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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||
No.
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Part I
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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 June 30, 2011 and December 31, 2010
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3
|
|
Statements of Operations – For the Three Months Ended June 30, 2011 and 2010
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4
|
|
Statements of Operations – For the Six Months Ended June 30, 2011 and 2010
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5
|
|
Statements of Cash Flows – For the Six Months Ended June 30, 2011 and 2010
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6
|
|
Notes to Financial Statements
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8
|
|
Item 2:
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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25
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Item 3:
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Quantitative and Qualitative Disclosure about Market Risk
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31
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Item 4:
|
Controls and Procedures
|
31
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Part II
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Other Information
|
32
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Item 1:
|
Legal Proceedings
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32 |
Item 1A:
|
Risk Factors
|
32 |
Item 2:
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Unregistered Sales of Equity Securities and Use of Proceeds
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32 |
Item 3:
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Defaults Upon Senior Securities
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32 |
Item 4:
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Submission of Matters to a Vote of Security Holders
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32 |
Item 5:
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Other Information
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32 |
Item 6:
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Exhibits
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32 |
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 1,871 | $ | 46,007 | ||||
Accounts receivable
|
41,667 | 4,258 | ||||||
Due from related parties
|
106,582 | 84,269 | ||||||
Prepaid expenses
|
76,423 | 24,184 | ||||||
Total current assets
|
226,543 | 158,718 | ||||||
Property and equipment, net
|
20,502 | 25,563 | ||||||
Available-for-sale investments at fair value
|
425,622 | 352,500 | ||||||
Investments accounted for under the equity method
|
92,536 | 87,200 | ||||||
Investments accounted for under the cost method
|
766,598 | 766,598 | ||||||
Deposits
|
23,980 | 23,980 | ||||||
Total assets
|
$ | 1,555,781 | $ | 1,414,559 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 296,132 | $ | 211,432 | ||||
Accrued expenses
|
9,588 | 66,103 | ||||||
Notes payable
|
247,760 | 250,000 | ||||||
Deferred revenue
|
- | 1,750 | ||||||
Due to related parties
|
84,894 | 116,349 | ||||||
Total current liabilities
|
638,374 | 645,634 | ||||||
Convertible notes payable
|
- | 686,500 | ||||||
Total liabilities
|
638,374 | 1,332,134 | ||||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Common stock, $0.0001 par value. Authorized 200,000,000 shares; issued 2,984,204 and 2,571,918 shares and outstanding 2,460,974 and 2,048,688 shares at June 30, 2011 and at December 31, 2010, respectively
|
298 | 257 | ||||||
Common stock warrants
|
16,058 | - | ||||||
Additional paid in capital
|
6,302,856 | 5,456,067 | ||||||
Non-controlling interest
|
48,758 | 24,175 | ||||||
Other comprehensive income
|
15,818 | 68,027 | ||||||
Accumulated deficit
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(4,929,698 | ) | (4,929,418 | ) | ||||
Less treasury stock, 523,230 shares
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(536,683 | ) | (536,683 | ) | ||||
Total stockholders' equity
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917,407 | 82,425 | ||||||
Total liabilities and stockholders' equity
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$ | 1,555,781 | $ | 1,414,559 | ||||
See accompanying notes to condensed consolidated financial statements.
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2011
|
2010
|
|||||||
Management and consulting revenue
|
||||||||
Affiliate
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$ | 7,830 | $ | 17,796 | ||||
Other
|
25,000 | 25,125 | ||||||
32,830 | 42,921 | |||||||
Expenses:
|
||||||||
General and administrative expense
|
262,278 | 229,851 | ||||||
262,278 | 229,851 | |||||||
Loss from operations before income taxes
|
(229,448 | ) | (186,930 | ) | ||||
Income taxes
|
- | - | ||||||
Loss from operations
|
(229,448 | ) | (186,930 | ) | ||||
Other income (expense)
|
||||||||
Realized gain from sales of investments
|
361 | 114,279 | ||||||
Equity in earnings of investments
|
6,461 | 9,456 | ||||||
Interest and other income
|
- | 11,500 | ||||||
Interest expense
|
(3,927 | ) | (62,672 | ) | ||||
Total other income
|
2,895 | 72,563 | ||||||
Net loss before non-controlling interest
|
(226,553 | ) | (114,367 | ) | ||||
Non-controlling interest
|
566 | 242 | ||||||
Net loss
|
(225,987 | ) | (114,125 | ) | ||||
Other comprehensive income:
|
||||||||
Unrealized gain (loss) on available-for-sale securities
|
(38,209 | ) | 139,354 | |||||
Net comprehensive Income (loss)
|
$ | (264,196 | ) | $ | 25,229 | |||
Net loss per share, basic and diluted
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$ | (0.09 | ) | $ | (0.06 | ) | ||
Weighted average shares outstanding
|
2,460,974 | 1,969,822 |
2011
|
2010
|
|||||||
Management and consulting revenue
|
||||||||
Affiliate
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$ | 32,476 | $ | 24,421 | ||||
Other
|
441,667 | 46,833 | ||||||
474,143 | 71,254 | |||||||
Expenses:
|
||||||||
General and administrative expense
|
489,285 | 494,073 | ||||||
489,285 | 494,073 | |||||||
Loss from operations before income taxes
|
(15,142 | ) | (422,819 | ) | ||||
Income taxes
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- | - | ||||||
Loss from operations
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(15,142 | ) | (422,819 | ) | ||||
Other income (expense)
|
||||||||
Realized gain from sales of investments
|
19,991 | 151,008 | ||||||
Other than temporary decline in available-for-sale securities
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- | (40,386 | ) | |||||
Equity in earnings of investments
|
11,564 | 21,253 | ||||||
Interest and other income
|
5,016 | 23,000 | ||||||
Interest expense
|
(22,686 | ) | (76,974 | ) | ||||
Total other income
|
13,885 | 77,901 | ||||||
Net loss before non-controlling interest
|
(1,257 | ) | (344,918 | ) | ||||
Non-controlling interest
|
977 | (123 | ) | |||||
Net loss
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(280 | ) | (345,041 | ) | ||||
Other comprehensive income:
|
||||||||
Unrealized gain (loss) on available-for-sale securities
|
(52,209 | ) | 101,847 | |||||
Net comprehensive loss
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$ | (52,489 | ) | $ | (243,194 | ) | ||
Net loss per share, basic and diluted
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$ | (0.00 | ) | $ | (0.18 | ) | ||
Weighted average shares outstanding
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2,258,248 | 1,969,822 |
2011
|
2010
|
|||||||
Cash flows from operating activities
|
||||||||
Net earnings (loss)
|
$ | (280 | ) | $ | (345,041 | ) | ||
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
|
||||||||
Other than temporary decline in available-for-sale securities
|
- | 40,386 | ||||||
Depreciation
|
5,061 | 5,508 | ||||||
Equity in (earnings) loss of investments
|
(11,564 | ) | (21,253 | ) | ||||
Beneficial conversion feature of convertible notes payable
|
- | 41,660 | ||||||
Investment received in exchange for management services
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- | (33,000 | ) | |||||
Realized (gains) losses from sales of investments
|
(19,991 | ) | (151,008 | ) | ||||
Non-controlling interest
|
(977 | ) | 123 | |||||
Change in other assets and liabilities:
|
||||||||
(Increase) decrease in accounts receivable
|
(37,410 | ) | (5,010 | ) | ||||
(Increase) decrease in prepaid expenses and other assets
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(30,482 | ) | - | |||||
Increase (decrease) in accounts payable and accrued expenses
|
40,162 | 70,380 | ||||||
Advances from related parties
|
(36,805 | ) | (16,274 | ) | ||||
Increase (decrease) in deferred revenue
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(1,750 | ) | (13,833 | ) | ||||
Net cash used in operating activities
|
(94,036 | ) | (427,362 | ) | ||||
Cash flows from investing activities
|
||||||||
Purchase of fixed assets
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- | (3,628 | ) | |||||
Purchase of investments
|
(160,471 | ) | (26,334 | ) | ||||
Distributions from equity investments
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6,228 | 11,834 | ||||||
Proceeds from sale of investments
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190,325 | 148,910 | ||||||
Net cash provided by operating activities
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36,082 | 130,782 | ||||||
Cash flows from financing activities
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||||||||
Proceeds from sale of common stock warrants
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16,058 | - | ||||||
Loan repayment
|
(2,240 | ) | - | |||||
Loan proceeds
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- | 316,000 | ||||||
Net cash provided by financing activities
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13,818 | 316,000 | ||||||
Net increase (decrease) in cash and cash equivalents
|
(44,136 | ) | 19,420 | |||||
Cash and cash equivalents, beginning of period
|
46,007 | 2,374 | ||||||
Cash and cash equivalents, end of period
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$ | 1,871 | $ | 21,794 | ||||
(Continued)
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2011
|
2010
|
|||||||
Supplemental cash flow information
|
||||||||
Cash paid for interest and income taxes:
|
||||||||
Interest
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$ | 69,058 | $ | - | ||||
Income taxes
|
- | - | ||||||
Non-cash investing and financing activities:
|
||||||||
Investments received for management consulting contracts
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- | 33,000 | ||||||
Due to related party exchanged for convertible note payable
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25,000 | - | ||||||
Convertible notes payable exchanged for common stock
|
711,500 | - | ||||||
Accrued interest exchanged for common stock
|
10,000 | - | ||||||
Common stock issued for loan from related party
|
- | 58,790 | ||||||
Investment exchanged for another investment
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- | 124,573 | ||||||
Investment contributed by the Company's CEO
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125,331 | - |
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") and DineOut S.A. Ltd. ("DineOut") (own 88.99% at June 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;
|
|
·
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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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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 has not been activated and is expected to initially include captive insurance, CHIRA and trust services;
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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 owns our 50% interest in Hooters SA, GP, the general partner of the Hooters restaurant franchises in South Africa;
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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 June 30, 2011, the Company has sold 11.01% of its interest in DineOut.
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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 June 30, 2011 and December 31, 2010, the Company had current assets of $226,543 and $158,718; current liabilities of $638,374 and $645,634; and a working capital deficit of $411,831 and $486,916, respectively. The Company had a loss of $280 during the six months ended June 30, 2011 and had an unrealized loss from available-for-sale securities of $52,209 resulting in a comprehensive loss of $52,489.
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|
·
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The Company holds 3,559,661 shares in DineOut at June 30, 2011, which are free-trading on the Frankfurt Exchange and were valued at $0.159 per share at June 30, 2011. The Company plans to continue to sell some of these shares to meet its short-term capital requirements and collected cash proceeds of $190,325 and recognized a gain of $19,991 from sales during the six months ended June 30, 2011;
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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;
|
|
·
|
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. If all warrants are sold this would raise approximately $98,000, less legal costs.
|
|
(4)
|
Reclassifications -
Certain reclassifications have been made in the financial statements at December 31, 2010 and for the periods ended June 30, 2010 to conform to the June 30, 2011 presentation. The reclassifications had no effect on net earnings (loss).
|
|
(5)
|
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.
|
|
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.
|
|
Level 3
|
Significant inputs to the valuation model are unobservable.
|
|
(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 July 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.
|
NOTE 2:
|
INVESTMENTS
|
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 | ||||||
Proceeds from sale of securities
|
- | (41,645 | ) | |||||
Realized loss
|
- | (98,741 | ) | |||||
Cost at end of period
|
409,804 | 284,473 | ||||||
Unrealized gain (loss)
|
15,818 | 68,027 | ||||||
Total
|
$ | 425,622 | $ | 352,500 |
2011
|
2010
|
|||||||
Investments using the equity method:
|
||||||||
Balance, beginning of year
|
$ | 87,200 | $ | 82,500 | ||||
Equity in earnings (loss)
|
11,564 | 58,337 | ||||||
Sale of investment
|
- | (37,500 | ) | |||||
Distributions received
|
(6,228 | ) | (16,137 | ) | ||||
Balance, end of period
|
$ | 92,536 | $ | 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
|
|||||||||||||
June 30, 2011
|
||||||||||||||||
Remodel Auction *
|
$ | 900 | $ | - | $ | (900 | ) | $ | - | |||||||
North American Energy
|
126,000 | - | (91,000 | ) | 35,000 | |||||||||||
North American Energy *
|
10,500 | - | (3,000 | ) | 7,500 | |||||||||||
North American Energy
|
125,331 | - | (35,809 | ) | 89,522 | |||||||||||
Efftec International, Inc. *
|
22,500 | - | 3,000 | 25,500 | ||||||||||||
Efftec International, Inc. (warrant) *
|
- | - | 3,000 | 3,000 | ||||||||||||
HiTech Stages
|
124,573 | - | 140,527 | 265,100 | ||||||||||||
$ | 409,804 | $ | - | $ | 15,818 | $ | 425,622 | |||||||||
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 |
2011
|
2010
|
|||||||
Carrying value:
|
||||||||
Chanticleer & Shaw Foods Pty. Ltd. (50%)
|
$ | 92,536 | $ | 87,200 | ||||
$ | 92,536 | $ | 87,200 |
2011
|
2010
|
|||||||
Equity in earnings (loss):
|
||||||||
Hoot S.A. I, LLC (20%)
|
4,808 | 18,253 | ||||||
Hoot S.A. II, LLC (20%)
|
6,756 | 3,000 | ||||||
$ | 11,564 | $ | 21,253 | |||||
Distributions:
|
||||||||
Hoot S.A. I, LLC (20%)
|
4,335 | 11,834 | ||||||
Hoot S.A. II, LLC (20%)
|
1,893 | - | ||||||
$ | 6,228 | $ | 11,834 |
2011
|
2010
|
|||||||
Revenues
|
$ | 2,018,039 | $ | 1,393,200 | ||||
Gross profit
|
1,332,670 | 964,858 | ||||||
Income from continuing operations
|
120,286 | 203,156 | ||||||
Net income
|
120,286 | 203,156 |
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:
|
CONVERTIBLE NOTES PAYABLE
|
NOTE 4:
|
NOTES PAYABLE
|
NOTE 5:
|
RELATED PARTY TRANSACTIONS
|
2011
|
2010
|
|||||||
Chanticleer Investors, LLC
|
$ | - | $ | 6,035 | ||||
Chanticleer Investors II, LLC
|
30,726 | 46,547 | ||||||
Chanticleer Dividend Fund, Inc.
|
74,281 | 30,937 | ||||||
Hoot SA II LLC
|
825 | - | ||||||
Other
|
750 | 750 | ||||||
$ | 106,582 | $ | 84,269 |
2011
|
2010
|
|||||||
Avenel Financial Group, a company owned by Mr. Pruitt
|
21,349 | 46,349 | ||||||
Chanticleer Investors, LLC
|
4,045 | - | ||||||
Hoot SA II, LLC
|
10,500 | - | ||||||
Hoot SA III, LLC
|
49,000 | 70,000 | ||||||
$ | 84,894 | $ | 116,349 |
2011
|
2010
|
|||||||
Chanticleer Investors, LLC
|
$ | - | $ | 13,250 | ||||
Chanticleer Investors II, LLC
|
30,726 | 11,171 | ||||||
North American Energy Resources, Inc.
|
1,750 | - | ||||||
$ | 32,476 | $ | 24,421 |
NOTE 6:
|
COMMITMENTS AND CONTINGENCIES
|
NOTE 7:
|
DEFERRED REVENUE
|
2011
|
2010
|
|||||||
Balance at beginning of year
|
$ | 1,750 | $ | 20,833 | ||||
Additions:
|
||||||||
North American Energy common stock
|
- | 10,500 | ||||||
Amortization
|
(1,750 | ) | (29,583 | ) | ||||
Balance end of year
|
$ | - | $ | 1,750 |
NOTE 8:
|
STOCKHOLDERS' EQUITY
|
NOTE 9:
|
SEGMENTS OF BUSINESS
|
Management
|
Insurance
|
Restaurants
|
Total
|
|||||||||||||
Revenues
|
$ | 32,830 | $ | - | $ | - | $ | 32,830 | ||||||||
Interest expense
|
$ | 3,927 | $ | - | $ | - | $ | 3,927 | ||||||||
Depreciation and amortization
|
$ | 2,512 | $ | - | $ | - | $ | 2,512 | ||||||||
Profit (loss)
|
$ | (233,375 | ) | $ | - | $ | 6,461 | $ | (226,914 | ) | ||||||
Investments and other
|
361 | |||||||||||||||
(226,553 | ) | |||||||||||||||
Non-controlling interest
|
566 | |||||||||||||||
$ | (225,987 | ) | ||||||||||||||
Assets
|
$ | 271,025 | $ | - | $ | 92,536 | $ | 363,561 | ||||||||
Investments
|
1,192,220 | |||||||||||||||
$ | 1,555,781 | |||||||||||||||
Liabilities
|
$ | 638,374 | $ | - | $ | - | $ | 638,374 | ||||||||
Expenditures for non-current assets
|
$ | - | $ | - | $ | - | $ | - |
Management
|
Insurance
|
Restaurants
|
Total
|
|||||||||||||
Revenues
|
$ | 42,921 | $ | - | $ | - | $ | 42,921 | ||||||||
Interest expense
|
$ | 62,672 | $ | - | $ | - | $ | 62,672 | ||||||||
Depreciation and amortization
|
$ | 2,774 | $ | - | $ | - | $ | 2,774 | ||||||||
Profit (loss)
|
$ | (249,603 | ) | $ | - | $ | 9,456 | $ | (240,147 | ) | ||||||
Investments and other
|
125,780 | |||||||||||||||
(114,367 | ) | |||||||||||||||
Non-controlling interest
|
242 | |||||||||||||||
$ | (114,125 | ) | ||||||||||||||
Assets
|
$ | 105,050 | $ | - | $ | 54,419 | $ | 159,469 | ||||||||
Investments
|
1,486,141 | |||||||||||||||
$ | 1,645,610 | |||||||||||||||
Liabilities
|
$ | 1,008,624 | $ | - | $ | 25,000 | $ | 1,033,624 | ||||||||
Expenditures for non-current assets
|
$ | - | $ | - | $ | - | $ | - |
Management
|
Insurance
|
Restaurants
|
Total
|
|||||||||||||
Revenues
|
$ | 474,143 | $ | - | $ | - | $ | 474,143 | ||||||||
Interest expense
|
$ | 22,686 | $ | - | $ | - | $ | 22,686 | ||||||||
Depreciation and amortization
|
$ | 5,061 | $ | - | $ | - | $ | 5,061 | ||||||||
Profit (loss)
|
$ | (37,828 | ) | $ | - | $ | 11,564 | $ | (26,264 | ) | ||||||
Investments and other
|
25,007 | |||||||||||||||
(1,257 | ) | |||||||||||||||
Non-controlling interest
|
977 | |||||||||||||||
$ | (280 | ) | ||||||||||||||
Assets
|
$ | 271,025 | $ | - | $ | 92,536 | $ | 363,561 | ||||||||
Investments
|
1,192,220 | |||||||||||||||
$ | 1,555,781 | |||||||||||||||
Liabilities
|
$ | 638,374 | $ | - | $ | - | $ | 638,374 | ||||||||
Expenditures for non-current assets
|
$ | - | $ | - | $ | - | $ | - |
Management
|
Insurance
|
Restaurants
|
Total
|
|||||||||||||
Revenues
|
$ | 71,254 | $ | - | $ | - | $ | 71,254 | ||||||||
Interest expense
|
$ | 76,974 | $ | - | $ | - | $ | 76,974 | ||||||||
Depreciation and amortization
|
$ | 5,508 | $ | - | $ | - | $ | 5,508 | ||||||||
Profit (loss)
|
$ | (499,793 | ) | $ | - | $ | 21,253 | $ | (478,540 | ) | ||||||
Investments and other
|
133,622 | |||||||||||||||
(344,918 | ) | |||||||||||||||
Non-controlling interest
|
(123 | ) | ||||||||||||||
$ | (345,041 | ) | ||||||||||||||
Assets
|
$ | 105,050 | $ | - | $ | 54,419 | $ | 159,469 | ||||||||
Investments
|
1,486,141 | |||||||||||||||
$ | 1,645,610 | |||||||||||||||
Liabilities
|
$ | 1,008,624 | $ | - | $ | 25,000 | $ | 1,033,624 | ||||||||
Expenditures for non-current assets
|
$ | 3,628 | $ | - | $ | - | $ | 3,628 |
NOTE 10:
|
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)
|
|||||||||||||
June 30, 2011
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities
|
$ | 425,622 | $ | 425,622 | $ | - | $ | - | ||||||||
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
|
·
|
The Company holds 3,559,661 shares in DineOut at June 30, 2011, which are free-trading on the Frankfurt Exchange and were valued at $0.159 per share at June 30, 2011. The Company plans to continue to sell some of these shares to meet its short-term capital requirements and collected cash proceeds of $190,325 and recognized a gain of $19,991 from sales during the six months ended June 30, 2011;
|
·
|
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 effective July 14, 2011, to register one Class A Warrant and one Class B Warrant for each share of the Company issued. If all warrants are sold this would raise approximately $98,000, less legal costs.
|
2011
|
2010
|
|||||||
HOA LLC acquisition
|
$ | - | $ | - | ||||
Investors II
|
- | 11,171 | ||||||
Investors LLC
|
- | 6,625 | ||||||
Total cash
|
- | 17,796 | ||||||
HOA LLC consulting accrual
|
25,000 | - | ||||||
Investors II accrual
|
7,830 | - | ||||||
Efftec Internation shares for management fee
|
- | 22,500 | ||||||
Amortization of deferred revenue
|
- | 2,625 | ||||||
$ | 32,830 | $ | 42,921 |
2011
|
2010
|
|||||||
Professional services and fees
|
$ | 70,154 | $ | 53,486 | ||||
Payroll
|
129,104 | 134,204 | ||||||
Travel and entertainment
|
17,384 | 9,087 | ||||||
Other
|
45,636 | 33,074 | ||||||
$ | 262,278 | $ | 229,851 |
2011
|
2010
|
|||||||
Realized gain from sale of investments
|
$ | 361 | $ | 114,279 | ||||
Equity in earnings of investments
|
6,461 | 9,456 | ||||||
Interest and other income
|
- | 11,500 | ||||||
Interest expense
|
(3,927 | ) | (62,672 | ) | ||||
$ | 2,895 | $ | 72,563 |
2011
|
2010
|
|||||||
HOA LLC acquisition
|
$ | 400,000 | $ | - | ||||
Investors II
|
- | 11,171 | ||||||
Investors LLC
|
- | 13,250 | ||||||
Total cash
|
400,000 | 24,421 | ||||||
HOA LLC consulting accrual
|
41,667 | - | ||||||
Investors II accrual
|
30,726 | - | ||||||
Efftec Internation shares for management fee
|
- | 22,500 | ||||||
Amortization of deferred revenue
|
1,750 | 24,333 | ||||||
$ | 474,143 | $ | 71,254 |
2011
|
2010
|
|||||||
Professional services and fees
|
$ | 123,022 | $ | 89,467 | ||||
Payroll
|
237,731 | 300,967 | ||||||
Travel and entertainment
|
30,570 | 21,830 | ||||||
Other
|
97,962 | 81,809 | ||||||
$ | 489,285 | $ | 494,073 |
2011
|
2010
|
|||||||
Realized gain from sale of investments
|
$ | 19,991 | $ | 151,008 | ||||
Other than temporary decline in available-for-sale securities
|
- | (40,386 | ) | |||||
Equity in earnings of investments
|
11,564 | 21,253 | ||||||
Interest and other income
|
5,016 | 23,000 | ||||||
Interest expense
|
(22,686 | ) | (76,974 | ) | ||||
$ | 13,885 | $ | 77,901 |
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 2.1
|
Certificate of Merger of Tulvine Systems, Inc. and Chanticleer Holdings, Inc.
|
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: August 15, 2011
|
By:
|
/s/ Michael D. Pruitt
|
Michael D. Pruitt,
|
||
Chief Executive Officer and
|
||
Chief Financial Officer
|
State of Delaware
|
|
Secretary of State
|
|
Division of Cosposetioris
|
|
Delivered 03:03 PAS
05/02/2005
|
|
TIMED 02:50 PAS
05/02/2005
|
|
0502c7191 -
3113795 MIS
|
BY: /s/ Michael D. Pruitt - Signature
|
Name: Michael D. Pruitt - Print Name
|
Title: President
|
Tulvine Systems, Inc.
|
BY: /s/ Michael D. Pruitt - Signature
|
Name: Michael D. Pruitt - Print Name
|
Title: Chief Executive Officer
|
Chanticleer Holdings, Inc.
|
1.
|
I have reviewed this Report on Form 10-Q of Chanticleer Holdings, Inc. (the registrant);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-a15(f) and 15d-15(f) for the registrant and have:
|
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant’s current fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;
|
5.
|
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions);
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls.
|
August 15, 2011
|
/s/ Michael D. Pruitt
|
|
Michael D. Pruitt
|
||
Chief Executive Officer and
|
||
Chief Financial Officer
|
|
1.
|
I am the Chief Executive Officer and Chief Financial Officer of Chanticleer Holdings, Inc.
|
|
2.
|
Attached to this certification is Form 10-Q for the quarter ended June 30, 2011, a periodic report (the “periodic report”) filed by the issuer with the Securities Exchange Commission pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 (the “Exchange Act”), which contains financial statements.
|
|
3.
|
I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
|
|
·
|
The periodic report containing the financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act, and
|
|
·
|
The information in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer for the periods presented.
|
August 15, 2011
|
/s/ Michael D. Pruitt
|
|
Michael D. Pruitt
|
||
Chief Executive Officer and
|
||
Chief Financial Officer
|