Segment Reporting

9 Months Ended

Sep. 30, 2022

Segment Reporting

Segment Reporting

Note 13 – Segment Reporting

The Company has identified its reportable operating segments as follows:

● STK. The STK segment consists of the results of operations from STK restaurant locations, competing in the full-service dining industry, as well as management, license and incentive fee revenue generated from the STK brand and pre-opening expenses associated with new restaurants under development.

● Kona Grill. The Kona Grill segment includes the results of operations of Kona Grill restaurant locations and pre-opening expenses associated with new restaurants under development.

● ONE Hospitality. The ONE Hospitality segment is composed of the management, license and incentive fee revenue and results of operations generated from the Company’s other brands and venue concepts, which include ANGEL, Bao Yum Heliot, Hideout, Marconi, Radio, and Rivershore Bar & Grill. Additionally, this segment includes the results of operations generated from F&B hospitality management agreements with hotels, casinos and other high-end locations.

● Corporate. The Corporate segment consists of the following: general and administrative costs, stock-based compensation, lease termination expenses, transaction costs, COVID-19 related expenses and other income and expenses. This segment also includes STK Meat Market, an e-commerce platform that offers signature steak cuts nationwide, the Company’s major off-site events group, which supports all brands and venue concepts, and revenue generated from gift card programs. The Corporate segment’s total assets primarily include cash and cash equivalents, the Kona Grill tradename, and deferred tax assets.

The Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), manages the business and allocates resources via a combination of restaurant sales reports and operating segment profit information, defined as revenues less operating expenses, related to the Company’s four operating segments. In the second quarter of 2022, the Company changed its financial information regularly reviewed by the CODM to include all cash and cash equivalents, the Kona Grill tradename and deferred tax assets in the Corporate segment. Previously, certain cash amounts were included in the STK and Kona Grill segments and the Kona Grill tradename and certain deferred tax assets were included in the Kona Grill segment. Fiscal 2021 figures have been reclassified for comparability.

Certain financial information relating to the three and nine months ended September 30, 2022 and 2021 for each segment is provided below (in thousands).

	STK		Kona Grill		ONE Hospitality		Corporate		Total
For the three months ended September 30, 2022
Total revenues	$	42,347		30,069		483		121		73,020
Operating income (loss)	$	6,448		259		216		(6,432)		491
Capital asset additions	$	5,788		2,761		58		611		9,218
For the nine months ended September 30, 2022
Total revenues	$	131,865		94,756		1,340		365		228,326
Operating income (loss)	$	28,379		5,094		377		(23,404)		10,446
Capital asset additions	$	13,122		6,029		111		2,047		21,309
As of September 30, 2022
Total assets	$	103,555		73,414		5,344		54,070		236,383

	STK		Kona Grill		ONE Hospitality		Corporate		Total
For the three months ended September 30, 2021
Total revenues	$	40,018		31,177		578		96		71,869
Operating income (loss)	$	9,996		2,258		369		(7,565)		5,058
Capital asset additions	$	1,890		665		29		155		2,739
For the nine months ended September 30, 2021
Total revenues	$	102,495		89,001		991		624		193,111
Operating income (loss)	$	26,403		9,124		185		(22,041)		13,671
Capital asset additions	$	5,115		1,570		102		1,325		8,112
As of December 31, 2021
Total assets	$	95,579		69,006		5,735		59,515		229,835