The ONE Group Hospitality, Inc.
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Delaware
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14-1961545
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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411 W. 14
th
Street, 2
nd
Floor, New York, New York
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10014
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(Address of principal executive offices)
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Zip Code
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646-624-2400
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(Registrant’s telephone number, including area code)
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Title of Each Class
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Name of Each Exchange
on Which Registered
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Common Stock, par value $0.0001 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
x
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(do not check if a smaller
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reporting company)
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Page
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•
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finding quality site locations, competing effectively to obtain quality site locations and reaching acceptable lease or management agreements;
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•
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obtaining certain government approvals, permits and licenses, such as liquor licenses;
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•
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complying with applicable zoning, land use and environmental regulations and obtaining, for an acceptable cost, required permits and approvals;
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•
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having adequate capital for construction and opening costs and efficiently managing the time and resources committed to building and opening each new restaurant and food and beverage hospitality services operation;
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•
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timely hiring and training and retaining the skilled management and other employees necessary to meet staffing needs;
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•
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successfully promoting our new locations and competing in their markets;
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•
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acquiring food and other supplies for new restaurants and food and beverage hospitality services operations from local suppliers; and
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•
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addressing unanticipated problems or risks that may arise during the development or opening of a new restaurant or food and beverage hospitality services operation or entering a new market.
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•
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labor disputes;
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•
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shortages of materials or skilled labor;
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•
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adverse weather conditions;
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•
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unforeseen engineering problems;
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•
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environmental problems;
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•
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construction or zoning problems;
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•
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local government regulations;
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•
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modifications in design; and
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•
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other unanticipated increases in costs.
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•
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increasing our vulnerability to general adverse economic and industry conditions;
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•
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limiting our ability to obtain additional financing;
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•
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requiring a substantial portion of our available cash flow to be applied to our rental obligations, thus reducing cash available for other purposes;
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•
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limiting our flexibility in planning for or reacting to changes in our business or the industry in which we compete; and
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•
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placing us at a disadvantage with respect to some of our competitors.
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•
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incur additional indebtedness or make amendments to indebtedness, subject to certain exceptions;
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•
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issue guarantees;
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•
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make investments;
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•
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use assets as security in other transactions or create any other liens;
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•
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sell assets or merge with or into other companies;
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•
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make capital expenditures in excess of specified amounts;
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•
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change the fiscal year or the nature of our operations; and
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•
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terminate any ERISA plans.
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•
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a limited availability of market quotations for our securities;
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•
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reduced liquidity with respect to our securities;
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•
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a limited amount of news and analyst coverage for our company; and
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•
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a decreased ability to issue additional securities or obtain additional financing in the future.
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Location
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Address of Location
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Ownership
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Management Agreement (M) or
Lease (L)
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Approximate Expiration of
Management Agreement or
Lease
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STK Downtown
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Meatpacking District, New York City
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61.22
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%
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L
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Up to 4/30/2026
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STK Las Vegas
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The Cosmopolitan, Las Vegas, NV
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—
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(1)
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M
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Up to 1/28/2030
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STK LA
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West Hollywood, LA
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77.00
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%
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(4)
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L
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10/26/2016
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STK Miami Beach
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South Beach, Miami Beach, FL
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100.00
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%
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L
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10/31/2032
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STK Atlanta
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Midtown, Atlanta, GA
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100.00
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%
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L
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12/31/2026
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STK DC
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Dupont Circle, DC
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93.50
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%
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(5)
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L
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12/31/2016
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STK London
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ME London – The Strand, London, England
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—
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(1)
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M
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Up to 9/3/2032
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STK Midtown
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Midtown, New York City
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100.00
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%
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L
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8/23/2031
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STK Westwood
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Westwood, Los Angeles, California
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100.00
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%
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L
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Up to 4/30/2035
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STK Orlando
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Disney Springs, Orlando, Florida
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100.00
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%
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L
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Up to 5/25/2036
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STK Chicago
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Chicago, Illinois
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100.00
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%
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L
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Up to 9/30/2035
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STK Milan
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ME Milan, Milan, Italy
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—
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(1)
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M
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Up to 2035
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STK Dallas
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Dallas, Texas
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100.00
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%
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L
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Up to 2036
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STK Toronto
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Toronto, Canada
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—
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(1)
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M
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Up to 7/30/2035
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STK Denver
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Downtown, Denver, Colorado
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100.00
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%
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(6)
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L
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Up to 6/30/2036
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STK Miami
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Downtown, Miami, Florida
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—
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(1)
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M
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Up to 20 years from hotel opening date
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STK Austin
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Austin, Texas
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100.00
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%
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L
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Up to 2036
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STK San Diego
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San Diego, California
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100.00
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%
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L
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Up to 2036
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STK Edinburgh
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Edinburgh, Scotland
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100.00
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%
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(7)
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L
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Up to 25 years from turnover
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STK Boston
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Boston, Massachusetts
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100.00
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%
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(8)
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L
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Up to 20 years from Commencement Date
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Ristorante Asellina
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Gansevoort Park Avenue – Midtown, New York City
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10.00
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%
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L
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Up to 4/29/2025
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Cucina Asellina
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Midtown, Atlanta, GA
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100.00
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%
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(3)
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L
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9/1/2020
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Cucina Asellina
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ME London – The Strand, London, England
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—
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(1)
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M
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4/2016
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Heliot
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Hippodrome Casino – Leicester Square, London, England
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—
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(1)
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M
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7/13/2022
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Gansevoort Park Rooftop (Lounge)
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Gansevoort Park Avenue – Midtown, New York City
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10.00
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%
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M
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Up to 4/29/2025
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Radio Rooftop Bar (Lounge)
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ME London – The Strand, London, England
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—
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(1)
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M
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Up to 9/3/2032
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STK Rooftop San Diego
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San Diego, California
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—
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(1)
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M
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Up to 2036
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Marconi
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ME London – The Strand, London, England
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—
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(1)
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M
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9/3/2032
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Bagatelle New York
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Meatpacking District, New York City
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51.13
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%
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(2)
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L
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11/30/2020
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Bagatelle LA
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West Hollywood, Los Angeles, California
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43.32
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%
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(2)
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L
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10/26/2016
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(1)
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We own 100% of the entities which hold the management agreements for these operations, but have no direct ownership interest in these properties. The management agreement for Cucina Asellina was terminated effective April 2016.
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(2)
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This represents our effective ownership interest. Such ownership interest is held in one or more entities. Bagatelle LA ceased operations in June 2016.
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(3)
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Closed in December 2015 and is expected to reopen in 2017 as a private dining room.
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(4)
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STK LA ceased operations in June 2015 and moved to the W Hotel in Westwood, California. The lease for STK LA was terminated on October 26, 2016.
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(5)
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STK DC ceased operations in December 2016. The lease was also terminated in December 2016.
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(6)
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STK Denver commenced operations in January 2017.
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(7)
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STK Edinburgh was put into liquidation in February 2017.
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(8)
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In March 2017 the lease for STK Boston was terminated.
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2016
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||||||||||||||||||||||||||||||||
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Units
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Common Stock
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Warrants
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||||||||||||||||||||||||
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High
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Low
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High
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Low
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High
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Low
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||||||||||||
First Quarter (through February 27, 2016 for the units and warrants)
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$
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2.15
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$
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1.10
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$
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3.24
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$
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2.33
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$
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0.02
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$
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0.0045
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Second Quarter
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2.96
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2.24
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||||||||||
Third Quarter
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2.84
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2.25
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Fourth Quarter
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$
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3.43
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$
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1.98
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2015
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||||||||||||||||||||||||||||||||
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Units
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Common Stock
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Warrants
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||||||||||||||||||||||||
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High
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Low
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High
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Low
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High
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Low
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||||||||||||
First Quarter
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$
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10.00
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$
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4.99
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$
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5.10
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|
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$
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4.50
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|
|
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$
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1.00
|
|
|
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$
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0.65
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Second Quarter
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5.05
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5.05
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5.00
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3.71
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0.97
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|
0.97
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||||||
Third Quarter
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5.40
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5.25
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|
|
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4.80
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2.80
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0.97
|
|
|
|
|
0.10
|
|
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|
||||||
Fourth Quarter
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$
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5.25
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|
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$
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3.75
|
|
|
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$
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3.70
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|
|
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|
$
|
2.22
|
|
|
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$
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0.12
|
|
|
|
|
$
|
0.01
|
|
|
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|
|
For the years Ended December 31,
|
||||||
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|
2016
|
|
2015
|
||||
Revenues:
|
|
|
|
|
|
|
||
Owned unit net revenues
|
|
$
|
63,948,436
|
|
|
$
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52,610,182
|
|
Management and incentive fee revenue
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|
8,465,584
|
|
|
7,921,584
|
|
||
Total revenue
|
|
72,414,020
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|
|
60,531,766
|
|
||
Cost and expenses:
|
|
|
|
|
|
|
||
Owned operating expenses:
|
|
|
|
|
|
|
||
Food and beverage costs
|
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15,919,350
|
|
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13,228,216
|
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||
Unit operating expenses
|
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41,208,880
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34,271,412
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||
General and administrative
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11,172,764
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10,711,002
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Depreciation and amortization
|
|
2,647,333
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2,191,450
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|
||
Impairment loss
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|
95,773
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|
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2,975,744
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||
Management and royalty fees
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|
—
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|
|
39,278
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||
Lease termination expense
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433,278
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—
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||
Pre-opening expenses
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|
5,993,819
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5,265,581
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|
||
Transaction costs
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1,293,265
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1,724,361
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|
||
Equity in income of investee companies
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(674,289
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)
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(1,038,854
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)
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||
Derivative income
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(100,000
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)
|
|
(6,141,000
|
)
|
||
Interest expense, net of interest income
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|
464,165
|
|
|
30,380
|
|
||
Other expense, net
|
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(46,451
|
)
|
|
(513,012
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)
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||
Total cost and expenses
|
|
78,407,887
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|
|
62,744,558
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|
||
(Loss) income from continuing operations before provision (benefit) for income taxes
|
|
(5,993,867
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)
|
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(2,212,792
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)
|
||
Provision (benefit) for income taxes
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|
10,369,912
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|
|
(9,316,487
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)
|
||
(Loss) income from continuing operations
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|
(16,363,779
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)
|
|
7,103,695
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|
||
Loss from discontinued operations, net of taxes
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|
92,090
|
|
|
2,476
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|
||
Net (loss) income
|
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(16,455,869
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)
|
|
7,101,219
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||
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|
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||
Less: net income attributable to noncontrolling interest
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232,617
|
|
|
170,526
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||
Net (loss) income attributable to The ONE Group Hospitality, Inc.
|
|
$
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(16,688,486
|
)
|
|
$
|
6,930,693
|
|
|
|
|
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|
||||
Amounts attributable to The ONE Group Hospitality, Inc.:
|
|
|
|
|
||||
(Loss) income from continuing operations
|
|
(16,596,396
|
)
|
|
$
|
6,933,169
|
|
|
Loss from discontinued operations, net of taxes
|
|
92,090
|
|
|
2,476
|
|
||
Net (loss) income attributable to The ONE Group Hospitality, Inc.
|
|
(16,688,486
|
)
|
|
$
|
6,930,693
|
|
|
|
|
|
|
|
||||
Net (loss) income attributable to The ONE Group Hospitality, Inc.
|
|
$
|
(16,688,486
|
)
|
|
$
|
6,930,693
|
|
Other comprehensive loss
|
|
|
|
|
||||
Currency translation adjustment
|
|
(1,123,568
|
)
|
|
(189,687
|
)
|
||
Comprehensive (loss) income
|
|
$
|
(17,812,054
|
)
|
|
$
|
6,741,006
|
|
|
|
For the years Ended December 31,
|
||||
|
|
2016
|
|
2015
|
||
Revenues:
|
|
|
|
|
|
|
Owned unit net revenues
|
|
88.3
|
%
|
|
86.9
|
%
|
Management and incentive fee revenue
|
|
11.7
|
%
|
|
13.1
|
%
|
Total revenue
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost and expenses:
|
|
|
|
|
|
|
Owned operating expenses:
|
|
|
|
|
|
|
Food and beverage costs
(1)
|
|
24.9
|
%
|
|
25.1
|
%
|
Unit operating expenses
(1)
|
|
64.4
|
%
|
|
65.1
|
%
|
General and administrative
|
|
15.4
|
%
|
|
17.7
|
%
|
Depreciation and amortization
|
|
3.7
|
%
|
|
3.6
|
%
|
Impairment loss
|
|
0.1
|
%
|
|
4.9
|
%
|
Management and royalty fees
|
|
—
|
%
|
|
0.1
|
%
|
Lease termination expenses
|
|
0.6
|
%
|
|
—
|
%
|
Pre-opening expenses
|
|
8.3
|
%
|
|
8.7
|
%
|
Transaction costs
|
|
1.8
|
%
|
|
2.8
|
%
|
Equity in income of investee companies
|
|
(0.9
|
)%
|
|
(1.7
|
)%
|
Derivative income
|
|
(0.1
|
)%
|
|
(10.1
|
)%
|
Interest expense, net of interest income
|
|
0.6
|
%
|
|
0.1
|
%
|
Other expense, net
|
|
(0.1
|
)%
|
|
(0.8
|
)%
|
Total cost and expenses
|
|
108.3
|
%
|
|
103.7
|
%
|
(Loss) income from continuing operations before provision (benefit) for income taxes
|
|
(8.3
|
)%
|
|
(3.7
|
)%
|
Provision (benefit) for income taxes
|
|
14.3
|
%
|
|
(15.4
|
)%
|
(Loss) income from continuing operations
|
|
(22.6
|
)%
|
|
11.7
|
%
|
Loss from discontinued operations, net of taxes
|
|
0.1
|
%
|
|
—
|
%
|
Net (loss) income
|
|
(22.7
|
)%
|
|
11.7
|
%
|
|
|
|
|
|
||
Less: net income attributable to noncontrolling interest
|
|
0.3
|
%
|
|
0.3
|
%
|
Net (loss) income attributable to The ONE Group Hospitality, Inc.
|
|
(23.0
|
)%
|
|
11.4
|
%
|
|
|
|
|
|
||
Amounts attributable to The ONE Group Hospitality, Inc.:
|
|
|
|
|
||
(Loss) income from continuing operations
|
|
(22.9
|
)%
|
|
11.5
|
%
|
Loss from discontinued operations, net of taxes
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
Net (loss) income attributable to The ONE Group Hospitality, Inc.
|
|
(23.0
|
)%
|
|
11.4
|
%
|
|
|
|
|
|
||
Net (loss) income attributable to The ONE Group Hospitality, Inc.
|
|
(23.0
|
)%
|
|
11.4
|
%
|
Other comprehensive loss
|
|
|
|
|
|
|
Currency translation adjustment
|
|
(1.6
|
)%
|
|
(0.3
|
)%
|
Comprehensive (loss) income
|
|
(24.6
|
)%
|
|
11.1
|
%
|
|
|
For the year Ended December 31, 2016
|
||||||||||||||
|
|
STKs
|
|
F&B
|
|
OTHER
|
|
TOTAL
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Owned unit net revenues
|
|
$
|
63,248,936
|
|
|
|
|
$
|
699,500
|
|
|
$
|
63,948,436
|
|
||
Management and incentive fee revenue
|
|
|
|
$
|
8,465,584
|
|
|
|
|
8,465,584
|
|
|||||
Total revenue
|
|
63,248,936
|
|
|
8,465,584
|
|
|
699,500
|
|
|
72,414,020
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cost and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Owned operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Food and beverage costs
|
|
15,779,441
|
|
|
|
|
139,909
|
|
|
15,919,350
|
|
|||||
Unit operating expenses
|
|
41,174,753
|
|
|
|
|
34,127
|
|
|
41,208,880
|
|
|||||
Total cost and expenses
|
|
56,954,194
|
|
|
—
|
|
|
174,036
|
|
|
57,128,230
|
|
||||
Income from restaurant and hospitality operations
|
|
$
|
6,294,742
|
|
|
$
|
8,465,584
|
|
|
$
|
525,464
|
|
|
15,285,790
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
General and administrative
|
|
|
|
|
|
|
|
11,172,764
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
2,647,333
|
|
|||||||
Impairment loss
|
|
|
|
|
|
|
|
95,773
|
|
|||||||
Management and royalty fees
|
|
|
|
|
|
|
|
—
|
|
|||||||
Lease termination expense
|
|
|
|
|
|
|
|
433,278
|
|
|||||||
Pre-opening expenses
|
|
|
|
|
|
|
|
5,993,819
|
|
|||||||
Transaction costs
|
|
|
|
|
|
|
|
1,293,265
|
|
|||||||
Equity in income of investee companies
|
|
|
|
|
|
|
|
(674,289
|
)
|
|||||||
Derivative income
|
|
|
|
|
|
|
|
(100,000
|
)
|
|||||||
Interest expense, net of interest income
|
|
|
|
|
|
|
|
464,165
|
|
|||||||
Other expense, net
|
|
|
|
|
|
|
|
(46,451
|
)
|
|||||||
Total cost and expenses
|
|
|
|
|
|
|
|
21,279,657
|
|
|||||||
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations before provision for income taxes
|
|
|
|
|
|
|
|
$
|
(5,993,867
|
)
|
|
|
For the year Ended December 31, 2015
|
||||||||||||||
|
|
STKs
|
|
F&B
|
|
OTHER
|
|
TOTAL
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Owned unit net revenues
|
|
$
|
52,213,149
|
|
|
|
|
$
|
397,033
|
|
|
$
|
52,610,182
|
|
||
Management and incentive fee revenue
|
|
|
|
$
|
7,921,584
|
|
|
|
|
7,921,584
|
|
|||||
Total revenue
|
|
52,213,149
|
|
|
7,921,584
|
|
|
397,033
|
|
|
60,531,766
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cost and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Owned operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Food and beverage costs
|
|
13,128,089
|
|
|
|
|
100,127
|
|
|
13,228,216
|
|
|||||
Unit operating expenses
|
|
33,771,445
|
|
|
|
|
499,967
|
|
|
34,271,412
|
|
|||||
Total cost and expenses
|
|
46,899,534
|
|
|
—
|
|
|
600,094
|
|
|
47,499,628
|
|
||||
Income (loss) from restaurant and hospitality operations
|
|
$
|
5,313,615
|
|
|
$
|
7,921,584
|
|
|
$
|
(203,061
|
)
|
|
13,032,138
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
General and administrative
|
|
|
|
|
|
|
|
10,711,002
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
2,191,450
|
|
|||||||
Impairment loss
|
|
|
|
|
|
|
|
2,975,744
|
|
|||||||
Management and royalty fees
|
|
|
|
|
|
|
|
39,278
|
|
|||||||
Lease termination expense
|
|
|
|
|
|
|
|
—
|
|
|||||||
Pre-opening expenses
|
|
|
|
|
|
|
|
5,265,581
|
|
|||||||
Transaction costs
|
|
|
|
|
|
|
|
1,724,361
|
|
|||||||
Equity in income of investee companies
|
|
|
|
|
|
|
|
(1,038,854
|
)
|
|||||||
Derivative income
|
|
|
|
|
|
|
|
(6,141,000
|
)
|
|||||||
Interest expense, net of interest income
|
|
|
|
|
|
|
|
30,380
|
|
|||||||
Other expense, net
|
|
|
|
|
|
|
|
(513,012
|
)
|
|||||||
Total cost and expenses
|
|
|
|
|
|
|
|
15,244,930
|
|
|||||||
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations before provision for income taxes
|
|
|
|
|
|
|
|
$
|
(2,212,792
|
)
|
|
|
For the years ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Net (loss) income attributable to The ONE Group Hospitality, Inc.
|
|
$
|
(16,688,486
|
)
|
|
$
|
6,930,693
|
|
Net income attributable to noncontrolling interest
|
|
232,617
|
|
|
170,526
|
|
||
Net (loss) income
|
|
(16,455,869
|
)
|
|
7,101,219
|
|
||
Interest expense, net of interest income
|
|
464,165
|
|
|
30,380
|
|
||
Provision for income taxes
|
|
10,369,912
|
|
|
(9,316,487
|
)
|
||
Depreciation and amortization
|
|
2,647,333
|
|
|
2,191,450
|
|
||
EBITDA
|
|
(2,974,459
|
)
|
|
6,562
|
|
||
Deferred rent
(1)
|
|
(657,242
|
)
|
|
1,227,578
|
|
||
Pre-opening expenses
|
|
5,993,819
|
|
|
5,265,581
|
|
||
Impairment loss (3)
|
|
95,773
|
|
|
2,975,744
|
|
||
Lease termination expense (4)
|
|
433,278
|
|
|
—
|
|
||
Loss from discontinued operations
|
|
92,090
|
|
|
2,476
|
|
||
Transaction costs
(2)
|
|
1,293,265
|
|
|
1,724,361
|
|
||
Derivative income
|
|
(100,000
|
)
|
|
(6,141,000
|
)
|
||
Stock based compensation
|
|
837,989
|
|
|
811,658
|
|
||
Adjusted EBITDA
|
|
5,014,513
|
|
|
5,872,960
|
|
||
Adjusted EBITDA attributable to noncontrolling interest
|
|
490,803
|
|
|
684,757
|
|
||
Adjusted EBITDA attributable to The ONE Group Hospitality, Inc.
|
|
$
|
4,523,710
|
|
|
$
|
5,188,203
|
|
|
For the years ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Net (loss) income attributable to The ONE Group Hospitality, Inc.
|
$
|
(16,688,486
|
)
|
|
$
|
6,930,693
|
|
Net income attributable to noncontrolling interest
|
232,617
|
|
|
170,526
|
|
||
Net (loss) income
|
(16,455,869
|
)
|
|
7,101,219
|
|
||
Loss from discontinued operations, net of taxes
|
92,090
|
|
|
2,476
|
|
||
Transaction costs (1)
|
1,293,265
|
|
|
1,724,361
|
|
||
Impairment loss
|
95,773
|
|
|
2,975,744
|
|
||
Lease termination expense (2)
|
433,278
|
|
|
—
|
|
||
Derivative income
|
(100,000
|
)
|
|
(6,141,000
|
)
|
||
Stock based compensation
|
837,989
|
|
|
811,658
|
|
||
Deferred tax adjustments
|
12,659,718
|
|
|
(4,716,109
|
)
|
||
Adjusted Net income
|
(1,143,756
|
)
|
|
1,758,349
|
|
||
Adjusted Net income attributable to noncontrolling interest
|
232,617
|
|
|
352,941
|
|
||
Adjusted Net income attributable to The ONE Group Hospitality, Inc.
|
$
|
(1,376,373
|
)
|
|
$
|
1,405,408
|
|
(1)
|
Transaction costs incurred relating to the terminated acquisition of the Katsuya and Cleo brands.
|
(2)
|
Lease termination expenses relate to the termination of the leases of Bridge Hospitality in October 2016 and STK DC in December 2016.
|
|
|
Fiscal Year Ended
|
||||||
|
|
December 31,
2016
|
|
December 31,
2015
|
||||
|
|
(in thousands)
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
||
Operating activities
|
|
$
|
2,102
|
|
|
$
|
2,042
|
|
Investing activities
|
|
(10,091
|
)
|
|
(12,652
|
)
|
||
Financing activities
|
|
8,042
|
|
|
4,738
|
|
||
Effect of exchange rate changes on cash
|
|
(297
|
)
|
|
(192
|
)
|
||
Net decrease in cash and cash equivalents
|
|
$
|
(244
|
)
|
|
$
|
(6,063
|
)
|
|
|
Total
|
|
Less than 1
year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5
years
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Term loans, equipment financing and promissory notes
|
|
$
|
17,157
|
|
|
$
|
3,154
|
|
|
$
|
6,380
|
|
|
$
|
7,623
|
|
|
$
|
—
|
|
Expected interest payments (1)
|
|
3,888
|
|
|
1,093
|
|
|
1,709
|
|
|
1,086
|
|
|
—
|
|
|||||
Operating leases
|
|
124,572
|
|
|
6,778
|
|
|
13,730
|
|
|
14,381
|
|
|
89,683
|
|
|||||
Total
|
|
$
|
145,617
|
|
|
$
|
11,025
|
|
|
$
|
21,819
|
|
|
$
|
23,090
|
|
|
$
|
89,683
|
|
(1)
|
Represents estimated future cash interest payments using the weighted-average balance and interest rate at
December 31, 2016
.
|
(a)(1)
|
Financial Statements.
For the financial statements included in this annual report, see “Index to the Financial Statements” on page F-1.
|
|
|
(a)(3)
|
Exhibits
. The list of exhibits filed as part of this Annual Report on Form 10-K is set forth on the Exhibit Index immediately preceding such exhibits and is incorporated by reference in this Item 15(a)(3).
|
|
|
(b)
|
Exhibits.
See Exhibit Index.
|
|
|
(c)
|
Separate Financial Statements.
None.
|
|
THE ONE GROUP HOSPITALITY, INC.
|
|
|
|
|
|
By:
|
/s/ SAMUEL GOLDFINGER
|
|
|
Samuel Goldfinger
|
|
|
Chief Financial Officer
|
Signature
|
Title
|
Date
|
|
|
|
/s/ JONATHAN SEGAL
|
Chief Executive Officer and Director
|
April 5, 2017
|
Jonathan Segal
|
(Principal Executive Officer)
|
|
|
|
|
/s/ SAMUEL GOLDFINGER
|
Chief Financial Officer
|
April 5, 2017
|
Samuel Goldfinger
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
/s/ MICHAEL SERRUYA
|
Non-Executive Chairman, Director
|
April 5, 2017
|
Michael Serruya
|
|
|
|
|
|
/s/ EUGENE BULLIS
|
Director
|
April 5, 2017
|
Eugene Bullis
|
|
|
|
|
|
/s/ NICHOLAS GIANNUZZI
|
Director
|
April 5, 2017
|
Nicholas Giannuzzi
|
|
|
|
|
|
/s/ RICHARD E. PERLMAN
|
Director
|
April 5, 2017
|
Richard E. Perlman
|
|
|
|
|
|
Exhibit Number
|
Exhibit Description
|
2.1
|
Agreement and Plan of Merger, dated as of October 16, 2013, by and among the Registrant, CCAC Acquisition Sub, LLC, The One Group, LLC, and Samuel Goldfinger, as Company Representative. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
3.1
|
Amended and Restated Certificate of Incorporation (Incorporated by reference to Form 8-K filed on June 5, 2014).
|
3.2
|
Amended and Restated Bylaws (Incorporated by reference to Form 8-K filed on October 25, 2011).
|
4.1
|
Specimen Unit Certificate (Incorporated by reference to Amendment No. 2 to Form S-1 filed on July 22, 2011).
|
4.2
|
Specimen Common Stock Certificate (Incorporated by reference to Amendment No. 2 to Form S-1 filed on July 22, 2011).
|
4.3
|
Specimen Warrant Certificate (Incorporated by reference to Amendment No. 2 to Form S-1 filed on July 22, 2011).
|
4.4
|
Warrant Agreement, dated October 24, 2011, by and between the Registrant and Continental Stock Transfer & Trust Company (Incorporated by reference to Form 8-K filed on October 25, 2011).
|
4.5
|
Form of Senior Indenture (Incorporated by reference to Form S-3 filed on April 15, 2015).
|
4.6
|
Form of Subordinated Indenture (Incorporated by reference to Form S-3 filed on April 15, 2015).
|
4.7
|
Common Stock Purchase Agreement dated as of August 11, 2016 (Incorporated by reference to Form 8-K filed on August 16, 2016).
|
4.8
|
Common Stock Purchase Warrant dated as of October 24, 2016 (Incorporated by reference to Form 8-K filed on October 28, 2016).
|
10.1
|
Form of Indemnity Agreement (Incorporated by reference to Amendment No. 1 to Form S-1 filed on June 30, 2011).
|
10.2
|
Escrow Agreement, dated October 16, 2013, by and among the Registrant, The One Group, LLC, Samuel Goldfinger, as Company Representative, the Liquidating Trust and Continental Stock Transfer & Trust Company, as Escrow Agent. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.3
|
Second Term Loan Agreement, dated June 2, 2015, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, CA Aldwych Limited, HIP Hospitality Limited, STK Chicago, LLC, STK Denver, LLC, STK-LA, LLC, STK Miami, LLC, STK Miami Service, LLC, STK Midtown Holdings, LLC, STK Midtown, LLC, STK Orlando, LLC, STK Westwood, LLC, T.O.G. (Aldwych) Limited, T.O.G. (UK) Limited, TOG Biscayne, LLC, and WSATOG (Miami) LLC and BankUnited, N.A. (Incorporated by reference to Form 10-Q filed on August 14, 2015).
|
10.4
|
Second Term Note of The ONE Group, LLC to BankUnited, N.A., dated June 2, 2015, in the principal amount of $6,000,000. (Incorporated by reference to Form 10-Q filed on August 14, 2015).
|
10.5
|
Grant of Security Interest (Trademarks), dated June 2, 2015, by and between The ONE Group, LLC and BankUnited, N.A. (Incorporated by reference to Form 10-Q filed on August 14, 2015).
|
10.6
|
Second Amended and Restated Pledge Agreement, dated June 2, 2015, by and between The ONE Group, LLC and BankUnited, N.A. (Incorporated by reference to Form 10-Q filed on August 14, 2015).
|
10.7
|
Fifth Amended and Restated Security Agreement, dated June 2, 2015, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, STK Chicago, LLC, STK-LA, LLC, STK Miami, LLC, STK Miami Service, LLC, STK Midtown Holdings, LLC, STK Midtown, LLC, STK Orlando, LLC, TOG Biscayne, LLC, WSATOG (Miami) LLC, STK Westwood, LLC, and STK Denver, LLC, and BankUnited, N.A. (Incorporated by reference to Form 10-Q filed on August 14, 2015).
|
10.8
|
Second Amended and Restated Pledge Agreement, dated June 2, 2015, by and between The ONE Group Hospitality, Inc. and BankUnited, N.A. (Incorporated by reference to Form 10-Q filed on August 14, 2015).
|
10.9
|
Guarantee Agreement, dated June 2, 2015, by and between The ONE Group Hospitality, Inc. and BankUnited, N.A. (Incorporated by reference to Form 10-Q filed on August 14, 2015).
|
10.10
|
Term Loan Agreement, dated December 17, 2014, by and between The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, CA Aldwych Limited, HIP Hospitality Limited, STK Chicago, LLC, STK Denver, LLC, STK-LA, LLC, STK Miami, LLC, STK Miami Service, LLC, STK Midtown Holdings, LLC, STK Midtown Holdings, LLC, STK Midtown, LLC, STK Orlando, LLC, STK Westwood, LLC, T.O.G. (Aldwych) Limited, T.O.G. (UK) Limited, TOG Biscayne, LLC, and WSATOG (Miami) LLC and BankUnited, N.A. (Incorporated by reference to Form 10-K/A filed on April 1, 2015).
|
10.11
|
Term Note of The ONE Group, LLC to BankUnited, N.A., dated December 17, 2014, in the principal amount of $7,475,000.07. (Incorporated by reference to Form 10-K/A filed on April 1, 2015).
|
10.12
|
Grant of Security Interest (Trademarks), dated December 17, 2014, by and between The ONE Group, LLC and BankUnited, N.A. (Incorporated by reference to Form 10-K/A filed on April 1, 2015).
|
10.13
|
Amended and Restated Pledge Agreement, dated December 17, 2014, by and between The ONE Group, LLC and BankUnited, N.A. (Incorporated by reference to Form 10-K/A filed on April 1, 2015).
|
10.14
|
Fourth Amended and Restated Security Agreement, dated December 17, 2014, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, STK Chicago, LLC, STK-LA, LLC, STK Miami, LLC, STK Miami Service, LLC, STK Midtown Holdings, LLC, STK Midtown, LLC, STK Orlando, LLC, TOG Biscayne, LLC, WSATOG (Miami), LLC, STK Westwood, LLC, STK Denver, LLC and BankUnited, N.A. (Incorporated by reference to Form 10-K/A filed on April 1, 2015).
|
10.15
|
Credit Agreement, dated October 31, 2011, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.16
|
Promissory Note of The ONE Group, LLC to Herald National Bank, dated October 31, 2011, in the principal amount of $1,250,000. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.17
|
Guaranty, dated October 31, 2011, of Jonathan Segal to Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.18
|
Pledge Agreement, dated October 31, 2011, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.19
|
Pledge Acknowledgment Agreement, dated October 31, 2011, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.20
|
Pledge Agreement, dated October 31, 2011, by and between Jonathan Segal and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.21
|
Pledge Acknowledgment Agreement, dated October 31, 2011, by and between Jonathan Segal and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.22
|
Subordination Agreement, dated October 31, 2011, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, RCI II, Ltd. and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.23
|
Subordination Agreement, dated October 31, 2011, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, Talia, Ltd. and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.24
|
Subordination Agreement, dated October 31, 2011, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, Jonathan Segal and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.25
|
Grant of Security Interest (Trademarks), dated October 31, 2011, by and between The ONE Group, LLC and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.26
|
Promissory Note of The ONE Group, LLC to Herald National Bank, dated April 11, 2012, in the principal amount of $1,500,000. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.27
|
Promissory Note of The ONE Group, LLC to Herald National Bank, dated November 15, 2012, in the principal amount of $500,000. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.28
|
Amendment No 1 and Addendum to Credit Agreement, dated January 24, 2013, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, Heraea Vegas, LLC, Xi Shi Las Vegas, LLC and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.29
|
Amended and Restated Security Agreement, dated January 24, 2013, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, Heraea Vegas, LLC, Xi Shi Las Vegas, LLC and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.30
|
Grant of Security Interest (Trademarks), dated January 24, 2013, by and between The ONE Group, LLC and Herald National Bank. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.31
|
Amendment No 2 and Addendum to Credit Agreement and Consent and Termination Agreement, dated October 15, 2013, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, Heraea Vegas, LLC, Xi Shi Las Vegas, LLC and BankUnited, N.A. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.32
|
Guarantee Agreement, dated October 25, 2013, by and between the Registrant and BankUnited, N.A. (Incorporated by reference to Form 8-K filed on October 29, 2013).
|
10.33
|
Pledge Agreement, dated October 25, 2013, by and between the Registrant and BankUnited, N.A. (Incorporated by reference to Form 8-K filed on October 29, 2013).
|
10.34
|
Amendment No. 3 to Credit Agreement, dated June 3, 2014, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC and BankUnited, N.A. (Incorporated by reference to Form 10-K/A filed on April 1, 2015).
|
10.35
|
Amendment No. 4 and Addendum to Credit Agreement, dated August 6, 2014, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, CA Aldwych Limited, HIP Hospitality Limited, STK Chicago, LLC, STK-LA, LLC, STK Miami, LLC, STK Miami Service, LLC, STK Midtown Holdings, LLC, STK Midtown, LLC, STK Orlando, LLC, T.O.G. (Aldwych) Limited, T.O.G. (UK) Limited, TOG Biscayne, LLC, WSATOG (Miami) LLC and BankUnited, N.A. (formerly Herald National Bank) (Incorporated by reference to Quarterly Report Form 10-Q filed on November 13, 2014).
|
10.36
|
Second Amended and Restated Security Agreement, dated August 6, 2014, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, STK Chicago LLC, STK-LA, LLC, STK Miami Service, LLC, STK Midtown, LLC, STK Midtown Holdings, LLC, STK Orlando LLC, TOG Biscayne, LLC, WSATOG (Miami), LLC and BankUnited, N.A. (formerly Herald National Bank) (Incorporated by reference to Quarterly Report Form 10-Q filed on November 13, 2014).
|
10.37
|
Grant of Security Interest (Trademarks), dated August 6, 2014, by and between The ONE Group, LLC and Herald National Bank (Incorporated by reference to Quarterly Report Form 10-Q filed on November 13, 2014).
|
10.38
|
Amendment No. 5 and Addendum to Credit Agreement, dated October 31, 2014, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, CA Aldwych Limited, HIP Hospitality Limited, STK Chicago, LLC, STK-LA, LLC, STK Miami, LLC, STK Miami Service, LLC, STK Midtown Holdings, LLC, STK Midtown, LLC, STK Orlando, LLC, T.O.G. (Aldwych) Limited, T.O.G. (UK) Limited, TOG Biscayne, LLC, WSATOG (Miami) LLC, STK Westwood, LLC and BankUnited, N.A. (formerly Herald National Bank). (Incorporated by reference to Form 10-K/A filed on April 1, 2015).
|
10.39
|
Third Amended and Restated Security Agreement, dated October 31, 2014, by and among The ONE Group, LLC, One 29 Park Management, LLC, STK-Las Vegas, LLC, STK Atlanta, LLC, STK Chicago LLC, STK-LA, LLC, STK Miami, LLC, STK Miami Service, LLC, STK Midtown Holdings, LLC, STK Midtown, LLC, STK Orlando LLC, TOG Biscayne, LLC, WSATOG (Miami), LLC, STK Westwood, LLC and BankUnited, N.A. (formerly Herald National Bank). (Incorporated by reference to Form 10-K/A filed on April 1, 2015).
|
10.40
|
Grant of Security Interest (Trademarks), dated October 31, 2014, by and between The ONE Group, LLC and Herald National Bank. (Incorporated by reference to Form 10-K/A filed on April 1, 2015).
|
10.41†
|
Employment Agreement, dated October 16, 2013, by and between The ONE Group, LLC and Jonathan Segal. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.42†
|
Employment Agreement, dated October 16, 2013, by and between The ONE Group, LLC and Samuel Goldfinger. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.43†
|
Offer Letter to Alejandro Munoz-Suarez from The ONE Group, LLC, dated March 3, 2016.
|
10.44
|
Transfer Agreement, dated January 1, 2012, by and between The ONE Group, LLC and Celeste Fierro. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.45
|
Transfer Agreement, dated January 1, 2012, by and between The ONE Group, LLC and Modern Hotels (Holdings), Limited. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.46†
|
2013 Employee, Director and Consultant Equity Incentive Plan. (Incorporated by reference to Form 8-K filed on November 27, 2013).
|
10.47†
|
Form of Stock Option Grant Notice. (Incorporated by reference to Form 8-K filed on October 16, 2013).
|
10.48
|
Loan Agreement by and between The ONE Group Hospitality, Inc. and Anson Investments Master Fund L.P., dated as of August 11, 2016 (Incorporated by reference to Form 8-K filed on August 16, 2016).
|
10.49
|
Unsecured Promissory Note dated as of August 11, 2016 (Incorporated by reference to Form 8-K filed on August 16, 2016).
|
10.50
|
Loan Agreement by and between The ONE Group Hospitality, Inc. and Anson Investments Master Fund L.P., dated as of October 24, 2016 (Incorporated by reference to Form 8-K filed on October 28, 2016).
|
10.51
|
Unsecured Promissory Note dated as of October 24, 2016 (Incorporated by reference to Form 8-K filed on October 28, 2016)
|
10.52
|
Business Loan and Security Agreement by and among STK Midtown, LLC, Little West 12th LLC, STK Miami, LLC, STK Atlanta, LLC, STK Westwood, LLC, STK Chicago LLC, STK Orlando LLC and American Express Bank, FSB, dated as of February 17, 2017 (Incorporated by reference to Form 8-K filed on March 28, 2017).
|
14.1
|
Code of Business and Ethics (Incorporated by reference to Form 10-K filed on April 1, 2014).
|
21.1*
|
List of Subsidiaries.
|
23.1*
|
Consent of Grant Thornton LLP
|
31.1*
|
Certification of Jonathan Segal, Chief Executive Officer, pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.
|
31.2*
|
Certification of Samuel Goldfinger, Chief Financial Officer, pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.
|
32.1**
|
Certification of Jonathan Segal, Chief Executive Officer, pursuant to Section 906 of the Sarbanes – Oxley Act of 2002, 18 U.S.C. Section 1350.
|
32.2**
|
Certification of Samuel Goldfinger, Chief Financial Officer, pursuant to Section 906 of the Sarbanes – Oxley Act of 2002, 18 U.S.C. Section 1350.
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
*
|
Filed herewith.
|
|
|
**
|
Furnished herewith.
|
|
|
†
|
Management contract or compensatory plan or arrangement.
|
|
Page
|
|
|
Report of Independent Registered Public Accounting Firm
|
F-
2
|
|
|
Consolidated Balance Sheets
|
F-
3
|
|
|
Consolidated Statements of Operations and Comprehensive (Loss) Income
|
F-
4
|
|
|
Consolidated Statements of Changes in Stockholders’ Equity
|
F-
5
|
|
|
Consolidated Statements of Cash Flows
|
F-
6
|
|
|
Notes to Consolidated Financial Statements
|
F-
7
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
1,597,782
|
|
|
$
|
1,841,872
|
|
Accounts receivable
|
4,959,822
|
|
|
4,063,516
|
|
||
Inventory
|
1,308,851
|
|
|
1,152,119
|
|
||
Other current assets
|
1,811,787
|
|
|
3,559,053
|
|
||
Due from related parties, net
|
415,773
|
|
|
1,337,356
|
|
||
Total current assets
|
10,094,015
|
|
|
11,953,916
|
|
||
|
|
|
|
||||
Property & equipment, net
|
36,815,239
|
|
|
27,952,327
|
|
||
Investments
|
3,065,557
|
|
|
2,910,362
|
|
||
Deferred tax assets
|
51,031
|
|
|
10,093,672
|
|
||
Other assets
|
661,936
|
|
|
691,551
|
|
||
Security deposits
|
2,203,837
|
|
|
2,444,482
|
|
||
Total assets
|
$
|
52,891,615
|
|
|
$
|
56,046,310
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Cash overdraft
|
$
|
679,938
|
|
|
$
|
973,754
|
|
Long term debt, current portion
|
3,153,666
|
|
|
2,680,116
|
|
||
Accounts payable
|
3,761,823
|
|
|
2,501,622
|
|
||
Accrued expenses
|
5,549,638
|
|
|
4,635,584
|
|
||
Deferred license revenue
|
109,957
|
|
|
54,978
|
|
||
Derivative liability
|
—
|
|
|
100,000
|
|
||
Due to related parties
|
—
|
|
|
—
|
|
||
Deferred revenue
|
612,574
|
|
|
204,033
|
|
||
Total current liabilities
|
13,867,596
|
|
|
11,150,087
|
|
||
|
|
|
|
||||
Deferred license revenue, long-term
|
1,109,635
|
|
|
1,044,592
|
|
||
Due to related parties, long-term
|
1,197,375
|
|
|
—
|
|
||
Long term debt net of current portion
|
13,167,867
|
|
|
9,956,647
|
|
||
Deferred rent payable
|
16,170,605
|
|
|
14,290,010
|
|
||
Total liabilities
|
45,513,078
|
|
|
36,441,336
|
|
||
|
|
|
|
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Common stock, $0.0001 par value, 75,000,000 shares authorized; 25,050,628 and 24,972,515 shares issued and outstanding at December 31, 2016 and 2015, respectively
|
2,505
|
|
|
2,497
|
|
||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2016 and 2015
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
37,384,243
|
|
|
31,778,266
|
|
||
Accumulated deficit
|
(27,763,194
|
)
|
|
(11,074,708
|
)
|
||
Accumulated other comprehensive loss
|
(1,543,951
|
)
|
|
(420,383
|
)
|
||
Total stockholders’ equity
|
8,079,603
|
|
|
20,285,672
|
|
||
Noncontrolling interest
|
(701,066
|
)
|
|
(680,698
|
)
|
||
Total stockholders’ equity including noncontrolling interest
|
7,378,537
|
|
|
19,604,974
|
|
||
|
|
|
|
||||
Total Liabilities and Stockholders’ Equity
|
$
|
52,891,615
|
|
|
$
|
56,046,310
|
|
|
For the years ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenues:
|
|
|
|
|
|
||
Owned unit net revenues
|
$
|
63,948,436
|
|
|
$
|
52,610,182
|
|
Management and incentive fee revenue
|
8,465,584
|
|
|
7,921,584
|
|
||
Total revenue
|
72,414,020
|
|
|
60,531,766
|
|
||
|
|
|
|
||||
Cost and expenses:
|
|
|
|
|
|
||
Owned operating expenses:
|
|
|
|
|
|
||
Food and beverage costs
|
15,919,350
|
|
|
13,228,216
|
|
||
Unit operating expenses
|
41,208,880
|
|
|
34,271,412
|
|
||
General and administrative
|
11,172,764
|
|
|
10,711,002
|
|
||
Depreciation and amortization
|
2,647,333
|
|
|
2,191,450
|
|
||
Impairment loss
|
95,773
|
|
|
2,975,744
|
|
||
Management and royalty fees
|
—
|
|
|
39,278
|
|
||
Lease termination expense
|
433,278
|
|
|
—
|
|
||
Pre-opening expenses
|
5,993,819
|
|
|
5,265,581
|
|
||
Transaction costs
|
1,293,265
|
|
|
1,724,361
|
|
||
Equity in income of investee companies
|
(674,289
|
)
|
|
(1,038,854
|
)
|
||
Derivative income
|
(100,000
|
)
|
|
(6,141,000
|
)
|
||
Interest expense, net of interest income
|
464,165
|
|
|
30,380
|
|
||
Other (income) expense, net
|
(46,451
|
)
|
|
(513,012
|
)
|
||
Total costs and expenses
|
78,407,887
|
|
|
62,744,558
|
|
||
|
|
|
|
||||
Loss from continuing operations before provision for income taxes
|
(5,993,867
|
)
|
|
(2,212,792
|
)
|
||
|
|
|
|
||||
Provision (benefit) for income taxes
|
10,369,912
|
|
|
(9,316,487
|
)
|
||
|
|
|
|
||||
(Loss) income from continuing operations
|
(16,363,779
|
)
|
|
7,103,695
|
|
||
|
|
|
|
||||
Loss from discontinued operations, net of taxes
|
92,090
|
|
|
2,476
|
|
||
|
|
|
|
||||
Net (loss) income
|
(16,455,869
|
)
|
|
7,101,219
|
|
||
Less: net income attributable to noncontrolling interest
|
232,617
|
|
|
170,526
|
|
||
Net (loss) income attributable to The ONE Group Hospitality, Inc.
|
$
|
(16,688,486
|
)
|
|
$
|
6,930,693
|
|
|
|
|
|
||||
Amounts attributable to The ONE Group Hospitality, Inc.:
|
|
|
|
||||
(Loss) income from continuing operations
|
(16,596,396
|
)
|
|
$
|
6,933,169
|
|
|
Loss from discontinued operations, net of taxes
|
92,090
|
|
|
2,476
|
|
||
Net (loss) income attributable to The ONE Group Hospitality, Inc.
|
(16,688,486
|
)
|
|
6,930,693
|
|
||
|
|
|
|
||||
Net (loss) income attributable to The ONE Group Hospitality, Inc.
|
$
|
(16,688,486
|
)
|
|
$
|
6,930,693
|
|
Other comprehensive loss
|
|
|
|
|
|
||
Currency translation adjustment
|
(1,123,568
|
)
|
|
(189,687
|
)
|
||
Comprehensive (loss) income
|
$
|
(17,812,054
|
)
|
|
$
|
6,741,006
|
|
|
|
|
|
||||
Basic and diluted (loss) income per share:
|
|
|
|
|
|
||
Continuing operations
|
$
|
(0.66
|
)
|
|
$
|
0.28
|
|
Discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
Attributable to The ONE Group Hospitality, Inc.
|
$
|
(0.66
|
)
|
|
$
|
0.28
|
|
|
|
|
|
||||
Shares used in computing basic and diluted income (loss) per share
|
25,078,113
|
|
|
24,960,295
|
|
|
Common stock
|
|
Additional
paid-in capital |
|
Accumulated
deficit |
|
Accumulated
other comprehensive loss |
|
Total
stockholders’ equity |
|
Noncontrolling
interest |
|
Total
stockholders’ equity including noncontrolling interest |
|||||||||||||||||
|
Shares
|
|
Par value
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2014
|
24,940,195
|
|
|
2,494
|
|
|
30,966,611
|
|
|
(18,005,401
|
)
|
|
(230,696
|
)
|
|
12,733,008
|
|
|
(260,311
|
)
|
|
12,472,697
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Issuance of stock-based compensation
|
32,320
|
|
|
3
|
|
|
811,655
|
|
|
|
|
|
|
811,658
|
|
|
|
|
811,658
|
|
||||||||||
Member distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
(590,913
|
)
|
|
(590,913
|
)
|
|||||||||||||
Loss on foreign currency translation
|
|
|
|
|
|
|
|
|
(189,687
|
)
|
|
(189,687
|
)
|
|
|
|
(189,687
|
)
|
||||||||||||
Net income
|
|
|
|
|
|
|
6,930,693
|
|
|
|
|
6,930,693
|
|
|
170,526
|
|
|
7,101,219
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2015
|
24,972,515
|
|
|
$
|
2,497
|
|
|
$
|
31,778,266
|
|
|
$
|
(11,074,708
|
)
|
|
$
|
(420,383
|
)
|
|
$
|
20,285,672
|
|
|
$
|
(680,698
|
)
|
|
$
|
19,604,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Issuance of stock-based compensation
|
61,068
|
|
|
6
|
|
|
837,989
|
|
|
|
|
|
|
837,995
|
|
|
|
|
837,995
|
|
||||||||||
Cancellation of shares upon expiration of warrants
|
(1,437,500
|
)
|
|
(143
|
)
|
|
143
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Rights Offering
|
1,454,545
|
|
|
145
|
|
|
3,862,845
|
|
|
|
|
|
|
3,862,990
|
|
|
|
|
3,862,990
|
|
||||||||||
Issuance of detachable warrants
|
|
|
|
|
905,000
|
|
|
|
|
|
|
905,000
|
|
|
|
|
905,000
|
|
||||||||||||
Distributions to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
(252,985
|
)
|
|
(252,985
|
)
|
|||||||||||||
Loss on foreign currency translation, net
|
|
|
|
|
|
|
|
|
(1,123,568
|
)
|
|
(1,123,568
|
)
|
|
|
|
(1,123,568
|
)
|
||||||||||||
Net income (loss)
|
|
|
|
|
|
|
(16,688,486
|
)
|
|
|
|
(16,688,486
|
)
|
|
232,617
|
|
|
(16,455,869
|
)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2016
|
25,050,628
|
|
|
$
|
2,505
|
|
|
$
|
37,384,243
|
|
|
$
|
(27,763,194
|
)
|
|
$
|
(1,543,951
|
)
|
|
$
|
8,079,603
|
|
|
$
|
(701,066
|
)
|
|
$
|
7,378,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Operating activities:
|
|
|
|
|
|
||
Net (loss) income
|
$
|
(16,455,869
|
)
|
|
$
|
7,101,219
|
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
2,647,333
|
|
|
2,191,450
|
|
||
Amortization of discount on warrants
|
70,500
|
|
|
—
|
|
||
Deferred rent payable
|
1,880,595
|
|
|
4,854,901
|
|
||
Deferred taxes
|
10,042,641
|
|
|
(10,058,254
|
)
|
||
Income from equity method investments
|
(674,289
|
)
|
|
(1,038,854
|
)
|
||
Derivative income
|
(100,000
|
)
|
|
(6,141,000
|
)
|
||
Stock-based compensation
|
837,995
|
|
|
811,658
|
|
||
Impairment of fixed assets
|
95,773
|
|
|
2,975,744
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
(826,374
|
)
|
|
(343,426
|
)
|
||
Inventory
|
(156,732
|
)
|
|
(12,814
|
)
|
||
Prepaid expenses and other current assets
|
1,731,286
|
|
|
(973,614
|
)
|
||
Due from related parties, net
|
811,750
|
|
|
(159,574
|
)
|
||
Security deposits
|
208,503
|
|
|
(76,060
|
)
|
||
Other assets
|
194,220
|
|
|
101,455
|
|
||
Accounts payable
|
907,648
|
|
|
(931,577
|
)
|
||
Accrued expenses
|
358,677
|
|
|
2,632,803
|
|
||
Deferred revenue
|
528,563
|
|
|
1,108,376
|
|
||
Net cash provided by operating activities
|
2,102,220
|
|
|
2,042,433
|
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
|
|
||
Purchase of property and equipment
|
(10,609,838
|
)
|
|
(13,582,852
|
)
|
||
Distribution from equity investment
|
519,095
|
|
|
930,936
|
|
||
Net cash used in investing activities
|
(10,090,743
|
)
|
|
(12,651,916
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
|
|
||
Cash overdraft
|
(293,816
|
)
|
|
888,156
|
|
||
Net proceeds from line of credit
|
—
|
|
|
6,000,000
|
|
||
Proceeds from term promissory notes
|
6,250,000
|
|
|
—
|
|
||
Repayment of term loan
|
(2,495,000
|
)
|
|
(1,495,000
|
)
|
||
Repayment of equipment financing agreement
|
(226,872
|
)
|
|
(64,282
|
)
|
||
Proceeds from rights offering
|
3,862,990
|
|
|
—
|
|
||
Proceeds from liquidating trust
|
1,197,375
|
|
|
—
|
|
||
Distributions to non-controlling interests
|
(252,985
|
)
|
|
(590,913
|
)
|
||
Net cash provided by financing activities
|
8,041,692
|
|
|
4,737,961
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(297,259
|
)
|
|
(191,610
|
)
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(244,090
|
)
|
|
(6,063,132
|
)
|
||
Cash and cash equivalents, beginning of year
|
1,841,872
|
|
|
7,905,004
|
|
||
|
|
|
|
||||
Cash and cash equivalents, end of year
|
$
|
1,597,782
|
|
|
$
|
1,841,872
|
|
Supplemental disclosure of cash flow data:
|
|
|
|
|
|
||
Interest paid
|
$
|
856,291
|
|
|
$
|
411,789
|
|
Income taxes paid
|
$
|
111,600
|
|
|
$
|
474,658
|
|
|
|
|
|
||||
Noncash investing and financing activities:
|
|
|
|
||||
Noncash property, fixtures and equipment additions from equipment financing
|
$
|
991,141
|
|
|
$
|
721,045
|
|
Noncash discount on detachable warrants
|
$
|
905,000
|
|
|
$
|
—
|
|
Computer and equipment
|
5-7 years
|
Furniture and fixtures
|
5-7 years
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
Food
|
$
|
209,319
|
|
|
$
|
208,452
|
|
Beverages
|
1,099,532
|
|
|
943,667
|
|
||
Totals
|
$
|
1,308,851
|
|
|
$
|
1,152,119
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
Prepaid taxes
|
$
|
212,252
|
|
|
$
|
706,650
|
|
Landlord receivable
|
678,604
|
|
|
1,476,502
|
|
||
Prepaid expenses
|
537,891
|
|
|
1,171,488
|
|
||
Other
|
383,040
|
|
|
204,413
|
|
||
Totals
|
$
|
1,811,787
|
|
|
$
|
3,559,053
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
Furniture, fixtures and equipment
|
$
|
9,543,573
|
|
|
$
|
7,576,125
|
|
Leasehold improvements
|
36,147,135
|
|
|
24,365,576
|
|
||
Less accumulated depreciation and amortization
|
15,809,101
|
|
|
13,188,872
|
|
||
|
29,881,607
|
|
|
18,752,829
|
|
||
Construction in progress
|
5,579,510
|
|
|
7,967,181
|
|
||
Restaurant supplies
|
1,354,122
|
|
|
1,232,317
|
|
||
Totals
|
$
|
36,815,239
|
|
|
$
|
27,952,327
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
Sales tax payable
|
$
|
1,386,499
|
|
|
$
|
1,045,195
|
|
Payroll and related
|
730,615
|
|
|
661,761
|
|
||
Income taxes payable
|
144,452
|
|
|
—
|
|
||
Due to hotels
|
1,327,026
|
|
|
1,396,776
|
|
||
Rent
|
320,854
|
|
|
—
|
|
||
Legal
|
704,190
|
|
|
947,054
|
|
||
Insurance
|
150,000
|
|
|
—
|
|
||
Other
|
786,002
|
|
|
584,798
|
|
||
Totals
|
$
|
5,549,638
|
|
|
$
|
4,635,584
|
|
|
|
At December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
||||
Term Loan Agreements
|
|
$
|
9,485,000
|
|
|
$
|
11,980,000
|
|
Equipment Financing Agreement
|
|
1,421,033
|
|
|
656,763
|
|
||
Promissory notes, net
|
|
6,250,000
|
|
|
—
|
|
||
|
|
17,156,033
|
|
|
12,636,763
|
|
||
Less: Current portion of Long Term Debt
|
|
3,153,666
|
|
|
2,680,116
|
|
||
Discount on warrants, net
|
|
834,500
|
|
|
—
|
|
||
Long Term Debt, net of Current Portion
|
|
13,167,867
|
|
|
9,956,647
|
|
||
|
|
|
|
|
||||
Future minimum loan payments:
|
|
|
|
|
||||
2017
|
|
$
|
3,153,333
|
|
|
|
||
2018
|
|
3,180,798
|
|
|
|
|||
2019
|
|
3,199,385
|
|
|
|
|||
2020
|
|
1,264,790
|
|
|
|
|||
2021
|
|
6,357,727
|
|
|
|
|||
Thereafter
|
|
—
|
|
|
|
|||
Total
|
|
$
|
17,156,033
|
|
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
Bagatelle NY LA Investors, LLC (“Bagatelle Investors”)
|
$
|
6,569
|
|
|
$
|
7,364
|
|
Bagatelle Little West 12
th
, LLC ( “Bagatelle NY”)
|
2,552,687
|
|
|
2,357,927
|
|
||
Bagatelle La Cienega, LLC (“Bagatelle LA”)
|
—
|
|
|
—
|
|
||
One 29 Park, LLC
|
506,301
|
|
|
545,071
|
|
||
Totals
|
$
|
3,065,557
|
|
|
$
|
2,910,362
|
|
|
|
|
|
||||
Equity in income of investee companies
|
$
|
674,289
|
|
|
$
|
1,038,854
|
|
|
|
Bagatelle Investors
|
|
Bagatelle NY
|
|
Bagatelle LA
|
|
One 29 Park, LLC
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Current assets
|
|
$
|
160,858
|
|
|
$
|
2,743,161
|
|
|
$
|
18,249
|
|
|
$
|
2,551,585
|
|
Non-current assets
|
|
$
|
328,745
|
|
|
$
|
1,831,906
|
|
|
$
|
393,934
|
|
|
$
|
1,366,194
|
|
Current liabilities
|
|
$
|
57,143
|
|
|
$
|
1,088,766
|
|
|
$
|
2,024,841
|
|
|
$
|
1,379,743
|
|
Non-current liabilities
|
|
$
|
—
|
|
|
$
|
188,032
|
|
|
$
|
7,418
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
—
|
|
|
$
|
13,569,513
|
|
|
$
|
1,080,249
|
|
|
$
|
8,418,929
|
|
Gross profit
|
|
$
|
—
|
|
|
$
|
10,147,373
|
|
|
$
|
815,404
|
|
|
$
|
6,729,996
|
|
Income (loss) from continuing operations
|
|
$
|
208,705
|
|
|
$
|
1,506,948
|
|
|
$
|
(502,366
|
)
|
|
$
|
(384,412
|
)
|
Net income (loss)
|
|
$
|
208,745
|
|
|
$
|
1,506,948
|
|
|
$
|
(502,366
|
)
|
|
$
|
(387,705
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Current assets
|
|
$
|
150,527
|
|
|
$
|
1,804,376
|
|
|
$
|
128,009
|
|
|
$
|
2,594,270
|
|
Non-current assets
|
|
$
|
352,376
|
|
|
$
|
2,022,934
|
|
|
$
|
434,567
|
|
|
$
|
1,242,770
|
|
Current liabilities
|
|
$
|
67,867
|
|
|
$
|
808,599
|
|
|
$
|
1,661,077
|
|
|
$
|
911,236
|
|
Non-current liabilities
|
|
$
|
—
|
|
|
$
|
199,807
|
|
|
$
|
19,209
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
—
|
|
|
$
|
13,521,968
|
|
|
$
|
2,277,738
|
|
|
$
|
9,254,962
|
|
Gross profit
|
|
$
|
—
|
|
|
$
|
10,061,406
|
|
|
$
|
1,806,393
|
|
|
$
|
7,486,609
|
|
Income from continuing operations
|
|
$
|
346,420
|
|
|
$
|
1,994,781
|
|
|
$
|
(310,393
|
)
|
|
$
|
95,082
|
|
Net income
|
|
$
|
346,420
|
|
|
$
|
1,994,781
|
|
|
$
|
(310,393
|
)
|
|
$
|
91,251
|
|
|
Year ended
|
||||||
|
December 31,
2016 |
|
December 31,
2015 |
||||
Loss from continuing operations before provision for income taxes
|
|
|
|
||||
Domestic
|
$
|
(5,769,069
|
)
|
|
$
|
(2,077,455
|
)
|
Foreign
|
(224,798
|
)
|
|
(135,337
|
)
|
||
|
|
|
|
||||
Total
|
$
|
(5,993,867
|
)
|
|
$
|
(2,212,792
|
)
|
|
Year Ended
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
||||
Current tax expense:
|
|
|
|
|
|
||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
State and local
|
61,920
|
|
|
533,815
|
|
||
Foreign
|
259,987
|
|
|
207,952
|
|
||
Total current tax expense
|
321,907
|
|
|
741,767
|
|
||
Deferred tax expense (benefit):
|
|
|
|
|
|
||
Federal
|
7,654,364
|
|
|
(7,631,243
|
)
|
||
State and local
|
2,393,893
|
|
|
(2,376,233
|
)
|
||
Foreign
|
(252
|
)
|
|
(50,778
|
)
|
||
Total deferred tax expense (benefit)
|
10,048,005
|
|
|
(10,058,254
|
)
|
||
Total income tax expense (benefit)
|
$
|
10,369,912
|
|
|
$
|
(9,316,487
|
)
|
|
Year ended
|
||||||||||||
|
December 31,
2016 |
|
December 31,
2015 |
||||||||||
Income tax benefit at federal statutory rate
|
$
|
(2,037,915
|
)
|
|
34.0
|
%
|
|
$
|
(752,349
|
)
|
|
34.0
|
%
|
State and local taxes – current
|
30,951
|
|
|
(0.5
|
)%
|
|
42,227
|
|
|
(1.9
|
)%
|
||
State and local taxes (benefits) – deferred
|
(746,820
|
)
|
|
12.5
|
%
|
|
(574,273
|
)
|
|
26.0
|
%
|
||
FICA tip credit
|
(430,360
|
)
|
|
7.2
|
%
|
|
(495,254
|
)
|
|
22.4
|
%
|
||
Foreign rate differential
|
(42,418
|
)
|
|
0.7
|
%
|
|
19,500
|
|
|
(0.9
|
)%
|
||
Foreign tax - unrepatriated earnings
|
784,999
|
|
|
(13.10
|
)%
|
|
—
|
|
|
—
|
%
|
||
Change in valuation allowance
|
12,029,957
|
|
|
(200.7
|
)%
|
|
(7,707,333
|
)
|
|
348.3
|
%
|
||
Other items, net
|
781,518
|
|
|
(13.1
|
)%
|
|
150,995
|
|
|
(6.8
|
)%
|
||
Total income tax expense
|
$
|
10,369,912
|
|
|
(173.0
|
)%
|
|
$
|
(9,316,487
|
)
|
|
421.1
|
%
|
|
Year ended
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
||||
Deferred tax assets:
|
|
|
|
|
|
||
Deferred rent liabilities
|
$
|
3,744,188
|
|
|
$
|
4,027,504
|
|
Lease incentives
|
1,565,606
|
|
|
508,351
|
|
||
Stock compensation
|
744,701
|
|
|
563,582
|
|
||
FICA tip credit carryforward
|
2,065,680
|
|
|
1,421,757
|
|
||
Net operating loss
|
6,246,404
|
|
|
1,899,676
|
|
||
Goodwill
|
2,861,663
|
|
|
3,258,403
|
|
||
Derivative expense
|
—
|
|
|
42,899
|
|
||
Inventory
|
10,200
|
|
|
9,789
|
|
||
Charitable contributions carryforward
|
30,283
|
|
|
6,131
|
|
||
Foreign tax credit carryforward
|
384,239
|
|
|
109,957
|
|
||
Deferred revenue
|
477,895
|
|
|
471,710
|
|
||
State and local tax credit carryforward
|
305,675
|
|
|
243,508
|
|
||
|
|
|
|
||||
Total deferred tax assets
|
18,436,534
|
|
|
12,563,267
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation and amortization
|
(5,321,194
|
)
|
|
(2,352,575
|
)
|
||
Basis in LLC interest
|
(20,353
|
)
|
|
(117,020
|
)
|
||
Unremitted foreign earnings
|
(784,999
|
)
|
|
—
|
|
||
ASC 740-10 liability
|
(229,000
|
)
|
|
—
|
|
||
Total deferred tax liabilities
|
(6,355,546
|
)
|
|
(2,469,595
|
)
|
||
|
|
|
|
||||
Valuation allowance
|
(12,029,957
|
)
|
|
—
|
|
||
|
|
|
|
||||
Net deferred tax assets
|
$
|
51,031
|
|
|
$
|
10,093,672
|
|
Year Ending
|
|
|
|
|
|
Net
|
||||||
December 31,
|
|
Payments
|
|
Receipts
|
|
Amount
|
||||||
2017
|
|
$
|
7,465,714
|
|
|
$
|
(687,687
|
)
|
|
$
|
6,778,027
|
|
2018
|
|
7,554,444
|
|
|
(708,496
|
)
|
|
6,845,948
|
|
|||
2019
|
|
7,613,432
|
|
|
(729,751
|
)
|
|
6,883,681
|
|
|||
2020
|
|
7,853,932
|
|
|
(705,284
|
)
|
|
7,148,648
|
|
|||
2021
|
|
7,376,633
|
|
|
(144,000
|
)
|
|
7,232,633
|
|
|||
Thereafter
|
|
89,682,674
|
|
|
—
|
|
|
89,682,674
|
|
|||
Total
|
|
$
|
127,546,829
|
|
|
$
|
(2,975,218
|
)
|
|
$
|
124,571,611
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
787
|
|
Accounts receivable
|
—
|
|
|
—
|
|
||
Inventory
|
—
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
47,376
|
|
|
47,376
|
|
||
Assets of discontinued operations - current
|
47,376
|
|
|
48,163
|
|
||
Property and equipment, net
|
—
|
|
|
—
|
|
||
Security deposits
|
75,000
|
|
|
75,000
|
|
||
Assets of discontinued operations - long term
|
75,000
|
|
|
75,000
|
|
||
Accounts payable and accrued liabilities
|
495,248
|
|
|
409,108
|
|
||
Liabilities of discontinued operations - current
|
495,248
|
|
|
409,108
|
|
||
Net assets
|
$
|
(372,872
|
)
|
|
$
|
(285,945
|
)
|
|
Years ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenue
|
$
|
—
|
|
|
$
|
—
|
|
Costs and expenses
|
92,090
|
|
|
2,476
|
|
||
|
|
|
|
||||
Net loss from discontinued operations, net of tax
|
$
|
(92,090
|
)
|
|
$
|
(2,476
|
)
|
Date
|
|
Number of shares
|
|
Exercise price
|
|
April 1
|
|
250,000
|
|
(1)
|
$2.83
|
April 8
|
|
1,000,000
|
|
(2)
|
$2.73
|
September 6
|
|
30,000
|
|
|
$2.61
|
September 19
|
|
30,000
|
|
|
$2.39
|
|
December 31,
|
|
|
|
|
2016
|
|
|
|
Expected life (in years)
|
7.45 years
|
|
|
|
Risk-free interest rate
|
1.41
|
%
|
|
|
Volatility
|
37
|
%
|
|
|
Dividend yield
|
0
|
%
|
|
|
|
Years ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenues:
|
|
|
|
||||
STKs
|
$
|
63,248,936
|
|
|
$
|
52,213,149
|
|
F&B
|
8,465,584
|
|
|
7,921,584
|
|
||
Other
|
699,500
|
|
|
397,033
|
|
||
|
$
|
72,414,020
|
|
|
$
|
60,531,766
|
|
|
|
|
|
||||
Segment Profits:
|
|
|
|
||||
STKs (1)
|
$
|
6,294,742
|
|
|
$
|
5,313,615
|
|
F&B
|
8,465,584
|
|
|
7,921,584
|
|
||
Other
|
525,464
|
|
|
(203,061
|
)
|
||
|
|
|
|
||||
Total segment profit
|
15,285,790
|
|
|
13,032,138
|
|
||
|
|
|
|
||||
General and Administrative
|
11,172,764
|
|
|
10,711,002
|
|
||
Depreciation and amortization
|
2,647,333
|
|
|
2,191,450
|
|
||
Interest expense, net of interest income
|
464,165
|
|
|
30,380
|
|
||
Equity in income of investee companies
|
(674,289
|
)
|
|
(1,038,854
|
)
|
||
Other
|
7,669,684
|
|
|
3,350,952
|
|
||
|
|
|
|
||||
Loss from continuing operations before provision (benefit) for income taxes
|
$
|
(5,993,867
|
)
|
|
$
|
(2,212,792
|
)
|
|
|
|
|
||||
|
|
|
|
||||
Capital assets, net
|
|
|
|
||||
STKs
|
$
|
36,505,741
|
|
|
$
|
27,678,010
|
|
F&B
|
253,120
|
|
|
217,942
|
|
||
Other
|
56,378
|
|
|
56,375
|
|
||
Total
|
$
|
36,815,239
|
|
|
$
|
27,952,327
|
|
|
Years ended December 31,
|
||||||
United States:
|
2016
|
|
2015
|
||||
Revenues – owned units
|
$
|
63,948,436
|
|
|
$
|
52,610,182
|
|
Management, incentive and royalty fee revenue
|
4,140,618
|
|
|
5,506,537
|
|
||
Net assets
|
3,899,627
|
|
|
15,167,639
|
|
||
|
|
|
|
||||
Foreign:
|
|
|
|
|
|
||
Revenues – owned units
|
$
|
—
|
|
|
$
|
—
|
|
Management and development fee revenue
|
4,324,966
|
|
|
2,415,047
|
|
||
Net assets
|
3,478,911
|
|
|
4,437,332
|
|
The ONE Group, LLC
|
Delaware
|
Little West 12th, LLC
|
Delaware
|
Basement Manager, LLC
|
New York
|
JEC II, LLC
|
New York
|
MPD Space Events, LLC
|
New York
|
ONE 29 Park Management, LLC
|
New York
|
STK Midtown Holdings, LLC
|
New York
|
STK Midtown, LLC
|
New York
|
ONE Marks, LLC
|
Delaware
|
Asellina Marks, LLC
|
Delaware
|
WSATOG, LLC
|
Delaware
|
STK Miami, LLC
|
Florida
|
STK Miami Service, LLC
|
Florida
|
Bridge Hospitality, LLC
|
California
|
STK-LA, LLC
|
New York
|
STK-Las Vegas, LLC
|
Nevada
|
BBCLV, LLC
|
Nevada
|
Xi Shi Las Vegas, LLC
|
Nevada
|
STK Atlanta, LLC
|
Georgia
|
STK DC, LLC
|
Delaware
|
STK Orlando, LLC
|
Florida
|
TOG Biscayne, LLC
|
Florida
|
STK Chicago, LLC
|
Illinois
|
STK Westwood, LLC
|
California
|
STK Denver, LLC
|
Colorado
|
T.O.G. (UK) Limited
|
United Kingdom
|
Hip Hospitality Limited
|
United Kingdom
|
T.O.G. (Aldwych) Limited
|
United Kingdom
|
CA Aldwych Limited
|
United Kingdom
|
T.O.G. (Milan) S.r.l.
|
Italy
|
STK Rebel (Edinburgh) Limited
|
United Kingdom
|
STK Dallas, LLC
|
Texas
|
STK Rebel Austin, LLC
|
Texas
|
STK Texas Holdings, LLC
|
Delaware
|
STK Texas Holdings II, LLC
|
Delaware
|
STK Rebel San Diego, LLC
|
California
|
STK Rooftop San Diego, LLC
|
California
|
STK Ibiza, LLC
|
Delaware
|
The ONE Group-STKPR, LLC
|
Delaware
|
The ONE Group-MENA, LLC
|
Delaware
|
The ONE Group-Qatar Ventures, LLC
|
Delaware
|
9401415 Canada Ltd.
|
Canada
|
Bagatelle Little West 12th, LLC
|
New York
|
Bagatelle La Cienega, LLC
|
California
|
Bagatelle NY LA Investors, LLC
|
New York
|
One 29 Park, LLC
|
Delaware
|
Seaport Rebel Restaurant LLC
|
Massachusetts
|