Chanticleer Holdings, Inc. (Nasdaq: BURG) (the “Company” or
“Chanticleer”), owner, operator and franchisor of multiple
nationally-recognized restaurant brands, today announced the 1:1
distribution ratio for its upcoming spin-off and provided a
corporate update disclosing:
- Sonnet Merger Continues towards Closing
- Restaurant Business to Spin Off as Independent “Amergent
Hospitality Group”
- Amergent Hospitality Group Hitting the Ground Running
Spin-Off Ratio
All stockholders of record as of the close of business on March
26, 2020 that hold shares in Chanticleer are eligible for one
share of the spin-off entity, Amergent Hospitality Group, Inc.
(“Amergent”), for each share of Chanticleer owned at that time.
Amergent is a newly formed entity owned by Chanticleer stockholders
independent of Sonnet.
Sonnet Merger Continues towards Closing
The Company previously announced its entry into the definitive
Agreement and Plan of Merger and Amendment No. 1 thereto with
Sonnet BioTherapeutics, Inc. (“Sonnet”) on October 10, 2019 and
February 7, 2020, respectively (collectively referred to as “the
merger”) and spin-off of its restaurant business into an
independent, public company. Closing of the merger and
spin-off, scheduled for March 30, 2020, will result in four major
corporate structure changes relevant to today’s disclosure:
- Existing Sonnet shareholders will become majority shareholders
of Chanticleer common stock;
- Chanticleer name will be changed to “Sonnet BioTherapeutics
Holdings, Inc.” and the company under the new name will operate
Sonnet’s biotech business, accelerating the advancement of its
oncology pipeline and clinical programs;
- Sonnet BioTherapeutics Holdings Inc. will be listed on the
Nasdaq Stock Market (“Nasdaq”) under ticker symbol “SONN;”
and
- Chanticleer restaurant business will spin off (with all assets
and liabilities) into Amergent.
Mike Pruitt, the Company’s CEO and Chairman of the Board said,
“We look forward to closing the Sonnet merger and spin-off soon and
focusing on growing the restaurant business. The merger and
spin-off will recapitalize that business while improving its
balance sheet. We anticipate reduced costs and an overhead
structure more conducive to growing the restaurant business both
organically and through strategic acquisitions. At the same
time, we are pleased that the merger and spin-off will provide
existing Chanticleer stockholders with equity in the newly
energized restaurant business as well as in Sonnet’s biotech
business having exciting potential for its proprietary
immunotherapy platform.”
New Restaurant Business: Amergent Hospitality
Group
As previously disclosed, the Company’s existing restaurant
business, including its assets and liabilities will be spun-off
immediately prior to the close of the merger into a newly created
corporate entity. This new entity will be named Amergent
Hospitality Group (“Amergent”) and will be wholly-owned by
Chanticleer’s shareholders owning common stock of record as of the
close of business on Thursday March 26, 2020, the record date for
the spin-off.
It is currently anticipated that Amergent will initially be
listed on the OTCBB market with the intent of ultimately planning
to up-list to Nasdaq within a reasonable and prudent time.
Amergent will be owned by the current Chanticleer stockholders
and will be independent of Sonnet, with Sonnet having no management
or control. Amergent will be managed day-to-day by our
current team of career restaurant professionals, led by our
President, Mr. Fred Glick.
Amergent will emerge as an independent company having better
fundamentals than Chanticleer’s restaurant business currently has
without the merger. Among other things, Amergent will enjoy a
cleaner balance sheet, the elimination of 1/3 of its debt, and a
long-term extension of remaining debt, with that debt held by a
strategic partner.
Amergent Hitting the Ground Running
In anticipation of the opportunity the merger and spin-off
afford our restaurant business, management has been busy preparing
for day one as Amergent and has already made significant
progress. Specifically, we have sharpened our overall
strategic plan which is built around three principles that govern
how we run our restaurants and our overall corporate
enterprise:
- Becoming the local market’s employer of choice
- Becoming the local market’s destination of choice
- Becoming our comp sector’s investment of choice
Mr. Glick, who will continue to lead the restaurant business as
President of Amergent, stated, “We cannot wait to close the merger
and spin-off and turn our focus solely to executing our strategic
plan for Amergent. We are excited about the future.”
Sonnet BioTherapeutics Holdings, Inc.
As noted, Sonnet will operate as an independent publicly traded
company. Sonnet is an oncology-focused biotechnology company
with a proprietary platform for innovating biologic drugs of
single- or bi-specific action. Known as FHAB™ (Fully Human Albumin
Binding), the technology utilizes a fully human single chain
antibody fragment (scFv) that binds to and "hitch-hikes" on human
serum albumin (HSA) for transport to target tissues. FHAB™ is the
foundation of a modular, plug-and-play construct for potentiating a
range of large molecule therapeutic classes, including cytokines,
peptides, antibodies and vaccines.
Pankaj Mohan, PhD, Founder and Chief Executive Officer of Sonnet
commented, “We look forward to closing this transaction and to
accelerating the execution of our proprietary platform and
advancement of our pipeline of clinical and pre-clinical
therapeutic candidates, working to generate lifesaving therapeutics
for cancer patients around the world.”
Information about the Proposed Merger and Where to Find It
In connection with the proposed Merger, Chanticleer and Sonnet
filed relevant materials with the Securities and Exchange
Commission, or the SEC, including a registration statement on Form
S-4 that contains a prospectus and a proxy statement. INVESTORS AND
SECURITY HOLDERS OF CHANTICLEER AND SONNET ARE URGED TO READ THESE
MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT CHANTICLEER, SONNET AND THE PROPOSED
MERGER. The proxy statement, prospectus and other relevant
materials (when they become available), and any other documents
filed by Chanticleer with the SEC, may be obtained free of charge
at the SEC website at www.sec.gov. In addition, investors and
security holders may obtain free copies of the documents filed with
the SEC by Chanticleer by directing a written request to:
Chanticleer Holdings, c/o Michael D. Pruitt, Chief Executive
Officer, 7621 Little Avenue, Suite 414, Charlotte, NC 28226.
Investors and security holders are urged to read the proxy
statement, prospectus and the other relevant materials when they
become available before making any voting or investment decision
with respect to the proposed Merger.
This report shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
in connection with the proposed Merger shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Participants in the Solicitation
Chanticleer and its directors and executive officers and Sonnet
and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the shareholders
of Chanticleer in connection with the proposed transaction under
the rules of the SEC. Information about the directors and executive
officers of Chanticleer and their ownership of shares of
Chanticleer’s Common Stock is set forth in its Annual Report on
Form 10-K for the year ended December 31, 2019, which was filed
with the SEC on March 19, 2020, and in other documents filed with
the SEC, including the joint proxy statement/prospectus referred to
above. Additional information regarding the persons who may be
deemed participants in the proxy solicitations and a description of
their direct and indirect interests in the proposed merger, by
security holdings or otherwise, will also be included in the joint
prospectus/proxy statement and other relevant materials to be filed
with the SEC when they become available. These documents are
available free of charge at the SEC web site (www.sec.gov) and from
the Chief Executive Officer at Chanticleer at the address described
above.
Forward-Looking Statements
This report contains forward-looking statements based upon
Chanticleer’s and Sonnet’s current expectations. This communication
contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Chanticleer and
Sonnet generally identify forward-looking statements by terminology
such as “may,” “should,” “expects,” “plans,” “anticipates,”
“could,” “intends,” “target,” “projects,” “contemplates,”
“believes,” “estimates,” “predicts,” “potential” or “continue” or
the negative of these terms or other similar words. These
statements are only predictions. Chanticleer and Sonnet have based
these forward-looking statements largely on their then-current
expectations and projections about future events and financial
trends as well as the beliefs and assumptions of management.
Forward-looking statements are subject to a number of risks and
uncertainties, many of which involve factors or circumstances that
are beyond each of Chanticleer’s and Sonnet’s control.
Chanticleer’s and Sonnet’s actual results could differ materially
from those stated or implied in forward-looking statements due to a
number of factors, including but not limited to: (i) risks
associated with Chanticleer’s ability to obtain the shareholder
approval required to consummate the proposed merger transaction and
the timing of the closing of the proposed merger transaction,
including the risks that a condition to closing would not be
satisfied within the expected timeframe or at all or that the
closing of the proposed merger transaction will not occur; (ii) the
outcome of any legal proceedings that may be instituted against the
parties and others related to the Merger Agreement; (iii) the
occurrence of any event, change or other circumstance or condition
that could give rise to the termination of the Merger Agreement,
(iv) unanticipated difficulties or expenditures relating to the
proposed merger transaction, the response of business partners and
competitors to the announcement of the proposed merger transaction,
and/or potential difficulties in employee retention as a result of
the announcement and pendency of the proposed merger transaction;
and (v) those risks detailed in Chanticleer’s most recent Annual
Report on Form 10-K and subsequent reports filed with the SEC, as
well as other documents that may be filed by Chanticleer from time
to time with the SEC. Accordingly, you should not rely upon
forward-looking statements as predictions of future events. Neither
Chanticleer nor Sonnet can assure you that the events and
circumstances reflected in the forward-looking statements will be
achieved or occur, and actual results could differ materially from
those projected in the forward-looking statements. The
forward-looking statements made in this communication relate only
to events as of the date on which the statements are made. Except
as required by applicable law or regulation, Chanticleer and Sonnet
undertake no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the
statement is made or to reflect the occurrence of unanticipated
events.
About Chanticleer Holdings, Inc.
Headquartered in Charlotte, NC, Chanticleer Holdings owns,
operates, and franchises fast, casual, and full-service restaurant
brands, including American Burger Company, BGR – Burgers Grilled
Right, Little Big Burger, Just Fresh, and Hooters. For more
information, please visit:
www.chanticleerholdings.com.
Contact Information:
Investor Relations Jason Assad
678-570-6791Ja@chanticleerholdings.com
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