Annual report pursuant to Section 13 and 15(d)

Acquisitions (Tables)

v3.3.1.900
Acquisitions (Tables)
 12 Months Ended
Dec. 31, 2015
Schedule of Acquisitions Valuation Assumptions

The contractual terms of the agreement does not provide for and the Company does not expect to declare dividends in the near future. Key assumptions used to apply this pricing model as of the date of issuance, December 31, 2014 and December 31, 2015 are presented in the table below:

 

    6% Note Issued on     15% Note Issued on     8% Note Issued on     8% Note Issued on     8% Notes Issued on     8% Notes Issued on  
    August 2, 2013     March 19, 2014     November 19, 2014     December 16, 2014     January 5, 2015     January 5, 2015  
Common stock closing price   $ 4.15     $ 3.87     $ 1.70     $ 1.53     $ 1.75     $ 1.75  
Conversion per share price   $ 3.73     $ 3.29     $ 1.45     $ 1.30     $ 1.33     $ 1.33  
Conversion shares     804,764       151,999       172,672       77,061       112,402       749,344  
Expected life (in years)     3.0       1.0       3.0       3.0       3.0       3.0  
Expected volatility     110 %     62 %     74 %     74 %     73 %     73 %
Call option value   $ 2.82     $ 1.19     $ 0.90     $ 0.81     $ 0.97     $ 0.97  
Risk-free interest rate     0.59 %     0.15 %     1.10 %     1.10 %     0.90 %     0.90 %
Dividends     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %

 

    December 31, 2014     December 31, 2014     December 31, 2014     December 31, 2014     December 31, 2014   December 31, 2014
Common stock closing price   $ 1.73     $ 1.73     $ 1.73     $ 1.73     NA   NA
Conversion per share price   $ 1.49     $ 1.47     $ 1.26     $ 1.26     NA   NA
Conversion shares     2,008,032       340,020       199,177       77,061     NA   NA
Expected life (in years)     1.6       0.2       2.9       3.0     NA   NA
Expected volatility     64 %     66 %     74 %     74 %   NA   NA
Call option value   $ 0.64     $ 0.35     $ 0.77     $ 0.78     NA   NA
Risk-free interest rate     0.67 %     0.40 %     1.10 %     1.10 %   NA   NA
Dividends     0.00 %     0.00 %     0.00 %     0.00 %   NA   NA

 

    December 31, 2015     December 31, 2015   December 31, 2015   December 31, 2015     December 31, 2015     December 31, 2015  
Common stock closing price   $ 1.00     NA   NA   $ 1.00     $ 1.00     $ 1.00  
Conversion per share price   $ 1.00     NA   NA   $ 0.76     $ 1.00     $ 1.00  
Conversion shares     3,000,000     NA   NA     132,188       150,000       475,000  
Expected life (in years)     0.6     NA   NA     2.0       2.0       2.0  
Expected volatility     85 %   NA   NA     75 %     75 %     75 %
Call option value   $ 0.26     NA   NA   $ 0.49     $ 0.41     $ 0.41  
Risk-free interest rate     0.65 %   NA   NA     0.98 %     0.98 %     0.98 %
Dividends     0.00 %   NA   NA     0.00 %     0.00 %     0.00 %

Schedule of Assets Acquired and Liabilities Assumed Recorded At Estimated Fair Values

The assets acquired and the liabilities assumed were recorded at estimated fair values based on information currently available and based on certain assumptions as to future operations as follows:

 

    2015 Acquisitions  
    BGR:                    
    The Burger Joint     BT’s Burger Joint     Little Big Burger     Total  
Consideration paid:                                
Common stock   $ 1,000,000     $ 1,000,848     $ 2,061,469     $ 4,062,317  
Cash     4,276,429       1,400,000       3,600,000       9,276,429  
Total consideration paid   $ 5,276,429     $ 2,400,848     $ 5,661,469     $ 13,338,746  
                                 
Cash acquired     11,000       8,000       234,638       253,638  
Property and equipment     2,164,023       1,511,270       1,711,990       5,387,283  
Goodwill     663,037       978,350       2,938,279       4,579,666  
Trademark/trade name/franchise fee     2,750,000       -       1,550,000       4,300,000  
Inventory, deposits and other assets     296,104       103,451       73,780       473,334  
Amounts held in escrow to satisfy acquired liabilities     -       -       675,000       675,000  
Total assets acquired, less cash     5,884,164       2,601,071       7,183,686       15,668,921  
Liabilities assumed     (607,735 )     (200,223 )     (949,857 )     (1,757,815 )
Deferred tax liabilities     -       -       (572,360 )     (572,360 )
Total consideration paid   $ 5,276,429     $ 2,400,848     $ 5,661,469     $ 13,338,746  

 

    2014 Acquisitions  
    Hooters           Hooters Australia     The        
    Pacific NW     Spoon     April 1, 2014     July 1, 2014     Burger Co.     Total  
Consideration paid:                                                
Common stock   $ 2,891,156     $ 828,750     $ -     $ -     $ 300,000     $ 4,019,906  
Warrants     978,000       280,400       -       123,333       -       1,381,733  
Assumption of debt     -       -       -       5,000,000       -       5,000,000  
Cash     -       -       100,000       -       250,000       350,000  
Total consideration paid     3,869,156       1,109,150       100,000       5,123,333       550,000       10,751,639  
                                                 
Cash acquired   $ 2,274     $ 21,636     $ 3,617     $ -     $ -     $ 27,527  
Current assets, excluding cash     112,078       89,817       377,296       47,777       9,926       636,894  
Property and equipment     2,731,031       391,462       2,934,307       1,603,557       284,795       7,945,152  
Goodwill     1,951,909       698,583       -       8,487,138       256,379       11,394,009  
Trademark/trade name/franchise fee     60,937       -       277,867       220,500       -       559,304  
Deposits and other assets     20,275       5,193       90,371       20,186       -       136,025  
Total assets acquired, less cash     4,878,504       1,206,691       3,683,458       10,379,158       551,100       20,698,911  
Liabilities assumed     (1,009,348 )     (97,541 )     (1,560,710 )     (1,496,536 )     (1,100 )     (4,165,235 )
Non-controlling interest     -       -       (993,999 )     (3,759,289 )     -       (4,753,288 )
Chanticleer equity     -       -       (1,028,749 )     -       -       (1,028,749 )
Total consideration paid   $ 3,869,156     $ 1,109,150     $ 100,000     $ 5,123,333     $ 550,000     $ 10,751,639  

Schedule of Business Combination Pro Forma Information

The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated, or which may result in the future.

 

    Years Ended December 31,  
    2015     2014  
             
Total revenues   $ 51,194,287     $ 53,738,800  
Loss from continuing operations     (16,039,046 )     (5,147,010 )
Gain (loss) frorm discontinued operations     53,350       (920,960 )
Loss attributable to non-controlling interest     2,319,117       263,307  
Net loss   $ (13,666,579 )   $ (5,804,663 )
Net loss per share, basic and diluted   $ (0.96 )   $ (0.92 )
Weighted average shares outstanding, basic and diluted     14,245,437       6,332,843  

Schedule of Business Combination Operating Income Loss

The following table includes information from the Company’s 2015 acquisitions, the results of which are included in the accompanying Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2015:

 

    2015 Acquisitions  
    BGR: The Burger Joint     BT’s Burger Joint     Little Big Burger     Total  
                         
Revenues   $ 7,028,700     $ 1,845,400     $ 1,346,400     $ 10,220,500  
Cost of sales     2,254,100       550,600       483,100       3,287,800  
Other expenses     4,994,400       1,136,600       648,700       6,779,700  
Operating income (loss)   $ (219,800 )   $ 158,200     $ 214,600     $ 153,000  

 

The following table includes information from the Company’s 2014 acquisitions, the results of which are included in the accompanying Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2014:

 

    2014 Acquisitions  
    Hooters Pacific NW     Spoon     Hooters Australia     The Burger Co.     Total  
                               
Revenues   $ 4,382,492     $ 1,207,688     $ 5,613,381     $ 81,539     $ 11,285,100  
                                         
Cost of sales     1,239,726       529,974       1,564,198       33,305       3,367,203  
Other expenses     3,340,963       915,661       4,330,224       30,847       8,617,695  
                                         
Operating income (loss)   $ (198,197 )   $ (237,947 )   $ (281,041 )   $ 17,387     $ (699,798 )

Hooters Australia [Member]  
Schedule of Acquisitions Valuation Assumptions

Acquisitions of Hooters Australia:

 

Assumptions:        
Risk-free interest rate     1.62 %
Expected life     5 years  
Expected volatility     109.1 %
Dividends     0 %

Hooters Pacific NW and Spoon [Member]  
Schedule of Acquisitions Valuation Assumptions

Acquisitions of Hooters Pacific NW and Spoon:

 

Assumptions:        
Risk-free interest rate     0.79 %
Expected life     5 years  
Expected volatility     89.1 %
Dividends     0 %