3. Merger with Chanticleer

As described in Note 1, Sonnet merged with Chanticleer on April 1, 2020. The Merger was accounted for as a reverse recapitalization with Sonnet as the accounting acquirer. Chanticleer had no assets, liabilities or operations at the time of the Merger. Legacy Chanticleer shareholders were issued 547,639 shares of common stock and 20,210 warrants with exercise prices ranging from $58.50 to 1,820.00 per share. The Merger consideration paid by Sonnet to Chanticleer included $6.0 million of cash and issuance of 186,161 warrants. The Company reflected the $6.0 million cash paid to Chanticleer as a decrease to additional paid-in capital.