Andrew Wiederhorn - President and CEO Ron Roe - CFO.

Analysts:.

Good afternoon, ladies and gentlemen, and thank you for standing-by. Welcome to the FAT Brands Inc. First Quarter 2018 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. The lines will be open for your questions following the presentation. Please note that this conference is being recorded today, May 9, 2018.

On the call today from FAT Brands are Andy Wiederhorn, President and Chief Executive Officer and Ron Roe, Chief Financial Officer. I would now like to turn the call over to Mr. Ron Roe to being..

Thank you, operator and good afternoon, everyone. By now you should all have access to our earnings release which can be found on our Investor Relations website at ir.fatbrands.com in the press release section. Before we begin I need to remind everyone that part of our discussion today will include forward-looking statements.

These forward-looking statements are not guarantees of future performance and therefore undue reliance should not be placed upon them. Actual results may differ materially from those indicated by these forward-looking statements due to a number of risks and uncertainties.

We do not undertake to update these forward-looking statements at a later date and refer you to today's earnings press release and our recent SEC filings for a more detailed discussion of the risks that could impact future operating results and financial condition.

During today's call we may discuss non-GAAP financial measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Reconciliations to comparable GAAP measures are available in today's earnings release. I would now like to turn the call over to Andy Wiederhorn, President and Chief Executive Officer..

Thank you, Ron> Good afternoon, everyone and thank you all for joining the call today. We are pleased to report first quarter results which were in line with our expectations.

Our Fatburger segment which is comprised of both Fatburger and Buffalo's Express restaurants continue to significantly outpace the industry achieving 6.3% system-wide same-store sales growth in the first quarter including 2.1% in transaction growth. Domestic results were even stronger with U.S.

same-store sales growth for Fatburger of 9.6%, including 3% transaction growth driven by impressive 13.6% same-store sales growth in California, where same-store transactions topped 5%. We are proud of these results and what remains a highly competitive and value focused environment.

Our outperformance of the industry can be attributed to the high quality of our products, continued successful cobranding of Fatburger and Buffalo's Express and strong momentum and delivery and the nationwide rollout of the impossible burger, a plant-based burger that smells, cooks, tastes, and bleeds by fresh grandees.

The Impossible Burger has a popular with our vegan and meat-eating guests alike as the consumer trend towards healthier and plant taste options continues to gain stem. During the quarter we brought on a new President and Chief Operating Officer of the Fatburger Brand, Toni Bianco.

We're thrilled to have Toni on board as we further expand the Fatburger presence worldwide. Our Buffalo's Café segment saw a same-store decline of 0.9% in the first quarter. However, we are pleased to see strong sales in our newest Buffalo's Café restaurant in Hamilton, North Georgia.

This restaurant was relocated to a newly constructed building in late February and is currently running at twice the average new volumes of the restaurant in the old location. Looking ahead, we have several upcoming initiatives that we expect to drive sales this year.

We are excited about the upcoming pork fest summer campaign highlighting pork in several different offerings. Additionally, we will be rolling out in a media campaign in the second quarter for all our casual dining prints which will incorporate TV, print and digital messaging highlighting a robust limited time offerings calendar.

Lastly, we are currently testing to go packaging and third-party delivery for Ponderosa and Bonanza which we expect to rollout later this year and we've already introduced delivery at Buffalo's Café where available.

We continue to be very pleased with successful acquisition of the Ponderosa and Bonanza Steakhouse brands and their smooth integration into our system. During the quarter, same-store sales grew 1.2% system-wide. Our Puerto Rico locations which were heavily impacted in 2017 by Hurricanes Maria and Irma have performed extremely well this year.

We currently have 24 stores open in Puerto Rico. One is under construction following the hurricanes and two, closed permanently. These stores have grown same-store sales by 16.7% year-to-date.

During the first quarter, we began to realize significant cost savings in our Ponderosa segment, including purchasing power savings enabled by our platform and we continue to expect full synergies to be realized beginning in the second quarter, anticipated synergies contribute to approximately $3 million in incremental EBITDA on an annualized basis.

We have a very active development pipeline across our portfolio of brands. During the first quarter, franchises opened three of its four locations, including two co-branded Fatburger Buffalo's Express locations and two Buffalo's Café.

We ended the quarter with 279 total restaurants across all of our brands, subsequent to the end of the quarter, our franchises opened first Tokyo location, which is a co-branded Fatburger Buffalo's Express, just steps away from the busiest intersection in the world should Shibuya classy.

As well as the second Philippine location, a co-branded Fatburger Buffalo's Express in the SM Mall of Asia, Pasay City. Our franchises remain on track to open approximately 25 units in 2018 across many markets including California, Texas, Canada, Japan, the Philippines, Qatar, the UAE, Pakistan, Scotland, China and Singapore.

Well, our development pipeline is strong, we continue to actively engage in new development fields. With both new and existing franchises around the world. During the first quarter, we announced international development deals to open co-branded restaurants across both Scotland and Singapore, we expect to open in both markets this year.

Our strong pipeline continues to grow as we cross-sell new brands for our global franchise base, and unprecedented business momentum generates interest from franchises around the world. We believe there is a massive opportunity to consolidate brand on to our platform and we have developed a strong and actionable pipeline of potential acquisitions.

Consumers around the world love American brands, they love burgers, chicken, stake, pizza, coffee and desert, and evaluated potential acquisitions we look for authentic American brands that we can sell with credibility to new franchises around the world. And cross-sell to our existing franchise partners.

We look for brands with long track records of sustainable operating performance and steady cash flows, with healthy franchisee relationships. We target a modest multiple of franchise levels cash flow evaluations to ensure that acquisitions are immediately accretive to our earnings prior to anticipated through synergies, which can be significant.

We believe that the marketplace has many strong brands that could be triple charged through our platform scale and efficiency. I now like to provide an update on our previously announced acquisition of Hurricane Grill and Wings. We are in the process of securing, financing and are is in this final stage of documentation.

The capital we are raising will enable the completion of both the Hurricane acquisition as well as providing dry powder for the future. We expect the Hurricane acquisition to close in the next 30 days, while this is later than we had originally expected when we have announced the deal last year.

We remain excited about this concept, which shares our commitment to providing high quality major order meals and we continue to view Hurricane as a wonderful complement to our Buffalo's Café and Buffalo's Express brands.

Lastly, subsequent to the end of the quarter, we established a credit facility of up to $5 million, for working capital purposes and for repayment of other indebtedness.

In summary, we believe the star brand system is poised for growth, our business momentum is solid and are upcoming sales driving initiatives give us confidence that this momentum will continue throughout the year.

We have a strong and growing development pipeline, our asset wide pipeline is highly scalable, there are a number of attractive brands we are evaluating for acquisition and we are ready to take our growth to the next level.

While we are still not in a position to give formal guidance for 2018, given the uncertainty around the exact timing of the meaning Hurricane acquisition, we do reiterate our forecast on an annualized run rate of a $1.10 share and adjusted cash EBITDA post the Hurricane acquisition and inclusive of expected synergy.

We don't believe it make sense to walk you through the line items of our financials as we don't have comparable data from a year ago. However, please feel free to ask any question about our results in the Q&A. Operator, please open the line for question..

[Operator instructions]. Thank you. Our first quarter comes from the line of Jan Anderson with RL Property [ph]. Please proceed..

Hey, Andy. Thanks for taking my call and congratulations on solid quarter. I know there has been a lot of transitional issues to sort out, as you guys might from being a private to a public company. I would just curious if you could talk about how you see international expansion relative to domestic market.

Is that as a portion of your overall expansion plan, is it a primary driver you see for growth or is it something you seen being secondary?.

Well, international important to us, Jan and it's interesting because prior to the acquisition Ponderosa & Bonanza about 30% of our revenue comes from international, royalties about half of that from Canada and the other half 15% was from the middle east and Asia.

Today it's about 10% because of the acquisition of Ponderosa & Bonanza and it will be even smaller than that with the acquisition of hurricane.

But, from a development pipeline standpoint, we've 300 resources or more and our development pipeline, those are the units that have already even paid by franchise use to the building source and that have to source we'll building of a year about these 25 or 30 sources of years are international. And we have 150 units in that international pipeline.

So, I do think it international we'll continue to play an important role and it will be a material role - I'm separating Canada from that because Canada is already so far with more than 53 stores, but we have - we just open our first store in Tokyo as we talk about earlier and the lines are down the stairs two to three times of stairs and they are doing very large volumes are about to open another store in Beijing.

We have stores coming up in Scotland and Pakistan and Dubai so international is going well..

Okay, great.

And I was wondering if you could give some color regarding the impact of the change to coming standards and how that's going to - how we should think about that relative to your past financials and going forward?.

It's a little bit of the headache and require some stock because we had and we're in the same way with everybody else and it's been a pain for everyone else to factoring having to restate prior years recognition of income from money you've already been paid start to amortize the portion that's allocated to the remaining life of franchise agreements.

Ron can speak up here and give some specifics but it's a few hundred thousand dollars in a direction and it causes us to take the charge and the equity of about $2.5 million for previous recognition that we had to enroll an equity when amortizing over the future. I think Ron quick review on around it's a few hundred thousand dollars a year..

Okay. Thanks. That's helpful. And just finally I think on the last call you had re-innovated your commitment to paying dividend in the common stockholder.

Is that still the plan going forward?.

It is plan, I appreciate you bringing that up. The dividend is important to us to make sure that all the shareholders receive that.

As you know stockholder elected to reinvest its portion of the dividend and its shares and we're going to continue to do that stockholder level, for the one also has the option shortly to be able to either reinvest the dividend in stock or to just receive then in cash.

There will be a filling shortly about that, so we have a dividend that's will plan to become the record that they can attracted if they want. But yes, we've plan to continue to dividend even post-financing, post-acquisition of hurricane something that will be integral to FAT Brands story..

Great. Thanks so much guys..

Thank you..

Thank you. Our next question comes from the line of Greg [ph] the Private Investor. Please proceed..

Hi, good afternoon. I have a number of questions, but I'll start up with the dividend because charges spread up.

Why do you give a dividend is so important?.

Well, I think it's in an asset life model, I mean you have curious is the cash where you can either payout new process to shareholders you can acquire more brand. Well, we are going to continue to be acquisitive, the income distribution to all shareholders as something was part of our IPO and part of our business plan.

We wanted to keep compensation low and reasonable at that end by creating a dividend structure where all shareholders get paid out equally and I fell that that was a far to the majority of shareholders if I could we get some cash flow from the business but not to do this proportionally to do some other way.

To discuss this issue in many times so I think it's just an - it's not a huge number in the greater scheme of things from a cash perspective..

How much cash was bid out in the dividend first time you did it?.

I think like 204 - so the total dividend would be $4.8 million and $0.48 per share on $10 million of shares but stockholder around to 80% of that and like it's take, it shows the dividend in stock by reinvesting, so it was only on an annualized basis it's less than $1 million and on a quarterly basis 240,000 buck..

Have you guys on the math like so curious from there how dilutive fat cutter taking that much in the dividend?.

Well, we're of course happy about today's moving stock price we believe overall and over the long term the stock price will improve significantly.

We know how accretive these acquisitions are that we have in mind and certainly the proof in all of that is printing a few more quarters of earnings and showing that we've acquired these brands and we've created the synergies that we've talked about and at that point if you look at any comparable multiple I think the stock price goes up significantly and the amount of cash we'll pay that as a dividend is really not going to be dilutive on - hopefully, for the premium.

We're certainly not a seller of the shares so you know how that goes off..

Okay, I appreciate you liking the stocking of the dollar today, but it has went public, so I think it's upside okay so what is the growth, I mean you're borrowing now at 15%....

Wait a minute I'm taking the shares at $6 you said taking the cash, I didn't like the stock price I wouldn't take the shares right at the fat cutter level..

I understand. That's fair, but I'm just saying normally you give a dividend support you want to be supportive of stock and people would think at 7% yield that would be enticing but unfortunately not helping so the reason the question is why do it, why dilute the dividend here and why give it a cash and you're paying to borrow? That's….

Well, I think if you were to change our dividend policy that would not be sincere to the shareholders but into the stock balance at the IPO some months ago, only six months.

So, I think we need more performance that has any kind of dividend discussion if we issue a significant number of additional shares because of the acquisitions, it's been a fair game to revisit but right now it's business as usual on all fronts our real focus is to complete the financing, complete the acquisition.

You referenced to the short-term financing that we put in place just to have ample short-term liquidity that will go away with the larger financing that we expect to close in the next few weeks so it's really a short-term facility, but it was important to have it in place..

So, if you're going to close in the next few weeks the large facility why spends the $170,000 on fees and all the other fees associated with getting this and then 15 percentage?.

For the reasons I just said never say never you never know if the financing doesn't close, these things take months to put in place not weeks or days. So, this is something we started in February when we walked away from the previous financing offer because the investor group didn't want us to pay dividends to the public shareholders.

And we put it in place then it took a while to close, we closed it and now we have it available and the company is in the better position because of it and look the dollars in question are sort of insignificant to the greater scheme of things, right.

The company makes a $10 a share over the long run, $11 million on a 10 million shares we're talking about a $170,000 it is what it is..

Okay, got it.

What percentage interest rate are we going to pay or you're going to pay on the next large loan?.

This is a LIBOR plus 900 facilities so it'll be about 11% it's got very low warrant coverage like 5% warrant coverage and I will tell you which is interesting that if you look at the original deal we were compared to do which was very heavy warrant coverage, little bit lower current yield like 8% current yield but very low warrant coverage over the life of the deal as the stock performs like we hope it will, this saves the company like a $100 million it's a really, really efficient facility and the best deal we found and glad we waited because -.

Growing - borrowing?.

The facility will be little bit more than $50 million..

50?.

50, yes..

Okay..

It gives us a lot of room for the acquisition and the ability to increase it from that..

So, 50 at 11% that's got $5.5 million of your interest coverage of cash?.

But only if that money is even borrowed unless you cannot invest it right, you have to dry down all that..

Okay fine so you're going to use so you're only paying for what you…?.

Exactly yeah, right of course..

So just a question about the EBITDA and what you expect so in this first quarter you did 940,000 of EBITDA and you're projecting $11 million of EBITDA I mean it seems like there's a lot of catching up to do….

Let me bridge that for you, let me give you a little bridge so you can understand it and I think hopefully it will helpful and feel free to ask questions if it doesn't make sense. We hope by the end of the second quarter we're really more of a $1.5 million plus per quarter run rate than $1 million per quarter.

And as we get into the third quarter, our run rate should increase to closer to $8 million annually or a $2 million at quarter end and that's based upon several factors. And so, let me just kind of give you a little list here.

One of them is we had some delays in the first quarter of opening some stores that we hope to would get open before March 31st, and so we did recover or receive all of the royalties from those new stores that are planning to open to this year, we still have a full schedule of stores open, when we opened four stores in Q1 yet, we plan to open more than 25 for the year and in fact even closer to 30.

We'll have more stores later which means the royalties will receive going forward on a run rate basis or higher, by a few 100,000 dollars.

Then you have the income recognition from the franchise fees you originally charge the franchisee before there, but open those store now gap has changed as Jan Anderson reference a few minutes ago, and all the reference companies are on the same boat that you now amortize fees that you received a while ago, over the life of the franchise agreement, that is upfront, that puts a little bit of a reduction on those that franchise fee recognition by $100,000 or a $200,000 but again because our franchise sales are actually more robust than we projected and openings are a little bit higher, we projected I think we can't make up for that.

Third, you have some seasonality in some of the brands, everyone knows, that the winter was severe if we were going to East Coast - you more than know it and in the South.

So, we have a little bit of seasonality in the royalties received that we don't receive as much in Q1 as we do in Q2, Q3 and Q4 and so that also smooth out over the life of the year and that helps build our run rate closer to $8 million as we get into Q3.

And then finally there is that a termination of development agreement just a regular part of our business is that franchises pay us a few 100,000 dollars here to a few hundred thousand dollars there to get to development rights for particular markets whether it's a city or state or country they make those deals and they have a certain amount of time to start to building the stores and maintain exclusivity and at certain point in time if they don't maintain exclusivity will terminate their development rights and recognize that income in full, we have already been paid the cash, it's just income recognition of money we have already received.

And in this case, we forecast about a $1 million a year of that kind of termination revenue, we only booked a $150,000 in the first quarter but we plan to book the 4 million over the course of the year so it's a little bit of timing issue there.

So, from a jump in run rate from what you are suggesting as a $1 million a quarter or $4 million up to close to $8 million that's a number of things that I just talked about plus the opening of new stores, that's 25 to 30 new stores that open this year each new store if you assuming averaging the volume of a $1 million and actually Fatburger now is in 1.1 million and Buffalo's are 1.5 million.

If you figure at a 6% royalty that's $60,000 you open and stores its $600,000 you open 30 store it's a million eight, you can do the math, but that's a significant improvement to the revenue side and we have very little marginal expense to add stores in the existing brand.

And then finally with the acquisition of Hurricane brand that's how you go from $8 million to $11 million or a $1.10 a share we believe the post synergies Hurricane will add $3 million to bottom line and we will do it right away like within the first quarter, so I think not - on the word, we'll complete the big financing by the end of the month and I think we'll complete the acquisition immediately thereafter.

And so, by the time we hit Q3, we'll be fully integrated, and we'll reap the run rate of that. Also, Hurricane has six new stores still to open this year so that that number make a little better. Hope that answers your question..

Yeah, that's it. I have two more questions. Since you announced the Hurricane deal, the price of Wings has come down significantly. I don't know I am sure you are aware of that.

Have you backed to that into your numbers, I mean I would think the numbers could even be better?.

Well, sure so think about it this way, we are the franchise where we don't directly benefit from the Wings price, we indirectly benefit, because hopefully customers buy more, or franchisees make more money and healthy lower food costs.

It in of itself just the franchisees becoming part of the - brand system we're going to see 2% to 3% lower food costs because that we have the buying power and the contract negotiations to get them a better deal, so if you a franchise with a $1.5 in sales and your food cost is 30% or $500,000 than you can save three point on a $1.5 that's $45,000 in your pocket that's a huge number to you and you normally make 10% or a $150,000.

So, I think there will, we are not changing our projections, but rather over deliver and under promise, but I think our franchise user going to read the benefit of that and consumers also you guys to have better price point and that's always going for everyone..

Okay. Last question and important one for our shareholder. So, the stock is basically in half less [indiscernible] kind of where we move but with more than half yesterday.

So, couple of questions you've been on the road on a number of times, just wondering what you here when you are out there - why you are not getting better reception - what the issues are? And I know that it's not great management to watch our stock price every day but there is an extent where it's drop and have and there are no apparent reasons, nothing bad has happen, doesn't seems like you straight from what you've promised.

What are your thoughts is going out of those?.

Yes, sure and speaking as the largest shareholder, of course no one cares more than I care. But I really believe that it's a long-term measurement of our performance not a short-term measurement. I know that's easy to say and it's painful to report your clients when IPO market has performed the way has.

But our stock has performed similar to all the other regular offering. So, I think if that something will be as point out.

My job is to get us out of what I call micro gap have right now in terms of the increasing our market gap and increasing our EBITDA and also increasing the flowed until I'm working diligently on the future merger of the stockholder platform was that brand bring that NOL into the business.

So, we're not restricted by only having 20% of this shares flooding.

But simply by emerging and the needs to go the public flowed on both entities will increase the overall public flow which I think will help have been doing a number of conferences and institutional industrial meetings with smaller microcap and small caps fund under it begun to take positions from the stock and continuing to hit the media.

But I really think that if you make a checklist if things that have to happen, we need to print another quarter of earnings, we need to complete the acquisition, complete the financing to show that the synergies work show the roadmap like I just discuss for you. Increasing their earnings power, the business will increase the market gap.

They need that merger to increase the flow. And knowing what I know about our acquisition pipeline which I can't disclose today, but I can tell you it's robust and there is a number of deals we're working on. And our financing that we have lined up we'll address to that nicely.

I think that this will see - this will help the stock price recover and far exceed the offering pricing over the coming few months. So, I'm very, very optimistic about business right now.

Or on a core level our business has never been better, our franchise this have never been happy, and it never made more money which I would little bit able to say with that level but comps 13% when your competition is negatively counting 3% or they're counting positive 1%, I mean we're so far ahead of our competition.

That's very comfortably, now there is core business is just been so well. And when I look at even our core business in Canada where we assist the three stockholders, our franchise partner in that market also and for another brand the casual to any brand which is can't be negatively but is not Produce Company 12% positively.

And so, I really believe that the things we've done at the flagship brand are paying off for a franchise they use, and they are building more source and we happy and it's a positive.

So, I think it's a long answer, but I really think focusing on finishing the balance sheet restructuring, so we can make these acquisitions, grow the EBITDA, like definition if we grow EBITDA and a prior base line multiple for an asset wise franchise or business we want be a microcap any more we'll be a much bigger enterprise.

And of course, this is going to be flow. So, we have to increase the flow..

So, those are the reasons, when you go on the road and you meet the people and then say, I love your story, but….

That can't by a stock I can't be a by a stock I want to see the synergies work first before I buy it. Is there - there isn't any one reason but certainly seen the acquisitions get completed in the financing. Now, look, one the financing emplaces then it's not just the Hurricane acquisition that we're in the middle of at this point.

So, I think that that's you'll see shortly but I think you'll be happy..

All right, I mean I listen, it sounds like you guys are doing the right things, it sounds like you are focuses on the future which is important I mean it is painful to buyers like a 12 and have go to 6 or 5.5 but, I guess at some point, all your work will kicking, I mean like I say is the keep on the tract and some inside or buying with go a long way?.

Yes, I think and just to that point and is that a buying to everyday comment and just as a new public company it took us the full Q1 for report our first quarter so our insides are under back appear the entire time of Q1 and then we immediately became in Q2, inside or trading policy is that you can't trade until - we can't trade within the last two weeks for quarter and we also can't trade until we've reported and two days has passed so I think there will be some insider buying but we've been restricted literally since December 31st or almost since the IPO date we able to do anything and that will change..

All right, good luck. Thank you very much..

Thank you for the questions..

Thank you. [Operator Instructions] Our next question comes from the line of Stephen [ph] with DTC Corp. please proceed..

Good afternoon. Just two very quick questions, can you tell me about if you're successful in closing this financing in the next 30 days, how much of that will go to the Hurricane acquisition? That's the first question and then the second question is some restaurant franchises chains are seeing some wage pressures.

And I'm just wondering if maybe you could address that from what you're hearing from your franchises. And then just a final comment is I'm not sure that increasing the flow is necessarily beneficial to existing shareholders..

Okay. So, first of all Hurricane purchase price is $12.5 million and that agreement has been fell publicly so you can quote up on EDGAR and read it.

What is your second question again?.

The second question is some other competitor….

Wage ….

Wage pressures are you seeing that in markets?.

Sure. Minimum wage, I actively speak on the business channels whenever I get the opportunity, so I'm blowing the face about the voters, the voters for elected officials to foot in and increasing minimum wage and think it's not going to cost customers money.

Operators make between 5% and 15% running these restaurants and it's their livelihood and you can't have a wage; your wages are 30% of your sales right labor is 30% of sales if you increase that $10 wage to $15 so this 50% increase in your wage cost right so that's picking your cost of labor from 30% to 45% that's your entire margin so prices have to go up overtime.

We've seen our franchise partners raise prices, we encourage them to do that, we're coaching them all the time on P&L management because I want them to make money. If they don't money we all know what's going to happen they'll close doors and we'll lose brokers.

So, it's very important that we help coach them the value we have not seen push back from customers about increases in prices that our franchises have taken although we don't have huge increases this year and so far, It's definitely an issue it's been more an issue in some states and others because some states have tipped credits and things like that but we're actively managing issues best we can and as the franchise or - are not our employees..

Okay.

And can you just briefly address this when you mentioned increasing the flow would be beneficial to the stock price it seems that if more people can sell shares then some may decide to sell shares I'm just wondering how does that benefit the stock price?.

So….

So, supply and demand..

Some institutional investors would like to take decision in the stock and believe it's a very reasonable value you compare to where the peer group trade through asset like company so if the peer group pays north of 15 times earnings and we're trading at a much lower multiple, did like to take a position but they have minimum investments.

They want to put $1 million to it, they want to put $2 million to it, they want to own 5% of the company or whatever the number is but they can't find enough shares owing $2 million shares floating.

If we increase the float by just by merging with the fat cutter platform the non - we don't want family members in the fat cutter platform and the FAT Brands platform and then the merger will be a beneficial merger to FAT Brands anyway because it brings the cash - into the entity, so on a dilutive they're not going to do deals dilutive.

Then that float allows more institutional investors to come into the platform..

Okay. Thanks..

Thank you..

Thank you. We have time for one more question. Our last question will come from the line of Martin [ph], a Private Investor. Please proceed..

Hi Andy.

How are you?.

Marty, hi..

Okay. Just want to say number one you did a great job and you answered most of my questions in your opening remark but as a short time investor in FAT Brands in a long-time investor in CCG I know you touched on it, but I just want to get a clear in my head this merger and a last conversation I had with you in the last quarter.

That you mentioned that merger was going to take place in a pretty short time, is that still on target for a short time..

Yeah, absolutely hope to be completed during the year if possible during Q3, if it requires the NASDAQ's approval and we're steps are underway to make that happen, there is various things that you take along and they are going on currently we just had a fat cutter board meeting moving that along last Friday and I hope to go through report about it just soon as possible, but it....

And how that [indiscernible] like was it be like the certain percentage of shares, per shares that..

Yeah, we are - evaluation on the tax asset, from number of the - big NOL, we did not want to get a year full of from shareholders who said that we value the tax asset last year, before the Tax Reform Act pass, so we valued at the old rate now the new rate, so we waited conservatively to do that now, we're in the middle of getting that valued and there is some steps necessary to put in place for the merger in companies and getting NASDAQ's blessing and all that, and so, we are working on all fronts there to get this done as soon as possible..

In the interim is there any chance of a cash dividend to the FCCG shareholders..

There is not presently, because we haven't completed the financing at top brands and FCCG hasn't been paid back but - there is - FAT Brands is not reporting the company, so we don't have….

I know that..

So, we don't have information available not yet..

Okay, thank you..

Thank you very much..

All right. Good luck for everything..

Thank you, operator I think we're finished and turn this back to you..

Thank you. We have reached at the end of our Q&A session, and this will conclude today's teleconference. You may disconnect your line at this time and thank you for your participation..