SUBSEQUENT EVENT - INITIAL BUSINESS TRANSACTIONAND PRIVATE PLACEMENT
|9 Months Ended|
Sep. 30, 2013
|SUBSEQUENT EVENT - INITIAL BUSINESS TRANSACTION AND PRIVATE PLACEMENT [Abstract]|
|SUBSEQUENT EVENT - INITIAL BUSINESS TRANSACTION AND PRIVATE PLACEMENT||
NOTE 6 - SUBSEQUENT EVENT - INITIAL BUSINESS TRANSACTIONAND PRIVATE PLACEMENT:
Initial Business Transaction - Merger Agreement
On October 16, 2013, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") among the Company, CCAC Acquisition Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company ("Merger Sub"), The ONE Group, LLC ("One Group") and Samuel Goldfinger as One Group Representative. One Group is a Delaware limited liability company that, through itself and several subsidiary entities, develops and operates upscale, high-energy restaurants and lounges and provides turn-key food and beverage services for hospitality venues including boutique hotels, casinos and other high-end locations in the United States and the United Kingdom.
Pursuant to the Merger Agreement, Merger Sub was merged with and into One Group, with One Group being the surviving entity and thereby becoming a wholly owned subsidiary of the Company. At the effective time of the Merger (the "Effective Time"), all of the issued and outstanding membership interests of One Group that were outstanding immediately prior to the Effective Time were cancelled and new membership interests of One Group comprising 100% of its ownership interests were issued to the Company. Simultaneously, the Company issued to the former holders of One Group membership interests (the "TOG Members") and to the Liquidating Trust established for the benefit of TOG Members and holders of warrants to acquire membership interests of One Group ("TOG Warrant Owners") an aggregate of 12,631,400 shares of the Company's common stock, par value $0.0001 per share (the "Common Stock") and paid to such TOG Members an aggregate of $11,750,000 in cash (collectively, the "Merger Consideration"). As part of the Merger Consideration, the Company issued to Jonathan Segal, the former Managing Member of One Group and now the Chief Executive Officer and a Director of the Company, 1,000,000 shares of Common Stock as a control premium. The foregoing shares are in addition to the 7,680,666 shares issued to Mr. Segal and related entities in respect of his pro rata portion of shares of Common Stock issued to all TOG Members. Of the 12,631,400 shares of Common Stock issued as part of the Merger Consideration, 2,000,000 shares (the "Escrow Shares") were deposited into an escrow account (the "Escrow Account") at Continental Stock Transfer & Trust Company, as escrow agent (the "Escrow Agent") to secure certain potential adjustments to the Merger Consideration as described in the Merger Agreement (including Working Capital Shortfalls and Excess Liabilities, among other items) and certain potential indemnification obligations. As of the Effective Time, the former members of One Group and the Liquidating Trust held shares of Common Stock comprising, in the aggregate, 50.68% of the issued and outstanding shares of the Company's Common Stock.
The Merger Agreement provides for up to an additional $14,100,000 of payments to the TOG Members and the Liquidating Trust based on a formula as described in the Merger Agreement ("Contingent Payments") and which is contingent upon the exercise of outstanding Company warrants to purchase 5,750,000 shares of Common Stock at an exercise price of $5.00 per share (the "Parent Warrants"). The Company is required to make any Contingent Payments on a monthly basis. Any Parent Warrants that are unexercised will expire on the date that is the earlier of (i) two years after the effective date of the registration statement registering the shares of Common Stock issuable upon the exercise of the Parent Warrants or (ii) the forty-fifth (45th) day following the date that the Company's Common Stock closes at or above $6.25 per share for 20 out of 30 trading days commencing on the effective date. The Company intends to file such registration statement as soon as practicable.
The Common Stock portion of the Merger Consideration is subject to adjustment to reflect Working Capital Shortfalls and Excess Liabilities compared to the amounts that will be set forth in a closing statement required to be delivered by One Group within 90 days of the Closing of the Merger. To the extent Working Capital Shortfalls exceed $100,000 or Adjustment Liabilities exceeds Excess Liabilities by greater than $20,000 in the aggregate, the Members and the Liquidating Trust, on a Pro Rated Basis, shall be liable to the Company for an amount equal to the sum of any Excess Liabilities and Working Capital Shortfall. Any payment required to be made with respect to the foregoing shall be made by reduction of the Escrow Shares or as a set off to Contingent Payments, if any.
As required by the Merger Agreement, the Company, One Group and the TOG Members entered into several ancillary agreements including (i) Lockup Agreements by and among the Company and the TOG Members, (ii) the Escrow Agreement and (ii) a Liquidating Trust Agreement.
Simultaneously with the Effective Time of the Merger, the Company completed a private placement of 3,131,339 shares of Common Stock at a purchase price of $5.00 per share to purchasers that include some of the Company's existing shareholders (collectively, the "Investors"), realizing gross proceeds of $15,657,000 (the "October 2013 Private Placement").
In connection with the October 2013 Private Placement, we also entered into a registration rights agreement (the "October 2013 Registration Rights Agreement") with the Investors, in which we agreed to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "SEC") to register the Shares for resale within 30 calendar days of the Closing Date, and to have the Registration Statement declared effective within 90 calendar days of the Closing Date or within 120 calendar days of the Closing Date if the SEC conducts a full review of the Registration Statement. We also have agreed to include in such Registration Statement the shares of Common Stock issued to TOG Members (other than those shares issued to Jonathan Segal) or issuable to TOG Warrant Owners pursuant to the Merger Agreement, subject to cut-back in certain circumstances.
Summary Pro Forma Information
The following unaudited pro forma summary information gives effect to the Initial Business Transaction and Private Placement which were consummated on October 16, 2013, as described above. Because Committed Capital is a shell company and The One Group's operations will comprise the ongoing operations of the combined entity and its senior management will serve as the senior management of the combined entity, The One Group is considered to have control and therefore is treated as the accounting acquirer and its assets are accounted for at their historical values.
The unaudited pro forma balance sheet summary information as of September 30, 2013 combines the unaudited balance sheet of Committed Capital at September 30, 2013 with the unaudited balance sheet of The One Group as of September 30, 2013 giving effect to the Business Combination as if it was consummated on September 30, 2013. The unaudited pro forma statement of operations summary information for the year ended December 31, 2012 includes Committed Capital and The One Group results of operations for the year ended December 31, 2012 as if the Business Combination was consummated on January 1, 2012. The unaudited pro forma statement of operations summary information for the nine months ended September 30, 2013 includes Committed Capital and The One Group results of operations for the nine months ended September 30, 2013 as if the Business Combination was consummated on January 1, 2013.
The unaudited pro forma results of operations summary information for the year ended December 31, 2012 are derived from the audited financial statements of Committed Capital and of The One Group at December 31, 2012 and for the year then ended. The unaudited pro forma balance sheet summary information as of September 30, 2012 and the results of operations for the nine months ended September 30, 2013 are derived from the unaudited condensed financial statements of Committed Capital and of The One Group as of September 30, 2012 and for the three and nine months then ended.
The unaudited pro forma condensed combined financial statements are not necessarily indicative of the financial position or results of operations had the two Companies been combined during the periods presented and should be read in conjunction with the historical financial statements and accompanying notes of Committed Capital Acquisition Corporation and of The One Group, LLC.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
No definition available.