| Acquisitions | 3. ACQUISITIONS 2016 Acquisitions The Company completed
one acquisition during the three months ended March 31, 2016, which was the acquisition of a restaurant location in the Harris
YMCA in Charlotte, N.C. to expand our Just Fresh business. The Company allocated the purchase price as of the date of acquisition
based on the estimated fair value of the acquired assets and assumed liabilities. In consideration of the purchased assets, the
Company paid a purchase price totaling $72,215 in cash, of which $1,611 was allocated to acquired inventory and $70,604 to Goodwill.
The equipment and other assets used in the operation of the business are property of the YMCA and no other tangible or identifiable
intangible assets other than inventory were acquired, with the balance being allocated to Goodwill. 2015 Acquisitions During the year
ended December 31, 2015, the Company acquired three businesses to complement and expand its current operations in the Better Burger
fast casual restaurant category. In connection with these acquisitions, the Company acquired strategic opportunities to expand
its scale and presence in the Better Burger category. Acquisition of
BGR: The Burger Joint The Company completed
the acquisition of BGR: The Burger Joint effective March 15, 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, 500,000 shares of the Companys common stock
valued at $1.0 million, and a contractual working capital adjustment of $276,429. The fair value of the shares was the closing
stock market price on, the date the deal acquisition was consummated. No warrants were issued in connection with the acquisition. Acquisition of
BTs Burger Joint On July 1, 2015,
the Company completed the acquisition with BTs Burgerjoint Management, LLC, a limited liability company organized under
the laws of North Carolina (BTs), including the ownership interests of four operating restaurant subsidiaries
engaged in the fast casual hamburger restaurant business under the name BTs Burger Joint. In consideration
of the purchased assets, the Company paid a purchase price consisting of $1.4 million in cash and 424,080 shares of the Companys
common stock valued at $1.0 million. The fair value of the shares was the closing stock market price on, the date the deal acquisition
was consummated. No warrants were issued in connection with the acquisition. Acquisition of
Little Big Burger On September 30,
2015, the Company completed the acquisition of various entities operating eight Little Big Burger restaurants in Oregon. In consideration
of the purchased assets, the Company paid a purchase price consisting of $3,600,000 in cash and 1,874,063 shares of the Companys
common stock valued at $2.1 million. The fair value of the shares was the closing stock market price on, the date the deal acquisition
was consummated. No warrants were issued in connection with the acquisition. The 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 Acquisitions
BGR:
The Burger Joint BTs Burger Joint Little Big Burger Total
Consideration paid:
Common stock $ 1,000,000 $ 1,000,848 $ 2,061,469 $ 4,062,317
Cash 4,276,429 1,400,000 3,600,000 9,276,429
Total consideration paid $ 5,276,429 $ 2,400,848 $ 5,661,469 $ 13,338,746
Cash acquired 11,000 8,000 234,638 253,638
Property and equipment 2,164,023 1,511,270 1,711,990 5,387,283
Goodwill 663,037 978,350 2,938,279 4,579,666
Trademark/trade name/franchise fee 2,750,000 - 1,550,000 4,300,000
Inventory, deposits and other assets 296,104 103,451 73,779 473,334
Amounts held in escrow to satisfy acquired liabilities - - 675,000 675,000
Total assets acquired, less cash 5,884,164 2,601,071 7,183,686 15,668,921
Liabilities assumed (607,735 ) (200,223 ) (949,857 ) (1,757,815 )
Deferred tax liabilities - - (572,360 ) (572,360 )
Total consideration paid $ 5,276,429 $ 2,400,848 $ 5,661,469 $ 13,338,746 Unaudited pro forma
results of operations for the three month periods ended March 31, 2016 and 2015, as if the Company had acquired majority ownership
of all operations acquired during 2015 and 2016 on January 1, 2015 is as follows. The pro forma results include estimates and assumptions
which management believes are reasonable. However, pro forma results 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.
Three Months Ended March 31,
2016 2015
Total revenues $ 11,655,218 $ 13,158,017
Loss from continuing operations (1,766,494 ) (2,246,306 )
Loss frorm discontinued operations - (1,899 )
Loss attributable to non-controlling interest 173,265 141,784
Net loss $ (1,593,229 ) $ (2,106,421 )
Net loss per share, basic and diluted $ (0.07 ) $ (0.26 )
Weighted average shares outstanding, basic and diluted 21,337,247 8,249,453 |
