Restatement of Previously Issued Condensed Consolidated and Combined Financial Statements (Unaudited) |
13.
Restatement of Previously Issued Condensed Consolidated and Combined Financial Statements (Unaudited)
The
Company, while undergoing the audit of its consolidated and combined financial statements as of December 31, 2020 and for the year then
ended, re-evaluated the lease term for three restaurants that were permanently closed in 2020 due to the pandemic and determined that
the lease terms should no longer have included periods subject to renewal options. Impairment charges had been recorded for these restaurants
during the respective quarter that the restaurants were closed, but the 2020 interim unaudited financial statements did not reflect the
revised lease terms. This impacted the previously reported amounts for operating lease assets, operating lease liabilities, and rent
expense, among other line items in the condensed consolidated and combined interim financial statements.
The
following table sets forth the effects of the adjustments on the affected items within the Company’s previously reported Condensed
Consolidated and Combined Interim Balance Sheet as of September 30, 2020:
SCHEDULE OF PREVIOUSLY ISSUED INTERIM FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2020 |
|
|
|
As reported |
|
|
Adjustment |
|
|
As restated |
|
Operating lease assets |
|
$ |
10,117,900 |
|
|
$ |
- |
|
|
$ |
10,117,900 |
|
Derivative liabilities |
|
$ |
1,195,724 |
|
|
$ |
(694,724 |
) |
|
$ |
501,000 |
|
Long-term operating lease liabilities |
|
$ |
15,115,651 |
|
|
$ |
(479,855 |
) |
|
$ |
14,635,796 |
|
Accumulated deficit |
|
$ |
(95,208,526 |
) |
|
$ |
1,048,450 |
|
|
$ |
(94,160,076 |
) |
Non-controlling interests |
|
$ |
(764,097 |
) |
|
$ |
126,129 |
|
|
$ |
(637,968 |
) |
The
following tables sets forth the effects of the adjustments on affected items within the Company’s previously reported Condensed
Consolidated and Combined Interim Statements of Operations for the three and nine months ended September 30, 2020:
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|
|
|
|
Three Months Ended September 30, 2020 |
|
|
|
As reported |
|
|
Adjustment |
|
|
As restated |
|
Restaurant operating expenses |
|
$ |
3,462,279 |
|
|
$ |
(13,436 |
) |
|
$ |
3,448,843 |
|
Asset impairment charge |
|
$ |
1,231,352 |
|
|
$ |
(95,223 |
) |
|
$ |
1,136,129 |
|
Operating loss |
|
$ |
(3,024,319 |
) |
|
$ |
108,659 |
|
|
$ |
(2,915,660 |
) |
Change in fair value of derivative liabilities * |
|
$ |
(6,536,241 |
) |
|
$ |
694,724 |
|
|
$ |
(5,841,517 |
) |
Other income (expense) |
|
$ |
(37,390 |
) |
|
$ |
11,986 |
|
|
$ |
(25,404 |
) |
Consolidated and combined net loss |
|
$ |
(10,002,997 |
) |
|
$ |
815,369 |
|
|
$ |
(9,187,628 |
) |
Net loss attributable to non-controlling interests |
|
$ |
453,296 |
|
|
$ |
(51,767 |
) |
|
$ |
401,529 |
|
Net loss attributable to Amergent Hospitality Group Inc |
|
$ |
(9,549,701 |
) |
|
$ |
763,602 |
|
|
$ |
(8,786,099 |
) |
Net loss per common share, basic and diluted |
|
$ |
(0.67 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.62 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2020 |
|
|
|
As reported |
|
|
Adjustment |
|
|
As restated |
|
Restaurant operating expenses |
|
$ |
10,349,516 |
|
|
$ |
(26,872 |
) |
|
$ |
10,322,644 |
|
Asset impairment charge |
|
$ |
1,505,279 |
|
|
$ |
(216,680 |
) |
|
$ |
1,288,599 |
|
Operating loss |
|
$ |
(7,033,996 |
) |
|
$ |
243,552 |
|
|
$ |
(6,790,444 |
) |
Change in fair value of derivative liabilities * |
|
$ |
(394,724 |
) |
|
$ |
694,724 |
|
|
$ |
300,000 |
|
Other income (expense) |
|
$ |
(85,399 |
) |
|
$ |
236,303 |
|
|
$ |
150,904 |
|
Consolidated and combined net loss |
|
$ |
(21,006,434 |
) |
|
$ |
1,174,579 |
|
|
$ |
(19,831,855 |
) |
Net loss attributable to non-controlling interests |
|
$ |
413,969 |
|
|
$ |
(126,129 |
) |
|
$ |
287,840 |
|
Net loss attributable to Amergent Hospitality Group Inc |
|
$ |
(20,592,465 |
) |
|
$ |
1,048,450 |
|
|
$ |
(19,544,015 |
) |
Net loss per common share, basic and diluted |
|
$ |
(1.53 |
) |
|
$ |
0.08 |
|
|
$ |
(1.45 |
) |
There
was no impact to the Company’s cash flows from operating, investing, or financing activities for the periods ended March 31, 2020,
June 30, 2020, or September 30, 2020 as a result of these restatements.
* |
These amounts have been changed from the amounts reported in Note 14 to the 2020 annual
financial statements filed on Form 10-K; however, the changes do not impact the restated operating loss, net loss, net loss attributable
to non-controlling interests and to Amergent Hospitality Group Inc., and let loss per common share, basis and diluted previously reported. |
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