Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A CURRENT REPORT - Sonnet BioTherapeutics Holdings, Inc. | v389355_8ka.htm |
| EX-99.2 - EXHIBIT 99.2 - Sonnet BioTherapeutics Holdings, Inc. | v389355_ex99-2.htm |
Exhibit 99.3
Pro Forma Financial Information.
Introduction to Unaudited Pro Forma Condensed Consolidated Financial Information
On July 3, 2014, Chanticleer Holdings, Inc., a Delaware corporation (“Chanticleer” or “the Company”), filed a Form 8-K to report its acquisition of a sixty percent (60%) ownership interest in Hoot Parramatta Pty Ltd, Hoot Australia Pty Ltd, Hoot Penrith Pty Ltd, and TMIX Management Australia Pty Ltd (collectively, the “Australian Entities”), which own, operate, and manage Hooters restaurant locations and gaming operations in Australia. The ownership interest in the Australian Entities was purchased from the respective entities in exchange for a debt assumption, whereby the Company agreed to assume a five million dollar ($5,000,000) debt and issued two hundred fifty thousand (250,000) warrants to purchase shares of the Company’s Common Stock. The debt is collateralized by Chanticleer’s assets including all accounts, documents, instruments, general intangibles, chattel paper, equipment, inventory, personal property, intellectual property and all other business assets of Chanticleer, secondary to a first lien on all the Company’s assets . The 5,000,000 debt is to be repaid in three installments as follows: $2,000,000 on or before December 31, 2014, $2,000,000 on or before June 30, 2015, $1,000,000 plus interest and all other fees on or before December 31, 2015. Warrants were fair valued at $515,600 using a Black-scholes valuation model. 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 the Australian Entities as of June 30, 2014, 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 the Australian Entities for the year ended December 31, 2013, and the six month period ended June 30, 2014, as if the acquisition of the Australian Entities 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, 2013 and the six months ended June 30, 2014 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 the Australian Entities included elsewhere in this report and in other reports and documents Chanticleer files with the United States Securities and Exchange Commission.
Chanticleer Holdings, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheets
(Unaudited)
As of June 30, 2014
| ASSETS | Chanticleer (a) | Hooters Australia (b) | Pro forma adjustments (c) | Pro Forma Total | ||||||||||||||
| Current assets: | ||||||||||||||||||
| Cash | $ | 273,378 | $ | 2,077 | $ | - | $ | 275,455 | ||||||||||
| Accounts receivable and other receivables | 163,564 | - | 163,564 | |||||||||||||||
| Inventory | 475,459 | 47,777 | 523,236 | |||||||||||||||
| Due from related parties | 113,481 | - | 113,481 | |||||||||||||||
| Prepaid expenses and other current assets | 552,490 | 18,109 | 570,599 | |||||||||||||||
| TOTAL CURRENT ASSETS | 1,578,372 | 67,963 | - | 1,646,335 | ||||||||||||||
| Property and equipment, net | 12,697,117 | 1,603,557 | 14,300,674 | |||||||||||||||
| Intangible assets, net | 12,790,757 | 220,500 | 8,797,183 | (c) | 21,808,440 | |||||||||||||
| Investments at fair value | 35,362 | - | 35,362 | |||||||||||||||
| Other investments | 1,550,000 | - | 1,550,000 | |||||||||||||||
| Deposits and other assets | 517,526 | - | 517,526 | |||||||||||||||
| TOTAL ASSETS | $ | 29,169,134 | $ | 1,892,020 | $ | 8,797,183 | $ | 39,858,537 | ||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Current maturities of long term debt and notes payable | $ | 1,959,579 | $ | - | $ | 1,959,579 | ||||||||||||
| Current maturities of convertible note payable, net | 289,917 | - | 289,917 | |||||||||||||||
| Derivative liability | 1,734,500 | - | 1,734,500 | |||||||||||||||
| Accounts payable and accrued expenses | 3,572,145 | 1,467,517 | 5,039,662 | |||||||||||||||
| Current maturities of capital leases payable | 58,630 | - | 58,630 | |||||||||||||||
| Deferred rent | 111,722 | 29,019 | 140,741 | |||||||||||||||
| Loan payable | 1,571,646 | - | 3,868,600 | (c)(e) | 5,440,246 | |||||||||||||
| Due to related parties | 12,191 | - | 12,191 | |||||||||||||||
| TOTAL CURRENT LIABILITIES | 9,310,330 | 1,496,536 | 3,868,600 | 14,675,466 | ||||||||||||||
| Capital leases payable, less current maturities | 73,033 | - | 73,033 | |||||||||||||||
| Convertible note payable, net | 916,667 | - | 916,667 | |||||||||||||||
| Deferred rent | 1,852,611 | - | 1,852,611 | |||||||||||||||
| Deferred tax liabilities | 1,275,317 | - | 1,275,317 | |||||||||||||||
| Long-term debt, less current maturities | 180,874 | - | 1,000,000 | (c) | 1,180,874 | |||||||||||||
| TOTAL LIABILITIES | 13,608,832 | 1,496,536 | 4,868,600 | 19,973,968 | ||||||||||||||
| Commitments and contingencies | ||||||||||||||||||
| Stockholders' equity: | ||||||||||||||||||
| Common stock: $0.0001 par value; authorized 20,000,000 | ||||||||||||||||||
| shares; issued and outstanding 6,499,433 at June 30, 2014 | 652 | 306 | (306 | ) | (d) | 652 | ||||||||||||
| Additional paid in capital | 31,159,996 | - | 515,600 | (c) | 31,675,596 | |||||||||||||
| Other comprehensive (loss) income | (30,339 | ) | 122,776 | (122,776 | ) | (d) | (30,339 | ) | ||||||||||
| Advances from/to stockholders | - | 429,514 | (429,514 | ) | - | |||||||||||||
| Accumulated (deficit) earnings | (17,334,191 | ) | 157,112 | 288,512 | (d), (e) | (17,215,306 | ) | |||||||||||
| Non-controlling interest | 1,764,184 | - | 3,677,067 | (c) | 5,441,251 | |||||||||||||
| TOTAL STOCKHOLDERS' EQUITY | 15,560,302 | 395,484 | 3,928,583 | 19,871,854 | ||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 29,169,134 | $ | 1,892,020 | $ | 8,797,183 | $ | 39,845,822 | ||||||||||
See accompanying notes to unaudited condensed consolidating financial statements
* A final valuation of the assets and liabilities and purchase price allocation of the Australian entities has not been completed as of this reporting period. Consequently, the purchase price was preliminarily allocated based upon the asset and liability amounts in the Australian entities accounting records with the excess classified as intangibles assets. These amounts are subject to revision upon the completion of formal studies and valuations which will occur during the quarter of 2014.
Chanticleer Holdings, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
For the Year Ended December 31, 2013
| Chanticleer (a) | Hooters Australia (b) | Pro forma Adj | Pro Forma Total | ||||||||||||||
| Revenue: | |||||||||||||||||
| Restaurant sales, net | $ | 8,144,035 | $ | 6,143,129 | $ | 14,287,164 | |||||||||||
| Gaming income, net | 304,101 | (c) | 304,101 | ||||||||||||||
| Management fee income - non-affiliates | 103,452 | - | 103,452 | ||||||||||||||
| Total revenue | 8,247,487 | 6,143,129 | - | 14,694,717 | |||||||||||||
| Expenses: | |||||||||||||||||
| Restaurant cost of sales | 3,031,457 | 1,496,673 | 4,528,130 | ||||||||||||||
| Restaurant operating expenses | 4,909,580 | 2,986,500 | 7,896,080 | ||||||||||||||
| Restaurant pre-opening expenses | 56,902 | - | 56,902 | ||||||||||||||
| General and administrative expenses | 4,233,629 | 1,239,306 | 5,472,935 | ||||||||||||||
| Depreciation and amortization | 622,274 | 189,771 | 812,045 | ||||||||||||||
| Total expenses | 12,853,842 | 5,912,250 | - | 18,766,092 | |||||||||||||
| (Loss) profit from operations | (4,606,355 | ) | 230,879 | - | (4,071,375 | ) | |||||||||||
| Other income (expense) | |||||||||||||||||
| Equity in losses of investments | (125,017 | ) | - | (125,017 | ) | ||||||||||||
| Interest and other income | 82,411 | - | 82,411 | ||||||||||||||
| Interest expense | (757,733 | ) | - | (757,733 | ) | ||||||||||||
| Change in fair value of derivative liabilities | 119,600 | - | 119,600 | ||||||||||||||
| Total other expense | (680,739 | ) | - | - | (680,739 | ) | |||||||||||
| (Loss) profit from continuing operations before income taxes | (5,287,094 | ) | 230,879 | - | (4,752,114 | ) | |||||||||||
| Provision for income taxes | 40,935 | (69,264 | ) | (28,329 | ) | ||||||||||||
| Loss from continuing operations | (5,328,029 | ) | 161,615 | - | (4,723,785 | ) | |||||||||||
| Loss from discontinued operations, net of taxes | (25,215 | ) | - | (25,215 | ) | ||||||||||||
| Consolidated net (loss) income | (5,353,244 | ) | 161,615 | - | (4,749,000 | ) | |||||||||||
| Less: Net loss attributable to non-controlling interest | 139,125 | 64,646 | (d) | 203,771 | |||||||||||||
| Net (loss) income attributable to Chanticleer Holdings, Inc. | $ | (5,214,119 | ) | $ | 161,615 | $ | - | $ | (4,545,229 | ) | |||||||
| Net (loss) income attributable to Chanticleer Holdings, Inc.: | |||||||||||||||||
| (Loss) income from continuing operations | $ | (5,188,904 | ) | $ | 161,615 | $ | - | $ | (5,027,289 | ) | |||||||
| Loss from discontinued operations | (25,215 | ) | - | (25,215 | ) | ||||||||||||
| $ | (5,214,119 | ) | $ | 161,615 | $ | - | $ | (5,052,504 | ) | ||||||||
| Other comprehensive loss: | |||||||||||||||||
| Unrealized loss on available-for-sale securities (none applies to | |||||||||||||||||
| non-controlling interest) | $ | 3,984 | $ | - | $ | - | (261,404 | ) | |||||||||
| Foreign translation income | 90,384 | 523 | - | 90,907 | |||||||||||||
| Other comprehensive loss | $ | (5,119,751 | ) | $ | 162,138 | $ | - | $ | (5,223,001 | ) | |||||||
| Net loss per attributable to Chanticleer Holdings, Inc. per common share, basic and diluted: | |||||||||||||||||
| Continuing operations attributable to common shareholders, basic and diluted | $ | (1.20 | ) | $ | (1.16 | ) | |||||||||||
| Discontinued operations attributable to common shareholders, basic and diluted | $ | (0.01 | ) | - | $ | (0.01 | ) | ||||||||||
| $ | (1.19 | ) | $ | - | $ | - | $ | (1.16 | ) | ||||||||
| Weighted average shares outstanding, basic and diluted | 4,365,468 | 4,365,468 | |||||||||||||||
See accompanying notes to Pro Forma unaudited condensed consolidated financial statements.
Chanticleer Holdings, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
For the Six Months Ended June 30, 2014
| Chanticleer (a) | Hooters Australia (b) |
Pro forma Adjusts |
Pro Forma Total | ||||||||||||||
| Revenue: | |||||||||||||||||
| Restaurant sales, net | $12,365,870 | $2,807,547 | $15,173,417 | ||||||||||||||
| Gaming income, net | 131,235 | 131,400 | (c) | 262,635 | |||||||||||||
| Management fee income - non-affiliates | 50,151 | - | 50,151 | ||||||||||||||
| Total revenue | 12,547,256 | 2,807,547 | 131,400 | 15,486,203 | |||||||||||||
| Expenses: | |||||||||||||||||
| Restaurant cost of sales | 4,437,907 | 698,368 | 5,136,275 | ||||||||||||||
| Restaurant operating expenses | 7,294,226 | 1,407,644 | 8,701,870 | ||||||||||||||
| Restaurant pre-opening expenses | 260,981 | - | 260,981 | ||||||||||||||
| General and administrative expenses | 2,860,453 | 503,164 | 3,363,617 | ||||||||||||||
| Depreciation and amortization | 777,375 | 94,886 | 872,261 | ||||||||||||||
| Total expenses | 15,630,942 | 2,704,062 | - | 18,335,004 | |||||||||||||
| (Loss) income from operations | (3,083,686 | ) | 103,485 | 131,400 | (2,848,801 | ) | |||||||||||
| Other income (expense) | |||||||||||||||||
| Equity in losses of investments | (40,694 | ) | - | (40,694 | ) | ||||||||||||
| Realized gains | 101,472 | - | 101,472 | ||||||||||||||
| Miscellaneous income | 7,838 | - | 7,838 | ||||||||||||||
| Change in fair value of derivative liability | 704,200 | - | 704,200 | ||||||||||||||
| Interest expense | (687,541 | ) | - | (687,541 | ) | ||||||||||||
| Total other expense | 85,275 | - | - | 85,275 | |||||||||||||
| (Loss) income from operations before income taxes | (2,998,411 | ) | 103,485 | 131,400 | (2,763,526 | ) | |||||||||||
| (Provision) expense for income taxes | (7,509 | ) | 31,046 | 23,537 | |||||||||||||
| Consolidated net (loss) income | (2,990,902 | ) | 72,439 | 131,400 | (2,787,063 | ) | |||||||||||
| Less: Net loss (income) attributable to | 129,528 | (28,976 | ) | (8,573 | ) | (d) | 91,979 | ||||||||||
| non-controlling interest | |||||||||||||||||
| Net (loss) income attributable to Chanticleer Holdings, Inc. | $ | (2,861,374 | ) | $ | 43,463 | $ | 122,827 | $ | (2,695,084 | ) | |||||||
| Other comprehensive income (loss): | |||||||||||||||||
| Unrealized loss on available-for-sale securities | |||||||||||||||||
| (none applies to non-controlling interest) | $ | (15,527 | ) | $ | - | $ | - | $ | (15,527 | ) | |||||||
| Foreign translation income (loss) | 51,165 | (40,866 | ) | - | 10,299 | ||||||||||||
| Other comprehensive (loss) income | $ | 35,638 | $ | (40,866 | ) | $ | - | $ | (5,228 | ) | |||||||
| Net loss attributable to Chanticleer Holdings, Inc. per | |||||||||||||||||
| common share, basic and diluted: | $ | (0.47 | ) | $ | (0.44 | ) | |||||||||||
| Weighted average shares outstanding, basic and diluted | 6,152,931 | - | - | 6,152,931 | |||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
CHANTICLEER HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ACQUISITION
On July 3, 2014, Chanticleer Holdings, Inc., a Delaware corporation (“Chanticleer” or “the Company”), filed a Form 8-K to report its acquisition of a sixty percent (60%) ownership interest in Hoot Parramatta Pty Ltd, Hoot Australia Pty Ltd, Hoot Penrith Pty Ltd, and TMIX Management Australia Pty Ltd (collectively, the “Australian Entities”), which own, operate, and manage Hooters restaurant locations and gaming operations in Australia. The ownership interest in the Australian Entities was purchased from the respective entities in exchange for a debt assumption, whereby the Company agreed to assume a five million dollar ($5,000,000) debt and issued two hundred fifty thousand (250,000) warrants to purchase shares of the Company’s Common Stock. The debt is collateralized by Chanticleer’s assets including all accounts, documents, instruments, general intangibles, chattel paper, equipment, inventory, personal property, intellectual property and all other business assets of Chanticleer. The 5,000,000 debt is to be repaid in three installments as follows: $2,000,000 on or before December 31, 2014, $2,000,000 on or before June 30, 2015, $1,000,000 plus interest and all other fees on or before December 31, 2015. Warrants were fair valued at $515,600 using a Black Scholes valuation model. The acquisition was accounted for using the purchase method in accordance with ASC 805, “Business Combinations”.
The audited consolidated financial statements of Chanticleer included herein are for the year ended December 31, 2013. The audited combined financial statements of TMIX Management Australia PTY. LTD., Hoot Parramatta PTY. LTD., and Hoot Penrith PTY. LTD. are for the year ended June 30, 2014.
NOTE 2 - PRO FORMA ADJUSTMENTS
The pro forma adjustments to the condensed combined balance sheet give effect to the acquisition of the Australian Entities as if the transactions had occurred on June 30, 2014. The pro forma adjustments to the condensed consolidated statements of operations for the year ended December 31, 2013 and for the six months ended June 30, 2014 give effect to the acquisition of the Australian Entities as if the transactions had occurred at the beginning for each period.
Balance Sheet - June 30, 2014
| a. | Derived from the unaudited balance sheet of Chanticleer as of June 30, 2014. |
| b. |
Derived from the audited combined balance sheet of TMIX Management Australia PTY. LTD., Hoot Parramatta PTY. LTD., and Hoot Penrith PTY. LTD. as of the year ended June 30, 2014. |
| c. |
Reflects the acquisition of TMIX Management Australia PTY. LTD., Hoot Parramatta PTY. LTD., and Hoot Penrith PTY. LTD. for assumption of $5,000,000 debt and issuance of 250,000 warrants. |
| d. | To eliminate equity of TMIX Management Australia PTY. LTD., Hoot Parramatta PTY. LTD., and Hoot Penrith PTY. LTD in consolidation with Chanticleer Holdings, Inc. |
| e. |
Gaming revenue cash received to be offset against assumed loan payable per debt assumption agreement. |
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed.
| Purchase Consideration (60% Value): | $ | 5,515,600 | ||
| Assets acquired and liabilities assumed: | ||||
| Property and equipment | $ | 1,603,557 | ||
| Intangible assets | 220,500 | |||
| Inventory | 47,777 | |||
| Non-controlling interest (at fair value) | (3,677,067 | ) | ||
| Other assets | 20,186 | |||
| Liabilities acquired | (1,496,536 | ) | ||
| Goodwill | 8,797,183 | |||
| Net assets acquired | $ | 5,515,600 |
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, 2013
| a) | Derived from the audited statement of operations of Chanticleer for the year ended December 31, 2013. |
| b) | Derived from the combined unaudited statement of operations of TMIX Management Australia PTY. LTD., Hoot Parramatta PTY. LTD., and Hoot Penrith PTY. LTD for the year ended December 31, 2013. |
| c) | To record gaming revenue in connection with purchase agreement. |
| d) | To allocate 40% of income after provision of income taxes to non-controlling interest. |
Statement of Operations - For the Six Months Ended June 30, 2014
| a) | Derived from the unaudited statement of operations of Chanticleer for the six months ended June 30, 2014. |
| b) | Derived from the combined unaudited statement of operations of TMIX Management Australia PTY. LTD., Hoot Parramatta PTY. LTD., and Hoot Penrith PTY. LTD for the year ended June 30, 2013. |
| c) | To record gaming revenue in connection with purchase agreement. |
| d) | To allocate 40% of income after provision of income taxes to non-controlling interest. |