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Going Concern
 12 Months Ended
Aug. 26, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern Going Concern We sustained a net loss of $15.2 million and cash flow from operations was a use of cash of $13.1 million for the fiscal year ended August 28, 2019. In the two quarters ended March 11, 2020 (a period prior to the COVID-19 pandemic), we sustained a net loss of $12.1 million and cash flow from operations was a use of cash of $5.9 million. For the full fiscal year ended August 26, 2020 we sustained a net loss of $29.5 million and our cash flow from operations was a use of cash of $21.6 million.
On March 13, 2020, shortly after the end of our second quarter, President Donald Trump declared a national emergency in response to the COVID-19 pandemic followed by Governor Greg Abbott of Texas issuing a public health disaster for the state of Texas on March 19, 2020. We took the necessary actions described in "Note 3. COVID-19 Pandemic" which further stressed the liquid financial resources of the Company. In the third quarter of fiscal year 2020, we borrowed the remaining $1.4 million available on our revolving line of credit with MSD Capital, borrowed $2.5 million on our Delayed Draw Term Loan, also with MSD Capital, and applied for and received a $10.0 million PPP Loan as described in "Note 3. COVID-19 Pandemic". As of the date of this filing, we have no undrawn borrowing capacity under our credit facility. Further, we do not believe that we are currently able to secure any additional debt financing.
On November 17, 2020, at a special meeting of the stockholders, the stockholders approved the Company’s plan of liquidation and dissolution "Plan of Liquidation" that provides for the sale of the Company’s assets and distribution of the net proceeds to the Company’s stockholders, after which the Company will be dissolved. See Note 2. Subsequent Events. The Company cannot predict with any precision the timing or amount of any distributions to stockholders under the Plan of Liquidation and as such, this shareholder-approved Plan could extend beyond 12 months. While the Company proceeds under this Plan, we believe we will be able to meet our obligations for the next 12 months when they come due through (1) cash flow from operating certain restaurants, (2) available cash balances, and (3) proceeds generated from real property sales as discussed below.
Since the onset of the COVID-19 Pandemic, we have reviewed and modified many aspects of our operating plan for our restaurants and corporate overhead. Our efforts are expected to partially mitigate the adverse impacts of the COVID-19 pandemic. Additionally, the sale of some assets will likely be necessary for the Company to generate cash to fund its operations. The Company has historically been able to successfully generate proceeds from property sales. Although the Company has been successful in these endeavors in the past, there are no assurances the Company will generate sufficient funds to meet all its obligations as they become due. The following conditions were considered in management’s evaluation of going concern and its efforts to mitigate that concern:
•Revamped restaurant operations to generate cost efficiencies, which resulted in higher restaurant operating margins even while sales levels have not returned to pre-COVID-19 pandemic levels. As the restaurants adapted to the new operating environment, a lower cost labor model was deployed, food costs declined as menu offerings were concentrated among the historically top selling items, and various restaurant service and supplier costs were reevaluated.
•Restructured corporate overhead earlier in calendar 2020 prior to the COVID-19 pandemic, including a transition to third party provider for certain accounting and payroll functions. Significant further restructuring took place in April, May and June of 2020, as we reviewed all corporate service providers, information technology needs, and personnel requirements to support a reduced level of operations going forward.
•Secured the PPP Loan which was necessary for funding continuing operations. The proceeds were used for qualifying expenses under the CARES Act. On November 12, 2020, we submitted an application to TCB for full forgiveness of our PPP Loan. Notwithstanding our application for loan forgiveness, we are unable to predict the actual amount of loan forgiveness the SBA will approve. See Note 2. Subsequent Events.
•During the fiscal year ended August 26, 2020 we received approximately $24.9 million proceeds from property sales, of which $11.8 million was used to pay down our Term Loan, including the minimum principal payments due in the next 12 months, and $13.1 million was used to fund operating expenses and provide liquidity.
We believe these plans are sufficient to overcome the substantial doubt as to whether we can meet our liquidity needs for the 12 months from the issuance of these financial statements.