Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K/A - ONE Group Hospitality, Inc. | v360334_8ka.htm |
| EX-99.1 - EXHIBIT 99.1 - ONE Group Hospitality, Inc. | v360334_ex99-1.htm |
COMMITTED CAPITAL ACQUISITION CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial statements give effect to the Business Combination which was consummated on October 16, 2013, pursuant to the Transaction Documents by and between the parties set out below and is being provided to aid in your analysis of the financial aspects of the Business Combination and gives effect to the equity offering.
Because Committed Capital is a shell company and The One Group’s operations will comprise the ongoing operations of the combined entity and its senior management will serve as the senior management of the combined entity, The One Group is considered to have control and therefore is treated as the accounting acquirer and its assets are accounted for at their historical values.
The unaudited pro forma condensed combined balance sheet as of September 30, 2013 combine the unaudited balance sheet of Committed Capital at September 30, 2013 with the unaudited balance sheet of The One Group as of September 30, 2013 giving effect to the Business Combination as if it was consummated on September 30, 2013.
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2012 includes Committed Capital and The One Group results of operations for the year ended December 31, 2012 as if the Business Combination was consummated on January 1, 2012. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2013 includes Committed Capital and The One Group results of operations for the nine months ended September 30, 2013 as if the Business Combination was consummated on January 1, 2013.
The results of operations of Committed Capital for the year ended December 31, 2012 are derived from the audited financial statements of Committed Capital at December 31, 2012 and for the year then ended. The unaudited balance sheet as of September 30, 2013 and the results of operations for the nine months ended September 30, 2013 of Committed Capital are derived from the unaudited condensed financial statements of Committed Capital as of September 30, 2013 and for the nine months then ended. The results of operations of The One Group for the year ended December 31, 2012 are derived from the audited financial statements of The One Group at December 31, 2012 and for the year then ended. The unaudited balance sheet as of September 30, 2013 and the results of operations for the nine months ended September 30, 2013 of The One Group are derived from the unaudited condensed financial statements of The One Group as of September 30, 2013 and for the nine months then ended.
The unaudited pro forma condensed combined financial statements should be read in conjunction with the historical financial statements and accompanying notes of Committed Capital Acquisition Corporation which are not included in this Form 8-K and the historical consolidated financial statements and accompanying notes of The One Group, LLC, which are included in this Form 8-K.
The historical financial information has been adjusted to give effect to pro forma events that are related and/or directly attributable to the merger, are factually supportable and are expected to have a continuing impact on the combined results. The adjustments presented on the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the merger.
The unaudited pro forma condensed combined financial statements are provided for illustrative purposes only and do not purport to represent the financial condition or results of operations had the acquisition been completed as of the dates indicated, nor are they necessarily indicative of future consolidated results of operations or financial position.
The transaction calls for: (a) $12,500,000 in cash and 12,631,400 common shares to be paid to the majority members of The One Group LLC for their membership interest, (b) the repayment of all member loans, notes payable, debt to related parties and other liabilities and (c) issuance of 59,000 shares to the new directors. Prior to the merger, on October 15, 2013, 3,375,000 founder shares were cancelled. The Company estimates total transaction costs to be approximately $6,700,000, including $110,000 of expenses related to the placement of shares, in connection with the transaction.
In connection with the business combination, the Company's initial stockholders (“initial stockholders”) and designees have committed to purchase 3,131,339 shares (originally 2,000,000 shares) of common stock at a price of $5.00 per share in a private placement which occurred in connection with the closing of the Company’s business combination.
COMMITTED CAPITAL ACQUISITION CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Condensed Pro Forma Balance Sheet data:
| September 30, 2013 (unaudited) | ||||||||||||||||||||||||
| CCAC | TOG | Pro-Forma Adjustments for Business Combination | As Adjusted for Business Combination | Pro-Forma Adjustment Equity Offering | Pro-Forma Combined | |||||||||||||||||||
| Assets : | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,316,000 | $ | - | $ | 1,322,000 | $ | 15,547,000 | (h) | $ | 16,869,000 | |||||||||||||
| (469,000 | )(d) | |||||||||||||||||||||||
| 475,000 | (c) | |||||||||||||||||||||||
| Accounts receivable, net | 3,046,000 | 3,046,000 | 3,046,000 | |||||||||||||||||||||
| Inventory | 951,000 | 951,000 | 951,000 | |||||||||||||||||||||
| Other current assets | 839,000 | 839,000 | 839,000 | |||||||||||||||||||||
| Due from related parties | 823,000 | 823,000 | 823,000 | |||||||||||||||||||||
| Total Current Assets | 0 | 6,975,000 | 6,000 | 6,981,000 | 15,547,000 | 22,528,000 | ||||||||||||||||||
| Investment held in Trust Account | 28,792,000 | (12,500,000 | )(a) | 0 | - | |||||||||||||||||||
| (6,700,000 | )(a) | |||||||||||||||||||||||
| (9,117,000 | )(b) | |||||||||||||||||||||||
| (475,000 | )(c) | |||||||||||||||||||||||
| Property, plant & equipment, net | 13,359,000 | 13,359,000 | 13,359,000 | |||||||||||||||||||||
| Investments | 2,279,000 | 2,279,000 | 2,279,000 | |||||||||||||||||||||
| Deferred tax assets | 307,000 | 307,000 | 307,000 | |||||||||||||||||||||
| Other assets | 930,000 | 930,000 | 930,000 | |||||||||||||||||||||
| Security deposits | 986,000 | 986,000 | 986,000 | |||||||||||||||||||||
| Total Assets | $ | 28,792,000 | $ | 24,836,000 | $ | (28,786,000 | ) | $ | 24,842,000 | $ | 15,547,000 | $ | 40,389,000 | |||||||||||
| Liabilities and Members' Equity | ||||||||||||||||||||||||
| Cash overdraft | $ | 469,000 | $ | (469,000 | )(d) | $ | - | $ | - | |||||||||||||||
| Member loans, current portion | 7,377,000 | (7,377,000 | )(b) | - | - | |||||||||||||||||||
| Notes payable, current portion | 320,000 | (320,000 | )(b) | - | - | |||||||||||||||||||
| Line of credit payable, net of current | 4,906,000 | (15,000 | )(b) | 4,891,000 | 4,891,000 | |||||||||||||||||||
| Accounts payable | 3,839,000 | 3,839,000 | 3,839,000 | |||||||||||||||||||||
| Accrued expenses | 629,000 | 2,837,000 | (405,000 | )(b) | 3,061,000 | 3,061,000 | ||||||||||||||||||
| Due to related parties | 960,000 | 305,000 | (960,000 | )(b) | 305,000 | 305,000 | ||||||||||||||||||
| Deferred revenue | 9,000 | 9,000 | 9,000 | |||||||||||||||||||||
| Total Current Liabilities | 1,589,000 | 20,062,000 | (9,546,000 | ) | 12,105,000 | 12,105,000 | ||||||||||||||||||
| Other long-term liabilities | 40,000 | (40,000 | )(b) | - | - | |||||||||||||||||||
| Deferred rent payable | 5,699,000 | 5,699,000 | 5,699,000 | |||||||||||||||||||||
| Total liabilities | 1,589,000 | 25,801,000 | (9,586,000 | ) | 17,804,000 | 17,804,000 | ||||||||||||||||||
| Stockholders'/Members’ Equity | ||||||||||||||||||||||||
| - | ||||||||||||||||||||||||
| Common stock, $0.0001 par value, 24,925,475 | ||||||||||||||||||||||||
| pro forma shares outstanding | 1,000 | 1,000 | 1,000 | (h) | 2,000 | |||||||||||||||||||
| Additional paid in capital | 28,369,000 | (16,750,000 | )(a) | 11,619,000 | 15,546,000 | (h) | 27,165,000 | |||||||||||||||||
| Deficit accumulated | (1,167,000 | ) | (6,590,000 | )(a) | (7,757,000 | ) | (7,757,000 | ) | ||||||||||||||||
| THE ONE GROUP, LLC and Subsidiaries and | - | |||||||||||||||||||||||
| Members' Equity | (4,140,000 | ) | 4,140,000 | (a) | - | - | ||||||||||||||||||
| Noncontrolling Interest | 3,175,000 | 3,175,000 | 3,175,000 | |||||||||||||||||||||
| Total Equity | 27,203,000 | (965,000 | ) | (19,200,000 | ) | 7,038,000 | 15,547,000 | 22,585,000 | ||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 28,792,000 | $ | 24,836,000 | $ | (28,786,000 | ) | $ | 24,842,000 | $ | 15,547,000 | $ | 40,389,000 | |||||||||||
See notes to pro forma condensed combined financial statements
COMMITTED CAPITAL ACQUISITION CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Condensed Pro Forma Statement of Operations:
| For the year ended December 31, 2012 (unaudited) | ||||||||||||||||||||||||
| CCAC | TOG |
Pro-Forma Adjustments | Pro-Forma Combined | Pro-Forma Adjustment for Equity Offering | As Adjusted for Business Combination and Equity Offering | |||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||
| Owned unit net revenues | $ | - | $ | 56,430,000 | $ | $ | 56,430,000 | $ | 56,430,000 | |||||||||||||||
| Management and incentive fee revenue | 3,691,000 | 3,691,000 | 3,691,000 | |||||||||||||||||||||
| Total revenue | - | 60,121,000 | 60,121,000 | 60,121,000 | ||||||||||||||||||||
| Cost of goods sold | 14,263,000 | 14,263,000 | 14,263,000 | |||||||||||||||||||||
| Gross profit | - | 45,858,000 | 45,858,000 | 45,858,000 | ||||||||||||||||||||
| General and administrative expenses | 423,000 | 42,176,000 | 42,599,000 | 42,599,000 | ||||||||||||||||||||
| Management and royalty fees | - | 341,000 | 341,000 | 341,000 | ||||||||||||||||||||
| Pre-opening expenses | - | 139,000 | 139,000 | 139,000 | ||||||||||||||||||||
| Equity in loss of subsiaries | - | 77,000 | 77,000 | 77,000 | ||||||||||||||||||||
| Other (income) expense: | ||||||||||||||||||||||||
| Interest expense | - | 689,000 | (500,000 | ) | (e) | 189,000 | 189,000 | |||||||||||||||||
| Other (income) | (30,000 | ) | (4,811,000 | ) | 30,000 | (f) | (4,811,000 | ) | (4,811,000 | ) | ||||||||||||||
| Income (loss) from continuing operations before | ||||||||||||||||||||||||
| provision for income taxes | (393,000 | ) | 7,247,000 | 470,000 | 7,324,000 | 7,324,000 | ||||||||||||||||||
| Provision for income taxes | - | 14,000 | 2,517,000 | (g) | 2,531,000 | 2,531,000 | ||||||||||||||||||
| Income (loss) from continuing operations | $ | (393,000 | ) | 7,233,000 | $ | (2,047,000 | ) | $ | 4,793,000 | $ | 4,793,000 | |||||||||||||
| Pro forma weighted average common shares outstanding basic and diluted | 21,815,000 | 3,131,000 | (h) | 24,946,000 | ||||||||||||||||||||
| Pro forma income from continuing operations per share basic and diluted | $ | 0.22 | $ | 0.19 | ||||||||||||||||||||
See notes to pro forma condensed combined financial statements
COMMITTED CAPITAL ACQUISITION CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Condensed Pro Forma Statement of Operations:
| For the nine months ended September 30, 2013 (unaudited) | ||||||||||||||||||||||||
| CCAC | TOG | Pro-Forma Adjustments | Pro-Forma Combined | Pro-Forma Adjustments for Equity Offering | Adjusted for Business Combination and Equity offering | |||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||
| Owned unit net revenues | $ | - | $ | 29,136,000 | $ | 29,136,000 | $ | 29,136,000 | ||||||||||||||||
| Management and incentive fee revenue | 5,586,000 | 5,586,000 | 5,586,000 | |||||||||||||||||||||
| Total revenue | - | 34,722,000 | 34,722,000 | 34,722,000 | ||||||||||||||||||||
| Cost of goods sold | 7,493,000 | 7,493,000 | 7,493,000 | |||||||||||||||||||||
| Gross profit | - | 27,229,000 | 27,229,000 | 27,229,000 | ||||||||||||||||||||
| General and administrative expenses | 383,000 | 23,954,000 | 24,337,000 | 24,337,000 | ||||||||||||||||||||
| Management and royalty fees | 120,000 | 120,000 | 120,000 | |||||||||||||||||||||
| Pre-opening expenses | 211,000 | 211,000 | 211,000 | |||||||||||||||||||||
| Equity in income of subsiaries | (564,000 | ) | (564,000 | ) | (564,000 | ) | ||||||||||||||||||
| Other (income) expense: | ||||||||||||||||||||||||
| Interest expense | - | 615,000 | (615,000 | ) | (e) | - | - | |||||||||||||||||
| Other (income) expense | (12,000) | 271,000 | 12,000 | (f) | 271,000 | 271,000 | ||||||||||||||||||
| Income (loss) from continuing operations before | - | |||||||||||||||||||||||
| provision for income taxes | (371,000) | 2,622,000 | 603,000 | 2,854,000 | 2,854,000 | |||||||||||||||||||
| Provision for income taxes | - | 156,000 | 834,000 | (g) | 990,000 | 990,000 | ||||||||||||||||||
| Income (loss) from continuing operations | $ | (371,000) | $ | 2,466,000 | $ | (231,000 | ) | $ | 1,864,000 | $ | 1,864,000 | |||||||||||||
| Pro forma weighted average common shares outstanding basic and diluted | 21,815,000 | 3,131,000 | (h) | 24,946,000 | ||||||||||||||||||||
| Pro forma income from continuing operations per share basic and diliuted | $ | 0.09 | $ | 0.07 | ||||||||||||||||||||
See notes to pro forma condensed combined financial statements
COMMITTED CAPITAL ACQUISITION CORPORATION
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
NOTE 1 – DESCRIPTION OF THE TRANSACTION - THE ONE GROUP, LLC ACQUISITION
The transaction calls for: (a) $12,500,000 in cash and 12,631,400 common shares to be paid to the majority members of The One Group LLC for their membership interest (of which 2,000,000 common shares are being held in an escrow account to secure certain potential adjustments to the merger consideration and certain potential indemnification obligations), (b) the repayment of all member loans, notes payable, debt to related parties and other liabilities and (c) issuance of 59,000 shares to the new directors. Prior to the merger, on October 15, 2013, 3,375,000 founder shares were cancelled. The Company estimates total transaction costs to be approximately $6,700,000 including $110,000 of expenses related to the placement of shares, in connection with the transaction and a related financing.
In connection with the business combination, the Company's initial stockholders (“initial stockholders”) and designees have committed to purchase 3,131,339 shares (originally 2,000,000 shares) of common stock at a price of $5.00 per share in a private placement which occurred in connection with the closing of the Company’s business combination.
NOTE 2 – PRO FORMA ADJUSTMENTS AND ASSUMPTIONS FOR BUSINESS COMBINATION
Descriptions of the adjustments included in the unaudited pro forma balance sheet and statement of operations are as follows:
| (a) | To reflect the payment of: (1) $12,500,000 to majority members for their interest in The One Group, LLC and (2) the payment of $6,700,000 less $110,000 of expenses related to the placement of shares of transactions fees associated with the transaction. |
| (b) | To reflect the payment of all outstanding member loans, notes payable, accrued expenses, due to related parties and other liabilities existing at the balance sheet date aggregating $9,117,000. |
| (c) | To transfer remaining cash balance out of Trust Account and into operating cash. |
| (d) | To use cash on hand to eliminate the cash overdraft. |
| (e) | To eliminate interest expense on debt eliminated in the transaction. |
| (f) | To eliminate interest income on Funds in Trust Account. |
| (g) | To include federal income taxes at the statutory rate assuming regular corporation status. |
NOTE 3 – PRO FORMA ADJUSTMENTS AND ASSUMPTIONS FOR EQUITY OFFERING
| (h) | To reflect the placement of 3,131,339 shares of common stock at $5.00 to initial investors or their designees less $110,000 of expenses. |