On August 2, 2013, the Company entered into an agreement with seven individual accredited investors, whereby the Company issued separate 6% Secured Subordinate Convertible Notes for a total of three million dollars ($3,000,000) in a private offering. The funding from the private offering is being used exclusively for the acquisition of the Nottingham, England Hooters restaurant location (complete details of the transaction included in the Form 8-K filed with the Securities and Exchange Commission on August 5, 2013). The funding from the private offering is being used exclusively for the acquisition of the Nottingham, England Hooters restaurant location (acquisition detailed below). The Notes have the following principal terms: | · | the principal amount of the Note shall be repaid within thirty six (36) months of the issuance date at a non-compounded six percent (6%) interest rate per annum; | | · | the Note holders shall receive ten percent (10%), pro rata, of the net profit of the Nottingham, England Hooters restaurant, paid quarterly for the life of the location, and ten percent (10%) of the net proceeds should the location be sold; | | · | the consortium of investors received a total of three hundred thousand (300,000) three (3) year warrants, exercisable at three dollars ($3.00) per share; | | · | the Note holder may convert his or her Note into shares of the Company’s common stock (at ninety percent (90%) of the average closing price ten (10) days prior to conversion, unless a public offering is pending at the time of the conversion notice, which would result in the conversion price being the same price as the offering).The conversion price is subject to a floor of one dollar ($1 USD) per share; | | · | the Note holder has the right to redeem the Note for a period of sixty (60) days following the eighteen (18) month anniversary of the issuance of the Note, unless a capital raise is conducted within eighteen (18) months after the issuance of the Note. | The securities were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933. On August 2, 2013, the Company entered into a Binding Letter of Intent with West End Wings Limited and Manchester Wings Limited (the “Seller”) for the purchase of the Nottingham, England Hooters restaurant location for a total purchase price of three million one hundred and fifty thousand dollars ($3,150,000). The closing is contingent upon the completion of a full and accurate audit, and is expected to occur the earlier of the completion of the audit or October 31, 2013. With the signing of the Binding Letter of Intent, Chanticleer provided the Seller with a $200,000 deposit towards the purchase consideration. As part of this transaction, all franchise rights to the location will be transferred to the Company.
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