ONE Group Hospitality Files 8-K: Material Agreement & Equity Sales

Ticker: STKS · Form: 8-K · Filed: Mar 26, 2024 · CIK: 1399520

One Group Hospitality, Inc. 8-K Filing Summary
FieldDetail
CompanyOne Group Hospitality, Inc. (STKS)
Form Type8-K
Filed DateMar 26, 2024
Risk Levelmedium
Pages6
Reading Time7 min
Key Dollar Amounts$365.0 million, $0.0001, $1,000, $0.01, $10.00
Sentimentneutral

Sentiment: neutral

Topics: material-agreement, equity-sale, 8-k

TL;DR

ONE Group Hospitality inked a deal and sold some stock. Details in the 8-K.

AI Summary

On March 26, 2024, ONE Group Hospitality, Inc. announced an entry into a material definitive agreement. The company also disclosed unregistered sales of equity securities and provided a Regulation FD disclosure. Further details regarding financial statements and exhibits were included in the filing.

Why It Matters

This filing indicates significant corporate actions, including a new material agreement and the issuance of equity, which could impact the company's financial structure and future operations.

Risk Assessment

Risk Level: medium — The filing involves a material definitive agreement and unregistered equity sales, which can introduce financial and operational risks.

Key Players & Entities

  • ONE Group Hospitality, Inc. (company) — Registrant
  • March 26, 2024 (date) — Date of Report
  • Delaware (jurisdiction) — State of Incorporation
  • 001-37379 (identifier) — SEC File Number
  • 14-1961545 (identifier) — IRS Employer Identification No.

FAQ

What is the nature of the material definitive agreement entered into by ONE Group Hospitality, Inc.?

The filing indicates an entry into a material definitive agreement, but the specific details of the agreement are not provided in the provided text.

When was the report filed and what is the earliest event date reported?

The report was filed on March 26, 2024, and the earliest event reported is also March 26, 2024.

What other items are covered in this 8-K filing besides the material agreement?

The filing also covers unregistered sales of equity securities, Regulation FD disclosure, other events, and financial statements and exhibits.

What was ONE Group Hospitality, Inc.'s former company name?

The company was formerly known as COMMITTED CAPITAL ACQUISITION Corp and PLASTRON ACQUISITION CORP II.

Where is ONE Group Hospitality, Inc. headquartered?

The company's business address is 411 W. 14th Street, 2nd Floor, New York, NY 10014.

Filing Stats: 1,838 words · 7 min read · ~6 pages · Grade level 10.7 · Accepted 2024-03-26 16:21:48

Key Financial Figures

  • $365.0 million — Corp. from Safflower Holdings LLC, for $365.0 million in cash, subject to customary adjustmen
  • $0.0001 — y's Series A Preferred Stock, par value $0.0001 per share (the "Preferred Stock"), at a
  • $1,000 — ce and with a liquidation preference of $1,000 per share; (b) warrants (in the form at
  • $0.01 — pany at closing at an exercise price of $0.01 per share; and (c) warrants (in the for
  • $10.00 — of the Company, at an exercise price of $10.00 per share, in each case, in a private p
  • $350.0 million — r, at the closing of the Acquisition, a $350.0 million senior secured term loan facility (the
  • $40.0 million — cility (the "Term Loan Facility") and a $40.0 million senior secured revolving credit facilit
  • $10.0 million — Loan Facility, the "Facilities"), up to $10.0 million of which will be available in the form

Filing Documents

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Stock Purchase Agreement On March 26, 2024, The ONE Group Hospitality, Inc. (the "Company"), TOG Kaizen Acquisition, LLC, a wholly owned subsidiary of the Company ("Buyer"), Safflower Holdings LLC and Safflower Holdings Corp. entered into a stock purchase agreement (the "Stock Purchase Agreement") pursuant to which Buyer will purchase 100% of the issued and outstanding equity interests of Safflower Holdings Corp. from Safflower Holdings LLC, for $365.0 million in cash, subject to customary adjustments for indebtedness, cash, net working capital and seller transaction expenses (the "Acquisition"). Safflower Holdings Corp. beneficially owns most of the Benihana restaurants, as well as all of the RA Sushi restaurants, in the United States. It also franchises Benihana locations in the U.S., Latin America (excluding Mexico) and the Caribbean. Closing of the Acquisition is subject to customary closing conditions, including the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 expiring or being terminated, among other things. There is no financing contingency for the Acquisition. The Company has guaranteed the obligations of TOG Kaizen Acquisition, LLC under the Stock Purchase Agreement. The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the Stock Purchase Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference, and a press release regarding the Acquisition is furnished as Exhibit 99.1. Investment Agreement In connection with the Acquisition, the Company, HPC III Kaizen LP, an affiliate of Hill Path Capital LP ("HPC Investor"), and HPS Investment Partners, LLC ("HPS Investor" and collectively with HPC Investor, "Investors") entered into an investment agreement (the "Investment Agreement") whereby the Investors agreed to purchase (a) an aggregate of 160,000 shares of the Company

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. The applicable information set forth in Item 1.01 of this Form 8-K is incorporated by reference in this Item 3.02.

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. Press Release On March 26, 2024, the Company issued a press release announcing entry into the Stock Purchase Agreement, the Investment Agreement and the Debt Commitment Letter (as defined below). A copy of the press release is furnished as Exhibit 99.1 and incorporated by reference into this Item 7.01. Investor Presentation On March 26, 2024, the Company posted on its website, www.togrp.com, under "Investor Relations," an investor presentation (the "Investor Presentation"). A copy of the Investor Presentation that was posted by the Company is furnished as Exhibit 99.2 hereto and is incorporated in this Item 7.01 by reference. The information provided pursuant to this Item 7.01, including Exhibit 99.1 and Exhibit 99.2 in Item 9.01, is "furnished" and shall not be deemed to be "filed" with the SEC or incorporated by reference in any filing under the Exchange Act or the Securities Act, except as shall be expressly set forth by specific reference in any such filings.

01. Other Events

Item 8.01. Other Events. In connection with the Acquisition, pursuant to an irrevocable commitment letter, dated March 26, 2024 (the "Debt Commitment Letter"), provided to The ONE Group, LLC by Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., HPS Investment Partners, LLC and HG Vora Capital Management, LLC (collectively, the "Initial Lenders"), the Initial Lenders committed to provide, on the terms and subject to the conditions set forth in the Debt Commitment Letter, at the closing of the Acquisition, a $350.0 million senior secured term loan facility (the "Term Loan Facility") and a $40.0 million senior secured revolving credit facility (the "Revolving Facility", and together with the Term Loan Facility, the "Facilities"), up to $10.0 million of which will be available in the form of letters of credit. The Term Loan Facility will not be subject to a financial covenant and the Revolving Facility's financial covenant will apply only after 35% of the Revolving Facility's capacity has been drawn. The Term Loan Facility will bear interest at a margin over a reference rate selected at the option of the borrower. The margin for the Term Loan Facility will be 6.5% per annum for SOFR borrowings and 5.5% per annum for base rate borrowings. The Term Loan Facility will mature on the fifth anniversary of the date of the related loan agreement. The Revolving Facility will bear interest a margin over a reference rate selected at the option of the borrower. The margin for the Revolving Facility will be set quarterly based on the Company's Consolidated Net Leverage Ratio for the preceding four fiscal quarter period and will range from 5.5% to 6% per annum for SOFR borrowings and 4.50% to 5.00% for base rate borrowings. The Revolving Facility will mature on the date that is fifty-four months after the date of the related loan agreement. The Facilities will be used to finance the Acquisition as well as refinance the Company's existing credit agreement with G

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 10.1 Stock Purchase Agreement dated March 26, 2024 between Safflower Holdings LLC, Safflower Holdings Corp., TOG Kaizen Acquisition, LLC and The ONE Group Hospitality, Inc.. 10.2 Investment Agreement dated March 26, 2024 between The One Group Hospitality, Inc., HPS Investment Partners, LLC and HPC III Kaizen LP. 10.3 Form of Certificate of Designation. 10.4 Form of Penny Warrant. 10.5 Form of Market Warrant. 10.6 Form of Registration Rights Agreement. 99.1 Press Release dated March 26 2024. 99.2 Investor Presentation.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: March 26, 2024 THE ONE GROUP HOSPITALITY, INC. By: /s/ Tyler Loy Name: Tyler Loy Title: Chief Financial Officer

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