Filed Pursuant to Rule 424(b)(5)
Registration Statement No. 333-203429
PROSPECTUS SUPPLEMENT (To Prospectus
dated May 22, 2015)
1,750,000 Shares
Common Stock
The ONE Group Hospitality, Inc.
We are offering 1,750,000 shares of our
common stock, par value $0.0001 per share (the “Common Stock”). In a concurrent private placement, we are also selling
to purchasers of shares of our Common Stock in this offering warrants to purchase 875,000 shares of our Common Stock (the “Warrants”).
The Warrants and the shares of our Common Stock issuable upon the exercise of the Warrants are not being registered under the Securities
Act of 1933, as amended, (the “Securities Act”), are not being offered pursuant to this prospectus supplement and the
accompanying prospectus and are being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and
Rule 506(b) promulgated thereunder.
Our Common Stock is listed on the NASDAQ
Capital Market under the symbol “STKS.” The last reported sale price of our Common Stock on November 14, 2017 was $1.63
per share.
You should read this prospectus supplement
and the accompanying prospectus and the documents incorporated by reference in this prospectus supplement carefully before you
invest.
See “Risk Factors” on page
S-8 of this prospectus supplement to read about factors you should consider before buying shares of our Common Stock.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement
is truthful or complete. Any representation to the contrary is a criminal offense.
As of November 15, 2017, the aggregate market
value of our outstanding Common Stock held by non-affiliates was approximately $28.0 million, based on 25,286,571 shares of outstanding
Common Stock, of which 16,449,207 shares were held by non-affiliates, and a per share price of $1.70 per share, which was the last
reported sale price of our Common Stock on The NASDAQ Capital Market on November 13, 2017. We have sold no shares of our Common
Stock pursuant to General Instruction I.B.6. of Form S-3 during the prior 12 calendar month period that ends on and includes the
date of this prospectus supplement.
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Per Share
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Total
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Public offering price
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$
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1.50
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$
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2,625,000
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Proceeds, before expenses, to us
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$
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1.50
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$
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2,625,000
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We expect that delivery of the shares of
our Common Stock being offered pursuant to this prospectus supplement and the accompanying prospectus will be made to purchasers
through the facilities of The Depository Trust Company on or about November 16, 2017.
The date of this prospectus supplement is
November 15, 2017.
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
ABOUT
THIS PROSPECTUS SUPPLEMENT
This document consists of two parts. The
first part is this prospectus supplement, which describes the specific terms of the offering and other matters relating to us.
The second part is the accompanying prospectus, which provides more general information about the securities we may offer from
time to time, some of which may not apply to this offering of Common Stock. This prospectus supplement and the accompanying prospectus
are part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) using the
SEC’s shelf registration rules. You should read both this prospectus supplement and the accompanying prospectus, together
with the documents incorporated by reference and the additional information described under the heading “Where You Can Find
More Information” in this prospectus supplement and the accompanying prospectus before making an investment decision.
To the extent there is a conflict between
the information contained in this prospectus supplement, on the one hand, and the information contained in the accompanying prospectus,
on the other hand, the information contained in this prospectus supplement shall control. If any statement in this prospectus supplement
conflicts with any statement in a document that has been incorporated herein by reference, then you should consider only the statement
in the more recent document. You should assume that the information contained in this prospectus supplement, the accompanying prospectus
and the documents incorporated by reference is accurate only as of their respective dates.
We have not, and the placement agent has
not, authorized any person to provide you with any information or to make any representation other than as contained in this prospectus
supplement or in the accompanying prospectus and the information incorporated by reference herein and therein. We and the placement
agent do not take any responsibility for, and can provide no assurance as to the reliability of, any information that others may
provide you. The information appearing or incorporated by reference in this prospectus supplement and the accompanying prospectus
is accurate only as of the date of this prospectus supplement or the date of the document in which incorporated information appears
unless otherwise noted in such documents. Our business, financial condition, results of operations and prospects may have changed
since those dates.
The distribution of this prospectus supplement
and the accompanying prospectus and the offering of the Common Stock in certain jurisdictions may be restricted by law. We are
not, and the placement agent is not, making an offer of the Common Stock in any jurisdiction where the offer is not permitted.
Persons who come into possession of this prospectus supplement and the accompanying prospectus should inform themselves about and
observe any such restrictions. This prospectus supplement and the accompanying prospectus do not constitute, and may not be used
in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make
such offer or solicitation.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and other periodic
reports, proxy statements and other information with the SEC. You can read our SEC filings over the Internet at the SEC’s
website at
www.sec.gov
. You may also read and copy any document we file with the SEC at its public reference facilities
at 100 F Street NE, Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates by writing to the
Public Reference Section of the SEC at 100 F Street NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference facilities.
Our Internet address is
www.togrp.com
.
There we make available free of charge, on or through the investor relations section of our website, annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with the SEC. The information
found on our website is not part of this prospectus supplement or the accompanying prospectus.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We are “incorporating by reference”
specific documents that we file with the SEC, which means that we can disclose important information to you by referring you to
those documents that are considered part of this prospectus supplement and the accompanying prospectus. Information that we file
subsequently with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed
below, and any documents that we file with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date
of this prospectus supplement until the termination of the offering of all of the securities registered pursuant to the registration
statement of which the accompanying prospectus is a part (excluding any portions of such documents that have been “furnished”
but not “filed” for purposes of the Exchange Act):
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1.
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Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed on April 5, 2017.
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2.
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Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on May 15, 2017.
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3.
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Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed on August 14, 2017.
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4.
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Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, filed on November 13, 2017.
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5.
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Current Reports on Form 8-K filed on April 11, 2017, April 24, 2017, May 19, 2017, June 26, 2017 and November 3, 2017.
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6.
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Definitive Proxy Statement on Schedule 14A for our Annual Meeting of Stockholders filed on May 1, 2017.
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You may request, and we will provide you
with, a copy of these filings, at no cost, by calling us at (646) 624-2400 or by writing to us at the following address:
The ONE Group Hospitality, Inc.
411 W. 14th Street, 2nd Floor
New York, NY 10014
Attn: General Counsel
Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this
prospectus supplement and the accompanying prospectus to the extent that a statement contained herein or therein, in any other
subsequently filed document that also is or is deemed to be incorporated by reference herein and in any accompanying prospectus
supplement, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified
and superseded, to constitute a part of this prospectus supplement.
Any statement made in this prospectus supplement
and the accompanying prospectus concerning the contents of any contract, agreement or other document is only a summary of the actual
contract, agreement or other document. If we have filed or incorporated by reference any contract, agreement or other document
as an exhibit to the registration statement, you should read the exhibit for a more complete understanding of the document or matter
involved. Each statement regarding a contract, agreement or other document is qualified by reference to the actual document.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated
by reference in this prospectus include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended (the “Securities Act”) and Section 21E of the Exchange Act that relate to future events or our future financial
performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity,
performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed
or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,”
“anticipate,” “estimate,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “targets,” “likely,” “will,” “would,”
“could,” “should,” “continue,” and similar expressions or phrases, or the negative of those
expressions or phrases, are intended to identify forward-looking statements, although not all forward-looking statements contain
these identifying words. Although we believe that we have a reasonable basis for each forward-looking statement contained in this
prospectus and incorporated by reference in this prospectus, we caution you that these statements are based on our projections
of the future that are subject to known and unknown risks and uncertainties and other factors that may cause our actual results,
level of activity, performance or achievements expressed or implied by these forward-looking statements, to differ. The sections
in our periodic reports, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, entitled “Business,”
“Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”
as well as other sections in this prospectus and the documents or reports incorporated by reference in this prospectus, discuss
some of the factors that could contribute to these differences. These forward-looking statements include, among other things, statements
about:
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our ability to successfully adjust to changes in consumer preferences, discretionary spending patterns and general economic conditions, including recent economic events;
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our restaurants and food and beverage hospitality services operations ability to compete successfully with other restaurants, food and beverage hospitality services operations and other similar operations;
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our expectations regarding future growth, including our ability to open new restaurants, and food and beverage hospital services locations and operate them profitably;
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our ability to continue to develop and grow new concepts;
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our ability to maintain and grow acceptance of our brands;
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our expectations regarding higher operating costs, including labor costs;
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our ability to obtain our principal food products and manage related costs;
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our expectations regarding the seasonality of our business;
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our expectations regarding litigation or other legal proceedings;
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the impact of federal, state or local government statutes, rules and regulations;
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our expectations regarding the loss of key members of our management team or employees;
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our expectations regarding our liquidity and capital resources, including our ability to meet our lease obligations;
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our expectations regarding the amount and terms of our existing or future indebtedness; and
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our ability to maintain adequate protection of our intellectual property.
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We may not actually achieve the plans, intentions
or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.
Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements
we make. We have included important cautionary statements in this prospectus or in the documents incorporated by reference in this
prospectus, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ
materially from the forward-looking statements that we make. For a summary of such factors, please refer to the section entitled
“Risk Factors” in this prospectus, as updated and supplemented by the discussion of risks and uncertainties under “Risk
Factors” contained in any supplements to this prospectus and in our most recent annual report on Form 10-K, as revised or
supplemented by our subsequent quarterly reports on Form 10-Q or our current reports on Form 8-K, as well as any amendments thereto,
as filed with the SEC and which are incorporated herein by reference.
In light of these assumptions, risks and
uncertainties, the results and events discussed in the forward-looking statements contained in this prospectus or in any document
incorporated herein by reference might not occur. Investors are cautioned not to place undue reliance on the forward-looking statements,
which speak only as of the date of this prospectus or the date of the document incorporated by reference in this prospectus. We
are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether
as a result of new information, future events or otherwise. All subsequent forward-looking statements attributable to us or to
any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to
in this section.
PROSPECTUS
SUPPLEMENT SUMMARY
Overview
We are a global hospitality company that
develops, owns and operates upscale, high-energy restaurants and lounges and provides turn-key food and beverage services for hospitality
venues including hotels, casinos and other high-end locations globally. Turn-key food and beverage services are food and beverage
services that can be scaled and implemented by us at a particular hospitality venue and customized per the requirements of the
client. We were established with the vision of becoming a global market leader in the hospitality industry by melding high-quality
service, ambiance and cuisine into one great experience. Our primary restaurant brand is STK, a multi-unit steakhouse concept that
combines a high-energy, social atmosphere with the quality of a traditional upscale steakhouse. Our food and beverage hospitality
management services, or “F&B,” include developing, managing and operating restaurants, bars, rooftop lounges, pools,
banqueting and catering facilities, private dining rooms, room service and mini bars tailored to the specific needs of high-end
hotels and casinos. Our F&B hospitality clients include global hospitality companies such as the W Hotel, Cosmopolitan Hotel,
Gansevoort Hotel Group, Hippodrome Casino, ME Hotels and Hyatt Hotels.
We opened our first restaurant in January
2004 and as of April 5, 2017, we owned and operated (under lease agreements) 11, managed (under management agreements)
13 restaurants and lounges and licensed (under a licensing agreement) one restaurant, including fourteen STKs in major metropolitan
cities in the United States and Europe (of which eight are owned, five are managed and one is under a licensing agreement). In
addition, we provided food and beverage services in six hotels and casinos, one of which is under a lease agreement and five of
which are under separate management agreements. We generate management and incentive fee revenue from those restaurants and lounges
that we do not own, but instead manage on behalf of our F&B hospitality clients. All of our restaurants, lounges and F&B
services are designed to create a social dining and entertainment experience within a destination location. We believe that this
design philosophy separates us from more traditional restaurant and foodservice competitors.
Based on our brand appeal, we expect to
continue to expand our operations domestically and internationally through a mix of licensed restaurants and managed units by continuing
our disciplined and targeted site selection process and supplemented by the increasingly regular inbound inquiries we receive from
office buildings, hotel and casino owners and landlords to develop and open new locations. There can be no assurance that we will
be able to expand our operations at the rate we currently expect or at all.
STK
STK is a steakhouse restaurant concept with
locations in major metropolitan cities globally. STK artfully blends two concepts into one — the modern steakhouse and a
chic lounge, offering a high-energy, fine dining experience in a social atmosphere with the quality of a traditional upscale steakhouse.
Each STK location features a large and open restaurant and bar area with a DJ or DJ mix playing music throughout the restaurant
so our customers can enjoy a high-energy, fun “destination” environment that encourages social interaction. We believe
this concept truly differentiates us from other upscale steakhouses. Our menu provides a variety of portion sizes and signature
options to appeal to a broad customer demographic.
F&B Hospitality Services Business
Our F&B hospitality services business
provides the development, management and operations for upscale restaurants and turn-key F&B services at high-end hotels and
casinos. Through our developmental and operational expertise, we are able to provide comprehensive tailored F&B solutions to
our hospitality clients. Our fee-based hospitality food and beverage solutions include developing, managing and operating restaurants,
bars, rooftops, pools, banqueting, catering, private dining rooms, room service and mini bars on a contract basis. Currently we
are operating under six F&B hospitality management agreements with hotels and casinos throughout the United States and in Europe.
Our F&B hospitality clients include global hospitality companies such as the W Hotel, Cosmopolitan Hotel, Gansevoort Hotel
Group, Hippodrome Casino, ME Hotels and the Hyatt Hotels. Historically, our clients have provided the majority of the capital required
for the development of the facilities we manage on their behalf. Our F&B hospitality contracts generate revenues for us through
base management fees, calculated as a percentage of the operation’s revenues, and additional incentive fees based on the
operation’s profitability. We expect our food and beverage hospitality services business to be an important driver of our
growth and profitability going forward, enabling us to generate management fee income with minimal capital expenditures.
Recent Developments
Pursuant to a letter agreement with Argyle Street Management
Limited, which is one of the investors that entered into the securities purchase agreement relating to this offering, Mr. Kin Chan
shall be appointed as a director of the Company upon the closing of this offering. Mr. Chan will replace Nicholas Giannuzzi, who
will resign from his position as a member of our board of directors.
Additional Information
For additional information related to our business and operations,
please refer to the reports incorporated herein by reference, including our Annual Report on Form 10-K for the year ended December
31, 2016, as described under the caption “Incorporation of Certain Information by Reference” in this prospectus.
Our Corporate Information
Our principal office is located at 411 W. 14th Street, 2nd Floor,
New York, New York 10014, and our telephone number is (646) 624-2400. Our website address is www.togrp.com. The information contained
on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this
prospectus solely as an inactive textual reference.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange
Act are available free of charge through the investor relations page of our internet website as soon as reasonably practicable
after we electronically file such material with, or furnish it to, the SEC.
All brand names or trademarks appearing in this prospectus are
the property of their respective holders. Use or display by us of other parties’ trademarks, trade dress, or products in
this prospectus is not intended to, and does not, imply a relationship with, or endorsements or sponsorship of, us by the trademark
or trade dress owners.
We are a “smaller reporting company” as defined
in Rule 12b-2 of the Exchange Act and have elected to take advantage of certain of the scaled disclosure available to smaller reporting
companies.
THE
OFFERING
Common stock offered
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1,750,000 shares.
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Common stock to be outstanding after this offering
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27,036,571 shares.
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Use of proceeds
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We expect to receive net proceeds of approximately $2,571,000 from this offering after deducting estimated offering expenses payable by us. We intend to use the net proceeds from this offering for general corporate purposes, including working capital, and repayment of existing corporate obligations. See “Use of Proceeds”.
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NASDAQ Capital Market symbol
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STKS
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Risk factors
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Investing in our securities involves a high degree of risk. See “Risk Factors” on page S-8 of this prospectus supplement to read about factors you should consider carefully before buying shares of our Common Stock.
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Concurrent private placement
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In a concurrent private placement, we are selling to the purchasers
of shares of our Common Stock in this offering, Warrants to purchase 875,000 shares of our Common Stock. The Warrants will be exercisable
on the six month anniversary of the date of issuance at an exercise price of $1.63 per share and will expire on the fifth anniversary
of the date that the Warrants become exercisable. The Warrants and the shares of our Common Stock issuable upon the exercise of
the Warrants are not being offered pursuant to this prospectus supplement and the accompanying prospectus and are being offered
pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder. See “Private
Placement Transaction.”
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The number of shares of Common Stock that
will be outstanding after this offering is based on 25,050,628 shares outstanding as of September 30, 2017, and such number excludes:
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2,142,035 shares of Common Stock issuable upon exercise of options to purchase our Common Stock outstanding as of September
30, 2017 at a weighted average exercise price of $3.65 per share;
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875,000 shares of Common Stock issuable upon vesting of restricted stock units as of September 30, 2017;
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740,000 shares of Common Stock issuable upon exercise of warrants to purchase our Common Stock outstanding as of September
30, 2017 at a weighted average exercise price of $2.51 per share;
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1,675,207 shares of Common Stock reserved as of September 30, 2017 for future issuance under our 2013 Stock Option Plan; and
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875,000 shares of Common Stock issuable upon the exercise of the Warrants to be issued in the concurrent private placement.
See “Private Placement Transaction.”
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RISK
FACTORS
You should carefully
consider the risks and uncertainties set forth below, together with all of the other information set forth in this prospectus supplement,
the accompanying prospectus and in the documents incorporated by reference herein. If any of these risks actually occur, our business,
financial condition, results of operations and future prospects could be materially and adversely affected.
Additional Risks Related to this Offering
Management will
have broad discretion as to the use of the proceeds from this offering, and may not use the proceeds effectively.
Because we have not
designated the amount of net proceeds from this offering to be used for any particular purpose, our management will have broad
discretion as to the application of the net proceeds from this offering and could use them for purposes other than those contemplated
at the time of the offering. Our management may use the net proceeds for corporate purposes that may not improve our financial
condition or market value.
You may experience
immediate and substantial dilution.
The offering price
per share in this offering exceeds the net tangible book value per share of our common stock outstanding prior to this offering,
and therefore, you will experience immediate dilution upon the exercise of the warrants sold in this offering for cash. The exercise
of outstanding stock options and warrants may result in further dilution of your investment.
You may experience
future dilution as a result of future equity offerings.
In order to raise additional
capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable
for our common stock at prices that may not be the same as the price per share in this offering. We may sell shares or other securities
in any other offering at a price per share that is less than the price per share paid by investors in this offering, and investors
purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at
which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions
may be higher or lower than the price per share paid by investors in this offering.
USE
OF PROCEEDS
We expect to receive
net proceeds of approximately $2,571,000 from this offering, after deducting estimated offering expenses.
We intend to use the
net proceeds from this offering for general corporate purposes, including working capital and repayment of existing corporate obligations.
DIVIDEND
POLICY
Although certain of
our subsidiary limited liability companies ("LLCs") make distributions to members of our subsidiary LLCs, we have not
declared or paid any cash dividends on our common stock and do not intend to declare or pay any cash dividend in the foreseeable
future. The payment of dividends, if any, is within the discretion of the board of directors and will depend on our earnings, if
any, our capital requirements and financial condition and such other factors as the board of directors may consider. We currently
intend to retain our earnings, if any, to finance our growth.
DILUTION
As of September 30,
2017, our net tangible book value was approximately $4.1 million, or $0.16 per share of our Common Stock. Net tangible book value
per share represents the amount of our total tangible assets less our total liabilities, divided by the total number of shares
of our Common Stock outstanding as of September 30, 2017.
After giving effect
to the sale of 1,750,000 shares of our Common Stock in this offering at an offering price of $1.50 per share and after deducting
estimated offering fees and expenses payable by us, our net tangible book value as of September 30, 2017 would have been approximately
$0.25 per share of Common Stock. This represents an immediate increase in net tangible book value of $0.09 per share to our existing
stockholders and an immediate dilution in net tangible book value of $1.25 per share to investors participating in this offering.
The following table illustrates this dilution per share of Common Stock to investors participating in this offering:
Public offering price per share
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$
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1.50
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Net tangible book value per share as of September 30, 2017
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$
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0.16
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Increase in net tangible book value per share attributable to new investors in this offering
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$
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0.09
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Adjusted net tangible book value per share after giving effect to the offering
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$
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0.25
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Dilution per share to new investors in this offering
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$
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1.25
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The foregoing illustration
does not reflect the potential dilution from the exercise of outstanding options or warrants to purchase shares of our common stock
or reflect the dilution that would result from the exercise of the Warrants sold in the concurrent private placement transaction,
as described below under “Private Placement Transaction.”
DESCRIPTION
OF CAPITAL STOCK
The following summary of our capital stock
is based on certain provisions of our amended and restated certificate of incorporation and bylaws and on the applicable provisions
of the Delaware General Corporation Law, or DGCL. This summary does not purport to be complete and is qualified in its entirety
by reference to the applicable provisions our amended and restated certificate of incorporation and bylaws and the DGCL. For information
on how to obtain copies of such documents, please refer to the heading “Where You Can Find More Information” in this
prospectus.
Our authorized capital stock consists of
85,000,000 shares, with a par value of $0.0001 per share, of which:
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75,000,000 shares are designated as Common Stock; and
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10,000,000 shares are designated as undesignated preferred stock.
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As of September 30, 2017, we had outstanding
25,050,628 shares of Common Stock and no shares of preferred stock. In addition, on September 30, 2017, we had outstanding options
to acquire 2,142,035 shares of Common Stock and outstanding unvested restricted stock units covering 875,000 shares of Common Stock.
Common Stock
Common stockholders
of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Our amended and restated
certificate of incorporation does not provide for cumulative voting. The holders of our common stock are entitled to receive ratably
such dividends, if any, as may be declared by the board of directors out of legally available funds, subject to any preferential
dividend rights of any series of preferred stock that we may designate and issue in the future. All shares of common stock outstanding
as of the date of this prospectus and, upon issuance and sale, all shares of common stock that we may offer pursuant to this prospectus,
will be fully paid and nonassessable.
Our board of directors
is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being
elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders
of more than 50% of the shares of common stock eligible to vote for the election of directors can elect all of the directors.
In the event of
a liquidation, dissolution or winding up of the company, our stockholders are entitled to share ratably in all assets remaining
available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having
preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions
applicable to the common stock. The rights, preferences and privileges of holders of common stock are subject to and may be adversely
affected by the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.
Preferred Stock
Our amended and restated certificate of
incorporation authorizes it to issue up to 10,000,000 shares of $0.0001 par value undesignated preferred stock. Our board of directors
may designate the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion
rights, voting rights, terms of redemption, liquidation preference, sinking fund terms and the number of shares constituting any
series or the designation of any series. As of September 30, 2017, no preferred stock was issued or outstanding.
Warrants
As of September 30, 2017, we had warrants
outstanding to purchase 740,000 shares of our Common Stock.
Transfer Agent and Registrar
The transfer agent
and registrar for our common stock is Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New York 10004.
Stock Exchange Listing
Our common stock
has been publicly traded on the NASDAQ Capital Market under the symbol “STKS.”
Anti-Takeover Law and Certain Charter
and Bylaw Provisions
The provisions
of Delaware law and our amended and restated certificate of incorporation and bylaws could discourage or make it more difficult
to accomplish a proxy contest or other change in our management or the acquisition of control by a holder of a substantial amount
of our voting stock. It is possible that these provisions could make it more difficult to accomplish, or could deter, transactions
that stockholders may otherwise consider to be in their best interests or in our best interests. These provisions are intended
to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated
by the board of directors and to discourage certain types of transactions that may involve an actual or threatened change of our
control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain
tactics that may be used in proxy fights. Such provisions also may have the effect of preventing changes in our management.
Delaware Statutory Business Combinations
Provision
We are subject
to Section 203 of the Delaware General Corporation Law. This statute regulating corporate takeovers prohibits a Delaware corporation
from engaging in any business combination with any interested stockholder for three years following the date that the stockholder
became an interested stockholder, unless:
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prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
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upon completion of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who are directors and also officers, and (b) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
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on or subsequent to the date of the transaction, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.
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Generally, a business
combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder.
An interested stockholder is any person who, together with such person’s affiliates and associates (i) owns 15% or more of
a corporation’s voting securities or (ii) is an affiliate or associate of a corporation and was the owner of 15% or more
of the corporation’s voting securities at any time within the three year period immediately preceding a business combination
of the corporation governed by Section 203. We expect the existence of this provision to have an anti-takeover effect with respect
to transactions our board of directors does not approve in advance. We also anticipate that Section 203 may discourage takeover
attempts that might result in a premium over the market price for the shares of Common Stock held by our stockholders.
Classified Board of Directors;
Removal of Directors for Cause
Pursuant to our
amended and restated certificate of incorporation and bylaws, our board of directors is divided into three classes, with the term
of office of the first class to expire at the first annual meeting of stockholders following the initial classification of directors,
the term of office of the second class to expire at the second annual meeting of stockholders following the initial classification
of directors, and the term of office of the third class to expire at the third annual meeting of stockholders following the initial
classification of directors. At each annual meeting of stockholders, directors elected to succeed those directors whose terms expire,
other than directors elected by the holders of any series of preferred stock under specified circumstances, will be elected for
a three-year term of office. All directors elected to our classified board of directors will serve until the election and qualification
of their respective successors or their earlier death, resignation, retirement, disqualification or removal. Members of the board
of directors may only be removed for cause and only by the affirmative vote of holders of a majority of the voting power of all
then outstanding shares of capital stock entitled to vote generally in the election of directors, voting as a single class. These
provisions are likely to increase the time required for stockholders to change the composition of the board of directors. For example,
at least two annual meetings will be necessary for stockholders to effect a change in a majority of the members of the board of
directors.
Advance Notice Provisions for
Stockholder Proposals and Stockholder Nominations of Directors
Our bylaws provide
that, for nominations to the board of directors or for other business to be properly brought by a stockholder before a meeting
of stockholders, the stockholder must first have given timely notice of the proposal in writing to our Secretary. For an annual
meeting, a stockholder’s notice generally must be delivered not less than 90 days nor more than 120 days prior to the first
anniversary of the previous year’s annual meeting date. For a special meeting, the notice must generally be delivered not
earlier than the 10th day following the day on which public announcement of the meeting is first made. Detailed requirements as
to the form of the notice and information required in the notice are specified in the bylaws. If it is determined that business
was not properly brought before a meeting in accordance with our bylaw provisions, such business will not be conducted at the meeting.
Special Meetings of Stockholders
Special meetings
of the stockholders may be called only by the Chairman of the board of directors, the Chief Executive Officer or President, or
our board of directors pursuant to a resolution adopted by a majority of the total number of directors.
No Stockholder Action by Written
Consent
Any action to be
effected by our stockholders must be effected at a duly called annual or special meeting of the stockholders.
Limitation of Liability and Indemnification
Our amended and
restated certificate of incorporation and our bylaws provide that each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative by reason of the fact that he or she is or was one of our directors or officers or, while one of
our directors or officers, is or was serving at our request as a director, officer, or employee or agent of another corporation,
or of a partnership, joint venture, trust or other enterprise or nonprofit entity, including service with respect to an employee
benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or
agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless
by us to the fullest extent authorized by the Delaware General Corporation Law against all liability and loss suffered and expenses
(including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such.
Section 145
of the Delaware General Corporation Law permits a corporation to indemnify any director or officer of the corporation against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection
with any action, suit or proceeding brought by reason of the fact that such person is or was a director or officer of the corporation,
if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests
of the corporation, and, with respect to any criminal action or proceeding, if he or she had no reasonable cause to believe his
or her conduct was unlawful. In a derivative action (i.e., one brought by or on behalf of the corporation), indemnification may
be provided only for expenses actually and reasonably incurred by any director or officer in connection with the defense or settlement
of such an action or suit if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation, except that no indemnification shall be provided if such person shall have been
adjudged to be liable to the corporation, unless and only to the extent that the Delaware Chancery Court or the court in which
the action or suit was brought shall determine that such person is fairly and reasonably entitled to indemnity for such expenses
despite such adjudication of liability.
Pursuant to Section 102(b)(7)
of the Delaware General Corporation Law, Article Eighth of our amended and restated certificate of incorporation eliminates the
liability of a director to us or our stockholders for monetary damages for such a breach of fiduciary duty as a director, except
for liabilities arising:
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from any breach of the
director’s duty of loyalty to us or our stockholders;
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from acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation of law;
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under Section 174
of the Delaware General Corporation Law; and
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from any transaction
from which the director derived an improper personal benefit.
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We have entered
into indemnification agreements with our directors and certain officers, in addition to the indemnification provided in our amended
and restated certificate of incorporation and our bylaws, and intend to enter into indemnification agreements with any new directors
and executive officers in the future. We have purchased and intend to maintain insurance on behalf of any person who is or was
a director or officer against any loss arising from any claim asserted against him or her and incurred by him or her in any such
capacity, subject to certain exclusions.
The foregoing discussion
of our amended and restated certificate of incorporation, bylaws, indemnification agreements, indemnity agreement, and Delaware
law is not intended to be exhaustive and is qualified in its entirety by such amended and restated certificate of incorporation,
bylaws, indemnification agreements, indemnity agreement, or law.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
PRIVATE
PLACEMENT TRANSACTION
In a concurrent private
placement (the “Private Placement Transaction”), we are selling to purchasers of our Common Stock in this offering
warrants (the “Warrants”) to purchase 875,000 shares of our Common Stock.
The Warrants and the
shares of our Common Stock issuable upon the exercise of the Warrants are not being registered under the Securities Act, are not
being offered pursuant to this prospectus supplement and the accompanying prospectus and are being offered pursuant to the exemption
provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder. Accordingly, purchasers of the Warrants
may only sell shares of Common Stock issued upon exercise of the Warrants being sold to them in the concurrent private placement,
in each case, pursuant to an effective registration statement under the Securities Act covering the resale of those shares, an
exemption under Rule 144 under the Securities Act or another applicable exemption under the Securities Act.
Each Warrant will be
exercisable on the six month anniversary of the date of its issuance (the “Initial Exercise Date”) at an exercise price
of $1.63 per share, subject to adjustment, and will remain exercisable for five years from the date it becomes exercisable, but
not thereafter. In addition, the holders of the Warrants will have the right to participate in any rights offering or distribution
of assets (such as a spinoff) together with the holders of our Common Stock on an as-exercised basis.
The exercise price
and number of the shares of our Common Stock issuable upon the exercise of the Warrants will be subject to adjustment for stock
splits, reverse splits, and similar capital transactions, as described in the Warrants. The Warrants will be exercisable on a “cashless”
basis in certain circumstances.
PLAN
OF DISTRIBUTION
We
are selling 1,750,000 shares of Common Stock offered under this prospectus supplement directly to several investors in a privately
negotiated transaction in which no party is acting as an underwriter or placement agent. Subject to the terms of a securities purchase
agreement dated the date of this prospectus supplement, the purchasers have agreed to purchase and we have agreed to sell to the
purchasers an aggregate of 1,750,000 shares of our Common Stock at a price of $1.50 per share of Common Stock. We expect to deliver
the shares of Common Stock through the book entry facilities of The Depository Trust Company against payment of the aggregate purchase
price for the shares of Common Stock purchased.
LEGAL
MATTERS
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., New York, New York, will pass upon the validity of the issuance of the securities
to be offered by this prospectus.
EXPERTS
The financial statements
incorporated by reference in this prospectus and elsewhere in the registration statement have been so incorporated by reference
in reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as
experts in accounting and auditing.
TABLE OF CONTENTS
ABOUT
THIS PROSPECTUS
This prospectus is
part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, utilizing a “shelf”
registration process. Under this shelf registration process, we may offer shares of our common stock and preferred stock, various
series of debt securities and/or warrants, rights or purchase contracts to purchase any of such securities, either individually
or in units, in one or more offerings, with a total value of up to $100,000,000. This prospectus provides you with a general description
of the securities we may offer. Each time we offer a type or series of securities under this prospectus, we will provide a prospectus
supplement that will contain specific information about the terms of that offering.
This prospectus does
not contain all of the information included in the registration statement. For a more complete understanding of the offering of
the securities, you should refer to the registration statement, including its exhibits. The prospectus supplement may also add,
update or change information contained or incorporated by reference in this prospectus. However, no prospectus supplement will
offer a security that is not registered and described in this prospectus at the time of its effectiveness. This prospectus, together
with the applicable prospectus supplements and the documents incorporated by reference into this prospectus, includes all material
information relating to the offering of securities under this prospectus. You should carefully read this prospectus, the applicable
prospectus supplement, the information and documents incorporated herein by reference and the additional information under the
heading “Where You Can Find More Information” before making an investment decision.
You should rely only
on the information we have provided or incorporated by reference in this prospectus or any prospectus supplement. We have not
authorized anyone to provide you with information different from that contained or incorporated by reference in this prospectus.
No dealer, salesperson or other person is authorized to give any information or to represent anything not contained or incorporated
by reference in this prospectus. You must not rely on any unauthorized information or representation. This prospectus is an offer
to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. You
should assume that the information in this prospectus or any prospectus supplement is accurate only as of the date on the front
of the document and that any information we have incorporated herein by reference is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of this prospectus or any sale of a security.
We further note that
the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is
incorporated by reference in the accompanying prospectus were made solely for the benefit of the parties to such agreement, including,
in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made.
Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state
of our affairs.
This prospectus may
not be used to consummate sales of our securities, unless it is accompanied by a prospectus supplement. To the extent there are
inconsistencies between any prospectus supplement, this prospectus and any documents incorporated by reference, the document with
the most recent date will control.
All references to “the
Company,” “we,” “us” and “our” refer to The ONE Group Hospitality, Inc., a Delaware
corporation, and its consolidated subsidiaries for periods after the closing of a merger transaction (the “Merger”)
with The ONE Group, LLC, a privately held Delaware limited liability company (“ONE Group”) pursuant to an Agreement
and Plan of Merger, dated as of October 16, 2013, by and among the Company, CCAC Acquisition Sub LLC, a Delaware limited liability
company and wholly owned subsidiary of the Company, ONE Group and Samuel Goldfinger as ONE Group Representative, and to ONE Group
and its consolidated subsidiaries for periods prior to the closing of the Merger unless the context requires otherwise.
PROSPECTUS
SUMMARY
The following is
a summary of what we believe to be the most important aspects of our business and the offering of our securities under this prospectus.
We urge you to read this entire prospectus, including the more detailed consolidated financial statements, notes to the consolidated
financial statements and other information incorporated by reference from our other filings with the SEC or included in any applicable
prospectus supplement. Investing in our securities involves risks. Therefore, carefully consider the risk factors set forth in
any prospectus supplements and in our most recent annual and quarterly filings with the SEC, as well as other information in this
prospectus and any prospectus supplements and the documents incorporated by reference herein or therein, before purchasing our
securities. Each of the risk factors could adversely affect our business, operating results and financial condition, as well as
adversely affect the value of an investment in our securities.
Overview
We are a hospitality company that develops
and operates upscale, high-energy restaurants and lounges and provides turn-key food and beverage services for hospitality venues
including hotels, casinos and other high-end locations globally. Turn-key food and beverage services are
food and beverage services that can be scaled and implemented by us at a particular hospitality venue and customized per the requirements
of the client. ONE Group was established with the vision of becoming a global market leader in the hospitality industry by melding
high-quality service, ambiance and cuisine into one great experience. Our primary restaurant brand is STK, a multi-unit steakhouse
concept that combines a high-energy, social atmosphere with the quality of a traditional upscale steakhouse. Our food and beverage
hospitality management services, or “F&B,” offerings include developing, managing and operating restaurants, bars,
rooftops, pools, banqueting and catering facilities, private dining rooms, room service and mini bars tailored to the specific
needs of high-end hotels and casinos. Our F&B hospitality clients include global hospitality companies such as the W Hotel,
Cosmopolitan Hotel, Gansevoort Hotel Group, Hippodrome Casino, and ME Hotels.
We opened our first restaurant
in January 2004 in New York City and as of May 22, 2015, we owned and operated nine (9) and managed ten (10) restaurants
and lounges globally. Ten (10) of our locations are operated under our five (5) F&B hospitality management agreements,
in which we provide comprehensive food and beverage services for our hospitality clients. We generate management
and incentive fee revenue from those restaurants and lounges that we do not own, but instead manage on behalf of our
F&B hospitality clients. All of our restaurants, lounges and F&B services are designed to create a social dining
and entertainment experience within a destination location. We believe that this design philosophy separates us from
more traditional restaurant and foodservice competitors.
Net loss
for the three months ended March 31, 2015 and 2014 was $1.2 million and $1.0 million, respectively, and
included a loss from discontinued operations of $3,138 and $925,174 for the three months ended March 31,
2015 and 2014, respectively. The loss from discontinued operations reflects our exiting of non-strategic and underperforming
units during these periods and includes the closing of the Tenjune concept in February 2014. In addition, the three months
ended March 31, 2015 and 2014 included non-cash derivative expense of $614,000 and $48,000, respectively, from
an adjustment of our derivative liability balance.
Based on our strong momentum and brand appeal,
we expect to continue to expand our operations domestically and internationally through a mix of company owned restaurants and
managed units by continuing our disciplined and targeted site selection process and supplemented by the increasingly regular inbound
inquiries we receive from office building, hotel and casino owners and landlords to develop and open new locations. We currently
anticipate that our expansion plans will require capital expenditures, net of improvement allowances, of approximately $11.0 million
over the next 12 months, subject to revision if we enter into new agreements. There can be no assurance that we will be able to
expand our operations at the rate we currently expect or at all.
STK and STK Rebel
STK is a steakhouse restaurant concept
with locations in major metropolitan cities globally. STK artfully blends two concepts into
one — the modern steakhouse and a chic lounge, offering a high-energy, fine dining experience in a social atmosphere
with the quality of a traditional upscale steakhouse. Each STK location features a large and open restaurant and bar area
with a DJ or DJ mix playing music throughout the restaurant so our customers can enjoy a high-energy, fun
“destination” environment that encourages social interaction. We believe this concept truly differentiates us
from other upscale steakhouses. Our menu provides a variety of portion sizes and signature options to appeal to a broad
customer demographic. We currently operate six (6) owned and three (3) managed STK restaurants in major metropolitan cities
globally, such as Atlanta, Las Vegas, Los Angeles, New York, Washington D.C. and London. We recently re-opened the STK in
Miami on March 13, 2015 and opened an STK in Milan, Italy on May 11, 2015. On February 10, 2014, we entered into a lease
agreement with Walt Disney Parks and Resorts U.S., Inc. with respect to the opening of an STK restaurant in Orlando, Florida,
which is expected to open in 2015. On June 9, 2014, we entered into a lease agreement to open an STK in Chicago, Illinois in
2015. In addition, on June 19, 2014 we entered into a management agreement to operate the food and beverage services at a
hotel in Milan, Italy, which is expected to commence in 2015. On August 28, 2014, we entered into a lease agreement to open
an STK restaurant as well as assume the food and beverage operations and operate a pool side restaurant at the W Hotel in
Los Angeles, California. We commenced certain of such operations on October 1, 2014 and expect to open the STK restaurant
and assume the remaining operations and services in 2015. Our STK restaurants average approximately 10,000 square
feet and we typically target locations that range in size from 8,000 to 10,000 square feet.
STK Rebel is a more accessible version of STK.
It embodies the same experience and quality of an STK restaurant and offers a broader menu and price point that we believe appeals
to a national and international market. On August 13, 2014 we announced that we entered into an agreement to operate the food
and beverage services for a hotel in Miami, Florida that will include an STK Rebel expected to open in 2015. On November 3, 2014,
we entered into a lease agreement to open an STK Rebel restaurant in Denver, Colorado in 2015. Our STK Rebel restaurants are targeted
to range in size from 5,000 to 7,000 square feet. We are targeting average unit volumes of approximately $5 million, check averages
of approximately $55 to $65 and a beverage mix of approximately 35% for STK Rebel restaurants.
Food & Beverage Hospitality Services Business
Our
food and beverage hospitality services business provides the development, management and operations for upscale
restaurants and turn-key food and beverage services at high-end hotels and casinos. Through our developmental and operational
expertise, we are able to provide comprehensive tailored food and beverage solutions to our hospitality clients. Our
fee-based hospitality food and beverage solutions include developing, managing and operating restaurants, bars, rooftops,
pools, banqueting, catering, private dining rooms, room service and mini bars on a contract basis. Currently we are operating
under five F&B hospitality management agreements with hotels and casinos globally. Our F&B hospitality clients
include global hospitality companies such as the W Hotel, Cosmopolitan Hotel, Gansevoort Hotel Group, Hippodrome Casino, and
ME Hotels. Historically, our clients have provided the majority of the capital required for the development of the facilities
we manage on their behalf. Our F&B hospitality contracts generate revenues for us through base
management
fees, calculated as a percentage of the operation’s revenues, and additional incentive fees based on
the operation’s profitability. Our management and royalty fee income has increased from
approximately $21,000 for the three months ended March 31, 2014 to $25,000 for the three months ended
March 31, 2015. Some of the operations we manage have an STK restaurant on the premises. We typically target F&B
hospitality opportunities where we believe we can generate $500,000 to $750,000 of pre-tax income. We expect our food and
beverage hospitality services business to be an important driver of our growth and profitability going forward, enabling us
to generate management fee income with minimal capital expenditures.
On March 13, 2015, after hotel renovations
and additional work required due to water damage were completed, we re-opened STK Miami in the new 1 Hotel & Homes (formerly
known as The Perry Hotel) building located in Miami Beach, Florida.
The Company completed its initial estimates of
losses and filed a claim with its insurance carrier of approximately $1.5 million, which includes claims of approximately $500,000 for
property damages and approximately $1.0 million for expense reimbursement and business interruption. The Company continues
to evaluate its estimates of damages and in the future may make adjustments to the claim. For the three months ended March 31,
2015 we have recorded in other income a $200,000 gain based on an initial estimate of insurance recoveries and have recorded an
initial estimate of $575,000 of reimbursements that were netted against preopening expenses.
Additional Information
For additional information
related to our business and operations, please refer to the reports incorporated herein by reference, including our Annual Report
on Form 10-K for the year ended December 31, 2014, as described under the caption “Incorporation of Documents by Reference”
on page 24 of this prospectus.
Our Corporate Information
Our
principal office is located at 411 W. 14th Street, 2
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Floor, New York, New
York 10014, and our telephone number is (646) 624-2400. Our website address is www.togrp.com. The information contained on, or
that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus
solely as an inactive textual reference.
Our Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge through the investor relations page of
our internet website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the
SEC.
All brand names or
trademarks appearing in this prospectus are the property of their respective holders. Use or display by us of other parties’
trademarks, trade dress, or products in this prospectus is not intended to, and does not, imply a relationship with, or endorsements
or sponsorship of, us by the trademark or trade dress owners.
We are a “smaller
reporting company” as defined in Rule 12b-2 of the Exchange Act and have elected to take advantage of certain of the scaled
disclosure available to smaller reporting companies.
Offerings Under This Prospectus
Under this prospectus,
we may offer shares of our common stock and preferred stock, various series of debt securities and/or warrants, rights or purchase
contracts to purchase any of such securities, either individually or in units, with a total value of up to $100,000,000, from
time to time at prices and on terms to be determined by market conditions at the time of the offering. This prospectus provides
you with a general description of the securities we may offer. Each time we offer a type or series of securities under this prospectus,
we will provide a prospectus supplement that will describe the specific amounts, prices and other important terms of the securities,
including, to the extent applicable:
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designation or classification;
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aggregate principal amount or aggregate offering price;
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maturity, if applicable;
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rates and times of payment of interest or dividends, if any;
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redemption, conversion or sinking fund terms, if any;
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voting or other rights, if any; and
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conversion or exercise prices, if any.
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The prospectus supplement
also may add, update or change information contained in this prospectus or in documents we have incorporated by reference into
this prospectus. However, no prospectus supplement will fundamentally change the terms that are set forth in this prospectus or
offer a security that is not registered and described in this prospectus at the time of its effectiveness.
We may sell the securities
directly to investors or to or through agents, underwriters or dealers. We, and our agents or underwriters, reserve the right
to accept or reject all or part of any proposed purchase of securities. If we offer securities through agents or underwriters,
we will include in the applicable prospectus supplement:
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the names of those agents or underwriters;
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applicable fees, discounts and commissions to be paid to them;
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details regarding over-allotment options, if any; and
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the net proceeds to us.
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This prospectus
may not be used to consummate a sale of any securities unless it is accompanied by a prospectus supplement.
RISK
FACTORS
Investing in our securities
involves significant risk. The prospectus supplement applicable to each offering of our securities will contain a discussion of
the risks applicable to an investment in The ONE Group Hospitality, Inc. Prior to making a decision about investing in our securities,
you should carefully consider the specific factors discussed under the heading “Risk Factors” in the applicable prospectus
supplement, together with all of the other information contained or incorporated by reference in the prospectus supplement or
appearing or incorporated by reference in this prospectus. You should also consider the risks, uncertainties and assumptions discussed
under the heading “Risk Factors” included in our most recent annual report on Form 10-K, as revised or supplemented
by our subsequent quarterly reports on Form 10-Q or our current reports on Form 8-K that we have filed with the SEC, all of which
are incorporated herein by reference, and which may be amended, supplemented or superseded from time to time by other reports
we file with the SEC in the future. The risks and uncertainties we have described are not the only ones we face. Additional risks
and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. The occurrence
of any of these risks might cause you to lose all or part of your investment in the offered securities.
RATIO
OF EARNINGS TO FIXED CHARGES
Any time debt securities
are offered pursuant to this prospectus, we will provide a table setting forth our ratio of earnings to fixed charges on a historical
basis in the applicable prospectus supplement, if required.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and
the documents incorporated by reference in this prospectus include forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act that relate
to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that
may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels
of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited
to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “may,”
“plan,” “potential,” “predict,” “project,” “targets,” “likely,”
“will,” “would,” “could,” “should,” “continue,” and similar expressions
or phrases, or the negative of those expressions or phrases, are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. Although we believe that we have a reasonable basis for each forward-looking
statement contained in this prospectus and incorporated by reference in this prospectus, we caution you that these statements
are based on our projections of the future that are subject to known and unknown risks and uncertainties and other factors that
may cause our actual results, level of activity, performance or achievements expressed or implied by these forward-looking statements,
to differ. The sections in our periodic reports, including our Annual Report on Form 10-K for the fiscal year ended December 31,
2014, entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” as well as other sections in this prospectus and the documents or reports incorporated
by reference in this prospectus, discuss some of the factors that could contribute to these differences. These forward-looking
statements include, among other things, statements about:
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our ability to successfully adjust to changes in consumer preferences,
discretionary spending patterns and general economic conditions, including recent economic events;
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our restaurants and food and beverage hospitality services operations
ability to compete successfully with other restaurants, food and beverage hospitality services operations and other similar
operations;
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our expectations regarding future growth, including our ability
to open new restaurants, and food and beverage hospital services locations and operate them profitably;
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our ability to continue to develop and grow new concepts;
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our ability to maintain and grow acceptance of our brands;
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our expectations regarding higher operating costs, including
labor costs;
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our ability to obtain our principal food products and manage
related costs;
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our expectations regarding the seasonality of our business;
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our expectations regarding litigation or other legal proceedings;
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the impact of federal, state or local government statutes, rules
and regulations;
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our expectations regarding the loss of key members of our management
team or employees;
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our expectations regarding our liquidity and capital resources,
including our ability to meet our lease obligations;
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our expectations regarding the amount and terms of our existing
or future indebtedness; and
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our ability to maintain adequate protection of our intellectual
property.
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We may not actually achieve the plans,
intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking
statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking
statements we make. We have included important cautionary statements in this prospectus or in the documents incorporated by reference
in this prospectus, particularly in the “Risk Factors” section, that we believe could cause actual results or events
to differ materially from the forward-looking statements that we make. For a summary of such factors, please refer to the section
entitled “Risk Factors” in this prospectus, as updated and supplemented by the discussion of risks and uncertainties
under “Risk Factors” contained in any supplements to this prospectus and in our most recent annual report on Form
10-K, as revised or supplemented by our subsequent quarterly reports on Form 10-Q or our current reports on Form 8-K, as well
as any amendments thereto, as filed with the SEC and which are incorporated herein by reference. The information contained in
this document is believed to be current as of the date of this document. We do not intend to update any of the forward-looking
statements after the date of this document to conform these statements to actual results or to changes in our expectations, except
as required by law.
In light of these
assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this prospectus
or in any document incorporated herein by reference might not occur. Investors are cautioned not to place undue reliance on the
forward-looking statements, which speak only as of the date of this prospectus or the date of the document incorporated by reference
in this prospectus. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking
statements, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements attributable
to us or to any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or
referred to in this section.
USE
OF PROCEEDS
We cannot assure you
that we will receive any proceeds in connection with securities which may be offered pursuant to this prospectus. Unless otherwise
indicated in the applicable prospectus supplement, we intend to use any net proceeds from the sale of securities under this prospectus
for general corporate purposes, including, but not limited to, working capital, capital expenditures, repayment of any existing
indebtedness, investments and acquisitions. We have not determined the amounts we plan to spend on any of the areas listed above
or the timing of these expenditures. As a result, our management will have broad discretion to allocate the net proceeds, if any,
we receive in connection with securities offered pursuant to this prospectus for any purpose. Pending application of the net proceeds
as described above, we may initially invest the net proceeds in short-term, investment-grade, interest-bearing securities or apply
them to the reduction of short-term indebtedness.
PLAN
OF DISTRIBUTION
We may offer securities
under this prospectus from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a
combination of these methods. We may sell the securities (1) through underwriters or dealers, (2) through agents or
(3) directly to one or more purchasers, or through a combination of such methods. We may distribute the securities from time
to time in one or more transactions at:
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a fixed price or prices, which may be changed from time to time;
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market prices prevailing at the time of sale;
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prices related to the prevailing market prices; or
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We may directly solicit
offers to purchase the securities being offered by this prospectus. We may also designate agents to solicit offers to purchase
the securities from time to time, and may enter into arrangements for “at-the-market,” equity line or similar transactions.
We will name in a prospectus supplement any underwriter or agent involved in the offer or sale of the securities.
If we utilize a dealer
in the sale of the securities being offered by this prospectus, we will sell the securities to the dealer, as principal. The dealer
may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
If we utilize an underwriter
in the sale of the securities being offered by this prospectus, we will execute an underwriting agreement with the underwriter
at the time of sale, and we will provide the name of any underwriter in the prospectus supplement which the underwriter will use
to make resales of the securities to the public. In connection with the sale of the securities, we, or the purchasers of the securities
for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting discounts or commissions.
The underwriter may sell the securities to or through dealers, and the underwriter may compensate those dealers in the form of
discounts, concessions or commissions.
With respect to underwritten
public offerings, negotiated transactions and block trades, we will provide in the applicable prospectus supplement information
regarding any compensation we pay to underwriters, dealers or agents in connection with the offering of the securities, and any
discounts, concessions or commissions allowed by underwriters to participating dealers. Underwriters, dealers and agents participating
in the distribution of the securities may be deemed to be underwriters within the meaning of the Securities Act, and any discounts
and commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting
discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and agents against civil liabilities,
including liabilities under the Securities Act, or to contribute to payments they may be required to make in respect thereof.
If so indicated in
the applicable prospectus supplement, we will authorize underwriters, dealers or other persons acting as our agents to solicit
offers by certain institutions to purchase securities from us pursuant to delayed delivery contracts providing for payment and
delivery on the date stated in each applicable prospectus supplement. Each contract will be for an amount not less than, and the
aggregate amount of securities sold pursuant to such contracts shall not be less nor more than, the respective amounts stated
in each applicable prospectus supplement. Institutions with whom the contracts, when authorized, may be made include commercial
and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other
institutions, but shall in all cases be subject to our approval. Delayed delivery contracts will not be subject to any conditions
except that:
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the purchase by an institution of the securities covered under
that contract shall not at the time of delivery be prohibited under the laws of the jurisdiction to which that institution
is subject; and
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if the securities are also being sold to underwriters acting
as principals for their own account, the underwriters shall have purchased such securities not sold for delayed delivery.
The underwriters and other persons acting as our agents will not have any responsibility in respect of the validity or performance
of delayed delivery contracts.
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One or more firms,
referred to as “remarketing firms,” may also offer or sell the securities, if a prospectus supplement so indicates,
in connection with a remarketing arrangement upon their purchase. Remarketing firms will act as principals for their own accounts
or as our agents. These remarketing firms will offer or sell the securities in accordance with the terms of the securities. Each
prospectus supplement will identify and describe any remarketing firm and the terms of its agreement, if any, with us and will
describe the remarketing firm’s compensation. Remarketing firms may be deemed to be underwriters in connection with the
securities they remarket. Remarketing firms may be entitled under agreements that may be entered into with us to indemnification
by us against certain civil liabilities, including liabilities under the Securities Act, and may be customers of, engage in transactions
with or perform services for us in the ordinary course of business.
Certain underwriters
may use this prospectus and any accompanying prospectus supplement for offers and sales related to market-making transactions
in the securities. These underwriters may act as principal or agent in these transactions, and the sales will be made at prices
related to prevailing market prices at the time of sale. Any underwriters involved in the sale of the securities may qualify as
“underwriters” within the meaning of Section 2(a)(11) of the Securities Act. In addition, the underwriters’
commissions, discounts or concessions may qualify as underwriters’ compensation under the Securities Act and the rules of
the Financial Industry Regulatory Authority, Inc., or FINRA.
Shares of our common
stock sold pursuant to the registration statement of which this prospectus is a part will be authorized for quotation and trading
on the NASDAQ Capital Market. The applicable prospectus supplement will contain information, where applicable, as to any other
listing, if any, on any securities market or other securities exchange of the securities covered by the prospectus supplement.
Underwriters may make a market in our common stock, but will not be obligated to do so and may discontinue any market making at
any time without notice. We can make no assurance as to the liquidity of or the existence, development or maintenance of trading
markets for any of the securities.
In order to facilitate
the offering of the securities, certain persons participating in the offering may engage in transactions that stabilize, maintain
or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involve
the sale by persons participating in the offering of more securities than we sold to them. In these circumstances, these persons
would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment
option. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing the applicable
security in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering
may be reclaimed if the securities sold by them are repurchased in connection with stabilization transactions. The effect of these
transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail
in the open market. These transactions may be discontinued at any time.
The underwriters,
dealers and agents may engage in other transactions with us, or perform other services for us, in the ordinary course of their
business.
DESCRIPTION
OF COMMON STOCK
We are authorized
to issue 75,000,000 shares of common stock, par value $0.0001 per share. On May 21, 2015, we had 24,940,195 shares of common stock
outstanding and approximately 102 stockholders of record.
The following summary
of certain provisions of our common stock does not purport to be complete. You should refer to our amended and restated certificate
of incorporation and our bylaws, both of which are included as exhibits to the registration statement of which this prospectus
is a part. The summary below is also qualified by provisions of applicable law.
General
Common stockholders of record are entitled
to one vote for each share held on all matters to be voted on by stockholders. Our amended and restated certificate of incorporation
does not provide for cumulative voting. The holders of our common stock are entitled to receive ratably such dividends, if any,
as may be declared by the board of directors out of legally available funds, subject to any preferential dividend rights of any
series of preferred stock that we may designate and issue in the future. All shares of common stock outstanding as of the date
of this prospectus and, upon issuance and sale, all shares of common stock that we may offer pursuant to this prospectus, will
be fully paid and nonassessable.
Our board of directors is divided into three
classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year.
There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of
the shares of common stock eligible to vote for the election of directors can elect all of the directors.
In the event of a liquidation, dissolution
or winding up of the company, our stockholders are entitled to share ratably in all assets remaining available for distribution
to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common
stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the
common stock. The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by
the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.
Transfer Agent and
Registrar
The transfer agent
and registrar for our common stock is Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New York 10004.
Stock Exchange Listing
Our common stock is
listed for trading on The NASDAQ Capital Market under the symbol “STKS.”
DESCRIPTION
OF PREFERRED STOCK
We are authorized
to issue 10,000,000 shares of blank check preferred stock, par value $0.0001 per share. As of the date of this prospectus, no
shares of our preferred stock were outstanding or designated. The following summary of certain provisions of our preferred stock
does not purport to be complete. You should refer to our amended and restated certificate of incorporation and our bylaws, both
of which are included as exhibits to the registration statement of which this prospectus is a part. The summary below is also
qualified by provisions of applicable law.
General
Our board of directors
may, without further action by our stockholders, from time to time, direct the issuance of shares of preferred stock in series
and may, at the time of issuance, determine the rights, preferences and limitations of each series, including voting rights, dividend
rights and redemption and liquidation preferences. Satisfaction of any dividend preferences of outstanding shares of preferred
stock would reduce the amount of funds available for the payment of dividends on shares of our common stock. Holders of shares
of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up
of our company before any payment is made to the holders of shares of our common stock. In some circumstances, the issuance of
shares of preferred stock may render more difficult or tend to discourage a merger, tender offer or proxy contest, the assumption
of control by a holder of a large block of our securities or the removal of incumbent management. Upon the affirmative vote of
our board of directors, without stockholder approval, we may issue shares of preferred stock with voting and conversion rights
which could adversely affect the holders of shares of our common stock.
If we offer a specific
series of preferred stock under this prospectus, we will describe the terms of the preferred stock in the prospectus supplement
for such offering and will file a copy of the certificate establishing the terms of the preferred stock with the SEC. To the extent
required, this description will include:
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the title and stated value;
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the number of shares offered, the liquidation preference, if
any, per share and the purchase price;
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the dividend rate(s), period(s) and/or payment date(s), or method(s)
of calculation for such dividends;
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whether dividends will be cumulative or non-cumulative and,
if cumulative, the date from which dividends will accumulate;
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the procedures for any auction and remarketing, if any;
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the provisions for a sinking fund, if any;
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the provisions for redemption, if applicable;
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any listing of the preferred stock on any securities exchange
or market;
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whether the preferred stock will be convertible into our common
stock, and, if applicable, the conversion price (or how it will be calculated) and conversion period;
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whether the preferred stock will be exchangeable into debt securities,
and, if applicable, the exchange price (or how it will be calculated) and exchange period;
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voting rights, if any, of the preferred stock;
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a discussion of any material and/or special U.S. federal income
tax considerations applicable to the preferred stock;
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the relative ranking and preferences of the preferred stock
as to dividend rights and rights upon liquidation, dissolution or winding up of the affairs of the Company; and
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any material limitations on issuance of any class or series
of preferred stock ranking pari passu with or senior to the series of preferred stock as to dividend rights and rights upon
liquidation, dissolution or winding up of the Company.
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Transfer Agent and Registrar
The transfer agent
and registrar for our preferred stock will be set forth in the applicable prospectus supplement.
DESCRIPTION
OF DEBT SECURITIES
The following description,
together with the additional information we include in any applicable prospectus supplements, summarizes the material terms and
provisions of the debt securities that we may offer under this prospectus. While the terms we have summarized below will apply
generally to any future debt securities we may offer pursuant to this prospectus, we will describe the particular terms of any
debt securities that we may offer in more detail in the applicable prospectus supplement. If we so indicate in a prospectus supplement,
the terms of any debt securities offered under such prospectus supplement may differ from the terms we describe below, and to
the extent the terms set forth in a prospectus supplement differ from the terms described below, the terms set forth in the prospectus
supplement shall control.
We may sell from time
to time, in one or more offerings under this prospectus, debt securities, which may be senior or subordinated. We will issue any
such senior debt securities under a senior indenture that we will enter into with a trustee to be named in the senior indenture.
We will issue any such subordinated debt securities under a subordinated indenture, which we will enter into with a trustee to
be named in the subordinated indenture. We have filed forms of these documents as exhibits to the registration statement, of which
this prospectus is a part. We use the term “indentures” to refer to either the senior indenture or the subordinated
indenture, as applicable. The indentures will be qualified under the Trust Indenture Act of 1939, as in effect on the date of
the indenture. We use the term “debenture trustee” to refer to either the trustee under the senior indenture or the
trustee under the subordinated indenture, as applicable.
The following summaries
of material provisions of the senior debt securities, the subordinated debt securities and the indentures are subject to, and
qualified in their entirety by reference to, all the provisions of the indenture applicable to a particular series of debt securities.
General
Each indenture provides
that debt securities may be issued from time to time in one or more series and may be denominated and payable in foreign currencies
or units based on or relating to foreign currencies. Neither indenture limits the amount of debt securities that may be issued
thereunder, and each indenture provides that the specific terms of any series of debt securities shall be set forth in, or determined
pursuant to, an authorizing resolution and/or a supplemental indenture, if any, relating to such series.
We will describe in
each prospectus supplement the following terms relating to a series of debt securities:
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the title or designation;
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the aggregate principal amount and any limit on the amount that
may be issued;
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the currency or units based on or relating to currencies in
which debt securities of such series are denominated and the currency or units in which principal or interest or both will
or may be payable;
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whether we will issue the series of debt securities in global
form, the terms of any global securities and who the depositary will be;
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the maturity date and the date or dates on which principal will
be payable;
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the interest rate, which may be fixed or variable, or the method
for determining the rate and the date interest will begin to accrue, the date or dates interest will be payable and the record
dates for interest payment dates or the method for determining such dates;
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whether or not the debt securities will be secured or unsecured,
and the terms of any secured debt;
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the terms of the subordination of any series of subordinated
debt;
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the place or places where payments will be payable;
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our right, if any, to defer payment of interest and the maximum
length of any such deferral period;
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the date, if any, after which, and the price at which, we may,
at our option, redeem the series of debt securities pursuant to any optional redemption provisions;
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the date, if any, on which, and the price at which we are obligated,
pursuant to any mandatory sinking fund provisions or otherwise, to redeem, or at the holder’s option to purchase, the
series of debt securities;
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whether the indenture will restrict our ability to pay dividends,
or will require us to maintain any asset ratios or reserves;
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whether we will be restricted from incurring any additional
indebtedness;
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a discussion of any material or special U.S. federal income
tax considerations applicable to a series of debt securities;
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the denominations in which we will issue the series of debt
securities, if other than denominations of $1,000 and any integral multiple thereof; and
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any other specific terms, preferences, rights or limitations
of, or restrictions on, the debt securities.
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We may issue debt
securities that provide for an amount less than their stated principal amount to be due and payable upon declaration of acceleration
of their maturity pursuant to the terms of the indenture. We will provide you with information on the federal income tax considerations
and other special considerations applicable to any of these debt securities in the applicable prospectus supplement.
Conversion or Exchange Rights
We will set forth
in the prospectus supplement the terms, if any, on which a series of debt securities may be convertible into or exchangeable for
our common stock or our other securities. We will include provisions as to whether conversion or exchange is mandatory, at the
option of the holder or at our option. We may include provisions pursuant to which the number of shares of our common stock or
our other securities that the holders of the series of debt securities receive would be subject to adjustment.
Consolidation, Merger or Sale; No
Protection in Event of a Change of Control or Highly Leveraged Transaction
The indentures do
not contain any covenant that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of
all or substantially all of our assets. However, any successor to or acquirer of such assets must assume all of our obligations
under the indentures or the debt securities, as appropriate.
Unless we state otherwise
in the applicable prospectus supplement, the debt securities will not contain any provisions that may afford holders of the debt
securities protection in the event we have a change of control or in the event of a highly leveraged transaction (whether or not
such transaction results in a change of control), which could adversely affect holders of debt securities.
Events of Default Under the Indenture
The following are
events of default under the indentures with respect to any series of debt securities that we may issue:
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if we fail to pay interest when due and our failure continues
for 90 days and the time for payment has not been extended or deferred;
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if we fail to pay the principal, or premium, if any, when due
and the time for payment has not been extended or delayed;
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if we fail to observe or perform any other covenant set forth
in the debt securities of such series or the applicable indentures, other than a covenant specifically relating to and for
the benefit of holders of another series of debt securities, and our failure continues for 90 days after we receive written
notice from the debenture trustee or holders of not less than a majority in aggregate principal amount of the outstanding
debt securities of the applicable series; and
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if specified events of bankruptcy, insolvency or reorganization
occur as to us.
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No event of default
with respect to a particular series of debt securities (except as to certain events of bankruptcy, insolvency or reorganization)
necessarily constitutes an event of default with respect to any other series of debt securities. The occurrence of an event of
default may constitute an event of default under any bank credit agreements we may have in existence from time to time. In addition,
the occurrence of certain events of default or an acceleration under the indenture may constitute an event of default under certain
of our other indebtedness outstanding from time to time.
If an event of default
with respect to debt securities of any series at the time outstanding occurs and is continuing, then the trustee or the holders
of not less than a majority in principal amount of the outstanding debt securities of that series may, by a notice in writing
to us (and to the debenture trustee if given by the holders), declare to be due and payable immediately the principal (or, if
the debt securities of that series are discount securities, that portion of the principal amount as may be specified in the terms
of that series) of and premium and accrued and unpaid interest, if any, on all debt securities of that series. Before a judgment
or decree for payment of the money due has been obtained with respect to debt securities of any series, the holders of a majority
in principal amount of the outstanding debt securities of that series (or, at a meeting of holders of such series at which a quorum
is present, the holders of a majority in principal amount of the debt securities of such series represented at such meeting) may
rescind and annul the acceleration if all events of default, other than the non-payment of accelerated principal, premium, if
any, and interest, if any, with respect to debt securities of that series, have been cured or waived as provided in the applicable
indenture (including payments or deposits in respect of principal, premium or interest that had become due other than as a result
of such acceleration). We refer you to the prospectus supplement relating to any series of debt securities that are discount securities
for the particular provisions relating to acceleration of a portion of the principal amount of such discount securities upon the
occurrence of an event of default.
Subject to the terms
of the indentures, if an event of default under an indenture shall occur and be continuing, the debenture trustee will be under
no obligation to exercise any of its rights or powers under such indenture at the request or direction of any of the holders of
the applicable series of debt securities, unless such holders have offered the debenture trustee reasonable indemnity. The holders
of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the debenture trustee, or exercising any trust or power conferred
on the debenture trustee, with respect to the debt securities of that series, provided that:
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the direction so given by the holder is not in conflict with
any law or the applicable indenture; and
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subject to its duties under the Trust Indenture Act, the debenture
trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders
not involved in the proceeding.
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A holder of the debt
securities of any series will only have the right to institute a proceeding under the indentures or to appoint a receiver or trustee,
or to seek other remedies if:
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the holder previously has given written notice to the debenture
trustee of a continuing event of default with respect to that series;
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the holders of at least a majority in aggregate principal amount
of the outstanding debt securities of that series have made written request, and such holders have offered reasonable indemnity
to the debenture trustee to institute the proceeding as trustee; and
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the debenture trustee does not institute the proceeding, and
does not receive from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series
(or at a meeting of holders of such series at which a quorum is present, the holders of a majority in principal amount of
the debt securities of such series represented at such meeting) other conflicting directions within 60 days after the notice,
request and offer.
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These limitations
do not apply to a suit instituted by a holder of debt securities if we default in the payment of the principal, premium, if any,
or interest on, the debt securities.
We will periodically
file statements with the applicable debenture trustee regarding our compliance with specified covenants in the applicable indenture.
Modification of Indenture; Waiver
The debenture trustee
and we may change the applicable indenture without the consent of any holders with respect to specific matters, including:
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to fix any ambiguity, defect or inconsistency in the indenture;
and
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to change anything that does not materially adversely affect
the interests of any holder of debt securities of any series issued pursuant to such indenture.
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In addition, under
the indentures, the rights of holders of a series of debt securities may be changed by us and the debenture trustee with the written
consent of the holders of at least a majority in aggregate principal amount of the outstanding debt securities of each series
(or, at a meeting of holders of such series at which a quorum is present, the holders of a majority in principal amount of the
debt securities of such series represented at such meeting) that is affected. However, the debenture trustee and we may make the
following changes only with the consent of each holder of any outstanding debt securities affected:
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extending the fixed maturity of the series of debt securities;
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reducing the principal amount, reducing the rate of or extending
the time of payment of interest, or any premium payable upon the redemption of any debt securities;
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reducing the principal amount of discount securities payable
upon acceleration of maturity;
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making the principal of or premium or interest on any debt security
payable in currency other than that stated in the debt security; or
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reducing the percentage of debt securities, the holders of which
are required to consent to any amendment or waiver.
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Except for certain
specified provisions, the holders of at least a majority in principal amount of the outstanding debt securities of any series
(or, at a meeting of holders of such series at which a quorum is present, the holders of a majority in principal amount of the
debt securities of such series represented at such meeting) may on behalf of the holders of all debt securities of that series
waive our compliance with provisions of the indenture. The holders of a majority in principal amount of the outstanding debt securities
of any series may on behalf of the holders of all the debt securities of such series waive any past default under the indenture
with respect to that series and its consequences, except a default in the payment of the principal of, premium or any interest
on any debt security of that series or in respect of a covenant or provision, which cannot be modified or amended without the
consent of the holder of each outstanding debt security of the series affected; provided, however, that the holders of a majority
in principal amount of the outstanding debt securities of any series may rescind an acceleration and its consequences, including
any related payment default that resulted from the acceleration.
Discharge
Each indenture provides
that we can elect to be discharged from our obligations with respect to one or more series of debt securities, except for obligations
to:
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the transfer or exchange of debt securities of the series;
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replace stolen, lost or mutilated debt securities of the series;
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maintain paying agencies;
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hold monies for payment in trust;
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compensate and indemnify the trustee; and
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appoint any successor trustee.
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In order to exercise
our rights to be discharged with respect to a series, we must deposit with the trustee money or government obligations sufficient
to pay all the principal of, the premium, if any, and interest on, the debt securities of the series on the dates payments are
due.
Form, Exchange, and Transfer
We will issue the
debt securities of each series only in fully registered form without coupons and, unless we otherwise specify in the applicable
prospectus supplement, in denominations of $1,000 and any integral multiple thereof. The indentures provide that we may issue
debt securities of a series in temporary or permanent global form and as book-entry securities that will be deposited with, or
on behalf of, The Depository Trust Company or another depositary named by us and identified in a prospectus supplement with respect
to that series.
At the option of the
holder, subject to the terms of the indentures and the limitations applicable to global securities described in the applicable
prospectus supplement, the holder of the debt securities of any series can exchange the debt securities for other debt securities
of the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject to the terms
of the indentures and the limitations applicable to global securities set forth in the applicable prospectus supplement, holders
of the debt securities may present the debt securities for exchange or for registration of transfer, duly endorsed or with the
form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the office of the security
registrar or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities
that the holder presents for transfer or exchange or in the applicable indenture, we will make no service charge for any registration
of transfer or exchange, but we may require payment of any taxes or other governmental charges.
We will name in the
applicable prospectus supplement the security registrar, and any transfer agent in addition to the security registrar, that we
initially designate for any debt securities. We may at any time designate additional transfer agents or rescind the designation
of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required
to maintain a transfer agent in each place of payment for the debt securities of each series.
If we elect to redeem
the debt securities of any series, we will not be required to:
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issue, register the transfer of, or exchange any debt securities
of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption
of any debt securities that may be selected for redemption and ending at the close of business on the day of the mailing;
or
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register the transfer of or exchange any debt securities so
selected for redemption, in whole or in part, except the unredeemed portion of any debt securities we are redeeming in part.
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Information Concerning the Debenture
Trustee
The debenture trustee,
other than during the occurrence and continuance of an event of default under the applicable indenture, undertakes to perform
only those duties as are specifically set forth in the applicable indenture. Upon an event of default under an indenture, the
debenture trustee under such indenture must use the same degree of care as a prudent person would exercise or use in the conduct
of his or her own affairs. Subject to this provision, the debenture trustee is under no obligation to exercise any of the powers
given it by the indentures at the request of any holder of debt securities unless it is offered reasonable security and indemnity
against the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise
indicate in the applicable prospectus supplement, we will make payment of the interest on any debt securities on any interest
payment date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close
of business on the regular record date for the interest.
We will pay principal
of and any premium and interest on the debt securities of a particular series at the office of the paying agents designated by
us, except that unless we otherwise indicate in the applicable prospectus supplement, will we make interest payments by check
which we will mail to the holder. Unless we otherwise indicate in a prospectus supplement, we will designate the corporate trust
office of the debenture trustee in the City of New York as our sole paying agent for payments with respect to debt securities
of each series. We will name in the applicable prospectus supplement any other paying agents that we initially designate for the
debt securities of a particular series. We will maintain a paying agent in each place of payment for the debt securities of a
particular series.
All money we pay to
a paying agent or the debenture trustee for the payment of the principal of or any premium or interest on any debt securities
which remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid
to us, and the holder of the security thereafter may look only to us for payment thereof.
Governing Law
The indentures and
the debt securities will be governed by and construed in accordance with the laws of the State of New York, except to the extent
that the Trust Indenture Act is applicable.
Subordination of Subordinated Debt
Securities
Our obligations pursuant
to any subordinated debt securities will be unsecured and will be subordinate and junior in priority of payment to certain of
our other indebtedness to the extent described in a prospectus supplement. The subordinated indenture does not limit the amount
of senior indebtedness we may incur. It also does not limit us from issuing any other secured or unsecured debt.
DESCRIPTION
OF WARRANTS
General
We may issue warrants
to purchase shares of our common stock, preferred stock and/or debt securities in one or more series together with other securities
or separately, as described in the applicable prospectus supplement. Below is a description of certain general terms and provisions
of the warrants that we may offer. Particular terms of the warrants will be described in the warrant agreements and the prospectus
supplement relating to the warrants.
The applicable prospectus
supplement will contain, where applicable, the following terms of and other information relating to the warrants:
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the specific designation and aggregate number of, and the price
at which we will issue, the warrants;
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the currency or currency units in which the offering price,
if any, and the exercise price are payable;
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the designation, amount and terms of the securities purchasable
upon exercise of the warrants;
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if applicable, the exercise price for shares of our common stock
and the number of shares of common stock to be received upon exercise of the warrants;
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if applicable, the exercise price for shares of our preferred
stock, the number of shares of preferred stock to be received upon exercise, and a description of that series of our preferred
stock;
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if applicable, the exercise price for our debt securities, the
amount of debt securities to be received upon exercise, and a description of that series of debt securities;
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the date on which the right to exercise the warrants will begin
and the date on which that right will expire or, if you may not continuously exercise the warrants throughout that period,
the specific date or dates on which you may exercise the warrants;
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whether the warrants will be issued in fully registered form
or bearer form, in definitive or global form or in any combination of these forms, although, in any case, the form of a warrant
included in a unit will correspond to the form of the unit and of any security included in that unit;
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any applicable material U.S. federal income tax consequences;
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the identity of the warrant agent for the warrants and of any
other depositaries, execution or paying agents, transfer agents, registrars or other agents;
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the proposed listing, if any, of the warrants or any securities
purchasable upon exercise of the warrants on any securities exchange;
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if applicable, the date from and after which the warrants and
the common stock, preferred stock and/or debt securities will be separately transferable;
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if applicable, the minimum or maximum amount of the warrants
that may be exercised at any one time;
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information with respect to book-entry procedures, if any;
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the anti-dilution provisions of the warrants, if any;
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any redemption or call provisions;
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whether the warrants may be sold separately or with other securities
as parts of units; and
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any additional terms of the warrants, including terms, procedures
and limitations relating to the exchange and exercise of the warrants.
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Outstanding Public Warrants
As of May 21, 2015,
we had outstanding public warrants to acquire 5,750,000 shares of our Common Stock at an exercise price of $5.00 per share, subject
to certain adjustments. The warrants will expire February 27, 2016 on the date that is the earlier of (i) or (ii) the forty-fifth
(45th) day following the date that the Company’s Common Stock closes at or above $6.25 per share for 20 out of 30 trading
days commencing on the effective date.
Holders of our public warrants will be only
able to exercise the warrants for cash and only if we have an effective registration statement covering the shares of Common Stock
issuable upon exercise of the warrants and a current prospectus relating to such Common Stock and, such shares of Common Stock
are qualified for sale or exempt from qualification under the applicable securities laws of the states in which the various holders
of warrants reside. Although we have undertaken in the warrant agreement, and therefore have a contractual obligation, to use
our best efforts to maintain an effective registration statement covering the shares of Common Stock issuable upon exercise of
the warrants, and we intend to comply with our undertaking, we cannot assure you that we will be able to do so. Proceeds of the
exercise of the warrants will be allocated 49.04% to the former members of ONE Group and to a Liquidating Trust established for
the benefit of former holders of membership interests of ONE Group (including persons who exercise previously outstanding warrants
to acquire membership interests of ONE Group) and 50.96% to the Company.
The warrants are issued in registered form
under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder to extend the exercise period, reduce
exercise price, cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least a
majority of the then outstanding public warrants in order to make any change that adversely affects the interests of the registered
holders. The material provisions of the warrants are set forth herein and a copy of the warrant agreement has been filed as an
exhibit to the registration statement for our initial public offering. We have agreed not to reduce the warrant exercise period
unless it is approved by the holders of all then outstanding warrants.
The exercise price and number of shares of
Common Stock issuable on exercise of the warrants may be adjusted in certain circumstances, including in the event of a stock
dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, the warrants will
not be adjusted for issuances of Common Stock at a price below their respective exercise prices.
Once the warrants become exercisable, the warrants
may be exercised upon surrender of the warrant certificate on or before the expiration date at the offices of the warrant agent,
with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full
payment of the exercise price, by certified or official bank check payable to us, for the number of warrants being exercised.
The warrant holders do not have the rights or privileges of holders of Common Stock and any voting rights until they exercise
their warrants and receive shares of Common Stock. After the issuance of shares of Common Stock upon exercise of the warrants,
each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
No fractional shares of Common Stock will be
issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest
in a share, we will, upon exercise, round up to the nearest whole number the number of shares of Common Stock to be issued to
the warrant holder.
Transfer Agent and Registrar
The transfer agent
and registrar for our warrants is Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New York 10004.
Stock Exchange Listing
Our warrants are quoted
for trading on the OTC Markets OTCQB tier, or OTCQB, of the OTC Markets Group Inc., an over-the-counter quotation system, under
the symbol “STKSW.”
DESCRIPTION
OF RIGHTS
General
We may issue rights
to our stockholders to purchase shares of our common stock, preferred stock or the other securities described in this prospectus.
We may offer rights separately or together with one or more additional rights, debt securities, preferred stock, common stock,
warrants or purchase contracts, or any combination of those securities in the form of units, as described in the applicable prospectus
supplement. Each series of rights will be issued under a separate rights agreement to be entered into between us and a bank or
trust company, as rights agent. The rights agent will act solely as our agent in connection with the certificates relating to
the rights of the series of certificates and will not assume any obligation or relationship of agency or trust for or with any
holders of rights certificates or beneficial owners of rights. The following description sets forth certain general terms and
provisions of the rights to which any prospectus supplement may relate. The particular terms of the rights to which any prospectus
supplement may relate and the extent, if any, to which the general provisions may apply to the rights so offered will be described
in the applicable prospectus supplement. To the extent that any particular terms of the rights, rights agreement or rights certificates
described in a prospectus supplement differ from any of the terms described below, then the terms described below will be deemed
to have been superseded by that prospectus supplement. We encourage you to read the applicable rights agreement and rights certificate
for additional information before you decide whether to purchase any of our rights.
We will provide in
a prospectus supplement the following terms of the rights being issued:
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the date of determining the stockholders entitled to the rights
distribution;
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the aggregate number of shares of common stock, preferred stock
or other securities purchasable upon exercise of the rights;
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the aggregate number of rights issued;
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whether the rights are transferrable and the date, if any, on
and after which the rights may be separately transferred;
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the date on which the right to exercise the rights will commence,
and the date on which the right to exercise the rights will expire;
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the method by which holders of rights will be entitled to exercise;
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the conditions to the completion of the offering, if any;
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the withdrawal, termination and cancellation rights, if any;
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whether there are any backstop or standby purchaser or purchasers
and the terms of their commitment, if any;
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whether stockholders are entitled to oversubscription rights,
if any;
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any applicable material U.S. federal income tax considerations;
and
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any other terms of the rights, including terms, procedures and
limitations relating to the distribution, exchange and exercise of the rights, as applicable.
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Each right will entitle
the holder of rights to purchase for cash the principal amount of shares of common stock, preferred stock or other securities
at the exercise price provided in the applicable prospectus supplement. Rights may be exercised at any time up to the close of
business on the expiration date for the rights provided in the applicable prospectus supplement.
Holders may exercise
rights as described in the applicable prospectus supplement. Upon receipt of payment and the rights certificate properly completed
and duly executed at the corporate trust office of the rights agent or any other office indicated in the prospectus supplement,
we will, as soon as practicable, forward the shares of common stock, preferred stock or other securities, as applicable, purchasable
upon exercise of the rights. If less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed
securities directly to persons other than stockholders, to or through agents, underwriters or dealers or through a combination
of such methods, including pursuant to standby arrangements, as described in the applicable prospectus supplement.
Rights Agent
The rights agent for
any rights we offer will be set forth in the applicable prospectus supplement.
DESCRIPTION
OF PURCHASE CONTRACTS
We may issue purchase
contracts, including contracts obligating holders to purchase from us, and for us to sell to holders, a specific or variable number
of our debt securities, shares of common stock, preferred stock, warrants or rights, or securities of an entity unaffiliated with
us, or any combination of the above, at a future date or dates. Alternatively, the purchase contracts may obligate us to purchase
from holders, and obligate holders to sell to us, a specific or variable number of our debt securities, shares of common stock,
preferred stock, warrants, rights or other property, or any combination of the above. The price of the securities or other property
subject to the purchase contracts may be fixed at the time the purchase contracts are issued or may be determined by reference
to a specific formula described in the purchase contracts. We may issue purchase contracts separately or as a part of units each
consisting of a purchase contract and one or more of our other securities described in this prospectus or securities of third
parties, including U.S. Treasury securities, securing the holder’s obligations under the purchase contract. The purchase
contracts may require us to make periodic payments to holders or vice versa and the payments may be unsecured or pre-funded on
some basis. The purchase contracts may require holders to secure the holder’s obligations in a manner specified in the applicable
prospectus supplement.
The applicable prospectus
supplement will describe the terms of any purchase contracts in respect of which this prospectus is being delivered, including,
to the extent applicable, the following:
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whether the purchase contracts obligate the holder or us to
purchase or sell, or both purchase and sell, the securities subject to purchase under the purchase contract, and the nature
and amount of each of those securities, or the method of determining those amounts;
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whether the purchase contracts are to be prepaid;
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whether the purchase contracts are to be settled by delivery,
or by reference or linkage to the value, performance or level of the securities subject to purchase under the purchase contract;
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any acceleration, cancellation, termination or other provisions
relating to the settlement of the purchase contracts;
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any applicable material U.S. federal income tax considerations;
and
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whether the purchase contracts will be issued in fully registered
or global form.
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The preceding description
sets forth certain general terms and provisions of the purchase contracts to which any prospectus supplement may relate. The particular
terms of the purchase contracts to which any prospectus supplement may relate and the extent, if any, to which the general provisions
may apply to the purchase contracts so offered will be described in the applicable prospectus supplement. To the extent that any
particular terms of the purchase contracts described in a prospectus supplement differ from any of the terms described above,
then the terms described above will be deemed to have been superseded by that prospectus supplement. We encourage you to read
the applicable purchase contract for additional information before you decide whether to purchase any of our purchase contracts.
DESCRIPTION
OF UNITS
The following description,
together with the additional information that we include in any applicable prospectus supplements summarizes the material terms
and provisions of the units that we may offer under this prospectus. While the terms we have summarized below will apply generally
to any units that we may offer under this prospectus, we will describe the particular terms of any series of units in more detail
in the applicable prospectus supplement. The terms of any units offered under a prospectus supplement may differ from the terms
described below.
We will incorporate
by reference from reports that we file with the SEC, the form of unit agreement that describes the terms of the series of units
we are offering, and any supplemental agreements, before the issuance of the related series of units. The following summaries
of material terms and provisions of the units are subject to, and qualified in their entirety by reference to, all the provisions
of the unit agreement and any supplemental agreements applicable to a particular series of units. We urge you to read the applicable
prospectus supplements related to the particular series of units that we may offer under this prospectus, as well as any related
free writing prospectuses and the complete unit agreement and any supplemental agreements that contain the terms of the units.
General
We may issue units
consisting of common stock, preferred stock, one or more debt securities, warrants, rights or purchase contacts for the purchase
of common stock, preferred stock and/or debt securities in one or more series, in any combination. Each unit will be issued so
that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the
rights and obligations of a holder of each security included in the unit. The unit agreement under which a unit is issued may
provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before
a specified date.
We will describe in
the applicable prospectus supplement the terms of the series of units being offered, including:
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the designation and terms of the units and of the securities
comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
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any provisions of the governing unit agreement that differ from
those described below; and
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any provisions for the issuance, payment, settlement, transfer
or exchange of the units or of the securities comprising the units.
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The provisions described
in this section, as well as those set forth in any prospectus supplement or as described under “Description of Common Stock,”
“Description of Preferred Stock,” “Description of Debt Securities,” “Description of Warrants,”
“Description of Rights” and “Description of Purchase Contracts” will apply to each unit, as applicable,
and to any common stock, preferred stock, debt security, warrant, right or purchase contract included in each unit, as applicable.
Unit Agent
The name and address
of the unit agent for any units we offer will be set forth in the applicable prospectus supplement.
Issuance in Series
We may issue units
in such amounts and in such numerous distinct series as we determine.
Enforceability of Rights by Holders
of Units
Each unit agent will
act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship of agency or trust
with any holder of any unit. A single bank or trust company may act as unit agent for more than one series of units. A unit agent
will have no duty or responsibility in case of any default by us under the applicable unit agreement or unit, including any duty
or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a unit may, without
the consent of the related unit agent or the holder of any other unit, enforce by appropriate legal action its rights as holder
under any security included in the unit.
CERTAIN
PROVISIONS OF DELAWARE LAW AND OF THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AND BYLAWS
Anti-Takeover Provisions
The provisions of Delaware law and our amended
and restated certificate of incorporation and bylaws could discourage or make it more difficult to accomplish a proxy contest
or other change in our management or the acquisition of control by a holder of a substantial amount of our voting stock. It is
possible that these provisions could make it more difficult to accomplish, or could deter, transactions that stockholders may
otherwise consider to be in their best interests or in our best interests. These provisions are intended to enhance the likelihood
of continuity and stability in the composition of our board of directors and in the policies formulated by the board of directors
and to discourage certain types of transactions that may involve an actual or threatened change of our control. These provisions
are designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain tactics that may be
used in proxy fights. Such provisions also may have the effect of preventing changes in our management.
Delaware Statutory
Business Combinations Provision
We are subject to
Section 203 of the Delaware General Corporation Law. This statute regulating corporate takeovers prohibits a Delaware corporation
from engaging in any business combination with any interested stockholder for three years following the date that the stockholder
became an interested stockholder, unless:
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prior to the date of the transaction, the board of directors
of the corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder;
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upon completion of the transaction that resulted in the
interested stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of shares outstanding
(a) shares owned by persons who are directors and also officers, and (b) shares owned
by employee stock plans in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a tender or
exchange offer; or
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on or subsequent to the date of the transaction, the business
combination is approved by the board of directors and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote of at least
66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.
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Generally, a business
combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder.
An interested stockholder is any person who, together with such person’s affiliates and associates (i) owns 15% or more
of a corporation’s voting securities or (ii) is an affiliate or associate of a corporation and was the owner of 15% or more
of the corporation’s voting securities at any time within the three year period immediately preceding a business combination
of the corporation governed by Section 203. We expect the existence of this provision to have an anti-takeover effect with respect
to transactions our board of directors does not approve in advance. We also anticipate that Section 203 may discourage takeover
attempts that might result in a premium over the market price for the shares of Common Stock held by our stockholders.
Classified Board of Directors;
Removal of Directors for Cause
Pursuant to our amended
and restated certificate of incorporation and bylaws, our board of directors is divided into three classes, with the term of office
of the first class to expire at the first annual meeting of stockholders following the initial classification of directors, the
term of office of the second class to expire at the second annual meeting of stockholders following the initial classification
of directors, and the term of office of the third class to expire at the third annual meeting of stockholders following the initial
classification of directors. At each annual meeting of stockholders, directors elected to succeed those directors whose terms
expire, other than directors elected by the holders of any series of preferred stock under specified circumstances, will be elected
for a three-year term of office. All directors elected to our classified board of directors will serve until the election and
qualification of their respective successors or their earlier death, resignation, retirement, disqualification or removal. Members
of the board of directors may only be removed for cause and only by the affirmative vote of holders of a majority of the voting
power of all then outstanding shares of capital stock entitled to vote generally in the election of directors, voting as a single
class. These provisions are likely to increase the time required for stockholders to change the composition of the board of directors.
For example, at least two annual meetings will be necessary for stockholders to effect a change in a majority of the members of
the board of directors.
Advance Notice Provisions
for Stockholder Proposals and Stockholder Nominations of Directors
Our bylaws provide
that, for nominations to the board of directors or for other business to be properly brought by a stockholder before a meeting
of stockholders, the stockholder must first have given timely notice of the proposal in writing to our Secretary. For an annual
meeting, a stockholder’s notice generally must be delivered not less than 90 days nor more than 120 days prior to the first
anniversary of the previous year’s annual meeting date. For a special meeting, the notice must generally be delivered not
earlier than the 10th day following the day on which public announcement of the meeting is first made. Detailed requirements as
to the form of the notice and information required in the notice are specified in the bylaws. If it is determined that business
was not properly brought before a meeting in accordance with our bylaw provisions, such business will not be conducted at the
meeting.
Special Meetings of Stockholders
Special meetings
of the stockholders may be called only by the Chairman of the board of directors, the Chief Executive Officer or President, or
our board of directors pursuant to a resolution adopted by a majority of the total number of directors.
No Stockholder Action by
Written Consent
Any action to be
effected by our stockholders must be effected at a duly called annual or special meeting of the stockholders.
Limitation of Liability and Indemnification
Our amended and restated
certificate of incorporation and our bylaws provide that each person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative by reason of the fact that he or she is or was one of our directors or officers or, while one
of our directors or officers, is or was serving at our request as a director, officer, or employee or agent of another corporation,
or of a partnership, joint venture, trust or other enterprise or nonprofit entity, including service with respect to an employee
benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee
or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless
by us to the fullest extent authorized by the Delaware General Corporation Law against all liability and loss suffered and expenses
(including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such.
Section 145
of the Delaware General Corporation Law permits a corporation to indemnify any director or officer of the corporation against
expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in
connection with any action, suit or proceeding brought by reason of the fact that such person is or was a director or officer
of the corporation, if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation, and, with respect to any criminal action or proceeding, if he or she had no reasonable
cause to believe his or her conduct was unlawful. In a derivative action (i.e., one brought by or on behalf of the corporation),
indemnification may be provided only for expenses actually and reasonably incurred by any director or officer in connection with
the defense or settlement of such an action or suit if such person acted in good faith and in a manner that he or she reasonably
believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be provided
if such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the Delaware Chancery
Court or the court in which the action or suit was brought shall determine that such person is fairly and reasonably entitled
to indemnity for such expenses despite such adjudication of liability.
Pursuant to Section 102(b)(7)
of the Delaware General Corporation Law, Article Eighth of our amended and restated certificate of incorporation eliminates the
liability of a director to us or our stockholders for monetary damages for such a breach of fiduciary duty as a director, except
for liabilities arising:
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from any breach of the director’s duty of loyalty to us
or our stockholders;
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from acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
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under Section 174 of the Delaware General Corporation Law;
and
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from any transaction from which the director derived an improper
personal benefit.
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We have entered into
indemnification agreements with our directors and certain officers, in addition to the indemnification provided in our amended
and restated certificate of incorporation and our bylaws, and intend to enter into indemnification agreements with any new directors
and executive officers in the future. We have purchased and intend to maintain insurance on behalf of any person who is or was
a director or officer against any loss arising from any claim asserted against him or her and incurred by him or her in any such
capacity, subject to certain exclusions.
The foregoing discussion
of our amended and restated certificate of incorporation, bylaws, indemnification agreements, indemnity agreement, and Delaware
law is not intended to be exhaustive and is qualified in its entirety by such amended and restated certificate of incorporation,
bylaws, indemnification agreements, indemnity agreement, or law.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore, unenforceable.
LEGAL
MATTERS
Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., New York, New York, will pass upon the validity of the issuance of the securities to be offered
by this prospectus.
EXPERTS
The financial statements
incorporated by reference in this prospectus and elsewhere in the registration statement have been so incorporated by reference
in reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm
as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We are subject to
the reporting requirements of the Securities Exchange Act of 1934, as amended, and file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may read and copy these reports, proxy statements and other information
at the SEC’s public reference facilities at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You can request copies
of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more
information about the operation of the public reference facilities. SEC filings are also available at the SEC’s web site
at http://www.sec.gov.
This prospectus is
only part of a registration statement on Form S-3 that we have filed with the SEC under the Securities Act of 1933, as amended,
and therefore omits certain information contained in the registration statement. We have also filed exhibits and schedules with
the registration statement that are excluded from this prospectus, and you should refer to the applicable exhibit or schedule
for a complete description of any statement referring to any contract or other document. You may inspect a copy of the registration
statement, including the exhibits and schedules, without charge, at the public reference room or obtain a copy from the SEC upon
payment of the fees prescribed by the SEC.
We also maintain
a website at www.togrp.com, through which you can access our SEC filings. The information set forth on our website is not part
of this prospectus.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The SEC allows us
to “incorporate by reference” information that we file with them. Incorporation by reference allows us to disclose
important information to you by referring you to those other documents. The information incorporated by reference is an important
part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information.
We filed a registration statement on Form S-3 under the Securities Act of 1933, as amended, with the SEC with respect to the securities
we may offer pursuant to this prospectus. This prospectus omits certain information contained in the registration statement, as
permitted by the SEC. You should refer to the registration statement, including the exhibits, for further information about us
and the securities we may offer pursuant to this prospectus. Statements in this prospectus regarding the provisions of certain
documents filed with, or incorporated by reference in, the registration statement are not necessarily complete and each statement
is qualified in all respects by that reference. Copies of all or any part of the registration statement, including the documents
incorporated by reference or the exhibits, may be obtained upon payment of the prescribed rates at the offices of the SEC listed
above in “Where You Can Find More Information.” The documents we are incorporating by reference are:
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our Annual Report on Form 10-K for the fiscal year ended December 31,
2014 that we filed with the SEC on March 31, 2015, and as amended on Form 10-K/A, filed with the SEC on April 1, 2015;
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the portions of our definitive proxy statement on Schedule 14A
filed on April 30, 2015 that are deemed “filed” with the SEC under the Exchange Act;
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our Quarterly Report on Form 10-Q that we filed with the SEC on May 15, 2015;
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our Current Reports on Form 8-K that we filed with the SEC on
January 12, 2015, March 16, 2015, March 31, 2015, April 21, 2015, May 7, 2015, May 14, 2015 and May 19, 2015 (except
for the information furnished under Items 2.02 or 7.01 and the exhibits furnished thereto);
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the description of our common stock contained in our Registration
Statement on Form 8-A filed on May 6, 2015, including any amendment or report filed for the purpose of updating such description;
and
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all reports and other documents subsequently filed by us pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this prospectus and prior to the termination
or completion of the offering of securities under this prospectus shall be deemed to be incorporated by reference in this
prospectus and to be a part hereof from the date of filing such reports and other documents.
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The SEC file number
for each of the documents listed above filed prior to May 4, 2015 is 000-52651 and filed on or after May 4, 2015 is 001-37379.
In addition, all
reports and other documents filed by us pursuant to the Exchange Act after the date of the initial registration statement and
prior to effectiveness of the registration statement shall be deemed to be incorporated by reference into this prospectus.
Any statement contained
in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed
to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or any
other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the
statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part
of this prospectus.
You may request,
orally or in writing, a copy of any or all of the documents incorporated herein by reference. These documents will be provided
to you at no cost, by contacting:
The ONE Group Hospitality,
Inc.
411
West 14
th
Street, 2
nd
Floor
New York, NY 10014
Attention: Corporate
Secretary
Telephone: (646) 624-2400
You may also access
these documents on our website, http://www.togrp.com.
You should rely only
on information contained in, or incorporated by reference into, this prospectus and any prospectus supplement. We have not authorized
anyone to provide you with information different from that contained in this prospectus or incorporated by reference in this prospectus.
We are not making offers to sell the securities in any jurisdiction in which such an offer or solicitation is not authorized or
in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such
offer or solicitation.
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