**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**





WASHINGTON,
      DC 20549





**FORM
      10-Q**





Quarterly
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934








For
                Quarter Ended:
            
            **September
                30, 2008**Commission
                File Number:
            
            **000-29507**




**CHANTICLEER
      HOLDINGS, INC.**


(Exact
      name of registrant as specified in its charter)




**Delaware**
            **20-2932652**(State
                or Jurisdiction ofIncorporation
                or Organization)
            (IRS
                Employer ID No)





**4201
      Congress Street, Suite 145, Charlotte, NC 28209**


(Address
      of principal executive office) (zip code)




**(704)
      366-5122**


(Issuer’s
      telephone number)




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter periods as the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes x No o.





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      definitions of “large accelerated filer,” accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act. (Check one):





Large
      accelerated filer o  Accelerated
      filer o  Non-accelerated
      filer x  Smaller
      reporting
      company o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No x.





The
      number of shares outstanding of registrant’s common stock, par value $.0001 per
      share, as of October 28, 2008, was 946,376 shares.










**Chanticleer
      Holdings, Inc. and Subsidiary**





INDEX




Page
                  No.Part
                I
              Financial
                Information
                (unaudited)Item
                  1:
              Condensed
                  Consolidated Financial StatementsBalance
                  Sheets as of September 30, 2008 and December 31, 2007
              3Statements
                  of Operations - For the Three Months Ended September 30, 2008 and
                  2007
              4Statements
                  of Operations - For the Nine Months Ended September 30, 2008 and
                  2007
              5Statements
                  of Cash Flows - For the Nine Months Ended September 30, 2008 and
                  2007
              6Notes
                  to Financial Statements
              7Item
                  2:
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              16Item
                  3:
              Quantitative
                  and Qualitative Disclosure about Market Risk
              20Item
                  4:
              Controls
                  and Procedures
              20Part
                II
              Other
                Information
              21Item
                  1:
              Legal
                  ProceedingsItem
                  1A:
              Risk
                  FactorsItem
                  2:
              Unregistered
                  Sales of Equity Securities and Use of ProceedsItem
                  3:
              Defaults
                  Upon Senior SecuritiesItem
                  4:
              Submission
                  of Matters to a Vote of Security HoldersItem
                  5:
              Other
                  InformationItem
                  6:
              Exhibits


2


**Chanticleer
          Holdings, Inc. and Subsidiary**
 **Consolidated
          Balance Sheets**
 **September
          30, 2008 and December 31, 2007**
 **(Unaudited)**
 
 **2008**
                
                **2007****ASSETS**Current
                    assets:Cash
                    and cash equivalents
                
                $
                746
                
                $
                183Accounts
                    receivable, controlled affiliate investment
                
                
                15,612
                
                
                11,150Prepaid
                    expenses
                
                
                5,311
                
                
                19,560Marketable
                    equity securities
                
                
                -
                
                
                65,000Total
                    investments
                
                
                21,669
                
                
                95,893Fixed
                    assets, net
                
                
                38,778
                
                
                45,537Deferred
                    acquisition costs
                
                
                279,050
                
                
                -Investments
                    at fair value
                
                
                352,814
                
                
                1,016,567Other
                    investments, principally accounted for under the equity
                    method
                
                
                1,889,861
                
                
                1,930,342Deposits
                
                
                3,980
                
                
                3,980**TOTAL
                    ASSETS**
                
                $
                2,586,152
                
                $
                3,092,319**TOTAL
                    LIABILITIES AND STOCKHOLDERS' EQUITY****CURRENT
                    LIABILITIES**Accounts
                    payable
                
                $
                157,978
                
                $
                25,555Accrued
                    expenses
                
                
                865
                
                
                4,150Notes
                    payable
                
                
                473,500
                
                
                165,272Deferred
                    revenue
                
                
                -
                
                
                128,555Bank
                    overdraft
                
                
                -
                
                
                25,736**TOTAL
                    CURRENT LIABILITIES**
                
                
                632,343
                
                
                349,268Commitments
                    and contingencies**STOCKHOLDERS'
                    EQUITY**Common
                    stock, $.0001 par value.   Authorized 200,000,000 shares;issued and outstanding 946,376 shares at September 30, 2008
                    and833,122 shares at December 31, 2007
                
                
                946
                
                
                833Additional
                    paid in capital
                
                
                4,642,346
                
                
                3,849,766Unrealized
                    loss on available for sale securities
                
                
                (905,756
                )
                
                (242,004
                )Accumulated
                    deficit
                
                
                (1,783,727
                )
                
                (865,544
                )**TOTAL STOCKHOLDERS' EQUITY**
                
                
                1,953,809
                
                
                2,743,051**TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY**
                
                $
                2,586,152
                
                $
                3,092,319
 See
            accompanying notes to condensed consolidated financial
            statements.
 
 3




**Chanticleer
        Holdings, Inc. and Subsidiary**
 **Consolidated
        Statements of Operations**
 **For
        the Three Months Ended September 30, 2008 and 2007**
 **(Unaudited)**
 
 **2008**
              
              **2007****Revenue**Management
                  fee income - affiliates
              
              $
              25,000
              
              $
              192,93525,000
              
              
              192,935**Expenses:**General
                  and administrative expense
              
              
              294,901
              
              
              166,591294,901
              
              
              166,591**Earnings
                  (loss) from operations before income taxes**
              
              
              (269,901
              )
              
              26,344**Income
                  taxes**
              
              
              -
              
              
              -**Earnings
                  (loss) from operations**
              
              
              (269,901
              )
              
              26,344**Other
                  income (expense)**Gain
                  (loss) on sale of investments
              
              
              -
              
              
              7,012Unrealized
                  gain (loss) from marketable equity securities
              
              
              -
              
              
              71,619Equity
                  in earnings (loss) of investments
              
              
              11,500
              
              
              5,540Loss
                  on sale of fixed asset
              
              
              -
              
              
              (713
              )Interest
                  income
              
              
              -
              
              
              462Interest
                  expense
              
              
              (6,852
              )
              
              (242
              )Total other income (expense)
              
              
              4,648
              
              
              83,678**Net
                  earnings (loss)**
              
              
              (265,253
              )
              
              110,022**Other
                  comprehensive earnings (loss):**Unrealized
                  gain (loss) on available-for-sale securities
              
              
              (192,844
              )
              
              363,451**Net comprehensive earnings (loss)**
              
              $
              (458,097
              )
              $
              473,473**Net
                  earnings (loss) per share, basic and diluted**
              
              $
              (0.28
              )
              $
              0.14**Weighted
                  average shares outstanding**
              
              
              945,053
              
              
              805,903


See
      accompanying notes to condensed consolidated
      financial statements.




4


**Chanticleer
        Holdings, Inc. and Subsidiary**
 **Consolidated
        Statements of Operations**
 **For
        the Nine Months Ended September 30, 2008 and 2007**
 **(Unaudited)**
 
 **2008**
              
              **2007****Revenue**Management
                  fee income - affiliates
              
              $
              203,555
              
              $
              371,490203,555
              
              
              371,490**Expenses:**General
                  and administrative expense
              
              
              985,911
              
              
              529,151Asset
                  impairment
              
              
              137,730
              
              
              -1,123,641
              
              
              529,151**Loss
                  from operations before income taxes**
              
              
              (920,086
              )
              
              (157,661
              )**Income
                  taxes**
              
              
              -
              
              
              -**Loss
                  from operations**
              
              
              (920,086
              )
              
              (157,661
              )**Other
                  income (expense)**Gain
                  (loss) on sale of investments
              
              
              -
              
              
              26,117Unrealized
                  gain (loss) from marketable equity securities
              
              
              5,000
              
              
              44,069Equity
                  in earnings (loss) of investments
              
              
              11,748
              
              
              25,071Loss
                  on sale of fixed asset
              
              
              -
              
              
              (713
              )Interest
                  income
              
              
              -
              
              
              3,628Interest
                  expense
              
              
              (14,846
              )
              
              (6,665
              )Total other income (expense)
              
              
              1,902
              
              
              91,507**Net
                  loss**
              
              
              (918,184
              )
              
              (66,154
              )**Other
                  comprehensive earnings (loss):****Unrealized
                  gain (loss) on available-for-sale securities**
              
              
              (663,572
              )
              
              268,251**Net comprehensive earnings (loss)**
              
              $
              (1,581,756
              )
              $
              202,097**Net
                  loss per share, basic and diluted**
              
              $
              (1.02
              )
              $
              (0.08
              )**Weighted
                  average shares outstanding**
              
              
              899,338
              
              
              788,203


See
      accompanying notes to condensed consolidated
      financial statements.




5


**Chanticleer
        Holdings, Inc. and Subsidiary**
 **Consolidated
        Statements of Cash Flows**
 **For
        the Nine Months Ended September 30, 2008 and 2007**
 **(Unaudited)**
 
 **2008**
              
              **2007****Cash
                  flows from operating activities**Net
                  loss
              
              $
              (918,184
              )
              $
              (66,154
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Change in unrealized (gain) loss of marketable securities
              
              
              (5,000
              )
              
              (44,069
              )Gain on sale of investments
              
              
              -
              
              
              (26,117
              )Depreciation
              
              
              8,581
              
              
              6,241Common stock issued for services
              
              
              7,993
              
              
              -Consulting and other services rendered for investment
                  securities
              
              
              -
              
              
              (553,601
              )Loss on sale of fixed asset
              
              
              -
              
              
              713Equity in (earnings) loss of investments
              
              
              (11,748
              )
              
              (25,071
              )Asset impairment
              
              
              137,730
              
              
              -Change in other assets and liabilities:(Increase)
                  decrease in accounts receivable
              
              
              (4,462
              )
              
              20,522(Increase)
                  decrease in prepaid expenses and other assets
              
              
              14,250
              
              
              13,520(Increase)
                  decrease in deferred acquisition costs
              
              
              (279,050
              )
              
              -Increase
                  (decrease) in accounts payable and accrued expenses
              
              
              129,137
              
              
              11,845Increase
                  (decrease) in deferred revenue
              
              
              (128,555
              )
              
              257,111Net cash used in operating activities
              
              
              (1,049,308
              )
              
              (405,060
              )**Cash
                  flows from investing activities**Purchase
                  of fixed assets
              
              
              (1,822
              )
              
              (4,603
              )Purchase
                  of investments
              
              
              (120,000
              )
              
              (15,444
              )Distributions
                  from equity investments
              
              
              34,500
              
              
              34,500Proceeds
                  from sale of investments
              
              
              -
              
              
              177,656Proceeds
                  from sale of fixed asset
              
              
              -
              
              
              270Net cash provided by (used in) operating activities
              
              
              (87,322
              )
              
              192,379**Cash
                  flows from financing activities**Proceeds
                  from sale of common stock
              
              
              784,701
              
              
              450,000Loan
                  repayment
              
              
              -
              
              
              (150,704
              )Cash
                  overdraft
              
              
              (25,736
              )
              
              -Loan
                  proceeds
              
              
              378,228
              
              
              -Net cash provided by financing activities
              
              
              1,137,193
              
              
              299,296Net
                  increase (decrease) in cash and cash equivalents
              
              
              563
              
              
              86,615Cash
                  and cash equivalents, beginning of period
              
              
              183
              
              
              124,311Cash
                  and cash equivalents, end of period
              
              $
              746
              
              $
              210,926**Supplemental
                  cash flow information**Cash
                  paid for interest and income taxes:Interest
              
              $
              6,594
              
              $
              6,764Income taxes
              
              
              -
              
              
              -Non-cash
                  investing and financing activities:Rescission of investment purchased with a note
              
              $
              70,000
              
              $
              -


See
      accompanying notes to condensed consolidated
      financial statements.




6




**Chanticleer
      Holdings, Inc. and Subsidiary**


**Notes
      to Consolidated Financial Statements**


**(Unaudited)**








**NOTE
                1:**
            **Nature
                of Business and Significant Accounting
                Policies**





**(1)**
            **Organization
                -**The consolidated financial statements include the accounts of Chanticleer
                Holdings, Inc. (“Holdings”) and its wholly owned subsidiary Chanticleer
                Advisors LLC (“Advisors”) (collectively the “Company”, “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. On May 2, 2005, Tulvine
                Systems, Inc. merged with and changed its name to Chanticleer Holdings,
                Inc.





**(2)**
            **Shareholder
                Actions**-
                The holders of a majority of the Company’s issued and outstanding common
                stock, pursuant to a written consent in lieu of a meeting, in accordance
                with the Company’s certificate of incorporation and Delaware General
                Corporation Law Section 228, have approved: (i) the withdrawal of
                the
                Company’s election to be treated as a BDC under the 1940 Act and (ii) the
                reverse split of the Company’s issued and outstanding common stock at a
                ratio of 1:10.





Withdrawal
      of the Company’s election to be treated as a BDC under the 1940 Act became
      effective on July 21, 2008, when the Company filed Form N-54c with the U.S.
      Securities and Exchange Commission (“SEC”).





The
      1:10
      reverse split of the Company’s issued and outstanding common stock was effective
      on July 17, 2008, at which time the Company began trading under a new symbol
      on
      the OTC Bulletin Board (CCLR). All share amounts and transactions have been
      restated to give effect to the reverse split as if it happened at the beginning
      of the earliest period presented.





**(3)**
            **General**-
                The 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 financial
                statements have not been audited.





Certain
      information and footnote disclosures normally included in financial statements
      prepared in accordance with accounting principles generally accepted in the
      United States of America have been condensed or omitted pursuant to such rules
      and regulations for interim reporting. The Company believes that the disclosures
      contained herein are adequate to make the information presented not misleading.
      However, these financial statements should be read in conjunction with the
      financial statements and notes thereto included in the Company’s Annual Report
      for the period ended December 31, 2007, which is included in the Company’s Form
      10-K.




7


**(4)**
              **Financial
                  Statement
                  Reporting**-
                  As noted in (2) above, the Company filed Form N-54c with the SEC
                  on July
                  21, 2008 indicating the withdrawal of its election to be treated
                  as a BDC
                  under the 1940 Act, which resulted in a change in its method of
                  accounting. BDC financial statement presentation and accounting
                  uses the
                  value method of accounting used by investment companies, which
                  allows BDCs
                  to value their investments at fair value as opposed to historical
                  cost. In
                  addition, entities in which the Company owns a majority are not
                  consolidated; rather the investments in these entities are reflected
                  on
                  the balance sheet as an investment in a majority-owned portfolio
                  company
                  at fair market value. Our investments will be accounted for as
                  either
                  available for sale securities, at amortized cost, or under the
                  equity
                  method. In addition, our statements will be consolidated with our
                  wholly
                  owned subsidiary.


Statement
      of Financial Accounting Standards No. 154, “Accounting Changes and Error
      Corrections,” (“SFAS 154”) provides that when an accounting change results in
      financial statements that are, in effect, the statements of a different
      reporting entity, the change shall be retrospectively applied to the financial
      statements of all prior periods presented to show financial information for
      the
      new reporting entity for those periods. Previously issued interim financial
      statements shall be presented on a retrospective basis.


**(5)**
                **Investments**-Investments
                    are classified into the following
                    categories:


·
            Trading
                securities reported at fair value with unrealized gains and loses
                included
                in earnings;


·
            Available-for-sale
                securities reported at fair value with unrealized gains and losses,
                net of
                applicable deferred income taxes, reported in other comprehensive
                income;


·
            Held-to-maturity
                securities and other investments reported at amortized cost;
                and


·
            Investments
                using the equity method of
                accounting.





8





**NOTE
                2:**
            **Change
                in Reporting
                Entity**


From
        May
        23, 2005 until July 21, 2008, the Company operated as a business development
        company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940
        Act”). As such, the Company was subject to different reporting requirements and
        methods of accounting for its investments. With the change back to being
        an
        operating company, the Company is no longer subject to the requirements of
        a BDC
        and the Company was required pursuant to SFAS No. 154, “Accounting Changes and
        Error Corrections” (“SFAS 154”) to retroactively modify its financial statements
        as if it were not subject to the requirements of a BDC during all periods
        presented.
 
 The
        following reports the effect of the change on net earnings (loss), other
        comprehensive income and net earnings per-share for the three months ended
        September 30, 2008 and 2007:
  **Three
                    months ended****September
                    30,****2008**
                
                **2007**Net
                    increase in net assets from operations
                
                $
                -
                
                $
                1,840,289Fair
                    value increases recorded for other investments
                
                
                -
                
                
                (1,359,557
                )Fair
                    value increases recorded for available-for-sale
                    securities now included in othercomprehensive
                    earnings (loss)
                
                
                -
                
                
                (363,451
                )Equity
                    in earnings (loss) of investments
                
                
                -
                
                
                (5,960
                )Net
                        loss of wholly-owned subsidiary notpreviously
                        consolidated
                
                
                -
                
                
                (1,299
                )Net earnings loss
                
                
                (265,253
                )
                
                110,022Other
                    comprehensive earnings (loss):As
                    originally reported
                
                
                -
                
                
                -Unrealized
                      gains (losses) on available-for-sale
                      securities
                
                
                (192,844
                )
                
                363,451Net
                    comprehensive earnings (loss)
                
                $
                (458,097
                )
                $
                473,473Net
                    earnings (loss) per share, basic and diluted:As
                    originally reported
                
                
                N/A
                
                $
                2.28Restated
                
                $
                (0.28
                )
                $
                0.14
 
 9
 
 The
        following reports the effect of the change on net earnings (loss), other
        comprehensive income and net earnings per-share for the nine months ended
        September 30, 2008 and 2007:
  **Nine
                          months ended****September
                          30,****2008**
                      
                      **2007**Net
                          increase (decrease) in net assets fromoperations
                          (six months ended June 30, 2008 for 2008)
                      
                      $
                      (1,138,887
                      )
                      $
                      1,576,908Fair
                          value increases recorded for other investments
                      
                      
                      -
                      
                      
                      (1,359,557
                      )Fair
                          value increases recorded for available-for-sale securities
                          now included in
                          othercomprehensive
                          earnings (loss)
                      
                      
                      470,908
                      
                      
                      (268,251
                      )Equity
                          in earnings (loss) of investments
                      
                      
                      39,518
                      
                      
                      (9,429
                      )Net
                          loss of wholly-owned subsidiary not previously
                          consolidated
                      
                      
                      (24,470
                      )
                      
                      (5,825
                      )Net
                          loss for the three months ended September 30, 2008
                      
                      
                      (265,253
                      )
                      
                      -Net loss
                      
                      
                      (918,184
                      )
                      
                      (66,154
                      )Other
                          comprehensive earnings (loss):As
                          originally reported
                      
                      
                      -
                      
                      
                      -Unrealized
                          gains (losses) on available-for-sale securitiesNine
                          months ended September 30, 2007
                      
                      
                      -
                      
                      
                      268,251Three
                          months ended September 30, 2008
                      
                      
                      (192,844
                      )
                      
                      -Six
                          months ended June 30, 2008
                      
                      
                      (470,908
                      )
                      
                      -Net
                          comprehensive earnings (loss)
                      
                      $
                      (1,581,936
                      )
                      $
                      202,097Net
                          earnings (loss) per share, basic and diluted:As
                          originally reported
                      
                      
                      N/A
                      
                      $
                      2.00Restated
                      
                      $
                      (1.02
                      )
                      $
                      (0.08
                      )
 
 10
  **NOTE
                    3:**
                **Investments**
 Investments
        are summarized as follows at September 30, 2008 and December 31,
        2007:
  **2008**
                
                **2007**Marketable
                    equity securities:Cost
                
                $
                -
                
                $
                70,000Unrealized
                    loss
                
                
                -
                
                
                (5,000
                )Total
                
                
                -
                
                
                65,000Available
                    for sale securities:Cost
                
                
                1,258,571
                
                
                1,258,571Unrealized
                    loss
                
                
                (905,756
                )
                
                (242,004
                )Total
                
                
                352,815
                
                
                1,016,567Other
                    investments:Investments
                    using the equity method:Balance, beginning of period
                
                
                1,410,482
                
                
                1,420,566Equity in earnings (loss)
                
                
                (22,752
                )
                
                (10,084
                )Asset impairment
                
                
                (137,730
                )
                
                -Balance,
                    end of period
                
                
                1,250,000
                
                
                1,410,482Investments
                    at cost
                
                
                499,860
                
                
                499,860Investment
                    deposits
                
                
                140,000
                
                
                20,000$
                1,889,860
                
                $
                1,930,342
 
 **NOTE
                    4:**
                **Note
                    Payable**
 The
        Company has a one-year line-of-credit with a bank in the amount of $500,000
        which matures on March 3, 2009. The line-of-credit is guaranteed by the CEO
        of
        the Company and is collateralized by all inventory, chattel paper, accounts,
        equipment and general intangibles of the Company. The loan bears interest
        at
        5.0% at September 30, 2008 and has a balance of $473,500. ($95,272 at December
        31, 2007).
 
 The
        Company had a one-year note with a company in the amount of $70,000 which
        would
        have matured on September 15, 2008, bearing interest at 4%. The loan was
        used to
        acquire 125,000 shares of HealthSport, Inc. common stock. Effective June
        30,
        2008, the seller and the Company rescinded the transaction. The Company returned
        the shares and the note payable was cancelled with no interest
        paid.
  11
 **NOTE
                    5:**
                **Stockholders’
                    Equity**
 The
        Company has 200,000,000 shares of its $0.0001 par value common stock authorized
        and 946,376 and 833,122 shares issued and outstanding at September 30, 2008
        and
        December 31, 2007, respectively. There are no warrants or options outstanding.
 
 A
        reverse
        split of the Company’s issued and outstanding common stock at a ratio of 1:10
        was effective on July 17, 2008, following approval by the majority of the
        Company’s shareholders. All share transactions have been restated to give effect
        to the reverse split.
 
 On
        April
        12, 2007, the Company filed an Offering Circular under Regulation E promulgated
        under the Securities Act of 1933 to raise up to $5,000,000 by selling between
        400,000 and 714,286 shares of its common stock at prices ranging between
        $7.00
        and $12.50 per share. The offering was closed on February 11, 2008 with $650,000
        received for 92,859 shares of common stock during the offering
        period.
 
 On
        March
        27, 2008, the Company filed a new Offering Circular under Regulation E to
        raise
        up to $4,500,000 by selling between 500,000 and 1,000,000 shares of its common
        stock at prices ranging between $4.50 and $9.00 per share. As of September
        30,
        2008, the Company had sold 83,532 shares for $584,700 pursuant to this 1-E.
        The
        1-E was closed on July 18, 2008.
  **NOTE
                    6:**
                **Related
                    Party
                    Transactions**
 Michael
        D. Pruitt, the Company’s Chief Executive Officer, is also CFO and the sole
        director of Syzygy Entertainment, Ltd.
 
 On
        July
        31, 2006, the Company formed Chanticleer Investors II, LLC (“Investors II”).
        Investors II began raising funds in January 2007 for the purpose of investing
        in
        publicly traded value securities.
 
 In
        January 2007, the Company formed Advisors as a wholly-owned subsidiary to
        manage
        Investors II, as well as other designated projects. Pursuant to Regulation
        S-X
        Rule 6, Advisors was not consolidated with the Company until July 21, 2008,
        when
        the Company withdrew its election to be treated as a BDC.
 
 During
        the three months ended March 31, 2007, the Company sold its investment in
        two
        securities to Investors II for $21,775, which approximated market value on
        the
        transaction dates. The Company realized a profit of $127 on the
        transactions.
 
 The
        Company’s CEO contributed 300,000 shares of SYZG to the Company in 2007. The
        shares were valued at $600,000 based upon a liquidity discount to the price
        at
        which SYZG was trading at the time.
 
 12
 
 **NOTE
                    7:**
                **Commitments
                    and
                    Contingencies**
 **PENDING
        ACQUISITIONS**
 **Hooters,
        Inc.**
 
 On
        March
        11, 2008, the Company entered into a Stock Purchase Agreement for the purchase
        of Hooters, Inc., Hooters Management Corporation and their related restaurants
        (collectively “HI”) from the nine current individual HI shareholders, many of
        whom will continue to stay involved in the ongoing operation as shareholders
        of
        Chanticleer. The transaction is valued at approximately $55.1 million and
        is
        anticipated to close in the first quarter of 2009.
 
 The
        closing of the transaction is subject to Chanticleer raising the necessary
        debt
        and equity financing to complete the acquisition. Chanticleer has retained
        an
        investment banking firm to assist in securing the equity capital necessary
        to
        close the proposed transaction. Chanticleer has completed all other conditions
        and is in process of raising the necessary debt and equity financing to complete
        the transaction.
 
 HI
        was
        founded in 1983 and was the creator of the Hooters brand and concept. In
        1984,
        HI licensed Neighborhood Restaurants of America, n/k/a Hooters of America,
        Inc.
        (“HOA”), owned by a separate group of shareholders, to be its exclusive licensee
        in the development and expansion of its restaurant business. In 2001 HI went
        on
        to sell the Hooters trademarks and other related proprietary rights to HOA.
        HI
        retained and continues to own certain rights including a perpetual irrevocable
        license agreement with greatly reduced royalties, to operate its restaurants
        in
        its retained territories and, most importantly, to acquire franchisees within
        the Hooters system. These rights will be acquired by Chanticleer as a part
        of
        the transaction.
 
 Chanticleer
        has an existing relationship with HOA through its position as the lead investor
        in a $5 million, 6% convertible three-year promissory note from the Estate
        of
        Robert Brooks, the former Chairman of HOA. This note is secured by and contains
        conversion options into 2% of Hooters of America outstanding stock. Chanticleer
        was also granted a right of first refusal and a right to match any equity
        financing proposed to, or sought by, HOA. Additionally, Chanticleer currently
        holds an Option Agreement with HOA to open Hooters franchises in the Republic
        of
        South Africa which is under development. The entire Hooters system, consisting
        of 433 restaurants in 28 countries, is currently celebrating its 25 th anniversary with events on the 25 th of each
        month and a grand pageant in Miami on July 23, 2008.
 
 HI
        currently owns and operates 22 restaurants, which comprise the highest average
        unit gross sales within the Hooters system, and includes locations in and
        around
        Tampa, Florida, Chicago, Illinois and the Manhattan regions, including the
        original Hooters restaurant located in Clearwater, Florida. These are the
        operations of HI being acquired by Chanticleer.
 
 Through
        September 30, 2008, the Company has recorded $279,050 in deferred acquisition
        costs related to the planned acquisition of HI.
 
 13
 **Texas
        Wings**
 
 On
        July
        8, 2008, the Company entered into an Asset Purchase Agreement to acquire
        substantially all of the assets of Texas Wings Incorporated and its 45 related
        Hooters branded restaurants (collectively “Texas Wings”) for total consideration
        of approximately $106 million, including approximately $53 million in cash,
        approximately $37 million in Chanticleer common stock and convertible notes
        with
        an aggregate principal amount of approximately $16 million (the
“Transaction”).
 
 The
        Company will create an operating company and combine Texas Wings with HI
        and its
        22 Hooters restaurants, which the Company agreed to acquire in March 2008.
 
 The
        Transaction is subject to a number of customary closing conditions and is
        anticipated to close during the first quarter of 2009, concurrently with
        the
        closing of the HI acquisition.
 
 When
        HI
        sold the Hooters brand to Hooters of America, HI retained unique acquisition
        and
        operational rights, which should benefit the Company going forward. HI has
        the
        right to acquire existing Hooters franchisees without the consent of the
        franchisor, and HI has significant flexibility in the manner in which it
        operates its restaurants, rights that should benefit the Texas Wings business
        upon the closing of the Transaction.
 
 **Current
        Status**
 
 The
        termination date for the Company’s pending acquisition of the stock of HI and
        certain of its related entities followed immediately by the subsequent
        acquisition of Texas Wings and certain of its related entities has passed.
        Although the sellers have not, to date, exercised their rights to terminate
        the
        agreements and the Company continues to seek to consummate these transactions,
        there is no assurance that the Company will be able to close the pending
        acquisitions.
 
 In
        addition, the commitment letters from certain financial institutions to provide
        one or more related entities of the Company the $85,000,000 Senior Secured
        Credit have expired, primarily due to the inability of the Company to raise
        the
        necessary equity portion of the financing at acceptable terms in today’s
        financial environment. The Company continues to communicate with the financial
        institutions that agreed to provide the credit facility; however, there can
        be
        no assurance that the Company will be successful in obtaining any financing
        or
        that the terms of any credit facility in the future will be acceptable to
        the
        Company.
 
 **LEASE**
 
 On
        February 22, 2007, the Company entered into a lease agreement jointly with
        Five
        Oaks Capital Partners, LLC to lease a total of 5,041 square feet, commencing
        March 26, 2007 through December 31, 2008. The Company’s allocated share of the
        space is 2,000 square feet and its monthly base rent is $3,980 in 2008. Five
        Oaks Capital Partners, LLC is the managing member of EE Investors, LLC, in
        which
        the Company is currently an investor.
 
 
 14
 
 **NOTE
                    8:**
                **Liquidity
                    and capital
                    resources**
 At
        September 30, 2008 and December 31, 2007, the Company had current assets
        of
        $21,669 and $95,893; current liabilities of $632,343 and $349,268; and negative
        working capital of $610,674 and $253,375, respectively. The Company incurred
        a
        loss of $918,184 during the nine month period ended September 30, 2008. The
        Company receives quarterly cash inflow of $25,000 from management fees and
        $11,500 from investment distributions, but has quarterly cash outflow of
        approximately $190,000 estimated for the fourth quarter of 2008, with an
        estimate of approximately $130,000 per quarter for 2009, assuming the
        acquisitions discussed above are not completed.
 
 The
        Company has requested its bank to increase its line of credit facility by
        $250,000 to $750,000 and expects this to be approved. The Company expects
        to
        have sufficient funding available from the line of credit until the projected
        first quarter of 2009 close of the acquisitions of HI and Texas Wings.
        Subsequent to the close, the overhead requirements will be covered by
        distributions from the operations of HI and Texas Wings.
 
 If
        the
        increase in the line of credit facility is not approved, the Company expects
        to
        meet its short-term requirements in the fourth quarter of 2008 through the
        sale
        of one investment and liquidation of another investment to raise approximately
        $50,000 in cash and return of the advance made for the development rights
        of
        Hooters restaurants in Nevada in the amount of $120,000. These actions, together
        with management income, the distribution from one investment and existing
        cash
        are expected to leave the Company with approximately $44,000 at December
        31,
        2008.
 
 In
        the
        event the acquisitions do not close, the Company expects to fund its reduced
        overhead of approximately $130,000 per quarter from management income,
        distributions from its investments and a short-term loan of no more than
        $100,000 until May 2009, when the Company is scheduled to receive a distribution
        from an investment in the amount of approximately $1,275,000. At that time,
        the
        Company plans to repay the line of credit, any other short-term borrowings
        and
        have sufficient cash to cover all overhead requirements for at least another
        year while increasing the funds which Advisors manages.
 
 
 15
  **ITEM
                    2:**
                **MANAGEMENT'S
                    DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF
                    OPERATIONS**
 The
        following discussion should be read in conjunction with our financial statements
        and notes thereto included elsewhere in this Form 10-Q. This Form 10-Q contains
        forward-looking statements regarding the plans and objectives of management
        for
        future operations. This information may involve known and unknown risks,
        uncertainties and other factors which may cause our actual results, performance
        or achievements to be materially different from future results, performance
        or
        achievements expressed or implied by any forward-looking statements.
        Forward-looking statements, which involve assumptions and describe our future
        plans, strategies and expectations, are generally identifiable by use of
        the
        words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,”
“intend,” “project” or the negative of these words or other variations on these
        words or comparable terminology. These forward-looking statements are based
        on
        assumptions that may be incorrect, and we cannot assure you that the projections
        included in these forward-looking statements will come to pass. Our actual
        results could differ materially from those expressed or implied by the
        forward-looking statements as a result of various factors.
 
 We
        registered our common stock on a Form 10-SB registration statement filed
        pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule
        12(g) thereof. We filed with the Securities and Exchange Commission periodic
        and
        episodic reports under Rule 13(a) of the Exchange Act, including quarterly
        reports on Form 10-QSB and annual reports on Form 10-KSB until we became
        a BDC
        when we began filing reports on Form 10-Q and Form 10-K.
 
 On
        June
        1, 2005, we filed a notification on Form N54a with the U.S. Securities and
        Exchange Commission, (the “SEC”) indicating our election to be regulated as a
        business development company (a “BDC”) under the Investment Company Act of 1940
        (the “1940 Act”). Under this election, we adopted corporate resolutions to
        operate as a closed-end management investment company as a BDC. We operated
        as a
        non-diversified company as that term is defined in Section 5(b)(2) of the
        1940
        Act and at all times conducted our business so as to retain our status as
        a BDC.
        We could not change the nature of our business so as to cease to be, or withdraw
        our election as, a BDC without the approval of the holders of a majority
        of our
        outstanding voting stock as defined under the 1940 Act.
 
 Withdrawal
        of the Company’s election to be treated as a BDC under the 1940 Act became
        effective on July 21, 2008, when the Company filed Form N-54c with the SEC,
        following approval by a majority of the Company’s shareholders.
   16
 **Critical
        Accounting Policies and Estimates**
 
 The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States requires management to make estimates
        and assumptions that affect the amounts reported in the financial statements.
        Critical accounting policies are those that are both important to the
        presentation of our financial condition and results of operations and require
        management’s most difficult, complex, or subjective judgments. Our most critical
        accounting policy relates to the valuation of our investments.
  **Liquidity
        and capital resources**
 
 At
        September 30, 2008, we had a working capital deficit of $610,674 as compared
        to
        $253,375 at December 31, 2007. Our working capital declined $357,299. The
        decline consisted primarily of the net loss for the period of $918,184 offset
        by
        our sales of common stock of $784,701
 
 As
        discussed in more detail in Note 7 to the condensed consolidated financial
        statements, on March 11, 2008, the Company entered into a Stock Purchase
        Agreement for the purchase of Hooters, Inc., Hooters Management Corporation
        and
        their related restaurants (collectively “HI”) from the nine current individual
        HI shareholders, many of whom will continue to stay involved in the ongoing
        operation as shareholders of Chanticleer. The transaction is valued at
        approximately $55.1 million and is anticipated to close in the first quarter
        of
        2009.
 
 The
        closing of the transaction is subject to Chanticleer raising the necessary
        debt
        and equity financing to complete the acquisition. Chanticleer has retained
        an
        investment banking firm to assist in securing the equity capital necessary
        to
        close the proposed transaction.
 
 On
        July
        8, 2008, the Company entered into an Asset Purchase Agreement to acquire
        substantially all of the assets of Texas Wings Incorporated and its 45 related
        Hooters branded restaurants (collectively “Texas Wings”) for total consideration
        of approximately $106 million, including approximately $53 million in cash,
        approximately $37 million in Chanticleer common stock and convertible notes
        with
        an aggregate principal amount of approximately $16 million (the
“Transaction”).
 
 The
        Company will create one operating company and combine Texas Wings with HI
        and
        its 22 Hooters restaurants, which the Company agreed to acquire in March
        2008.
        Texas Wings is one of the strongest franchises in the Hooters restaurant
        system
        and when combined with HI, which was the original creator of the Hooters
        concept, are expected to become the standard bearer for the Hooters
        brand.
 
 The
        Transaction is subject to a number of customary closing conditions and is
        anticipated to close during the first quarter of 2009, concurrently with
        the
        closing of the HI acquisition.
 
 When
        HI
        sold the Hooters brand to Hooters of America, HI retained unique acquisition
        and
        operational rights, which will benefit the Company going forward. HI has
        the
        right to acquire existing Hooters franchisees without the consent of the
        franchisor, and HI has significant flexibility in the manner in which it
        operates its restaurants, rights that will benefit the Texas Wings business
        upon
        the closing of the Transaction.
 
 17
 On
        April
        1, 2008, the Company advanced $120,000 to Tyler NV, Inc. for the initial
        required deposit to Hooters of America for development rights within the
        state
        of Nevada for Hooters restaurants. In the event the Company closes with HI,
        the
        combined companies would expect to provide the additional financing needed
        to
        open new Hooters restaurants in Nevada and would likely acquire all of or
        a
        majority of Tyler NV, Inc. If the transaction with HI does not close, the
        Company has discussed partnering with HI to develop and fund Hooters restaurants
        in Nevada. Should the Company not partner with HI and HI elects to move forward
        to develop Nevada, it is expected that HI would cause repayment of the $120,000
        to the Company as a part of any agreement HI would reach to fund the development
        of Hooters restaurants in Nevada.
 
 On
        April
        12, 2007, the Company filed an Offering Circular under Regulation E promulgated
        under the Securities Act of 1933 to raise up to $5,000,000 by selling between
        400,000 and 714,286 shares of its common stock at prices ranging between
        $7.00
        and $12.50 per share. The offering was closed on February 11, 2008 with $650,000
        received for 92,859 shares of common stock during the offering
        period.
 
 On
        March
        27, 2008, the Company filed a new Offering Circular under Regulation E to
        raise
        up to $4,500,000 by selling between 500,000 and 1,000,000 shares of its common
        stock at prices ranging between $4.50 and $9.00 per share. As of September
        30,
        2008, the Company had sold 83,532 shares for $584,700 pursuant to this 1-E.
        The
        Company closed the 1-E on July 18, 2008.
 
 **Comparison
        of three months ended September 30, 2008 and 2007**
 
 Revenues
        amounted to $25,000 in the three months ended September 30, 2008, as compared
        to
        $192,935 in the year earlier period. The decline was due to the decrease
        in
        management income of $167,935. In the 2007 period, the Company received
        investments for services performed. The Company did not receive any similar
        compensation in 2008.
 
 General
        and administrative expense amounted to $294,901 in the 2008 quarter as compared
        to $166,591 in the 2007 quarter. The principal increases were professional
        fees
        of $22,041, payroll of $65,351 and franchise taxes of $20,956. The professional
        fees and payroll increases are primarily related to the pending acquisitions
        and
        related financing.
 
 The
        principal item of other income (expense) in 2007 was the unrealized gain
        from
        marketable equity securities of $71,619. All marketable equity securities
        had
        been disposed of by the second quarter of 2008.
 
 18
 **Comparison
        of nine months ended September 30, 2008 and 2007**
 
 Revenues
        amounted to $203,555 in the nine months ended September 30, 2008, as compared
        to
        $371,490 in the comparable 2007 period. In the 2007 period the Company
        recognized revenue from the receipt of investments for management services
        rendered in the amount of $167,935 more than was recorded in 2008.
 
 General
        and administrative expenses amounted to $985,911 in the nine months ended
        September 30, 2008, as compared to $529,151 in the same 2007 period. The
        more
        significant increases were $190,614 in professional fees and contract services
        and $131,299 in payroll. Most of these increases are primarily related to
        the
        pending acquisitions and related financing.
 
 Other
        income and expense amounted to a net income of $1,902 in 2008 as compared
        to net
        income of $91,507 in 2007. Most of the decline is due to a reduction in realized
        and unrealized gains on marketable securities, all of which had been disposed
        of
        by the second quarter of 2008.
  19
 
 **ITEM
                    3:**
                **QUANTITATIVE
                    AND QUALITATIVE
                    DISCLOSURES ABOUT MARKET
                    RISK**
 Market
        risk is the risk of loss arising from adverse changes in market rates and
        prices. We are primarily exposed to equity price risk. Equity price risk
        arises
        from exposure to securities that represent an ownership interest in our
        portfolio companies. The value of our equity securities and our other
        investments are based on quoted market prices or our Board of Directors’ good
        faith determination of their fair value (which is based, in part, on quoted
        market prices). Market prices of common equity securities, in general, are
        subject to fluctuations, which could cause the amount to be realized upon
        sale
        or exercise of the instruments to differ significantly from the current reported
        value. The fluctuations may result from perceived changes in the underlying
        economic characteristics of our portfolio companies, the relative price of
        alternative investments, general market conditions and supply and demand
        imbalances for a particular security.
  **ITEM
                    4:**
                **CONTROLS
                    AND
                    PROCEDURES**
 (a)
        Evaluation of Disclosure Controls and Procedures
 
 The
        Company’s Chief Executive Officer has reviewed and evaluated the effectiveness
        of the Company’s disclosure controls and procedures (as defined in Rules
        240.13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act
        of
        1934) as of September 30, 2008. Based on that review and evaluation, which
        included inquiries made to certain other employees of the Company, the CEO
        concluded that the Company’s current disclosure controls and procedures, as
        designed and implemented, are effective in ensuring that information relating
        to
        the Company required to be disclosed in the reports the Company files or
        submits
        under the Securities Exchange Act of 1934 is recorded, processed, summarized
        and
        reported within the time periods specified in the Securities and Exchange
        Commission’s rules and forms, including insuring that such information is
        accumulated and communicated to the Company’s management, including the CEO, as
        appropriate to allow timely decisions regarding required
        disclosure.
 
 (b)
        Changes in Internal Controls
 
 There
        have been no significant changes in internal controls or in other factors
        that
        could significantly affect these controls during the quarter ended September
        30,
        2008, including any corrective actions with regard to significant deficiencies
        and material weaknesses.
 
 20
 
 **PART
        II - OTHER INFORMATION**
 
 **ITEM
                    1:**
                **LEGAL
                    PROCEEDINGS**
 Not
        applicable.
  **ITEM
                    1A:**
                **RISK
                    FACTORS**
 Not
        applicable.
 **ITEM
                    2:**
                **UNREGISTERED
                    SALES OF EQUITY SECURITIES
                    AND USE OF PROCEEDS**
 The
        Company sold 3,500 shares of its common stock for $24,500 in cash, pursuant
        to
        its ** Form
        1-E
        offering during the three months ended September 30, 2008. In August 2008,
        after
        the Company ceased being a BDC, the Company issued 1,150 shares for professional
        services.
 
 All
        of
        the shares issued were sold pursuant to an exemption from registration under
        Section 4(2) promulgated under the Securities Act of 1933, as
        amended.
 **ITEM
                    3:**
                **DEFAULTS
                    UPON SENIOR
                    SECURITIES**
 Not
        applicable.
  **ITEM
                    4:**
                **SUBMISSION
                    OF MATTERS TO A VOTE OF
                    SECURITY HOLDERS**
 Not
        applicable.
  **ITEM
                    5:**
                **OTHER
                    INFORMATION**
 Although
        the Company does not currently employ a Chief Financial Officer, Michael
        D.
        Pruitt, President and Chief Executive Officer, is also the principal accounting
        officer.
  **ITEM
                    6:**
                **EXHIBITS**
 The
        following exhibits are filed with this report on Form 10-Q.
 
 Exhibit
                31
              Certification
                  pursuant to 18 U.S.C. Section 1350 Section 302 of the Sarbanes-Oxley
                  Act
                  of 2002  Exhibit 32
              Certification
                pursuant to 18 U.S.C. Section 1350Section
                906 of the Sarbanes-Oxley Act of 2002
 
 21
  **SIGNATURE**
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, the Registrant
        has
        duly caused this report to be signed on its behalf by the undersigned thereunto
        duly authorized.
  CHANTICLEER
                HOLDINGS, INC.Date:
                November
                14, 2008
              By:
              /s/ Michael
                D. PruittMichael
                  D. Pruitt,
                Chief
                  Executive Officer andChief
                  Financial Officer
 22