Related Party Transactions
|9 Months Ended|
Sep. 30, 2021
|Related Party Transactions [Abstract]|
|Related Party Transactions||
7. Related Party Transactions
The Company is affiliated with various entities through a significant shareholder. The accompanying condensed consolidated balance sheets reflect amounts related to periodic advances between the Company and these entities for working capital and other needs as due from related companies or due to related companies, as appropriate. The amounts due from related companies are not expected to be repaid within one year and accordingly, are classified as non-current assets in the accompanying condensed consolidated balance sheets. These advances are unsecured and non-interest bearing.
There were approximately $83,000 and $74,000 included as due from related companies in the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively. There were no amounts due to related companies as of September 30, 2021 and December 31, 2020.
For the Successor period, for the three and nine months ended due September 30, 2021, the Company received royalty revenue from franchisees related to a significant shareholder totaling approximately $83,000 and $274,000, respectively. For the Predecessor period, for the three and nine months ended September 30, 2020, the Company received royalty revenue from franchisees related to a significant shareholder totaling approximately $90,000 and $272,000, respectively.
The Company leases building space for its corporate office from an entity related to a significant shareholder. This lease has a 36 month term, effective January 1, 2020. For the Successor period, for the three and nine months ended September 30, 2021, rent expense was approximately $54,000 and $166,000, respectively. For the Predecessor period, for the three and nine months ended September 30, 2020, rent expense was $40,000 and $120,000, respectively.
The Company leases building space for a restaurant located in Virginia from an entity (i) in which our Executive Chairman of the Board has a minority ownership interest, and (ii) which is managed by an entity in which our Executive Chairman has an indirect ownership interest. This lease, entered into on October 21, 2020, is for a 10-year term effective on the earlier to occur of the date the tenant opened for business and 180 days from the date the landlord delivered possession of the premises to the tenant.
In April 2021, the Company entered into an independent contractor agreement with a corporation (the “Consultant”) for which the Chief Operating Officer of Lionheart Capital, LLC, an entity controlled by the Company’s Executive Chairman of the Board, serves as President. Pursuant to the terms of the agreement, the Consultant shall provide certain strategic advisory services to the Company in exchange for total annual cash compensation and expense reimbursements of $100,000, payable in twelve (12) equal monthly payments beginning in April 2021. The Consultant has also received an additional $29,166 of cash compensation for services provided in April 2021. Also, the Consultant received an award of 50,000 restricted stock units, which shall vest in five equal annual installments, subject to the Company achieving certain annual revenue targets starting in 2021.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef