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ARC Group, Inc. – ‘10-Q’ for 9/30/19 – ‘EX-101.INS’

On:  Thursday, 11/14/19, at 11:50am ET   ·   For:  9/30/19   ·   Accession #:  1493152-19-17269   ·   File #:  0-54226

Previous ‘10-Q’:  ‘10-Q’ on 8/14/19 for 6/30/19   ·   Latest ‘10-Q’:  This Filing

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

11/14/19  ARC Group, Inc.                   10-Q        9/30/19   90:6.4M                                   M2 Compliance/FA

Quarterly Report   —   Form 10-Q   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    583K 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     33K 
 3: EX-31.2     Certification -- §302 - SOA'02                      HTML     33K 
 4: EX-32.1     Certification -- §906 - SOA'02                      HTML     28K 
54: R1          Document and Entity Information                     HTML     56K 
25: R2          Condensed Consolidated Balance Sheets               HTML    145K 
34: R3          Condensed Consolidated Balance Sheets               HTML     45K 
                (Parenthetical)                                                  
83: R4          Condensed Consolidated Statements of Operations     HTML     95K 
                (Unaudited)                                                      
53: R5          Condensed Consolidated Statements of Cash Flows     HTML    164K 
                (Unaudited)                                                      
24: R6          Description of Business                             HTML     34K 
33: R7          Basis of Presentation and Significant Accounting    HTML     85K 
                Policies                                                         
81: R8          Net (Loss) / Income Per Share                       HTML     37K 
56: R9          Acquisition of Fat Patty's                          HTML     52K 
70: R10         Agreement to Acquire Tilted Kilt                    HTML     30K 
78: R11         Inventory                                           HTML     30K 
47: R12         Property and Equipment, Net                         HTML     34K 
16: R13         Intangible Assets                                   HTML     33K 
71: R14         Fair Value Measurements                             HTML     38K 
79: R15         Notes Receivable                                    HTML     34K 
48: R16         Debt Obligations                                    HTML     36K 
17: R17         Leases                                              HTML     52K 
69: R18         Capital Stock                                       HTML     80K 
80: R19         Stock Options and Warrants                          HTML     29K 
32: R20         Stock Compensation Plans                            HTML     30K 
23: R21         Commitments and Contingencies                       HTML     84K 
52: R22         Related-Party Transactions                          HTML     52K 
82: R23         Judgments in Legal Proceedings                      HTML     32K 
35: R24         Segment Reporting                                   HTML     51K 
26: R25         Restatement of Previously Issued Condensed          HTML     38K 
                Consolidated Financial Statements                                
55: R26         Subsequent Events                                   HTML     53K 
84: R27         Basis of Presentation and Significant Accounting    HTML    107K 
                Policies (Policies)                                              
36: R28         Basis of Presentation and Significant Accounting    HTML     51K 
                Policies (Tables)                                                
22: R29         Net (Loss) / Income Per Share (Tables)              HTML     36K 
20: R30         Acquisition of Fat Patty's (Tables)                 HTML     41K 
51: R31         Inventory (Tables)                                  HTML     32K 
77: R32         Property and Equipment, Net (Tables)                HTML     32K 
68: R33         Intangible Assets (Tables)                          HTML     30K 
19: R34         Fair Value Measurements (Tables)                    HTML     31K 
50: R35         Leases (Tables)                                     HTML     56K 
76: R36         Capital Stock (Tables)                              HTML     54K 
67: R37         Commitments and Contingencies (Tables)              HTML     30K 
21: R38         Segment Reporting (Tables)                          HTML     47K 
49: R39         Restatement of Previously Issued Condensed          HTML     36K 
                Consolidated Financial Statements (Tables)                       
28: R40         Description of Business (Details Narrative)         HTML     36K 
39: R41         Basis of Presentation and Significant Accounting    HTML     72K 
                Policies (Details Narrative)                                     
90: R42         Basis of Presentation and Significant Accounting    HTML     49K 
                Policies - Schedule of Disaggregation of Revenue                 
                (Details)                                                        
61: R43         Basis of Presentation and Significant Accounting    HTML     33K 
                Policies - Schedule of Deferred Franchise Fees                   
                Under Contract Balances (Details)                                
27: R44         Basis of Presentation and Significant Accounting    HTML     40K 
                Policies - Schedule of Estimated Franchise Fees to               
                be Recognized in the Future Related to Performance               
                Obligations (Details)                                            
38: R45         Net (Loss) / Income Per Share - Schedule of Basic   HTML     52K 
                and Diluted Net (Loss) / Income (Details)                        
89: R46         Acquisition of Fat Patty's (Details Narrative)      HTML     97K 
60: R47         Acquisition of Fat Patty's - Schedule of Assets     HTML     58K 
                Acquired and Liabilities Assumed (Details)                       
29: R48         Acquisition of Fat Patty's - Schedule of Pro Forma  HTML     41K 
                Financial Information (Details)                                  
37: R49         Agreement to Acquire Tilted Kilt (Details           HTML     43K 
                Narrative)                                                       
42: R50         Inventory - Schedule of Inventory (Details)         HTML     33K 
12: R51         Property and Equipment, Net (Detail Narrative)      HTML     35K 
64: R52         Property and Equipment, Net - Schedule of           HTML     42K 
                Property, Plant and Equipment (Details)                          
74: R53         Intangible Assets (Details Narrative)               HTML     46K 
43: R54         Intangible Assets - Schedule of Future              HTML     42K 
                Amortization Expense Recognized from Intangible                  
                Assets (Details)                                                 
13: R55         Fair Value Measurements (Details Narrative)         HTML     43K 
65: R56         Fair Value Measurements - Schedule of Equity        HTML     37K 
                Investment in Seediv Within the Fair Value                       
                Hierarchy Utilized to Measure Fair Value on a                    
                Recurring Basis (Details)                                        
75: R57         Notes Receivable (Details Narrative)                HTML     91K 
44: R58         Debt Obligations (Details Narrative)                HTML     74K 
11: R59         Leases (Details Narrative)                          HTML     31K 
58: R60         Leases - Schedule of Operating and Financing Lease  HTML     42K 
                Assets and Liabilities (Details)                                 
86: R61         Leases - Schedule of Supplemental Cash Flow         HTML     32K 
                Information Related to Leases (Details)                          
40: R62         Leases - Schedule of Components Lease Cost Related  HTML     36K 
                (Details)                                                        
30: R63         Leases - Schedule of Weighted Average Lease Term    HTML     35K 
                and Discount Rates for Operating and Financing                   
                Leases (Details)                                                 
59: R64         Leases - Schedule of Maturity of Operating and      HTML     65K 
                Financing Lease Liabilities (Details)                            
87: R65         Capital Stock (Details Narrative)                   HTML    160K 
41: R66         Capital Stock - Schedule of Changes in              HTML    102K 
                Stockholders' Equity (Details)                                   
31: R67         Stock Options and Warrants (Details Narrative)      HTML     40K 
57: R68         Stock Compensation Plans (Details Narrative)        HTML     36K 
88: R69         Commitments and Contingencies (Details Narrative)   HTML    310K 
73: R70         Commitments and Contingencies - Schedule of Future  HTML     47K 
                Minimum Annual Payments Under the Sponsorship                    
                Agreement (Details)                                              
63: R71         Related-Party Transactions (Details Narrative)      HTML    103K 
15: R72         Judgments in Legal Proceedings (Details Narrative)  HTML     60K 
46: R73         Segment Reporting (Details Narrative)               HTML     31K 
72: R74         Segment Reporting - Schedule of Segment Reporting   HTML     53K 
                Financial Information (Details)                                  
62: R75         Restatement of Previously Issued Condensed          HTML     38K 
                Consolidated Financial Statements (Detail                        
                Narrative)                                                       
14: R76         Restatement of Previously Issued Condensed          HTML     41K 
                Consolidated Financial Statements - Schedule of                  
                Consolidated Statement of Operation (Details)                    
45: R77         Subsequent Events (Detail Narrative)                HTML    122K 
18: XML         IDEA XML File -- Filing Summary                      XML    170K 
66: EXCEL       IDEA Workbook of Financial Reports                  XLSX    112K 
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 7: EX-101.CAL  XBRL Calculations -- rlly-20190930_cal               XML    251K 
 8: EX-101.DEF  XBRL Definitions -- rlly-20190930_def                XML    917K 
 9: EX-101.LAB  XBRL Labels -- rlly-20190930_lab                     XML   1.37M 
10: EX-101.PRE  XBRL Presentations -- rlly-20190930_pre              XML   1.08M 
 6: EX-101.SCH  XBRL Schema -- rlly-20190930                         XSD    236K 
85: ZIP         XBRL Zipped Folder -- 0001493152-19-017269-xbrl      Zip    197K 


‘EX-101.INS’   —   XBRL Instance — rlly-20190930


This Exhibit is an XBRL XML File.


                                                                                                                                                                                
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<us-gaap:ProceedsFromRelatedPartyDebt contextRef="From2018-08-29to2018-08-30_custom_SeenuGKasturiMember_custom_FatPattyMember" unitRef="USD" decimals="0"> 622929 </us-gaap:ProceedsFromRelatedPartyDebt>
<us-gaap:ProceedsFromRelatedPartyDebt contextRef="From2019-01-01to2019-09-30_custom_BlueVictoryHoldingsIncMember" unitRef="USD" decimals="0"> 1540886 </us-gaap:ProceedsFromRelatedPartyDebt>
<us-gaap:ProceedsFromRelatedPartyDebt contextRef="From2018-08-29to2018-08-30_custom_SecuredConvertiblePromissoryNoteMember_custom_SeenuGKasturiMember" unitRef="USD" decimals="0"> 622929 </us-gaap:ProceedsFromRelatedPartyDebt>
<us-gaap:ProceedsFromRelatedPartyDebt contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="USD" decimals="0"> 106410 </us-gaap:ProceedsFromRelatedPartyDebt>
<us-gaap:ProceedsFromRelatedPartyDebt contextRef="From2018-01-01to2018-12-31_custom_BlueVictoryHoldingsIncMember" unitRef="USD" decimals="0"> 277707 </us-gaap:ProceedsFromRelatedPartyDebt>
<us-gaap:LeaseExpirationDate1 contextRef="From2019-01-01to2019-09-30_custom_StoreCapitalAcquisitionsLlcMember_custom_MasterLeaseAgreementMember"> 2038-08-31 </us-gaap:LeaseExpirationDate1>
<us-gaap:LeaseExpirationDate1 contextRef="From2015-01-01to2015-01-31_custom_CorporateHeadquartersMember"> 2017-12-31 </us-gaap:LeaseExpirationDate1>
<us-gaap:LeaseExpirationDate1 contextRef="From2018-01-01to2018-01-31_custom_CorporateHeadquartersMember"> 2018-12-31 </us-gaap:LeaseExpirationDate1>
<us-gaap:LeaseExpirationDate1 contextRef="From2017-03-29to2017-04-01_custom_LeaseAgreementMember_custom_DWGAcquisitionsLLCMember"> 2023-03-31 </us-gaap:LeaseExpirationDate1>
<us-gaap:LeaseExpirationDate1 contextRef="From2015-06-29to2015-07-01_custom_LeaseAgreementMember_custom_PanamaCityBeachDicksWingsRestaurantMember"> 2018-06-30 </us-gaap:LeaseExpirationDate1>
<us-gaap:LeaseExpirationDate1 contextRef="From2018-08-29to2018-08-30_custom_MasterLeaseMember"> 2038-08-31 </us-gaap:LeaseExpirationDate1>
<us-gaap:LeaseExpirationDate1 contextRef="From2017-11-01to2017-11-30_custom_SponsorshipAgreementMember_custom_JacksonvilleJaguarsLLCMember"> 2023-02-28 </us-gaap:LeaseExpirationDate1>
<us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment contextRef="AsOf2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 614295 </us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment>
<us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment contextRef="AsOf2017-10-04_custom_SeedivLLCMember_custom_RacingQsrLlcMember" unitRef="USD" decimals="0"> 2000000 </us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2016-07-31_custom_FranchiseesMember_custom_LineOfCreditAgreementMember_srt_MaximumMember" unitRef="USD" decimals="0"> 28136 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2016-09-30_custom_FranchiseesMember_custom_SecondLineOfCreditAgreementMember_srt_MaximumMember" unitRef="USD" decimals="0"> 25000 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2017-10-31_custom_FranchiseesMember_custom_NotesReceivableTwoMember" unitRef="USD" decimals="0"> 7659 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2017-12-31_custom_BlueVictoryHoldingsIncMember" unitRef="USD" decimals="0"> 30503 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2019-09-30_custom_BlueVictoryHoldingsIncMember" unitRef="USD" decimals="0"> 263335 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2017-12-31_custom_PromissoryNotesMember_custom_SeedivLlcMember_srt_AffiliatedEntityMember" unitRef="USD" decimals="0"> 216469 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2019-09-30_custom_MembershipInterestPurchaseAgreementMember_custom_SDAHoldingsLLCMember_custom_SeenuGKasturiMember" unitRef="USD" decimals="0"> 2500000 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2018-12-31_custom_BlueVictoryHoldingsIncMember" unitRef="USD" decimals="0"> 236333 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2016-06-30_custom_FranchiseesMember_custom_PromissoryNotesMember" unitRef="USD" decimals="0"> 25000 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2019-06-30_custom_FranchiseesOneMember" unitRef="USD" decimals="0"> 15000 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2019-10-11_us-gaap_SubsequentEventMember" unitRef="USD" decimals="0"> 1000000 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:DebtInstrumentFaceAmount contextRef="AsOf2019-10-11_us-gaap_SubsequentEventMember_custom_ARCWingHouseLLCMember_custom_CityNationalBankMember" unitRef="USD" decimals="0"> 12250000 </us-gaap:DebtInstrumentFaceAmount>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2018-12-31" unitRef="USD" decimals="0"> 786565 </us-gaap:FiniteLivedIntangibleAssetsNet>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 783739 </us-gaap:FiniteLivedIntangibleAssetsNet>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2018-08-30_us-gaap_TradeNamesMember_custom_FatPattyMember" unitRef="USD" decimals="0"> 770000 </us-gaap:FiniteLivedIntangibleAssetsNet>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2018-08-30_custom_NoncompeteAgreementMember_custom_FatPattyMember" unitRef="USD" decimals="0"> 18840 </us-gaap:FiniteLivedIntangibleAssetsNet>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2018-08-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 788840 </us-gaap:FiniteLivedIntangibleAssetsNet>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2019-09-30_us-gaap_FiniteLivedIntangibleAssetsMember" unitRef="USD" decimals="0"> 13739 </us-gaap:FiniteLivedIntangibleAssetsNet>
<us-gaap:SalariesWagesAndOfficersCompensation contextRef="From2013-01-20to2013-01-22_custom_EmploymentAgreementMember_custom_RichardWAkamMember" unitRef="USD" decimals="0"> 150000 </us-gaap:SalariesWagesAndOfficersCompensation>
<us-gaap:SalariesWagesAndOfficersCompensation contextRef="From2017-01-17to2017-01-18_custom_EmploymentAgreementMember_custom_SeenuGKasturiMember" unitRef="USD" decimals="0"> 80000 </us-gaap:SalariesWagesAndOfficersCompensation>
<RLLY:TermOfAgreement contextRef="From2013-01-20to2013-01-22_custom_EmploymentAgreementMember_custom_RichardWAkamMember"> P1Y </RLLY:TermOfAgreement>
<RLLY:TermOfAgreement contextRef="From2018-12-30to2019-01-02_custom_EmploymentAgreementMember_custom_SeenuGKasturiMember"> P3Y </RLLY:TermOfAgreement>
<us-gaap:StockIssuedDuringPeriodValueShareBasedCompensationGross contextRef="From2013-01-20to2013-01-22_custom_EmploymentAgreementMember_custom_RichardWAkamMember" unitRef="USD" decimals="0"> 50000 </us-gaap:StockIssuedDuringPeriodValueShareBasedCompensationGross>
<us-gaap:StockIssuedDuringPeriodValueShareBasedCompensationGross contextRef="From2013-01-21to2013-01-22_custom_EmploymentAgreementMember" unitRef="USD" decimals="0"> 50000 </us-gaap:StockIssuedDuringPeriodValueShareBasedCompensationGross>
<RLLY:SharesIssuedDuringPeriodNumberOfAdditionalSharesIssuedUnderAgreement contextRef="From2013-01-20to2013-01-22_custom_EmploymentAgreementMember_custom_RichardWAkamMember" unitRef="USD" decimals="0"> 50000 </RLLY:SharesIssuedDuringPeriodNumberOfAdditionalSharesIssuedUnderAgreement>
<us-gaap:StockIssuedDuringPeriodSharesShareBasedCompensationGross contextRef="From2013-01-20to2013-01-22_custom_EmploymentAgreementMember_custom_RichardWAkamMember" unitRef="Shares" decimals="INF"> 71429 </us-gaap:StockIssuedDuringPeriodSharesShareBasedCompensationGross>
<RLLY:AdditionalRenewalTermOfAgreement contextRef="From2013-01-20to2013-01-22_custom_EmploymentAgreementMember_custom_RichardWAkamMember"> P1Y </RLLY:AdditionalRenewalTermOfAgreement>
<us-gaap:LeaseAndRentalExpense contextRef="From2015-01-01to2015-01-31_custom_CorporateHeadquartersMember" unitRef="USD" decimals="0"> 1806 </us-gaap:LeaseAndRentalExpense>
<us-gaap:LeaseAndRentalExpense contextRef="From2018-01-01to2018-01-31_custom_CorporateHeadquartersMember" unitRef="USD" decimals="0"> 2063 </us-gaap:LeaseAndRentalExpense>
<us-gaap:LeaseAndRentalExpense contextRef="From2018-11-14to2018-11-15_custom_NewCorporateHeadquartersMember" unitRef="USD" decimals="0"> 4000 </us-gaap:LeaseAndRentalExpense>
<us-gaap:LeaseAndRentalExpense contextRef="From2013-10-01to2013-10-31_custom_DWGAcquisitionsLLCMember" unitRef="USD" decimals="0"> 1100 </us-gaap:LeaseAndRentalExpense>
<us-gaap:LeaseAndRentalExpense contextRef="From2017-03-29to2017-04-01_custom_LeaseAgreementMember_custom_DWGAcquisitionsLLCMember" unitRef="USD" decimals="0"> 7035 </us-gaap:LeaseAndRentalExpense>
<us-gaap:LeaseAndRentalExpense contextRef="From2016-12-18to2016-12-20_custom_LeaseAgreementMember_custom_YoungermanCircleRestaurantMember" unitRef="USD" decimals="0"> 10000 </us-gaap:LeaseAndRentalExpense>
<us-gaap:LeaseAndRentalExpense contextRef="From2015-06-29to2015-07-01_custom_LeaseAgreementMember_custom_PanamaCityBeachDicksWingsRestaurantMember" unitRef="USD" decimals="0"> 5000 </us-gaap:LeaseAndRentalExpense>
<us-gaap:LeaseAndRentalExpense contextRef="From2015-06-29to2015-07-01_custom_PanamaCityBeachDicksWingsRestaurantMember" unitRef="USD" decimals="0"> 3000 </us-gaap:LeaseAndRentalExpense>
<us-gaap:LeaseAndRentalExpense contextRef="From2018-09-24to2018-09-25_custom_LeaseAgreementMember_custom_GonzalezTiltedKiltRestaurantMember" unitRef="USD" decimals="0"> 12000 </us-gaap:LeaseAndRentalExpense>
<us-gaap:LeaseAndRentalExpense contextRef="From2018-08-29to2018-08-30_custom_MasterLeaseMember" unitRef="USD" decimals="0"> 876875 </us-gaap:LeaseAndRentalExpense>
<RLLY:PercentageIncreaseInAdditionalAnnualRentPayment contextRef="From2013-10-01to2013-10-31_custom_DWGAcquisitionsLLCMember" unitRef="Percentage" decimals="INF"> 0.06 </RLLY:PercentageIncreaseInAdditionalAnnualRentPayment>
<RLLY:PercentageIncreaseInAdditionalAnnualRentPayment contextRef="From2017-12-30to2017-12-31_custom_DWAGValdostaLLCMember" unitRef="Percentage" decimals="INF"> 0.06 </RLLY:PercentageIncreaseInAdditionalAnnualRentPayment>
<RLLY:PercentageIncreaseInAdditionalAnnualRentPayment contextRef="From2015-06-29to2015-07-01_custom_LeaseAgreementMember_custom_PanamaCityBeachDicksWingsRestaurantMember" unitRef="Percentage" decimals="INF"> 0.06 </RLLY:PercentageIncreaseInAdditionalAnnualRentPayment>
<RLLY:PercentageIncreaseInAdditionalAnnualRentPayment contextRef="From2018-04-29to2018-05-01_custom_LeaseAgreementMember_custom_TallahasseeDicksWingsRestaurantMember" unitRef="Percentage" decimals="INF"> 0.06 </RLLY:PercentageIncreaseInAdditionalAnnualRentPayment>
<us-gaap:LesseeOperatingLeaseTermOfContract contextRef="AsOf2013-10-31_custom_DWGAcquisitionsLLCMember"> P53M </us-gaap:LesseeOperatingLeaseTermOfContract>
<us-gaap:LesseeOperatingLeaseTermOfContract contextRef="AsOf2014-05-31_custom_LeaseAgreementMember_custom_YoungermanCircleRestaurantMember"> P10Y </us-gaap:LesseeOperatingLeaseTermOfContract>
<us-gaap:LesseeOperatingLeaseTermOfContract contextRef="AsOf2016-12-20_custom_YoungermanCircleRestaurantMember_custom_LeaseAgreementMember"> P20Y </us-gaap:LesseeOperatingLeaseTermOfContract>
<us-gaap:LesseeOperatingLeaseTermOfContract contextRef="AsOf2017-12-31_custom_DWAGValdostaLLCMember_custom_LeaseAgreementMember"> P5Y </us-gaap:LesseeOperatingLeaseTermOfContract>
<us-gaap:LesseeOperatingLeaseTermOfContract contextRef="AsOf2015-07-01_custom_LeaseAgreementMember_custom_PanamaCityBeachDicksWingsRestaurantMember"> P3Y </us-gaap:LesseeOperatingLeaseTermOfContract>
<us-gaap:LesseeOperatingLeaseTermOfContract contextRef="AsOf2018-05-01_custom_LeaseAgreementMember_custom_TallahasseeDicksWingsRestaurantMember"> P10Y </us-gaap:LesseeOperatingLeaseTermOfContract>
<us-gaap:LesseeOperatingLeaseTermOfContract contextRef="AsOf2018-09-25_custom_LeaseAgreementMember_custom_GonzalezTiltedKiltRestaurantMember"> P10Y </us-gaap:LesseeOperatingLeaseTermOfContract>
<us-gaap:LesseeOperatingLeaseTermOfContract contextRef="AsOf2013-07-31_custom_SponsorshipAgreementMember_custom_JacksonvilleJaguarsLLCMember"> P3Y </us-gaap:LesseeOperatingLeaseTermOfContract>
<us-gaap:LesseeOperatingLeaseTermOfContract contextRef="AsOf2017-11-30_custom_SponsorshipAgreementMember_custom_JacksonvilleJaguarsLLCMember"> P5Y </us-gaap:LesseeOperatingLeaseTermOfContract>
<us-gaap:LesseeOperatingLeaseRenewalTerm contextRef="AsOf2013-10-31_custom_DWGAcquisitionsLLCMember"> P60M </us-gaap:LesseeOperatingLeaseRenewalTerm>
<us-gaap:LesseeOperatingLeaseRenewalTerm contextRef="AsOf2017-04-01_custom_LeaseAgreementMember_custom_DWGAcquisitionsLLCMember"> P60M </us-gaap:LesseeOperatingLeaseRenewalTerm>
<us-gaap:LesseeOperatingLeaseRenewalTerm contextRef="AsOf2014-05-31_custom_LeaseAgreementMember_custom_YoungermanCircleRestaurantMember"> P1Y </us-gaap:LesseeOperatingLeaseRenewalTerm>
<us-gaap:LesseeOperatingLeaseRenewalTerm contextRef="AsOf2016-12-20_custom_YoungermanCircleRestaurantMember_custom_LeaseAgreementMember"> P5Y </us-gaap:LesseeOperatingLeaseRenewalTerm>
<us-gaap:LesseeOperatingLeaseRenewalTerm contextRef="AsOf2017-12-31_custom_DWAGValdostaLLCMember_custom_LeaseAgreementMember"> P5Y </us-gaap:LesseeOperatingLeaseRenewalTerm>
<us-gaap:LesseeOperatingLeaseRenewalTerm contextRef="AsOf2015-07-01_custom_LeaseAgreementMember_custom_PanamaCityBeachDicksWingsRestaurantMember"> P3Y </us-gaap:LesseeOperatingLeaseRenewalTerm>
<us-gaap:LesseeOperatingLeaseRenewalTerm contextRef="AsOf2018-05-01_custom_LeaseAgreementMember_custom_TallahasseeDicksWingsRestaurantMember"> P5Y </us-gaap:LesseeOperatingLeaseRenewalTerm>
<us-gaap:LesseeOperatingLeaseRenewalTerm contextRef="AsOf2018-09-25_custom_LeaseAgreementMember_custom_GonzalezTiltedKiltRestaurantMember"> P5Y </us-gaap:LesseeOperatingLeaseRenewalTerm>
<us-gaap:LesseeOperatingLeaseRenewalTerm contextRef="AsOf2015-07-31_custom_SponsorshipAgreementMember_custom_JacksonvilleJaguarsLLCMember"> P2Y </us-gaap:LesseeOperatingLeaseRenewalTerm>
<us-gaap:LesseeOperatingLeaseRenewalTerm contextRef="AsOf2019-09-30_srt_MinimumMember"> P3Y </us-gaap:LesseeOperatingLeaseRenewalTerm>
<us-gaap:LesseeOperatingLeaseRenewalTerm contextRef="AsOf2019-09-30_srt_MaximumMember"> P5Y </us-gaap:LesseeOperatingLeaseRenewalTerm>
<us-gaap:AreaOfLand contextRef="AsOf2017-04-01_custom_LeaseAgreementMember_custom_DWGAcquisitionsLLCMember" unitRef="SquareFeet" decimals="INF"> 3400 </us-gaap:AreaOfLand>
<RLLY:InitialBaseRentPaymentPercentageOfNetSales contextRef="From2014-05-01to2014-05-31_custom_YoungermanCircleRestaurantMember_custom_LeaseAgreementMember" unitRef="Percentage" decimals="INF"> 0.07 </RLLY:InitialBaseRentPaymentPercentageOfNetSales>
<RLLY:InitialBaseRentPaymentPercentageOfNetSales contextRef="From2016-12-18to2016-12-20_custom_LeaseAgreementMember_custom_YoungermanCircleRestaurantMember" unitRef="Percentage" decimals="INF"> 0.075 </RLLY:InitialBaseRentPaymentPercentageOfNetSales>
<RLLY:NumberOfRentPeriod contextRef="From2016-12-18to2016-12-20_custom_LeaseAgreementMember_custom_YoungermanCircleRestaurantMember" unitRef="RentPeriod" decimals="INF"> 13 </RLLY:NumberOfRentPeriod>
<us-gaap:LesseeOperatingLeaseDescription contextRef="From2019-01-01to2019-09-30"> The Company's real estate leases include one or more options to renew, with renewal terms that can extend the lease term from three to five years or more. </us-gaap:LesseeOperatingLeaseDescription>
<us-gaap:LesseeOperatingLeaseDescription contextRef="From2016-12-18to2016-12-20_custom_LeaseAgreementMember_custom_YoungermanCircleRestaurantMember"> The lease provides for rent payments to be made by the Company for each of 13 rent periods per year, with each rent period comprised of four weeks. The lease provides for an initial base rent payment equal to the greater of: (i) $10,000 per rent period, or (ii) 7.5% of the Youngerman Circle Restaurant's net sales for the applicable rent period. Commencing on the fifth (5th) anniversary and continuing every five years thereafter, the base rent will be equal to the sum of: (i) the average base rent previously in effect for the preceding five-year period, and (ii) the product of such previous average base rent multiplied by 7.5%. The lease has an initial term of 20 years and provides the Company with an option to extend the lease for two additional five-year periods. </us-gaap:LesseeOperatingLeaseDescription>
<us-gaap:LesseeOperatingLeaseDescription contextRef="From2018-04-29to2018-05-01_custom_LeaseAgreementMember_custom_TallahasseeDicksWingsRestaurantMember"> DWAG has the right to terminate the lease at the end of the 42nd month of the initial term in the event if gross sales during the period commencing on the first day of the 25th month of the initial term and ending on the last day of the 36th month of the initial term are less than $1,400,000 </us-gaap:LesseeOperatingLeaseDescription>
<us-gaap:LesseeOperatingLeaseDescription contextRef="From2018-08-29to2018-08-30_custom_MasterLeaseMember"> (i) 1.75%, or (ii) 1.25 times the change in the Consumer Price Index. </us-gaap:LesseeOperatingLeaseDescription>
<us-gaap:OperatingLeasesFutureMinimumPaymentsDueInTwoYears contextRef="AsOf2017-12-31_custom_DWAGValdostaLLCMember_custom_LeaseAgreementMember" unitRef="USD" decimals="0"> 3333 </us-gaap:OperatingLeasesFutureMinimumPaymentsDueInTwoYears>
<us-gaap:OperatingLeasesFutureMinimumPaymentsDueInTwoYears contextRef="AsOf2019-09-30_custom_SponsorshipAgreementMember" unitRef="USD" decimals="0"> 794000 </us-gaap:OperatingLeasesFutureMinimumPaymentsDueInTwoYears>
<us-gaap:OperatingLeasesFutureMinimumPaymentsDueInThreeYears contextRef="AsOf2017-12-31_custom_DWAGValdostaLLCMember_custom_LeaseAgreementMember" unitRef="USD" decimals="0"> 5000 </us-gaap:OperatingLeasesFutureMinimumPaymentsDueInThreeYears>
<us-gaap:OperatingLeasesFutureMinimumPaymentsDueInThreeYears contextRef="AsOf2019-09-30_custom_SponsorshipAgreementMember" unitRef="USD" decimals="0"> 794000 </us-gaap:OperatingLeasesFutureMinimumPaymentsDueInThreeYears>
<RLLY:AnnualGrossSalesOnRestaurant contextRef="From2017-12-30to2017-12-31_custom_DWAGValdostaLLCMember" unitRef="USD" decimals="0"> 1000000 </RLLY:AnnualGrossSalesOnRestaurant>
<RLLY:AnnualGrossSalesOnRestaurant contextRef="From2015-06-29to2015-07-01_custom_LeaseAgreementMember_custom_PanamaCityBeachDicksWingsRestaurantMember" unitRef="USD" decimals="0"> 1200000 </RLLY:AnnualGrossSalesOnRestaurant>
<RLLY:AnnualGrossSalesOnRestaurant contextRef="From2018-04-29to2018-05-01_custom_LeaseAgreementMember_custom_TallahasseeDicksWingsRestaurantMember" unitRef="USD" decimals="0"> 1400000 </RLLY:AnnualGrossSalesOnRestaurant>
<us-gaap:OperatingLeasesFutureMinimumPaymentsRemainderOfFiscalYear contextRef="AsOf2018-05-01_custom_LeaseAgreementMember_custom_TallahasseeDicksWingsRestaurantMember" unitRef="USD" xsi:nil="true"/>
<us-gaap:OperatingLeasesFutureMinimumPaymentsRemainderOfFiscalYear contextRef="AsOf2019-09-30_custom_SponsorshipAgreementMember" unitRef="USD" decimals="0"> 166667 </us-gaap:OperatingLeasesFutureMinimumPaymentsRemainderOfFiscalYear>
<us-gaap:TenantImprovements contextRef="AsOf2018-05-01_custom_LeaseAgreementMember_custom_TallahasseeDicksWingsRestaurantMember" unitRef="USD" decimals="0"> 250000 </us-gaap:TenantImprovements>
<us-gaap:IncreaseDecreaseInLeaseAcquisitionCosts contextRef="From2018-09-24to2018-09-25_custom_LeaseAgreementMember_custom_GonzalezTiltedKiltRestaurantMember" unitRef="USD" decimals="0"> 17600 </us-gaap:IncreaseDecreaseInLeaseAcquisitionCosts>
<us-gaap:PaymentsForFees contextRef="From2013-07-02to2013-07-31_custom_SponsorshipAgreementMember_custom_JacksonvilleJaguarsLLCMember" unitRef="USD" decimals="0"> 2000 </us-gaap:PaymentsForFees>
<us-gaap:PaymentsForFees contextRef="From2015-07-02to2015-07-31_custom_SponsorshipAgreementMember_custom_JacksonvilleJaguarsLLCMember" unitRef="USD" decimals="0"> 3000 </us-gaap:PaymentsForFees>
<RLLY:AnnualFeesFirstYear contextRef="From2017-11-01to2017-11-30_custom_SponsorshipAgreementMember_custom_JacksonvilleJaguarsLLCMember" unitRef="USD" decimals="0"> 200000 </RLLY:AnnualFeesFirstYear>
<RLLY:AnnualFeesIncreasesFromFirstYearToLastYear contextRef="From2017-11-01to2017-11-30_custom_SponsorshipAgreementMember_custom_JacksonvilleJaguarsLLCMember" unitRef="USD" decimals="0"> 216490 </RLLY:AnnualFeesIncreasesFromFirstYearToLastYear>
<RLLY:ServicesFeesDuringFirstYear contextRef="From2017-11-01to2017-11-30_custom_SponsorshipAgreementMember_custom_JacksonvilleJaguarsLLCMember" unitRef="USD" decimals="0"> 35000 </RLLY:ServicesFeesDuringFirstYear>
<RLLY:ServicesFeesIncreasesFromFirstYearToLastYear contextRef="From2017-11-01to2017-11-30_custom_SponsorshipAgreementMember_custom_JacksonvilleJaguarsLLCMember" unitRef="USD" decimals="0"> 37890 </RLLY:ServicesFeesIncreasesFromFirstYearToLastYear>
<us-gaap:NetCashProvidedByUsedInInvestingActivities contextRef="From2019-01-01to2019-09-30" unitRef="USD" decimals="0"> -382335 </us-gaap:NetCashProvidedByUsedInInvestingActivities>
<us-gaap:NetCashProvidedByUsedInInvestingActivities contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="USD" decimals="0"> -343785 </us-gaap:NetCashProvidedByUsedInInvestingActivities>
<us-gaap:EquityMethodInvestmentOwnershipPercentage contextRef="AsOf2019-09-30_custom_SeenuGKasturiMember_custom_SeriesAConvertiblePreferredStockMember" unitRef="Percentage" decimals="INF"> 1.00 </us-gaap:EquityMethodInvestmentOwnershipPercentage>
<us-gaap:EquityMethodInvestmentOwnershipPercentage contextRef="AsOf2019-09-30_custom_SeenuGKasturiMember" unitRef="Percentage" decimals="INF"> 0.894 </us-gaap:EquityMethodInvestmentOwnershipPercentage>
<us-gaap:EquityMethodInvestmentOwnershipPercentage contextRef="AsOf2019-09-30_custom_SeenuGKasturiMember_custom_BlueVictoryHoldingsIncMember" unitRef="Percentage" decimals="INF"> 0.90 </us-gaap:EquityMethodInvestmentOwnershipPercentage>
<us-gaap:EquityMethodInvestmentOwnershipPercentage contextRef="AsOf2019-10-11_us-gaap_SubsequentEventMember_custom_ARCWingHouseLLCMember" unitRef="Percentage" decimals="INF"> 0.10 </us-gaap:EquityMethodInvestmentOwnershipPercentage>
<RLLY:EarnoutPayment contextRef="From2019-01-01to2019-09-30_custom_SeenuGKasturiMember" unitRef="USD" xsi:nil="true"/>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 12. Leases</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company leases certain office space, land, buildings and equipment. The Company’s lease agreements for equipment are immaterial in amount, both individually and collectively. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants, and none of the Company’s lease agreements include options to purchase the leased property. The Company does not have any significant leases that have not yet commenced that create significant rights and obligations for the Company. The Company elected the practical expedient under ASC 842 to not separate lease and non-lease components. A description of the Company’s operating and financing leases is set forth herein under Note 16. <i>Commitments and Contingencies – Operating Leases</i> and – <i>Financing Leases.</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Most of the Company’s lease agreements have fixed rental payments. Certain of the Company’s lease agreements include fixed rental payments that are adjusted periodically based on rate or are based in part on a percentage of sales. Payments based on a percentage of sales is not considered in the determination of lease payments for purposes of measuring the related lease liability.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Most of the Company’s real estate leases include one or more options to renew, with renewal terms that can extend the lease term from three to five years or more. The exercise of lease renewal options is at the Company’s sole discretion. If the Company is reasonably certain that it will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of the Company’s right-of-use assets and liabilities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company determines discount rates based on the rates of its outstanding debt.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth information about the Company’s operating and financing lease assets and liabilities included in its condensed consolidated balance sheet as of September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Classification on the Condensed<br /> Consolidated Balance Sheet</font></td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Assets</font></td> <td> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 44%; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Operating lease right-of-use assets</font></td> <td style="width: 1%"> </td> <td style="width: 36%"><font style="font-size: 10pt">Right-of-use assets</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">3,582,774</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Financing lease right-of-use assets</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Right-of-use assets</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">10,896,130</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Total right of use assets</font></td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">14,478,904</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Liabilities</font></td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Current liabilities:</font></td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Operating lease liability</font></td> <td> </td> <td><font style="font-size: 10pt">Current operating lease liabilities</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">284,059</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Financing lease liability</font></td> <td> </td> <td><font style="font-size: 10pt">Current portion of other long-term liabilities</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">202,944</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Non-current liabilities:</font></td> <td> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Operating lease liabilities, net of current portion</font></td> <td> </td> <td><font style="font-size: 10pt">Operating lease liabilities</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,351,890</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Financing lease liabilities, net of current portion</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Other long-term liabilities</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">11,054,732</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Total lease liabilities</font></td> <td> </td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">14,893,625</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth the supplemental cash flow information related to the Company’s leases for the three- and nine-month periods ended September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Three Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Nine Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Cash paid for amounts included in the measurement of lease liabilities:</font></td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 58%; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Operating cash flows from operating leases</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">138,036</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">387,477</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Operating cash flows from financing leases</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">176,240</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">530,702</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Financing cash flows from financing leases</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">145,092</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">430,545</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth the components of lease costs related to the Company’s leases for the three- and nine-month periods ended September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Three Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Nine Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 58%; text-align: justify"><font style="font-size: 10pt">Operating lease costs</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">154,597</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">441,146</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Financing lease costs:</font></td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Amortization of right-of-use assets</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">145,092</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">430,546</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Interest on lease liabilities</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">176,240</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">530,701</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Total financing lease costs</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">321,332</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">961,247</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table shows certain information related to the weighted-average remaining lease terms and the weighted-average discount rates for our operating and financing leases:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Weighted<br /> Average <br /> Remaining<br /> Lease Term</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Weighted <br /> Average<br /> Discount Rate</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: center"><font style="font-size: 10pt">(in years)</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: center"><font style="font-size: 10pt">(annual)</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 62%; text-align: justify"><font style="font-size: 10pt">Operating leases</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">10.91</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">7.73</font></td> <td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Financing leases</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">18.92</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">8.00</font></td> <td><font style="font-size: 10pt">%</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth the maturity of our operating and financing leases liabilities as of September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Operating Leases</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Financing Leases</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Year Ended December 31,</font></td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 66%; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">2019 (remaining three months)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">124,703</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">223,055</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">2020</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">544,759</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">897,425</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">2021</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">570,765</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">913,130</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">2022</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">583,392</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">929,110</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">2023</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">472,444</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">945,369</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Thereafter</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">3,206,389</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">15,924,033</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total lease payments</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">5,502,452</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">19,832,122</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Less: imputed interest</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(1,866,503</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(8,574,446</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">3,635,949</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">11,257,676</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b></b></p>
</us-gaap:LesseeOperatingLeasesTextBlock>
<RLLY:ScheduleOfOperatingAndFinancingLeaseAssetsAndLiabilitiesTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth information about the Company’s operating and financing lease assets and liabilities included in its condensed consolidated balance sheet as of September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Classification on the Condensed<br /> Consolidated Balance Sheet</font></td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Assets</font></td> <td> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 44%; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Operating lease right-of-use assets</font></td> <td style="width: 1%"> </td> <td style="width: 36%"><font style="font-size: 10pt">Right-of-use assets</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">3,582,774</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Financing lease right-of-use assets</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Right-of-use assets</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">10,896,130</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Total right of use assets</font></td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">14,478,904</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Liabilities</font></td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Current liabilities:</font></td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Operating lease liability</font></td> <td> </td> <td><font style="font-size: 10pt">Current operating lease liabilities</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">284,059</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Financing lease liability</font></td> <td> </td> <td><font style="font-size: 10pt">Current portion of other long-term liabilities</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">202,944</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Non-current liabilities:</font></td> <td> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Operating lease liabilities, net of current portion</font></td> <td> </td> <td><font style="font-size: 10pt">Operating lease liabilities</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,351,890</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Financing lease liabilities, net of current portion</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Other long-term liabilities</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">11,054,732</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Total lease liabilities</font></td> <td> </td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">14,893,625</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b></b></p>
</RLLY:ScheduleOfOperatingAndFinancingLeaseAssetsAndLiabilitiesTableTextBlock>
<us-gaap:ScheduleOfCashFlowSupplementalDisclosuresTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth the supplemental cash flow information related to the Company’s leases for the three- and nine-month periods ended September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Three Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Nine Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Cash paid for amounts included in the measurement of lease liabilities:</font></td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 58%; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Operating cash flows from operating leases</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">138,036</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">387,477</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Operating cash flows from financing leases</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">176,240</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">530,702</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Financing cash flows from financing leases</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">145,092</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">430,545</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth the components of lease costs related to the Company’s leases for the three- and nine-month periods ended September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Three Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Nine Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 58%; text-align: justify"><font style="font-size: 10pt">Operating lease costs</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">154,597</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">441,146</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Financing lease costs:</font></td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Amortization of right-of-use assets</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">145,092</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">430,546</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Interest on lease liabilities</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">176,240</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">530,701</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Total financing lease costs</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">321,332</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">961,247</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b></b></p>
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<RLLY:ScheduleOfWeightedAverageLeaseTermAndDiscountRatesForOperatingAndFinancingLeasesTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table shows certain information related to the weighted-average remaining lease terms and the weighted-average discount rates for our operating and financing leases:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Weighted<br /> Average <br /> Remaining<br /> Lease Term</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Weighted <br /> Average<br /> Discount Rate</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: center"><font style="font-size: 10pt">(in years)</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: center"><font style="font-size: 10pt">(annual)</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 62%; text-align: justify"><font style="font-size: 10pt">Operating leases</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">10.91</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">7.73</font></td> <td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Financing leases</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">18.92</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">8.00</font></td> <td><font style="font-size: 10pt">%</font></td></tr> </table> <p style="margin: 0pt"></p>
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<us-gaap:OfficersCompensation contextRef="From2017-01-17to2017-01-18_custom_EmploymentAgreementMember_custom_SeenuGKasturiMember" unitRef="USD" decimals="0"> 26000 </us-gaap:OfficersCompensation>
<us-gaap:OfficersCompensation contextRef="From2018-12-30to2019-01-02_custom_EmploymentAgreementMember_custom_SeenuGKasturiMember" unitRef="USD" decimals="0"> 350000 </us-gaap:OfficersCompensation>
<us-gaap:OfficersCompensation contextRef="From2019-11-04to2019-11-06_us-gaap_SubsequentEventMember_custom_EmploymentAgreementMember_custom_JosephDominiakMember" unitRef="USD" decimals="0"> 200000 </us-gaap:OfficersCompensation>
<RLLY:PercenatgeOfPlacementFee contextRef="From2019-04-16to2019-04-17_custom_MaximAndJosephGunnarAndCoLLCMember" unitRef="Percentage" decimals="INF"> 0.07 </RLLY:PercenatgeOfPlacementFee>
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<us-gaap:DebtConversionDescription contextRef="From2019-04-16to2019-04-17_custom_SeriesBConvertiblePreferredStockMember"> The greater of (i) $1.40 plus any declared and unpaid dividends thereon, and (ii) the amount per share such holder would receive if such holder converted such shares of Series B convertible preferred stock into shares of common stock at a conversion price of $1.40, subject to adjustment. </us-gaap:DebtConversionDescription>
<us-gaap:DebtConversionDescription contextRef="From2019-04-16to2019-04-17"> The Company's common stock on the Nasdaq Stock Market, NYSE or NYSE MKT within 12 months after the final closing of the Offering, each share of Series B convertible preferred stock will automatically convert into the securities issued by the Company in the Qualified Public Offering (the "Conversion Securities") at a conversion price equal to the lesser of: (a) $1.40 per share, and (b) the greater of: (i) 70% of the public offering price of the Conversion Securities, and (ii) $0.28 per share (the "Conversion Price"), subject to adjustment. The Conversion Price is subject to adjustment for stock splits, stock dividends, or the reclassification of the common stock. In the event that the Company does not complete a Qualified Public Offering within 12 months after the final closing of the Offering or does not file with the SEC the audited financial statements and other financial information required to be filed in connection with the Company's acquisition of the Fat Patty's restaurant concept on August 30, 2018 or in connection with the Company's proposed acquisition of the Tilted Kilt within four months after the final closing of the Offering, the Company will be required to repurchase all Shares issued in the Offering for a purchase price of $1.75 per share. </us-gaap:DebtConversionDescription>
<us-gaap:NatureOfOperations contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 1. Description of Business</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">ARC Group, Inc., a Nevada corporation (the “Company”), was incorporated in April 2000. The Company’s business is focused primarily on the development of the <i>Dick’s Wings & Grill</i><sup>®</sup> franchise (“Dick’s Wings”) and <i>Fat Patty’s</i><sup>®</sup> concept (“Fat Patty’s”) and the acquisition of financial interests in other restaurant brands. The Dick’s Wings concept is currently comprised of its traditional Dick’s Wings restaurants and non-traditional units like the Dick’s Wings concession stands that the Company has at TIAA Bank Field (formerly EverBank Field) and Jacksonville Veterans Memorial Arena in Jacksonville, Florida. The Fat Patty’s concept is currently comprised of its traditional Fat Patty’s restaurants.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 30, 2018, the Company closed upon an asset purchase agreement for Fat Patty’s. Fat Patty’s is comprised of four company-owned restaurants located at 1442 Winchester Avenue, Ashland, Kentucky 41101, 5156 WV 34, Hurricane, West Virginia 25526, 3401 Rt. 60 East, Barboursville, West Virginia 25504, and 1935 Third Avenue, Huntington, West Virginia 25702 (collectively, the “Fat Patty’s Restaurants”). A description of the Company’s acquisition of Fat Patty’s is set forth herein under <i>Note 4. – Acquisition of Fat Patty’s.</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 30, 2018, the Company entered into an agreement to acquire the <i>Tilted Kilt Eatery and Pub<sup>®</sup></i> restaurant franchise (“Tilted Kilt”). The Tilted Kilt franchise is comprised of 26 restaurants operating in 13 states, of which two were company owned and operated and the remaining 24 were franchise locations. A description of the transaction is set forth herein under <i>Note 5. Agreement to Acquire Tilted Kilt</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">At September 30, 2019, the Company had 20 Dick’s Wings restaurants and nine Dick’s Wings concession stands. Of the 20 restaurants, 16 were located in Florida and four were located in Georgia. The Company’s concession stands were also located in Florida. Four of the Company’s restaurants were owned by the Company, and the remaining 16 restaurants were owned and operated by franchisees. The Company’s concession stands were also owned by the Company. In addition, the Company had four Fat Patty’s restaurants at September 30, 2019. Of the four restaurants, three were located in West Virginia and one was located in Kentucky. All four of the restaurants were owned by the Company.</p>
</us-gaap:NatureOfOperations>
<us-gaap:SignificantAccountingPoliciesTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 2. Basis of Presentation and Significant Accounting Policies</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Interim Financial Information</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) <font style="background-color: white">applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions were eliminated in consolidation.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The accompanying </font>unaudited condensed consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. Certain information and footnotes disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules and regulations. Notwithstanding this, the Company believes that the disclosures herein are adequate to make the information presented not misleading.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K. Information presented as of December 31, 2018 is derived from the audited consolidated financial statements. The results of operations for the three- and nine-month periods ended September 30, 2019 are not necessarily indicative of the results that the Company will have for any subsequent quarter or full fiscal year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">This summary of significant accounting policies is provided to assist the reader in understanding the Company’s financial statements. The financial statements and notes thereto are representations of the Company’s management. The Company’s management is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and have been consistently applied in the preparation of the financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Estimates</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Restatement</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company has restated its previously issued condensed consolidated statement of operations for the three- and nine-month periods ended September 30, 2018. The impact of the restatement is more specifically described herein under <i>Note 20. Restatement of Previously Issued Condensed Consolidated Financial Statements</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Going Concern</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The company concluded that facts existed that created an uncertainty about the Company’s ability to continue as a going concern as of December 31, 2016. </font>The Company generated net income of $344,740 and cash flows from operations of $248,345 during the year ended December 31, 2017. While the Company had a working capital deficit of $2,784,844 at December 31, 2018 and a net loss of $282,483 during the year ended December 31, 2018, it generated cash flows from operations of $478,238 during the year ended December 31, 2018. The improvement in cash flows during the year ended December 31, 2017 was due primarily to the Company’s acquisition of two Company-owned Dick’s Wings restaurants in December 2016. The improvement in cash flows during the year ended December 31, 2018 was due primarily to the Company’s acquisition of Fat Patty’s in August 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">While the Company generated a net loss of $1,303,318 during the nine-month period ended September 30, 2019 and had a working capital deficit of $4,100,874 at September 30, 2019, the Company generated cash flow from operating activities of $565,856 during the nine-month period ended September 30, 2019 and received continued financial support from related parties during the nine-month period ended September 30, 2019 and the years ended December 31, 2018 and 2017. As a result of these factors, the Company concluded that the substantial doubt about its ability to continue as a going concern had been alleviated as of September 30, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Segment Disclosure</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company has both <font style="background-color: white">Company-owned restaurants and franchised restaurants</font>, all of which operate in the full-service casual dining industry in the United States. Pursuant to the standards of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, <i>Segment Reporting</i> (“ASC 280”), the Company’s Chief Executive Officer, who comprises the Company’s Chief Operating Decision Maker function for the purposes of ASC 280, concluded that the Company has two segments for reporting purposes, which are Company-owned restaurants and franchise operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Other Receivables</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Other receivables <font style="background-color: white">was comprised primarily of receipts from credit card sales by Company-owned Fat Patty’s restaurants that occurred after the Company completed the acquisition of Fat Patty’s that were held by the former owner of Fat Patty’s, all of which are expected to be collected in full by the Company during the next 12 months.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Intangible Assets, Net</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company acquired various intangible assets in connection with the acquisition of Fat Patty’s. The intangible assets were comprised of a tradename and a non-compete agreement. The Company amortizes the non-compete agreement on a straight-line basis over the expected period of benefit, which is five years. The tradename has an indefinite life and is not subject to amortization but tested for impairment on an annual basis. The Company recognized $942 and $2,826 of amortization expense for the non-compete agreement during the three- and nine-month periods ended September 30, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="background-color: white"><u>Other Payables</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">Other payables was comprised primarily of accounts payable owed to the former owner of Fat Patty’s for alcohol and other items purchased by him in connection with the operation of the concept.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Revenue Recognition</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The Company generates revenue from two primary sources: (a) retail sales at company-operated restaurants; and (b) franchise revenue, which consists of royalties based on a percentage of sales reported by franchised restaurants, funds contributed by franchisees to the Company’s general advertising fund, and initial and renewal franchise license fees.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Revenue From Company-Owned Restaurants</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Revenue from company-owned restaurants is primarily recognized as customers pay for products at the point of sale. The Company reports Company-owned restaurant revenues net of sales and use taxes collected from customers and remitted to governmental taxing authorities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Revenue From Franchised Restaurants</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">The Company grants individual restaurant franchises to operators in exchange for initial franchise license fees and continuing royalty payments.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Initial and renewal franchise license fees are payable by the franchisee upon a new restaurant opening or renewal of an existing franchise agreement. Under franchise agreements, the Company provides franchisees with: (a) a franchise license, which includes a non-exclusive license to our intellectual property for the duration of the franchise agreement and where the Company manages a marketing or co-op advertising fund, advertising and promotion management; (b) pre-opening services, such as training and inspections; and (c) ongoing services, such as development of training materials and menu items and restaurant monitoring and inspections. The services that the Company provides are highly interrelated and dependent on the franchise license so the Company does not consider the services to be individually distinct and therefore accounts for them as a single performance obligation. The performance obligation is satisfied by providing a right to use the Company’s intellectual property over the term of each franchise agreement. Accordingly, initial and renewal franchise fees are recognized as revenue on a straight-line basis over the term of the respective agreement.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">The Company’s performance obligation under area development agreements generally consists of an obligation to grant exclusive development rights for a particular geographic region over a stated term. These development rights are not distinct from franchise agreements and are creditable towards the initial franchise license fee, so upfront fees paid by franchisees for exclusive development rights are deferred and allocated to the appropriate franchise restaurant when the franchise agreement is executed.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Franchise royalty revenues represents sales-based royalties that are related entirely to the Company’s performance obligation under the franchise agreement. Continuing franchise royalty revenues are based on a percentage of monthly sales and are recognized on the accrual basis as franchise sales occur. In certain circumstances, the Company may reduce or waive franchise license fees and/or the franchise royalty percentage for a period of time.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Franchises contributions to the Company’s general advertising funds are calculated as a percentage of monthly sales. Contributions to the fund generally represent sales-based or fixed monthly fee amounts that are related entirely to the Company’s performance obligation under the franchise agreement and are recognized as franchise sales occur.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>ASC Topic 606</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 1, 2018, the Company adopted the provisions of ASC Topic 606, <i>Revenue From Contracts With Customers</i> (“ASC 606”). ASC 606 supersedes the current revenue recognition guidance, including industry-specific guidance. ASC 606 provides a single framework in which revenue is required to be recognized to depict the transfer of goods or services to customers in amounts that reflect the consideration to which a company expects to be entitled in exchange for those goods or services. The Company adopted this new guidance effective the first day of fiscal year 2018, using the modified retrospective method of adoption. Under this method, the cumulative effect of initially adopting the guidance was recognized as an adjustment to the opening balance of equity at January 1, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Franchise Fees</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">ASC 606 impacted the timing of recognition of franchise fees. Under previous guidance, these fees were typically recognized upon the opening of restaurants. Under ASC 606, the fees are deferred and recognized as revenue over the term of the individual franchise agreements. The effect of the required deferral of fees received in a given year will be mitigated by the recognition of revenue from fees retrospectively deferred from prior years. The Company recognized $4,718 and $11,968 of deferred franchise fees as income during the three- and nine-month periods ended September 30, 2019, and recognized $7,250 and $45,264 of deferred franchise fees as income during the three- and nine-month periods ended September 30, 2018, respectively. The carrying value of the Company’s deferred franchised fees was $103,266 at September 30, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Advertising Funds</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">ASC 606 also impacted the accounting for transactions related to the Company’s general advertising fund. Under previous guidance, franchisee contributions to and expenditures by the fund were not included in the Company’s condensed consolidated financial statements. Under ASC 606, the Company records contributions to and expenditures by the fund as revenue and expenses within the Company’s condensed consolidated financial statements. The Company recognized contributions to and expenditures by the fund of $33,255 and $97,123 during the three- and nine-month periods ended September 30, 2019, and recognized contributions to and expenditures by the fund of $46,816 and $145,076 during the three- and nine-month periods ended September 30, 2018, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Gift Card Funds</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Additionally, ASC 606 impacted the accounting for transactions related to the Company’s gift card program. Under previous guidance, estimated breakage income on gift cards was deferred until it was deemed remote that the unused gift card balance would be redeemed. Under ASC 606, breakage income on gift cards is recognized as gift cards are utilized. The effect of this change on the Company’s condensed consolidated financial statements was negligible.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Disaggregation of Revenue</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table disaggregate revenue by primary geographical market and source:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended <br /> September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended <br /> September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 9pt">Primary <br /> Geographic Markets</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 16%; padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Florida</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 21%; text-align: right"><font style="font-size: 9pt">1,587,413</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 17%; text-align: right"><font style="font-size: 9pt">1,285,038</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 17%; text-align: right"><font style="font-size: 9pt">4,239,126</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 17%; text-align: right"><font style="font-size: 9pt">3,489,830</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Georgia</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">256,430</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">47,050</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">824,190</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">146,009</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Kentucky</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">616,417</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">232,744</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">1,907,793</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">232,744</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Louisiana</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">95,884</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625,227</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">North Carolina</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Texas</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">West Virginia</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">1,485,250</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">795,232</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">5,222,846</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">795,232</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 9pt">Total revenue</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,042,644</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">2,360,064</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">12,820,432</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,663,815</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 9pt">Sources of Revenue</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Restaurant sales</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">3,803,609</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">2,104,825</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">12,150,290</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">3,871,929</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Royalties</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">193,010</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">197,369</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">547,548</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">591,847</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Franchise fees</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">4,718</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">7,250</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">11,968</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">45,264</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Advertising fund fees</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">33,255</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">46,816</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">97,123</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">145,077</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Other revenue</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">8,052</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">3,804</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">13,503</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">9,698</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 9pt">Total revenue</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,042,644</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">2,360,064</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">12,820,432</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,663,815</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Deferred Revenue</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">Deferred revenue consists of contract liabilities resulting from initial and renewal franchise license fees paid by franchisees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement, as well as upfront development fees paid by franchisees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement once it is executed or if the development agreement is terminated.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents changes in deferred franchise fees as of and for the nine-month period ended September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Total Liabilities</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 84%; text-align: justify"><font style="font-size: 10pt">Deferred franchise fees at December 31, 2018</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 13%; text-align: right"><font style="font-size: 10pt">65,234</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Revenue recognized during the period</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(11,968</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">New deferrals due to cash received</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">50,000</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Deferred franchise fees at September 30, 2019</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">103,266</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Anticipated Future Recognition of Deferred Franchise Fees</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents the estimated franchise fees to be recognized in the future related to performance obligations that were unsatisfied at September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 10pt">Year</font></td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Franchise <br /> Fees to be Recognized</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 77%; text-align: justify"><font style="font-size: 10pt">2019 (remaining three months)</font></td> <td style="width: 2%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 19%; text-align: right"><font style="font-size: 10pt">4,250</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2020</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">17,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2021</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">15,925</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2022</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">14,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2023</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">11,637</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Thereafter</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">40,454</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">103,266</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Recent Accounting Pronouncements</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, <i>Leases </i>(“ASU 2016-02”), establishing Accounting Standards Codification (“ASC”) Topic 842, <i>Leases</i> (“ASC Topic 842”), which modified and superseded the guidance under ASC Topic 840, <i>Leases</i> (“ASC Topic 840”). The FASB subsequently issued several other Accounting Standards Updates, including ASU 2018-11 and ASU 2018-12, which among other things provide for a practical expedient related to the recognition of the cumulative effect on retained earnings resulting from the adoption of the pronouncements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">ASC Topic 842 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less are accounted for in the same manner as operating leases under ASC Topic 840.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 22.5pt">The Company adopted ASC Topic 842 effective January 1, 2019 applying the modified retrospective transition approach. Under this approach, results for reporting periods beginning after January 1, 2019, are presented under Topic 842, while prior periods are not adjusted and continue to be reported under the accounting standards in effect for those periods. The Company recognized $3,832,779 and $3,832,286 of additional assets and liabilities, respectively, in connection with its operating leases upon the adoption of ASC Topic 842 on January 1, 2019. The Company did not recognize any additional assets or liabilities in connection with its financing lease upon the adoption of ASC Topic 842 on January 1, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 22.5pt">The Company determines whether a contract is or contains a lease at inception of the contract based on whether an identified asset exists and whether the Company has the right to obtain substantially all of the benefit of the assets and to control its use over the full term of the agreement. When available, the Company uses the rate implicit in the lease to discount lease payments to present value. However, none of our leases provide a readily determinable implicit rate. Therefore, the Company estimated its incremental borrowing rate considering both the revolving credit rates and a credit notching approach to discount the lease payments based on information available at lease commencement. There are no material residual value guarantees and no restrictions or covenants included in the Company’s lease agreements. Certain of the Company’s leases include provisions for variable payments. These variable payments are typically determined based on a measure of throughput or actual days or another measure of usage and are not included in the calculation of lease liabilities and right-of-use assets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 22.5pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company elected the package of practical expedients available for implementation, which allows for the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><font style="font-size: 10pt"></font></td> <td style="text-align: justify"><font style="font-size: 10pt">An entity need not reassess whether any expired or existing contracts are or contain leases;</font></td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td><font style="font-size: 10pt"></font></td> <td style="text-align: justify"><font style="font-size: 10pt">An entity need not reassess the lease classification for any expired or existing leases; and</font></td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td><font style="font-size: 10pt"></font></td> <td style="text-align: justify"><font style="font-size: 10pt">An entity need not reassess initial indirect costs for any existing leases.</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 40pt">Furthermore, the Company elected the optional transition method to make January 1, 2019 the initial application date of the standard. This package of practical expedients allows entities to account for their existing leases for the remainder of their respective lease terms following the previous accounting guidance.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company also elected to adopt the optional transition practical expedient provided in ASU 2018-01 to not evaluate under ASC Topic 842 for existing or expired land easements prior to the application date to determine if they meet the definition of a lease.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The impact of ASC Topic 842 is more specifically described herein under <i>Note 12. Leases</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In June 2018, the FASB issued ASU 2018-07, <i>Improvements to Nonemployee Share-Based Payment Accounting </i>(“ASU 2018-07”), which expands the scope of ASC Topic 718, Compensation – Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions. Under the new guidance, the measurement of equity-classified nonemployee awards is fixed at the grant date. The Company adopted ASU 2018-07 on January 1, 2019. The adoption of ASU 2018-07 did not have a significant impact on the Company’s condensed consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to the Company’s operations or that no material effect is expected on the Company’s condensed consolidated financial statements as a result of future adoption.</p>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 3. Net (Loss) / Income Per Share</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company calculates basic and diluted net (loss) / income per share in accordance with ASC Topic 260, <i>Earnings per Share</i>. Basic net (loss) / income per share is based on the weighted-average number of shares of the Company’s common stock outstanding during the applicable period and is calculated by dividing the reported net (loss) / income for the applicable period by the weighted-average number of shares of common stock outstanding during the applicable period. Diluted net (loss) / income per share is calculated by dividing the reported net (loss) / income for the applicable period by the weighted-average number of shares of common stock outstanding during the applicable period, as adjusted to give effect to the exercise or conversion of all potentially dilutive securities outstanding at the end of the applicable period.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth the computation of basic and diluted net (loss) / income per share:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 9pt">Numerator</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 32%; padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Net (loss) / income</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">(597,514</font></td> <td style="width: 1%"><font style="font-size: 9pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">97,467</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">(1,303,318</font></td> <td style="width: 1%"><font style="font-size: 9pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">89,550</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 9pt">Denominator</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Weighted average shares outstanding — basic</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">7,071,985</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">6,524,427</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">7,077,875</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">6,795,644</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Dilutive effect of potential shares of common stock</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">30,000</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">15,165</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Weighted average shares outstanding – fully diluted</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">7,071,985</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">6,554,427</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">7,077,875</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">6,810,809</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 9pt">Basic net income / (loss) per share</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.08</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.01</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.18</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.01</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 9pt">Fully diluted net income / (loss) per share</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.08</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.01</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.18</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.01</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 4. Acquisition of Fat Patty’s</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 3, 2018, the Company entered into an asset purchase agreement with CSA, Inc., a West Virginia corporation (“CSA”), CSA Investments, LLC, a West Virginia limited liability company (“CSA Investments”), CSA of Teays Valley, Inc., a West Virginia corporation (“CSA Teays Valley”), CSA, Inc. of Ashland, a Kentucky corporation (“CSA Ashland”), Fat Patty’s, LLC, a West Virginia limited liability company (“FPLLC”), and Clint Artrip, an individual (“Artrip”; together with CSA, CSA Investments, CSA Teays Valley, and CSA Ashland, FPLLC, the “Sellers”), pursuant to which the Company agreed to acquire all of the assets associated with Fat Patty’s (the “Fat Patty’s Acquisition”). The Company agreed to pay the Sellers $12,352,000 for the assets, of which $12,000,000 was to be paid to the Sellers at closing, $40,000 was to be paid to the Sellers within 10 days after the closing and the remaining $312,000 will be paid to the Sellers on the first anniversary of the closing. The closing of the Fat Patty’s Acquisition occurred on August 30, 2018, however, as discussed below, the Company entered into a separate related agreement with a third party that resulted in a direct transfer of the Properties (as defined below) from the Sellers to the third party. Accordingly, in substance, the Company only acquired the net assets detailed below for a purchase price of $852,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In connection with the Fat Patty’s Acquisition, the Company entered into a secured convertible promissory note with Seenu G. Kasturi on August 30, 2018 pursuant to which the Company borrowed $622,929 from Mr. Kasturi to help finance the Fat Patty’s Acquisition. All principal and accrued but unpaid interest is due and payable by the Company in full on the earlier of (i) the fifth (5<sup>th</sup>) anniversary of the date of the note, or (ii) the date that Mr. Kasturi demands repayment in full by providing written notice thereof to the Company. Interest accrues at the rate of six percent (6%) per annum and is payable in full on the maturity date. Mr. Kasturi has the right, at any time during the term of the note and from time to time, to convert all of any portion of the outstanding principal of the note, together with accrued and unpaid interest payable thereon, into shares of the Company’s common stock at a conversion rate of $1.36 per share. The note is secured by all of the assets of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">Also on August 3, 2018,</font> the Company entered into a purchase and sale agreement with Store Capital Acquisitions, LLC, a Delaware limited liability company (“Store Capital”), pursuant to which the Company agreed to sell all of the real property acquired in the Fat Patty’s Acquisition to Store Capital (the “Property Acquisition”). The real property consists of the four properties upon which the restaurants acquired in the Asset Acquisition are located (collectively, the “Properties”). Store Capital agreed to pay the Company $11,500,000 for the Properties at closing. Title to the Properties was transferred directly from the applicable Sellers to Store Capital, and the purchase price for the Properties was paid by Store Capital directly to Sellers. Accordingly, the Company never took title to, or ownership of, the Properties. As a result, the ultimate purchase price paid by the Company was $852,000, which was the difference between the $12,352,000 purchase price for the assets that the Company agreed to pay to the Sellers and the $11,500,000 purchase price for the Properties that was paid by Store Capital. The closing of the Property Acquisition occurred on August 30, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In connection with the Property Acquisition, the Company entered into a master lease agreement (the “Master Lease”) with Store Capital on August 30, 2018 pursuant to which the Company leased each of the Properties from Store Capital. The initial term of the lease expires on August 31, 2038. The Company has the option to extend the term of the lease for four additional successive periods of five years each. The aggregate base annual rent is $876,875 and is subject to annual increases commencing September 1, 2019 in an amount equal to the lesser of: (i) 1.75%, or (ii) 1.25 times the change in the Consumer Price Index. The Company is responsible for all costs and obligations relating to the Properties.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The acquisition of Fat Patty’s was accounted for as a business combination using the acquisition method of accounting in accordance with Accounting Standard Codification (“ASC”) Topic 805, <i>Business Combinations</i> (“ASC 805”), with the Company considered the acquirer of Fat Patty’s. In accordance with ASC 805, the assets acquired and the liabilities assumed have been measured at fair value based on a report issued by a third-party valuation firm with the remaining purchase price, if any, recorded as goodwill.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">For purposes of measuring the estimated fair value, where applicable, of the assets acquired and the liabilities assumed as reflected in the Company’s condensed consolidated financial statements, the guidance in ASC Topic 820, <i>Fair Value Measurements and Disclosures</i> (“ASC 820”) has been applied, which establishes a framework for measuring fair value. In accordance with ASC 820, fair value is an exit price and is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company incurred $82,929 of acquisition-related transaction costs. Under ASC 805, acquisition-related transaction costs and acquisition-related restructuring charges are not included as components of consideration transferred but are accounted for as expenses in the period in which the costs are incurred. Accordingly, the Company recognized $82,929 of acquisition-related transaction costs during the year ended December 31, 2018. The acquisition-related transaction costs were recorded in general and administrative expenses.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The assets acquired and liabilities assumed were comprised of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 79%; text-align: justify"><font style="font-size: 10pt">Cash</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">7,100</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Inventory</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">91,424</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Intangible assets</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">788,840</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Equipment</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">614,295</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total assets acquired</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">1,501,659</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Gift card liabilities</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(24,707</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total liabilities assumed</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(24,707</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Gain on bargain purchase</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(624,952</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Net assets acquired with note payable and deferred compensation liability</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">852,000</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The estimates of fair values recorded are Level 3 inputs that have been determined by management based upon various market and income analyses and recent asset appraisals. The Company made certain adjustments to the amounts initially allocated to intangible assets and gift card liabilities after evaluating additional information that was present on the date the acquisition was completed.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The fair value of the identifiable assets acquired and liabilities assumed of $1,476,952 exceeded the purchase price of Fat Patty’s by $624,952. Consequently, the Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed and concluded that the valuation procedures and resulting measures were appropriate. As a result, the Company recognized a gain of $624,952 during the year ended December 31, 2018 in connection with the acquisition. The Sellers of Fat Patty’s received cash without any earnouts or indemnification holdbacks, which was the primary motivation for the sale of Fat Patty’s. This was the primary reason the acquisition resulted in a bargain purchase. The gain was recorded in the other income in the Company’s condensed consolidated statements of operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table summarizes <font style="background-color: white">certain financial information for the three- and nine-month periods ended September 30, 2019 contained in the Company’s condensed </font>consolidated financial statements and certain unaudited pro forma financial information for the <font style="background-color: white">three- and nine-month periods ended September 30, 2018 </font>as if the acquisition of Fat Patty’s had occurred on January 1, 2018:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months <br /> Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months <br /> Ended <br /> September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months <br /> Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months<br /> Ended <br /> September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 32%; text-align: justify"><font style="font-size: 9pt">Revenue</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">4,042,644</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">4,323,019</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">12,820,432</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">12,515,636</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 9pt">(Loss) / income from continuing operations</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">(421,961</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">(13,051</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">(986,970</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">1,256,629</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 9pt">Net income / (loss)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">(597,514</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">548,218</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">(1,303,318</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">1,892,553</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 9pt">Net income / (loss) per share – basic</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.08</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.08</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.18</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.28</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 9pt">Net income / (loss) per share – fully diluted</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.08</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.08</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.18</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.28</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The results of operations for Fat Patty’s were included in the Company’s results of operations beginning August 30, 2018. The actual amounts of revenue and net income for Fat Patty’s that were included in the Company’s condensed consolidated statements of operations for the three-month period ended September 30, 2019 were $2,101,667 and $110,399, respectively, and the actual amounts of revenue and net income for Fat Patty’s that were included in the Company’s condensed consolidated statements of operations for the nine-month period ended September 30, 2019 were $7,130,639 and $720,887, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The unaudited pro forma financial information has been presented for informational purposes only and <font style="background-color: white">is not necessarily indicative of the actual results that would have occurred had the acquisition been consummated on January 1, 2018 or of the future results of the combined entities</font>. For additional information about the Company’s acquisition of Fat Patty’s, please refer to the Company’s Current Reports on Form 8-K filed with the SEC on August 9, 2018 and September 5, 2018.</p>
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<RLLY:AcquisitionDisclosureTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 5. Agreement to Acquire Tilted Kilt</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 30, 2018, the Company entered into a Membership Interest Purchase Agreement with SDA Holdings, LLC, a Louisiana limited liability company (“SDA Holdings”), and Fred D. Alexander pursuant to which the Company agreed to acquire all of the issued and outstanding membership interests in SDA Holdings for $10. SDA Holdings is the owner of the <i>Tilted Kilt Pub & Eatery</i><sup>®</sup> restaurant franchise. SDA Holdings is owned by Mr. Alexander, who is a member of the Company’s board of directors.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The closing of the transaction is conditioned upon SDA Holdings, Trustee Services Group (the “Custodian”), Seenu G. Kasturi, who served as the Company’s President and Chief Financial Officer and the Chairman of its board of directors as of December 31, 2018, Let’s Eat Incorporated (“Let’s Eat”), the Reilly Group, LLC (the “Reilly Group”) and John Reynauld entering into an amendment to that certain Custodian Agreement, dated June 7, 2018, by an among the parties to add SDA Holdings as a party to the agreement and remove Mr. Kasturi as a party to the agreement, in which event SDA Holdings will be required to deliver 718,563 shares of the Company’s common stock to the Custodian. The closing of the transaction is also conditioned upon the Company raising gross proceeds of at least $2,000,000 through the sale of debt or equity securities, as well as other customary closing conditions. Upon closing of this acquisition, the Company will issue 666,667 shares of common stock to Mr. Kasturi, place 718,563 shares of common stock into escrow to replace a like number of shares placed in escrow by Mr. Kasturi, and through a wholly-owned subsidiary, be the obligor under a demand promissory note in favor of Mr. Kasturi in the principal amount of up to $2,500,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of September 30, 3019, the conditions to closing had not yet been satisfied or waived by the parties. There is no set closing date for the transaction.</p>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 6. Inventory</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Inventory was comprised of the following at September 30, 2019 and December 31, 2018, respectively:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 62%; text-align: justify"><font style="font-size: 10pt">Food</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">130,786</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">120,426</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Beverages</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">64,337</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">90,599</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">195,123</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">211,025</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> </table> <p style="margin: 0pt"></p>
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<us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 7. Property and Equipment, Net</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Property and equipment was comprised of the following at September 30, 2019 and December 31, 2018, respectively:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 62%; text-align: justify"><font style="font-size: 10pt">Land, buildings and improvements</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">-0-</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">11,500,000</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Leasehold improvements</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">342,500</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">323,500</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Furniture, fixtures and equipment</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">1,466,977</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">1,021,735</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Subtotal</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">1,809,477</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">12,845,235</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Less: accumulated depreciation</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(285,097</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(307,733</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">1,524,380</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">12,537,502</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The land, buildings and improvements of $11,500,000 included within property and equipment at December 31, 2018 consisted of gross assets acquired on the capital lease. On January 1, 2019, in connection with the adoption of ASC Topic 842, the Company determined that the lease was a financing lease and recorded a right-of-use asset and lease liability for the lease, reversing the capital lease asset and capital lease obligation previously recognized.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Depreciation expense was $61,851 and $163,830 during the three- and nine-month periods ended September 30, 2019<font style="background-color: white">, respectively, and was </font>$49,481 and $68,688 during the three- and nine-month periods ended September 30, 2018, respectively.</p>
</us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock>
<us-gaap:IntangibleAssetsDisclosureTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 8. Intangible Assets</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company acquired various intangible assets in connection with the acquisition of Fat Patty’s. Intangible assets include a tradename valued at $770,000 and a non-compete agreement valued at $18,840 for a total of $788,840 on August 30, 2018, which is the date the acquisition of Fat Patty’s was completed. The Company amortizes the non-compete agreement on a straight-line basis over the expected period of benefit, which is five years. The tradename has an indefinite life and is not subject to amortization but tested for impairment on an annual basis. The Company recognized $2,275 of amortization expense on the non-compete agreement during the year ended December 31, 2018. Accordingly, the Company had total intangible assets of $786,565 at December 31, 2018. The Company recognized $942 and $2,826 of amortization expense on the non-compete agreement during the three- and nine-month periods ended September 30, 2019. Accordingly, the Company had total intangible assets of $783,739 at September 30, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents the future amortization expense to be recognized from the Company’s intangible assets at September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Year</p></td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Amortization Expense<br /> to be Recognized</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 79%; text-align: justify"><font style="font-size: 10pt">2019 (remaining three months)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">942</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2020</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,768</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2021</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,768</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2022</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,768</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2023</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">1,493</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Thereafter</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">13,739</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b></b></p>
</us-gaap:IntangibleAssetsDisclosureTextBlock>
<us-gaap:FairValueDisclosuresTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 9. Fair Value Measurements</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 19, 2016, the Company acquired all of the issued and outstanding membership interests of Seediv, LLC, a Louisiana limited liability company (“Seediv”), from Seenu G. Kasturi for $600,000 and an earn-out payment. Seediv is the owner and operator of the Dick’s Wings & Grill restaurant located at 100 Marketside Avenue, Suite 301, in the Nocatee development in Ponte Vedra, Florida (the “Nocatee Restaurant”) and the Dick’s Wings & Grill restaurant located at 6055 Youngerman Circle in Argyle Village in Jacksonville, Florida (the “Youngerman Circle Restaurant”; together with the Nocatee Restaurant, the “Nocatee and Youngerman Circle Restaurants”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In connection with the acquisition of Seediv, the Company agreed to pay contingent consideration in the form of an earn-out payment. The Company determined that the fair value of the liability for the contingent consideration was estimated to be $20,897 at the acquisition date. The Company determined the fair value of the contingent consideration based on a probability-weighted approach derived from earn-out criteria estimates and a probability assessment with respect to the likelihood of achieving the earn-out criteria. The measurement was based upon significant inputs not observable in the market, including internal projections and an analysis of the target markets. The resultant probability-weighted contingent consideration was discounted using a discount rate based upon the weighted-average cost of capital.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of December 31, 2017, the Company calculated the earnout payment in accordance with the provisions of the membership interest purchase agreement and determined that the earnout payment was $199,682. The Company recognized additional Seediv compensation expense in the amount of $178,785 during the year ended December 31, 2017 in connection with the earnout payment and the liability for the contingent consideration was increased by $178,785 to $199,682 at December 31, 2017. The Company made payments in the amount of $144,326 to Mr. Kasturi with respect to the earnout payment during the year ended December 31, 2018. The Company did not make any payments to Mr. Kasturi during the nine-month period ended September 30, 2019. Accordingly, the outstanding balance of contingent consideration was $55,356 at September 30, 2019 and December 31, 2018, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents the contingent consideration recorded by the Company in connection with the acquisition of Seediv within the fair value hierarchy utilized to measure fair value on a recurring basis at September 30, 2019 and December 31, 2018, respectively:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Level 1</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Level 2</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Level 3</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 61%; text-align: justify"><font style="font-size: 10pt">September 30, 2019</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 10%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 10%; text-align: right"><font style="font-size: 10pt">55,356</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 10%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">December 31, 2018</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">55,356</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The earnout payment was to be calculated based on the earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the Nocatee and Youngerman Circle Restaurants during the year ended December 31, 2017. As of December 31, 2017, the EBITDA for the Nocatee and Youngerman Circle Restaurants was utilized to compute the ending contingent consideration liability. As a result, the fair value measurement of the contingent consideration represented a Level 2 fair value measurement at September 30, 2019 and December 31, 2018 because it was based on other significant observable inputs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company’s other financial instruments consist of cash and cash equivalents, accounts and ad fund receivables, notes receivable, operating and financing lease right-of-use assets and liabilities, accounts payable, accrued expenses and notes payable. The estimated fair values of the cash and cash equivalents, accounts and ad fund receivables, notes receivable, accounts payable, accrued expenses and notes payable (and the related beneficial conversion feature associated with the notes payable) approximate their respective carrying amounts due to the short-term maturities of these instruments. The estimated fair value of the financing and operating lease right-of-use assets and liabilities approximated their respective carrying amounts as the interest rate used in calculating the right-of-use-assets and liabilities approximated the interest rate on the outstanding debt.</p>
</us-gaap:FairValueDisclosuresTextBlock>
<us-gaap:LoansNotesTradeAndOtherReceivablesDisclosureTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 10. Notes Receivable</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In June 2016, the Company made a loan to one of its franchisees under a promissory note in the aggregate original principal amount of $25,000. In July 2016, the Company made an additional loan to the same franchisee under a line of credit agreement for an aggregate original principal amount of up to $28,136. In September 2016, the Company made an additional loan to the same franchisee under a second line of credit agreement for an aggregate original principal amount of up to $25,000. The loan under the promissory note is for a term of two years, is payable in monthly installments beginning January 1, 2017, and accrues interest at a rate of 5% per annum beginning September 1, 2016. The loan under the $28,136 line of credit agreement was for a term of two years, was payable in monthly installments beginning January 1, 2017, and did not require the payment of any interest. The loan was repaid in full during the year ended December 31, 2017. The loan under the $25,000 line of credit agreement is for a term of two years, is payable in monthly installments beginning January 1, 2017 and accrues interest at a rate of 5% per annum beginning October 1, 2016. A total of $414 was outstanding under the loan at December 31, 2018. The loan was repaid in full during the nine-month period ended September 30, 2019. Interest in the aggregate amount of $2 accrued and was paid in full under the loans during the nine-month period ended September 30, 2019. Interest in the aggregate amount of $139 and $657 accrued and was paid in full under the loans during the three- and nine-month periods ended September 30, 2018, respectively. No accrued interest was outstanding under the loans at September 30, 2019 and December 31, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In October 2017, the Company made a loan to one of its franchisees in the aggregate original principal amount of $7,659. The loan is due and payable in full on December 1, 2020, is payable in monthly installments beginning January 1, 2018, and does not require the payment of any interest. A total of $2,979 and $5,106 of principal was outstanding under the loan at September 30, 2019 and December 31, 2018, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In June 2019, the Company made a loan to one of its franchisees in the aggregate original principal amount of $15,000. The loan is due and payable in monthly installments with an initial payment of $2,000 due July 1, 2019, followed by six monthly payments of $2,000 due on the 27<sup>th</sup> day of each month thereafter beginning July 27<sup>th</sup>, with a final payment of $1,000 due on January 27, 2020. The loan does not require the payment of any interest. A total of $7,000 of principal was outstanding under the loan at September 30, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The carrying value of the Company’s outstanding notes receivable was $9,978 and $5,520 at September 30, 2019 and December 31, 2018, respectively, all of which was due from unrelated third parties. Of these amounts, $9,344 and $634 were classified as short-term and long-term notes receivable, respectively, at September 30, 2019, and $2,967 and $2,553 were classified as short-term and long-term notes receivable, respectively, at December 31, 2018. The Company generated interest income of $2 during the nine-month period ended September 30, 2019, and generated interest income of $139 and $657 during the three- and nine-month periods ended September 30, 2018, respectively. The Company did not have any interest receivable outstanding at September 30, 2019 and December 31, 2018.</p>
</us-gaap:LoansNotesTradeAndOtherReceivablesDisclosureTextBlock>
<us-gaap:StockholdersEquityNoteDisclosureTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 13. Capital Stock</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company’s authorized capital consisted of 100,000,000 shares of Class A common stock, par value $0.01 per share, at September 30, 2019 and December 31, 2018, respectively, of which 7,080,771 and 6,680,065 shares of common stock were outstanding at September 30, 2019 and December 31, 2018, respectively, 1,000,000 shares of Series A convertible preferred stock, par value $0.01 per share, at September 30, 2019 and December 31, 2018, of which 449,581 shares were outstanding at September 30, 2019 and December 31, 2018, and 2,500,000 shares of Series B Convertible Preferred Stock, $0.01 par value per share, none of which was outstanding at September 30, 2019 and December 31, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In May 2018, the Company issued a stock option to an employee that is exercisable into 30,000 shares of common stock. The shares were valued on the date of grant by using the Black-Scholes pricing model. The Company recognized $10,002 of stock compensation expense during the year ended December 31, 2018 in connection with the vesting of the option. In February 2019, the stock option terminated in its entirety upon the termination of the employee’s employment with the Company. In connection therewith, the stock compensation previously recognized by the Company during the year ended December 31, 2018 was reversed during the nine-month period ended September 30, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In May 2018, the Company provided an employee with the right to receive $33,000 in cash or 20,000 shares of shares of the Company’s common stock on May 15, 2021. The shares were valued at a price per share equal to the closing price of the Company’s common stock on the OTCQB on the date of grant and remeasured as of December 31, 2018. In accordance with ASC 718, as the employee is able to settle the right in either cash or common stock, the Company recognized $8,701 of stock compensation expense in connection therewith during the year ended December 31, 2018 and recorded a corresponding liability which has been recorded in accounts payable and accrued expenses within the Company’s consolidated balance sheet<font style="background-color: white">. In February 2019, the right terminated </font>in its entirety upon the termination of the employee’s employment with the Company<font style="background-color: white">. </font>In connection therewith, the stock compensation previously recognized by the Company during the year ended December 31, 2018 was reversed during the nine-month period ended September 30, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">In August 2018, the Company entered into an agreement with a firm to provide investor relations services to the Company. Under the terms of the agreement, the Company agreed to pay the firm $12,250 and issue 3,500 shares of common stock to the firm upon the execution of the agreement as compensation for services to be performed during the months of August and September 2018. The Company agreed to pay the firm $7,000 and issue 1,500 shares of common stock each month thereafter during the remainder of the term of the agreement. The Company recognized $5,652 and $16,797 of stock compensation expense under the agreement during </font>the three- and nine-month periods ended September 30, 2019<font style="background-color: white">.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The Company recognized $147 of stock compensation expense during the nine-month period ended September 30, 2019 in connection with the vesting of 10,706 shares of common stock earned by Mr. Kasturi on January 1, 2019 under the employment agreement that he was then a party to with the Company.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">In January 2019, the Company issued a restricted stock award to Seenu G. Kasturi, who is the Company’s Chief Executive Officer, pursuant to the terms of a new employment agreement that the Company entered into with him. The Company recognized $49,505 and $145,824 of stock compensation expense in connection therewith during the three- and nine-month periods ended September 30, 2019. A description of the new employment agreement and restricted stock award is set forth herein under <i>Note. 16 – Commitments and Contingencies – Employment Agreements – Seenu G. Kasturi</i>.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In January 2019, the Company commenced a private offering of up to 5,000,000 units, each unit comprised of one share of common stock and one warrant to purchase one share of common stock, at a purchase price of $1.40 per unit (the “Offering”). Each warrant is exercisable for a term of five years at an exercise price of $1.55 per share, subject to adjustment. The units are being offered without registration under the Securities Act of 1933, as amended (“Securities Act”), solely to persons who qualify as accredited investors, as that term is defined in Rule 501 of Regulation D under the Securities Act, in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506(c) of Regulation D promulgated thereunder.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company retained Maxim Group, LLC (“Maxim”) to serve as its placement agent for the Offering. The Company agreed to pay the placement agent a placement fee equal to 7% of the aggregate gross proceeds raised in the Offering and warrants exercisable for a term of five years to purchase 4% of the number of shares of common stock included in the units sold in the Offering at an exercise price of $1.55 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Offering may be increased by up to an additional $1,000,000 at the mutual discretion of the Company and the placement agent. The initial closing of the Offering is conditioned, among other things, on the Company’s acceptance of subscriptions for at least $500,000 of units and the closing of the Company’s agreement to purchase all of the membership interests in SDA Holdings.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Net proceeds, if any, from the Offering will be used to fund the deferred portion of the purchase price for the Company’s acquisition of Fat Patty’s, future payments to the persons that owned Tilted Kilt prior to SDA Holdings, and the repayment of the loan made by Seenu G. Kasturi to help fund the acquisitions of Fat Patty’s and Tilted Kilt, and the balance for general corporate purposes.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Offering was originally contemplated to terminate on March 31, 2019, unless extended by the Company and the placement agent to a date not later than May 31, 2019. <font style="background-color: white">On March 31, 2019, the Company extended the offering until May 31, 2019. No securities were sold in the offering during the three- and nine-month periods ended September 30, 2019.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 8, 2019, the Company granted a restricted stock award to Alex Andre, who is the Company’s Chief Financial Officer, for a total of 225,000 shares of the Company’s common stock. The shares vest in three equal annual installments commencing on April 30, 2020. <font style="background-color: white">The Company recognized $24,070 and $45,785 of stock compensation expense in connection therewith during the three- and nine-month periods ended September 30, 2019, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 17, 2019, the Company revised the terms of the Offering. As revised, the Offering covers the sale of up to 1,785,715 units, each unit comprised of one share of Series B convertible preferred stock (the “Shares”) and one warrant to purchase one share of common stock at a purchase price of $1.40 per unit, for an aggregate offering price of $2,500,000. Each warrant is exercisable for a term of five years at an exercise price equal to the lesser of: (i) $1.70 per share, and the greater of: (ii) one hundred twenty percent (120%) of the conversion price of the Shares and $0.28 per share, subject to adjustment. The units are being offered without registration under the Securities Act solely to persons who qualify as accredited investors, as that term is defined in Rule 501 of Regulation D under the Securities Act, in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506(c) of Regulation D promulgated thereunder.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company retained Maxim and Joseph Gunnar & Co., LLC to serve as its placement agents for the Offering. The Company agreed to pay the placement agents an aggregate placement fee equal to 7% of the aggregate gross proceeds raised in the Offering and warrants exercisable for a term of five years to purchase that number of shares of common stock equal to 7% of the number of Shares issued in the Offering and 7% of the number of shares of common stock underlying the warrants issued in the Offering at an exercise price of $1.70 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Offering may be increased by up to an additional $1,000,000 at the mutual discretion of the Company and Maxim. The Offering was set to terminate on April 30, 2019, unless extended by the Company and Maxim to a date not later than May 31, 2019. On April 30, 2019, the Company extended the Offering to May 31, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The initial closing of the Offering is conditioned, among other things, on the Company’s acceptance of subscriptions for at least $500,000 of Units and the closing of the Company’s agreement to purchase all of the membership interests in SDA Holdings, the sole owner of the entities which own Tilted Kilt.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The net proceeds, if any, from the Offering will be used to fund the partial repayment of the loan made by Seenu G. Kasturi, who is the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of its board of directors, to SDA Holdings to help fund SDA Holding’s acquisition of Tilted Kilt.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In connection therewith, on April 17, 2019, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of the Series B Convertible Preferred Stock with the Secretary of State of Nevada designating 2,500,000 shares of the Company’s authorized but unissued shares of preferred stock, $0.01 par value per share, as Series B Convertible Preferred Stock (the “Series B Preferred Stock”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Series B convertible preferred stock has a stated value of $1.40 per share. In the event that the Company is liquidated, dissolved, effects certain mergers or consolidations, transfers all or substantially all of its assets, or completes certain other significant transactions, holders of the Series B convertible preferred stock are entitled to receive, in preference to holders of the Company’s common stock and the Company’s Series A convertible preferred stock, an amount per share equal to the greater of (i) $1.40 plus any declared and unpaid dividends thereon, and (ii) the amount per share such holder would receive if such holder converted such shares of Series B convertible preferred stock into shares of common stock at a conversion price of $1.40, subject to adjustment.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Upon the completion of a firm commitment underwritten public offering (a “Qualified Public Offering”) of the Company’s common stock and concurrent listing of the Company’s common stock on the Nasdaq Stock Market, NYSE or NYSE MKT within 12 months after the final closing of the Offering, each share of Series B convertible preferred stock will automatically convert into the securities issued by the Company in the Qualified Public Offering (the “Conversion Securities”) at a conversion price equal to the lesser of: (a) $1.40 per share, and (b) the greater of: (i) 70% of the public offering price of the Conversion Securities, and (ii) $0.28 per share (the “Conversion Price”), subject to adjustment. The Conversion Price is subject to adjustment for stock splits, stock dividends, or the reclassification of the common stock. In the event that the Company does not complete a Qualified Public Offering within 12 months after the final closing of the Offering or does not file with the SEC the audited financial statements and other financial information required to be filed in connection with the Company’s acquisition of the Fat Patty’s restaurant concept on August 30, 2018 or in connection with the Company’s proposed acquisition of the Tilted Kilt within four months after the final closing of the Offering, the Company will be required to repurchase all Shares issued in the Offering for a purchase price of $1.75 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Series B convertible preferred stock participates, on an as-converted to common stock basis, in any dividends declared or paid on common stock and votes together with holders of common stock, on an as-converted to common stock basis, on all matters presented to holders of common stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company cannot undertake certain corporate actions without approval of the holders of a majority of the issued and outstanding shares of Series B convertible preferred stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The Offering terminated on May 31, 2019. No securities were sold in the offering during the three- and nine-month periods ended September 30, 2019.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The Company recognized a total of $79,226 and $189,849 for stock compensation expense during the three- and nine-month periods ended September 30, 2019, respectively. The Company had a total of $64,682 and $15,453 of stock subscription payable outstanding at September 30, 2019 and December 31, 2018, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The following table sets forth the changes in stockholders’ equity as of September 30, 2019:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Common Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Series A Convertible Preferred Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Series B Convertible Preferred Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"><font style="font-size: 10pt">Additional</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"><font style="font-size: 10pt">Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid"><font style="font-size: 10pt">Shares</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Par<br /> Value</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 10pt">Shares</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Par<br /> Value</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Shares</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Par <br /> Value</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Paid-in Capital</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Subscriptions Payable</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Accumulated Deficit</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Total</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 40%"><font style="font-size: 10pt">Balance at December 31, 2018</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">6,680,065</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">66,801</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">449,581</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">4,496</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">4,490,338</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">15,453</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">(5,247,553</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">(670,465</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Common stock issued for <br /> services</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">400,706</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">4,007</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">155,316</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">49,229</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">208,552</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Cancellation of stock option <br /> issued for services</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(10,002</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(10,002</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Net loss</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(1,303,318</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(1,303,318</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Balance at September 30, 2019</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">7,080,771</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">70,808</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">449,581</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">4,496</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">4,635,652</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">64,682</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(6,550,871</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(1,775,233</font></td> <td><font style="font-size: 10pt">)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The following table sets forth the changes in stockholders’ equity as of September 30, 2018:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Common Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Series A <br /> Convertible <br /> Preferred Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"><font style="font-size: 10pt">Additional</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"><font style="font-size: 10pt">Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Shares</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Par<br /> Value</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Shares</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Par <br /> Value</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Paid-in Capital</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Subscriptions Payable</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Accumulated Deficit</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Total</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 36%"><font style="font-size: 10pt">Balance at December 31, 2017</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">6,950,869</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">69,509</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">3,995,306</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">26,853</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">(4,768,592</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">(676,924</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Common stock issued for services</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">23,139</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">232</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">35,769</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">263,750</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">299,751</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Stock option issued for services</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,752</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,752</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Deferred franchise fees</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(196,478</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(196,478</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Beneficial conversion feature</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">155,732</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">155,732</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Common stock exchanged for preferred stock</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(449,581</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(4,496</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">449,581</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">4,496</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Net income</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">89,550</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">89,550</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Balance at September 30, 2018</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">6,524,427</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">65,244</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">449,581</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">4,496</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">4,190,559</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">290,603</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(4,875,520</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(324,617</font></td> <td><font style="font-size: 10pt">)</font></td></tr> </table> <p style="margin: 0pt"></p>
</us-gaap:StockholdersEquityNoteDisclosureTextBlock>
<RLLY:StockOptionsAndWarrantsTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 14. Stock Options and Warrants</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company issued one stock option during the year ended December 31, 2018. The stock option was exercisable into 30,000 shares of common stock at an exercise price of $1.49 and vested in three equal annual installments commencing on the first anniversary of the date of issuance. The shares were valued on the date of grant by using the Black-Scholes pricing model in accordance with the provisions of ASC Topic 718. This stock option was the only stock option outstanding at December 31, 2018. In February 2019, the stock option terminated in its entirety. The Company did not issue any stock options or warrants exercisable into shares of the Company’s common stock during the three- and nine-month periods ended September 30, 2019 and 2018, and no stock options or warrants were exercised during the three- and nine-month periods ended September 30, 2019 and 2018. There were no stock options or warrants outstanding at September 30, 2019.</p>
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<us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 15. Stock Compensation Plans</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>American Restaurant Concepts, Inc. 2011 Stock Incentive Plan</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In August 2011, the Company adopted the American Restaurant Concepts, Inc. 2011 Stock Incentive Plan. Under the plan, 1,214,286 shares of common stock may be granted to employees, officers and directors of, and consultants and advisors to, the Company under awards that may be made in the form of stock options, warrants, stock appreciation rights, restricted stock, restricted units, unrestricted stock and other equity-based or equity-related awards. As of September 30, 2019, 142,858 shares of the Company’s common stock remained available for issuance under the plan. The plan terminates in August 2021. On August 18, 2011, the Company filed a registration statement on Form S-8, File No. 333-<font style="background-color: white">176383</font>, with the SEC covering the public sale of all 1,214,286 shares of common stock available for issuance under the plan.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>ARC Group, Inc. 2014 Stock Incentive Plan</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In June 2014, the Company adopted the ARC Group, Inc. 2014 Stock Incentive Plan. Under the plan, 1,000,000 shares of common stock may be granted to employees, officers and directors of, and consultants and advisors to, the Company under awards that may be made in the form of stock options, warrants, stock appreciation rights, restricted stock, restricted units, unrestricted stock and other equity-based or equity-related awards. As of September 30, 2019, all 1,000,000 shares of the Company’s common stock remained available for issuance under the plan. The plan terminates in June 2024.</p>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 16. Commitments and Contingencies</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Employment Agreements</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Seenu G. Kasturi</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 18, 2017, the Company appointed Seenu G. Kasturi as its President, Chief Financial Officer and Chairman of its board of directors. In connection therewith, <font style="background-color: white">on January 18, 2017, the Company entered into an employment agreement with Mr. Kasturi to serve as the President and Chief Financial Officer of the Company. The employment agreement was for an initial term of three years with automatic one-year renewals thereafter unless earlier terminated or not renewed as provided therein. Under the terms of the employment agreement, Mr. Kasturi was paid annual compensation in the amount of $80,000 per year, consisting of: (i) an initial annual base salary of $26,000, and (ii) equity awards equal in value to $54,000 per year. Mr. Kasturi was eligible to receive increases in salary on January 1<sup>st</sup> of each subsequent year in the discretion of the Company’s board of directors. He was also eligible to receive annual bonuses in the discretion of the Company’s board of directors beginning with the Company’s fiscal year ended December 31, 2017. The employment agreement contains customary confidentiality, non-competition and non-solicitation provisions in favor of the Company. </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 2, 2019, the Company appointed Seenu G. Kasturi as its Chief Executive Officer. As a result of the appointment, Mr. Kasturi then served as the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the its board of directors. In connection therewith, on January 2, 2019, Mr. Kasturi resigned as the Company’s President and Richard W. Akam resigned as the Company’s Chief Executive Officer. Mr. Akam continues to serve as the Company’s Chief Operating Officer and Secretary.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">On January 2, 2019, the Company entered into an amended and restated employment agreement with Mr. Kasturi to serve as the Chief Executive Officer and Chief Financial Officer of the Company. The agreement is for an initial term of three years with automatic one-year renewals thereafter unless earlier terminated or not renewed as provided therein. Under the terms of the agreement, Mr. Kasturi will be paid an initial annual base salary in the amount of $350,000. Mr. Kasturi will be eligible to receive increases in salary on January 1<sup>st</sup> of each subsequent year in the discretion of the Company’s board of directors. He will also be eligible to receive annual bonuses in the discretion of the Company’s board of directors beginning with the Company’s fiscal year ended December 31, 2019. The employment agreement contains customary confidentiality, non-competition and non-solicitation provisions in favor of the Company. </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">Pursuant to the terms of the new employment agreement, the Company entered into a restricted stock award agreement with Mr. Kasturi pursuant to which the Company granted 390,000 shares of the Company’s common stock to Mr. Kasturi. The shares vest in accordance with the following schedule: (i) 130,000 shares on March 31, 2019; (ii) 130,000 shares on March 31, 2020; and (iii) 130,000 shares on March 31, 2021. </font>In the event the Company terminates the employment of Mr. Kasturi without “cause”, as such term is defined in the employment agreement, his restricted stock award will vest in full immediately. In the event Mr. Kasturi’s employment with the Company terminates by reason of death or “disability”, as such term is defined in the employment agreement, or if the Company terminates Mr. Kasturi’s employment for “cause”, as such term is defined in the employment agreement, or if Mr. Kasturi terminates his own employment with the Company, then any shares that have not yet vested will be forfeited to the Company. In the event of certain “changes in control” as such term is defined in the Company’s 2014 Stock Incentive Plan adopted by the Company’s board of directors on June 16, 2014, all restrictions and conditions on any of the shares then outstanding will automatically be deemed terminated or satisfied in full, as applicable, immediately prior to the consummation of the change in control event.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Richard W. Akam</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">On January 22, 2013, the Company appointed Richard W. Akam to serve as its Chief Operating Officer. In connection therewith, the Company entered into an employment agreement with Mr. Akam pursuant to which it agreed to pay him an annual base salary of $150,000, subject to annual adjustment and discretionary bonuses, plus certain standard and customary fringe benefits. The initial term of the employment agreement is for one year and automatically renews for additional one-year terms until terminated by Mr. Akam or the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">The employment agreement provided that, on July 22, 2013, the Company would grant Mr. Akam shares of its common stock equal in value to $50,000 if Mr. Akam was continuously employed by the Company through that date. The number of shares of common stock that the Company would issue to Mr. Akam would be calculated based on the last sales price of the Company’s common stock as reported on the OTCQB on July 22, 2013. The employment agreement also provided that the Company would grant Mr. Akam additional shares of its common stock equal in value to $50,000 on January 1st of each year thereafter if Mr. Akam was continuously employed by the Company through January 1st of the applicable year. The number of shares of common stock that the Company would issue to Mr. Akam for each applicable year would be calculated based on the average of the last sales price of shares of the Company’s common stock as reported on the OTCQB for the month of January of the applicable year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Notwithstanding the above, and in connection therewith, Mr. Akam agreed that the number of shares that may be earned by him under his employment agreement in connection with any particular grant would be equal to the lesser of: (i) 71,429 shares of common stock, or (ii) the number of shares of common stock calculated by dividing $50,000 by the closing price of the Company’s common stock on the day immediately preceding the date the Company’s obligation to issue the shares to him fully accrues. Mr. Akam also agreed that in the event the Company was unable to fulfill its obligation to issue all of the shares earned by him with respect to any particular grant because it did not have enough shares of common stock authorized and available for issuance, (i) Mr. Akam would not require the Company to issue more shares of common stock than are then authorized and available for issuance by the Company, and (i) the Company would be permitted to settle any liability to Mr. Akam created as a result thereof in cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">In the event the Company terminates Mr. Akam’s employment without “cause” (as such term is defined in the employment agreement), Mr. Akam will be entitled to receive the following severance compensation from the Company: (i) if the Company terminates Mr. Akam’s employment during the first year of his employment with the Company, that amount of compensation equal to the salary payable to Mr. Akam during that year, (ii) if the Company terminates Mr. Akam’s employment during the second year of his employment with the Company, that amount of compensation equal to nine months of the salary payable to Mr. Akam during that year, (iii) if the Company terminates Mr. Akam’s employment during the third year of his employment with the Company, that amount of compensation equal to six months of the salary payable to Mr. Akam during that year, and (iv) if the Company terminates Mr. Akam’s employment after the third year of his employment with the Company, that amount of compensation equal to three months of the salary payable to Mr. Akam during the year that such termination occurs. Mr. Akam will not be entitled to receive any severance compensation from the Company if the Company terminates his employment for “cause” or as a result of his disability, or if Mr. Akam resigns from his employment with the Company.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">The employment agreement also contains customary provisions that provide that, during the term of Mr. Akam’s employment with the Company and for a period of one year thereafter, Mr. Akam is prohibited from disclosing confidential information of the Company, soliciting Company employees and certain other persons, and competing with the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On July 31, 2013, the Company appointed Richard Akam as its Chief Executive Officer, Chief Financial Officer and Secretary. The Company and Mr. Akam did not amend the employment agreement in connection with the above appointments, and Mr. Akam did not receive any additional compensation in connection with the above appointments.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 19, 2013, Richard Akam resigned as the Company’s Chief Financial Officer. Mr. Akam retained his positions as the Company’s Chief Executive Officer, Chief Operating Officer and Secretary.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 31, 2017, the Company and Richard W. Akam entered into an amendment to the employment agreement. Under the terms of the amendment, the parties confirmed the appointment of Mr. Akam as the Company’s Chief Operating Officer on January 22, 2013 and as the Company’s Chief Executive Officer on July 31, 2013, clarified that Mr. Akam’s monthly base salary after the initial term of the employment agreement may be adjusted from time to time by the Company with Mr. Akam’s consent, removed the provision relating to the grant of shares of the Company’s common stock to Mr. Akam on January 1<sup>st</sup> of each year effective December 31, 2016, and clarified that the criteria for Mr. Akam’s annual bonuses will be identified and agreed upon by the Company and Mr. Akam by the end of the 1<sup>st</sup> quarter of each fiscal year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 2, 2019, the <font style="background-color: white">Company entered into a Second Amendment to Employment Agreement with Richard W. Akam pursuant to which Mr. Akam resigned as the Company Chief Executive Officer but retained his positions as the Company’s Chief Operating Officer and Secretary. </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="background-color: white"><i>Alex Andre</i></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On July 15, 2019, the Company appointed Alex Andre as its Chief Financial Officer. In connection therewith, on July 15, 2019, Seenu G. Kasturi resigned as the Company’s Chief Financial Officer. Mr. Kasturi continued to serve as the Company’s Chief Executive Officer and Chairman of the Company’s board of directors.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">On July 15, 2019, the Company entered into an employment agreement with Mr. Andre to serve as the Chief Financial Officer of the Company and, upon the completion of all applicable registration and licensing requirements, to serve as the General Counsel of the Company. The employment agreement is for an initial term of three years with automatic one-year renewals thereafter unless earlier terminated or not renewed as provided therein. Under the terms of the agreement, Mr. Andre will be paid an initial annual base salary in the amount of $175,000. On May 1, 2020, Mr. Andre’s salary will increase to $200,000 for the remainder of the employment term. Mr. Andre will be eligible to receive increases in salary on January 1<sup>st</sup> of each subsequent year in the discretion of the Company’s board of directors. On November 1, 2019, he will be eligible to receive an interim bonus of up to an amount equal to 10% of his then current base salary in the discretion of the Company’s board of directors, and will be eligible to receive annual bonuses on May 1<sup>st</sup> of each year thereafter of up to an amount equal to 10% of his then current base salary in the discretion of the Company’s board of directors. The employment agreement contains customary confidentiality, non-competition and non-solicitation provisions in favor of the Company.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Operating Leases</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Company Headquarters</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In January 2015, the Company entered into a lease with Crescent Hill Office Park for its corporate headquarters located at <font style="background-color: white">6327-4 Argyle Forest Boulevard, Jacksonville, Florida</font>. The lease provided for an initial monthly rent payment of $1,806 and expired on December 31, 2017, at which time it converted to a month-to-month lease.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In January 2018, the Company entered into a new, month-to-month lease with Crescent Hill Office Park for its corporate headquarters located at <font style="background-color: white">6327-4 Argyle Forest Boulevard, Jacksonville, Florida</font>. The lease provided for an initial monthly rent payment of $2,063 and continued in place until it terminated on December 31, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On November 15, 2018, the Company entered into a triple net lease with the Kasturi Children’s Trust (the “Trust”) for its new corporate headquarters located at 1409 Kingsley Ave., Ste. 2, Orange Park, Florida. The lease is for a term of 60 months and provides the Company with an option to extend the lease by three additional five-year periods. The lease provides for rent payments in the amount of $4,000 per month. The Trust is an irrevocable trust for which the children of Seenu G. Kasturi are the beneficiaries. The trustee of the Trust is an unrelated third party.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="background-color: white"><i>Nocatee Restaurant</i></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">In October 2013, </font>DWG Acquisitions, LLC, a Louisiana limited liability company (“DWG Acquisitions”), entered into a triple net shopping center lease with NTC-REG, LLC (“NTC-REG) for the Nocatee Restaurant. The lease provides for an initial monthly rent payment of $1,100 and an additional annual rent payment equal to the amount by which 6% of the restaurant’s annual gross sales exceeds the aggregate monthly rent payments accrued during the applicable year. The lease has an initial term of 53 months and provides DWG Acquisitions with an option to extend the lease by an additional term of 60 months. The lease was assumed by Seediv when Seediv acquired all of the assets and liabilities associated with the Nocatee and Youngerman Circle Restaurants from DWG Acquisitions pursuant to the terms of that certain asset purchase agreement, dated December 1, 2016, by and between Seediv and DWG Acquisitions (the “Seediv Purchase Agreement”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 1, 2017, DWG Acquisitions, Seediv and NTC-REG entered into an assignment and assumption & first modification to lease agreement for the Nocatee Restaurant. Under the agreement, DWG Acquisitions assigned all of its right, title, interest and claim in and to the Nocatee lease, and Seediv assumed the payment and performance of all obligations, liabilities and covenants of DWG Acquisitions under the lease for the Nocatee Restaurant. In addition, the parties amended certain terms of the lease to state that the lease covers approximately 3,400 square feet of space, to extend the term of the lease for a 60-month period commencing on April 1, 2018 and expiring March 31, 2023, and to change the rent payments to an initial monthly rent payment of $7,035 without an additional annual rent payment.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Youngerman Circle Restaurant</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">In May 2014, </font>DWG Acquisitions entered into a triple net lease with Raceland QSR, LLC, a Louisiana limited liability company (“Raceland QSR”), which is a related party, for the Youngerman Circle Restaurant. The lease provides for a monthly rent payment equal to 7% of the restaurant’s monthly net sales. The lease has an initial term of 10 years and renews automatically for additional one-year terms unless prior written notice is provided by either party. The lease was assumed by Seediv when Seediv acquired all of the assets and liabilities associated with the Nocatee and Youngerman Circle Restaurants from DWG Acquisitions pursuant to the terms of the Seediv Purchase Agreement.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 20, 2016, Seediv entered into a new triple net lease with Raceland QSR for the Youngerman Circle Restaurant. The lease provides for rent payments to be made by the Company for each of 13 rent periods per year, with each rent period comprised of four weeks. The lease provides for an initial base rent payment equal to the greater of: (i) $10,000 per rent period, or (ii) 7.5% of the Youngerman Circle Restaurant’s net sales for the applicable rent period. Commencing on the fifth (5<sup>th</sup>) anniversary and continuing every five years thereafter, the base rent will be equal to the sum of: (i) the average base rent previously in effect for the preceding five-year period, and (ii) the product of such previous average base rent multiplied by 7.5%. The lease has an initial term of 20 years and provides the Company with an option to extend the lease for two additional five-year periods. The Company agreed to guarantee Seediv’s payment and performance of all of its obligations under the lease.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Valdosta Dick’s Wings Restaurant</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 31, 2017, DWAG Valdosta, LLC, a Georgia limited liability company that is a wholly-owned subsidiary of the Company, entered into a triple net lease with PLD, L.L.L.P., a Georgia limited liability company, for the Dick’s Wings and Grill restaurant located at 153 Baytree Road, Valdosta, Georgia. The lease provides for monthly rent payments of $3,333 for the first two years and $5,000 for the following three years, plus an additional annual rent payment equal to the amount by which 6% of the restaurant’s annual gross sales exceeds $1,000,000. The lease has an initial term of five years and provides the Company with an option to extend the lease for two additional five-year periods.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Panama City Beach Dick’s Wings Restaurant</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On July 1, 2015, DWG Acquisitions entered into a lease with Arquette Development Corporation, a Florida corporation (“Arquette Development”), for the Dick’s Wings and Grill restaurant located at 1136 Thomas Drive, Panama City Beach, Florida (the “Panama City Lease”). The lease provided for rent payments of $5,000 plus an additional annual rent payment equal to the amount by which 6% of the restaurant’s annual gross sales exceeds $1,200,000. The lease had an initial term of three years and provided DWG Acquisitions with an option to extend the lease for three additional three-year periods. The lease expired on June 30, 2018 and was not renewed by DWG Acquisitions. Upon the expiration of the lease, DWG Acquisitions entered into a month-to-month tenancy with Arquette Development pursuant to which DWAG PCB, LLC, a Florida limited liability company that is a wholly-owned subsidiary of the Company (“DWAG PCB”), makes monthly rent payments of $3,000 to Arquette Development on behalf of DWG Acquisitions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Tallahassee Dick’s Wings Restaurant</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 1, 2018, DWAG Tallahassee, LLC, a Florida limited liability company that is a wholly-owned subsidiary of the Company (“DWAG Tallahassee”), entered into a triple net lease with Bannerman Crossings III, LLC, a Florida limited liability company, for a Dick’s Wings and Grill restaurant to be located at 3427 Bannerman Rd., Suite 104, Tallahassee, Florida. The lease provides for no rent during the first year of the lease, followed by monthly rent payments equal to 6% of the restaurant’s monthly gross sales for each month remaining under the lease. The lease has an initial term of 10 years and provides the Company with an option to extend the lease for two additional five-year periods. Bannerman Crossings agreed to loan DWAG Tallahassee $250,000 to be used for tenant improvements to the property. DWAG has the right to terminate the lease at the end of the 42<sup>nd</sup> month of the initial term in the event if gross sales during the period commencing on the first day of the 25<sup>th</sup> month of the initial term and ending on the last day of the 36<sup>th</sup> month of the initial term are less than $1,400,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Gonzalez Tilted Kilt Restaurant</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On September 25, 2018, TK Gonzales LA, LLC, a Louisiana limited liability company that is a wholly-owned subsidiary of the Company (“TK Gonzales”), entered into a triple net lease with Acadiana Development of Gonzales, LLC, a Louisiana limited liability company, for the Tilted Kilt restaurant located at 2838 Outfitter’s Drive, Gonzales, Louisiana. The lease provides for initial monthly rent payments of $12,000 that increase to $17,600 during the term of the lease. The lease has an initial term of 10 years and provides the Company with an option to extend the lease for two additional five-year periods.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Financing Leases</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 30, 2018, the Company entered into the Master Lease. The initial term of the lease expires on August 31, 2038. The Company has the option to extend the term of the lease for four additional successive periods of five years each. The aggregate base annual rent is $876,875 and is subject to annual increases commencing September 1, 2019 in an amount equal to the lesser of: (i) 1.75%, or (ii) 1.25 times the change in the Consumer Price Index. The Company is responsible for all costs and obligations relating to the Properties.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Sponsorship Agreements</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In July 2013, the Company entered into a three-year sponsorship agreement with the Jacksonville Jaguars, LLC (the “Jacksonville Jaguars”) and, in connection therewith, in August 2013, entered into a subcontractor concession agreement with Levy Premium Foodservice Limited Partnership (“Levy”) for a concession stand to be located at TIAA Bank Field in Jacksonville, Florida. The Company concurrently assigned all of its rights and obligations under the concession agreement to DWG Acquisitions in return for a fee of $2,000 per month for each full or partial month during which the concession agreement is in effect. In July 2015, the Company extended its sponsorship agreement with the Jaguars by an additional two years and entered into a subcontractor concession agreement with Ovations Food Services, L.P. (“Ovations”) for a second concession stand at TIAA Bank Field. The Company concurrently assigned all of its rights and obligations under the second concession agreement to DWG Acquisitions in return for an additional fee of $3,000 per month for each full or partial month during which the concession agreement is in effect.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In September 2016, the Company terminated its subcontractor concession agreements with Levy and Ovations and the related assignment agreements with DWG Acquisitions, and entered into a sub-concession agreement with Jacksonville Sportservice, Inc. (“Jacksonville Sportservice”) and DWG Acquisitions with respect to the two concession stands previously covered by the Levy and Ovations subcontractor concession agreements. The Company concurrently assigned all of its rights and obligations under the sub-concession agreement to DWG Acquisitions in return for a fee equal to the income generated by the concession stands less all expenses incurred by the concession stands for each full or partial month during which the concession agreement is in effect. In October 2017, the Company entered into a termination agreement with DWG Acquisitions whereby the Company terminated the assignment to DWG Acquisitions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In November 2017, the Company entered into a new five-year sponsorship agreement with the Jacksonville Jaguars. Under the terms of the sponsorship agreement, during each preseason and regular season football game played by the Jacksonville Jaguars and at certain other events held at the football-based stadium in Jacksonville, Florida currently named “Everbank Field”: (i) the Company has the right to display its branding on one fixed concession stand in the Bud Light Party Zone at Everbank Field and a second concession stand located on the concourse at Everbank Field, (ii) the Company has the right to have its food products sold or otherwise distributed from the stands and/or certain general concession areas at Everbank Field, and (iii) the Company has the right to receive a variety of stadium signage at Everbank Field, radio broadcasting on the Jacksonville Jaguars’ radio programming, and digital advertising on the Jacksonville Jaguars’ website and certain of its social media sites.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The term of the sponsorship agreement commences on April 1, 2018 and expires on the later of: (i) the conclusion of the 2022/23 NFL season, and (ii) February 28, 2023. The Company is required to pay the Jacksonville Jaguars annual fees in the amount of $200,000 during the first year of the agreement increasing to $216,490 during the last year of the agreement. In addition, the Company is required to provide the Jacksonville Jaguars with food, beverages and serving products equal in value to $35,000 during the first year of the agreement increasing to $37,890 during the last year of the agreement. In the event the Jacksonville Jaguars play in any post-season playoff games, the Company will pay the Jacksonville Jaguars an additional amount per playoff game equal to a pro-rated portion of the annual fee applicable during the then-current year of the agreement.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In July 2019, the Company entered into a First Amendment to Sponsorship Agreement (the “Amendment”), with the <font style="background-color: white">Jacksonville Jaguars, LLC</font>, a Delaware limited liability company (the “Jaguars”). The Amendment amended the terms of that certain Sponsorship Agreement, dated November 27, 2017, by and between the Company and the Jaguars.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Under the terms of the Amendment, during each preseason and regular season football game played by the National Football League’s Jacksonville Jaguars and at certain other events held at the football-based stadium in Jacksonville, Florida currently named “TIAA Bank Field”: (i) the Company has the right to display its branding on two fixed concession stands in the stadium located in the Bud Light Party Zone at Everbank Field, five fixed concession stands on the stadium concourse, and two fixed concession stands on the upper club level of the stadium, and up to four portable concession stands on the north end zone deck, (ii) the Company has the right to have its food products sold or otherwise distributed from the stands and/or certain general concession areas at TIAA Bank Field, (iii) the Company has the right to receive a variety of advertising and stadium signage at TIAA Bank Field, radio broadcasting on the Jacksonville Jaguars’ radio programming, and digital advertising on the Jacksonville Jaguars’ website and certain of its social media sites, and (iv) the Company will be identified as the “Official Watch Party Restaurant / Bar for Jaguars away games, including social media spots, radio spots and banner ads.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Amendment is for a term of 10 NFL football seasons and expires on the later of: (i) the conclusion of the 2028/29 NFL season, and (ii) February 2029. The Company is required to pay the Jaguars annual fees in the amount of $500,000 during the 2019/20 NFL season and $794,444 for each of the next nine NFL seasons. In addition, <font style="background-color: white">the Company </font>is required to provide the Jaguars with food, beverages and serving products equal in value to $35,700 during the 2019/20 NFL season increasing to $40,000 for each of the last six NFL seasons. In the event the Jaguars play in any post-season playoff games, <font style="background-color: white">the Company </font>will pay the Jaguars an additional amount per playoff game equal to a pro-rated portion of the annual fee applicable during the then-current year of the agreement.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents the future minimum annual payments under the sponsorship agreement as of September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 10pt">Year</font></td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Minimum</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Annual<br /> Payments</p></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 82%; text-align: justify"><font style="font-size: 10pt">2019 (remaining three months)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 15%; text-align: right"><font style="font-size: 10pt">166,667</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2020</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">794,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2021</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">794,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2022</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">794,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2023</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">794,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Thereafter</font></td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">3,970,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">7,312,667</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Teay’s Valley Fire</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On March 25, 2019, the Company experienced a fire at its Fat Patty’s restaurant located at 5156 State Route 34 in Hurricane, West Virginia. As a result, the restaurant was closed for repair. The company has an insurance policy in place on the property and received insurance proceeds in the amount of $186,224 and $766,109 under the policy for such items as lost income and damaged equipment during the three- and nine-month periods ended September 30, 2019. The Company recorded $186,224 and $584,521 of the insurance proceeds under “revenue – restaurant sales” for the three-and nine-month periods ended September 30, 2019 on its condensed consolidated statements of operations as that portion of the insurance proceeds was paid for lost income from business interruption, and recorded the remaining $181,588 of the insurance proceeds under “income from insurance proceeds” on its condensed consolidated statements of operations for the three- and nine-month periods ended September 30, 2019 as that portion of the insurance proceeds was for equipment and other assets that were destroyed in the fire. The restaurant is expected to reopen in mid-November 2019.</p>
</us-gaap:CommitmentsAndContingenciesDisclosureTextBlock>
<us-gaap:RelatedPartyTransactionsDisclosureTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 17. Related-Party Transactions</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Except as otherwise set forth below, all of the following transactions are with Seenu G. Kasturi or an entity affiliated with Mr. Kasturi. On January 18, 2017, Mr. Kasturi was appointed as the Company’s President, Chief Financial Officer and Chairman of the Company’s board of directors. As of September 30, 2019, Mr. Kasturi was the beneficial owner of 30.3% of the Company’s common stock and 100% of the Company’s Series A convertible preferred stock, collectively representing 89.4% of the voting power of the Company’s capital stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Seenu G. Kasturi has served as Vice President and Controller of TKFO since June 2018. He has owned all of the outstanding membership interests in DWG Acquisitions and Raceland QSR and has served as the President, Treasurer and Secretary of DWG Acquisitions and Raceland QSR, since their formation in 2013 and 2012, respectively. Mr. Kasturi has owned 90% of the equity interests in Blue Victory and has served as its President, Treasurer, Secretary and sole member of its board of directors since its formation in 2009. He also owned all of the outstanding membership interests in Seediv, and served as its President, Treasurer and Secretary, from its formation in July 2016 to December 19, 2016, the date the Company acquired Seediv.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Employment Agreements</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In January 2017, the Company appointed Seenu G. Kasturi as its President, Chief Financial Officer and Chairman of the board of directors and, in connection therewith, entered into an employment agreement with him. In January 2019, the Company appointed Mr. Kasturi as its Chief Executive Officer and entered into a new employment agreement with him. As of September 30, 2019, Mr. Kasturi served as the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the its board of directors. A description of the employment agreement is set forth herein under <i>Note 16. Commitments and Contingencies – Employment Agreements – Seenu G. Kasturi</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In January 2013, the Company entered into an employment agreement with Richard W. Akam in connection with his appointment as the Company’s Chief Operating Officer. As of September 30, 2019, Mr. Akam served as the Company’s Chief Operating Officer and Secretary. A description of the employment agreement is set forth herein under <i>Note 16. Commitments and Contingencies – Employment Agreements – Richard W. Akam</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In July 2019, the Company appointed Alex Andre as its Chief Financial Officer and, in connection therewith, entered into an employment agreement with him. A description of the employment agreement is set forth herein under <i>Note 16. Commitments and Contingencies – Employment Agreements – Alex Andre</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Financing Transactions</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The Company is a party to a credit facility with Blue Victory. </font>A description of the credit facility is set forth herein under <i>Note 11. Debt Obligations</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company borrowed <font style="background-color: white">funds from, and repaid funds to, Blue Victory under a separate loan that it had entered into with Blue Victory during the year ended December 31, 2017. </font>A description of the loan is set forth herein under <i>Note 11. Debt Obligations</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Leases</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In October 2013, DWG Acquisitions entered into a triple net shopping center lease with NTC-REG, LLC (“NTC-REG) for the Nocatee Restaurant. A description of the lease is set forth herein under <i>Note 16. Commitments and Contingencies – Operating Leases. </i>The lease was assumed by Seediv on December 1, 2016 when Seediv acquired all of the assets and liabilities associated with the Nocatee and Youngerman Circle Restaurants from DWG Acquisitions, and became the Company’s obligation when the Company acquired Seediv on December 19, 2016. On April 1, 2017, DWG Acquisitions, Seediv and NTC-REG entered into an assignment and assumption & first modification to lease agreement for the Nocatee Restaurant. A description of the agreement is set forth herein under <i>Note 16. Commitments and Contingencies – Operating Leases.</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In May 2014, DWG Acquisitions entered into a triple net lease with Raceland QSR for the Youngerman Circle Restaurant. A description of the lease is set forth herein under <i>Note 16. Commitments and Contingencies – Operating Leases.</i> The lease was assumed by Seediv on December 1, 2016 when Seediv acquired all of the assets and liabilities associated with the Nocatee and Youngerman Circle Restaurants from DWG Acquisitions, and became the Company’s obligation when the Company acquired Seediv on December 19, 2016. On December 20, 2016, Seediv entered into a new triple net lease with Raceland QSR for the Youngerman Circle Restaurant. A description of the lease is set forth herein under <i>Note 16. Commitments and Contingencies – Operating Leases.</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On November 15, 2018, the Company entered into a triple net lease with the Kasturi Children’s Trust (the “Trust”) for its new corporate headquarters. A description of the lease is set forth herein under <i>Note 16. Commitments and Contingencies – Operating Leases.</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Upon the expiration of the Panama City Lease on June 30, 2018, DWG Acquisitions entered into a month-to-month tenancy with Arquette Development pursuant to which DWAG PCB makes monthly rent payments of $3,000 to Arquette Development on behalf of DWG Acquisitions. A description of the Panama City Lease and DWG Acquisitions’ month-to-month tenancy with Arquette Development is set forth herein under <i>Note 16. Commitments and Contingencies – Operating Leases</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Franchise Agreements</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Prior to December 31, 2018, the Company had been a party to several franchise agreements with DWG Acquisitions pursuant to which DWG Acquisitions owned and operated Dick’s Wings restaurants. The terms of these franchise agreements were identical to the terms of the franchise agreements that the Company enters into with unrelated franchisees, except that the Company did not require DWG Acquisitions to pay a franchise fee to the Company under the franchise agreements for the Nocatee and Youngerman Circle Restaurants. The Company generated $23,256 and $100,994 in royalties and franchise fees through its franchise agreements with DWG Acquisitions during the three- and nine-month periods ended September 30, 2018, respectively. The Company had a total of $41,512 for accounts payable and accrued expenses outstanding from DWG Acquisitions at December 31, 2018. The Company did not have any accounts payable and accrued expenses outstanding from DWG Acquisitions at September 30, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In September 2018, the Company became a franchisee of a Tilted Kilt restaurant located in Gonzales, Louisiana. Richard W. Akam, who serves as the Company’s Chief Operating Officer and Secretary, has served as President of TKFO since June 2018, and Ketan Pandya, who serves as a member of the Company’s board of directors, has served as Vice President of Franchise Relations of TKFO since June 2018. Fred D. Alexander, who serves as a member of the Company’s board of directors, is the owner of SDA Holdings. The Company closed the Tilted Kilt restaurant and terminated the franchise agreement in August 2019. The Company paid ad fund fees of $1,444 and $9,423 to Tilted Kilt during the three- and nine-month periods ended September 30, 2019. The Company was not required to pay any royalties or franchise fees to Tilted Kilt under its franchise agreement with Tilted Kilt.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Series A Convertible Preferred Stock</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In June 2018, the Company entered into a securities purchase agreement with Seenu G. Kasturi pursuant to which the Company issued Mr. Kasturi 449,581 shares of Series A convertible preferred stock in exchange for 449,581 shares of common stock then held by Mr. Kasturi. A description of this transaction is set forth herein under <i>Note 13. Capital Stock.</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Acquisitions and Dispositions</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 19, 2016, the Company acquired all of the outstanding membership interests of Seediv from Seenu G. Kasturi for a purchase price of $600,000 and an earnout payment. The earn-out payment was determined to be $199,682, of which $144,326 had been paid as of September 30, 2019. As part of the transaction, the Company assumed debt owed by Seediv to Blue Victory in the amount of $216,469 which the Company repaid in full during the year ended December 31, 2017. A description of the debt is set forth herein under <i>Note 11. Debt Obligations</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">On October 4, 2017, Seediv entered into an agreement for purchase and sale of real estate with Raceland QSR pursuant to which Seediv agreed to purchase the real property located at 6055 Youngerman Circle in Argyle Circle, Jacksonville, Florida from Raceland QSR. The purchase price for the property was to be the lesser of: (i) $2,000,000, or (ii) the appraised value of the property determined by the appraisal completed by the financing source proposed to be utilized by Seediv to finance the acquisition of the property. The agreement provided for the payment by Seediv of a deposit of $10,000 within 10 days of the date of the agreement to an escrow agent to be selected by the parties with the remainder of the purchase price to be paid by Seediv at closing. Seediv had the right to terminate the transaction in the event that certain feasibility studies, the title commitment or the appraisal was unsatisfactory to Seediv, or if Raceland QSR breached any of its representations, warranties, covenants, agreements or obligations under the agreement, in which case the deposit would be returned to Seediv. The closing of the transaction was to occur on December 3, 2017.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On November 30, 2017, <font style="background-color: white">Seediv </font>and Raceland QSR entered into an amendment to the agreement pursuant to which the parties agreed to extend the closing date by 60 calendar days. On February 1, 2018, Seediv and Raceland QSR entered into a termination agreement and mutual release with respect to the agreement pursuant to which the parties agreed to terminate the agreement and release each other from any claims arising out of the agreement.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 30, 2018, the Company closed upon the asset purchase agreement for Fat Patty’s. In connection therewith, the Company issued a secured convertible promissory note to Seenu G. Kasturi pursuant to which the Company borrowed $622,929 to help finance this acquisition. A description of the promissory note is set forth herein under <i>Note 11. Debt Obligations</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 30, 2018, the Company entered into a membership interest purchase agreement with SDA Holdings and Fred D. Alexander pursuant to which the Company agreed to acquire all of the issued and outstanding membership interests in SDA Holdings. A description of this transaction is set forth herein under <i>Note 5. Agreement to Acquire Tilted Kilt.</i> Richard W. Akam, who served as the Company’s Chief Operating Officer and Secretary as of September 30, 2019, has served as President of TKFO since June 2018, and Ketan Pandya, who serves as a member of the Company’s board of directors, has served as Vice President of Franchise Relations of TKFO since June 2018. Mr. Alexander serves as a member of the Company’s board of directors.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Other Related-Party Arrangements.</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Certain part-time employees of the Company are also employed on a part-time basis by various entities affiliated with Seenu G. Kasturi. In addition, the Company had a total of $350,530 and $231,187 of accounts payable and accrued expenses outstanding at September 30, 2019 and December 31, 2018, respectively, that were owed to employees and other affiliates of the Company primarily for salaries and other payroll liabilities.</p>
</us-gaap:RelatedPartyTransactionsDisclosureTextBlock>
<us-gaap:LegalMattersAndContingenciesTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 18. Judgments in Legal Proceedings</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On February 25, 2011, a legal proceeding entitled <i>Duval Station Investment, LLC vs. Hot Wing Concepts, Inc. d/b/a Dick’s Wings and Grill, and American Restaurant Concepts, Inc. </i>was filed with the Fourth Judicial Circuit Court in and for Duval County, Florida. In the complaint, the plaintiff alleged damages for breach of guaranty. On October 4, 2011, a final judgment was entered by the court in favor of the plaintiff in the amount of $161,747, and on November 11, 2011 a final judgment for attorneys’ fees and costs was entered in favor of the plaintiff in the amount of $33,000. These judgments, together with accrued interest of $2,369 thereon, resulted in a total loss from legal proceedings of $197,116 during the year ended December 25, 2011. The Company had not paid any part of the judgment or the accrued interest thereon. As a result, the loss was reflected in settlement agreements payable at September 30, 2019 and December 31, 2018. Interest expense in the amount of $2,841 and $8,431 accrued on the outstanding balance of the loss during the three- and nine-month periods ended September 30, 2019. The interest expense was credited to settlement agreements payable. The Company had accrued interest of $89,953 and $81,522 outstanding at September 30, 2019 and December 31, 2018, respectively. The outstanding judgment and legal fees in the amount of $194,747 along with the accrued interest of $89,953 totaled $284,700 at September 30, 2019. The outstanding judgment and legal fees in the amount of $194,747 along with the accrued interest of $81,522 totaled $276,269 at December 31, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In January 2015, Santander Bank filed a complaint against the Company in the Circuit Court, Fourth Judicial Circuit in and for Duval County, Florida, seeking damages of $194,181 plus interest, costs and attorney’s fees for breach of a guaranty of certain obligations of Ritz Aviation, LLC (“Ritz Aviation”) under a promissory note executed by Ritz Aviation in July 2005. During the Company’s fourth fiscal quarter of 2016, Santander Bank informed the Company that certain assets of Ritz Aviation had been sold for $82,642 and that the proceeds from the sale were applied towards the balance of the damages being sought, resulting in an outstanding balance of damages sought of $111,539. The outstanding balance of damages sought was reflected in accrued legal contingency at September 30, 2019 and December 31, 2018. Interest expense in the amount of $1,974 and $5,856 accrued on the outstanding balance of the accrued legal contingency during the three- and nine-month period ended September 30, 2019. The interest expense was credited to accrued legal contingency. A total of $47,495 and $41,638 of accrued interest, and $10,586 of other expenses (excluding legal fees), were outstanding at September 30, 2019 and December 31, 2018, respectively, resulting in an aggregate potential loss of $169,620 and $163,764 at September 30, 2019 and December 31, 2018, respectively. This case is currently pending.</p>
</us-gaap:LegalMattersAndContingenciesTextBlock>
<us-gaap:SegmentReportingDisclosureTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 19. Segment Reporting</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company has two reportable segments, which are Company-owned restaurants and franchise operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Company-Owned Restaurants</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Company-owned restaurants consist of several brands that are aggregated into one reportable segment because of the nature of the products and services, the production processes, the customers, the methods used to distribute the products and services, the nature of the regulatory environment, and store level profit margin for each of the brands are similar. The brands are Dick’s Wings and Grill and Fat Patty’s. All Company-owned restaurants are casual dining restaurants. There were a total of eight and nine company-owned restaurants at September 30, 2019 and December 31, 2018, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Franchise Operations</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">The Company only offers franchises for the Dick’s Wings brand. All franchised restaurants are casual dining restaurants. Franchises are sold in markets where expansion is deemed advantageous to the development of the Dick’s Wings brand and system of restaurants. The Company enters into franchise agreements with franchisees to build and operate restaurants using the Dicks Wings brand within a defined geographic area. The agreements have a 10-year term and can be renewed for one additional 10-year term.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">In exchange for royalty payments, advertising funds, franchise fees and area development fees, the Company provides the franchisees with the use of its Dick’s Wings trademarks and Dick’s Wings system, which includes uniform operating procedures, standards for consistency and quality of products, technical knowledge, and procedures for accounting, inventory control and management. The Company also provides franchisees with assistance with site selection, prototypical architectural plans, interior and exterior design and layout, training, marketing and sales techniques, and restaurant openings. Franchisees generally remit royalty payments weekly for the prior week’s sales. Franchise fees and area development fees are paid upon the signing of the related franchise agreements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Franchisees are required to operate their restaurants in compliance with their franchise agreements, which includes adherence to operating and quality control standards, procedures and specifications established by the Company. Franchisees are evaluated regularly by the Company for compliance with their franchise agreements through the use of periodic, unannounced, on-site inspections and standard evaluation reports.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">The Company is not required to provide loans, leases, or guarantees to franchisees or the franchisees’ employees and vendors. If a franchisee becomes financially distressed, the Company is not required to provide financial assistance. If financial distress leads to insolvency of the franchisee or the filing of a petition by or against the franchisee under bankruptcy laws, the Company has the right, but not the obligation, to acquire the franchise at fair value as determined by an independent appraiser selected by the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">There were a total of 16 and 17 franchised restaurants at September 30, 2019 and December 31, 2018, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Segment Financial Information</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Information on segments and a reconciliation of income from operations to net loss is as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended<br /> September 30,  2019</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended<br /> September 30,  2018</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended<br /> September 30,  2019</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended<br /> September 30,  2018</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 9pt">Revenue</font></td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 28%; padding-left: 10pt"><font style="font-size: 9pt">Company-owned restaurants</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 15%; text-align: right"><font style="font-size: 9pt">3,803,609</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 15%; text-align: right"><font style="font-size: 9pt">2,104,825</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 15%; text-align: right"><font style="font-size: 9pt">12,150,290</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 15%; text-align: right"><font style="font-size: 9pt">3,871,929</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Franchise operations</font></td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">239,035</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">255,239</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">670,142</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">791,886</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt"><font style="font-size: 9pt">Total revenue</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,042,644</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">2,360,064</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">12,820,432</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,663,815</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 9pt">Net Loss</font></td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Company-owned restaurants</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">240,570</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">229,728</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">639,735</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">410,820</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Franchise operations</font></td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">76,872</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">133,402</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">276,414</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">590,597</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt"><font style="font-size: 9pt">Total income from operations</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">317,442</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">363,130</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">916,149</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">1,001,417</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; padding-left: 10pt"><font style="font-size: 9pt">Corporate and unallocated expenses</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">(914,956</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 9pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">(265,663</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 9pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">(2,219,467</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 9pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">(911,867</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 9pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt"><font style="font-size: 9pt">Net (loss) / income</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(597,514</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">97,467</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(1,303,318</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">89,550</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 9pt">Depreciation and Amortization</font></td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Company-owned restaurants</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">296,843</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">47,833</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">864,980</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">70,995</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Franchise operations</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Corporate</font></td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">1,389</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">146</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">5,511</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">289</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt"><font style="font-size: 9pt">Total</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">298,232</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">47,979</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">870,491</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">71,284</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 9pt">Capital Expenditures</font></td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Company-owned restaurants</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">317,780</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">88,408</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">468,877</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">223,526</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Franchise operations</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Corporate</font></td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">1,224</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">9,000</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">4,058</font></td> <td> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: bottom; padding-left: 20pt"><font style="font-size: 9pt">Total</font></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"><font style="font-size: 9pt">$</font></td> <td style="vertical-align: bottom; text-align: right"><font style="font-size: 9pt">317,780</font></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"><font style="font-size: 9pt">$</font></td> <td style="vertical-align: bottom; text-align: right"><font style="font-size: 9pt">89,632</font></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"><font style="font-size: 9pt">$</font></td> <td style="vertical-align: bottom; text-align: right"><font style="font-size: 9pt">477,877</font></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"><font style="font-size: 9pt">$</font></td> <td style="vertical-align: bottom; text-align: right"><font style="font-size: 9pt">227,584 </font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
</us-gaap:SegmentReportingDisclosureTextBlock>
<us-gaap:SubsequentEventsTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 21. Subsequent Events</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Acquisition of WingHouse Concept</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 11, 2019, the Company and ARC WingHouse, LLC, a Florida limited liability company that is a wholly-owned subsidiary of the Company (“ARC WingHouse”), entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Soaring Wings, LLC, a Florida limited liability company (“Soaring Wings”), Soaring Wings HQ, LLC, a Florida limited liability company (“Soaring Wings HQ”), Soaring Wings Advertising, LLC, a Florida limited liability company (“Soaring Wings Advertising”), Soaring Wings IP, LLC, a Florida limited liability company (“Soaring Wings IP”), and the wholly-owned subsidiaries of Soaring Wings that own and operate all of the Restaurants (as defined below) (the “WH Operating Entities”). Soaring Wings, Soaring Wings HQ, Soaring Wings Advertising, Soaring Wings IP and the WH Operating Entities are sometimes collectively referred to as the “Sellers” and each a “Seller”. The Company and ARC Winghouse are sometimes collectively referred to as the “Purchasers”. The transactions contemplated by the Asset Purchase Agreement are sometimes referred to herein collectively as the “Acquisition”. The closing of the Acquisition occurred on October 11, 2019 (the “Closing Date”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Sellers are the owners and operators of the WingHouse Bar and Grill restaurant concept (the “WingHouse Concept”), which is comprised of 24 WingHouse Bar and Grill restaurants (the “Restaurants”). Purchasers agreed to pay the Sellers <font style="background-color: white">a total of $18,000,000 as adjusted pursuant to a working capital adjustment (the “Purchase Price”), and to assume, satisfy and discharge certain assumed liabilities. On the Closing Date, ARC WingHouse paid $11,000,000 to the Sellers and delivered to Sellers a promissory note in the amount of $1,000,000 (the “Purchaser Note”). The Purchaser Note accrues interest at a rate of five percent (5%) per annum. The Purchaser Note is </font>due and payable in a single payment on the earliest to occur of the following: (i) the first anniversary of the date of the Purchaser Note, (ii) the merger or sale of substantially all the membership interest or assets of ARC WingHouse, and (iii) the liquidation, dissolution or winding up of ARC WingHouse. <font style="background-color: white">In addition, ARC WingHouse delivered to SW WH Holdings, LLC, a Florida limited liability company (“SW WH Holdings”), an equity interest in ARC WingHouse representing a ten percent (10%) ownership interest in ARC WingHouse (the “Equity Interest”). The Company also agreed to deliver to Soaring Wings shares (the “ARC Stock”) of the Company’s common stock on each of the first three anniversaries of the Closing Date. The number of shares of common stock to be delivered on each anniversary will be </font>equal to the quotient of $1,000,000 divided by the following per share prices<font style="background-color: white">: (i) $1.40 per share of common stock on the first anniversary, (ii) 2.00 per share of common stock on the second anniversary, and (iii) $3.00 per share of common stock on the third anniversary (collectively, the “ARC Stock Consideration”). The per share price of the ARC Stock Consideration will be equitably adjusted for any stock dividend, stock split, reverse stock split or recapitalization. If the ARC Stock is not listed and quoted for trading on the NYSE, </font>NASDAQ Global Select Market, NASDAQ Global Market or NASDAQ Capital Market <font style="background-color: white">on any of the first, second and third anniversaries of the Closing (the first such anniversary referred to as a “Listing Failure Anniversary”), then ARC WingHouse will pay $1,000,000 cash to Soaring Wings on the Listing Failure Anniversary and each anniversary of the Closing after a Listing Failure Anniversary (if any), ending on the third anniversary of the Closing Date in full satisfaction of the Company’s obligation to deliver the ARC Stock Consideration to Soaring Wings on the Listing Failure Anniversary and each anniversary thereafter, ending on the 3<sup>rd</sup> anniversary (the “Contingent Cash Consideration”). Notwithstanding the existence of a Listing Failure Anniversary, Soaring Wings may, in its sole discretion, elect to receive ARC Stock on the Listing Failure Anniversary and/or any anniversary after the Listing Failure Anniversary in lieu of a $1,000,000 cash payment by providing ARC WingHouse with written notice no less than 30 days before the Listing Failure Anniversary or subsequent anniversary, as applicable. The ARC Stock Consideration is subject to the terms of a Put Agreement (as defined below), and Sellers were granted customary piggy-back registration rights with respect to the ARC Stock Consideration.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">Also on October 11, 2019,</font> the Purchasers entered into a Put Agreement (the “Put Agreement”; together with the Asset Purchase Agreement, the “Purchase Agreements”) with Soaring Wings pursuant to which Soaring Wings was granted the right, but not the obligation, upon written notice to the Purchasers given at any time before the Put Deadline (as defined below), to require the Company to purchase, for cash, at the Put Closing (as defined below), all or any portion of the shares of ARC Stock received by Soaring Wings under Section 1.2(c) of the Asset Purchase Agreement or Section 15 of the Put Agreement. In the event Soaring Wings receives ARC Stock pursuant to Section 1.2(c) of the Asset Purchase Agreement and puts all of such ARC Stock to the Company, then the amount payable by the Company to Soaring Wings at the Put Closing will be equal to the Put Price (as defined below). In the event Soaring Wings elects to put only a portion of such shares to the Company, either because Soaring Wings received Contingent Cash Consideration on one or more of such anniversaries, Soaring Wings sold some of the ARC Stock, Soaring Wings elected to retain some of the ARC Stock and put only a portion of the ARC Stock to the Company, and/or for any other reason, then the amount payable by the Company to Soaring Wings at the Put Closing will calculated in the following manner: (x) the Put Price, multiplied by (y) a fraction, the numerator of which is the number of shares of ARC Stock put to the Company by Soaring Wings hereunder, and the denominator of which is the number of shares of ARC Stock received by Soaring Wings under the Asset Purchase Agreement had Soaring Wings received ARC Stock on each of the first, second and third anniversaries of the Closing Date. The amount payable by the Company to Soaring Wings at the Put Closing is referred to herein as, the “Put Payment”. In the event that Soaring Wings receives the Put Price from Purchasers, then, without any action on the part of the Purchasers, SW WH Holdings or any other person, the Equity Interest will be immediately terminated and forfeited to ARC WingHouse and no longer be owned beneficially or of record by SW WH Holdings.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">For the purposes hereof, “Put Price” means an amount equal to: (i) $6,000,000, less (ii) the aggregate dividends (if any) received by Soaring Wings from the Company attributable to any shares of ARC Stock received by Soaring Wings under Section 1.2(c) of the Asset Purchase Agreement and not required to be paid to City National Bank (as defined below) pursuant to that certain Subordination Agreement, dated October 11, 2019, by ARC WingHouse and Soaring Wings for the benefit of City National Bank (the “Subordination Agreement”), less (iii) the aggregate distributions (other than tax distributions) made by ARC WingHouse to Soaring Wings under its operating agreement that are not required to be paid to City National Bank pursuant to the Subordination Agreement, less (iv) the aggregate cash payments made by Purchaser to Soaring Wings following a Listing Failure Anniversary pursuant to Section 1.2(c) of the Asset Purchase Agreement that are not required to be paid to City National Bank pursuant to the Subordination Agreement (and for the avoidance of doubt, were not applied to satisfy losses pursuant to Section 7.9(b) under the Asset Purchase Agreement), less (v) the aggregate amount of losses satisfied by Sellers to Purchasers or their indemnitees pursuant to Sections 7.9(a), (b) and (c) under the Asset Purchase Agreement that are not required to be paid to City National Bank pursuant to the Subordination Agreement.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">For the purposes hereof, “Put Deadline” means the later of (y) the fifth anniversary of the Closing Date and (z) 12 months following the date on which the Company provides written notice to Soaring Wings that: (i) it has indefeasibly paid and satisfied in full the Loan (as defined below), (ii) Soaring Wings is not restricted from exercising its rights under this Agreement (in whole or in part) pursuant to the Subordination Agreement, or otherwise, and (iii) the Company has legally sufficient funds to pay the Put Payment in full.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.45in">In connection with the closing of the Acquisition, Seenu G. Kasturi executed a guaranty in favor of Soaring Wings guaranteeing all of the Purchasers’ obligations under the Asset Purchase Agreement, the Put Agreement, and the Purchaser Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.45in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Financing of WingHouse Acquisition</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">On October 11, 2019, ARC WingHouse entered into a Loan Agreement (the “Loan Agreement”) with City National Bank of Florida (“City National Bank”) pursuant to which the Company borrowed $12,250,000 (the “Loan”) to help fund the acquisition of the WingHouse Concept. In connection therewith, ARC WingHouse issued a promissory note in favor of City National Bank in the amount of $12,250,000 (the “CNB Note”). Interest accrues under the CNB Note at a rate of six percent (6%) per annum. The Company makes monthly payments of principal and interest of </font>$179,481 to City National Bank under the CNB Note. <font style="background-color: white">T</font>he entire outstanding principal balance of the CNB Note plus all accrued interest is due and payable in full on October 11, 2024.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">ARC WingHouse may make prepayments of principal under the CNB Note, provided, however, that (i) if ARC WingHouse prepays any portion of the outstanding balance of the CNB Note during the first year of the term of the CNB Note, ARC WingHouse will pay a fee to City National Bank in an amount equal to three percent (3%) of the amount prepaid by ARC WingHouse in excess of $2,250,000, (ii) if ARC WingHouse prepays any portion of the outstanding balance of the CNB Note during the second year of the term of the CNB Note, ARC WingHouse will pay to City National Bank a fee in an amount equal to two percent (2%) of the amount prepaid by ARC WingHouse, and (iii) if ARC WingHouse prepays any portion of the outstanding balance of the CNB Note during the third (3<sup>rd</sup>) year of the term of the CNB Note, ARC WingHouse will pay to City National Bank a fee in an amount equal to one percent (1%) of the amount prepaid by ARC WingHouse. Thereafter, ARC WingHouse may make prepayments of principal under the CNB Note without penalty or premium.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Seenu G. Kasturi, as guarantor for the loan, deposited $1,250,000 with City National Bank in an account that is under the sole control of City National Bank. Mr. Kasturi granted a security interest to City National Bank in the account and the funds held therein as security for the loan. City National Bank will return the funds to Mr. Kasturi in the event ARC WingHouse contributes a like amount of funds to City National Bank. City National Bank will return all funds held in the account to Mr. Kasturi or ARC WingHouse, as applicable, upon repayment of the loan by ARC WingHouse.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In addition, ARC WingHouse deposited $1,000,000 with City National Bank in an account that is under the sole control of City National Bank. ARC WingHouse granted a security interest to City National Bank in the account and the funds held therein as security for the loan. After April 11, 2020, but no sooner than City National Bank receives ARC WingHouse’s audited financial statements for the year ended December 31, 2019 and ARC Winghouse’s quarterly financial statements for the quarter end March 30, 2020, so long as ARC Winghouse is in compliance with the financial covenants contained in the Loan Agreement and no event of default as occurred, City National Bank, upon the request of ARC WingHouse, will disburse certain amounts to pay down the Purchaser Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The CNB Note is secured, in part, by that that certain Security Agreement, dated October 11, 2019, executed by ARC WingHouse in favor of City National Bank (as the same may be amended or modified from time to time, the “Security Agreement”), granting City National Bank a lien and security interest in and to all assets owned by ARC WingHouse. In addition, the Company entered into a Negative Pledge Agreement, dated October 11, 2019, pursuant to which the Company agreed not to: (i) sell, transfer, assign or lease any of its assets, except for the transfer or sale of assets in the ordinary course of business for at least equal consideration, (ii) create, incur, assume or suffer to exist certain types of liens on its assets, (iii) enter into any agreement with any person other than City National Bank which prohibits or limits the ability of the Company to create, incur, assume or suffer to exist any security interest, mortgage, pledge, lien or other encumbrance upon any of its assets, and (iv) create, incur, assume or suffer to exist certain types of indebtedness.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In connection with the completion of the Loan, Seenu G. Kasturi executed a guaranty in favor of City National Bank guaranteeing all of ARC WingHouse’s obligations under the CNB Note, the Loan Agreement and the other loan documents executed in connection therewith.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Appointment of Alex Andre</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 22, 2019, the Company appointed Alex Andre as its General Counsel, and on November 12, 2019, the Company appointed Mr. Andre as its Secretary. Mr. Andre will also continue to serve as the Company’s Chief Financial Officer. In connection there with, Richard W. Akam resigned as the Company’s Secretary.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Appointment of Joe Dominiak</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On November 12, 2019, the Company appointed Joseph Dominiak, age 54, as its Chief Operating Officer. In connection therewith, on November 12, 2019, Richard W. Akam resigned as the Company’s Chief Operating Officer.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">On November 6, 2019, the Company entered into an employment agreement with Mr. Dominiak to serve as the Chief Operating Officer of the Company. The employment agreement is for an initial term of three years with automatic one-year renewals thereafter unless earlier terminated or not renewed as provided therein. Under the terms of the agreement, Mr. Dominiak will be paid an initial annual base salary in the amount of $200,000. Beginning January 1, 2021, he will be eligible to receive increases in salary in the discretion of the Company’s board of directors. Mr. Dominiak will be eligible to receive annual bonuses on each anniversary of the Effective Date of up to 20% of his then current base salary in the discretion of the Company’s board of directors. The employment agreement contains customary confidentiality, non-competition and non-solicitation provisions in favor of the Company.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">On November 12, 2019, the Company entered into a restricted stock award agreement with Mr. Dominiak pursuant to which the Company granted 100,000 shares of the Company’s common stock, $0.01 par value per share, to Mr. Dominiak. The shares vest in accordance with the following schedule: (i) 33,333 shares on November 12, 2020; (ii) 33,333 shares on November 12, 2021; and (iii) 33,334 shares on November 12, 2022. </font>In the event the Company terminates the employment of Mr. Dominiak without “cause”, as such term is defined in Section 4(c) of the employment agreement, then all shares that would have vested within the following 12 months had the Executive continued to be employed by the Company during such period shall immediately vest in full. In the event Mr. Dominiak’s employment with the Company terminates by reason of death or “disability”, as such term is defined in Section 4(b) of the employment agreement, or if the Company terminates Mr. Dominiak’s employment for “cause”, as such term is defined in Section 4(c) of the employment agreement, or if Mr. Dominiak terminates his own employment with the Company, then any shares that have not yet vested shall be forfeited to the Company. In the event of certain “changes in control” as such term is defined in the Company’s 2014 Stock Incentive Plan adopted by the Company’s board of directors on June 16, 2014, all restrictions and conditions on any of the shares then outstanding shall automatically be deemed terminated or satisfied in full, as applicable, immediately prior to the consummation of the change in control event.</p>
</us-gaap:SubsequentEventsTextBlock>
<us-gaap:BasisOfAccountingPolicyPolicyTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Interim Financial Information</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) <font style="background-color: white">applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions were eliminated in consolidation.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The accompanying </font>unaudited condensed consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. Certain information and footnotes disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules and regulations. Notwithstanding this, the Company believes that the disclosures herein are adequate to make the information presented not misleading.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K. Information presented as of December 31, 2018 is derived from the audited consolidated financial statements. The results of operations for the three- and nine-month periods ended September 30, 2019 are not necessarily indicative of the results that the Company will have for any subsequent quarter or full fiscal year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">This summary of significant accounting policies is provided to assist the reader in understanding the Company’s financial statements. The financial statements and notes thereto are representations of the Company’s management. The Company’s management is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and have been consistently applied in the preparation of the financial statements.</p>
</us-gaap:BasisOfAccountingPolicyPolicyTextBlock>
<us-gaap:UseOfEstimates contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Estimates</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.</p>
</us-gaap:UseOfEstimates>
<RLLY:AccountingChangesAndErrorCorrectionsPolicyTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Restatement</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company has restated its previously issued condensed consolidated statement of operations for the three- and nine-month periods ended September 30, 2018. The impact of the restatement is more specifically described herein under <i>Note 20. Restatement of Previously Issued Condensed Consolidated Financial Statements</i>.</p>
</RLLY:AccountingChangesAndErrorCorrectionsPolicyTextBlock>
<RLLY:GoingConcernPolicyTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Going Concern</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The company concluded that facts existed that created an uncertainty about the Company’s ability to continue as a going concern as of December 31, 2016. </font>The Company generated net income of $344,740 and cash flows from operations of $248,345 during the year ended December 31, 2017. While the Company had a working capital deficit of $2,784,844 at December 31, 2018 and a net loss of $282,483 during the year ended December 31, 2018, it generated cash flows from operations of $478,238 during the year ended December 31, 2018. The improvement in cash flows during the year ended December 31, 2017 was due primarily to the Company’s acquisition of two Company-owned Dick’s Wings restaurants in December 2016. The improvement in cash flows during the year ended December 31, 2018 was due primarily to the Company’s acquisition of Fat Patty’s in August 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">While the Company generated a net loss of $1,303,318 during the nine-month period ended September 30, 2019 and had a working capital deficit of $4,100,874 at September 30, 2019, the Company generated cash flow from operating activities of $565,856 during the nine-month period ended September 30, 2019 and received continued financial support from related parties during the nine-month period ended September 30, 2019 and the years ended December 31, 2018 and 2017. As a result of these factors, the Company concluded that the substantial doubt about its ability to continue as a going concern had been alleviated as of September 30, 2019.</p>
</RLLY:GoingConcernPolicyTextBlock>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Segment Disclosure</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company has both <font style="background-color: white">Company-owned restaurants and franchised restaurants</font>, all of which operate in the full-service casual dining industry in the United States. Pursuant to the standards of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, <i>Segment Reporting</i> (“ASC 280”), the Company’s Chief Executive Officer, who comprises the Company’s Chief Operating Decision Maker function for the purposes of ASC 280, concluded that the Company has two segments for reporting purposes, which are Company-owned restaurants and franchise operations.</p>
</us-gaap:SegmentReportingPolicyPolicyTextBlock>
<us-gaap:ReceivablesPolicyTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Other Receivables</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Other receivables <font style="background-color: white">was comprised primarily of receipts from credit card sales by Company-owned Fat Patty’s restaurants that occurred after the Company completed the acquisition of Fat Patty’s that were held by the former owner of Fat Patty’s, all of which are expected to be collected in full by the Company during the next 12 months.</font></p>
</us-gaap:ReceivablesPolicyTextBlock>
<us-gaap:IntangibleAssetsFiniteLivedPolicy contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Intangible Assets, Net</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company acquired various intangible assets in connection with the acquisition of Fat Patty’s. The intangible assets were comprised of a tradename and a non-compete agreement. The Company amortizes the non-compete agreement on a straight-line basis over the expected period of benefit, which is five years. The tradename has an indefinite life and is not subject to amortization but tested for impairment on an annual basis. The Company recognized $942 and $2,826 of amortization expense for the non-compete agreement during the three- and nine-month periods ended September 30, 2019.</p>
</us-gaap:IntangibleAssetsFiniteLivedPolicy>
<RLLY:OtherPayablesPolicyTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="background-color: white"><u>Other Payables</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">Other payables was comprised primarily of accounts payable owed to the former owner of Fat Patty’s for alcohol and other items purchased by him in connection with the operation of the concept.</font></p>
</RLLY:OtherPayablesPolicyTextBlock>
<us-gaap:RevenueFromContractWithCustomerPolicyTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Revenue Recognition</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The Company generates revenue from two primary sources: (a) retail sales at company-operated restaurants; and (b) franchise revenue, which consists of royalties based on a percentage of sales reported by franchised restaurants, funds contributed by franchisees to the Company’s general advertising fund, and initial and renewal franchise license fees.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Revenue From Company-Owned Restaurants</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Revenue from company-owned restaurants is primarily recognized as customers pay for products at the point of sale. The Company reports Company-owned restaurant revenues net of sales and use taxes collected from customers and remitted to governmental taxing authorities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Revenue From Franchised Restaurants</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">The Company grants individual restaurant franchises to operators in exchange for initial franchise license fees and continuing royalty payments.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Initial and renewal franchise license fees are payable by the franchisee upon a new restaurant opening or renewal of an existing franchise agreement. Under franchise agreements, the Company provides franchisees with: (a) a franchise license, which includes a non-exclusive license to our intellectual property for the duration of the franchise agreement and where the Company manages a marketing or co-op advertising fund, advertising and promotion management; (b) pre-opening services, such as training and inspections; and (c) ongoing services, such as development of training materials and menu items and restaurant monitoring and inspections. The services that the Company provides are highly interrelated and dependent on the franchise license so the Company does not consider the services to be individually distinct and therefore accounts for them as a single performance obligation. The performance obligation is satisfied by providing a right to use the Company’s intellectual property over the term of each franchise agreement. Accordingly, initial and renewal franchise fees are recognized as revenue on a straight-line basis over the term of the respective agreement.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">The Company’s performance obligation under area development agreements generally consists of an obligation to grant exclusive development rights for a particular geographic region over a stated term. These development rights are not distinct from franchise agreements and are creditable towards the initial franchise license fee, so upfront fees paid by franchisees for exclusive development rights are deferred and allocated to the appropriate franchise restaurant when the franchise agreement is executed.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Franchise royalty revenues represents sales-based royalties that are related entirely to the Company’s performance obligation under the franchise agreement. Continuing franchise royalty revenues are based on a percentage of monthly sales and are recognized on the accrual basis as franchise sales occur. In certain circumstances, the Company may reduce or waive franchise license fees and/or the franchise royalty percentage for a period of time.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Franchises contributions to the Company’s general advertising funds are calculated as a percentage of monthly sales. Contributions to the fund generally represent sales-based or fixed monthly fee amounts that are related entirely to the Company’s performance obligation under the franchise agreement and are recognized as franchise sales occur.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>ASC Topic 606</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 1, 2018, the Company adopted the provisions of ASC Topic 606, <i>Revenue From Contracts With Customers</i> (“ASC 606”). ASC 606 supersedes the current revenue recognition guidance, including industry-specific guidance. ASC 606 provides a single framework in which revenue is required to be recognized to depict the transfer of goods or services to customers in amounts that reflect the consideration to which a company expects to be entitled in exchange for those goods or services. The Company adopted this new guidance effective the first day of fiscal year 2018, using the modified retrospective method of adoption. Under this method, the cumulative effect of initially adopting the guidance was recognized as an adjustment to the opening balance of equity at January 1, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Franchise Fees</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">ASC 606 impacted the timing of recognition of franchise fees. Under previous guidance, these fees were typically recognized upon the opening of restaurants. Under ASC 606, the fees are deferred and recognized as revenue over the term of the individual franchise agreements. The effect of the required deferral of fees received in a given year will be mitigated by the recognition of revenue from fees retrospectively deferred from prior years. The Company recognized $4,718 and $11,968 of deferred franchise fees as income during the three- and nine-month periods ended September 30, 2019, and recognized $7,250 and $45,264 of deferred franchise fees as income during the three- and nine-month periods ended September 30, 2018, respectively. The carrying value of the Company’s deferred franchised fees was $103,266 at September 30, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Advertising Funds</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">ASC 606 also impacted the accounting for transactions related to the Company’s general advertising fund. Under previous guidance, franchisee contributions to and expenditures by the fund were not included in the Company’s condensed consolidated financial statements. Under ASC 606, the Company records contributions to and expenditures by the fund as revenue and expenses within the Company’s condensed consolidated financial statements. The Company recognized contributions to and expenditures by the fund of $33,255 and $97,123 during the three- and nine-month periods ended September 30, 2019, and recognized contributions to and expenditures by the fund of $46,816 and $145,076 during the three- and nine-month periods ended September 30, 2018, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Gift Card Funds</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Additionally, ASC 606 impacted the accounting for transactions related to the Company’s gift card program. Under previous guidance, estimated breakage income on gift cards was deferred until it was deemed remote that the unused gift card balance would be redeemed. Under ASC 606, breakage income on gift cards is recognized as gift cards are utilized. The effect of this change on the Company’s condensed consolidated financial statements was negligible.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Disaggregation of Revenue</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table disaggregate revenue by primary geographical market and source:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended <br /> September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended <br /> September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 9pt">Primary <br /> Geographic Markets</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 16%; padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Florida</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 21%; text-align: right"><font style="font-size: 9pt">1,587,413</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 17%; text-align: right"><font style="font-size: 9pt">1,285,038</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 17%; text-align: right"><font style="font-size: 9pt">4,239,126</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 17%; text-align: right"><font style="font-size: 9pt">3,489,830</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Georgia</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">256,430</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">47,050</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">824,190</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">146,009</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Kentucky</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">616,417</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">232,744</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">1,907,793</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">232,744</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Louisiana</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">95,884</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625,227</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">North Carolina</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Texas</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">West Virginia</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">1,485,250</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">795,232</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">5,222,846</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">795,232</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 9pt">Total revenue</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,042,644</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">2,360,064</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">12,820,432</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,663,815</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 9pt">Sources of Revenue</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Restaurant sales</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">3,803,609</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">2,104,825</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">12,150,290</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">3,871,929</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Royalties</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">193,010</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">197,369</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">547,548</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">591,847</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Franchise fees</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">4,718</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">7,250</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">11,968</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">45,264</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Advertising fund fees</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">33,255</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">46,816</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">97,123</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">145,077</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Other revenue</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">8,052</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">3,804</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">13,503</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">9,698</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 9pt">Total revenue</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,042,644</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">2,360,064</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">12,820,432</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,663,815</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Deferred Revenue</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">Deferred revenue consists of contract liabilities resulting from initial and renewal franchise license fees paid by franchisees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement, as well as upfront development fees paid by franchisees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement once it is executed or if the development agreement is terminated.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents changes in deferred franchise fees as of and for the nine-month period ended September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Total Liabilities</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 84%; text-align: justify"><font style="font-size: 10pt">Deferred franchise fees at December 31, 2018</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 13%; text-align: right"><font style="font-size: 10pt">65,234</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Revenue recognized during the period</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(11,968</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">New deferrals due to cash received</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">50,000</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Deferred franchise fees at September 30, 2019</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">103,266</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Anticipated Future Recognition of Deferred Franchise Fees</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents the estimated franchise fees to be recognized in the future related to performance obligations that were unsatisfied at September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 10pt">Year</font></td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Franchise <br /> Fees to be Recognized</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 77%; text-align: justify"><font style="font-size: 10pt">2019 (remaining three months)</font></td> <td style="width: 2%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 19%; text-align: right"><font style="font-size: 10pt">4,250</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2020</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">17,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2021</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">15,925</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2022</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">14,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2023</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">11,637</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Thereafter</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">40,454</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">103,266</font></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
</us-gaap:RevenueFromContractWithCustomerPolicyTextBlock>
<us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Recent Accounting Pronouncements</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, <i>Leases </i>(“ASU 2016-02”), establishing Accounting Standards Codification (“ASC”) Topic 842, <i>Leases</i> (“ASC Topic 842”), which modified and superseded the guidance under ASC Topic 840, <i>Leases</i> (“ASC Topic 840”). The FASB subsequently issued several other Accounting Standards Updates, including ASU 2018-11 and ASU 2018-12, which among other things provide for a practical expedient related to the recognition of the cumulative effect on retained earnings resulting from the adoption of the pronouncements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">ASC Topic 842 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less are accounted for in the same manner as operating leases under ASC Topic 840.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 22.5pt">The Company adopted ASC Topic 842 effective January 1, 2019 applying the modified retrospective transition approach. Under this approach, results for reporting periods beginning after January 1, 2019, are presented under Topic 842, while prior periods are not adjusted and continue to be reported under the accounting standards in effect for those periods. The Company recognized $3,832,779 and $3,832,286 of additional assets and liabilities, respectively, in connection with its operating leases upon the adoption of ASC Topic 842 on January 1, 2019. The Company did not recognize any additional assets or liabilities in connection with its financing lease upon the adoption of ASC Topic 842 on January 1, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 22.5pt">The Company determines whether a contract is or contains a lease at inception of the contract based on whether an identified asset exists and whether the Company has the right to obtain substantially all of the benefit of the assets and to control its use over the full term of the agreement. When available, the Company uses the rate implicit in the lease to discount lease payments to present value. However, none of our leases provide a readily determinable implicit rate. Therefore, the Company estimated its incremental borrowing rate considering both the revolving credit rates and a credit notching approach to discount the lease payments based on information available at lease commencement. There are no material residual value guarantees and no restrictions or covenants included in the Company’s lease agreements. Certain of the Company’s leases include provisions for variable payments. These variable payments are typically determined based on a measure of throughput or actual days or another measure of usage and are not included in the calculation of lease liabilities and right-of-use assets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 22.5pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company elected the package of practical expedients available for implementation, which allows for the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><font style="font-size: 10pt"></font></td> <td style="text-align: justify"><font style="font-size: 10pt">An entity need not reassess whether any expired or existing contracts are or contain leases;</font></td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td><font style="font-size: 10pt"></font></td> <td style="text-align: justify"><font style="font-size: 10pt">An entity need not reassess the lease classification for any expired or existing leases; and</font></td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td><font style="font-size: 10pt"></font></td> <td style="text-align: justify"><font style="font-size: 10pt">An entity need not reassess initial indirect costs for any existing leases.</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 40pt">Furthermore, the Company elected the optional transition method to make January 1, 2019 the initial application date of the standard. This package of practical expedients allows entities to account for their existing leases for the remainder of their respective lease terms following the previous accounting guidance.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company also elected to adopt the optional transition practical expedient provided in ASU 2018-01 to not evaluate under ASC Topic 842 for existing or expired land easements prior to the application date to determine if they meet the definition of a lease.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The impact of ASC Topic 842 is more specifically described herein under <i>Note 12. Leases</i>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In June 2018, the FASB issued ASU 2018-07, <i>Improvements to Nonemployee Share-Based Payment Accounting </i>(“ASU 2018-07”), which expands the scope of ASC Topic 718, Compensation – Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions. Under the new guidance, the measurement of equity-classified nonemployee awards is fixed at the grant date. The Company adopted ASU 2018-07 on January 1, 2019. The adoption of ASU 2018-07 did not have a significant impact on the Company’s condensed consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to the Company’s operations or that no material effect is expected on the Company’s condensed consolidated financial statements as a result of future adoption.</p>
</us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock>
<us-gaap:DisaggregationOfRevenueTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table disaggregate revenue by primary geographical market and source:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended <br /> September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended <br /> September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 9pt">Primary <br /> Geographic Markets</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 16%; padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Florida</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 21%; text-align: right"><font style="font-size: 9pt">1,587,413</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 17%; text-align: right"><font style="font-size: 9pt">1,285,038</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 17%; text-align: right"><font style="font-size: 9pt">4,239,126</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 17%; text-align: right"><font style="font-size: 9pt">3,489,830</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Georgia</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">256,430</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">47,050</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">824,190</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">146,009</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Kentucky</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">616,417</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">232,744</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">1,907,793</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">232,744</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Louisiana</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">95,884</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625,227</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">North Carolina</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Texas</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">625</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">West Virginia</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">1,485,250</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">795,232</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">5,222,846</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">795,232</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 9pt">Total revenue</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,042,644</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">2,360,064</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">12,820,432</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,663,815</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 9pt">Sources of Revenue</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Restaurant sales</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">3,803,609</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">2,104,825</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">12,150,290</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">3,871,929</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Royalties</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">193,010</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">197,369</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">547,548</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">591,847</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Franchise fees</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">4,718</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">7,250</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">11,968</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">45,264</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Advertising fund fees</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">33,255</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">46,816</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">97,123</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">145,077</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Other revenue</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">8,052</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">3,804</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">13,503</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">9,698</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 9pt">Total revenue</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,042,644</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">2,360,064</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">12,820,432</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,663,815</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
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<RLLY:ScheduleOfDeferredFranchiseFeesUnderContractBalancesTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents changes in deferred franchise fees as of and for the nine-month period ended September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Total Liabilities</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 84%; text-align: justify"><font style="font-size: 10pt">Deferred franchise fees at December 31, 2018</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 13%; text-align: right"><font style="font-size: 10pt">65,234</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Revenue recognized during the period</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(11,968</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">New deferrals due to cash received</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">50,000</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Deferred franchise fees at September 30, 2019</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">103,266</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
</RLLY:ScheduleOfDeferredFranchiseFeesUnderContractBalancesTableTextBlock>
<RLLY:RevenueFuturePerformanceObligationEstimatedFranchiseFeesWhichIsUnsatisfedTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents the estimated franchise fees to be recognized in the future related to performance obligations that were unsatisfied at September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 10pt">Year</font></td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Franchise <br /> Fees to be Recognized</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 77%; text-align: justify"><font style="font-size: 10pt">2019 (remaining three months)</font></td> <td style="width: 2%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 19%; text-align: right"><font style="font-size: 10pt">4,250</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2020</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">17,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2021</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">15,925</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2022</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">14,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2023</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">11,637</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Thereafter</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">40,454</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">103,266</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
</RLLY:RevenueFuturePerformanceObligationEstimatedFranchiseFeesWhichIsUnsatisfedTableTextBlock>
<us-gaap:AccountingChangesAndErrorCorrectionsTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 20. Restatement of Previously Issued Condensed Consolidated Financial Statements</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company is restating its condensed consolidated financial statements for the three- and nine-month periods ended September 30, 2018 to correct an error related to the manner by which it recorded $92,638 and $204,378, respectively, of food discounts provided to customers and complimentary meals provided to employees. The Company recorded each of these items as an increase to restaurant operating costs – other operating expenses rather than as a reduction to restaurant sales on its condensed consolidated statements of operations. As a result, restaurant sales and restaurant operating costs – other operating expenses were each overstated by $92,638 and $204,378 during the three-and nine-month periods ended September 30, 2018, respectively. The Company has restated its condensed consolidated financial statements for the three- and nine-month periods ended September 30, 2018 for the sole purpose of reducing restaurant sales and restaurant operating costs – other operating expenses by $92,638 and $204,378, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The impact of the restatement on the Company’s condensed consolidated statement of operations for the three- and nine-month periods is presented below. The restatement did not have any impact on the Company’s condensed consolidated balance sheet as of September 30, 2018 or the Company’s statement of cash flows for the nine-month period ended September 30, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">For the Three Months Ended September 30, 2018</font></td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Condensed Consolidated Statement of</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Operations: </i></p></td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">As Previously Reported</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Adjustments</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">As <br /> Restated</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 49%; text-align: justify"><font style="font-size: 10pt">Restaurant sales</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">2,197,463</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">(92,638</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">2,104,825</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Revenue</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">2,452,702</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(92,638</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">2,360,064</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Restaurant operating costs – other operating expenses</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(474,165</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">92,638</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(381,527</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Total operating expenses</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(2,916,504</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">92,638</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(2,823,866</font></td> <td><font style="font-size: 10pt">) </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">For the Nine Months Ended September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i>Condensed Consolidated Statement of</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i>Operations: </i></p></td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">As Previously Reported</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Adjustments</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">As <br /> Restated</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 49%"><font style="font-size: 10pt">Restaurant sales</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">4,076,307</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">(204,378</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">3,871,929</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Revenue</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">4,868,193</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(204,378</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">4,663,815</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Restaurant operating costs – other operating expenses</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(911,356</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">204,378</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(706,978</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Total operating expenses</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(5,414,567</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">204,378</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(5,210,189</font></td> <td><font style="font-size: 10pt">)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b></b></p>
</us-gaap:AccountingChangesAndErrorCorrectionsTextBlock>
<us-gaap:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The assets acquired and liabilities assumed were comprised of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 79%; text-align: justify"><font style="font-size: 10pt">Cash</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">7,100</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Inventory</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">91,424</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Intangible assets</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">788,840</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Equipment</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">614,295</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total assets acquired</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">1,501,659</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Gift card liabilities</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(24,707</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total liabilities assumed</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(24,707</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Gain on bargain purchase</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(624,952</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Net assets acquired with note payable and deferred compensation liability</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">852,000</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
</us-gaap:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock>
<us-gaap:BusinessAcquisitionProFormaInformationTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table summarizes <font style="background-color: white">certain financial information for the three- and nine-month periods ended September 30, 2019 contained in the Company’s condensed </font>consolidated financial statements and certain unaudited pro forma financial information for the <font style="background-color: white">three- and nine-month periods ended September 30, 2018 </font>as if the acquisition of Fat Patty’s had occurred on January 1, 2018:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months <br /> Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months <br /> Ended <br /> September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months <br /> Ended <br /> September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months<br /> Ended <br /> September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 32%; text-align: justify"><font style="font-size: 9pt">Revenue</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">4,042,644</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">4,323,019</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">12,820,432</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">12,515,636</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 9pt">(Loss) / income from continuing operations</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">(421,961</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">(13,051</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">(986,970</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">1,256,629</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 9pt">Net income / (loss)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">(597,514</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">548,218</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">(1,303,318</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">1,892,553</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 9pt">Net income / (loss) per share – basic</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.08</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.08</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.18</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.28</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 9pt">Net income / (loss) per share – fully diluted</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.08</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.08</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.18</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.28</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
</us-gaap:BusinessAcquisitionProFormaInformationTextBlock>
<us-gaap:ScheduleOfInventoryCurrentTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Inventory was comprised of the following at September 30, 2019 and December 31, 2018, respectively:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 62%; text-align: justify"><font style="font-size: 10pt">Food</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">130,786</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">120,426</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Beverages</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">64,337</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">90,599</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">195,123</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">211,025</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> </table> <p style="margin: 0pt"></p>
</us-gaap:ScheduleOfInventoryCurrentTableTextBlock>
<us-gaap:PropertyPlantAndEquipmentTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Property and equipment was comprised of the following at September 30, 2019 and December 31, 2018, respectively:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 62%; text-align: justify"><font style="font-size: 10pt">Land, buildings and improvements</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">-0-</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 16%; text-align: right"><font style="font-size: 10pt">11,500,000</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Leasehold improvements</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">342,500</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">323,500</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Furniture, fixtures and equipment</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">1,466,977</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">1,021,735</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Subtotal</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">1,809,477</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">12,845,235</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Less: accumulated depreciation</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(285,097</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(307,733</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">1,524,380</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">12,537,502</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
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<us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents the future amortization expense to be recognized from the Company’s intangible assets at September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Year</p></td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Amortization Expense<br /> to be Recognized</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 79%; text-align: justify"><font style="font-size: 10pt">2019 (remaining three months)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 18%; text-align: right"><font style="font-size: 10pt">942</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2020</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,768</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2021</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,768</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2022</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,768</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2023</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">1,493</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Thereafter</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">13,739</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
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<us-gaap:FairValueLiabilitiesMeasuredOnRecurringBasisTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents the contingent consideration recorded by the Company in connection with the acquisition of Seediv within the fair value hierarchy utilized to measure fair value on a recurring basis at September 30, 2019 and December 31, 2018, respectively:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Level 1</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Level 2</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Level 3</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 61%; text-align: justify"><font style="font-size: 10pt">September 30, 2019</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 10%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 10%; text-align: right"><font style="font-size: 10pt">55,356</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 10%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">December 31, 2018</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">55,356</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
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<us-gaap:ScheduleOfStockholdersEquityTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The following table sets forth the changes in stockholders’ equity as of September 30, 2019:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Common Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Series A Convertible Preferred Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Series B Convertible Preferred Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"><font style="font-size: 10pt">Additional</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"><font style="font-size: 10pt">Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid"><font style="font-size: 10pt">Shares</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Par<br /> Value</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 10pt">Shares</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Par<br /> Value</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Shares</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Par <br /> Value</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Paid-in Capital</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Subscriptions Payable</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Accumulated Deficit</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Total</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 40%"><font style="font-size: 10pt">Balance at December 31, 2018</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">6,680,065</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">66,801</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">449,581</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">4,496</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">4,490,338</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">15,453</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">(5,247,553</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 3%; text-align: right"><font style="font-size: 10pt">(670,465</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Common stock issued for <br /> services</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">400,706</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">4,007</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">155,316</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">49,229</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">208,552</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Cancellation of stock option <br /> issued for services</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(10,002</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(10,002</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Net loss</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(1,303,318</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(1,303,318</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Balance at September 30, 2019</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">7,080,771</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">70,808</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">449,581</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">4,496</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">4,635,652</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">64,682</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(6,550,871</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(1,775,233</font></td> <td><font style="font-size: 10pt">)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The following table sets forth the changes in stockholders’ equity as of September 30, 2018:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Common Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Series A <br /> Convertible <br /> Preferred Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"><font style="font-size: 10pt">Additional</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"><font style="font-size: 10pt">Stock</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Shares</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Par<br /> Value</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Shares</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Par <br /> Value</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Paid-in Capital</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Subscriptions Payable</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Accumulated Deficit</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Total</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 36%"><font style="font-size: 10pt">Balance at December 31, 2017</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">6,950,869</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">69,509</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt"></font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">3,995,306</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">26,853</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">(4,768,592</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 5%; text-align: right"><font style="font-size: 10pt">(676,924</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Common stock issued for services</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">23,139</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">232</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">35,769</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">263,750</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">299,751</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Stock option issued for services</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,752</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">3,752</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Deferred franchise fees</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(196,478</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(196,478</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Beneficial conversion feature</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">155,732</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">155,732</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Common stock exchanged for preferred stock</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(449,581</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(4,496</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">449,581</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">4,496</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Net income</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt"></font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">89,550</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">89,550</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Balance at September 30, 2018</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">6,524,427</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">65,244</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">449,581</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">4,496</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">4,190,559</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">290,603</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(4,875,520</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(324,617</font></td> <td><font style="font-size: 10pt">)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b></b></p>
</us-gaap:ScheduleOfStockholdersEquityTableTextBlock>
<RLLY:ScheduleOfFutureMinimumRentalPaymentsForSponsorshipAgreementTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table presents the future minimum annual payments under the sponsorship agreement as of September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 10pt">Year</font></td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Minimum</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Annual<br /> Payments</p></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 82%; text-align: justify"><font style="font-size: 10pt">2019 (remaining three months)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 15%; text-align: right"><font style="font-size: 10pt">166,667</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2020</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">794,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2021</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">794,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">2022</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">794,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">2023</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">794,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Thereafter</font></td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">3,970,000</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">7,312,667</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
</RLLY:ScheduleOfFutureMinimumRentalPaymentsForSponsorshipAgreementTableTextBlock>
<us-gaap:ScheduleOfSegmentReportingInformationBySegmentTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Information on segments and a reconciliation of income from operations to net loss is as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended<br /> September 30,  2019</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended<br /> September 30,  2018</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended<br /> September 30,  2019</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended<br /> September 30,  2018</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 9pt">Revenue</font></td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 28%; padding-left: 10pt"><font style="font-size: 9pt">Company-owned restaurants</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 15%; text-align: right"><font style="font-size: 9pt">3,803,609</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 15%; text-align: right"><font style="font-size: 9pt">2,104,825</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 15%; text-align: right"><font style="font-size: 9pt">12,150,290</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 15%; text-align: right"><font style="font-size: 9pt">3,871,929</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Franchise operations</font></td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">239,035</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">255,239</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">670,142</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">791,886</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt"><font style="font-size: 9pt">Total revenue</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,042,644</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">2,360,064</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">12,820,432</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">4,663,815</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 9pt">Net Loss</font></td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Company-owned restaurants</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">240,570</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">229,728</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">639,735</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">410,820</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Franchise operations</font></td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">76,872</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">133,402</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">276,414</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">590,597</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt"><font style="font-size: 9pt">Total income from operations</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">317,442</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">363,130</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">916,149</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">1,001,417</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt; padding-left: 10pt"><font style="font-size: 9pt">Corporate and unallocated expenses</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">(914,956</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 9pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">(265,663</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 9pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">(2,219,467</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 9pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">(911,867</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 9pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt"><font style="font-size: 9pt">Net (loss) / income</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(597,514</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">97,467</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(1,303,318</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">89,550</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 9pt">Depreciation and Amortization</font></td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Company-owned restaurants</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">296,843</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">47,833</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">864,980</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">70,995</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Franchise operations</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Corporate</font></td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">1,389</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">146</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">5,511</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">289</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 20pt"><font style="font-size: 9pt">Total</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">298,232</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">47,979</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">870,491</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">71,284</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid"><font style="font-size: 9pt">Capital Expenditures</font></td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Company-owned restaurants</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">317,780</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">88,408</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">468,877</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">223,526</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Franchise operations</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt"></font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Corporate</font></td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">1,224</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">9,000</font></td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 9pt">4,058</font></td> <td> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: bottom; padding-left: 20pt"><font style="font-size: 9pt">Total</font></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"><font style="font-size: 9pt">$</font></td> <td style="vertical-align: bottom; text-align: right"><font style="font-size: 9pt">317,780</font></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"><font style="font-size: 9pt">$</font></td> <td style="vertical-align: bottom; text-align: right"><font style="font-size: 9pt">89,632</font></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"><font style="font-size: 9pt">$</font></td> <td style="vertical-align: bottom; text-align: right"><font style="font-size: 9pt">477,877</font></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"><font style="font-size: 9pt">$</font></td> <td style="vertical-align: bottom; text-align: right"><font style="font-size: 9pt">227,584 </font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
</us-gaap:ScheduleOfSegmentReportingInformationBySegmentTextBlock>
<srt:ScheduleOfCondensedIncomeStatementTableTextBlock contextRef="From2019-01-01to2019-09-30">
<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The restatement did not have any impact on the Company’s condensed consolidated balance sheet as of September 30, 2018 or the Company’s statement of cash flows for the nine-month period ended September 30, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">For the Three Months Ended September 30, 2018</font></td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Condensed Consolidated Statement of</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Operations: </i></p></td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">As Previously Reported</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Adjustments</font></td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">As <br /> Restated</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 49%; text-align: justify"><font style="font-size: 10pt">Restaurant sales</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">2,197,463</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">(92,638</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">2,104,825</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Revenue</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">2,452,702</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(92,638</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">2,360,064</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Restaurant operating costs – other operating expenses</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(474,165</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">92,638</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(381,527</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: justify"><font style="font-size: 10pt">Total operating expenses</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(2,916,504</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">92,638</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(2,823,866</font></td> <td><font style="font-size: 10pt">) </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">For the Nine Months Ended September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i>Condensed Consolidated Statement of</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i>Operations: </i></p></td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">As Previously Reported</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Adjustments</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">As <br /> Restated</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 49%"><font style="font-size: 10pt">Restaurant sales</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">4,076,307</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">(204,378</font></td> <td style="width: 1%"><font style="font-size: 10pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">3,871,929</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Revenue</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">4,868,193</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(204,378</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">4,663,815</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Restaurant operating costs – other operating expenses</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(911,356</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">204,378</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(706,978</font></td> <td><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Total operating expenses</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(5,414,567</font></td> <td><font style="font-size: 10pt">)</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">204,378</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">(5,210,189</font></td> <td><font style="font-size: 10pt">)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b></b></p>
</srt:ScheduleOfCondensedIncomeStatementTableTextBlock>
<us-gaap:SharePrice contextRef="AsOf2019-01-31_us-gaap_PrivatePlacementMember" unitRef="USDPShares" decimals="INF"> 1.40 </us-gaap:SharePrice>
<us-gaap:SaleOfStockDescriptionOfTransaction contextRef="From2019-01-01to2019-01-31_us-gaap_PrivatePlacementMember"> The Company agreed to pay the placement agent a placement fee equal to 7% of the aggregate gross proceeds raised in the Offering and warrants exercisable for a term of five years to purchase 4% of the number of shares of common stock included in the units sold in the Offering at an exercise price of $1.55 per share. </us-gaap:SaleOfStockDescriptionOfTransaction>
<us-gaap:SaleOfStockDescriptionOfTransaction contextRef="From2019-04-16to2019-04-17_custom_SeriesBConvertiblePreferredStockMember"> As revised, the Offering covers the sale of up to 1,785,715 units, each unit comprised of one share of Series B convertible preferred stock (the "Shares") and one warrant to purchase one share of common stock at a purchase price of $1.40 per unit, for an aggregate offering price of $2,500,000. </us-gaap:SaleOfStockDescriptionOfTransaction>
<RLLY:TerminationOfPlan contextRef="From2011-08-01to2011-08-31_custom_StockIncentivePlanTwoThousandElevenMember"> The plan terminates in August 2021. </RLLY:TerminationOfPlan>
<RLLY:TerminationOfPlan contextRef="From2014-06-01to2014-06-30_custom_StockIncentivePlanTwoThousandFourteenMember"> The plan terminates in June 2024. </RLLY:TerminationOfPlan>
<RLLY:PaymentOfFundFee contextRef="From2019-01-01to2019-09-30_custom_TiltedKiltMember" unitRef="USD" decimals="0"> 9423 </RLLY:PaymentOfFundFee>
<RLLY:PaymentOfFundFee contextRef="From2019-07-01to2019-09-30_custom_TiltedKiltMember" unitRef="USD" decimals="0"> 1444 </RLLY:PaymentOfFundFee>
<RLLY:DesignatingSharesAuthorized contextRef="AsOf2019-04-17_custom_SeriesBConvertiblePreferredStockMember_srt_MaximumMember" unitRef="Shares" decimals="INF"> 2500000 </RLLY:DesignatingSharesAuthorized>
<RLLY:UnissuedSharesOfPreferredStock contextRef="AsOf2019-04-17_custom_SeriesBConvertiblePreferredStockMember_srt_MaximumMember" unitRef="USDPShares" decimals="INF"> 0.01 </RLLY:UnissuedSharesOfPreferredStock>
<RLLY:AccruedLiabilitiesForUnredeeemedGiftCardsCurrent contextRef="AsOf2018-12-31" unitRef="USD" decimals="0"> 81956 </RLLY:AccruedLiabilitiesForUnredeeemedGiftCardsCurrent>
<RLLY:AccruedLiabilitiesForUnredeeemedGiftCardsCurrent contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 55999 </RLLY:AccruedLiabilitiesForUnredeeemedGiftCardsCurrent>
<RLLY:IncreaseDecreaseInGiftCardsLiability contextRef="From2019-01-01to2019-09-30" unitRef="USD" decimals="0"> -25957 </RLLY:IncreaseDecreaseInGiftCardsLiability>
<RLLY:IncreaseDecreaseInGiftCardsLiability contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="USD" decimals="0"> 2192 </RLLY:IncreaseDecreaseInGiftCardsLiability>
<us-gaap:IncreaseDecreaseInNotesReceivableRelatedPartiesCurrent contextRef="From2019-01-01to2019-09-30" unitRef="USD" xsi:nil="true"/>
<us-gaap:IncreaseDecreaseInNotesReceivableRelatedPartiesCurrent contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="USD" decimals="0"> -614 </us-gaap:IncreaseDecreaseInNotesReceivableRelatedPartiesCurrent>
<RLLY:IncreaseDecreaseInAdFundReceivableRelatedParty contextRef="From2019-01-01to2019-09-30" unitRef="USD" xsi:nil="true"/>
<RLLY:IncreaseDecreaseInAdFundReceivableRelatedParty contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="USD" decimals="0"> -519 </RLLY:IncreaseDecreaseInAdFundReceivableRelatedParty>
<RLLY:OperatingLeaseRightOfUseAssetAmortization contextRef="From2019-01-01to2019-09-30" unitRef="USD" decimals="0"> 250005 </RLLY:OperatingLeaseRightOfUseAssetAmortization>
<RLLY:OperatingLeaseRightOfUseAssetAmortization contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="USD" xsi:nil="true"/>
<us-gaap:StockIssuedDuringPeriodSharesRestrictedStockAwardGross contextRef="From2019-04-07to2019-04-08_custom_EmployeeMember" unitRef="Shares" decimals="INF"> 225000 </us-gaap:StockIssuedDuringPeriodSharesRestrictedStockAwardGross>
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<RLLY:OccupancyCost contextRef="From2019-01-01to2019-09-30" unitRef="USD" decimals="0"> 432463 </RLLY:OccupancyCost>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 11. Debt Obligations</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In September 2013, the Company entered into a loan agreement with <font style="background-color: white">Blue Victory Holdings, Inc., a Nevada corporation (“Blue Victory”), </font>pursuant to which Blue Victory agreed to extend a revolving line of credit facility to the Company for up to $1,000,000. In March 2017, the Company entered into an amendment to the loan agreement with Blue Victory to reduce the maximum amount of funds available under the credit facility from $1,000,000 to $50,000. The credit facility is unsecured, accrues interest at a rate of 6% per annum, and will terminate upon the earlier to occur of the fifth anniversary of the loan agreement or the occurrence of an event of default. The outstanding principal balance of the credit facility and any accrued and unpaid interest thereon are payable in full on the termination date. All loan requests are subject to approval by Blue Victory. Loans may be prepaid by the Company without penalty and borrowed again at any time prior to the termination date. Blue Victory has the right to convert all or any portion of the outstanding principal of the credit facility, together with accrued interest payable thereon, into shares of common stock at a conversion rate equal to: (i) the closing price of the common stock on the date immediately preceding the conversion date if the common stock is then listed on the OTCQB or a national securities exchange, (ii) the average of the most recent bid and ask prices on the date immediately preceding the conversion date if the common stock is then listed on any of the tiers of the OTC Markets Group, Inc., or (iii) in all other cases, the fair market value of the common stock as determined by the Company and Blue Victory. <font style="background-color: white">The Company did not borrow any funds under the credit facility during the nine-month period ended September 30, 2019 and the year ended December 31, 2018, and there was no principal outstanding under the credit facility at September 30, 2019 and December 31, 2018.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The Company entered into an unsecured loan with Blue Victory during the year ended December 31, 2017. </font>The amount of principal outstanding under the loan was $30,503 at December 31, 2017. The Company borrowed $277,707 and repaid $71,877 under the loan during the year ended December 31, 2018. Accordingly, the amount of principal outstanding under the loan was $236,333 at December 31, 2018. The Company borrowed $1,540,886 and repaid $1,513,884 under the loan during the nine-month period ended September 30, 2019. Accordingly, the amount of principal outstanding under the loan was $263,335 at September 30, 2019. The Company recognized $2,910 and $9,894 of interest expense under the loan during the three- and nine-month periods ended September 30, 2019, and recognized $816 and $2,466 of interest expense under the loan during the three- and nine-month periods ended September 30, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 30, 2018, the Company entered into a secured convertible promissory note with Seenu G. Kasturi pursuant to which the Company borrowed $622,929 to help finance the Fat Patty’s Acquisition. A description of the note is set forth herein under <i>Note 4. Acquisition of Fat Patty’s.</i> At the date of the financing, because the effective conversion rate of the convertible note was less than the market value of the Company’s common stock, a beneficial conversion feature of $155,732 was recorded as a discount to the convertible note and an increase to additional paid in capital. The Company recorded a total of $16,648 for amortization of the discount to the convertible note during the year ended December 31, 2018. Accordingly, the amount of unamortized debt discount outstanding was $139,084 at December 31, 2018. The Company recorded $8,410 and $23,285 for amortization of the discount to the convertible note during the three- and nine-month periods ended September 30, 2019. Accordingly, the amount of unamortized debt discount outstanding was $115,799 at September 30, 2019, and the principal balance of the note net of unamortized debt discount outstanding was $507,130 at September 30, 2019. The Company recognized $9,416 and $27,848 of interest expense under the convertible note during the three- and nine-month periods ended September 30, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The carrying value of the Company’s outstanding promissory notes, net of unamortized discount of $115,799 and $139,084 at September 30, 2019 and December 31, 2018, respectively, and excluding financing and operating lease liabilities, was $770,465 and $720,178 at September 30, 2019 and December 31, 2018, respectively.</p>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth the maturity of our operating and financing leases liabilities as of September 30, 2019:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Operating Leases</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Financing Leases</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Year Ended December 31,</font></td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 66%; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">2019 (remaining three months)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">124,703</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 10pt">223,055</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">2020</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">544,759</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">897,425</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">2021</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">570,765</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">913,130</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">2022</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">583,392</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">929,110</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">2023</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">472,444</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">945,369</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Thereafter</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">3,206,389</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">15,924,033</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Total lease payments</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">5,502,452</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 10pt">19,832,122</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Less: imputed interest</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(1,866,503</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(8,574,446</font></td> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 20pt; text-align: justify"><font style="font-size: 10pt">Total</font></td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">3,635,949</font></td> <td> </td> <td> </td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">11,257,676</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
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<us-gaap:ProceedsFromSaleOfNotesReceivable contextRef="From2019-01-01to2019-09-30" unitRef="USD" decimals="0"> 15000 </us-gaap:ProceedsFromSaleOfNotesReceivable>
<us-gaap:ProceedsFromSaleOfNotesReceivable contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="USD" xsi:nil="true"/>
<us-gaap:NumberOfRestaurants contextRef="AsOf2018-12-31" unitRef="Integer" decimals="INF"> 17 </us-gaap:NumberOfRestaurants>
<us-gaap:NumberOfRestaurants contextRef="AsOf2019-09-30" unitRef="Integer" decimals="INF"> 16 </us-gaap:NumberOfRestaurants>
<us-gaap:NumberOfRestaurants contextRef="AsOf2019-09-30_custom_FLMember_custom_DicksWingsMember" unitRef="Restaurants" decimals="INF"> 16 </us-gaap:NumberOfRestaurants>
<us-gaap:NumberOfRestaurants contextRef="AsOf2019-09-30_country_GA_custom_DicksWingsMember" unitRef="Restaurants" decimals="INF"> 4 </us-gaap:NumberOfRestaurants>
<us-gaap:NumberOfRestaurants contextRef="AsOf2019-09-30_us-gaap_FranchisedUnitsMember" unitRef="Restaurants" decimals="INF"> 16 </us-gaap:NumberOfRestaurants>
<us-gaap:NumberOfRestaurants contextRef="AsOf2019-09-30_custom_DicksWingsMember" unitRef="Restaurants" decimals="INF"> 20 </us-gaap:NumberOfRestaurants>
<us-gaap:NumberOfRestaurants contextRef="AsOf2018-10-30_custom_TiltedKiltEateryAndPubMember" unitRef="Restaurants" decimals="INF"> 26 </us-gaap:NumberOfRestaurants>
<us-gaap:NumberOfRestaurants contextRef="AsOf2018-10-30_custom_ARCGroupIncMember" unitRef="Restaurants" decimals="INF"> 2 </us-gaap:NumberOfRestaurants>
<us-gaap:NumberOfRestaurants contextRef="AsOf2018-10-30_us-gaap_FranchisedUnitsMember" unitRef="Restaurants" decimals="INF"> 24 </us-gaap:NumberOfRestaurants>
<us-gaap:NumberOfRestaurants contextRef="AsOf2019-09-30_custom_ARCGroupIncMember" unitRef="Restaurants" decimals="INF"> 4 </us-gaap:NumberOfRestaurants>
<RLLY:WorkingCapitalDeficit contextRef="AsOf2018-12-31" unitRef="USD" decimals="0"> -2784844 </RLLY:WorkingCapitalDeficit>
<RLLY:WorkingCapitalDeficit contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> -4100874 </RLLY:WorkingCapitalDeficit>
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<us-gaap:FiniteLivedIntangibleAssetsAmortizationMethod contextRef="From2019-01-01to2019-09-30"> The Company amortizes the non-compete agreement on a straight-line basis over the expected period of benefit, which is five years. </us-gaap:FiniteLivedIntangibleAssetsAmortizationMethod>
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<us-gaap:ContractWithCustomerLiabilityRevenueRecognized contextRef="From2019-01-01to2019-09-30_custom_DeferredFranchisedFeesMember" unitRef="USD" decimals="0"> 11968 </us-gaap:ContractWithCustomerLiabilityRevenueRecognized>
<us-gaap:ContractWithCustomerLiabilityRevenueRecognized contextRef="From2018-01-01to2018-09-30_custom_DeferredFranchisedFeesMember" unitRef="USD" decimals="0"> 45264 </us-gaap:ContractWithCustomerLiabilityRevenueRecognized>
<us-gaap:ContractWithCustomerLiabilityRevenueRecognized contextRef="From2019-07-01to2019-09-30_custom_DeferredFranchisedFeesMember" unitRef="USD" decimals="0"> 4718 </us-gaap:ContractWithCustomerLiabilityRevenueRecognized>
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<us-gaap:ContractWithCustomerLiability contextRef="AsOf2018-12-31" unitRef="USD" decimals="0"> 65234 </us-gaap:ContractWithCustomerLiability>
<us-gaap:ContractWithCustomerLiability contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 103266 </us-gaap:ContractWithCustomerLiability>
<us-gaap:AdvertisingExpense contextRef="From2019-01-01to2019-09-30" unitRef="USD" decimals="0"> 97123 </us-gaap:AdvertisingExpense>
<us-gaap:AdvertisingExpense contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="USD" decimals="0"> 145076 </us-gaap:AdvertisingExpense>
<us-gaap:AdvertisingExpense contextRef="From2018-07-01to2018-09-30" unitRef="USD" decimals="0"> 46816 </us-gaap:AdvertisingExpense>
<us-gaap:AdvertisingExpense contextRef="From2019-07-01to2019-09-30" unitRef="USD" decimals="0"> 33255 </us-gaap:AdvertisingExpense>
<us-gaap:ContractWithCustomerLiabilityIncreaseDecreaseForContractAcquiredInBusinessCombination contextRef="From2019-01-01to2019-09-30" unitRef="USD" decimals="0"> 50000 </us-gaap:ContractWithCustomerLiabilityIncreaseDecreaseForContractAcquiredInBusinessCombination>
<RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedRemainderOfFiscalYear contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 4250 </RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedRemainderOfFiscalYear>
<RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedYearTwo contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 17000 </RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedYearTwo>
<RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedYearThree contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 15925 </RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedYearThree>
<RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedYearFour contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 14000 </RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedYearFour>
<RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedYearFive contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 11637 </RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedYearFive>
<RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedAfterFiveYears contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 40454 </RLLY:RevenueAnticipatedFutureRecognitionPerformanceObligationUnsatisfiedAfterFiveYears>
<us-gaap:RevenueRemainingPerformanceObligation contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 103266 </us-gaap:RevenueRemainingPerformanceObligation>
<us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount contextRef="From2019-01-01to2019-09-30" unitRef="Shares" xsi:nil="true"/>
<us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="Shares" decimals="INF"> 15165 </us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount>
<us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount contextRef="From2018-07-01to2018-09-30" unitRef="Shares" decimals="INF"> 30000 </us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount>
<us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount contextRef="From2019-07-01to2019-09-30" unitRef="Shares" xsi:nil="true"/>
<us-gaap:PaymentsToAcquireBusinessesGross contextRef="From2018-08-01to2018-08-03_custom_FatPattyMember" unitRef="USD" decimals="0"> 12352000 </us-gaap:PaymentsToAcquireBusinessesGross>
<RLLY:AmountPaidToSellersAtClosingAcquisition contextRef="From2018-08-01to2018-08-03_custom_FatPattyMember" unitRef="USD" decimals="0"> 12000000 </RLLY:AmountPaidToSellersAtClosingAcquisition>
<RLLY:PaymentsToAcquireAdditionalBusinessesCost contextRef="From2018-08-01to2018-08-03_custom_FatPattyMember" unitRef="USD" decimals="0"> 40000 </RLLY:PaymentsToAcquireAdditionalBusinessesCost>
<RLLY:RemainingAmountToBePaidToSellerOnFirstAnniversaryOfClosingOfAcquisition contextRef="From2018-08-01to2018-08-03_custom_FatPattyMember" unitRef="USD" decimals="0"> 312000 </RLLY:RemainingAmountToBePaidToSellerOnFirstAnniversaryOfClosingOfAcquisition>
<us-gaap:BusinessCombinationConsiderationTransferred1 contextRef="From2018-08-01to2018-08-03_custom_FatPattyMember" unitRef="USD" decimals="0"> 852000 </us-gaap:BusinessCombinationConsiderationTransferred1>
<us-gaap:BusinessCombinationConsiderationTransferred1 contextRef="From2019-01-01to2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 852000 </us-gaap:BusinessCombinationConsiderationTransferred1>
<us-gaap:BusinessCombinationConsiderationTransferred1 contextRef="From2019-10-10to2019-10-11_us-gaap_SubsequentEventMember_custom_WingHouseBarandGrillRestaurantMember" unitRef="USD" decimals="0"> 18000000 </us-gaap:BusinessCombinationConsiderationTransferred1>
<us-gaap:BusinessCombinationConsiderationTransferred1 contextRef="From2019-10-10to2019-10-11_us-gaap_SubsequentEventMember_custom_ARCWingHouseLLCMember" unitRef="USD" decimals="0"> 11000000 </us-gaap:BusinessCombinationConsiderationTransferred1>
<us-gaap:DebtInstrumentInterestRateStatedPercentage contextRef="AsOf2018-08-30_custom_SeenuGKasturiMember_custom_FatPattyMember" unitRef="Percentage" decimals="INF"> 0.06 </us-gaap:DebtInstrumentInterestRateStatedPercentage>
<us-gaap:DebtInstrumentInterestRateStatedPercentage contextRef="AsOf2016-09-30_custom_PromissoryNotesMember_custom_LineOfCreditAgreementMember" unitRef="Percentage" decimals="INF"> 0.05 </us-gaap:DebtInstrumentInterestRateStatedPercentage>
<us-gaap:DebtInstrumentInterestRateStatedPercentage contextRef="AsOf2016-10-31_custom_PromissoryNotesMember_custom_LineOfCreditAgreementMember" unitRef="Percentage" decimals="INF"> 0.05 </us-gaap:DebtInstrumentInterestRateStatedPercentage>
<us-gaap:DebtInstrumentInterestRateStatedPercentage contextRef="AsOf2019-10-11_us-gaap_SubsequentEventMember" unitRef="Percentage" decimals="INF"> 0.05 </us-gaap:DebtInstrumentInterestRateStatedPercentage>
<us-gaap:DebtInstrumentInterestRateStatedPercentage contextRef="AsOf2019-10-11_us-gaap_SubsequentEventMember_custom_ARCWingHouseLLCMember_custom_CityNationalBankMember" unitRef="Percentage" decimals="INF"> 0.06 </us-gaap:DebtInstrumentInterestRateStatedPercentage>
<RLLY:CommonStockConversionRate contextRef="AsOf2018-08-30_custom_SeenuGKasturiMember_custom_FatPattyMember" unitRef="USDPShares" decimals="INF"> 1.36 </RLLY:CommonStockConversionRate>
<us-gaap:ProceedsFromSaleOfPropertyPlantAndEquipment contextRef="From2018-08-01to2018-08-03_custom_StoreCapitalAcquisitionsLlcMember_custom_PurchaseAndSaleAgreementMember" unitRef="USD" decimals="0"> 11500000 </us-gaap:ProceedsFromSaleOfPropertyPlantAndEquipment>
<RLLY:BusinessAcquisitionsPurchasePriceDifferenceBetweenAssetsAndProperties contextRef="From2018-08-01to2018-08-03_custom_StoreCapitalAcquisitionsLlcMember_custom_PurchaseAndSaleAgreementMember" unitRef="USD" decimals="0"> 852000 </RLLY:BusinessAcquisitionsPurchasePriceDifferenceBetweenAssetsAndProperties>
<RLLY:PurchaseDescription contextRef="From2018-08-01to2018-08-03_custom_StoreCapitalAcquisitionsLlcMember_custom_PurchaseAndSaleAgreementMember"> Accordingly, the Company never took title to, or ownership of, the Properties. As a result, the ultimate purchase price paid by the Company was $852,000, which was the difference between the $12,352,000 purchase price for the assets that the Company agreed to pay to the Sellers and the $11,500,000 purchase price for the Properties that was paid by Store Capital. The closing of the Property Acquisition occurred on August 30, 2018. </RLLY:PurchaseDescription>
<RLLY:LesseeCapitalLeaseRenewalTerm contextRef="From2019-01-01to2019-09-30_custom_StoreCapitalAcquisitionsLlcMember_custom_MasterLeaseAgreementMember"> P5Y </RLLY:LesseeCapitalLeaseRenewalTerm>
<RLLY:CapitalLeaseAndRentalExpense contextRef="From2019-01-01to2019-09-30_custom_StoreCapitalAcquisitionsLlcMember_custom_MasterLeaseAgreementMember" unitRef="USD" decimals="0"> 876875 </RLLY:CapitalLeaseAndRentalExpense>
<RLLY:PercentageIncreaseInAdditionalAnnualRentPaymentCapitalLease contextRef="From2019-01-01to2019-09-30_custom_StoreCapitalAcquisitionsLlcMember_custom_MasterLeaseAgreementMember" unitRef="Percentage" decimals="INF"> 0.0175 </RLLY:PercentageIncreaseInAdditionalAnnualRentPaymentCapitalLease>
<RLLY:PriceIndexDescription contextRef="From2019-01-01to2019-09-30_custom_StoreCapitalAcquisitionsLlcMember_custom_MasterLeaseAgreementMember"> (i) 1.75%, or (ii) 1.25 times the change in the Consumer Price Index. </RLLY:PriceIndexDescription>
<us-gaap:BusinessAcquisitionCostOfAcquiredEntityTransactionCosts contextRef="AsOf2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 82929 </us-gaap:BusinessAcquisitionCostOfAcquiredEntityTransactionCosts>
<us-gaap:BusinessAcquisitionCostOfAcquiredEntityTransactionCosts contextRef="AsOf2018-12-31_custom_FatPattyMember" unitRef="USD" decimals="0"> 82929 </us-gaap:BusinessAcquisitionCostOfAcquiredEntityTransactionCosts>
<us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNet contextRef="AsOf2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 1476952 </us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNet>
<RLLY:IncreaseInPurchasePriceOfBusiness contextRef="From2019-01-01to2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 624952 </RLLY:IncreaseInPurchasePriceOfBusiness>
<us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents contextRef="AsOf2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 7100 </us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents>
<us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedInventory contextRef="AsOf2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 91424 </us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedInventory>
<us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibles contextRef="AsOf2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 788840 </us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibles>
<us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedAssets contextRef="AsOf2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 1501659 </us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedAssets>
<us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesOther contextRef="AsOf2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 24707 </us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesOther>
<us-gaap:BusinessAcquisitionsProFormaRevenue contextRef="From2019-01-01to2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 12820432 </us-gaap:BusinessAcquisitionsProFormaRevenue>
<us-gaap:BusinessAcquisitionsProFormaRevenue contextRef="From2018-01-01to2018-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 12515636 </us-gaap:BusinessAcquisitionsProFormaRevenue>
<us-gaap:BusinessAcquisitionsProFormaRevenue contextRef="From2019-07-01to2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 4042644 </us-gaap:BusinessAcquisitionsProFormaRevenue>
<us-gaap:BusinessAcquisitionsProFormaRevenue contextRef="From2018-07-01to2018-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 4323019 </us-gaap:BusinessAcquisitionsProFormaRevenue>
<us-gaap:BusinessAcquisitionsProFormaIncomeLossFromContinuingOperationsBeforeChangesInAccountingAndExtraordinaryItemsNetOfTax contextRef="From2019-01-01to2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> -986970 </us-gaap:BusinessAcquisitionsProFormaIncomeLossFromContinuingOperationsBeforeChangesInAccountingAndExtraordinaryItemsNetOfTax>
<us-gaap:BusinessAcquisitionsProFormaIncomeLossFromContinuingOperationsBeforeChangesInAccountingAndExtraordinaryItemsNetOfTax contextRef="From2018-01-01to2018-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 1256629 </us-gaap:BusinessAcquisitionsProFormaIncomeLossFromContinuingOperationsBeforeChangesInAccountingAndExtraordinaryItemsNetOfTax>
<us-gaap:BusinessAcquisitionsProFormaIncomeLossFromContinuingOperationsBeforeChangesInAccountingAndExtraordinaryItemsNetOfTax contextRef="From2019-07-01to2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> -421961 </us-gaap:BusinessAcquisitionsProFormaIncomeLossFromContinuingOperationsBeforeChangesInAccountingAndExtraordinaryItemsNetOfTax>
<us-gaap:BusinessAcquisitionsProFormaIncomeLossFromContinuingOperationsBeforeChangesInAccountingAndExtraordinaryItemsNetOfTax contextRef="From2018-07-01to2018-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> -13051 </us-gaap:BusinessAcquisitionsProFormaIncomeLossFromContinuingOperationsBeforeChangesInAccountingAndExtraordinaryItemsNetOfTax>
<us-gaap:BusinessAcquisitionsProFormaNetIncomeLoss contextRef="From2019-01-01to2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> -1303318 </us-gaap:BusinessAcquisitionsProFormaNetIncomeLoss>
<us-gaap:BusinessAcquisitionsProFormaNetIncomeLoss contextRef="From2018-01-01to2018-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 1892553 </us-gaap:BusinessAcquisitionsProFormaNetIncomeLoss>
<us-gaap:BusinessAcquisitionsProFormaNetIncomeLoss contextRef="From2019-07-01to2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> -597514 </us-gaap:BusinessAcquisitionsProFormaNetIncomeLoss>
<us-gaap:BusinessAcquisitionsProFormaNetIncomeLoss contextRef="From2018-07-01to2018-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 548218 </us-gaap:BusinessAcquisitionsProFormaNetIncomeLoss>
<us-gaap:BusinessAcquisitionProFormaEarningsPerShareBasic contextRef="From2019-01-01to2019-09-30_custom_FatPattyMember" unitRef="USDPShares" decimals="INF"> -0.18 </us-gaap:BusinessAcquisitionProFormaEarningsPerShareBasic>
<us-gaap:BusinessAcquisitionProFormaEarningsPerShareBasic contextRef="From2018-01-01to2018-09-30_custom_FatPattyMember" unitRef="USDPShares" decimals="INF"> 0.28 </us-gaap:BusinessAcquisitionProFormaEarningsPerShareBasic>
<us-gaap:BusinessAcquisitionProFormaEarningsPerShareBasic contextRef="From2019-07-01to2019-09-30_custom_FatPattyMember" unitRef="USDPShares" decimals="INF"> -0.08 </us-gaap:BusinessAcquisitionProFormaEarningsPerShareBasic>
<us-gaap:BusinessAcquisitionProFormaEarningsPerShareBasic contextRef="From2018-07-01to2018-09-30_custom_FatPattyMember" unitRef="USDPShares" decimals="INF"> 0.08 </us-gaap:BusinessAcquisitionProFormaEarningsPerShareBasic>
<us-gaap:BusinessAcquisitionProFormaEarningsPerShareDiluted contextRef="From2019-01-01to2019-09-30_custom_FatPattyMember" unitRef="USDPShares" decimals="INF"> -0.18 </us-gaap:BusinessAcquisitionProFormaEarningsPerShareDiluted>
<us-gaap:BusinessAcquisitionProFormaEarningsPerShareDiluted contextRef="From2018-01-01to2018-09-30_custom_FatPattyMember" unitRef="USDPShares" decimals="INF"> 0.28 </us-gaap:BusinessAcquisitionProFormaEarningsPerShareDiluted>
<us-gaap:BusinessAcquisitionProFormaEarningsPerShareDiluted contextRef="From2019-07-01to2019-09-30_custom_FatPattyMember" unitRef="USDPShares" decimals="INF"> -0.08 </us-gaap:BusinessAcquisitionProFormaEarningsPerShareDiluted>
<us-gaap:BusinessAcquisitionProFormaEarningsPerShareDiluted contextRef="From2018-07-01to2018-09-30_custom_FatPattyMember" unitRef="USDPShares" decimals="INF"> 0.08 </us-gaap:BusinessAcquisitionProFormaEarningsPerShareDiluted>
<RLLY:AcquireOfIssuedAndOutstandingInterestAmount contextRef="From2018-10-29to2018-10-30_custom_MembershipInterestPurchaseAgreementMember_custom_SDAHoldingsLLCMember" unitRef="USD" decimals="0"> 10 </RLLY:AcquireOfIssuedAndOutstandingInterestAmount>
<us-gaap:ProceedsFromIssuanceOrSaleOfEquity contextRef="From2019-01-01to2019-09-30_custom_MembershipInterestPurchaseAgreementMember_custom_SDAHoldingsLLCMember_custom_SeenuGKasturiMember" unitRef="USD" decimals="0"> 2000000 </us-gaap:ProceedsFromIssuanceOrSaleOfEquity>
<us-gaap:StockIssuedDuringPeriodSharesAcquisitions contextRef="From2019-01-01to2019-09-30_custom_MembershipInterestPurchaseAgreementMember_custom_SDAHoldingsLLCMember_custom_SeenuGKasturiMember" unitRef="Shares" decimals="INF"> 666667 </us-gaap:StockIssuedDuringPeriodSharesAcquisitions>
<RLLY:ReplacementReserveEscrowShares contextRef="From2019-01-01to2019-09-30_custom_MembershipInterestPurchaseAgreementMember_custom_SDAHoldingsLLCMember_custom_SeenuGKasturiMember" unitRef="Shares" decimals="INF"> 718563 </RLLY:ReplacementReserveEscrowShares>
<us-gaap:PropertyPlantAndEquipmentGross contextRef="AsOf2018-12-31" unitRef="USD" decimals="0"> 12845235 </us-gaap:PropertyPlantAndEquipmentGross>
<us-gaap:PropertyPlantAndEquipmentGross contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 1809477 </us-gaap:PropertyPlantAndEquipmentGross>
<us-gaap:PropertyPlantAndEquipmentGross contextRef="AsOf2018-12-31_us-gaap_LandBuildingsAndImprovementsMember" unitRef="USD" decimals="0"> 11500000 </us-gaap:PropertyPlantAndEquipmentGross>
<us-gaap:PropertyPlantAndEquipmentGross contextRef="AsOf2018-12-31_us-gaap_LeaseholdImprovementsMember" unitRef="USD" decimals="0"> 323500 </us-gaap:PropertyPlantAndEquipmentGross>
<us-gaap:PropertyPlantAndEquipmentGross contextRef="AsOf2018-12-31_us-gaap_FurnitureAndFixturesMember" unitRef="USD" decimals="0"> 1021735 </us-gaap:PropertyPlantAndEquipmentGross>
<us-gaap:PropertyPlantAndEquipmentGross contextRef="AsOf2019-09-30_us-gaap_LandBuildingsAndImprovementsMember" unitRef="USD" decimals="0"> 0 </us-gaap:PropertyPlantAndEquipmentGross>
<us-gaap:PropertyPlantAndEquipmentGross contextRef="AsOf2019-09-30_us-gaap_LeaseholdImprovementsMember" unitRef="USD" decimals="0"> 342500 </us-gaap:PropertyPlantAndEquipmentGross>
<us-gaap:PropertyPlantAndEquipmentGross contextRef="AsOf2019-09-30_us-gaap_FurnitureAndFixturesMember" unitRef="USD" decimals="0"> 1466977 </us-gaap:PropertyPlantAndEquipmentGross>
<us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment contextRef="AsOf2018-12-31" unitRef="USD" decimals="0"> 307733 </us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment>
<us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment contextRef="AsOf2019-09-30" unitRef="USD" decimals="0"> 285097 </us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment>
<us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseRemainderOfFiscalYear contextRef="AsOf2019-09-30_us-gaap_FiniteLivedIntangibleAssetsMember" unitRef="USD" decimals="0"> 942 </us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseRemainderOfFiscalYear>
<us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearTwo contextRef="AsOf2019-09-30_us-gaap_FiniteLivedIntangibleAssetsMember" unitRef="USD" decimals="0"> 3768 </us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearTwo>
<us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearThree contextRef="AsOf2019-09-30_us-gaap_FiniteLivedIntangibleAssetsMember" unitRef="USD" decimals="0"> 3768 </us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearThree>
<us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearFour contextRef="AsOf2019-09-30_us-gaap_FiniteLivedIntangibleAssetsMember" unitRef="USD" decimals="0"> 3768 </us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearFour>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth the computation of basic and diluted net (loss) / income per share:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Three Months Ended</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">Nine Months Ended</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">September 30, 2019</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 9pt">September 30, 2018</font></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 9pt">Numerator</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 32%; padding-left: 10pt; text-align: justify"><font style="font-size: 9pt">Net (loss) / income</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">(597,514</font></td> <td style="width: 1%"><font style="font-size: 9pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">97,467</font></td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">(1,303,318</font></td> <td style="width: 1%"><font style="font-size: 9pt">)</font></td> <td style="width: 1%"> </td> <td style="width: 1%"><font style="font-size: 9pt">$</font></td> <td style="width: 14%; text-align: right"><font style="font-size: 9pt">89,550</font></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-size: 9pt">Denominator</font></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Weighted average shares outstanding — basic</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">7,071,985</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">6,524,427</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">7,077,875</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">6,795,644</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Dilutive effect of potential shares of common stock</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">30,000</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt"></font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">15,165</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt"><font style="font-size: 9pt">Weighted average shares outstanding – fully diluted</font></td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">7,071,985</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">6,554,427</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">7,077,875</font></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"><font style="font-size: 9pt">6,810,809</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 9pt">Basic net income / (loss) per share</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.08</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.01</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.18</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.01</font></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 9pt">Fully diluted net income / (loss) per share</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.08</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.01</font></td> <td> </td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">(0.18</font></td> <td><font style="font-size: 9pt">)</font></td> <td> </td> <td><font style="font-size: 9pt">$</font></td> <td style="text-align: right"><font style="font-size: 9pt">0.01</font></td> <td> </td></tr> </table> <p style="margin: 0pt"></p>
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<us-gaap:AdjustmentsToAdditionalPaidInCapitalShareBasedCompensationStockOptionsRequisiteServicePeriodRecognition contextRef="From2018-01-01to2018-09-30_us-gaap_RetainedEarningsMember" unitRef="USD" xsi:nil="true"/>
<us-gaap:AdjustmentsToAdditionalPaidInCapitalShareBasedCompensationStockOptionsRequisiteServicePeriodRecognition contextRef="From2018-01-01to2018-09-30_custom_SeriesAConvertiblePreferredStockMember" unitRef="USD" xsi:nil="true"/>
<RLLY:InterimBonusPercentageEqualToCurrentBaseSalary contextRef="From2019-01-01to2019-09-30_srt_ChiefFinancialOfficerMember_srt_ScenarioForecastMember" unitRef="Percentage" decimals="INF"> 0.10 </RLLY:InterimBonusPercentageEqualToCurrentBaseSalary>
<RLLY:InterimBonusPercentageDescription contextRef="From2019-01-01to2019-09-30_srt_ChiefFinancialOfficerMember_srt_ScenarioForecastMember" unitRef="Percentage" decimals="INF"> 12019101 </RLLY:InterimBonusPercentageDescription>
<RLLY:SponsorshipAgreementAmendedDescription contextRef="From2019-07-02to2019-07-31_custom_JacksonvilleJaguarsLLCMember"> The Amendment is for a term of 10 NFL football seasons and expires on the later of: (i) the conclusion of the 2028/29 NFL season, and (ii) February 2029. The Company is required to pay the Jaguars annual fees in the amount of $500,000 during the 2019/20 NFL season and $794,444 for each of the next nine NFL seasons. In addition, the Company is required to provide the Jaguars with food, beverages and serving products equal in value to $35,700 during the 2019/20 NFL season increasing to $40,000 for each of the last six NFL seasons. In the event the Jaguars play in any post-season playoff games, the Company will pay the Jaguars an additional amount per playoff game equal to a pro-rated portion of the annual fee applicable during the then-current year of the agreement. </RLLY:SponsorshipAgreementAmendedDescription>
<us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedLiabilities contextRef="AsOf2019-09-30_custom_FatPattyMember" unitRef="USD" decimals="0"> 24707 </us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedLiabilities>
<us-gaap:RepaymentsOfDebtAndCapitalLeaseObligations contextRef="From2019-01-01to2019-09-30" unitRef="USD" xsi:nil="true"/>
<us-gaap:RepaymentsOfDebtAndCapitalLeaseObligations contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="USD" decimals="0"> 86674 </us-gaap:RepaymentsOfDebtAndCapitalLeaseObligations>
<us-gaap:LoansPayable contextRef="AsOf2019-10-11_us-gaap_SubsequentEventMember_custom_ARCWingHouseLLCMember_custom_LoanAgreementMember" unitRef="USD" decimals="0"> 12250000 </us-gaap:LoansPayable>
<RLLY:GainFromInsuranceRecoveriesOnImpairedFixedAssets contextRef="From2019-01-01to2019-09-30" unitRef="USD" decimals="0"> 100000 </RLLY:GainFromInsuranceRecoveriesOnImpairedFixedAssets>
<RLLY:GainFromInsuranceRecoveriesOnImpairedFixedAssets contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="USD" xsi:nil="true"/>
<RLLY:InsuranceRecoveriesForImpairedFixedAssets contextRef="From2019-01-01to2019-09-30" unitRef="USD" decimals="0"> 100000 </RLLY:InsuranceRecoveriesForImpairedFixedAssets>
<RLLY:InsuranceRecoveriesForImpairedFixedAssets contextRef="Context_9ME_01_Jan_2018T00_00_00_TO_30_Sep_2018T00_00_00" unitRef="USD" xsi:nil="true"/>
<us-gaap:LineOfCreditFacilityPeriodicPayment contextRef="From2019-10-09to2019-10-11_us-gaap_SubsequentEventMember_custom_ARCWingHouseLLCMember_custom_CityNationalBankMember" unitRef="USD" decimals="0"> 179481 </us-gaap:LineOfCreditFacilityPeriodicPayment>
<RLLY:BonusPercentage contextRef="From2019-11-04to2019-11-06_us-gaap_SubsequentEventMember_custom_EmploymentAgreementMember_custom_JosephDominiakMember" unitRef="Percentage" decimals="INF"> 0.20 </RLLY:BonusPercentage>
</xbrli:xbrl>

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Filing Submission 0001493152-19-017269   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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