,027,976 | |||||
Payments to sellers for assets | $ 12,352,000 | 934,929 | |||||
Amount paid to sellers at closing of acquisition | 12,000,000 | ||||||
Remaining amount to be paid to seller on first anniversary of closing of acquisition | 312,000 | ||||||
Additional amount paid within 10 days after asset acquisition closing date to seller | 40,000 | ||||||
Acquisition - related transaction costs | 82,929 | 82,929 | |||||
Gain on bargain purchase option | (625,193) | $ (625,193) | |||||
Actual Amounts Of Revenue And Net Income | $ 1,027,976 | ||||||
Net assets acquired by entity | 852,000 | ||||||
Acquisition of Fat Patty's | Seenu G Kasturi | |||||||
Business Acquisition [Line Items] | |||||||
Proceeds from related party debt | $ 622,929 | ||||||
Interest rate per annum | 6.00% | ||||||
Common stock at a conversion rate | $ 1.36 | ||||||
Store Capital Acquisitions, LLC | Purchase and sale agreement | |||||||
Business Acquisition [Line Items] | |||||||
Proceeds from sale of real properties upon which restaurants acquired | $ 11,500,000 | ||||||
Ultimate purchase price of assets and properties | $ 852,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory [Line Items] | ||
Total | $ 139,634 | $ 45,417 |
Food | ||
Inventory [Line Items] | ||
Total | 89,334 | 23,987 |
Beverages | ||
Inventory [Line Items] | ||
Total | $ 50,300 | $ 21,430 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 12,618,415 | $ 148,093 |
Less: accumulated depreciation | (120,110) | (48,979) |
Total | 12,498,305 | 99,114 |
Land, buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 11,500,000 | 0 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 295,133 | 69,472 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 823,282 | $ 78,621 |
Property and Equipment, Net (_2
Property and Equipment, Net (Detail Textuals) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense | $ 49,481 | $ 4,571 | $ 68,688 | $ 11,902 | |
Improvements cost | 12,618,415 | 12,618,415 | $ 148,093 | ||
Assets acquired on the capital lease with related depreciation expense and accumulated depreciation | 24,000 | 24,000 | |||
Land, buildings and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Improvements cost | $ 11,500,000 | $ 11,500,000 | $ 0 |
Intangible Assets (Details)
Intangible Assets (Details) | Sep. 30, 2018USD ($) |
Finite-Lived Intangible Assets, Net [Abstract] | |
2,018 | $ 2,275 |
2,019 | 9,101 |
2,020 | 9,101 |
2,021 | 7,324 |
2,022 | 3,768 |
Thereafter | 2,512 |
Total | $ 34,081 |
Intangible Assets (Details Text
Intangible Assets (Details Textuals) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||
Amount of Intangible assets | $ 34,081 | $ 34,081 |
Assembled workforce and non-compete agreement, amortization method | straight-line basis | |
Amortization recognized for the assembled workforce and non-compete agreement | 759 | $ 759 |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Assembled workforce and non-compete agreement, expected period | 5 years | |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Assembled workforce and non-compete agreement, expected period | 3 years | |
Trade names | Fat Patty | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount of Intangible assets | 810,000 | $ 810,000 |
Assembled workforce | Fat Patty | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount of Intangible assets | 15,556 | 15,556 |
Non-compete agreement | Fat Patty | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount of Intangible assets | $ 18,526 | $ 18,526 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of equity investment within fair value hierarchy utilized to measure fair value on recurring basis (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 55,356 | $ 199,682 |
Recurring basis | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Recurring basis | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 55,356 | 199,682 |
Recurring basis | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 0 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Detail Textuals) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 19, 2016 | Jan. 20, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Contingent consideration | $ 55,356 | $ 199,682 | |||||
Acquisition of Seediv | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Additional Seediv compensation expense | 178,785 | ||||||
Increase in contingent consideration | 199,682 | ||||||
Seenu G Kasturi | Acquisition of Seediv | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Contingent consideration | $ 20,897 | ||||||
Earnout payment | $ 144,326 | $ 199,682 | |||||
Paradise on Wings Franchise Group, LLC | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Percentage of ownership interest | 50.00% | ||||||
Net loss | $ (263,897) | $ (440,561) | |||||
Paradise on Wings Franchise Group, LLC | Seenu G Kasturi | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Percentage of ownership interest | 50.00% | 50.00% | 50.00% | 50.00% | |||
Sale of investment in Paradise on Wings | $ 24,000 |
Notes Receivable (Detail Textua
Notes Receivable (Detail Textuals) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2016 | Jul. 31, 2016 | Jun. 30, 2016 | Sep. 30, 2014 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Oct. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Carrying value of outstanding notes receivable | $ 12,603 | $ 12,603 | $ 33,628 | |||||||
Notes classified as short-term | 9,412 | 9,412 | 28,522 | |||||||
Notes classified as long-term | 3,191 | 3,191 | 5,106 | |||||||
Interest income - related party | 425 | $ 543 | 1,515 | $ 1,931 | ||||||
Notes receivable | One of franchisees | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Aggregate original principal amount | $ 6,329 | $ 7,659 | ||||||||
Term of notes receivable | 3 years | |||||||||
Principal outstanding under loan | 25 | |||||||||
Principal of accrued interest outstanding | 5,745 | 5,745 | 7,659 | |||||||
Notes receivable | One of franchisees | Promissory notes | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Aggregate original principal amount | $ 25,000 | |||||||||
Term of notes receivable | 2 years | |||||||||
Accrued interest rate per year | 5.00% | |||||||||
Notes receivable | One of franchisees | Line of credit | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Aggregate original principal amount | $ 25,000 | $ 28,136 | ||||||||
Term of notes receivable | 2 years | 2 years | ||||||||
Accrued interest rate per year | 5.00% | |||||||||
Notes receivable | One of franchisees | Promissory note and Line of credit | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Principal outstanding under loan | 6,858 | 6,858 | $ 25,944 | |||||||
Interest expenses - related party | $ 139 | 425 | $ 657 | 1,515 | ||||||
Aggregate amount of interest payment | $ 425 | $ 2,354 |
Debt Obligations (Detail Textua
Debt Obligations (Detail Textuals) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Aug. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||||
Repayments of notes payable - related party | $ 206,324 | ||||
Notes payable - related party | $ 523,777 | $ 30,503 | |||
Promissory notes, net of unamortized discount | 153,136 | ||||
Seenu G Kasturi | Fat Patty | |||||
Debt Instrument [Line Items] | |||||
Proceeds from related party debt | $ 622,929 | ||||
Interest rate per annum | 6.00% | ||||
Common stock at a conversion rate | $ 1.36 | ||||
Value of convertible debt with conversion feature recorded as a discount | $ 155,732 | ||||
Blue Victory Holdings | |||||
Debt Instrument [Line Items] | |||||
Outstanding principal amount of credit facility | 53,984 | 30,503 | $ 30,503 | ||
Proceeds from related party debt | $ 23,481 | 372,049 | |||
Repayments of notes payable - related party | 341,546 | ||||
Interest rate per annum | 6.00% | ||||
Notes payable - related party | $ 53,984 | ||||
Blue Victory Holdings | Revolving line of credit facility | |||||
Debt Instrument [Line Items] | |||||
Outstanding principal amount of credit facility | 16,103 | ||||
Proceeds from related party debt | 61,721 | ||||
Repayments of notes payable - related party | $ 77,824 | $ 824,250 |
Capital Stock (Detail Textuals)
Capital Stock (Detail Textuals) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Stockholders Equity Note [Abstract] | ||
Class A common stock, shares authorized | 100,000,000 | 100,000,000 |
Class A common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Class A common stock, shares outstanding | 6,524,427 | 6,950,869 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Series A convertible preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Outstanding | 449,581 | 0 |
Capital Stock (Detail Textuals
Capital Stock (Detail Textuals 1) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Aug. 30, 2018 | Jun. 30, 2018 | May 31, 2018 | Jan. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Capital Stock [Line Items] | |||||||||
Allocated share-based compensation expense | $ 9,000 | ||||||||
Stock-based compensation expense | $ 265,629 | $ 26,889 | 303,503 | $ 233,740 | |||||
Stock subscriptions payable | $ 290,603 | $ 290,603 | $ 26,853 | ||||||
Series A convertible preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | ||||||
Series A convertible preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Series A convertible preferred stock in exchange | 449,581 | 449,581 | 0 | ||||||
Class A common stock, shares outstanding | 6,524,427 | 6,524,427 | 6,950,869 | ||||||
Amount of common stock share received in cash | $ 33,000 | ||||||||
Number of common stock share received | 20,000 | ||||||||
Employee stock option | |||||||||
Capital Stock [Line Items] | |||||||||
Allocated share-based compensation expense | $ 3,752 | $ 5,628 | |||||||
Stock-based compensation expense | $ 2,501 | $ 3,752 | |||||||
Class A common stock, shares outstanding | 6,524,427 | 6,524,427 | |||||||
Number of stock option common stock share issued | 30,000 | ||||||||
One of franchisees | |||||||||
Capital Stock [Line Items] | |||||||||
Common stock issued as incentive compensation (in shares) | 5,625 | ||||||||
Board of Directors | |||||||||
Capital Stock [Line Items] | |||||||||
Series A convertible preferred stock, shares authorized | 1,000,000 | ||||||||
Series A convertible preferred stock, par value (in dollars per share) | $ 0.01 | ||||||||
Series A convertible preferred stock voting rights | 100 votes | ||||||||
Common stock at a conversion price | $ 0.75 | ||||||||
Employment agreement | Seenu G Kasturi | |||||||||
Capital Stock [Line Items] | |||||||||
Number of common stock issued in connection with employment agreement | 9,337 | ||||||||
Employment agreement | Seenu G Kasturi | Vesting on January 1, 2018 | |||||||||
Capital Stock [Line Items] | |||||||||
Allocated share-based compensation expense | $ 147 | ||||||||
Employment agreement | Seenu G Kasturi | Vesting on April 1, 2018 | |||||||||
Capital Stock [Line Items] | |||||||||
Allocated share-based compensation expense | $ 13,500 | ||||||||
Number of common stock related to vesting | 9,660 | 9,660 | |||||||
Employment agreement | Seenu G Kasturi | Vesting on July 1, 2018 | |||||||||
Capital Stock [Line Items] | |||||||||
Allocated share-based compensation expense | $ 148 | $ 13,500 | |||||||
Number of common stock related to vesting | 7,064 | 7,064 | |||||||
Employment agreement | Seenu G Kasturi | Vesting on October 1, 2018 | |||||||||
Capital Stock [Line Items] | |||||||||
Allocated share-based compensation expense | $ 13,353 | $ 13,353 | |||||||
Number of common stock related to vesting | 7,414 | 7,414 | |||||||
Securities purchase agreement | Seenu G Kasturi | |||||||||
Capital Stock [Line Items] | |||||||||
Series A convertible preferred stock in exchange | 449,581 | ||||||||
Class A common stock, shares outstanding | 6,974,008 | ||||||||
Investor Relations Service Agreement | |||||||||
Capital Stock [Line Items] | |||||||||
Allocated share-based compensation expense | $ 5,250 | $ 5,250 | |||||||
Number of common stock related to vesting | 3,500 | 3,500 | |||||||
Common stock issued as incentive compensation (in shares) | 3,500 | ||||||||
Compensation paid for services | $ 12,250 | ||||||||
Compensation for services, each month thereafter, amount | $ 7,000 | ||||||||
Compensation for services, each month thereafter, common stock | 3,500 | ||||||||
Investment Banking And Mergers And Acquisition Service Agreement | Maxim Group LLC ("Maxim") | |||||||||
Capital Stock [Line Items] | |||||||||
Allocated share-based compensation expense | $ 245,000 | $ 240,625 | |||||||
Common stock issued as incentive compensation (in shares) | 125,000 | ||||||||
Compensation for services, each month thereafter, amount | $ 7,500 |
Stock Options and Warrants (Det
Stock Options and Warrants (Detail Textuals) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Stock Options and Warrants [Abstract] | |
Number of stock option exercisable | shares | 30,000 |
Stock option exercise price | $ / shares | $ 1.49 |
Stock option valuation method | Black-Scholes pricing model |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Sep. 30, 2018USD ($) |
Future Minimum Lease Payments | |
2,018 | $ 146,146 |
2,019 | 881,990 |
2,020 | 897,425 |
2,021 | 913,130 |
2,022 | 929,110 |
Thereafter | 16,869,402 |
Total | 20,637,203 |
Less: portion representing interest | (9,223,877) |
Present value of lease payments | $ 11,413,326 |
Commitments and Contingencies_3
Commitments and Contingencies (Detail 1) | Sep. 30, 2018USD ($) |
Lease Obligation Recognized | |
2,018 | $ 27,416 |
2,019 | 175,764 |
2,020 | 202,944 |
2,021 | 232,148 |
2,022 | 263,512 |
Thereafter | 10,511,542 |
Total | $ 11,413,326 |
Commitments and Contingencies_4
Commitments and Contingencies (Detail Textuals) | Apr. 01, 2017USD ($)ft² | Jan. 31, 2018USD ($)ft² | Dec. 20, 2016USD ($)Rent_PeriodWeek | Jan. 31, 2015USD ($)ft² | May 31, 2014ft² | Oct. 31, 2013USD ($)ft² | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) |
Commitments And Contingencies [Line Items] | ||||||||||
Fixed monthly rent payment | $ 57,713 | $ 98,748 | $ 182,293 | $ 205,220 | ||||||
Corporate Headquarters | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Area of land leased | ft² | 1,500 | 1,500 | ||||||||
Fixed monthly rent payment | $ 2,063 | $ 1,806 | ||||||||
Lease expires date | Dec. 31, 2017 | |||||||||
Nocatee Restaurant | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Area of land leased | ft² | 3,400 | 2,900 | ||||||||
Fixed monthly rent payment | $ 6,830 | $ 1,100 | ||||||||
Lease expires date | Mar. 31, 2023 | |||||||||
Percentage increase in additional annual rent payment | 6.00% | |||||||||
Initial term of lease | 60 months | 53 months | ||||||||
Additional extended lease period | 60 months | |||||||||
Youngerman Circle Restaurant | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Area of land leased | ft² | 6,500 | |||||||||
Fixed monthly rent payment | $ 10,000 | |||||||||
Percentage of restaurant's monthly net sales as monthly rent payment | 7.00% | |||||||||
Percentage of restaurant's monthly net sales for applicable rent period | 7.50% | |||||||||
Initial term of lease | 20 years | 10 years | ||||||||
Additional extended lease period | 5 years | 1 year | ||||||||
Number of rent periods per year | Rent_Period | 13 | |||||||||
Number of weeks included in each rent period | Week | 4 |
Commitments and Contingencies_5
Commitments and Contingencies (Detail Textuals 1) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Commitments And Contingencies [Line Items] | |||
Additional successive term of lease | 5 years | ||
Aggregate base annual rent | $ 876,875 | ||
Percentage of increase in additional rent | 1.75% | ||
Capital lease obligation | $ 11,500,000 | $ 11,500,000 | |
Outstanding balance of capital lease obligation | 11,413,326 | 11,413,326 | |
Long-term portion of capital lease obligation | 11,241,915 | 11,241,915 | |
Short-term portion of capital lease obligation | 171,411 | 171,411 | |
Depreciation, Depletion and Amortization | 24,000 | 24,000 | |
Interest expense | 59,471 | 59,471 | |
Improvements cost | 12,618,415 | 12,618,415 | $ 148,093 |
Gross amount of future payments under the lease | 20,637,203 | 20,637,203 | |
Interest on lease | (9,223,877) | (9,223,877) | |
Land, buildings and improvements | |||
Commitments And Contingencies [Line Items] | |||
Improvements cost | $ 11,500,000 | $ 11,500,000 | $ 0 |
Related-Party Transactions (Det
Related-Party Transactions (Detail Textuals) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||||||
Repayments of notes payable - related party | $ 206,324 | |||||
Total revenue | $ 2,452,702 | $ 1,047,404 | $ 4,868,193 | 3,228,054 | ||
Accounts payable and accrued expenses - related party | 100,892 | 100,892 | $ 94,150 | |||
Franchise and other revenue - related party | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenue | 23,256 | 40,285 | 100,994 | 123,343 | ||
Blue Victory Holdings | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from related party debt | 23,481 | 372,049 | ||||
Repayments of notes payable - related party | 341,546 | |||||
Outstanding principal amount of credit facility | $ 53,984 | $ 53,984 | 30,503 | $ 30,503 | ||
Interest rate per annum | 6.00% | 6.00% | ||||
Seenu G Kasturi | Blue Victory Holdings | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage in common stock of company | 17.00% | 17.00% | ||||
Equity interest, percent | 90.00% | 90.00% | ||||
DWG acquisitions LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Accounts receivable | $ 891 | $ 891 | 1,505 | |||
Fund receivable from acquisitions | 1,761 | 1,761 | 2,280 | |||
Accounts payable and accrued expenses - related party | 100,892 | 100,892 | $ 94,150 | |||
Franchise agreement | DWG acquisitions LLC | Franchise and other revenue - related party | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenue | $ 23,256 | $ 40,285 | $ 100,994 | $ 123,343 |
Judgments in Legal Proceedings
Judgments in Legal Proceedings (Detail Textuals) - USD ($) | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2016 | Jan. 31, 2010 | Dec. 31, 2016 | |
2010 Settlement Agreement | |||
Loss Contingencies [Line Items] | |||
Litigation settlement amount | $ 250,000 | ||
Payments for legal settlement | 40,000 | ||
Amount payable of legal settlement | $ 210,000 | ||
Settlement and Release Agreement | Joseph Cala | |||
Loss Contingencies [Line Items] | |||
Litigation settlement amount | $ 15,000 | ||
Amount payable of legal settlement | $ 210,000 | ||
Stock issued during period for litigation settlements | 35,000 | ||
Non-cash gain on settlement of liabilities | $ 175,449 |
Judgments in Legal Proceeding_2
Judgments in Legal Proceedings (Detail Textuals 1) - USD ($) | Nov. 11, 2011 | Oct. 04, 2011 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 25, 2011 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | ||||||||
Settlement agreements payable | $ 8,431 | $ 8,431 | ||||||
Outstanding Judgment And Legal Fees | $ 194,747 | 194,747 | $ 194,747 | |||||
Accrued interest of litigation settlement | 78,681 | 78,681 | 70,250 | |||||
Outstanding judgment and legal fees along with accrued interest | 273,428 | 273,428 | 264,997 | |||||
Breach of guarantee | ||||||||
Loss Contingencies [Line Items] | ||||||||
Litigation settlement amount | $ 161,747 | |||||||
Litigation settlement expense | $ 33,000 | |||||||
Loss from legal proceedings | $ 197,116 | |||||||
Interest expense | 2,841 | $ 2,841 | 8,431 | $ 8,431 | ||||
Accrued interest of litigation settlement | $ 78,681 | $ 78,681 | $ 2,369 | $ 70,250 |
Judgments in Legal Proceeding_3
Judgments in Legal Proceedings (Detail Textuals 2) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jan. 31, 2015 | Dec. 31, 2016 | Sep. 30, 2018 | Dec. 31, 2017 | |
Loss Contingencies [Line Items] | ||||
Accrued legal contingency | $ 161,790 | $ 155,935 | ||
Breach of a guaranty of certain obligations of Ritz Aviation, LLC | Pending Litigation | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency damages sought | $ 194,181 | $ 111,539 | ||
Non-cash gain on settlement of liabilities | $ 82,642 | |||
Accrued legal contingency | 161,790 | 155,935 | ||
Accrued interest outstanding | 39,665 | 33,809 | ||
Other expenses outstanding | $ 10,586 | $ 10,586 |
Subsequent Events (Detail Textu
Subsequent Events (Detail Textuals) - USD ($) | Oct. 01, 2018 | Oct. 30, 2018 | Jan. 31, 2018 |
Employment agreement | Seenu G Kasturi | |||
Subsequent Event [Line Items] | |||
Number of common stock issued in connection with employment agreement | 9,337 | ||
Subsequent event | Employment agreement | Seenu G Kasturi | |||
Subsequent Event [Line Items] | |||
Number of common stock issued in connection with employment agreement | 7,414 | ||
Subsequent event | Custodian Agreement | Seenu G Kasturi | SDA Holdings, LLC | |||
Subsequent Event [Line Items] | |||
Number of shares delivered | 718,563 | ||
Gross proceeds from sale of debt or equity securities | $ 2,000,000 | ||
Subsequent event | Membership Interest Purchase Agreement | SDA Holdings, LLC | |||
Subsequent Event [Line Items] | |||
Outstanding membership interests | $ 10 |