Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 20, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Muscle Maker, Inc. | |
Entity Central Index Key | 0001701756 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,867,016 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash | $ 2,009,650 | $ 4,195,932 |
Accounts receivable, net of allowance for doubtful accounts of $75,000 as of March 31, 2021 and December 31, 2020, respectively | 144,220 | 140,305 |
Inventory | 122,032 | 113,824 |
Current portion of loans receivable, net of allowance of $61,275 and $106,900 at March 31, 2021 and December 31, 2020, respectively | 5,148 | 2,394 |
Prepaid expenses and other current assets | 34,927 | 40,903 |
Total Current Assets | 2,315,977 | 4,493,358 |
Property and equipment, net | 2,356,928 | 2,342,723 |
Goodwill | 939,348 | 656,348 |
Intangible assets, net | 3,592,672 | 2,878,278 |
Loans receivable, non-current | 996 | |
Security deposits and other assets | 131,916 | 131,916 |
Total Assets | 9,336,841 | 10,503,619 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 2,087,651 | 1,500,935 |
Convertible notes payable to Former Parent | 82,458 | 82,458 |
Convertible notes payable | 100,000 | 100,000 |
Other notes payable, current | 961,157 | 701,552 |
Deferred revenue, current | 22,498 | 62,858 |
Deferred rent, current | 27,203 | 20,569 |
Other current liabilities | 638,701 | 641,418 |
Total Current Liabilities | 3,919,668 | 3,109,790 |
Other notes payable, non-current | 297,042 | 575,140 |
Deferred revenue, non-current | 963,892 | 944,271 |
Deferred rent, non-current | 76,950 | 79,290 |
Total Liabilities | 5,257,552 | 4,708,491 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Common stock, $0.0001 par value, 25,000,000 shares authorized, 12,545,824 and 11,725,764 shares issued and outstanding as of March 31, 2021, and December 31, 2020, respectively | 1,254 | 1,172 |
Additional paid-in capital | 70,983,426 | 68,987,663 |
Accumulated deficit | (66,905,391) | (63,193,707) |
Total Stockholders' Equity | 4,079,289 | 5,795,128 |
Total Liabilities and Stockholders' Equity | $ 9,336,841 | $ 10,503,619 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 75,000 | $ 75,000 |
Allowance for loans receivable | $ 61,275 | $ 55,000 |
Common stock, no par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 12,545,824 | 11,725,764 |
Common stock, shares outstanding | 12,545,824 | 11,725,764 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Total Revenues | $ 1,328,338 | $ 1,435,054 |
Restaurant operating expenses: | ||
Total restaurant operating expenses | 1,867,639 | 1,529,351 |
Preopening expenses | 10,986 | |
Depreciation and amortization | 169,128 | 111,257 |
Franchise advertising fund expenses | 14,087 | 21,596 |
General and administrative expenses | 2,966,636 | 5,129,403 |
Total Costs and Expenses | 5,028,476 | 6,791,607 |
Loss from Operations | (3,700,138) | (5,356,553) |
Other Income (Expense): | ||
Other income (expense), net | 2,628 | (3,188) |
Interest expense, net | (14,174) | (93,604) |
Amortization of debt discounts | (38,918) | |
Total Other Expense, Net | (11,546) | (135,710) |
Loss Before Income Tax | (3,711,684) | (5,492,263) |
Income tax provision | ||
Net Loss | $ (3,711,684) | $ (5,492,263) |
Net Loss Per Share: | ||
Basic and diluted | $ (0.31) | $ (0.84) |
Weighted Average Number of Common Shares Outstanding: | ||
Basic and diluted | 11,817,591 | 6,531,696 |
Company Restaurant Net Sales [Member] | ||
Revenues: | ||
Total Revenues | $ 1,178,911 | $ 1,237,427 |
Franchise Royalties and Fees [Member] | ||
Revenues: | ||
Total Revenues | 135,340 | 176,031 |
Franchise Advertising Fund Contributions [Member] | ||
Revenues: | ||
Total Revenues | 14,087 | 21,596 |
Food and Beverage Costs [Member] | ||
Restaurant operating expenses: | ||
Total restaurant operating expenses | 504,461 | 465,694 |
Labor [Member] | ||
Restaurant operating expenses: | ||
Total restaurant operating expenses | 767,065 | 586,620 |
Rent [Member] | ||
Restaurant operating expenses: | ||
Total restaurant operating expenses | 256,191 | 144,677 |
Other Restaurant Operating Expenses [Member] | ||
Restaurant operating expenses: | ||
Total restaurant operating expenses | $ 339,922 | $ 332,360 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2019 | $ 571 | $ 53,339,793 | $ (53,094,602) | $ 245,762 |
Balance, shares at Dec. 31, 2019 | 5,714,464 | |||
Issuance of restricted stock | ||||
Issuance of restricted stock, shares | 1,226 | |||
Common stock issued upon offering on February 12, 2020, net of underwriter's discount and offering costs of $920,000 | $ 154 | 6,779,846 | 6,780,000 | |
Common stock issued upon offering on February 12, 2020, net of underwriter's discount and offering costs of $920,000, shares | 1,540,000 | |||
Restricted common stock issued as compensation to executive team upon completion of the initial public offering | $ 22 | 1,083,893 | 1,083,915 | |
Restricted common stock issued as compensation to executive team upon completion of the initial public offering, shares | 216,783 | |||
Common stock issued as compensation to board of directors | $ 3 | 128,077 | 128,080 | |
Common stock issued as compensation to board of directors, shares | 25,616 | |||
Common stock issued as compensation for services | $ 39 | 1,924,961 | 1,925,000 | |
Common stock issued as compensation for services, shares | 385,000 | |||
Stock-based compensation: Restricted common stock | 20,148 | 20,148 | ||
Stock-based compensation: Warrant | 191,000 | 191,000 | ||
Net loss | (5,492,263) | (5,492,263) | ||
Balance at Mar. 31, 2020 | $ 789 | 63,467,718 | (58,586,865) | 4,881,642 |
Balance, shares at Mar. 31, 2020 | 7,883,089 | |||
Balance at Dec. 31, 2020 | $ 1,172 | 68,987,663 | (63,193,707) | 5,795,128 |
Balance, shares at Dec. 31, 2020 | 11,725,764 | |||
Issuance of restricted stock | ||||
Issuance of restricted stock, shares | 1,200 | |||
Common stock issued as part of the acquisition of SuperFit Foods on March 25, 2021 | $ 27 | 624,973 | 625,000 | |
Common stock issued as part of the acquisition of SuperFit Foods on March 25, 2021, shares | 268,240 | |||
Restricted common stock issued as compensation to executives and employees | $ 22 | 636,495 | 636,517 | |
Restricted common stock issued as compensation to executives and employees, shares | 221,783 | |||
Common stock issued as compensation to board of directors | $ 3 | 57,199 | 57,202 | |
Common stock issued as compensation to board of directors, shares | 28,837 | |||
Common stock issued as compensation for services | $ 30 | 676,670 | 676,700 | |
Common stock issued as compensation for services, shares | 300,000 | |||
Stock-based compensation: Restricted common stock | 426 | 426 | ||
Net loss | (3,711,684) | (3,711,684) | ||
Balance at Mar. 31, 2021 | $ 1,254 | $ 70,983,426 | $ (66,905,391) | $ 4,079,289 |
Balance, shares at Mar. 31, 2021 | 12,545,824 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - USD ($) | Feb. 12, 2020 | Mar. 31, 2021 |
Statement of Stockholders' Equity [Abstract] | ||
Offering costs | $ 920,000 | $ 920,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net loss | $ (3,711,684) | $ (5,492,263) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 169,128 | 111,257 |
Stock-based compensation | 1,712,845 | 3,348,143 |
Amortization of debt discounts | 38,918 | |
Write off of property and equipment | 37,027 | |
Bad debt expense | 18,676 | |
Deferred rent | 4,294 | 18,375 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (24,549) | (6,293) |
Inventory | (8,208) | 20,893 |
Prepaid expenses and other current assets | 5,976 | (17,423) |
Security deposits and other assets | (37,600) | |
Accounts payable and accrued expenses | 219,716 | (503,985) |
Deferred revenue | (20,739) | (24,899) |
Other current liabilities | (2,717) | 2,357 |
Total Adjustments | 2,111,449 | 2,949,743 |
Net Cash Used in Operating Activities | (1,600,235) | (2,542,520) |
Cash Flows from Investing Activities | ||
Purchases of property and equipment | (67,754) | (57,893) |
Cash paid in connection with the acquisition of SuperFit Foods | (500,000) | |
Collections from loans receivables | 200 | 8,802 |
Net Cash Used in Investing Activities | (567,554) | (49,091) |
Cash Flows from Financing Activities | ||
Proceeds from offerings, net of underwriter's discount and offering costs of $920,000 | 6,780,000 | |
Repayments of convertible note payable | (550,000) | |
Repayments of convertible note payable - related parties | (91,000) | |
Repayments of other notes payables | (18,493) | (468,879) |
Proceeds from other note payable | 150,000 | |
Net Cash (Used in) Provided by Financing Activities | (18,493) | 5,820,121 |
Net (Decrease) Increase in Cash | (2,186,282) | 3,228,510 |
Cash - Beginning of Period | 4,195,932 | 478,854 |
Cash - End of Period | 2,009,650 | 3,707,364 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for interest | $ 9,950 | $ 297,455 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) | Feb. 12, 2020 | Mar. 31, 2021 |
Statement of Cash Flows [Abstract] | ||
Offering costs | $ 920,000 | $ 920,000 |
Business Organization and Natur
Business Organization and Nature of Operations, Going Concern and Management's Plans | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Organization and Nature of Operations, Going Concern and Management's Plans | NOTE 1 – BUSINESS ORGANIZATION AND NATURE OF OPERATIONS, GOING CONCERN AND MANAGEMENT’S PLANS Muscle Maker, Inc. (“MMI”), a Nevada corporation was incorporated in Nevada on October 25, 2019. MMI was a wholly owned subsidiary of Muscle Maker, Inc (“MMI-Cal”), a California corporation incorporated on December 8, 2014, but the two merged on November 13, 2019 with MMI as the surviving entity. MMI wholly owns Muscle Maker Development, LLC (“MMD”), Muscle Maker Corp, LLC (“MMC”) and Muscle Maker USA, Inc (“Muscle USA”). MMD was formed on July 18, 2017, in the State of Nevada for the purpose of running our existing franchise operations and continuing to franchise the Muscle Maker Grill® name and business system to qualified franchisees. MMC was formed on July 18, 2017, in the State of Nevada for the purpose of developing new corporate stores and operating new and existing corporate stores of MMI. Muscle USA was formed on March 14, 2019 in the State of Texas for the purpose of opening additional new corporate stores. Muscle Maker Development International. LLC, a directly wholly owned subsidiary, which was formed in Nevada on November 13, 2020 to franchise the Muscle Maker Grill name and business system to qualified franchisees internationally. MMI is a fast-casual restaurant concept that specializes in preparing healthy-inspired, high-quality, fresh, made-to-order lean, protein-based meals featuring chicken, seafood, pasta, hamburgers, wraps and flat breads. In addition, our restaurants feature freshly prepared entrée salads and an appealing selection of sides, protein shakes and fruit smoothies. MMI operates in the fast-casual restaurant segment. MMI is the owner of the trade name and service mark Muscle Maker Grill®, Healthy Joe’s and other trademarks and intellectual property we use in connection with the operation of Muscle Maker Grill® restaurants. We license the right to use the Muscle Maker Grill® and Healthy Joe’s trademarks and intellectual property to our wholly-owned subsidiaries, MMD, MMC and Muscle USA, and to further sublicense them to our franchisees for use in connection with Muscle Maker Grill® and Healthy Joe’s restaurants. On March 25, 2021, we acquired the assets of Superfit Foods, a subscription based fresh-prepared meal prep business located in Jacksonville, Florida. With this acquisition, we are also the owner of the trade name Superfit Foods that we use in connection with the operations of Superfit Foods. In 2020 Superfit foods produced overs 220,000 fresh-prepared meals. Superfit Foods is differentiated from other meal prep services by allowing customers in the Jacksonville Florida market to order online via the company’s website or mobile app and pick up their fully prepared meals from 28 company owned coolers located in gyms and wellness centers. MMI and its subsidiaries are hereinafter referred to as the “Company”. The Company operates under the name SuperFit Foods and Muscle Maker Grill and is a franchisor and owner operator of Muscle Maker Grill and Healthy Joe’s restaurants. As of March 31, 2021, the Company’s restaurant system included eighteen company-owned restaurants, and fourteen franchise restaurants. Seven of the company-owned restaurants are delivery-only locations. In addition, the Company built four new locations on university campuses but due to Covid-19 restrictions have not yet opened these locations but incurred expenses during the twelve months ended December 31, 2020. A Muscle Maker Grill restaurant offers quality food freshly prepared with the Company’s proprietary recipes created with the guest’s health in mind. The menu is protein based, and features various supplements, health food snacks, along with a nutritious children’s menu and meal plans. SuperFit Foods is a healthy meal prep Company that offers subscription meal services to customers in the Northeast Florida market with 100 meals to choose from. COVID-19 The COVID-19 global pandemic continues to rapidly evolve. The Company is continually monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. The pandemic has resulted in a negative impact on the Company’s operations during the year ended December 31, 2020 and continued into the first three months of March 31, 2021. However, due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this report. While there could ultimately be an additional material impact on operations and liquidity of the Company, the full impact could not be determined, as of the date of this report. Going Concern and Management’s Plans As of March 31, 2021, the Company had a cash balance, a working capital deficit and an accumulated deficit of $2,009,650, $1,603,691, and $66,905,391, respectively. During the three months ended March 31, 2021, the Company incurred a pre-tax net loss of $3,711,684. These conditions indicate that there is substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of the issuance of these condensed consolidated financial statements. Subsequent to March 31, 2021, the Company received an aggregate of $9,181,355, net of underwriters’ costs and other fees of $790,000, upon closing of a private placement. (See Note 13 - Subsequent Events – Private Placement) Although management believes that the Company has access to capital resources, there are no commitments in place for new financing as of the date of the issuance of these condensed consolidated financial statements and there can be no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. The Company expects to have ongoing needs for working capital in order to (a) fund operations; plus (b) expand operations by opening additional corporate-owned restaurants. To that end, the Company may be required to raise additional funds through equity or debt financing. However, there can be no assurance that the Company will be successful in securing additional capital. If the Company is unsuccessful, the Company may need to (a) initiate cost reductions; (b) forego business development opportunities; (c) seek extensions of time to fund its liabilities, or (d) seek protection from creditors. The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2021, and for the three months ended March 31, 2021, and 2020. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results for the full year. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2020. The balance sheet as of December 31, 2020 has been derived from the Company’s audited financial statements. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Any intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates include: ● the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets; ● the estimated useful lives of intangible and depreciable assets; ● estimates and assumptions used to value warrants and options; ● the recognition of revenue; and ● the recognition, measurement and valuation of current and deferred income taxes. Estimates and assumptions are periodically reviewed, and the effects of any material revisions are reflected in the financial statements in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions. Cash and Cash Equivalents The Company considers all highly-liquid instruments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of March 31, 2021 and December 31, 2020. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized, and minor replacements, maintenance and repairs are charged to expense as incurred. Depreciation and amortization are calculated on the straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the estimated useful life or the lease term of the related asset. The estimated useful lives are as follows: Furniture and equipment 5 - 7 years Vehicles 5 years Leasehold improvements 0.5 – 10.38 years Smallware, which consists of pots, pans and other cooking utensils, is carried at cost and any replacements are expensed when acquired. Intangible Assets We account for recorded intangible assets in accordance with ASC 350 “Intangibles - Goodwill and Other”. In accordance with ASC 350, we do not amortize intangible assets with indefinite useful lives. Our goodwill and trademarks are deemed to have indefinite lives, and accordingly are not amortized, but are evaluated for impairment at least annually, or more often whenever changes in facts and circumstances may indicate that the carrying value may not be recoverable. The Accounting Standards Codification (“ASC”) requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment). Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgment is required to estimate the fair value of reporting units which includes estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment. Other intangible assets include a trademark with an indefinite useful life. The other intangible assets estimated useful lives are as follows: Franchisee agreements 13 years Trademark – SuperFit, domain name, customer list and proprietary recipes 5 years Non-compete agreement 3 years Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases. ASU 2016-02 will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating ASU 2016-02 and its impact on its condensed consolidated financial statements and disclosures. In June 2018, the FASB issued ASU No. 2018-07, “Compensation — Stock Compensation (Topic 718),” (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. ASU 2018-07 expands the scope of Topic 718, Compensation — Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, Equity — Equity-Based Payments to Nonemployees. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted, but no earlier than a Company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company is currently evaluating ASU 2018-07 and its impact on the condensed consolidated financial statements. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases” (“ASU 2018-10”). The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2018-10 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2018-10 is effective for emerging growth companies for interim and annual reporting periods beginning after December 15, 2021, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. The Company is currently assessing the impact this guidance will have on its condensed consolidated financial statements. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements,” (“ASU 2018-11”). The amendments in ASU 2018-11 related to transition relief on comparative reporting at adoption affect all entities with lease contracts that choose the additional transition method and separating components of a contract affect only lessors whose lease contracts qualify for the practical expedient. The amendments in ASU 2018-11 are effective for emerging growth companies for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The Company is currently assessing the impact this guidance will have on its condensed consolidated financial statements. In March 2019, the FASB issued ASU 2019-01, “Leases (Topic 842): Codification Improvements” (“Topic 842”) (“ASU 2019-01”). These amendments align the guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. As a result, the fair value of the underlying asset at lease commencement is its cost, reflecting any volume or trade discounts that may apply. However, if there has been a significant lapse of time between when the underlying asset is acquired and when the lease commences, the definition of fair value (in Topic 820, Fair Value Measurement) should be applied. (Issue 1). The ASU also requires lessors within the scope of Topic 942, Financial Services—Depository and Lending, to present all “principal payments received under leases” within investing activities. (Issue 2). Finally, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard. (Issue 3). The transition and effective date provisions apply to Issue 1 and Issue 2. They do not apply to Issue 3 because the amendments for that Issue are to the original transition requirements in Topic 842. On June 3, 2020, the FASB issued ASU 2020-05 that extended the adoption to fiscal years beginning after December 15, 2021, with interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company is currently evaluating ASU 2019-01 and its impact on its unaudited condensed consolidated financial statements and financial statement disclosures. Subsequent Events The Company evaluated events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation and transactions, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed in Note 13 – Subsequent Events. Revenue Recognition In accordance with the Accounting Standards Codification Topic 606 “Revenue from Contracts with Customers”, the Company recognized revenue in accordance with a five-step revenue model, as follows: (1) identifying the contract with the customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when (or as) the entity satisfies a performance obligation. In applying this five-step model, we have made significant judgments in identifying the promised goods or services in our contracts with franchisees that are distinct, and which represent separate performance obligations. Restaurant Sales Retail store revenue at Company operated restaurants is recognized when payment is tendered at the point of sale, net of sales tax, discount and other sales related taxes. The Company recorded retail store revenues of $1,178,911 and $1,237,427 during the three months ended March 31, 2021 and 2020, respectively. The Company sells gift cards which do not have an expiration date, and it does not deduct dormancy fees from outstanding gift card balances. The Company recognizes revenues from gift cards as restaurant revenues once the Company performs its obligation to provide food and beverage to the customer simultaneously with the redemption of the gift card or through gift card breakage, as discussed in Other Revenues below. Franchise Royalties and Fees Franchise revenues consists of royalties, franchise fees and rebates. Royalties are based on a percentage of franchisee net sales revenue. The Company recognizes the royalties as the underlying sales occur. The Company recorded revenue from royalties of $81,469 and $120,909 during the three months ended March 31, 2021 and 2020, respectively, which is included in franchise royalties and fees on the accompanying condensed consolidated statements of operations. The Company provides the franchisees with management expertise, training, pre-opening assistance, and restaurant operating assistance in exchange for the multi-unit development fees and franchise fees. The Company capitalizes these fees upon collection from the franchisee, these fees are then recognized as franchise fee revenue on a straight-line basis over the life of the related franchise agreements and any exercised renewal periods. Cash payments are due upon the execution of the related franchise agreement. The Company’s performance obligation with respect to franchise fee revenues consists of a license to utilize the Company’s brand for a specified period of time, which is satisfied equally over the life of each franchise agreement. The Company recorded revenues from franchise fees of $9,786 and $14,440, respectively, during the three months ended March 31, 2021 and 2020, which is included in franchise royalties and fees on the accompanying condensed consolidated statements of operations. The Company has supply agreements with certain food and beverage vendors. Pursuant to the terms of these agreements, rebates are provided to the Company based upon the dollar volume of purchases for all company-owned and franchised restaurants from these vendors. Rebates earned on purchases by franchise stores are recorded as revenue during the period in which the related food and beverage purchases are made. The Company recorded revenue from rebates of $44,085 and $40,682 during the three months ended March 31, 2021 and 2020, respectively, which is included in franchise royalties and fees on the accompanying consolidated statements of operations. Rebates earned on purchases by Company owned stores are recorded as a reduction of food and beverage costs during the period in which the related food and beverage purchases are made. Other Revenues Gift card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote and the Company determines there is not a legal obligation to remit the unredeemed gift card balance to the relevant jurisdiction. The determination of the gift card breakage rate is based upon the Company’s specific historical redemption patterns. The Company recognizes gift card breakage by applying its estimate of the rate of gift card breakage on a pro rata basis over the period of estimated redemption. Gift card liability is recorded in other current liabilities on the condensed consolidated balance sheet. For the three months ended March 31, 2021 and 2020, respectively, the Company determined that no gift card breakage is necessary based on current redemption rates. Deferred Revenue Deferred revenue primarily includes initial franchise fees received by the Company, which are being amortized over the life of the Company’s franchise agreements, as well as unearned vendor rebates. Deferred revenue is recognized in income over the life of the franchise agreements and vendor rebates are recognized in income as performance obligations are satisfied. Franchise Advertising Fund Contributions Under the Company’s franchise agreements, the Company and its franchisees are required to contribute a certain percentage of revenues to a national advertising fund. The Company’s national advertising services are provided on a system-wide basis and therefore, not considered distinct performance obligations for individual franchisees. In accordance with Topic 606, the Company recognizes these sales-based advertising contributions from franchisees as franchise revenue when the underlying franchisee Company incurs the corresponding advertising expense. The Company records the related advertising expenses as incurred under general and administrative expenses. When an advertising contribution fund is over-spent at year end, advertising expenses will be reported on the consolidated statement of operations in an amount that is greater than the revenue recorded for advertising contributions. Conversely, when an advertising contribution fund is under-spent at a period end, the Company will accrue advertising costs up to advertising contributions recorded in revenue. The Company recorded contributions from franchisees of $25,140 and $32,536, respectively, during the three months ended March 31, 2021 and 2020, respectively, which are included in franchise advertising fund contributions on the accompanying condensed consolidated statements of operations. Advertising Advertising costs are charged to expense as incurred. Advertising costs were approximately $13,615 and $103,643 for the three months ended March 31, 2021 and 2020, respectively, and are included in general and administrative expenses in the accompanying condensed consolidated statements of operations. Net Loss per Share Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of potential common shares, if dilutive, resulting from the exercise of warrants, options or the conversion of convertible notes payable. The following securities are excluded from the calculation of weighted average diluted common shares at March 31, 2021 and 2020, respectively, because their inclusion would have been anti-dilutive: March 31, 2021 2020 Warrants 2,560,361 2,537,264 Options 300,000 4,821 Convertible debt 32,350 32,350 Total potentially dilutive shares 2,892,711 2,574,435 Major Vendor The Company engages various vendors to distribute food products to their Company-owned restaurants. Purchases from the Company’s largest supplier totaled 84% and 85% of the Company’s purchases for the three months ended March 31, 2021 and 2020, respectively. Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) The carrying amounts of accrued liabilities approximate fair value due to the short-term nature of these instruments. The carrying amounts of our short–term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates, taken together with other features such as concurrent issuance of common stock and warrants, are comparable to rates of returns for instruments of similar credit risk. See Note 12 – Equity – Warrant and Options Valuation for details related to a accrued compensation liability being fair valued using Level 1 inputs. Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net loss. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 3 – ACQUISITIONS On March 25, 2021, the Company entered into an asset purchase agreement with Superfit Foods, LLC, a Florida limited liability company and Superfit Foods, LLC, a Nevada limited liability company (the “Superfit Acquisition”). The purchase price of the assets and rights was $1,150,000. The purchase price is payable as follows: $500,000 that was paid at closing, of which $25,000 was released from an escrow account held by our attorney, and $625,000 paid in 268,240 shares of common stock to be held for six months before being registered. The remaining $25,000 shall be paid in shares of common stock provided that the seller meets various obligation, within 60 days, as outline in the purchase agreement. As of March 31, 2021 the Company has accrued for the liability in accounts payable and accrued expenses. The Company acquired the following assets as part of the purchase agreement: Furniture and equipment $ 82,000 Vehicles 55,000 Tradename 45,000 Customer list 140,000 Domain name 125,000 Proprietary Recipes 160,000 Non-compete agreement 260,000 Goodwill 283,000 Total assets acquired $ 1,150,000 The unaudited pro-forma financial information in the table below summarizes the consolidated results of operations of the Company and SuperFits Foods, LLC as though the acquisition had occurred as of January 1, 2020. The pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to be a projection of future results. Pro Forma (Unaudited) For the Three Months Ended 2021 2020 Revenues $ 1,835,838 $ 1,865,979 Restaurant operating expenses 2,322,412 1,915,505 Total cost and expenses 5,482,877 7,177,761 Loss from Operations (3,647,039 ) (5,311,782 ) |
Loans Receivable
Loans Receivable | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Loans Receivable | NOTE 4 - LOANS RECEIVABLE At March 31, 2021 and December 31, 2020, the Company’s loans receivable consists of the following: March 31, 2021 December 31, 2020 Loans receivable, net $ 5,148 $ 3,390 Less: current portion (5,148 ) (2,394 ) Loans receivable, non-current $ - $ 996 Loans receivable includes loans to franchisees and a former franchisee totaling, in the aggregate, $5,148 and $3,390, net of reserves for uncollectible loans of $61,275 and $106,900 at March 31, 2021 and December 31, 2020, respectively. The loans have original terms ranging up to 10 years, earn interest at rates ranging from 5% to 12%, and are being repaid on a weekly or monthly basis. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | NOTE 5 – PROPERTY AND EQUIPMENT, NET As of March 31, 2021 and December 31, 2020 property and equipment consists of the following: March 31, 2021 December 31, 2020 Furniture and equipment $ 1,221,313 $ 1,143,320 Vehicles 55,000 - Leasehold improvements 1,913,355 1,940,907 3,189,668 3,084,227 Less: accumulated depreciation and amortization (832,740 ) (741,504 ) Property and equipment, net $ 2,356,928 $ 2,342,723 Depreciation expense amounted to $153,522 and $362,009 for the three months ended March 31, 2021 and 2020, respectively. During the three months ended March 31, 2021, the Company wrote off property and equipment with an original cost value of $99,313 related to a closed location and a future location that was terminated due to the economic environment as a result of COVID-19 and recorded a loss on disposal of $37,027 after accumulated depreciation of $62,286 in the unaudited condensed consolidated statement of operations. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | NOTE 6 – GOODWILL AND OTHER INTANGIBLE ASSETS, NET The Company’s intangible assets include a trademark with an indefinite useful life as well as franchise agreements which are amortized over useful lives of thirteen years. A summary of the intangible assets is presented below: Intangible Assets Trademark Franchise Agreements Trademark - SuperFit Domain Name Customer List Proprietary Recipes Non-Compete Agreement Total Intangible assets, net at December 31, 2020 $ 2,524,000 $ 354,278 $ - $ - $ - $ - $ - $ 2,878,278 SuperFit acquisition - - 45,000 125,000 140,000 160,000 260,000 730,000 Amortization expense - (12,638 ) (148 ) (411 ) (460 ) (526 ) (1,423 ) (15,606 ) Intangible assets, net at March 31, 2021 $ 2,524,000 $ 341,640 $ 44,852 $ 124,589 $ 139,540 $ 159,474 $ 258,577 $ 3,592,672 Weighted average remaining amortization period at March 31, 2021 (in years) 7.06 4.98 4.98 4.98 4.98 2.98 Amortization expense related to intangible assets amounted to $15,606 and $15,732 for the three months ended March 31, 2021 and 2020, respectively. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payables and accrued expenses consist of the following: March 31, 2021 December 31, 2020 Accounts payable $ 675,863 $ 692,966 Accrued payroll 204,486 78,667 Accrued professional fees 275,522 224,028 Accrued board members fees 21,000 36,697 Accrued rent expense 196,066 171,266 Accrued compensation expense (1) 342,000 - Sales taxes payable (2) 233,713 231,177 Accrued interest 29,446 25,222 Other accrued expenses 109,555 40,912 Total Accounts Payable and Accrued Expenses $ 2,087,651 $ 1,500,935 (1) Included within accrued compensation expense is a liability of $342,000 related to 150,000 shares of common stock to be issued by the Company to a consultant for services. See Note 13 – Subsequent events – Common Stock for details related to the issuance of the stock. (2) See Note 11 – Commitments and Contingencies –Taxes for detail related to delinquent sales taxes. |
Deferred Revenue
Deferred Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue | NOTE 8 – DEFERRED REVENUE At March 31, 2021 and December 31, 2020, deferred revenue consists of the following: March 31, 2021 December 31, 2020 Franchise fees $ 973,678 $ 983,958 Unearned vendor rebates 12,712 23,171 Less: Unearned vendor rebates, current (12,712 ) (23,171 ) Less: Franchise fees, current (9,786 ) (39,687 ) Deferred revenues, non-current $ 963,892 $ 944,271 |
Other Current Liabilities
Other Current Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | NOTE 9 – OTHER CURRENT LIABILITIES At March 31, 2021 and December 31, 2020, other current liabilities consist of the following: March 31, 2021 December 31, 2020 Gift card liability $ 93,163 $ 91,034 Co-op advertising fund liability 295,407 299,490 Advertising fund liability 250,131 250,894 $ 638,701 $ 641,418 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 10 – NOTES PAYABLE Convertible Notes Convertible Note Payable to Former Parent As of March 31, 2021, the Company had an amount of $82,458 in convertible notes payable to Former Parent outstanding. Other Convertible Notes As of March 31, 2021 and December 31, 2020, the Company has another convertible note payable in the amount of $100,000 which is included within convertible notes payable. See Note 11 – Commitments and Contingencies – Litigation, Claims and Assessments for details related to the $100,000 other convertible note payable. Other Notes Payable During the three months ended March 31, 2021, the Company repaid $18,493 of the other notes payable. As of March 31, 2021, the Company had an aggregate amount of $1,258,199 in other notes payable. The notes had interest rates ranging between 1% - 8% per annum, due on various dates through October 31, 2025. The maturities of other notes payable as of March 31, 2021, are as follows: Principal Repayments due as of Amount 03/31/2022 $ 88,993 03/31/2023 960,914 03/31/2024 102,114 03/31/2025 82,668 03/31/2026 23,510 $ 1,258,199 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11 – COMMITMENTS AND CONTINGENCIES Consulting Agreements On February 7, 2021, the Company entered into a Consulting Agreement with consultants as a strategy business consultant to provide the Company with business and marketing advice as needed. The term of the agreement is for five months from the effective date on February 7, 2021. Pursuant to the terms of the agreement the Company agreed to pay the consultant a total of 100,000 shares of the Company’s common stock. The Company issued 60,000 shares of common stock upon the effective date of the agreement with the remaining 40,000 to be issued upon the successful completion of the agreement. On March 8, 2021, the Company entered into a Consulting Agreement with consultants as a strategy business consultant to provide the Company with financial and business advice. The term of the agreement is for five months from the effective date on March 8, 2021. Pursuant to the terms of the agreement the Company agreed to pay the consultant a total of 100,000 shares of the Company’s common stock. The Company issued 70,000 shares of common stock upon the effective date of the agreement with the remaining 30,000 to be issued upon the successful completion of the agreement. On March 22, 2021, the Company entered into a Consulting Agreement with consultants with experience in the area of investor relations and capital introductions. The term of the agreement is for six months from the effective date on March 22, 2021. Pursuant to the terms of the agreement the Company agreed to pay $250,000 in cash for ancillary marketing, to be paid out at the Company’s discretion. In addition, the Company issued 150,000 shares of the Company’s common stock as a commencement incentive which is fully earned by entering into the agreement. Litigations, Claims and Assessments On March 27, 2018 a convertible note holder filed a complaint in the Iowa District Court for Polk County #CVCV056029 against the Company for failure to pay the remaining balance due on a promissory note in the amount of $100,000, together with interest, attorney fees and other costs of $171,035. On June 6, 2018 a default judgement was entered against the Company for the amount of $171,035. The Company repaid an aggregate amount of $71,035, consisting of principal and interest, as of the date of the filing of this report. As of March 31, 2021, the Company has accrued for the liability in convertible notes payable in the amount of $100,000 and accrued interest of $24,082 is included in accounts payable and accrued expenses. In May 2018, Resolute Contractors, Inc., Quality Tile, MTL Construction, Genesis Electric, JNB Interiors and Captive Aire filed a Mechanics Lien for labor, service, equipment and materials in the total amount of $98,005. The Company intends to set up various payment plans with these vendors. As of March 31, 2021, the Company has accrued for the liability in accounts payable and accrued expenses. On or about March 7, 2019, the Company was listed as a defendant to a lawsuit filed by a contractor in the State of Texas. The contractor is claiming a breach of contract and is seeking approximately $32,809 in damages for services claimed to be rendered by the contractor. The Company is working with legal counsel in order to reach a settlement. As of March 31, 2021, the Company accrued $30,000 for the liability in accounts payable and accrued expenses. On January 23, 2020, the Company was served a judgment in the amount of $130,185 for a breach of a lease agreement in Chicago, Illinois, in connection with a Company owned store that was closed in 2018. As of March 31, 2021, the Company has accrued for the liability in accounts payable and accrued expenses. In March 2021, the Company participated in a mediation concerning an investor who invested with American Restaurant Holdings, Inc and/or American Restaurants, LLC, our former parent company, from 2013 through 2015 in the total amount of $531,250. As of the filing of this report, the company entered into a settlement with American Restaurant, LLC and the investor in the amount of $160,000. In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. In the opinion of management after consulting legal counsel, such matters are currently not expected to have a material impact on the Company’s financial statements. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements after consulting legal counsel. Taxes The Company failed in certain instances in paying sales taxes collected from customers in specific states that impose a tax on sales of the Company’s products during 2018 and 2019. The Company had accrued $233,713 and $231,177 which includes penalties and interest as of March 31, 2021 and December 31, 2020, respectively, related to this matter. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Equity | NOTE 12 – EQUITY Common Stock On February 3, 2021, the Company issued an aggregate of 20,000 shares of common stock of the Company to a digital marketing consultant with an aggregate fair value of $42,600. On February 3, 2021, the Company issued an aggregate of 16,126 shares of common stock of the Company to the members of the board of directors as compensation earned through the end of the fourth quarter of 2020. On March 31, 2021, the Company authorized the issuance of an aggregate of 12,711 shares of common stock to the members of the board of directors as compensation earned during the first quarter of 2021. See Note 11 – Commitments and Contingencies – Consulting Agreements for details related to additional stock issuances during the three months ended March 31, 2021. Restricted Common Stock On February 11, 2021, the Company issued an aggregate of 221,783 shares of restricted common stock of the Company to various executives and an employee. A summary of the activity related to the restricted common stock for the three months ended March 31, 2021 is presented below: Weighted Total Date Fair Value Outstanding at January 1, 2021 1,200 $ 65.33 Granted 221,783 2.87 Forfeited - - Vested (222,983 ) (3.21 ) Outstanding at March 31, 2021 - $ - Stock-Based Compensation Expense Stock-based compensation related to restricted stock issued to employees, directors and consultants and warrants issued to consultants amounted to $1,712,845 and $3,348,143 for the three months ended March 31, 2021 and 2020, respectively, of which $1,712,845 and $3,347,591, respectively, was recorded in general and administrative expenses and $248 and $552, respectively, was recorded in labor expense within restaurant operating expenses. Options A summary of option activity during the three months ended March 31, 2021 is presented below: Weighted Weighted Average Average Remaining Number of Exercise Life Options Price In Years Outstanding, December 31, 2020 300,000 $ 3.33 1.1 Issued - - Exercised - - Forfeited - - Outstanding, March 31, 2021 300,000 $ 3.33 0.9 Exercisable, March 31, 2021 300,000 $ 3.33 0.9 Warrants A summary of warrants activity during the three months ended March 31, 2021 is presented below: Number of Warrants Weighted Weighted Outstanding, December 31, 2020 2,582,857 $ 4.08 3.3 Issued - - - Exercised - - - Forfeited/cancelled (22,496 ) 11.38 - Outstanding, March 31, 2021 2,560,361 $ 4.02 3.1 Exercisable, March 31, 2021 2,560,361 $ 4.08 3.1 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 – SUBSEQUENT EVENTS Private Placement On April 7, 2021, the Company entered into a Securities Purchase Agreement with an accredited investor (the “Securities Purchase Agreement”) for a private placement (the “Private Placement”) pursuant to which the investor agreed to purchase from the Company for an aggregate purchase price of approximately $10,000,000 (i) 1,250,000 shares of common stock of the Company (ii) a common stock purchase warrant to purchase up to 4,115,227 shares of Common Stock (the “Common Warrant”) and (iii) a pre-funded common stock purchase warrant to purchase up to 2,865,227 shares of Common Stock (the “Pre-Funded Warrant”). Each share is being sold together at a combined offering price of $2.43 per share and Common Warrant, and each Pre-Funded Warrant and accompanying Common Warrant is being sold together at a combined offering price of $2.42 per Pre-Funded Warrant and accompanying Common Warrant. The Pre-Funded Warrant is immediately exercisable, at a nominal exercise price of $0.01 per share, and may be exercised at any time until the Pre-Funded Warrant is fully exercised. The Common Warrant will have an exercise price of $2.43 per share, are immediately exercisable and will expire five and one-half (5.5) years from the date of issuance. The Private Placement closed on April 9, 2021. The Securities Purchase Agreement contains customary representations, warranties and agreements of the Company and the Purchaser and customary indemnification rights and obligations of the parties thereto. Pursuant to the Securities Purchase Agreement, the Company is required to register the resale of the Shares and the shares issuable upon exercise of the Common Warrant and the Pre-Funded Warrant. The Company is required to prepare and file a registration statement with the Securities and Exchange Commission within 30 days of the date of the Securities Purchase Agreement and to use commercially reasonable efforts to have the registration statement declared effective within 90 days of the closing of the Private Placement. Pursuant to a placement agency agreement, dated April 6, 2021, between the Company and A.G.P./Alliance Global Partners (the “Placement Agent”) entered into in connection with the Private Offering, the Placement Agent acted as the sole placement agent for the Private Placement and the Company has paid customary placement fees to the Placement Agent, including a cash fee equal to 8% of the gross proceeds raised in the Private Placement and a 164,609 common stock purchase warrant to purchase shares of Common Stock in an amount equal to 4% of the Shares and shares of Common Stock issuable upon exercise of the Warrants sold in the Private Placement, the warrant has an exercise price of $2.916 per share and is exercisable commencing six months from the date of the pricing of the Private Placement for a period of five years after such date. Pursuant to the Placement Agency Agreement, the Company has also agreed to reimburse certain expenses of the placement agent incurred in connection with the Private Placement. Common Stock On April 30, 2021, the Company issued an aggregate of 10,000 shares of common stock of the Company to a digital marketing consultant, pursuant to their service agreement, with an aggregate fair value of $14,700. On May 6, 2021, the Company issued an aggregate of 150,000 shares of common stock of the Company to a digital marketing consultant with an aggregate fair value of $214,500. The Company accrued for the liability as accrued compensation expense on the books as of March 31, 2021, as the share were fully earned pursuant to their service agreement. Members Interest Purchase Agreement On May 14, 2021, Muscle Maker, Inc. (the “Company”) entered into a Membership Interest Purchase Agreement with the members (the (“Poke Sellers”) of PKM Stamford, LLC, Poke Co., LLC, LB Holdings LLC, and TNB Holdings, LLC, each a Connecticut limited liability company (collectively, the “Poke Entities”) pursuant to which the Company acquired all of the issued and outstanding membership interest of the Poke Entities in consideration of $4,000,000 in cash and $730,000 payable in the form of a promissory note (the “Poke Note”). The closing occurred on May 14, 2021. Within 90 days of the closing, the purchase price will be adjusted to reflect credit card payments and third-party delivery vendors of the Poke Entities prior to the closing and the aggregate amount of expenses and liabilities incurred by the Poke Entities after the Closing but accrued or attributable to the period prior to the closing. If the Adjustment Amount is a positive amount, the Company shall remit the adjustment amount to the Sellers. If the adjustment amount is a negative amount, the Sellers shall remit the adjustment amount to the Company. The Poke Note provides for the payment of principal and interest to be paid in 60 monthly installments consisting of 59 installments of $5,308.73 commencing June 1, 2021 and one installment of $535,855.79 due and payable in May 1, 2026. In a related transaction, on May 14, 2021, the Company and the Poke Sellers entered into a Membership Interest Exchange Agreement pursuant to which the Company acquired Poke Co Holdings LLC, GLL Enterprises, LLC, and TNB Holdings II, LLC, each a Connecticut limited liability company (collectively, the Poke Entities II”) in exchange for shares of common stock of the Company valued at $1,250,000. The Company issued 880,282 shares of common stock of the Company. The price per share was determine by using the 10-day trading average preceding the date of closing. The closing occurred on May 14, 2021. On May 14, 2021, between Saladco Holdings, LLC and Poke Co Holdings, LLC, a wholly owned subsidiary of the Compay (“Poke Co”), entered into an Intellectual Property License Agreement providing Poke Co with a license to use certain intellectual property in connection with the preparation of Saladcraft®branded fruit and vegetable salads and related items for a term of one year in consideration of a fee of 10% of the restaurant’s net sales of Saladcraft® Products with respect to Pokémoto Restaurants owned and operated by Poke Co or its affiliates and 50% of the license revenue collected by Poke Co from such franchisees that is directly attributable to the sale of Saladcraft® Products in or from franchisees’ Pokémoto Restaurants. As a result of the above transactions, the Company has acquired PokeMoto (www.pokemoto.com), a thirteen-location concept known for its healthier modern culinary twist on a traditional Hawaiian poke classic. The Company claims an exemption from the registration requirements of the Securities Act of 1933 (the “Securities Act”) for the private placement of these securities pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2021, and for the three months ended March 31, 2021, and 2020. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results for the full year. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2020. The balance sheet as of December 31, 2020 has been derived from the Company’s audited financial statements. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Any intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates include: ● the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets; ● the estimated useful lives of intangible and depreciable assets; ● estimates and assumptions used to value warrants and options; ● the recognition of revenue; and ● the recognition, measurement and valuation of current and deferred income taxes. Estimates and assumptions are periodically reviewed, and the effects of any material revisions are reflected in the financial statements in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly-liquid instruments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of March 31, 2021 and December 31, 2020. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized, and minor replacements, maintenance and repairs are charged to expense as incurred. Depreciation and amortization are calculated on the straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the estimated useful life or the lease term of the related asset. The estimated useful lives are as follows: Furniture and equipment 5 - 7 years Vehicles 5 years Leasehold improvements 0.5 – 10.38 years Smallware, which consists of pots, pans and other cooking utensils, is carried at cost and any replacements are expensed when acquired. |
Intangible Assets | Intangible Assets We account for recorded intangible assets in accordance with ASC 350 “Intangibles - Goodwill and Other”. In accordance with ASC 350, we do not amortize intangible assets with indefinite useful lives. Our goodwill and trademarks are deemed to have indefinite lives, and accordingly are not amortized, but are evaluated for impairment at least annually, or more often whenever changes in facts and circumstances may indicate that the carrying value may not be recoverable. The Accounting Standards Codification (“ASC”) requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment). Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgment is required to estimate the fair value of reporting units which includes estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment. Other intangible assets include a trademark with an indefinite useful life. The other intangible assets estimated useful lives are as follows: Franchisee agreements 13 years Trademark – SuperFit, domain name, customer list and proprietary recipes 5 years Non-compete agreement 3 years |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases. ASU 2016-02 will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating ASU 2016-02 and its impact on its condensed consolidated financial statements and disclosures. In June 2018, the FASB issued ASU No. 2018-07, “Compensation — Stock Compensation (Topic 718),” (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. ASU 2018-07 expands the scope of Topic 718, Compensation — Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, Equity — Equity-Based Payments to Nonemployees. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted, but no earlier than a Company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company is currently evaluating ASU 2018-07 and its impact on the condensed consolidated financial statements. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases” (“ASU 2018-10”). The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2018-10 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2018-10 is effective for emerging growth companies for interim and annual reporting periods beginning after December 15, 2021, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. The Company is currently assessing the impact this guidance will have on its condensed consolidated financial statements. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements,” (“ASU 2018-11”). The amendments in ASU 2018-11 related to transition relief on comparative reporting at adoption affect all entities with lease contracts that choose the additional transition method and separating components of a contract affect only lessors whose lease contracts qualify for the practical expedient. The amendments in ASU 2018-11 are effective for emerging growth companies for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The Company is currently assessing the impact this guidance will have on its condensed consolidated financial statements. In March 2019, the FASB issued ASU 2019-01, “Leases (Topic 842): Codification Improvements” (“Topic 842”) (“ASU 2019-01”). These amendments align the guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. As a result, the fair value of the underlying asset at lease commencement is its cost, reflecting any volume or trade discounts that may apply. However, if there has been a significant lapse of time between when the underlying asset is acquired and when the lease commences, the definition of fair value (in Topic 820, Fair Value Measurement) should be applied. (Issue 1). The ASU also requires lessors within the scope of Topic 942, Financial Services—Depository and Lending, to present all “principal payments received under leases” within investing activities. (Issue 2). Finally, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard. (Issue 3). The transition and effective date provisions apply to Issue 1 and Issue 2. They do not apply to Issue 3 because the amendments for that Issue are to the original transition requirements in Topic 842. On June 3, 2020, the FASB issued ASU 2020-05 that extended the adoption to fiscal years beginning after December 15, 2021, with interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company is currently evaluating ASU 2019-01 and its impact on its unaudited condensed consolidated financial statements and financial statement disclosures. |
Subsequent Events | Subsequent Events The Company evaluated events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation and transactions, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed in Note 13 – Subsequent Events. |
Revenue Recognition | Revenue Recognition In accordance with the Accounting Standards Codification Topic 606 “Revenue from Contracts with Customers”, the Company recognized revenue in accordance with a five-step revenue model, as follows: (1) identifying the contract with the customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when (or as) the entity satisfies a performance obligation. In applying this five-step model, we have made significant judgments in identifying the promised goods or services in our contracts with franchisees that are distinct, and which represent separate performance obligations. Restaurant Sales Retail store revenue at Company operated restaurants is recognized when payment is tendered at the point of sale, net of sales tax, discount and other sales related taxes. The Company recorded retail store revenues of $1,178,911 and $1,237,427 during the three months ended March 31, 2021 and 2020, respectively. The Company sells gift cards which do not have an expiration date, and it does not deduct dormancy fees from outstanding gift card balances. The Company recognizes revenues from gift cards as restaurant revenues once the Company performs its obligation to provide food and beverage to the customer simultaneously with the redemption of the gift card or through gift card breakage, as discussed in Other Revenues below. Franchise Royalties and Fees Franchise revenues consists of royalties, franchise fees and rebates. Royalties are based on a percentage of franchisee net sales revenue. The Company recognizes the royalties as the underlying sales occur. The Company recorded revenue from royalties of $81,469 and $120,909 during the three months ended March 31, 2021 and 2020, respectively, which is included in franchise royalties and fees on the accompanying condensed consolidated statements of operations. The Company provides the franchisees with management expertise, training, pre-opening assistance, and restaurant operating assistance in exchange for the multi-unit development fees and franchise fees. The Company capitalizes these fees upon collection from the franchisee, these fees are then recognized as franchise fee revenue on a straight-line basis over the life of the related franchise agreements and any exercised renewal periods. Cash payments are due upon the execution of the related franchise agreement. The Company’s performance obligation with respect to franchise fee revenues consists of a license to utilize the Company’s brand for a specified period of time, which is satisfied equally over the life of each franchise agreement. The Company recorded revenues from franchise fees of $9,786 and $14,440, respectively, during the three months ended March 31, 2021 and 2020, which is included in franchise royalties and fees on the accompanying condensed consolidated statements of operations. The Company has supply agreements with certain food and beverage vendors. Pursuant to the terms of these agreements, rebates are provided to the Company based upon the dollar volume of purchases for all company-owned and franchised restaurants from these vendors. Rebates earned on purchases by franchise stores are recorded as revenue during the period in which the related food and beverage purchases are made. The Company recorded revenue from rebates of $44,085 and $40,682 during the three months ended March 31, 2021 and 2020, respectively, which is included in franchise royalties and fees on the accompanying consolidated statements of operations. Rebates earned on purchases by Company owned stores are recorded as a reduction of food and beverage costs during the period in which the related food and beverage purchases are made. Other Revenues Gift card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote and the Company determines there is not a legal obligation to remit the unredeemed gift card balance to the relevant jurisdiction. The determination of the gift card breakage rate is based upon the Company’s specific historical redemption patterns. The Company recognizes gift card breakage by applying its estimate of the rate of gift card breakage on a pro rata basis over the period of estimated redemption. Gift card liability is recorded in other current liabilities on the condensed consolidated balance sheet. For the three months ended March 31, 2021 and 2020, respectively, the Company determined that no gift card breakage is necessary based on current redemption rates. Deferred Revenue Deferred revenue primarily includes initial franchise fees received by the Company, which are being amortized over the life of the Company’s franchise agreements, as well as unearned vendor rebates. Deferred revenue is recognized in income over the life of the franchise agreements and vendor rebates are recognized in income as performance obligations are satisfied. Franchise Advertising Fund Contributions Under the Company’s franchise agreements, the Company and its franchisees are required to contribute a certain percentage of revenues to a national advertising fund. The Company’s national advertising services are provided on a system-wide basis and therefore, not considered distinct performance obligations for individual franchisees. In accordance with Topic 606, the Company recognizes these sales-based advertising contributions from franchisees as franchise revenue when the underlying franchisee Company incurs the corresponding advertising expense. The Company records the related advertising expenses as incurred under general and administrative expenses. When an advertising contribution fund is over-spent at year end, advertising expenses will be reported on the consolidated statement of operations in an amount that is greater than the revenue recorded for advertising contributions. Conversely, when an advertising contribution fund is under-spent at a period end, the Company will accrue advertising costs up to advertising contributions recorded in revenue. The Company recorded contributions from franchisees of $25,140 and $32,536, respectively, during the three months ended March 31, 2021 and 2020, respectively, which are included in franchise advertising fund contributions on the accompanying condensed consolidated statements of operations. |
Advertising | Advertising Advertising costs are charged to expense as incurred. Advertising costs were approximately $13,615 and $103,643 for the three months ended March 31, 2021 and 2020, respectively, and are included in general and administrative expenses in the accompanying condensed consolidated statements of operations. |
Net Loss Per Share | Net Loss per Share Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of potential common shares, if dilutive, resulting from the exercise of warrants, options or the conversion of convertible notes payable. The following securities are excluded from the calculation of weighted average diluted common shares at March 31, 2021 and 2020, respectively, because their inclusion would have been anti-dilutive: March 31, 2021 2020 Warrants 2,560,361 2,537,264 Options 300,000 4,821 Convertible debt 32,350 32,350 Total potentially dilutive shares 2,892,711 2,574,435 |
Major Vendor | Major Vendor The Company engages various vendors to distribute food products to their Company-owned restaurants. Purchases from the Company’s largest supplier totaled 84% and 85% of the Company’s purchases for the three months ended March 31, 2021 and 2020, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) The carrying amounts of accrued liabilities approximate fair value due to the short-term nature of these instruments. The carrying amounts of our short–term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates, taken together with other features such as concurrent issuance of common stock and warrants, are comparable to rates of returns for instruments of similar credit risk. See Note 12 – Equity – Warrant and Options Valuation for details related to a accrued compensation liability being fair valued using Level 1 inputs. |
Reclassifications | Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net loss. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Property and Equipment | The estimated useful lives are as follows: Furniture and equipment 5 - 7 years Vehicles 5 years Leasehold improvements 0.5 – 10.38 years |
Schedule of Estimated Useful Lives of Other Intangible Assets | Other intangible assets include a trademark with an indefinite useful life. The other intangible assets estimated useful lives are as follows: Franchisee agreements 13 years Trademark – SuperFit, domain name, customer list and proprietary recipes 5 years Non-compete agreement 3 years |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following securities are excluded from the calculation of weighted average diluted common shares at March 31, 2021 and 2020, respectively, because their inclusion would have been anti-dilutive: March 31, 2021 2020 Warrants 2,560,361 2,537,264 Options 300,000 4,821 Convertible debt 32,350 32,350 Total potentially dilutive shares 2,892,711 2,574,435 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired in Business Combinations | The Company acquired the following assets as part of the purchase agreement: Furniture and equipment $ 82,000 Vehicles 55,000 Tradename 45,000 Customer list 140,000 Domain name 125,000 Proprietary Recipes 160,000 Non-compete agreement 260,000 Goodwill 283,000 Total assets acquired $ 1,150,000 |
Schedule of Supplemental Proforma Acquired Franchisee Store | The pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to be a projection of future results. Pro Forma (Unaudited) For the Three Months Ended 2021 2020 Revenues $ 1,835,838 $ 1,865,979 Restaurant operating expenses 2,322,412 1,915,505 Total cost and expenses 5,482,877 7,177,761 Loss from Operations (3,647,039 ) (5,311,782 ) |
Loans Receivable (Tables)
Loans Receivable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Schedule of Loans Receivables | At March 31, 2021 and December 31, 2020, the Company’s loans receivable consists of the following: March 31, 2021 December 31, 2020 Loans receivable, net $ 5,148 $ 3,390 Less: current portion (5,148 ) (2,394 ) Loans receivable, non-current $ - $ 996 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | As of March 31, 2021 and December 31, 2020 property and equipment consists of the following: March 31, 2021 December 31, 2020 Furniture and equipment $ 1,221,313 $ 1,143,320 Vehicles 55,000 - Leasehold improvements 1,913,355 1,940,907 3,189,668 3,084,227 Less: accumulated depreciation and amortization (832,740 ) (741,504 ) Property and equipment, net $ 2,356,928 $ 2,342,723 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | A summary of the intangible assets is presented below: Intangible Assets Trademark Franchise Agreements Trademark - SuperFit Domain Name Customer List Proprietary Recipes Non-Compete Agreement Total Intangible assets, net at December 31, 2020 $ 2,524,000 $ 354,278 $ - $ - $ - $ - $ - $ 2,878,278 SuperFit acquisition - - 45,000 125,000 140,000 160,000 260,000 730,000 Amortization expense - (12,638 ) (148 ) (411 ) (460 ) (526 ) (1,423 ) (15,606 ) Intangible assets, net at March 31, 2021 $ 2,524,000 $ 341,640 $ 44,852 $ 124,589 $ 139,540 $ 159,474 $ 258,577 $ 3,592,672 Weighted average remaining amortization period at March 31, 2021 (in years) 7.06 4.98 4.98 4.98 4.98 2.98 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payables and Accrued Expenses | Accounts payables and accrued expenses consist of the following: March 31, 2021 December 31, 2020 Accounts payable $ 675,863 $ 692,966 Accrued payroll 204,486 78,667 Accrued professional fees 275,522 224,028 Accrued board members fees 21,000 36,697 Accrued rent expense 196,066 171,266 Accrued compensation expense (1) 342,000 - Sales taxes payable (2) 233,713 231,177 Accrued interest 29,446 25,222 Other accrued expenses 109,555 40,912 Total Accounts Payable and Accrued Expenses $ 2,087,651 $ 1,500,935 (1) Included within accrued compensation expense is a liability of $342,000 related to 150,000 shares of common stock to be issued by the Company to a consultant for services. See Note 13 – Subsequent events – Common Stock for details related to the issuance of the stock. (2) See Note 11 – Commitments and Contingencies –Taxes for detail related to delinquent sales taxes. |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Deferred Revenue | At March 31, 2021 and December 31, 2020, deferred revenue consists of the following: March 31, 2021 December 31, 2020 Franchise fees $ 973,678 $ 983,958 Unearned vendor rebates 12,712 23,171 Less: Unearned vendor rebates, current (12,712 ) (23,171 ) Less: Franchise fees, current (9,786 ) (39,687 ) Deferred revenues, non-current $ 963,892 $ 944,271 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | At March 31, 2021 and December 31, 2020, other current liabilities consist of the following: March 31, 2021 December 31, 2020 Gift card liability $ 93,163 $ 91,034 Co-op advertising fund liability 295,407 299,490 Advertising fund liability 250,131 250,894 $ 638,701 $ 641,418 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The maturities of other notes payable as of March 31, 2021, are as follows: Principal Repayments due as of Amount 03/31/2022 $ 88,993 03/31/2023 960,914 03/31/2024 102,114 03/31/2025 82,668 03/31/2026 23,510 $ 1,258,199 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Activity Related to Restricted Common Stock | A summary of the activity related to the restricted common stock for the three months ended March 31, 2021 is presented below: Weighted Total Date Fair Value Outstanding at January 1, 2021 1,200 $ 65.33 Granted 221,783 2.87 Forfeited - - Vested (222,983 ) (3.21 ) Outstanding at March 31, 2021 - $ - |
Schedule of Option Activity | A summary of option activity during the three months ended March 31, 2021 is presented below: Weighted Weighted Average Average Remaining Number of Exercise Life Options Price In Years Outstanding, December 31, 2020 300,000 $ 3.33 1.1 Issued - - Exercised - - Forfeited - - Outstanding, March 31, 2021 300,000 $ 3.33 0.9 Exercisable, March 31, 2021 300,000 $ 3.33 0.9 |
Schedule of Warrants Activity | A summary of warrants activity during the three months ended March 31, 2021 is presented below: Number of Warrants Weighted Weighted Outstanding, December 31, 2020 2,582,857 $ 4.08 3.3 Issued - - - Exercised - - - Forfeited/cancelled (22,496 ) 11.38 - Outstanding, March 31, 2021 2,560,361 $ 4.02 3.1 Exercisable, March 31, 2021 2,560,361 $ 4.08 3.1 |
Business Organization and Nat_2
Business Organization and Nature of Operations, Going Concern and Management's Plans (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cash balance | $ 2,009,650 | $ 4,195,932 | |
Working capital deficit | 1,603,691 | ||
Accumulated deficit | (66,905,391) | $ (63,193,707) | |
Net loss before income tax | (3,711,684) | $ (5,492,263) | |
Proceeds from underwriters' cost | 9,181,355 | ||
Proceeds from other fees | $ 790,000 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash equivalents | ||
Revenues | 1,328,338 | 1,435,054 |
Advertising costs | $ 13,615 | $ 130,643 |
Supplier Concentration Risk [Member] | Purchases [Member] | ||
Concentration risk percentage | 84.00% | 85.00% |
Company Restaurant Net Sales [Member] | ||
Revenues | $ 1,178,911 | $ 1,237,427 |
Royalties [Member] | ||
Revenues | 81,469 | 120,909 |
Franchise Fees [Member] | ||
Revenues | 9,786 | 14,440 |
Rebates [Member] | ||
Revenues | 44,085 | 40,682 |
Franchisees [Member] | ||
Revenues | $ 25,140 | $ 32,536 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Furniture and Equipment [Member] | Minimum [Member] | ||
Estimated useful life | 5 years | 5 years |
Furniture and Equipment [Member] | Maximum [Member] | ||
Estimated useful life | 7 years | 7 years |
Leasehold Improvements [Member] | Minimum [Member] | ||
Estimated useful life | 1 year 9 months 18 days | 6 months |
Leasehold Improvements [Member] | Maximum [Member] | ||
Estimated useful life | 10 years 4 months 24 days | 10 years 4 months 17 days |
Vehicles [Member] | Maximum [Member] | ||
Estimated useful life | 5 years |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Estimated Useful Lives of Other Intangible Assets (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Franchise Agreements [Member] | |
Intangible assets, estimated useful lives | 13 years |
Trademark [Member] | |
Intangible assets, estimated useful lives | 5 years |
Non-compete Agreement [Member] | |
Intangible assets, estimated useful lives | 3 years |
Significant Accounting Polici_7
Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total potentially dilutive shares | 2,892,711 | 2,574,435 |
Warrants [Member] | ||
Total potentially dilutive shares | 2,560,361 | 2,537,264 |
Options [Member] | ||
Total potentially dilutive shares | 300,000 | 4,821 |
Convertible Debt [Member] | ||
Total potentially dilutive shares | 32,350 | 32,350 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | Mar. 25, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Cash payment | $ 500,000 | ||
Superfit Foods, LLC [Member] | |||
Purchase price | $ 1,150,000 | ||
Cash payment | 500,000 | ||
Business combinations escrow account held amount | 25,000 | ||
Business combinations amount paid in shares | $ 625,000 | ||
Business combinations consideration transferred in shares, description | The purchase price is payable as follows: $500,000 that was paid at closing, of which $25,000 was released from an escrow account held by our attorney, and $625,000 paid in 268,240 shares of common stock to be held for six months before being registered. The remaining $25,000 shall be paid in shares of common stock provided that the seller meets various obligation, within 60 days, as outline in the purchase agreement. | ||
Number of shares issued during the period for acquisition | 268,240 |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired in Business Combinations (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill | $ 939,348 | $ 656,348 |
Superfit Foods, LLC [Member] | ||
Goodwill | 283,000 | |
Total assets acquired | 1,150,000 | |
Superfit Foods, LLC [Member] | Trade Name [Member] | ||
Assets acquired, gross | 45,000 | |
Superfit Foods, LLC [Member] | Customer List [Member] | ||
Assets acquired, gross | 140,000 | |
Superfit Foods, LLC [Member] | Domain Name [Member] | ||
Assets acquired, gross | 125,000 | |
Superfit Foods, LLC [Member] | Proprietary Recipes [Member] | ||
Assets acquired, gross | 160,000 | |
Superfit Foods, LLC [Member] | Non-compete Agreement [Member] | ||
Assets acquired, gross | 260,000 | |
Superfit Foods, LLC [Member] | Furniture and Equipment [Member] | ||
Assets acquired, gross | 82,000 | |
Superfit Foods, LLC [Member] | Vehicles [Member] | ||
Assets acquired, gross | $ 55,000 |
Acquisitions - Schedule of Supp
Acquisitions - Schedule of Supplemental Proforma Acquired Franchisee Store (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | $ 1,328,338 | $ 1,435,054 |
Total cost and expenses | 5,028,476 | 6,791,607 |
Loss from Operations | (3,700,138) | (5,356,553) |
Superfit Foods, LLC [Member] | Pro Forma [Member] | ||
Revenues | 1,835,838 | 1,865,979 |
Restaurant operating expenses | 2,322,412 | 1,915,505 |
Total cost and expenses | 5,482,877 | 7,177,761 |
Loss from Operations | $ (3,647,039) | $ (5,311,782) |
Loans Receivable (Details Narra
Loans Receivable (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Loans receivable | $ 5,148 | $ 3,390 |
Net of reserves for uncollectible loans | 61,275 | 55,000 |
Former Franchisee [Member] | ||
Loans receivable | 5,148 | 3,390 |
Net of reserves for uncollectible loans | $ 61,275 | $ 106,900 |
Loan original term | 10 years | |
Former Franchisee [Member] | Minimum [Member] | ||
Debt instrument, interest rate | 5.00% | |
Former Franchisee [Member] | Maximum [Member] | ||
Debt instrument, interest rate | 12.00% |
Loans Receivable - Schedule of
Loans Receivable - Schedule of Loans Receivables (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Loans receivable, net | $ 5,148 | $ 3,390 |
Less: current portion | (5,148) | (2,394) |
Loans receivable, non-current | $ 996 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Depreciation expense | $ 153,522 | $ 362,009 | |
Property and equipment written off | 99,313 | ||
Loss on disposal | 37,027 | ||
Accumulated depreciation | $ 832,740 | $ 741,504 | |
Property and Equipment [Member] | |||
Accumulated depreciation | $ 62,286 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Abstract] | ||
Furniture and equipment | $ 1,221,313 | $ 1,143,320 |
Vehicles | 55,000 | |
Leasehold improvements | 1,913,355 | 1,940,907 |
Property and equipment, gross | 3,189,668 | 3,084,227 |
Less: accumulated depreciation and amortization | (832,740) | (741,504) |
Property and equipment, net | $ 2,356,928 | $ 2,342,723 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 15,606 | $ 15,732 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Intangible assets, net beginning balance | $ 2,878,278 | |
SuperFit acquisition | 730,000 | |
Amortization expense | (15,606) | $ (15,732) |
Intangible assets, net ending balance | 3,592,672 | |
Trademark [Member] | ||
Intangible assets, net beginning balance | 2,524,000 | |
SuperFit acquisition | ||
Amortization expense | ||
Intangible assets, net ending balance | 2,524,000 | |
Franchise Agreements [Member] | ||
Intangible assets, net beginning balance | 354,278 | |
SuperFit acquisition | ||
Amortization expense | (12,638) | |
Intangible assets, net ending balance | $ 341,640 | |
Weighted average remaining amortization period at March 31, 2021 (in years) | 7 years 22 days | |
Trade Name [Member] | ||
Intangible assets, net beginning balance | ||
SuperFit acquisition | 45,000 | |
Amortization expense | (148) | |
Intangible assets, net ending balance | $ 44,852 | |
Weighted average remaining amortization period at March 31, 2021 (in years) | 4 years 11 months 23 days | |
Domain Name [Member] | ||
Intangible assets, net beginning balance | ||
SuperFit acquisition | 125,000 | |
Amortization expense | (411) | |
Intangible assets, net ending balance | $ 124,589 | |
Weighted average remaining amortization period at March 31, 2021 (in years) | 4 years 11 months 23 days | |
Customer List [Member] | ||
Intangible assets, net beginning balance | ||
SuperFit acquisition | 140,000 | |
Amortization expense | (460) | |
Intangible assets, net ending balance | $ 139,540 | |
Weighted average remaining amortization period at March 31, 2021 (in years) | 4 years 11 months 23 days | |
Proprietary Recipes [Member] | ||
Intangible assets, net beginning balance | ||
SuperFit acquisition | 160,000 | |
Amortization expense | (526) | |
Intangible assets, net ending balance | $ 159,474 | |
Weighted average remaining amortization period at March 31, 2021 (in years) | 4 years 11 months 23 days | |
Non-compete Agreement [Member] | ||
SuperFit acquisition | $ 260,000 | |
Amortization expense | (1,423) | |
Intangible assets, net ending balance | $ 258,577 | |
Weighted average remaining amortization period at March 31, 2021 (in years) | 2 years 11 months 23 days |
Accounts Payables and Accrued E
Accounts Payables and Accrued Expenses - Schedule of Accounts Payables and Accrued Expenses (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |||
Accounts payable | $ 675,863 | $ 692,966 | |
Accrued payroll | 204,486 | 78,667 | |
Accrued professional fees | 275,522 | 224,028 | |
Accrued board members fees | 21,000 | 36,697 | |
Accrued rent expense | 196,066 | 171,266 | |
Accrued compensation expense | [1] | 342,000 | |
Sales taxes payable | [2] | 233,713 | 231,177 |
Accrued interest | 29,446 | 25,222 | |
Other accrued expenses | 109,555 | 40,912 | |
Total Accounts Payable and Accrued Expenses | $ 2,087,651 | $ 1,500,935 | |
[1] | Included within accrued compensation expense is a liability of $342,000 related to 150,000 shares of common stock to be issued by the Company to a consultant for services. See Note 13 - Subsequent events - Common Stock for details related to the issuance of the stock. | ||
[2] | See Note 11 - Commitments and Contingencies -Taxes for detail related to delinquent sales taxes. |
Deferred Revenue - Schedule of
Deferred Revenue - Schedule of Deferred Revenue (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Franchise fees | $ 973,678 | $ 983,958 |
Unearned vendor rebates | 12,712 | 23,171 |
Less: Unearned vendor rebates, current | (12,712) | (23,171) |
Less: Franchise fees, current | (9,786) | (39,687) |
Deferred revenues, non-current | $ 963,892 | $ 944,271 |
Other Current Liabilities - Sch
Other Current Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Other Liabilities Disclosure [Abstract] | ||
Gift card liability | $ 93,163 | $ 91,034 |
Co-op advertising fund liability | 295,407 | 299,490 |
Advertising fund liability | 250,131 | 250,894 |
Other current liabilities | $ 638,701 | $ 641,418 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||
Convertible note payable, current | $ 82,458 | $ 82,458 | |
Repayment of debt | $ 550,000 | ||
Other notes payable | 1,258,199 | ||
Other Convertible Notes [Member] | |||
Debt Instrument [Line Items] | |||
Convertible note payable, current | 100,000 | $ 100,000 | |
Other Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Repayment of debt | $ 18,493 | ||
Debt instrument maturity date | Oct. 31, 2025 | ||
Other Notes Payable [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Debt interest percentage | 1.00% | ||
Other Notes Payable [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Debt interest percentage | 8.00% | ||
Former Parent [Member] | |||
Debt Instrument [Line Items] | |||
Convertible notes payable | $ 82,458 |
Notes Payable - Schedule of Out
Notes Payable - Schedule of Outstanding Debt (Details) | Mar. 31, 2021USD ($) |
Total debt | $ 1,258,199 |
03/31/2022 [Member] | |
Total debt | 88,993 |
03/31/2023 [Member] | |
Total debt | 960,914 |
03/31/2024 [Member] | |
Total debt | 102,114 |
03/31/2025 [Member] | |
Total debt | 82,668 |
03/31/2026 [Member] | |
Total debt | $ 23,510 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Mar. 22, 2021 | Mar. 08, 2021 | Mar. 08, 2021 | Feb. 07, 2021 | Jan. 23, 2020 | Nov. 19, 2019 | Mar. 07, 2019 | Jun. 06, 2018 | Mar. 27, 2018 | Mar. 31, 2021 | May 31, 2018 | Dec. 31, 2020 |
Debt instrument accrued interest | $ 29,446 | $ 25,222 | ||||||||||
Sales Taxes [Member] | ||||||||||||
Debt instrument accrued interest | 233,713 | $ 231,177 | ||||||||||
Resolute Contractors, Inc [Member] | ||||||||||||
Litigation settlement amount | $ 98,005 | |||||||||||
Note Holder [Member] | ||||||||||||
Convertible promissory notes | $ 100,000 | 100,000 | ||||||||||
Other costs | $ 171,035 | $ 171,035 | ||||||||||
Repayment of debt | $ 71,035 | |||||||||||
Debt instrument accrued interest | 24,082 | |||||||||||
Upon Completion of Agreement [Member] | ||||||||||||
Issuable for service | 30,000 | 40,000 | ||||||||||
Consulting Agreement [Member] | ||||||||||||
Issuable for service | 100,000 | 100,000 | ||||||||||
Shares issued for service | 150,000 | 70,000 | 60,000 | |||||||||
Marketing expense | $ 250,000 | |||||||||||
Litigations, Claims and Assessments [Member] | ||||||||||||
Litigation settlement amount | $ 130,185 | |||||||||||
Loss contingency seeking damages | $ 32,809 | |||||||||||
Accounts payable and accrued expenses | 30,000 | |||||||||||
Litigations, Claims and Assessments [Member] | American Restaurant, LLC [Member] | ||||||||||||
Litigation settlement amount | 160,000 | |||||||||||
Litigations, Claims and Assessments [Member] | American Restaurant, LLC [Member] | Investor [Member] | ||||||||||||
Litigation settlement amount | $ 531,250 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | Feb. 11, 2021 | Feb. 03, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Value of issued shares of common stock | $ 6,780,000 | |||
Stock-based compensation | $ 1,712,845 | 3,348,143 | ||
General and administrative expenses | $ 2,966,636 | $ 5,129,403 | ||
Board of Directors [Member] | ||||
Number of common stock shares issued | 20,000 | 12,711 | ||
Value of issued shares of common stock | $ 42,600 | |||
Consultant [Member] | ||||
Number of stock issued as compensation | 16,126 | |||
Consultant [Member] | Warrants [Member] | ||||
Stock-based compensation | $ 3,348,143 | |||
General and administrative expenses | 552 | |||
Various Executive Officer and Employee [Member] | Restricted Common Stock [Member] | ||||
Number of common stock shares issued | 221,783 | |||
Employees, Directors and Consultants [Member] | Restricted Common Stock [Member] | ||||
Stock-based compensation | 1,712,845 | |||
General and administrative expenses | $ 248 |
Equity - Schedule of Activity R
Equity - Schedule of Activity Related to Restricted Common Stock (Details) - Restricted Common Stock [Member] | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted Common Stock, Outstanding Beginning | shares | 1,200 |
Restricted Common Stock, Granted | shares | 221,783 |
Restricted Common Stock, Forfeited | shares | |
Restricted Common Stock, Vested | shares | (222,983) |
Restricted Common Stock, Outstanding Ending | shares | |
Weighted Average Grant Date Fair Value, Outstanding Beginning | $ / shares | $ 65.33 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 2.87 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | |
Weighted Average Grant Date Fair Value, Vested | $ / shares | (3.21) |
Weighted Average Grant Date Fair Value, Outstanding Ending | $ / shares |
Equity - Schedule of Option Act
Equity - Schedule of Option Activity (Details) - Options [Member] | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options, Outstanding Beginning | shares | 300,000 |
Number of Options, Issued | shares | |
Number of Options, Exercised | shares | |
Number of Options, Forfeited | shares | |
Number of Options, Outstanding Ending | shares | 300,000 |
Number of Options, Exercisable | shares | 300,000 |
Number of Options, Weighted Average Exercise Price, Outstanding Beginning | $ / shares | $ 3.33 |
Number of Options, Weighted Average Exercise Price, Issued | $ / shares | |
Number of Options, Weighted Average Exercise Price, Exercised | $ / shares | |
Number of Options, Weighted Average Exercise Price, Forfeited | $ / shares | |
Number of Options, Weighted Average Exercise Price, Outstanding Ending | $ / shares | 3.33 |
Number of Options, Weighted Average Exercise Price, Exercisable | $ / shares | $ 3.33 |
Number of Options, Weighted Average Remaining Life In Years, Outstanding Beginning | 1 year 1 month 6 days |
Number of Options, Weighted Average Remaining Life In Years, Outstanding Ending | 10 months 25 days |
Number of Options, Weighted Average Remaining Life In Years, Exercisable | 10 months 25 days |
Equity - Schedule of Warrants A
Equity - Schedule of Warrants Activity (Details) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of Warrants, Outstanding Beginning | shares | 2,582,857 |
Number of Warrants, Issued | shares | |
Number of Warrants, Exercised | shares | |
Number of Warrants, Forfeited/cancelled | shares | (22,496) |
Number of Warrants, Outstanding Ending | shares | 2,560,361 |
Number of Warrants, Exercisable | shares | 2,560,361 |
Weighted Average Exercise Price, Outstanding Beginning | $ / shares | $ 4.08 |
Weighted Average Exercise Price, Issued | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Forfeited/cancelled | $ / shares | 11.38 |
Weighted Average Exercise Price, Outstanding Ending | $ / shares | 4.02 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.08 |
Weighted Average Remaining Life In Years, Outstanding Beginning | 3 years 3 months 19 days |
Weighted Average Remaining Life In Years, Outstanding Ending | 3 years 1 month 6 days |
Weighted Average Remaining Life In Years, Exercisable | 3 years 1 month 6 days |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | May 14, 2021USD ($)Integershares | May 06, 2021USD ($)shares | Apr. 30, 2021USD ($)shares | Apr. 07, 2021USD ($)$ / sharesshares | Apr. 05, 2021$ / sharesshares | Mar. 31, 2020USD ($)shares | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Subsequent Event [Line Items] | ||||||||
Value of issued shares of common stock | $ 6,780,000 | |||||||
Cash | $ 2,009,650 | $ 4,195,932 | ||||||
Common Stock [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of common stock shares issued | shares | 1,540,000 | |||||||
Value of issued shares of common stock | $ 154 | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt instrument, term | 5 years 6 months | |||||||
Subsequent Event [Member] | Common Warrant [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of warrant purchase | shares | 4,115,227 | |||||||
Share issued price per share | $ / shares | $ 2.43 | |||||||
Warrant exercise price | $ / shares | $ 2.43 | |||||||
Subsequent Event [Member] | Pre-Funded Warrant [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of warrant purchase | shares | 2,865,227 | |||||||
Share issued price per share | $ / shares | $ 2.42 | |||||||
Warrant exercise price | $ / shares | $ 0.01 | |||||||
Subsequent Event [Member] | Private Placement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Warrant exercise price | $ / shares | $ 2.916 | |||||||
Subsequent Event [Member] | Private Placement [Member] | Alliance Global Partners [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Percentage of cash fee gross proceeds | 8.00% | |||||||
Warrant or right description | common stock purchase warrant to purchase shares of Common Stock in an amount equal to 4% of the Shares and shares of Common Stock issuable upon exercise of the Warrants sold in the Private Placement | |||||||
Subsequent Event [Member] | Private Placement [Member] | Common Stock [Member] | Alliance Global Partners [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of warrant purchase | shares | 164,609 | |||||||
Subsequent Event [Member] | Securities Purchase Agreements [Member] | Private Placement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of common stock shares issued | shares | 1,250,000 | |||||||
Stock issued during period, shares, purchase of assets | $ 10,000,000 | |||||||
Subsequent Event [Member] | Service Agreement [Member] | Consultant [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of common stock shares issued | shares | 150,000 | 10,000 | ||||||
Value of issued shares of common stock | $ 214,500 | $ 14,700 | ||||||
Subsequent Event [Member] | Members Interest Purchase Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of common stock shares issued | shares | 880,282 | |||||||
Value of issued shares of common stock | $ 1,250,000 | |||||||
Cash | 4,000,000 | |||||||
Notes payable | $ 730,000 | |||||||
Debt instrument, description | The Poke Note provides for the payment of principal and interest to be paid in 60 monthly installments consisting of 59 installments of $5,308.73 commencing June 1, 2021 and one installment of $535,855.79 due and payable in May 1, 2026. | |||||||
Trading days | Integer | 10 | |||||||
Subsequent Event [Member] | Members Interest Purchase Agreement [Member] | 59 Installments [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt instrument, periodic payment | $ 5,309 | |||||||
Subsequent Event [Member] | Members Interest Purchase Agreement [Member] | One Installments [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt instrument, periodic payment | $ 535,856 | |||||||
Subsequent Event [Member] | Intellectual Property License Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership percentage | 10.00% | |||||||
License revenue percentage | 50.00% |