3.    Merger with Chanticleer

Sonnet merged with Chanticleer Holdings on April 1, 2020. The Merger was accounted for as a reverse recapitalization with Sonnet as the accounting acquirer. Legacy Chanticleer shareholders were issued 547,639 shares of common stock. Merger consideration paid by Sonnet to Chanticleer Holdings included $6.0 million of cash and issuance of warrants to the spin-off entity. Sonnet reflected the $6.0 million cash paid to the spin-off entity as a decrease to additional paid-in capital.