ARC Group, Inc.

CIK:0001452872|SEC Filings

Consolidated Statements of Operations - USD ($)	12 Months Ended
Consolidated Statements of Operations - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Revenue:
Total net revenue	$ 29,091,024	$ 9,500,537
Operating expenses:
Cost of sales	9,705,951	3,248,801
Labor	9,579,783	2,801,867
Occupancy	1,452,731	308,295
Other operating expenses	6,541,157	1,840,661
Professional fees	525,065	796,473
Employee compensation expense	1,349,766	564,521
General and administrative expenses	1,922,422	718,563
Total operating expenses	31,076,875	10,279,181
Loss from operations	(1,985,851)	(778,644)
Other (expense) / income:
Interest expense	(1,016,079)	(230,256)
Income from insurance proceeds	219,005
Gain on bargain purchase		624,952
Other income	138,479	101,465
Total other (expense) / income	(658,595)	496,161
Net loss	$ (2,644,446)	$ (282,483)
Net loss per share - basic and fully diluted	$ (0.36)	$ (0.04)
Weighted average number of shares outstanding - basic and fully diluted	7,258,513	6,777,903
Restaurant Sales [Member]
Revenue:
Total net revenue	$ 28,234,826	$ 8,374,022
Franchise and Other Revenue [Member]
Revenue:
Total net revenue	856,198	922,124
Franchise and Other Revenue Related Party [Member]
Revenue:
Total net revenue		$ 204,391

Condensed Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities
Net loss	$ (2,644,446)	$ (282,483)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation expense	611,937	252,914
Amortization of operating lease right-of-use assets	330,430
Amortization of financing lease right-of-use assets	575,639
Amortization of intangible assets	3,768	2,275
Amortization of debt discount	(122,733)	9,548
Stock-based compensation expense	312,600	329,688
Gain on bargain purchase		(624,952)
Gain from insurance recoveries on impaired fixed assets	(100,000)
Changes in operating activities, net of acquisition of Fat Patty's concept:
Accounts receivable	(135,120)	39,057
Accounts receivable - related party		1,505
Ad fund receivable	(110)	26,337
Ad fund receivable - related party		2,280
Other receivables	(18,323)	(556,986)
Prepaid expenses	370,363	(34,582)
Inventory	109,784	(74,184)
Deposits	(70,947)
Other assets	5,348	(30,387)
Accounts payable and accrued liabilities	847,341	1,345,212
Accounts payable and accrued liabilities - related party	123,122	137,037
Settlement agreements payable	11,272	11,272
Accrued legal settlement	7,829	7,829
Deferred franchise fees	103,282	(131,244)
Gift card liabilities	9,570	48,102
Net cash provided by operating activities	330,606	478,238
Cash flows from investing activities
Repayments of notes receivable	3,180	28,108
Cash acquired in business acquisition		7,100
Insurance recoveries for impaired fixed assets	100,000
Contingent consideration		(144,326)
Purchases of fixed assets	(1,014,746)	(351,007)
Acquisition of WingHouse	(11,000,000)
Net cash used by investing activities	(11,911,566)	(460,125)
Cash flows from financing activities
Proceeds from issuance of notes payable	12,807,098
Proceeds from issuance of notes payable - related party	2,123,963	367,736
Repayments of notes payable - related party		(71,877)
Payments on operating lease liability	(149,499)
Payments on financing lease liability	(175,764)
Payments on capital lease obligation		(114,090)
Net cash provided by financing activities	14,605,798	181,769
Net decrease in cash and cash equivalents	3,024,838	199,882
Cash and cash equivalents, beginning of period	345,228	145,346
Cash and cash equivalents, end of period	3,370,066	345,228
Supplemental disclosure of cash flow information
Cash paid for interest	123,990	178,201
Cash paid for income taxes
Schedule of non-cash transactions
Adjustment to deferred franchise fees related to prior period		196,478
Preferred stock issued in exchange for common stock		4,496
Property and equipment acquired through accounts payable		226,000
Acquisition of Fat Patty's franchise with note payable and deferred compensation liability		852,000
Property and equipment acquired with capital lease		11,500,000
Acquisition of WingHouse concept with note payable and deferred compensation liability	18,374,000
Recognition of operating lease liability and right-of-use assets	45,975,202
Recognition of financing lease liability and right-of-use assets	$ 11,326,676

Consolidated Balance Sheets - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Assets
Cash and cash equivalents	$ 1,110,066	$ 345,228
Restricted cash	2,260,000
Accounts receivable, net	459,032	127,930
Ad funds receivable, net	10,610	10,500
Other receivables	36,751	556,986
Prepaid expenses	329,578	34,582
Inventory	846,971	211,025
Notes receivable, net	2,340	2,967
Other current assets	2,730	8,078
Total current assets	5,058,078	1,297,296
Deposits	356,067	49,421
Notes receivable, net of current portion		2,553
Intangible assets, net	6,162,797	786,565
Property and equipment, net	7,661,856	12,537,502
Operating lease right-of-use assets	45,420,680
Financing lease right-of-use assets, net	10,175,399
Goodwill	11,246,741
Total assets	86,081,618	14,673,337
Liabilities and stockholders' equity / (deficit)
Accounts payable and accrued expenses	6,841,062	1,478,745
Accounts payable and accrued expenses - related party	1,448,232	231,187
Other payables	5,540	544,098
Accrued interest	152,227	29,105
Settlement agreements payable	287,541	276,269
Accrued legal contingency	171,593	163,764
Contingent consideration	55,356	55,356
Deferred franchise fees	24,000	13,718
Gift card liabilities	91,526	81,956
Operating lease liability	580,646
Financing lease liability	202,944	175,764
Seller payable	312,000	312,000
Notes payable, net	3,253,337
Notes payable - related party, net	2,721,408	720,178
Put option	1,536,911
Total current liabilities	17,684,323	4,082,140
Deferred franchise fees, net of current portion	144,516	51,516
Operating lease liability, net of current portion	44,857,127
Financing lease liability, net of current portion	11,007,202	11,210,146
Notes payable, net of current portion	10,553,761
Total liabilities	84,246,929	15,343,802
Stockholders' equity / (deficit):
Class A common stock - $0.01 par value: 100,000,000 shares authorized, 7,429,621 and 6,680,065 shares issued and outstanding at December 31, 2019 and 2018, respectively	74,296	66,801
Additional paid-in capital	4,786,074	4,490,338
Stock subscriptions payable	3,024,822	15,453
Non-controlling interest in ARC WingHouse	1,837,000
Accumulated deficit	(7,891,999)	(5,247,553)
Total stockholders' equity / (deficit)	1,834,689	(670,465)
Total liabilities and stockholders' equity / (deficit)	86,081,618	14,673,337
Series A Convertible Preferred Stock [Member]
Stockholders' equity / (deficit):
Preferred Stock, value	4,496	4,496
Total stockholders' equity / (deficit)	4,496	4,496
Series B Convertible Preferred Stock [Member]
Stockholders' equity / (deficit):
Preferred Stock, value
Total stockholders' equity / (deficit)