Quarterly report pursuant to Section 13 or 15(d)

Acquisitions

v3.2.0.727
Acquisitions
 6 Months Ended
Jun. 30, 2015
Business Combinations [Abstract]  
Acquisitions

3. ACQUISITIONS

 

The Company completed the acquisition of BGR: The Burger Joint effective March 15, 2015. As of June 30, 2015, the Company allocated the purchase price as of the date of acquisition based on appraisals and estimated the fair value of the acquired assets and assumed liabilities. In consideration of the purchased assets, the Company paid a purchase price consisting of $4,000,000 in cash and 500,000 shares of the Company’s common stock, a contractual working capital adjustment of $233,929, and $42,500 in additional consideration paid to the seller.

 

The Company’s acquisitions were accounted for using the purchase method of accounting in accordance with ASC 805 “Business Combinations” and, accordingly, the condensed consolidated statements of operations include the results of these operations from the dates of acquisition. 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 Acquisition  
    BGR:  
    The Burger Joint  
Consideration paid:        
Common stock   $ 1,000,000  
Cash     4,276,429  
Total consideration paid     5,276,429  
         
Property and equipment     2,164,023  
Goodwill     663,037  
Trademark/trade name/franchise fee     2,750,000  
Inventory, deposits and other assets     296,104  
Total assets acquired, less cash     5,873,164  
Liabilities assumed     (607,735 )
Common stock and warrants issued     (1,000,000 )
Cash paid     (4,276,429 )
Cash received in excess of cash paid   $ 11,000  

 

    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  
                                                 
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     4,876,230       1,185,055       3,679,841       10,379,158       551,100       20,671,384  
Liabilities assumed     (1,009,348 )     (97,541 )     (1,560,710 )     (1,496,536 )     (1,100 )     (4,165,235 )
Deferred tax liabilities     -       -                       -       -  
Non-controlling interest     -       -       (993,999 )     (3,759,289 )     -       (4,753,288 )
Chanticleer equity     -       -       (1,028,749 )     -       -       (1,028,749 )
Common stock and warrants issued     (3,869,156 )     (1,109,150 )     -       (123,333 )     (300,000 )     (5,401,639 )
Assumption of debt     -       -       -       (5,000,000 )     -       (5,000,000 )
Cash paid     -       -       (100,000 )     -       (250,000 )     (350,000 )
Cash received in excess of cash paid   $ 2,274     $ 21,636     $ 3,617     $ -     $ -     $ 27,527  

 

Unaudited pro forma results of operations for the three month periods ended June 30, 2015 and 2014, as if the Company had acquired majority ownership of all operations acquired during 2014 and 2015 on January 1, 2014 is as follows.

 

    Three Months Ended     Six Months Ended  
    June 30, 2015     June 30, 2014     June 30, 2015     June 30, 2014  
                         
Total revenues   $ 10,793,035     $ 11,030,341     $ 21,336,437     $ 21,381,179  
Loss from continuing operations     (3,350,670 )     (1,629,806 )     (5,899,719 )     (2,743,802 )
Gain (loss) from discontinued operations     2,088       (72,300 )     189       (104,973 )
Loss attributable to non-controlling interest     201,184       126,642       342,968       149,373  
Net loss   $ (3,147,398 )   $ (1,575,464 )   $ (5,556,562 )   $ (2,699,402 )
Net loss per share, basic and diluted   $ (0.25 )   $ (0.25 )   $ (0.60 )   $ (0.44 )
Weighted average shares outstanding, basic and diluted     12,455,828       6,329,406       9,314,030       6,152,931  

 

The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do not include any adjustments to reflect expected synergies or profit improvements that might be anticipated post-acquisition, and 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.