16. SUBSEQUENT EVENTS

Acquisition of BT’s

On July 1, 2015, the Company closed the acquisition with BT’s Burgerjoint Management, LLC, a limited liability company organized under the laws of North Carolina (“BT’s”), including the ownership interests of four operating restaurant subsidiaries engaged in the fast casual hamburger restaurant business under the name “BT’s Burger Joint.” In consideration of the purchased assets, the Company paid a purchase price consisting of $1,400,000 in cash and 424,080 shares of the Company’s common stock, $0.0001 par value per share.

A final valuation of the assets and liabilities and purchase price allocation of BT’s has not been completed as of this reporting period. Consequently, the purchase price will be allocated based upon the fair values of asset and liability amounts with the excess classified as goodwill during the third quarter of 2015.

Acquisition of LBB

On July 31, 2015, Chanticleer Holdings, Inc. entered into a Membership Interest Purchase Agreement to acquire various entities operating eight Little Big Burger restaurants in the State of Oregon and LBB Acquisition, LLC, (“LBB”). The Company has agreed to pay a purchase price consisting of $3,600,000 in cash and shares of the Company’s common stock, $0.0001 par value per share, equal to $2,500,000 in the aggregate. Closing of the acquisition is expected to occur on or before September 30, 2015, and is dependent on various closing conditions.

Conversion of Debt

During July 2015, $225,000 of the Company’s $1 million January 2015 convertible debt was converted into 112,500 shares of common stock at $2.00 per share.

Australia

On July 14, 2015, voluntary administrators were appointed to review the affairs and assess the financial condition of the Hooters Australia stores. The initiation of voluntary administration followed the request of the Company because the Company believes its operating partner had been mismanaging the business.

The Company has 60% ownership of the following entities, all of which were placed into administration:

The administration does not include Chanticleer Holdings or its subsidiaries, other than the Australian Entities.

The Administrators came to the conclusion to place the assets of the above entities up for sale to satisfy the creditors.

The Company has been negotiating with the administrators and has reached an agreement with the administrator as to the consideration for the purchase of the assets of the Hooters and the Darling Harbor Margaritaville properties located in Australia.  The transactions will allow the Company to continue to operate its Hooters Australia stores, and also take over operations of the Margaritaville store, which it did not previously own. 

The Company and its new partner in Australia have established new legal entities for the purpose of purchasing the assets from administration, holding the franchise rights for Hooters and the Darling Harbor Margaritaville, and operating the stores.  Through these entities, the Company’s ownership in the Hooters Australia stores will be 80%. Through this agreement, the Company will also obtain a 50% ownership of the Margaritaville store. Also as part of this agreement the Company will obtain ownership of certain gaming machines and gaming licenses located at the Margaritaville store. The Company will receive 100% of the gaming revenue from these gaming machines and licenses.

As of July 14, 2015, the Company lost temporary control of these assets as a result of the administrative process, however, the Company anticipates regaining control in the near future. In the event that the Company is not able to complete the transactions and regain control of the Australia operations, it may then have to deconsolidate the subsidiary and may incur an impairment of its investment in those subsidiaries.