March 15, 2016

Recent Price: $0.84

Target Price: $2.56

Chanticleer

Holdings, Inc. (Nasdaq: HOTR)

Market Data

Fiscal Year December

Industry Restaurant

Market Cap $18.0M

Price/Earnings (ttm) N/A

Price/Book (mrq) 0.72x

Price/Sales (ttm) 0.47x

Insider Ownership 3.6%

Shares Outstanding 21.5M

Equity Float 17.8M

Avg. Volume (3 mo.) 93,720 As of March 15, 2016

Income Statement Snapshot

TTM

Revenue $38.4M

Restaurant EBITDA $2.6M

Balance Sheet Snapshot MRQ

Cash $1.8M

Debt $9.1M

Company Website http://www.chanticleerholdings.com/

Company Overview

Chanticleer Holdings (“HOTR,” “Chanticleer,” or the “Company”), together with its

subsidiaries, owns and operates restaurant brands in the U.S. and internationally. The

Company is a franchisee owner of Hooters® restaurants in international markets

including Australia, South Africa, and Europe, and two Hooters restaurants in the U.S.

The Company also owns and operates Better Burger brands in the fast casual space,

including American Burger Co., BGR the Burger Joint, BT's Burger Joint, and Little

Big Burger, as well as a healthy fast casual concept Just Fresh restaurants in the U.S.

Value Proposition

We are valuing HOTR using 1.0x EV/Sales multiple applied to our 2016 sales estimate

of $62.43 million. This derives a target price of $2.56.

Investment Highlights

2015 acquisitions of Better Burger brands in the fast casual space sets

the stage for strong 2016 results

Normalized restaurant revenue grew 44% YoY to $12.5 million in 3Q15

Cost of sales improvement in most business segments in 3Q15

Company plans to shift its focus from acquisitions to driving profits

Significant franchisee opportunity in Better Burger Space, with 80+

franchises under development agreement for BGR

Exclusive Hooters Franchise rights in certain United States and

International Markets

HOTR is the only way to publicly invest in Hooters of America (HOA)

High traction in fast-casual restaurant chains

We believe that the Company, given its current growth plans and

operating results, will not need to raise additional equity capital

Investment Highlights

2015 acquisitions of Better Burger brands in the fast casual space sets the stage for strong 2016 results.

The below chart shows the significant growth in restaurant locations for HOTR over the past several years.

The main impetus for this growth were acquisitions in the “better burger” category. The acquisitions of BGR

the Burger Joint, BT’s Burger Joint, and Little Big Burger more than doubled company locations in 2015.

In a span of six years, HOTR has grown to 63 locations around the world and its growth strategy is to expand

these brands in the United States and emerging markets through franchising, acquisitions, and organic

growth. These locations give the Company a current annualized run rate of approximately $55 million. In

2016, HOTR expects to open about 8 to 10 new locations domestically and internationally. We expect three

of these locations to be company-owned restaurants domestically and the rest to be franchises, with a primary

focus on international BGR locations.

Normalized restaurant revenue grew 44% YoY to $12.5 million in 3Q15. Total reported revenues, which

include company-operated restaurant sales, franchise fees, and gaming income, grew to $10.3 million, a 10%

increase from last year’s third quarter results of $9.3 million. Company-operated restaurant revenues

increased 14.3% in 3Q15 to $10 million. This figure understates revenue growth significantly; however,

when these revenues were normalized for the temporary administrative period at Hooters Australia and

currency fluctuations, the Company increased its revenues by 44% to $12.5 million in the same period. The

strong revenue growth is primarily from acquisition of “better burger” brands, along with organic growth, as

indicated in the Company’s strong same store sales growth.

During 3Q15, HOTR reported a large one-time, non-cash impairment charge of $4.5 million, along with one-

time expenses related to merger and acquisition expenses. This led to a GAAP net loss per share of $0.33.

Adjusting for one-time expenses lowered the net loss per share to $0.11. The Company also resumed

operational control of its five Hooters locations in Australia during October 2015, and these locations will

once again contribute to GAAP revenue going forward. For 4Q15, management is projecting revenue of $13-

$14 million. This strong QoQ growth is driven by an estimated $1.5 million in revenues from the Company’s

recent acquisition of Little Big Burger and revenue from its Hooters Australia restaurants.

The Company generated strong same store sales growth in 3Q15 in its Fast Casual concepts, as indicated in

the following chart.

Same store sales growth was up a robust 16.2% in the Better Burger Fast Casual segment, Just Fresh same

store sales were up 7.1% and U.S Hooters same store sales were up 3%.

Cost of sales improvement in most business segments in 3Q15. The Company’s cost of sales improved in

many segments of its business in 3Q15. The Better Burger segments cost of sales improved from 36.8% in

3Q14 to 32.9% in 3Q15, while the cost of sales for Just Fresh improved from 36.2% in 3Q14 to 35.2% in

3Q15. Cost of sales improved as a percent of revenue at Hooters restaurants in the United States, South Africa

and other international locations. However, these improvements were offset by higher costs in Australia.

HOTR has divested its Margaritaville operation, so this will not weigh on cost of sales and operating expenses

going forward. We believe that cost of sales and operating expenses will improve in the coming quarters, as

restaurant operations and back office functions are consolidated in the Company’s segments. We believe that

improvement in back office functions will be particularly apparent in the Better Burger segment.

Company plans to shift its focus from acquisitions to driving cash flow. After a series of acquisitions that

began in 2013, the Company aims to drive positive cash flow in 2016. Currently, HOTR has 63 locations and

an estimated $55 million annual revenue run rate. HOTR plans to open 8-10 locations in 2016. The Company

plans to open an additional 3-4 company-owned locations in 2016, with the rest of the increase coming from

franchised operations. With no further planned acquisitions in 2016, the Company is focused on organic

growth and improvements in operating efficiency. HOTR is targeting to move food and beverage costs into

the low 30% range, along with generating cost efficiencies in back office operations. According to the Bureau

of Labor Statistics, wholesale food prices have declined over the past 6-7 months, as shown in the following

chart from the National Restaurant Association:

Declines in food and beverage costs should lead to improvements in cost of sales, and thus also lead to

improvements in EBITDA. The Company believes it can generate restaurant level EBITDA of approximately

$6 to $8 million and overall EBITDA of $1 to $3 million in 2016.

Significant franchisee opportunity in Better Burger Space, with 80+ franchises under development

agreement for BGR. Chanticleer Holdings has rapidly expanded its better burger model since 2013 and has

acquired four brands in the better burger industry. The Company has acquired American Burger Company

(ABC), BGR: The Burger Joint, BT’s Burger Joint and Little Big Burger. With the increasing demand for

fast casual dining, these acquisitions provide HOTR with good potential for strong cash flows from the Better

Burger industry. American Burger Company (ABC) focuses on traditional American food offering with its

signature “Made in America” menu offering. The menu includes signature premium beef burgers, salads,

milk shakes, beer, and wine. ABC has three locations in Charlotte, one location in Smithtown, New York

and one location in South Carolina. The president and COO of ABC have been instrumental in the success

of fast food chain Bojangles.

In March 2015, the Company acquired BGR: The Burger Joint, which was named as the best burger in

Washington D.C. by Business Insider and also has been named as one of America’s Top 10 Chain Burgers

by MSN. The better burger menu is designed to provide the highest quality and includes burger styles like

prime and grilled over an open flame. BGR also has a brand audit underway with Streetsense. BGR has 10

corporate owned and 13 franchise locations with an additional 80+ franchise locations under a development

agreement for domestic and international markets; 35 of these locations are under an international agreement

with contracts in Kuwait, Qatar, and Dubai. We anticipate robust franchise growth in BGR over the next few

years.

HOTR also acquired BT’s Burger in 2Q15 which has four locations in North Carolina. It has a reputation for

serving one of the best burgers in North Carolina. HOTR acquired Little Big Burger in the third quarter which

increased its presence in the Pacific Northwest. Currently with eight locations in the Pacific Northwest, Little

Big Burger has earned excellent reviews and has been named “The next Chipotle” by the Huffington Post.

These acquisitions provide HOTR an excellent opportunity to have strong organic growth and franchise

opportunities in both domestic and international markets.

Excluding the better burger model, HOTR acquired a 56% ownership interest in Just Fresh in November

2013. Just Fresh has seven locations in Charlotte, North Carolina and its menu represents items which are

fresh and nutritious. A trend among consumers has been to seek out more nutritious food options, as the

following table indicates:

Just Fresh offers fresh sandwiches, wraps, smoothies, and soups. HOTR is currently evaluating franchise

opportunities in both domestic and international markets with huge upside potential for organic and

franchisee growth.

Exclusive Hooters Franchise rights in the United States and International Markets. Chanticleer

Holdings currently has exclusive franchise rights to develop and operate Hooters Restaurants in certain

United States and International markets. It currently operates 15 Hooters Restaurants worldwide with

locations in South Africa, Australia, Europe, and the United States. The figure below illustrates the number

of Hooters Restaurants Chanticleer Holdings has been operating since 2009.

In 3Q15, the Company went through a temporary administrative period at Hooters Australia. The Company

believed its operating partner had been mismanaging operations and the business could be more effective

with a brief administration process to enhance the Company’s operational and financial performance. During

this period, the company upsized its Australian ownership from 60% to 80% and improved the operations of

the five Hooters Australia stores with a new local partner, PCS Investments. The Company owns 80% of the

restaurants with the remaining 20% owned by PCS Investments. It has implemented new regional

management to drive improved performance. HOTR can open up to 15 locations in Australia. We expect

cash flow and margins from these restaurants to improve in the coming quarters. Further, more of the cash

flows generated from the restaurants will be retained by the Company, as its ownership percentage is now

greater.

HOTR is the only way to publicly invest in Hooters of America (HOA). Growing rapidly in fast casual

space, HOTR currently operates 15 hooters restaurants in the United States, Australia, South Africa, Hungary,

and the United Kingdom. In addition,, HOTR controls a 3% interest in HOA, the parent company of Hooters.

Hooters is a global brand with over 430 total restaurants in 28 countries that generate approximately $1 billion

in revenues. With its 3% stake in HOA, HOTR received cash dividends of $526,106 in August 2014 and

$543,000 in October 2015. We believe there is a strong chance that HOTR receives a similar size cash

dividend in 2016.

High traction in fast-casual restaurant chains. According to 2016 Restaurant Industry Forecast report by

the National Restaurant Association, restaurant industry sales have increased 33% since 2010 to $782.7

billion. Fast-food chains have dominated the restaurant industry for years, but fast-casual restaurants offer an

upgrade to fast food with higher quality food at affordable prices. Many industry experts categorize fast-

causal food with price ranges from $9 to $13, compared to an average price of $5 at a fast-food restaurant.

Fast casual chains grew 10.5% in 2014, giving them a total market size of $34.5 billion. According to data

from market research firm Euromonitor, fast casual chains have grown by 550%. One of the big players in

fast food restaurants, McDonalds, has recently started to introduce new menu items to compete with the fast-

casual restaurants. Companies like Shake Shack and Hamburger Joint, the closest publicly traded peers to

HOTR are growing at a fast rate and are being given premium multiples compared to other restaurant

operators. The chart below focuses on the growth rates between fast-casual and fast-food chains.

We believe that the Company, given its current growth plans and operating results, will not need to

raise additional equity capital. We believe, given a number of reasons, that the Company will not need to

raise additional equity capital. The majority of the Company’s debt is a $4.8 million loan at 12% interest

annually. The lender has not demanded scheduled principal repayments due since December 31, 2014, and

they will not demand the payments unless the negotiations are ended. Therefore, we are currently not

forecasting the Company to repay principal on this note in 2016. HOTR is also planning to refinance a portion

of its debt at a lower interest cost in 2016. Nonrecurring M&A expenses were $195,000 in 3Q15, and were

$1 million in 9M15. There might be a bit of spillover in 4Q15 but this should be non-recurring in 2016.

Further additions to cash flow should come from the acquisition of Little Big Burger and BGR franchises

which were opened in Texas and Kuwait in 3Q15. No further acquisitions are planned, and the focus is now

on organic growth and implementing operational efficiencies.

Going further into 2016, management has a positive outlook on the company’s cash flows and believes that

no additional capital is required . We believe this accurate, and our analysis is based on the following:

- The Company and the note holder of the mezzanine debt are currently in discussions to renegotiate

the terms of the principal payments and other terms of the agreement and the note holder has not

demanded any payments since December 31, 2014 nor will they unless the negotiations terminate.

We are assuming that the only debt payments HOTR need to make are interest payments in 2016.

- We are estimating positive operating cash flows of $0.5 million in 2016, and cash used in investing

activities (for new store openings) of $1.6 million in 2016. This leads to us projecting total cash at

the end of 2016 $0.45 million.

- Even if our projections are understating overall cash burn in 2016, we believe that the Company can

slow down or delay investment in new store openings, which will allow them to preserve more cash.

Additionally, with projected positive EBITDA in 2016 (we are projecting 2016 EBITDA $2.7

million), HOTR should continue to generate positive cash flow from operations.

We believe that HOTR’s overall cash burn will be less than $1.8 million through 4Q16 and we project that the Company

will generate positive operating cash flows (with no required principal debt repayments) in 2016. If the Company needs

to make principal debt repayments in 2016, we believe that HOTR may need to raise additional capital.

Valuation

We are valuing HOTR using 1.0x EV/Sales multiple applied to our 2016 sales estimate of $62.43 million.

This derives a target price of $2.56. A 1.0x EV/Sales multiple values HOTR near the low-end of its peer

group and we believe that a discount is appropriate, given that HOTR is a smaller company relative to the

majority of its comps, and the fact that the Company is just beginning to generate positive EBITDA. We

believe that HOTR has strong potential for cash flow growth, given its recent acquisitions of brands in a high-

growth segment of the restaurant market and its significant potential to grow the Company through both

company-operated and franchised stores.

Risks

Chanticleer Holdings has not yet generated positive cash flows. The Company has yet to generate positive

cash flows. While we believe that HOTR will begin generating positive EBITDA in 4Q15, this may not come

to fruition.

There is no guarantee that the Company will be able to effectively integrate its acquisitions. HOTR

acquired multiple brands in 2015 and it is unknown whether the Company can effectively integrate these

acquisitions and improve operations. Integrating acquisitions and effectively implementing operating

efficiencies will have an important impact on future Company results.

The Company has a high debt balance. This includes a $1 million line of credit from a local bank that

carries a personal guarantee from CEO Mike Pruitt and $4.8 million in debt at 12% interest annually. While

the debt balance is relatively high, the lender has not demanded principal repayments since December 2014

and will not demand payments unless negotiations terminate.

HOTR may need to raise additional equity and/or debt capital. Given the Company’s current operational plans, we

do not believe that HOTR will need to raise additional capital at least through the end of 2016. However, the Company

may need to raise capital post this period. Additionally, if cash flows are lower than expected, expansion plans are more

aggressive than anticipated, or the Company needs to repay a portion of its debt principal in 2016, than HOTR may need

to raise additional funds.

Company Name TickerPrice

(USD)

Market

Cap

(USD)

Revenue

(TTM, USD)

Enterprise

Value

Revenue

(FY2015E)

Revenue

(FY2016E)

P/S

(TTM)

EV/S

(FY2015E)

EV/S

(FY2016E)

Famous Dave's of America Inc DAVE $6.17 42.93M 127.2M 37.63M 103.8M 103.16M 0.38x 0.36x 0.36x

Good Times Restaurants Inc GTIM $4.22 51.76M 50.04M 48.0M 67.98M 94.44M 1.03x 0.71x 0.51x

Diversified Restaurant Holdings Inc SAUC $2.07 54.52M 172.49M 167.59M 198.21M N/A 0.32x 0.85x N/A

Imvescor Restaurant Group Inc IRG $2.02 111.94M 36.48M 114.84M 37.M 36.88M 3.09x 3.10x 3.11x

Kona Grill Inc KONA $13.04 146.92M 143.02M 137.69M 179.96M 219.51M 1.03x 0.77x 0.63x

Jamba Inc JMBA $12.44 187.13M 186.06M 161.9M 68.26M 66.33M 1.01x 2.37x 2.44x

Habit Restaurants Inc HABT $20.20 525.22M 230.6M 536.76M 290.25M 356.56M 2.28x 1.85x 1.51x

Shake Shack Inc SHAK $35.25 1277.81M 190.59M 1215.06M 242.94M 300.43M 6.70x 5.00x 4.04x

Median 129.43M 157.75M 149.79M 141.88M 103.16M 1.03x 1.35x 1.51x

Average 299.78M 142.06M 302.43M 148.55M 168.19M 1.98x 1.88x 1.80x

Chanticleer Holdings Inc HOTR $0.86 18.46M 37.4M 26.32M 43.77M 62.43M 0.49x 0.60x 0.42x

Source: Thomson Reuters, As of March 15, 2016

Management

Michael Pruitt, Chairman, CEO & President:

Michael Pruitt, a long-time entrepreneur with a proven track record, possesses the expertise to evaluate

potential investments, form key relationships and recognize a strong management team. Mr. Pruitt founded

Avenel Financial Group, a boutique financial services firm concentrating on emerging technology company

investments. The business succeeded immediately, and in order to grow Avenel Financial Group to its full

potential and better represent the company's ongoing business model, he formed Avenel Ventures, an

innovative technology investment and business development company. In the late 1980s, Mr. Pruitt owned

Southern Cartridge, Inc., which he eventually sold to MicroMagnetic, Inc., where he continued working as

Executive Vice President and a Board member until the company was sold to Carolina Ribbon in 1992. From

1992 to 1996, Mr. Pruitt worked in a trucking firm where he was instrumental in increasing revenues from

$6 million to $30 million. Between 1997 and 2000, Mr. Pruitt assisted several public and private companies

in raising capital, recruiting management and preparing companies to go public or be sold. He was the CEO

and President of RCG Companies, Inc. (later changed to One Travel), a publicly traded holding company

listed on the AMEX. Mr. Pruitt received a Bachelor of Arts degree from Coastal Carolina University in

Conway, South Carolina, where he sits on the Board of Visitors of the Wall School of Business, the Coastal

Education Foundation Board and the Athletic Committee of the Board of Trustees. He also sits on the Board

of Chanticleer Holdings, Inc. (HOTR).

Eric Lederer, CFO

Eric joined Chanticleer Holdings in February 2011. Mr. Lederer has served as the Company’s Controller

since February, 2011 and was appointed CFO in June 2012. From December 2005 through January 2011,

Eric was the Controller of PokerTek, Inc. (NASDAQ: PTEK), a licensed gaming company that develops and

distributes electronic table games, where he was responsible for day-to-day accounting functions and

preparing SEC filings. There is no written agreement or contract between Mr. Lederer and the Company.

Mark Roberson, COO

Mark Roberson has more than 25 years of finance and operations experience with publicly-traded companies.

Most recently, he was Chief Executive Officer of PokerTek, Inc., a NASDAQ-listed gaming technology

company. Under Roberson's leadership, PokerTek developed innovative new products, expanded

internationally and delivered profitable operating results, leading the company to be acquired at a significant

market premium in late 2014. Roberson also served in financial and operational management roles with

Krispy Kreme Doughnut Corporation, a NYSE-listed fast-casual restaurant franchisor and operator, LifeStyle

Furnishings International, a $2 billion furniture manufacturer, and Curtiss-Wright, Inc. a NYSE-listed

aerospace and defense contractor.

Mark is a Certified Public Accountant, starting his career in public accounting with Ernst & Young and

PricewaterhouseCoopers. He received a Master’s in Business Administration from Wake Forest University

and a Bachelor of Science in Accounting from UNC-Greensboro. He was named Small Public Company

CFO of the Year by the Charlotte Business Journal in 2010.

Alex Hemingway, Director of Chanticleer Europe

Alex brings domestic and international executive management experience to the team and a proven track

record of success in the Central European QSR industry. Between 1999–2005, Alex was President and Chief

Executive of Central European Franchise Group (“CEFG”), the owner and operator of the Pizza Hut and

Kentucky Fried Chicken brands in Hungary as well as three local national brands. Both brands boasted the

highest customer feedback scores in the region for YUM! Restaurants International. While managing CEFG,

Mr. Hemingway was approached by Orient Rt., Central Europe’s largest restaurant company with 130+

operating units based in Budapest, to be its Chief Executive Officer. Between the two companies Alex has

had over 180 units and 5000 people under his employ. Alex founded and served as the Director of the Fast

Food Association of Hungary. He currently serves on the Board of Supervisors of the Budapest Honved

Football Club and local charitable foundations.

April Miller, Director of Training

April Miller joined Chanticleer in September 2013. She has over thirteen years of experience specializing in

employee hourly training, quality assurance, new store openings, Image and Hospitality Training,

management development, as well as educating managers during Hooters University - Phase 1 for both HOA

and Franchise locations. As Master Trainer for Hooters of America, LLC, her focus was Field Training for

new management positions. April got her start with Hooters Restaurants in 2000 as a part-time Hooters Girl

at Hooters of Columbia, SC. Since that time she has doggedly climbed through the ranks as a Certified

Trainer, Regional Training Coordinator, Opening Training Coordinator, etc; she emerged as a role model and

leader and continued to increase her passion through MIT Communication, Training and Tracking. April has

led on-site training for over 50 new store openings, to include 9 international locations. She has also

conducted FOH/HOH hourly training for over 100 Franchise stores as a Field Training Coordinator. She is

a Certified Hospitality Trainer (CHT) and a member of the Counsel of Hotel and Restaurant Trainers

(CHART). April is also a proctor and instructor for ServSafe Alcohol. April graduated Cum Laude from

Newberry College with a major in Business Administration in 2000 and was recognized as President of SIFE

(Students in Free Enterprise), a member of Phi Gamma Nu Business team, as well as being nominated for

Who’s Who among Universities and Colleges. She has shared the honor of being acknowledged as

Department of the Year for the Hooters Corporate Office support in 2009.

Michelle Arcidiacono, Accountant/ Corporate Secretary

Michelle joined Chanticleer Holdings in January 2008. She is a 2003 Magna Cum Laude graduate of

Winthrop University earning a Bachelor degree in Business Administration with a concentration in

Accounting. In May of 2011, Michelle received her Master of Business Administration in Accounting from

Winthrop University. She is a member of the South Carolina Association of Public Accountants. Prior to

Chanticleer, Michelle worked as an Accounting Manager for a real estate development company

headquartered in Charlotte. Prior to this position, Michelle was employed as a Staff Accountant for a local

CPA firm which she specialized in corporate taxation.

FY14 1Q15 2Q15 3Q15 9M15 4Q15E FY15E 1Q16E 2Q16E 3Q16E 4Q16E FY16E

Revenue:

Restaurant sales, net 28,745,258 8,421,842 10,480,370 10,005,324 28,907,536 13,807,347 42,714,883 14,290,604 14,862,228 15,456,718 15,997,703 60,607,253

Gaming income, net 432,688 132,027 99,823 121,031 352,881 167,023 519,904 172,869 179,783 186,975 193,519 733,145

Management fee income - non-affiliates 665,488 101,221 77,903 25,000 204,124 81,798 285,922 84,661 88,048 91,569 94,774 359,052

Franchise income 0 16,059 134,939 119,950 270,948 165,531 436,479 171,325 178,178 185,305 191,790 726,597

Total revenue 29,843,434 8,671,149 10,793,035 10,271,305 29,735,489 14,174,401 43,909,890 14,719,459 15,308,237 15,920,566 16,477,786 62,426,048

Expenses:

Restaurant cost of sales 9,934,532 2,961,658 3,616,930 3,358,602 9,937,190 4,400,000 14,337,190 4,501,540 4,830,224 4,946,150 4,879,299 19,157,214

Restaurant operating expenses 17,363,743 5,068,139 6,384,905 5,998,627 17,451,671 8,000,000 25,451,671 8,074,191 8,322,848 8,501,195 8,558,771 33,457,005

Restaurant pre-opening and closing expenses 524,739 206,747 391,442 141,306 739,495 125,000 864,495 125,000 125,000 125,000 125,000 500,000

General and administrative expenses 5,976,870 1,898,353 2,081,583 1,676,609 5,656,545 2,062,000 7,718,545 1,857,779 1,683,906 1,751,262 1,812,556 7,105,503

G&A+ Restaurant operating expenses 23,340,613 6,966,492 8,466,488 7,675,236 23,108,216 10,062,000 33,170,216 9,931,970 10,006,754 10,252,457 10,371,327 40,562,508

Asset impairment charge 0 0 0 4,489,043 4,489,043 0 4,489,043 0 0 0 0 0

EBITDA (3,431,711) (1,257,001) (1,290,383) (762,533) (3,309,917) (287,599) (3,597,516) 285,948 471,259 721,960 1,227,159 2,706,326

Restaurant-EBITDA 1,446,983 392,045 478,535 648,095 1,518,675 1,407,347 2,926,022 1,714,873 1,709,156 2,009,373 2,559,632 7,993,034

Depreciation and amortization 1,587,858 438,637 408,311 358,307 1,205,255 300,000 1,505,255 500,000 500,000 500,000 500,000 2,000,000

Total expenses 35,387,742 10,573,534 12,883,171 16,022,494 39,479,199 14,887,000 54,366,199 15,058,510 15,461,978 15,823,607 15,875,627 62,219,722

Operating Income (Loss from operations) (5,544,308) (1,902,385) (2,090,136) (5,751,189) (9,743,710) (712,599) (10,456,309) (339,052) (153,741) 96,960 602,159 206,326

Other (expense) income

Interest expense (2,280,921) (704,852) (1,373,797) (657,906) (2,736,555) (720,000) (3,456,555) (800,000) (800,000) (800,000) (800,000) (3,200,000)

Change in fair value of derivative liabilities 1,227,600 338,053 232,854 262,232 833,139 250,000 1,083,139 0 0 0 0 0

Loss on extinguishment of debt (170,089) 0 (145,834) (315,923) 0 (315,923) 0 0 0 0 0

Realized gains on securities 101,472 0 0 0 0 0 0 0 0 0 0 0

Equity in losses of investments (40,694) 0 0 0 0 0 0 0 0 0 0 0

Other income (expense) 334,477 (1,533) 76,859 (40,262) 35,064 (40,262) (5,198) 0 0 0 0 0

Total other (expense) income (658,066) (538,421) (1,064,084) (581,770) (2,184,275) (510,262) (2,694,537) (800,000) (800,000) (800,000) (800,000) (3,200,000)

Loss from continuing operations before income taxes (6,202,374) (2,440,806) (3,154,220) (6,332,959) (11,927,985) (1,222,861) (13,150,846) (1,139,052) (953,741) (703,040) (197,841) (2,993,674)

Income tax benefit (expense) 476,501 32,920 4,734 (7,356) 30,298 15,000 45,298 10,000 10,000 10,000 10,000 40,000

Loss from continuing operations (5,725,873) (2,407,886) (3,149,486) (6,340,315) (11,897,687) (1,207,861) (13,105,548) (1,129,052) (943,741) (693,040) (187,841) (2,953,674)

Gain (loss) from discontinued operations, net of taxes (920,960) (1,899) 2,088 0 189 189 0 0 0 0 0

Consolidated net loss (6,646,833) (2,409,785) (3,147,398) (6,340,315) (11,897,498) (1,207,861) (13,105,359) (1,129,052) (943,741) (693,040) (187,841) (2,953,674)

Less: Net loss (income) attributable to non-controlling interest 243,462 141,784 201,184 1,823,601 2,166,570 2,166,569

Net loss attributable to Chanticleer Holdings, Inc. (6,403,371) (2,268,001) (2,946,214) (4,516,714) (9,730,928) (1,207,861) (10,938,790) (1,129,052) (943,741) (693,040) (187,841) (2,953,674)

0Net loss attributable to Chanticleer Holdings, Inc.: 0

0

Other comprehensive loss: 0

Unrealized loss on available-for-sale securities (none applies to

non-controlling interest) (223,746) 0 0 0 0 0 0 0 0 0 0 0

Foreign currency translation (loss) gain (1,345,793) (1,286,028) (160,426) (572,954) (891,772) 0 (2,019,408) 0 0 0 0 0

Total other comprehensive loss (1,569,539) (1,286,028) (160,426) (572,954) (891,772) 0 (2,019,408) 0 0 0 0 0

Comprehensive loss (7,972,910) (3,554,029) (3,106,640) (5,089,669) (10,622,700) (1,182,861) (12,933,199) (1,129,052) (943,741) (693,040) (187,841) (2,953,674)

0

Continuing operations attributable to common stockholders,

basic and diluted (0.90) (0.29) (0.25) (0.43) (0.85) (0.06) (0.92) (0.05) (0.04) (0.03) (0.01) (0.14)

Discontinued operations attributable to common stockholders,

basic and diluted (0.15) (0.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Net loss attributable to Chanticleer Holdings, Inc. per common

share, basic and diluted: (1.01) (0.27) (0.24) (0.31) (0.69) (0.06) (0.77) (0.05) (0.04) (0.03) (0.01) (0.14)

Weighted average shares outstanding, basic and diluted 6,332,843 8,249,453 12,455,828 14,802,370 14,059,116 21,500,000 14,251,913 21,500,000 21,500,000 21,500,000 21,500,000 21,500,000

QoQ Revenue Growth 0.39% 24.47% -4.83% 189.50% 38.00% 3.50% 4.00% 4.00% 3.50%

EBITDA Margin -11.50% -14.50% -11.96% -7.42% -11.13% -2.03% -8.19% 1.94% 3.08% 4.53% 7.45% 4.34%

Restaurant EBITDA Margin 4.85% 4.52% 4.43% 6.31% 5.11% 9.93% 6.66% 11.65% 11.16% 12.62% 15.53% 12.80%

Cost of sales as % of revenue 33.29% 34.16% 33.51% 32.70% 33.42% 31.04% 32.65% 31.50% 32.50% 32.00% 30.50% 30.69%

Restaurant operating expenses as % of revenue 58.18% 58.45% 59.16% 58.40% 58.69% 57.00% 57.96% 56.50% 56.00% 55.00% 53.50% 53.59%

Restaurant pre-opening & closing expense as % of revenue 1.76% 2.38% 3.63% 1.38% 2.49% 0.88% 1.97% 1.50% 1.50% 1.50% 1.50% 0.80%

G&A as % of Revenue 20.03% 21.89% 19.29% 16.32% 19.02% 14.55% 17.58% 13.00% 11.00% 11.00% 11.00% 11.38%

Operating Margin -23.54% -18.58% -21.94% -19.37% -5.03% -23.81% -2.30% -1.00% 0.61% 3.65% 3.65%

Net Margin -26.72% -40.99% -28.78% -49.55% -8.35% -29.45% -7.67% -6.16% -4.35% -1.14% -4.73%

Current assets: 4Q14 9M15 4Q15E 4Q16E

Cash 245,828 1,805,927 1,506,014 415,187

Accounts and other receivables 313,509 194,589 241,504 218,491

Inventories 532,803 593,778 645,174 750,961

Due from related parties 46,015 45,615 45,000 45,000

Prepaid expenses and other current assets 330,745 421,508 497,553 567,875

TOTAL CURRENT ASSETS 1,468,900 3,061,417 2,935,245 1,997,514

Property and equipment, net 13,315,409 17,855,282 17,855,282 18,000,000

Goodwill 15,617,308 12,269,504 12,269,504 13,000,000

Intangible assets, net 3,396,503 7,542,395 7,542,395 7,542,395

Investments at fair value 35,362 35,362 35,362 35,362

Other investments 1,550,000 1,550,000 1,550,000 1,000,000

Deposits and other assets 408,492 297,037 297,037 297,000

TOTAL ASSETS 35,791,974 42,610,997 42,484,825 41,872,271

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued expenses 5,580,131 4,420,370 5,700,889 5,933,654

Current maturities of long-term debt and notes

payable 1,813,647 1,134,025 1,500,000 1,500,000

Current maturities of convertible notes payable 436,270 215,757 216,000 2,160,000

Current maturities of capital leases payable 42,032 47,370 48,000 48,000

Due to related parties 1,299,083 212,399 212,399 212,399

Deferred rent 118,986 686,622 690,000 600,000

Derivative liabilities 1,945,200 1,318,661 1,318,661 1,318,661

Deferred revenue 0 0 25,250 0

Liabilities of discontinued operations 177,393 177,204 177,204 177,204

TOTAL CURRENT LIABILITIES 11,412,742 8,212,408 9,888,403 11,949,918

Long-term debt, less current maturities 5,009,283 5,419,925 5,419,925 5,419,925

Convertible notes payable, 1,477,413 2,294,823 2,500,000 2,500,000

Capital leases payable, less current maturities 36,628 25,144 25,000 250,000

Deferred rent 2,196,523 1,784,840 2,000,000 2,000,000

Deferred tax liabilities 686,884 655,050 700,000 700,000

TOTAL LIABILITIES 20,819,473 18,392,190 20,533,328 22,819,843

Commitments and contingencies (Note 13)

Stockholders’ equity:

Additional paid in capital 32,601,400 55,208,098 55,208,098 55,208,098

Accumulated other comprehensive loss -1,657,908 -911,900 -5,000,000 -5,000,000

Non-controlling interest 4,904,471 -527,590 -527,590 -527,590

Accumulated deficit -20,876,187 -30,607,114 -30,607,114 -30,607,114

TOTAL STOCKHOLDERS’ EQUITY 14,971,776 23,161,494 19,073,394 19,073,394

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 35,791,249 41,553,684 39,606,722 41,893,237

AR as % of Revenue 1.05% 0.65% 0.55% 0.35%

Inventory as % of COGS 5.36% 5.98% 4.50% 4.00%

Prepaids as % of op. expenses 1.42% 1.82% 1.50% 1.40%

AP as % of COGS & op. expenses 16.77% 13.38% 12.00% 10.00%

Cash flows from operating activities: 1Q2015 6M20152Q2015 9m2015 FY2015E FY2016E

Net loss (2,409,785) (5,557,183) (11,897,498) (13,105,359) (2,953,674)

Less net loss attributable to non-contrlling interest 141,784 342968 0 0

Net loss attributable to Chanticleer Holdings (2,268,001) (5,214,215) (11,897,498) (13,105,359) (2,953,674)

Net loss from discontinued operations 1,899 (189) (189) (189) 0

Net loss from continuing operations (2,266,102) (5,214,404) (11,897,687) (13,105,548) (2,953,674)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 438,637 846,948 1,205,255 1,455,255 1,600,000

Asset impairment charge 4,489,043 4,489,043 0

Loss on extinguishment debt 315,923 315,923 0

Loss of disposal of property and equipment 472,770 514,522 514,522 0

Common stock issued for services 83,725 186,830 231,857 316,857 0

Amortization of debt discount 474,874 1,592,414 1,356,365 1,756,365 1,800,000

Amortization of warrants 22,375 22,375 22,375 22,375 0

Change in the fair value of derivative liabilities (338,053) (570,907) (833,139) (833,139) 0

Gain on debt extinguishment 0 0 0 0

Changes in:

Decrease in amunts payable to affilate (479,830) (681,855) 0 0 0

(Increase) decrease in accounts receivable and other receivable 19,743 (84,668) (70,421) 72,005 23,013

Decrease (increase) in prepaid expenses and other assets (85,204) 10,955 (171,450) (166,808) (70,322)

Increase (decrease) in inventory 41,790 57,813 (2,239) (112,371) (121,115)

Increase in accounts payable and accrued expenses 635,776 1,057,729 1,224,599 120,758 271,083

Decrease(increasse) in deferred rent (78,785) (309,868) (311,104) (311,104) 0

(Decrease) increase in accounts payable and accrued expenses 0 0 0

Deferred income taxes (32,920) -68664 (31,834) (31,834) 0

Net cash used in operating activities from continuing operations (1,563,974) (2,682,532) (3,957,935) (4,253,370) 548,986

Net cash (used in) provided by operating activities from discontinued operations (4,500) -4500 (4,500) (4,500)

Net cash used in operating activities (1,568,474) (2,687,032) (3,962,435) (4,257,870) 548,986

Cash flows from investing activities:

Purchase of property and equipment (262,764) (872,246) (1,518,747) (1,518,747) (1,600,000)

Cash paid for acquisitions, net of cash acquired (4,222,929) -4265429 (9,082,918) (9,082,918) 0

Proceeds from sale of investments 0 0 0 0

Purchase of investments 0 0 0

Franchise costs 0 0 0

Net cash used in investing activities from continuing operations 0 0 0

Net cash used in investing activities from discontinued operations 0 0 0

Net cash used in investing activities (4,485,693) (5,137,675) (10,601,665) (10,601,665) (1,600,000)

Cash flows from financing activities:

Proceeds from sale of common stock and warrants 7,062,715 8,961,213 14,920,937 14,920,937 0

Loan proceeds 2,204,369 2,204,369 656,837 656,837 0

Loan repayments (137,079) (760,138) (824,981) (824,981) 0

Proceeds from convertible debt 2,150,000 2,150,000 0

Capital lease payments (14,271) (27,405) (39,822) (39,822) 0

Decrease in ammounts payable to affiliate (1,086,684) (1,086,684) 0

Minority interest 333,342 333,342 0

Net cash provided by financing activities from continuing operations 9,115,734 10,378,039 16,109,629 16,109,629 0

Net cash provided by financing activities from discontinued operations 0 0 0 0

Net cash provided by financing activities 9,115,734 10,378,039 16,109,629 16,109,629 0

Effect of exchange rate changes on cash 17174 9021 10,092 10,092 0

Net Increase (decrease) in cash 3,078,741 2,562,353 1,555,621 1,260,186 (1,051,014)

Cash, beginning of year 245,828 245,828 245,828 245,828 1,506,014

Cash, end of year 3,324,569 2,808,181 1,801,449 1,506,014 454,999

Additional Information

Auditor: Cherry Bekaert LLP

Legal: Libertas Law Group, Inc.

Transfer Agent: Securities Transfer Corp

Company Website

Company Information

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Company Contact Info:

Chanticleer Holdings, Inc.

7621 Little Ave – Suite 414

Charlotte, NC 28226

Tel: 704-366-5122

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1017 Maitland Center Commons Blvd.

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