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ARC Group, Inc. Provides Second Quarter 2018 Business Update

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JACKSONVILLE, Fla., Aug. 21, 2018 (GLOBE NEWSWIRE) -- ARC Group, Inc. (OTC:ARCK), the owner, operator and franchisor of the award-winning Dick's Wings & Grill® concept, announced financial results for the second quarter of 2018 ended June 30, 2018.

Second quarter 2018 financial highlights:

  • Revenue increased 7% to $1.2 million for Q2 2018 from $1.1 million for Q2 2017.
  • Net loss improved to $55,531, or $(0.01) per share, during Q2 2018 compared to $118,313, or $(0.02) per share, during Q2 2017.
  • Cash flows from operating activities were $180,000 during the six months ended June 30, 2018.

Richard W. Akam, Chief Executive Officer of ARC Group, stated, "We are pleased to report that our revenues increased 7% to $1.2 million for the second quarter of 2018. We expect this revenue trend to continue for the remainder of the year as we continue to grow the Dick's Wings® brand through the execution of our organic growth strategy.  We expect to open 2-3 new company-owned Dick's Wings restaurants during the remainder of 2018, which should provide a noticeable benefit to our top and bottom line."

"In addition to our organic growth strategy, we are actively pursuing a number of potential acquisitions that should help us to rapidly scale the business," stated Seenu G. Kasturi, Chief Financial Officer of ARC Group.  "Specifically, we are targeting acquisitions that are accretive to earnings and/or that offer significant growth prospects.  We believe these acquisitions will benefit from our strong marketing and operating experience, while leveraging our existing infrastructure."

Mr. Kasturi continued, "In June, we announced that we intend to acquire Tilted Kilt Pub and Eatery® franchise. Tilted Kilt Pub and Eatery has more than 40 locations in operation across the United States and Canada. The brand is well recognized and is a pace setter in the sports bar category.  Additionally, we recently entered into a definitive agreement to acquire Fat Patty's, a local brand located in West Virginia and Kentucky, that is expected to close at the end of this month and will immediately improve our bottom line.  We will be announcing additional information about this acquisition in the near future."

About ARC Group, Inc.                                                         

ARC Group, Inc., headquartered in Jacksonville, Florida, is the owner, operator and franchisor of the Dick's Wings & Grill concept.  Now in its 23rd year of operation, Dick's Wings prides itself on its award-winning chicken wings, hog wings and duck wings spun in its signature sauces and seasonings.  It also offers its own proprietary line of craft beers under the name "Dick's Craft Beers".  Dick's Wings has 15 restaurants in Florida and five restaurants in Georgia.  It also has two concession stands at TIAA Bank Field (formerly EverBank Field), home of the NFL's Jacksonville Jaguars, as well as a concession stand at Jacksonville Veterans Memorial Arena, home of the National Arena League's Jacksonville Sharks.

Dick's Wings is actively offering franchise opportunities in Florida, Georgia, Alabama, Louisiana, North Carolina and South Carolina.  For more information about Dick's Wings locations, and for additional franchising information, please visit www.dickswingsandgrill.com.

Safe Harbor Provision

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created thereby.  All statements other than statements of historical fact contained herein, including, without limitation, statements regarding the Company's future financial position, business strategy, plans and objectives, are forward-looking statements.  Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expects," "intends," "plans," "projects," "estimates," "anticipates," or "believes" or the negative thereof or any variation thereon or similar terminology or expressions.  Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from results proposed in such statements.  Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct.  Important factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, those factors set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 and its other filings and submissions with the SEC.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made.  Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements.

Contact:

David Waldman / Natalya Rudman
Crescendo Communications, LLC
Tel: 212-671-1020
Email: arck@crescendo-ir.com

(tables follow)

 
 ARC Group, Inc. 
Condensed Consolidated Statements of Operations (Unaudited)
                     
  For the Three Months Ended     For the Six Months Ended
  June 30, 2018     June 30, 2017     June 30, 2018     June 30, 2017
                     
Revenue:                    
Restaurant sales $ 894,069       $ 885,989       $ 1,878,844       $ 1,754,465  
Franchise and other revenue   225,650         165,825         458,909         343,127  
Franchise and other revenue – related party   49,110         40,040         77,738         83,058  
                     
Total net revenue   1,168,829         1,091,854         2,415,491         2,180,650  
                     
Operating expenses:                    
Restaurant operating costs:                  
Cost of sales   278,985         311,748         549,520         594,754  
Labor   343,167         296,419         597,706         564,898  
Occupancy   52,876         63,820         113,335         94,535  
Other operating expenses   225,073         187,258         437,191         357,310  
Professional fees   118,254         257,590         247,167         283,210  
Employee compensation expense   120,207         74,270         251,412         159,593  
General and administrative expenses   161,147         16,237         301,732         31,446  
                     
Total operating expenses   1,299,709         1,207,342         2,498,063         2,085,746  
                     
Income / (loss) from operations   (130,880 )       (115,488 )       (82,572 )       94,904  
                     
Other income / (expense):                    
Interest expense   (5,479 )       (8,299 )       (10,873 )       (16,224 )
Other income   80,828         5,474         85,528         9,084  
                     
Total other income / (expense)   75,349         (2,825 )       74,655         (7,140 )
                     
Net income / (loss) $ (55,531 )     $ (118,313 )     $ (7,917 )     $ 87,764  
                     
Net income / (loss) per share – basic and fully diluted $ (0.01 )     $ (0.02 )     $ (0.00 )     $ 0.01  
                     
Weighted average number of shares outstanding – basic and fully diluted   6,901,687         6,734,534         6,933,500         6,691,239  
                                     


 
 ARC Group, Inc. 
Condensed Consolidated Balance Sheets
         
    June 30,   December 31,
    2018   2017
    (Unaudited)    
         
Assets        
         
Cash and cash equivalents   $ 32,992     $ 145,346  
Accounts receivable, net     44,363       166,987  
Accounts receivable, net – related party     733       1,505  
Ad funds receivable, net     10,707       36,837  
Ad funds receivable, net – related party     1,765       2,280  
Inventory     52,281       45,417  
Notes receivable, net     15,853       28,522  
Deposits     17,461       21,189  
Other current assets     7,234       5,923  
         
Total current assets     183,389       454,006  
         
Notes receivable, net of current portion     3,829       5,106  
Property and equipment, net     343,859       99,114  
         
Total assets   $ 531,077     $ 558,226  
         
Liabilities and stockholders' deficit      
         
Accounts payable and accrued expenses   $ 625,194     $ 467,264  
Accounts payable and accrued expenses – related party     75,057       94,150  
Accrued interest     15,226       13,472  
Settlement agreements payable     270,587       264,997  
Accrued legal contingency     159,817       155,935  
Notes payable – related party     2,177       30,503  
Contingent consideration     56,356       199,682  
Deferred franchise fees     27,956       -  
Other current liabilities     11,643       9,147  
         
Total current liabilities     1,244,013       1,235,150  
         
Deferred franchise fees, net of current portion     130,508       -  
         
Total liabilities     1,374,521       1,235,150  
         
Stockholders' equity deficit:      
         
Class A common stock – $0.01 par value: 100,000,000 shares authorized, 6,524,427 and 6,950,869 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively     65,244       69,509  
Series A convertible preferred stock – $0.01 par value: 1,000,000 shares authorized, 449,581 and -0- outstanding at June 30, 2018 and December 31, 2017, respectively     4,496       -  
Additional paid-in capital     4,032,951       3,995,306  
Stock subscriptions payable     26,852       26,853  
Accumulated deficit     (4,972,987 )     (4,768,592 )
         
Total stockholders' deficit     (843,444 )     (676,924 )
         
Total liabilities and stockholders' deficit $ 531,077     $ 558,226  
         

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