FIKA

Client Profile

Founded in 2006 and headquartered in New York City, Pachanga, Inc., et al, d/b/a
FIKA (“FIKA” or the “Company”) operates a chain of specialty espresso bars and
restaurants as well as an award-wining chocolate operation. The Swedish concept of
“fika” means “to drink coffee” and the Company was created to represent the
coffee culture in Sweden where taking a break to enjoy several fikas a day is
common tradition. FIKA operates espresso bars at six locations, a bakery and
kitchen, a chocolate factory and conducts catering and e-commerce businesses.

Situation

After several years of organic and steady growth, FIKA carried out a rapid
expansion plan by bringing in an outside investor in 2013 and opening twelve more
stores (for a total of 17 locations) in 2014 and 2015. The expansion plan burdened
FIKA with significant start-up expenses of which the Company looked to fund by
raising follow-on capital from a third party. Unable to obtain additional funding,
the Company rationalized its footprint around its profitable retail locations but
continued to face significant legacy costs from the closed operations and
constrained liquidity. FIKA subsequently looked to evaluate strategic alternatives,
including a sale of the business.

Solution

In order to effectuate a transaction, the Company filed for Chapter 11 bankruptcy
protection in the Southern District of New York in September 2018. SSG was
retained to conduct a comprehensive marketing process and solicit offers from
potential strategic and financial parties. The stalking horse credit bid submitted by
FIKA Acquisitions, LLC was ultimately determined to be the highest and best price
for substantially all of the Company’s assets. SSG’s industry knowledge from prior
transactions and experience with efficient Chapter 11 sale processes enabled the
Company to maximize the value of the assets and emerge from bankruptcy in a
timely manner.