Rights convert to one common share for every share held as of Sept. 4
By Devika Patel
Knoxville, Tenn., Sept. 28 – Chanticleer Holdings, Inc. completed its $6.05 million rights offering on Sept. 22, according to an 8-K filed Monday with the Securities and Exchange Commission. The deal was announced Aug. 21 and priced for $10 million on Sept. 8. The company raised $6 million on Sept. 21, when it extended the settlement date of the sale to Sept. 22 from Sept. 18.
The company sold rights for 4,479,892 common shares at $1.35 per share, which is a 4.65% premium to the Sept. 4 closing share price of $1.29. Investors received rights to purchase one common share for every share held as of Sept. 4, the record date.
The company also said that an additional subscription for 400,000 shares, or $540,000, was submitted by an investor but not delivered to Chanticleer. That transaction is being investigated.
In addition to the rights offering, the company negotiated a $559,980 standby purchase agreement with Richard H. Kreger on Sept. 27. Kreger agreed to purchase 414,800 shares at $1.35 per share on the same terms as the stock offered to shareholders in the rights offering.
Source Capital Group, Inc. was the dealer.
Proceeds will be used for working capital and general corporate purposes.
“The proceeds from this rights offering will be used to close the Little Big Burger acquisition and to increase our financial interest in Australia,” chairman and chief executive officer Mike Pruitt said in a press release when the deal was announced. “Little Big Burger is a gourmet fast-casual restaurant concept with eight locations in Oregon which generated $6 million of net sales in 2014. Their unit economic model with EBITDA margin greater than 25% will be accretive to Chanticleer’s earnings and provide a great addition to our portfolio of brands. Additionally, increasing our interest in Australia will enable us to drive improved performance in that attractive market.
“Although we believe that our current share price does not reflect the value of our company, we believe that these are attractive opportunities, and management and the board determined a rights offering to be the fairest and most efficient way to raise the funds to advance the company while also best preserving our over $26.3 million net operating U.S. federal and state net operating loss carry-forwards.”
The Charlotte, N.C., company operates Hooters franchises and other restaurants.
| Issuer: | Chanticleer Holdings, Inc.
|
| Issue: | Common stock
|
| Amount: | $6.047.854
|
| Shares: | 4,479,892
|
| Price: | $1.35
|
| Warrants: | No
|
| Dealer-manager: | Source Capital Group, Inc.
|
| Announcement date: | Aug. 21
|
| Record date: | Sept. 4
|
| Pricing date: | Sept. 8
|
| Revised: | Sept. 21
|
| Expiration date: | Sept. 22
|
| Stock symbol: | Nasdaq: HOTR
|
| Stock price: | $1.29 at close Sept. 4
|
| Market capitalization: | $17.07 million
|
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