Nature of Operations and Summary of Significant Accounting Policies (Tables)
|
12 Months Ended |
Dec. 31, 2020 |
|---|
| Accounting Policies [Abstract] |
|
| Summary of Store Activity |
Store activity for the years ended December 31, 2020 and 2019 is as follows:
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Franchised stores, beginning of year |
|
|
117 |
|
|
|
109 |
|
Stores opened during the year |
|
|
9 |
|
|
|
15 |
|
Stores transferred/sold to the Company |
|
|
(2 |
) |
|
|
0 |
|
Stores closed during the year |
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|
(22 |
) |
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|
(7 |
) |
| |
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|
|
|
|
|
|
Franchised stores, end of year |
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|
102 |
|
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|
117 |
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| |
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Company-owned stores, beginning of year |
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13 |
|
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|
11 |
|
Stores opened during the year |
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2 |
|
|
|
3 |
|
Stores transferred/sold to the Company |
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2 |
|
|
|
0 |
|
Stores closed during the year |
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— |
|
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|
(1 |
) |
| |
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Company-owned stores, end of year |
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|
17 |
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13 |
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| |
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| Summary of Fair Values of Assets Acquired Net of Current Liabilities |
The consideration was the fair value of the three loans at the Takeover Date and the assets are recorded based on the fair values of the assets acquired, net of current liabilities as of the Takeover Date as follows (in thousands):
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|
|
|
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|
$ |
39 |
|
|
|
|
1 |
|
|
|
|
28 |
|
|
|
|
24 |
|
|
|
|
1,126 |
|
|
|
|
4 |
|
|
|
|
(330 |
) |
| |
|
|
|
|
Net tangible and identifiable intangible assets acquired |
|
|
892 |
|
|
|
|
397 |
|
| |
|
|
|
|
|
|
$ |
1,289 |
|
| |
|
|
|
|
|
|
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| |
|
Fair Value
December 16,
2020 |
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| |
|
$ |
2,179 |
|
| |
|
|
611 |
|
| |
|
|
378 |
|
| |
|
|
260 |
|
| |
|
|
1,235 |
|
| |
|
|
8,520 |
|
| |
|
|
117,124 |
|
| |
|
|
199 |
|
| |
|
|
(1,952 |
) |
| |
|
|
(1,057 |
) |
| |
|
|
(292 |
) |
| |
|
|
(3,012 |
) |
Current portion of deferred franchise fees |
|
|
(521 |
) |
| |
|
|
(907 |
) |
Deferred initial franchise fees, net of current portion |
|
|
(2,531 |
) |
| |
|
|
(2,889 |
) |
| |
|
|
|
|
| Fair Value of Tangible and Identifiable Intangible assets and liabilities assumed |
|
$ |
117,345 |
|
| |
|
|
|
|
| |
|
|
236,887 |
|
| |
|
|
|
|
| |
|
$ |
119,542 |
|
| |
|
|
|
|
| |
|
|
|
|
|
| Summary of Consolidated Financial Statements from Variable Interest Entities |
Included in the consolidated financial statements are the following from variable interest entities for which the Company was the primary beneficiary (in thousands):
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| |
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| |
|
Predecessor December 31, 2019 |
|
|
|
$ |
3 |
|
|
|
|
853 |
|
|
|
|
398 |
|
| |
|
|
|
|
|
|
$ |
1,254 |
|
| |
|
|
|
|
|
|
$ |
1,207 |
|
Notes payable – net of current portion |
|
|
— |
|
| |
|
|
|
|
|
|
|
1,207 |
|
|
|
|
47 |
|
| |
|
|
|
|
Total Liabilities and Members’ Equity |
|
$ |
1,254 |
|
| |
|
|
|
|
|
| Summary of Calculation of Basic and Diluted income (loss) Per Common Share |
Basic and diluted income (loss) per common share is calculated as follows:
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| |
|
Successor
December 16,
2020 through
December 31,
2020 |
|
|
|
|
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|
Net income available to common stockholders
|
|
$ |
5,348,000 |
|
Reversal of Gain on change in value of warrant liability |
|
|
(5,597,000 |
) |
| |
|
|
|
|
|
|
|
|
|
Net loss available to common shareholders - diluted |
|
$ |
(249,000 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding |
|
|
17,541,838 |
|
Effect of dilutive securities |
|
|
|
|
Restricted stock grants and warrants |
|
|
3,468,872 |
|
|
|
|
415,405 |
|
| |
|
|
|
|
Diluted weighted-average shares outstanding |
|
|
21,426,115 |
|
| |
|
|
|
|
Basic net income per common share |
|
$ |
0.30 |
|
| |
|
|
|
|
Diluted net loss per common share |
|
$ |
(0.01 |
) |
| |
|
|
|
|
|
| Summary of the revisions to previously reported financial information |
A summary of the revisions to previously reported financial information is as follows:
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|
Revised Consolidated Statement of Operations Data for the six months ended June 30, 2020 (Unaudited) |
|
|
|
|
|
|
|
|
|
| |
|
$ |
12,097 |
|
|
$ |
(315 |
) |
|
$ |
11,782 |
|
| |
|
$ |
15,864 |
|
|
$ |
(315 |
) |
|
$ |
15,549 |
|
Labor and Related Expenses |
|
$ |
3,463 |
|
|
$ |
(315 |
) |
|
$ |
3,148 |
|
| |
|
$ |
14,930 |
|
|
$ |
(315 |
) |
|
$ |
14,615 |
|
| |
|
|
|
Revised Consolidated Statement of Operations Data for the nine months ended September 30, 2020 (Unaudited) |
|
|
|
|
|
|
|
|
|
| |
|
$ |
18,892 |
|
|
$ |
(441 |
) |
|
$ |
18,451 |
|
| |
|
$ |
24,939 |
|
|
$ |
(441 |
) |
|
$ |
24,498 |
|
Labor and Related Expenses |
|
$ |
5,482 |
|
|
$ |
(409 |
) |
|
$ |
5,073 |
|
| |
|
$ |
4,575 |
|
|
$ |
(32 |
) |
|
$ |
4,543 |
|
| |
|
$ |
24,832 |
|
|
$ |
(441 |
) |
|
$ |
24,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revised Consolidated Statement of Operations Data for the six months ended June 30, 2019 (Unaudited) |
|
|
|
|
|
|
|
|
|
| |
|
$ |
11,977 |
|
|
$ |
(294 |
) |
|
$ |
11,683 |
|
| |
|
$ |
17,518 |
|
|
$ |
(294 |
) |
|
$ |
17,224 |
|
Labor and Related Expenses |
|
$ |
3,880 |
|
|
$ |
(294 |
) |
|
$ |
3,586 |
|
| |
|
$ |
15,021 |
|
|
$ |
(294 |
) |
|
$ |
14,727 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Revised Consolidated Statement of Operations Data for the nine months ended September 30, 2019 (Unaudited) |
|
|
|
|
|
|
|
|
|
| |
|
$ |
17,641 |
|
|
$ |
(477 |
) |
|
$ |
17,164 |
|
| |
|
$ |
25,336 |
|
|
$ |
(477 |
) |
|
$ |
24,859 |
|
Labor and Related Expenses |
|
$ |
5,784 |
|
|
$ |
(477 |
) |
|
$ |
5,307 |
|
| |
|
$ |
23,181 |
|
|
$ |
(477 |
) |
|
$ |
22,704 |
|
| |
|
|
|
|
|
|
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| |
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|
Revised Consolidated Statement of Operations Data for the year ended December 31, 2019 |
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|
|
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|
|
|
|
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|
$ |
23,855 |
|
|
$ |
(672 |
) |
|
$ |
23,183 |
|
|
|
$ |
34,227 |
|
|
$ |
(672 |
) |
|
$ |
33,555 |
|
Labor and Related Expenses |
|
$ |
7,839 |
|
|
$ |
(672 |
) |
|
$ |
7,167 |
|
|
|
$ |
31,178 |
|
|
$ |
(672 |
) |
|
$ |
30,506 |
|
|
| Summary of Revenue Recognized |
Revenue recognized during the Successor period from December 16, 2020 to December 31, 2020 and for the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019 disaggregated by type is as follows:
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| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
$ |
1,326 |
|
|
$ |
23,139 |
|
|
$ |
22,473 |
|
|
|
|
24 |
|
|
|
827 |
|
|
|
710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
255 |
|
|
|
5,366 |
|
|
|
6,805 |
|
|
|
|
— |
|
|
|
750 |
|
|
|
564 |
|
Brand development and advertising co-op royalties |
|
|
74 |
|
|
|
1,441 |
|
|
|
1,720 |
|
|
|
|
17 |
|
|
|
272 |
|
|
|
254 |
|
Initial distinct services |
|
|
8 |
|
|
|
90 |
|
|
|
204 |
|
Other revenue - terminations of franchises |
|
|
— |
|
|
|
693 |
|
|
|
825 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,704 |
|
|
$ |
32,578 |
|
|
$ |
33,555 |
|
| |
|
|
|
|
|
|
|
|
|
|
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|
| Summary of Revenue Disaggregated According to Timing of Transfer of Goods or Services |
The following table shows the Company’s revenue disaggregated according to the timing of transfer of goods or services:
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|
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| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
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|
Revenue recognized at a point in time |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
23,139 |
|
|
$ |
22,473 |
|
|
|
|
|
|
|
|
827 |
|
|
|
710 |
|
|
|
|
|
|
|
|
6,116 |
|
|
|
7,369 |
|
Terminated franchise fees |
|
|
|
|
|
|
693 |
|
|
|
825 |
|
Brand development and advertising co-op royalties |
|
|
|
|
|
|
1,441 |
|
|
|
1,720 |
|
Franchising revenue – distinct initial services |
|
|
|
|
|
|
90 |
|
|
|
204 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue recognized at a point in time |
|
|
|
|
|
$ |
32,306 |
|
|
$ |
33,301 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue recognized over time |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
272 |
|
|
|
254 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue recognized over time |
|
|
|
|
|
|
272 |
|
|
|
254 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
32,578 |
|
|
$ |
33,555 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Summary of Contract Balances |
Opening and closing balances of contract liabilities and receivables from contracts with customers for the years ended December 31, 2020 and 2019 are as follows (in thousands):
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
Predecessor
2019 |
|
|
|
|
|
|
|
$ |
369 |
|
|
|
|
|
|
|
|
159 |
|
|
|
|
|
|
|
|
586 |
|
Deferred revenue, current |
|
|
|
|
|
|
438 |
|
Deferred revenue, long-term |
|
|
|
|
|
|
4,250 |
|
|
| Summary of Franchise Revenue |
Revenue recognized during the period ended which were included in the balance of deferred franchise revenue at the beginning of the period are as follow: |
| Analysis of Deferred Revenue |
An analysis of deferred revenue is as follows:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
December 31,
2020 |
|
|
Predecessor
December 15,
2020 |
|
|
Predecessor
December 31,
2019 |
|
Balance, beginning of period |
|
|
|
|
|
$ |
4,688 |
|
|
$ |
3,935 |
|
Initial franchise fees received |
|
|
|
|
|
|
413 |
|
|
|
2,036 |
|
Revenue recognized for stores opened during period |
|
|
|
|
|
|
(362 |
) |
|
|
(458 |
) |
Revenue recognized related to franchise agreement
Default
|
|
|
|
|
|
|
(693 |
) |
|
|
(825 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,046 |
|
|
$ |
4,688 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|