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Delaware
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20-2932652
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(State or Jurisdiction of
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(IRS Employer ID No)
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Incorporation or Organization)
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Page
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||
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No.
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Financial Information (unaudited)
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Item 1:
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Condensed Consolidated Financial Statements
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Balance Sheets as of September 30, 2011 and December 31, 2010
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3
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Statements of Operations – For the Three Months Ended September 30, 2011 and 2010
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4
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Statements of Operations – For the Nine Months Ended September 30, 2011 and 2010
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5
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Statements of Cash Flows – For the Nine Months Ended September 30, 2011 and 2010
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6
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Notes to Financial Statements
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8
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Item 2:
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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29
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Item 3:
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Quantitative and Qualitative Disclosure about Market Risk
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35
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Item 4:
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Controls and Procedures
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35
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Other Information
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36
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Item 1:
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Legal Proceedings
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36 |
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Item 1A:
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Risk Factors
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36 |
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Item 2:
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Unregistered Sales of Equity Securities and Use of Proceeds
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36 |
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Item 3:
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Defaults Upon Senior Securities
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36 |
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Item 4:
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Submission of Matters to a Vote of Security Holders
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36 |
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Item 5:
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Other Information
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36 |
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Item 6:
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Exhibits
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36 |
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2011
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2010
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|||||||
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ASSETS
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||||||||
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Current assets:
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||||||||
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Cash and cash equivalents
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$ | 223,857 | $ | 46,007 | ||||
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Accounts receivable
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66,667 | 4,258 | ||||||
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Due from related parties
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75,106 | 84,269 | ||||||
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Prepaid expenses
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99,238 | 24,184 | ||||||
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Total current assets
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464,868 | 158,718 | ||||||
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Property and equipment, net
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17,990 | 25,563 | ||||||
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Available-for-sale investments at fair value
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105,618 | 352,500 | ||||||
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Investments accounted for under the equity method
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786,560 | 87,200 | ||||||
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Investments accounted for under the cost method
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766,598 | 766,598 | ||||||
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Deposits
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23,980 | 23,980 | ||||||
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Total assets
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$ | 2,165,614 | $ | 1,414,559 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
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Current liabilities:
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||||||||
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Accounts payable
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$ | 191,821 | $ | 211,432 | ||||
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Accrued expenses
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13,071 | 66,103 | ||||||
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Notes payable and current portion of long-term debt
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1,301,723 | 250,000 | ||||||
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Deferred revenue
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- | 1,750 | ||||||
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Due to related parties
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44,053 | 116,349 | ||||||
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Total current liabilities
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1,550,668 | 645,634 | ||||||
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Long-term debt, less current portion
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238,026 | 686,500 | ||||||
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Total liabilities
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1,788,694 | 1,332,134 | ||||||
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Commitments and contingencies
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||||||||
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Stockholders' equity:
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||||||||
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Common stock, $0.0001 par value. Authorized 200,000,000 shares; issued 3,011,954 and 2,571,918 shares and outstanding 2,498,724 and 2,048,688 shares at September 30, 2011 and at December 31, 2010, respectively
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301 | 257 | ||||||
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Additional paid in capital
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6,436,348 | 5,456,067 | ||||||
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Non-controlling interest
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48,359 | 24,175 | ||||||
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Other comprehensive income (loss)
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(156,213 | ) | 68,027 | |||||
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Accumulated deficit
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(5,425,455 | ) | (4,929,418 | ) | ||||
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Less treasury stock, 513,230 shares and 523,230 shares at September 30, 2011 and December 31, 2010, respectively
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(526,420 | ) | (536,683 | ) | ||||
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Total stockholders' equity
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376,920 | 82,425 | ||||||
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Total liabilities and stockholders' equity
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$ | 2,165,614 | $ | 1,414,559 | ||||
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2011
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2010
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|||||||
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Management and consulting revenue
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||||||||
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Affiliate
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$ | (30,726 | ) | $ | 9,250 | |||
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Other
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25,000 | - | ||||||
| (5,726 | ) | 9,250 | ||||||
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Expenses:
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||||||||
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General and administrative expense
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280,446 | 163,177 | ||||||
| 280,446 | 163,177 | |||||||
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Loss from operations before income taxes
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(286,172 | ) | (153,927 | ) | ||||
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Income taxes
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- | - | ||||||
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Loss from operations
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(286,172 | ) | (153,927 | ) | ||||
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Other income (expense)
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||||||||
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Realized gain from sales of investments
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- | (1,658 | ) | |||||
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Other than temporary decline in available-for-sale securities
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(147,973 | ) | - | |||||
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Equity in earnings (losses) of investments
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(20,820 | ) | 21,597 | |||||
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Interest and other income
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- | 11,500 | ||||||
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Interest expense
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(41,190 | ) | (27,421 | ) | ||||
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Total other income (expense)
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(209,983 | ) | 4,018 | |||||
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Net loss before non-controlling interest
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(496,155 | ) | (149,909 | ) | ||||
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Non-controlling interest
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399 | 553 | ||||||
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Net loss
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(495,756 | ) | (149,356 | ) | ||||
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Other comprehensive income:
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||||||||
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Unrealized gain (loss) on available-for-sale securities
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(172,031 | ) | (62,901 | ) | ||||
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Net comprehensive Income (loss)
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$ | (667,787 | ) | $ | (212,257 | ) | ||
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Net loss per share, basic and diluted
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$ | (0.20 | ) | $ | (0.07 | ) | ||
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Weighted average shares outstanding
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2,477,759 | 2,009,272 | ||||||
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2011
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2010
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|||||||
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Management and consulting revenue
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||||||||
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Affiliate
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$ | 1,750 | $ | 59,671 | ||||
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Other
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466,667 | 20,833 | ||||||
| 468,417 | 80,504 | |||||||
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Expenses:
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||||||||
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General and administrative expense
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769,732 | 657,249 | ||||||
| 769,732 | 657,249 | |||||||
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Loss from operations before income taxes
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(301,315 | ) | (576,745 | ) | ||||
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Income taxes
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- | - | ||||||
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Loss from operations
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(301,315 | ) | (576,745 | ) | ||||
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Other income (expense)
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||||||||
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Realized gain from sales of investments
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19,991 | 149,350 | ||||||
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Other than temporary decline in available-for-sale securities
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(147,973 | ) | (40,386 | ) | ||||
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Equity in earnings (losses) of investments
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(9,256 | ) | 42,850 | |||||
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Interest and other income
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5,016 | 34,500 | ||||||
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Interest expense
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(63,876 | ) | (104,396 | ) | ||||
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Total other income (expense)
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(196,098 | ) | 81,918 | |||||
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Net loss before non-controlling interest
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(497,413 | ) | (494,827 | ) | ||||
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Non-controlling interest
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1,376 | 430 | ||||||
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Net loss
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(496,037 | ) | (494,397 | ) | ||||
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Other comprehensive income:
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||||||||
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Unrealized gain (loss) on available-for-sale securities
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(224,240 | ) | 38,946 | |||||
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Net comprehensive loss
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$ | (720,277 | ) | $ | (455,451 | ) | ||
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Net loss per share, basic and diluted
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$ | (0.21 | ) | $ | (0.25 | ) | ||
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Weighted average shares outstanding
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2,332,222 | 1,969,822 | ||||||
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2011
|
2010
|
|||||||
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Cash flows from operating activities
|
||||||||
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Net earnings (loss)
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$ | (496,037 | ) | $ | (494,397 | ) | ||
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Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
|
||||||||
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Other than temporary decline in available-for-sale securities
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147,973 | 40,386 | ||||||
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Depreciation
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7,573 | 8,281 | ||||||
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Equity in (earnings) loss of investments
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9,256 | (42,850 | ) | |||||
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Beneficial conversion feature of convertible notes payable
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- | 49,994 | ||||||
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Amortization to interest expense of value of warrants
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12,588 | - | ||||||
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Common stock issued for services
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29,723 | - | ||||||
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Investment received in exchange for management services
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- | (33,000 | ) | |||||
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Realized (gains) losses from sales of investments
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(19,991 | ) | (149,350 | ) | ||||
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Bad debt expense
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750 | - | ||||||
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Non-controlling interest
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(1,376 | ) | (430 | ) | ||||
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Change in other assets and liabilities:
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||||||||
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(Increase) decrease in accounts receivable
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(62,410 | ) | (2,482 | ) | ||||
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(Increase) decrease in prepaid expenses and other assets
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(14,507 | ) | 2,500 | |||||
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Increase (decrease) in accounts payable and accrued expenses
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(53,054 | ) | 44,163 | |||||
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Advances from (repayment to) related parties
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(38,883 | ) | 3,174 | |||||
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Increase (decrease) in deferred revenue
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(1,750 | ) | (16,459 | ) | ||||
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Net cash used in operating activities
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(480,145 | ) | (590,470 | ) | ||||
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Cash flows from investing activities
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||||||||
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Purchase of fixed assets
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- | (3,628 | ) | |||||
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Purchase of investments
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(877,228 | ) | (26,334 | ) | ||||
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Purchase of treasury stock
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- | (680 | ) | |||||
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Proceeds from sale of treasury stock
|
26,401 | - | ||||||
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Distributions from equity investments
|
8,140 | 11,833 | ||||||
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Proceeds from sale of investments
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190,325 | 182,710 | ||||||
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Net cash provided by (used in) operating activities
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(652,362 | ) | 163,901 | |||||
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Cash flows from financing activities
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||||||||
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Proceeds from sale of common stock warrants, net
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20,608 | - | ||||||
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Loan repayment
|
(5,251 | ) | (4,500 | ) | ||||
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Loan proceeds
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1,295,000 | 441,000 | ||||||
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Net cash provided by financing activities
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1,310,357 | 436,500 | ||||||
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Net increase (decrease) in cash and cash equivalents
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177,850 | 9,931 | ||||||
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Cash and cash equivalents, beginning of period
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46,007 | 2,374 | ||||||
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Cash and cash equivalents, end of period
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$ | 223,857 | $ | 12,305 | ||||
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(Continued)
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||||||||
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2011
|
2010
|
|||||||
|
Supplemental cash flow information
|
||||||||
|
Cash paid for interest and income taxes:
|
||||||||
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Interest
|
$ | 85,176 | $ | 20,139 | ||||
|
Income taxes
|
- | - | ||||||
|
Non-cash investing and financing activities:
|
||||||||
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Investments received for management consulting contracts
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- | 33,000 | ||||||
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Due to related party exchanged for convertible note payable
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25,000 | - | ||||||
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Convertible notes payable exchanged for common stock
|
711,500 | - | ||||||
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Accrued interest exchanged for common stock
|
10,000 | - | ||||||
|
Common stock issued for loan from related party
|
- | 58,790 | ||||||
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Investment exchanged for another investment
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- | 124,573 | ||||||
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Investment contributed by the Company's CEO
|
125,331 | - | ||||||
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Common stock issued for prepaid consulting contract
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44,850 | 10,000 | ||||||
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NOTE 1:
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NATURE OF BUSINESS
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(1)
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Organization –
The consolidated financial statements include the accounts of Chanticleer Holdings, Inc. (“Holdings”) and its wholly owned subsidiaries Chanticleer Advisors LLC (“Advisors”), Avenel Ventures LLC ("Ventures"), Avenel Financial Services LLC ("Financial"), Chanticleer Holdings Limited ("CHL"), Chanticleer Holdings Australia Pty, Ltd. ("CHA"), Chanticleer Investment Partners, LLC ("CIP") and DineOut S.A. Ltd. ("DineOut") (Holdings owns 88.99% at September 30, 2011) (collectively the “Company”, "Companies," “we”, or “us”). All significant intercompany balances and transactions have been eliminated in consolidation. Holdings was organized October 21, 1999, under the laws of the State of Delaware. On April 25, 2005, the Company formed a wholly owned subsidiary, Chanticleer Holdings, Inc. and on May 2, 2005, Tulvine Systems, Inc. merged with and changed its name to Chanticleer Holdings, Inc.
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·
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Advisors was formed as a Nevada Limited Liability Company on January 18, 2007 to manage related companies, Chanticleer Investors, LLC ("Investors LLC"), Chanticleer Investors II, LLC ("Investors II") and other investments owned by the Company (for additional information, see www.chanticleer advisors.com);
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·
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Ventures was formed as a Nevada Limited Liability Company on December 24, 2008 to provide business management and consulting services to its clients;
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·
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CHL is wholly owned and was formed as a Limited Liability Company in Jersey on March 24, 2009 and now owns 100% interest in Hooters SA, GP, the general partner of the Hooters restaurant franchises in South Africa. CHL owned 50% of Hooters SA, GP until September 2011, when it acquired the remaining 50%;
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·
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DineOut was formed as a Private Limited Liability Company in England and Wales on October 29, 2009 to finance growth activity for the Company around the world. DineOut's common stock is listed on the Frankfurt stock exchange. As of September 30, 2011, the Company has sold 11.01% of its interest in DineOut;
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·
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CHA was formed on September 30, 2011 in Australia as a wholly-owned subsidiary to invest in Hooters Restaurants in Australia;
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·
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AFS was formed as a Nevada Limited Liability Company on February 19, 2009 to provide unique financial services to the restaurant, real estate development, investment advisor/asset management and philanthropic organizations. AFS's business operation had never been activated and was discontinued in September 2011; and
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·
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CIP was formed as a North Carolina Limited Liability Company on September 20, 2011. CIP has not commenced business at September 30, 2011. The intended use of CIP will be to manage separate and customized investment accounts for investors. The Company plans to register CIP as a registered investment advisor so that it can market openly to the public.
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(2)
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General
- The consolidated financial statements included in this report have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and include all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation. These consolidated financial statements have not been audited.
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(3)
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Going Concern -
At September 30, 2011 and December 31, 2010, the Company had current assets of $464,868 and $158,718; current liabilities of $1,550,668 and $645,634; and a working capital deficit of $1,085,800 and $486,916, respectively. The Company had a loss of $496,037 during the nine months ended September 30, 2011 and had an unrealized loss from available-for-sale securities of $224,240 resulting in a comprehensive loss of $720,277.
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Durban
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Johannesburg
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Cape Town
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Total
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|||||||||||||
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Other limited partners
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$ | 351,500 | $ | 412,500 | $ | 433,250 | $ | 1,197,250 | ||||||||
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Chanticleer LP interest
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9,299 | 68,596 | 183,861 | 261,756 | ||||||||||||
| $ | 360,799 | $ | 481,096 | $ | 617,111 | $ | 1,459,006 | |||||||||
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·
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During the quarter ended September 30, 2011, the Company executed a line of credit with its bank in the amount of $2,000,000 and at September 30, 2011 had borrowed $920,000. This line of credit is planned to be used for the buy-out of the other GP in South Africa and for investments in other countries, as discussed elsewhere herein. The Company
plans to sell its common stock in the future
with the intended use of the funds to repay existing loans and complete restaurant expansion plans;
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·
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The Company currently is receiving its share of earnings from the Durban and Johannesburg, South Africa restaurants which commenced operations in 2010 and will begin receiving its share of earnings from the Cape Town, South Africa location which opened in June of 2011;
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·
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The Company is funding the initial formation of Chanticleer Dividend Fund, Inc. ("CDF"), including the registration of its common stock. The Company expects to get most of its capital outlay back after the registration statement becomes effective and CDF begins raising funds; and
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·
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The Company has completed a registration statement on Form S-1, which was declared effective on July 14, 2011, to register one Class A Warrant and one Class B Warrant for each share of the Company issued. The Company raised $20,608, net of legal and professional fees from the sale of the warrants.
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(4)
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Reclassifications -
Certain reclassifications have been made in the financial statements at December 31, 2010 and for the periods ended September 30, 2010 to conform to the September 30, 2011 presentation. The reclassifications had no effect on net earnings (loss).
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(5)
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Fair value measurements -
For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date.
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Level 1
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Quoted prices for identical instruments in active markets.
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Level 2
|
Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
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Level 3
|
Significant inputs to the valuation model are unobservable.
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(6)
|
New accounting pronouncements -
There are several new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. At October 31, 2011, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of the Company when adopted.
|
|
2011
|
2010
|
|||||||
|
Trading securities:
|
||||||||
|
Balance, beginning of year
|
$ | - | $ | - | ||||
|
Shares acquired from a related party
|
- | 26,334 | ||||||
|
Cost of securities sold
|
- | (26,334 | ) | |||||
|
Balance, end of period
|
$ | - | $ | - | ||||
|
Proceeds from sale of trading securities
|
$ | - | $ | 32,917 | ||||
|
Gain from sale of trading securities
|
$ | - | $ | 6,583 | ||||
|
2011
|
2010
|
|||||||
|
Available for sale securities:
|
||||||||
|
Cost at beginning of year
|
$ | 284,473 | $ | 167,286 | ||||
|
Transfer from investments accounted for by the cost method
|
- | 100,000 | ||||||
|
Contributed by the Company's CEO
|
125,331 | - | ||||||
|
Received as management fees
|
- | 33,000 | ||||||
|
Acquired in exchange for DineOut shares
|
- | 124,573 | ||||||
|
Impairment
|
(147,973 | ) | - | |||||
|
Proceeds from sale of securities
|
- | (41,645 | ) | |||||
|
Realized loss
|
- | (98,741 | ) | |||||
|
Cost at end of period
|
261,831 | 284,473 | ||||||
|
Unrealized gain (loss)
|
(156,213 | ) | 68,027 | |||||
|
Total
|
$ | 105,618 | $ | 352,500 | ||||
|
2011
|
2010
|
|||||||
|
Investments using the equity method:
|
||||||||
|
Balance, beginning of year
|
$ | 87,200 | $ | 82,500 | ||||
|
Investments made
|
716,756 | - | ||||||
|
Equity in earnings (loss)
|
(9,256 | ) | 58,337 | |||||
|
Sale of investment
|
- | (37,500 | ) | |||||
|
Distributions received
|
(8,140 | ) | (16,137 | ) | ||||
|
Balance, end of period
|
$ | 786,560 | $ | 87,200 | ||||
|
2011
|
2010
|
|||||||
|
Investments at cost:
|
||||||||
|
Balance, beginning of year
|
$ | 766,598 | $ | 1,191,598 | ||||
|
Impairment
|
- | (250,000 | ) | |||||
|
Proceeds from sale of investment
|
- | (75,000 | ) | |||||
|
Investment transferred to available-for-sale securities
|
- | (100,000 | ) | |||||
|
Total
|
$ | 766,598 | $ | 766,598 | ||||
|
Realized
|
Unrecognized
|
|||||||||||||||
|
Holding
|
Holding
|
Fair
|
||||||||||||||
|
Cost
|
Loss
|
Gains (Losses)
|
Value
|
|||||||||||||
|
September 30, 2011
|
||||||||||||||||
|
Remodel Auction *
|
$ | 900 | $ | (900 | ) | $ | - | $ | - | |||||||
|
North American Energy
|
126,000 | - | (98,000 | ) | 28,000 | |||||||||||
|
North American Energy *
|
10,500 | - | (4,500 | ) | 6,000 | |||||||||||
|
North American Energy
|
125,331 | - | (53,713 | ) | 71,618 | |||||||||||
|
Efftec International, Inc. *
|
22,500 | (22,500 | ) | - | - | |||||||||||
|
Efftec International, Inc. (warrant) *
|
- | - | - | - | ||||||||||||
|
HiTech Stages
|
124,573 | (124,573 | ) | - | - | |||||||||||
| $ | 409,804 | $ | (147,973 | ) | $ | (156,213 | ) | $ | 105,618 | |||||||
|
December 31, 2010
|
||||||||||||||||
|
Syzygy Entertainment, Ltd. *
|
$ | 1,286 | $ | (1,286 | ) | $ | - | $ | - | |||||||
|
Remodel Auction *
|
40,000 | (39,100 | ) | 100 | 1,000 | |||||||||||
|
North American Energy
|
126,000 | - | (98,000 | ) | 28,000 | |||||||||||
|
North American Energy *
|
10,500 | - | (4,500 | ) | 6,000 | |||||||||||
|
Efftec International, Inc. *
|
22,500 | - | 22,500 | 45,000 | ||||||||||||
|
Efftec International, Inc. (warrant) *
|
- | - | 22,500 | 22,500 | ||||||||||||
|
HiTech Stages
|
124,573 | - | 125,427 | 250,000 | ||||||||||||
| $ | 324,859 | $ | (40,386 | ) | $ | 68,027 | $ | 352,500 | ||||||||
|
·
|
Collects, stores and analyzes chiller operating data,
|
|
·
|
Calculates and trends chiller performance,
|
|
·
|
Diagnoses the cause of chiller inefficiencies,
|
|
·
|
Notifies plant contacts when problems occur,
|
|
·
|
Recommends corrective actions,
|
|
·
|
Measures the results of corrective actions and
|
|
·
|
Provides cost analysis of operational improvements.
|
|
2011
|
2010
|
|||||||
|
Carrying value:
|
||||||||
|
South Africa
|
$ | 536,560 | $ | 87,200 | ||||
|
Australia
|
250,000 | - | ||||||
| $ | 786,560 | $ | 87,200 | |||||
|
Before Acquisition
|
After Acquisition
|
|||||||||||||||||||||||
|
GP
|
LP
|
Total
|
GP
|
LP
|
Total
|
|||||||||||||||||||
|
Durban
|
10.00 | % | 1.17 | % | 11.17 | % | 20.00 | % | 1.17 | % | 21.17 | % | ||||||||||||
|
Johannesburg
|
10.00 | % | 8.32 | % | 18.32 | % | 20.00 | % | 24.70 | % | 44.70 | % | ||||||||||||
|
Cape town
|
10.00 | % | 15.85 | % | 25.85 | % | 20.00 | % | 32.73 | % | 52.73 | % | ||||||||||||
|
2011
|
2010
|
|||||||
|
Equity in earnings (loss):
|
||||||||
|
Durban
|
(4,901 | ) | 21,023 | |||||
|
Johannesburg
|
(9,933 | ) | 21,827 | |||||
|
Cape Town
|
5,578 | - | ||||||
| $ | (9,256 | ) | $ | 42,850 | ||||
|
Distributions:
|
||||||||
|
Durban
|
6,248 | 11,834 | ||||||
|
Johannesburg
|
1,892 | - | ||||||
|
Cape Town
|
- | - | ||||||
| $ | 8,140 | $ | 11,834 | |||||
|
2011
|
2010
|
|||||||
|
Revenues
|
$ | 3,364,265 | $ | 2,696,902 | ||||
|
Gross profit
|
2,122,073 | 1,715,081 | ||||||
|
Income from continuing operations
|
125,730 | 269,519 | ||||||
|
Net income
|
125,730 | 269,519 | ||||||
|
|
·
|
Chanticleer Holdings Australia Pty, Ltd ("CHA") -
We are partnering with the current Hooters franchisee in Australia in a joint venture. The first Hooters restaurant under this joint venture (which will be the third Hooters restaurant to be opened in Australia) is expected to open in January 2012 in Campbelltown, a suburb of Sydney and we will own a 49% interest. We are in discussions to purchase from the same franchisee a partial interest in the first two existing Hooters locations in the Sydney area. We have invested $250,000 as of September 30, 2011.
|
|
2011
|
2010
|
|||||||
|
Chanticleer Investors, LLC
|
$ | 500,000 | $ | 500,000 | ||||
|
Edison Nation LLC (FKA Bouncing Brain Productions)
|
250,000 | 250,000 | ||||||
|
Chanticleer Investors II
|
16,598 | 16,598 | ||||||
| $ | 766,598 | $ | 766,598 | |||||
|
NOTE 3:
|
LONG-TERM DEBT AND NOTES PAYABLE
|
|
September 30,
|
December 31,
|
|||||||
|
2011
|
2010
|
|||||||
|
$2,000,000 line of credit with a bank, interest at Wall Street Journal Prime +0.5% (minimum of 4.5%) payable monthly; due August 20, 2012; collateralized by a certificate of deposit owned by a shareholder; collateralized by substantially all of the Company's assets and guaranteed by Mr. Pruitt
|
$ | 920,000 | $ | - | ||||
|
Note payable to a bank due in monthly installments of $1,739 including interest at Wall Street Journal Prime + 1% (minimum of 5.5%); remaining balance due August 10, 2013; collateralized by substantially all of the Company's assets and guarnateed by Mr. Pruitt
|
244,749 | 250,000 | ||||||
|
18% convertible notes payable; interest payable quarterly; due on the six-month anniversary of the date issued; convertible under the same terms as the subsequent capital raised in connection with a public offering of the Company's securities
|
375,000 | - | ||||||
|
10% convertible notes payable; interest payable quarterly; due January 4, 2010; converted into common stock at the rate of $1.75 per share on March 30, 2011
|
- | 686,500 | ||||||
| 1,539,749 | 936,500 | |||||||
|
Notes payable and current portion of long-term debt
|
1,301,723 | 250,000 | ||||||
|
Long-term debt, less current portion
|
$ | 238,026 | $ | 686,500 | ||||
|
2011
|
2010
|
|||||||
|
Chanticleer Investors, LLC
|
$ | - | $ | 6,035 | ||||
|
Chanticleer Investors II, LLC
|
- | 46,547 | ||||||
|
Chanticleer Dividend Fund, Inc.
|
74,281 | 30,937 | ||||||
|
Hoot SA II LLC
|
825 | - | ||||||
|
Other
|
- | 750 | ||||||
| $ | 75,106 | $ | 84,269 | |||||
|
2011
|
2010
|
|||||||
|
Avenel Financial Group, a company owned by Mr. Pruitt
|
13,849 | 46,349 | ||||||
|
Chanticleer Investors, LLC
|
4,045 | - | ||||||
|
Hoot SA I, LLC
|
15,409 | - | ||||||
|
Hoot SA III, LLC
|
- | 70,000 | ||||||
|
Chanticleer Foundation
|
10,750 | - | ||||||
| $ | 44,053 | $ | 116,349 | |||||
|
2011
|
2010
|
|||||||
|
Chanticleer Investors, LLC
|
$ | - | $ | 19,875 | ||||
|
Chanticleer Investors II, LLC
|
- | 11,171 | ||||||
|
North American Energy Resources, Inc.
|
1,750 | 6,125 | ||||||
|
Efftec International, Inc.
|
- | 22,500 | ||||||
| $ | 1,750 | $ | 59,671 | |||||
|
NOTE 5:
|
COMMITMENTS AND CONTINGENCIES
|
|
NOTE 6:
|
STOCKHOLDERS' EQUITY
|
|
Proceeds from sales of Class A and Class B warrants
|
$ | 87,780 | ||
|
Legal and professional fees incurred for offering
|
(67,172 | ) | ||
| $ | 20,608 |
|
NOTE 7:
|
SEGMENTS OF BUSINESS
|
|
Management
|
Restaurants
|
Total
|
||||||||||
|
Revenues
|
$ | (5,726 | ) | $ | - | $ | (5,726 | ) | ||||
|
Interest expense
|
$ | 41,190 | $ | - | $ | 41,190 | ||||||
|
Depreciation and amortization
|
$ | 2,512 | $ | - | $ | 2,512 | ||||||
|
Profit (loss)
|
$ | (327,362 | ) | $ | (20,820 | ) | $ | (348,182 | ) | |||
|
Investments and other
|
(147,973 | ) | ||||||||||
| (496,155 | ) | |||||||||||
|
Non-controlling interest
|
399 | |||||||||||
| $ | (495,756 | ) | ||||||||||
|
Assets
|
$ | 506,838 | $ | 786,560 | $ | 1,293,398 | ||||||
|
Investments
|
872,216 | |||||||||||
| $ | 2,165,614 | |||||||||||
|
Liabilities
|
$ | 1,071,938 | $ | 716,756 | $ | 1,788,694 | ||||||
|
Expenditures for non-current assets
|
$ | - | $ | - | $ | - | ||||||
|
Management
|
Restaurants
|
Total
|
||||||||||
|
Revenues
|
$ | 9,250 | $ | - | $ | 9,250 | ||||||
|
Interest expense
|
$ | 27,422 | $ | - | $ | 27,422 | ||||||
|
Depreciation and amortization
|
$ | 2,713 | $ | - | $ | 2,713 | ||||||
|
Profit (loss)
|
$ | (181,348 | ) | $ | 21,597 | $ | (159,751 | ) | ||||
|
Investments and other
|
9,842 | |||||||||||
| (149,909 | ) | |||||||||||
|
Non-controlling interest
|
553 | |||||||||||
| $ | (149,356 | ) | ||||||||||
|
Assets
|
$ | 89,336 | $ | 76,016 | $ | 165,352 | ||||||
|
Investments
|
1,400,571 | |||||||||||
| $ | 1,565,923 | |||||||||||
|
Liabilities
|
$ | 1,118,615 | $ | 25,000 | $ | 1,143,615 | ||||||
|
Expenditures for non-current assets
|
$ | 3,628 | $ | - | $ | 3,628 | ||||||
|
Management
|
Restaurants
|
Total
|
||||||||||
|
Revenues
|
$ | 468,417 | $ | - | $ | 468,417 | ||||||
|
Interest expense
|
$ | 63,876 | $ | - | $ | 63,876 | ||||||
|
Depreciation and amortization
|
$ | 7,573 | $ | - | $ | 7,573 | ||||||
|
Profit (loss)
|
$ | (365,191 | ) | $ | (9,256 | ) | $ | (374,447 | ) | |||
|
Investments and other
|
(122,966 | ) | ||||||||||
| (497,413 | ) | |||||||||||
|
Non-controlling interest
|
1,376 | |||||||||||
| $ | (496,037 | ) | ||||||||||
|
Management
|
Restaurants
|
Total
|
||||||||||
|
Revenues
|
$ | 80,504 | $ | - | $ | 80,504 | ||||||
|
Interest expense **
|
$ | 104,396 | $ | - | $ | 104,396 | ||||||
|
Depreciation and amortization
|
$ | 8,281 | $ | - | $ | 8,281 | ||||||
|
Profit (loss)
|
$ | (681,141 | ) | $ | 42,850 | $ | (638,291 | ) | ||||
|
Investments and other
|
143,464 | |||||||||||
| (494,827 | ) | |||||||||||
|
Non-controlling interest
|
430 | |||||||||||
| $ | (494,397 | ) | ||||||||||
|
NOTE 8:
|
DISCLOSURES ABOUT FAIR VALUE
|
|
Fair Value Measurement Using
|
||||||||||||||||
|
Quoted prices
|
||||||||||||||||
|
in active
|
Significant
|
|||||||||||||||
|
markets of
|
other
|
Significant
|
||||||||||||||
|
identical
|
observable
|
Unobservable
|
||||||||||||||
|
Recorded
|
assets
|
inputs
|
Inputs
|
|||||||||||||
|
value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
|
September 30, 2011
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Available-for-sale securities
|
$ | 105,618 | $ | 105,618 | $ | - | $ | - | ||||||||
|
December 31, 2010
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Available-for-sale securities
|
$ | 352,500 | $ | 101,500 | $ | 251,000 | $ | - | ||||||||
|
ITEM 2:
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Durban
|
Johannesburg
|
Cape Town
|
Total
|
|||||||||||||
|
Other limited partners
|
$ | 351,500 | $ | 412,500 | $ | 433,250 | $ | 1,197,250 | ||||||||
|
Chanticleer LP interest
|
9,299 | 68,596 | 183,861 | 261,756 | ||||||||||||
| $ | 360,799 | $ | 481,096 | $ | 617,111 | $ | 1,459,006 | |||||||||
|
|
·
|
During the quarter ended September 30, 2011, the Company executed a line of credit with its bank in the amount of $2,000,000 and at September 30, 2011 had borrowed $920,000. This line of credit is planned to be used for the buy-out of the other GP in South Africa and for investments in other countries, as discussed elsewhere herein. The Company is planning on completing an S-1 registration statement, with the intended use of the funds to repay existing loans and complete restaurant expansion plans;
|
|
|
·
|
The Company currently is receiving its share of earnings from the Durban and Johannesburg, South Africa restaurants which commenced operations in 2010 and will begin receiving its share of earnings from the Cape Town, South Africa location which opened in June of 2011;
|
|
|
·
|
The Company is funding the initial formation of Chanticleer Dividend Fund, Inc. ("CDF"), including the registration of its common stock. The Company expects to get most of its capital outlay back after the registration statement becomes effective and CDF begins raising funds; and
|
|
|
·
|
The Company has completed a registration statement on Form S-1, which was declared effective on July 14, 2011, to register one Class A Warrant and one Class B Warrant for each share of the Company issued. The Company raised $20,608, net of legal and professional fees from the sale of the warrants.
|
|
2011
|
2010
|
|||||||
|
HOA LLC acquisition
|
$ | - | $ | - | ||||
|
Investors II
|
- | - | ||||||
|
Investors LLC
|
- | 6,625 | ||||||
|
Total cash
|
- | 6,625 | ||||||
|
HOA LLC consulting accrual
|
25,000 | - | ||||||
|
Investors II accrual
|
(30,726 | ) | - | |||||
|
Amortization of deferred revenue
|
- | 2,625 | ||||||
| $ | (5,726 | ) | $ | 9,250 | ||||
|
2011
|
2010
|
|||||||
|
Professional services and fees
|
$ | 85,431 | $ | 30,350 | ||||
|
Payroll
|
118,970 | 87,107 | ||||||
|
Travel and entertainment
|
21,482 | 5,337 | ||||||
|
Other
|
54,563 | 40,383 | ||||||
| $ | 280,446 | $ | 163,177 | |||||
|
2011
|
2010
|
|||||||
|
Realized gain from sale of investments
|
$ | - | $ | (1,658 | ) | |||
|
Equity in earnings (losses) of investments
|
(20,820 | ) | 21,597 | |||||
|
Other than temporary decline in available-for-sale securities
|
(147,973 | ) | - | |||||
|
Interest and other income
|
- | 11,500 | ||||||
|
Interest expense
|
(41,190 | ) | (27,421 | ) | ||||
| $ | (209,983 | ) | $ | 4,018 | ||||
|
2011
|
2010
|
|||||||
|
HOA LLC acquisition
|
$ | 400,000 | $ | - | ||||
|
Investors II
|
- | 11,171 | ||||||
|
Investors LLC
|
- | 19,875 | ||||||
|
Total cash
|
400,000 | 31,046 | ||||||
|
HOA LLC consulting accrual
|
66,667 | - | ||||||
|
Investors II accrual
|
- | - | ||||||
|
Efftec International shares for management fee
|
- | 22,500 | ||||||
|
Amortization of deferred revenue
|
1,750 | 26,958 | ||||||
| $ | 468,417 | $ | 80,504 | |||||
|
2011
|
2010
|
|||||||
|
Professional services and fees
|
$ | 214,645 | $ | 124,018 | ||||
|
Payroll
|
356,701 | 388,074 | ||||||
|
Travel and entertainment
|
52,052 | 27,167 | ||||||
|
Other
|
146,333 | 117,990 | ||||||
| $ | 769,731 | $ | 657,249 | |||||
|
2011
|
2010
|
|||||||
|
Realized gain from sale of investments
|
$ | 19,991 | $ | 149,350 | ||||
|
Other than temporary decline in available-for-sale securities
|
(147,973 | ) | (40,386 | ) | ||||
|
Equity in earnings (losses) of investments
|
(9,256 | ) | 42,850 | |||||
|
Interest and other income
|
5,016 | 34,500 | ||||||
|
Interest expense
|
(63,876 | ) | (104,396 | ) | ||||
| $ | (196,098 | ) | $ | 81,918 | ||||
|
ITEM 3:
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
ITEM 4:
|
CONTROLS AND PROCEDURES
|
|
ITEM 1:
|
LEGAL PROCEEDINGS
|
|
ITEM 1A:
|
RISK FACTORS
|
|
ITEM 2:
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
ITEM 3:
|
DEFAULTS UPON SENIOR SECURITIES
|
|
ITEM 4:
|
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
|
ITEM 5:
|
OTHER INFORMATION
|
|
ITEM 6:
|
EXHIBITS
|
|
Exhibit 31.1
|
Certification pursuant to 18 U.S.C. Section 1350
Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
Exhibit 32.1
|
Certification pursuant to 18 U.S.C. Section 1350
Section 906 of the Sarbanes-Oxley Act of 2002
|
|
CHANTICLEER HOLDINGS, INC.
|
|||
|
Date:
|
November 11, 2011
|
By:
|
/s/ Michael D. Pruitt
|
| Michael D. Pruitt, | |||
| Chief Executive Officer and | |||
| Chief Financial Officer | |||
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|