Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K/A - Sonnet BioTherapeutics Holdings, Inc. | v365648_8ka.htm |
| EX-99.2 - EXHIBIT 99.2 - Sonnet BioTherapeutics Holdings, Inc. | v365648_ex99-2.htm |
Pro Forma Financial Information.
Introduction to Unaudited Pro Forma Condensed Consolidated Financial Information
On November 6, 2013, Chanticleer purchased WEW, a Hooters Restaurant located Nottingham, England, through its wholly-owned subsidiary, Hooters UK (Nottingham) Ltd. The acquisition was accounted for using the purchase method in accordance with ASC 805, “Business Combinations”.
The following unaudited pro forma condensed consolidated financial information gives effect to the above described acquisition. The following unaudited pro forma condensed consolidated balance sheet combines the balance sheet of Chanticleer with WEW as of September 30, 2013, as if the acquisition occurred on that date. The following unaudited pro forma condensed consolidated statements of operations combine the results of operations of Chanticleer with WEW for the year ended December 31, 2012, and the nine month period ended September 30, 2013, as if the acquisition of WEW had been completed as the beginning of the periods indicated.
The following unaudited pro forma condensed consolidated financial information is based on historical amounts for the year ended December 31, 2012 and the nine months ended September 30, 2013 and certain amounts at the close of the acquisition. The information presented is for illustrative purposes only and is not necessarily indicative of the results of operations of the consolidated company that would have occurred had the acquisition been completed as of the beginning of the periods indicated or that may be attained in the future. Actual future results will likely be materially different from these pro forma results. This unaudited pro forma financial information should be read in conjunction with the historical financial information of Chanticleer and WEW included elsewhere in this report and in other reports and documents Chanticleer files with the United States Securities and Exchange Commission.
| 1 |
Chanticleer Holdings, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheets
(Unaudited)
As of September 30, 2013
| ASSETS | Chanticleer (a) | WEW (b) | Pro forma adjustments (c) | Pro Forma Total | ||||||||||||||
| Current assets: | ||||||||||||||||||
| Cash | $ | 213,229 | $ | 631,005 | $ | (631,005 | ) | (c) | $ | 213,229 | ||||||||
| Restricted cash | 3,000,000 | - | 3,000,000 | |||||||||||||||
| Accounts receivable and other receivables | 315,901 | 60,015 | (60,015 | ) | (c) | 315,901 | ||||||||||||
| Inventory | 198,274 | 55,393 | (50,393 | ) | (c),(d) | 203,274 | ||||||||||||
| Due from related parties | 116,305 | - | 116,305 | |||||||||||||||
| Prepaid expenses | 436,219 | 16,265 | (16,265 | ) | (c) | 436,219 | ||||||||||||
| Assets of discontinued operations | 51,804 | - | 51,804 | |||||||||||||||
| TOTAL CURRENT ASSETS | 4,331,732 | 762,678 | (757,678 | ) | 4,336,732 | |||||||||||||
| Property and equipment, net | 5,047,122 | 20,493 | 5,067,615 | |||||||||||||||
| Goodwill | 2,053,946 | - | 3,124,507 | (d) | 5,178,453 | |||||||||||||
| Intangible assets, net | 2,398,919 | - | 2,398,919 | |||||||||||||||
| Investments at fair value | 12,062 | - | 12,062 | |||||||||||||||
| Other investments | 1,970,796 | - | 1,970,796 | |||||||||||||||
| Deposits and other assets | 213,437 | - | 213,437 | |||||||||||||||
| TOTAL ASSETS | $ | 16,028,014 | $ | 783,171 | $ | 2,366,829 | $ | 19,178,014 | ||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Current maturities of long term debt and notes payable | $ | 625,959 | $ | - | $ | 625,959 | ||||||||||||
| Derivative liability | 2,341,500 | - | 2,341,500 | |||||||||||||||
| Advances from investors | 575,000 | - | 575,000 | |||||||||||||||
| Accounts payable and accrued expenses | 1,550,827 | 355,487 | (355,487 | ) | (c) | 1,550,827 | ||||||||||||
| Other current liabilities | 105,453 | - | 105,453 | |||||||||||||||
| Current maturities of capital leases payable | 47,186 | - | 47,186 | |||||||||||||||
| Deferred rent | 19,561 | - | 19,561 | |||||||||||||||
| Due to related parties | 12,191 | 477,214 | (477,214 | ) | (c) | 12,191 | ||||||||||||
| Liabilities of discontinued operations | 9,881 | - | 9,881 | |||||||||||||||
| TOTAL CURRENT LIABILITIES | 5,287,558 | 832,701 | (832,701 | ) | 5,287,558 | |||||||||||||
| Capital leases payable, less current maturities | 63,032 | - | 63,032 | |||||||||||||||
| Convertible note payable, net of debt discount of $2,833,333 | 166,667 | - | 166,667 | |||||||||||||||
| Deferred rent | 1,204,999 | - | 1,204,999 | |||||||||||||||
| Other liabilities | 100,647 | - | 100,647 | |||||||||||||||
| TOTAL LIABILITIES | 6,822,903 | 832,701 | (832,701 | ) | 6,822,903 | |||||||||||||
| Commitments and contingencies | ||||||||||||||||||
| Stockholders' equity: | ||||||||||||||||||
| Common stock: $0.0001 par value; authorized 20,000,000 | ||||||||||||||||||
| shares; issued and outstanding 4,467,896 at September 30, 2013 | 446 | 155 | (155 | ) | (c) | 446 | ||||||||||||
| Additional paid in capital | 21,501,399 | - | 3,150,000 | (d) | 24,651,399 | |||||||||||||
| Other comprehensive loss | (155,872 | ) | (24,000 | ) | 24,000 | (c) | (155,872 | ) | ||||||||||
| Accumulated deficit (earnings) | (12,126,946 | ) | (25,685 | ) | 25,685 | (c) | (12,126,946 | ) | ||||||||||
| Non-controlling interest | (13,916 | ) | - | (13,916 | ) | |||||||||||||
| TOTAL STOCKHOLDERS' EQUITY | 9,205,111 | (49,530 | ) | 3,199,530 | 12,355,111 | |||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 16,028,014 | $ | 783,171 | $ | 2,366,829 | $ | 19,178,014 | ||||||||||
See accompanying notes to unaudited condensed consolidating financial statements
| 2 |
Chanticleer Holdings, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
For the Year Ended December 31, 2012
| Chanticleer (a) | WEW (b) | Pro forma Adj | Pro Forma Total | |||||||||||||
| Revenue: | ||||||||||||||||
| Restaurant sales, net | $ | 6,752,323 | $ | 3,528,529 | $ | 10,280,852 | ||||||||||
| Management fee income - non-affiliates | 100,000 | - | 100,000 | |||||||||||||
| Total revenue | 6,852,323 | 3,528,529 | - | 10,380,852 | ||||||||||||
| Expenses: | ||||||||||||||||
| Restaurant cost of sales | 2,761,949 | 1,307,717 | 4,069,666 | |||||||||||||
| Restaurant operating expenses | 3,785,034 | 1,599,731 | 5,384,765 | |||||||||||||
| Restaurant pre-opening expenses | 204,126 | - | 204,126 | |||||||||||||
| General and administrative expenses | 2,389,163 | 310,407 | 2,699,570 | |||||||||||||
| Depreciation and amortization | 383,454 | 98,017 | 481,471 | |||||||||||||
| Total expenses | 9,523,726 | 3,315,872 | - | 12,839,598 | ||||||||||||
| (Loss) profit from operations | (2,671,403 | ) | 212,657 | - | (2,458,746 | ) | ||||||||||
| Other income (expense) | ||||||||||||||||
| Equity in losses of investments | (14,803 | ) | - | (14,803 | ) | |||||||||||
| Realized losses from sales of investments | (16,598 | ) | - | (16,598 | ) | |||||||||||
| Miscellaneous income | 23 | 48,933 | 48,956 | |||||||||||||
| Interest expense | (474,926 | ) | (686 | ) | (475,612 | ) | ||||||||||
| Total other expense | (506,304 | ) | 48,247 | - | (458,057 | ) | ||||||||||
| (Loss) profit from continuing operations before income taxes | (3,177,707 | ) | 260,904 | - | (2,916,803 | ) | ||||||||||
| Provision for income taxes | 19,205 | 94,292 | 113,497 | |||||||||||||
| Loss from continuing operations | (3,196,912 | ) | 166,612 | - | (3,030,300 | ) | ||||||||||
| Loss from discontinued operations, net of taxes | (258,315 | ) | (257,474 | ) | ||||||||||||
| Consolidated net (loss) income | (2,938,597 | ) | 166,612 | - | (2,772,826 | ) | ||||||||||
| Less: Net loss attributable to non-controlling interest | 227,968 | 227,968 | ||||||||||||||
| Net (loss) income attributable to Chanticleer Holdings, Inc. | $ | (3,166,565 | ) | $ | 166,612 | $ | - | $ | (3,000,794 | ) | ||||||
| Net (loss) income attributable to Chanticleer Holdings, Inc.: | ||||||||||||||||
| (Loss) income from continuing operations | $ | (2,908,250 | ) | $ | 166,612 | $ | - | $ | (2,741,638 | ) | ||||||
| Loss from discontinued operations | (258,315 | ) | - | (258,315 | ) | |||||||||||
| $ | (3,166,565 | ) | $ | 166,612 | $ | - | $ | (2,999,953 | ) | |||||||
| Other comprehensive loss: | ||||||||||||||||
| Unrealized loss on available-for-sale securities (none applies to | ||||||||||||||||
| non-controlling interest) | $ | (261,404 | ) | $ | - | $ | - | $ | (261,404 | ) | ||||||
| Foreign translation income | 29,013 | 523 | - | 29,536 | ||||||||||||
| Other comprehensive loss | $ | (3,398,956 | ) | $ | 167,135 | $ | - | $ | (3,231,821 | ) | ||||||
| Net loss per attributable to Chanticleer Holdings, Inc. per common share, basic and diluted: | ||||||||||||||||
| Continuing operations attributable to common shareholders, basic and diluted | $ | (1.15 | ) | $ | - | $ | (1.08 | ) | ||||||||
| Discontinued operations attributable to common shareholders, basic and diluted | $ | (0.10 | ) | - | $ | (0.10 | ) | |||||||||
| $ | (1.25 | ) | $ | - | $ | - | $ | (1.18 | ) | |||||||
| Weighted average shares outstanding, basic and diluted | 2,541,696 | 2,541,696 | ||||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
| 3 |
Chanticleer Holdings, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
For the Nine Months Ended September 30, 2013
| Chanticleer (a) | WEW (b) | Pro forma Adjusts | Pro Forma Total | |||||||||||||
| Revenue: | ||||||||||||||||
| Restaurant sales, net | $ | 4,864,410 | $ | 2,741,016 | $ | 7,605,426 | ||||||||||
| Management fee income - non-affiliates | 75,000 | - | 75,000 | |||||||||||||
| Total revenue | 4,939,410 | 2,741,016 | - | 7,680,426 | ||||||||||||
| Expenses: | ||||||||||||||||
| Restaurant cost of sales | 1,840,535 | 934,560 | 2,775,095 | |||||||||||||
| Restaurant operating expenses | 2,833,035 | 1,321,094 | 4,154,129 | |||||||||||||
| Restaurant pre-opening expenses | 17,538 | - | 17,538 | |||||||||||||
| General and administrative expenses | 2,294,370 | 235,259 | 2,529,629 | |||||||||||||
| Depreciation and amortization | 373,226 | 7,607 | 380,833 | |||||||||||||
| Total expenses | 7,358,704 | 2,498,520 | - | 9,857,224 | ||||||||||||
| Loss from operations | (2,419,294 | ) | 242,496 | - | (2,176,798 | ) | ||||||||||
| Other income (expense) | ||||||||||||||||
| Equity in losses of investments | (46,184 | ) | - | (46,184 | ) | |||||||||||
| Gain on extinguishment of debt | 70,900 | - | 70,900 | |||||||||||||
| Miscellaneous income | 3,785 | - | 3,785 | |||||||||||||
| Change in fair value of derivative liability | (75,900 | ) | - | (75,900 | ) | |||||||||||
| Interest (expense) income | (438,941 | ) | 1,774 | (437,167 | ) | |||||||||||
| Total other expense | (486,340 | ) | 1,774 | - | (484,566 | ) | ||||||||||
| Loss from continuing operations before income taxes | (2,905,634 | ) | 244,270 | - | (2,661,364 | ) | ||||||||||
| Provision for income taxes | 27,216 | 63,493 | 90,709 | |||||||||||||
| Loss from continuing operations | (2,932,850 | ) | 180,777 | - | (2,752,073 | ) | ||||||||||
| Loss from discontinued operations, net of taxes | (19,513 | ) | - | (19,513 | ) | |||||||||||
| Consolidated net loss | (2,952,363 | ) | 180,777 | - | (2,771,586 | ) | ||||||||||
| Less: Net loss attributable to non-controlling interest | 84,114 | - | 84,114 | |||||||||||||
| Net loss attributable to Chanticleer Holdings, Inc. | $ | (2,868,249 | ) | $ | 180,777 | $ | - | $ | (2,687,472 | ) | ||||||
| Net loss attributable to Chanticleer Holdings, Inc.: | ||||||||||||||||
| (Loss) income from continuing operations | $ | (2,848,736 | ) | $ | 180,777 | $ | - | $ | (2,667,959 | ) | ||||||
| Loss from discontinued operations | (19,513 | ) | - | (19,513 | ) | |||||||||||
| $ | (2,868,249 | ) | $ | 180,777 | $ | - | $ | (2,687,472 | ) | |||||||
| Other comprehensive income (loss): | ||||||||||||||||
| Unrealized loss on available-for-sale securities (none applies to | ||||||||||||||||
| non-controlling interest) | $ | (44,887 | ) | $ | - | $ | - | $ | (44,887 | ) | ||||||
| Foreign translation income (loss) | 70,756 | (40,866 | ) | - | 29,890 | |||||||||||
| Other comprehensive (loss) income | $ | (2,842,380 | ) | $ | 139,911 | $ | - | $ | (2,702,469 | ) | ||||||
| Net loss per attributable to Chanticleer Holdings, Inc. per common share, basic and diluted: | ||||||||||||||||
| Continuing operations attributable to common shareholders, basic and diluted | $ | (0.77 | ) | $ | - | $ | (0.72 | ) | ||||||||
| Discontinued operations attributable to common shareholders, basic and diluted | (0.01 | ) | - | (0.01 | ) | |||||||||||
| $ | (0.78 | ) | $ | - | $ | - | $ | (0.73 | ) | |||||||
| Weighted average shares outstanding, basic and diluted | 3,701,804 | - | - | 3,701,804 | ||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
| 4 |
CHANTICLEER HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ACQUISITION
On November 6, 2013, Chanticleer Holdings, Inc. (“Chanticleer”) entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with West End Wings Limited (“WEW”), whereby the Company acquired one hundred percent (100%) of the outstanding shares of WEW. The Share Purchase Agreement provides that the Company shall operate as WEW, with WEW continuing as the surviving entity and subsidiary of the Company.
NOTE 2 - PRO FORMA ADJUSTMENTS
The pro forma adjustments to the condensed combined balance sheet give effect to the acquisition of WEW as if the transactions had occurred on September 30, 2013. The pro forma adjustments to the condensed consolidated statements of operations for the nine months ended September 30, 2013 give effect to the acquisition of WEW as if the transactions had occurred on September 30, 2013.
Balance Sheet – September 30, 2013
| a. | Derived from the unaudited balance sheet of Chanticleer as of September 30, 2013. | |
| b. | Derived from the audited balance sheet of WEW as of 40-weeks ended October 6, 2013. | |
| c. | Represents certain assets and liabilities excluded from acquisition. | |
| d. | Reflects the acquisition of WEW. |
| 5 |
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed.
| Consideration paid: | $ | 3,150,000 | ||
| Assets acquired and liabilities assumed: | ||||
| Property and equipment | $ | 20,493 | ||
| Inventory | 5,000 | |||
| Goodwill | 3,124,507 | |||
| Net assets acquired | $ | 3,150,000 |
The cost of the transaction was allocated to the tangible and intangible assets and liabilities assumed based on estimates of their respective fair values at the date of acquisition with the remaining unallocated purchase price recorded as goodwill. Management is responsible for the valuation of net assets and considered a number of factors when estimating the fair values and estimated useful lives of acquired assets and liabilities.
Statement of Operations - For the Year Ended December 31, 2012
| a) | Derived from the audited statement of operations of Chanticleer for the year ended December 31, 2012. |
| b) | Derived from the unaudited statement of operations of WEW for the 52-weeks ended December 30, 2012. |
Statement of Operations - For the Nine Months Ended September 30, 2013
| a) | Derived from the unaudited statement of operations of Chanticleer for the nine months ended September 30, 2013. |
| b) | Derived from the audited statement of operations of WEW for the 40-weeks ended October 6, 2013. |
| 6 |