**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**FORM      10-Q**

**June      30, 2008**

**814-00709**

**CHANTICLEER      HOLDINGS, INC.**

| **Delaware**                                  | **20-2932652**                      |
|-----------------------------------------------|-------------------------------------|
| (State                or Jurisdiction of      | (IRS                Employer ID No) |
| Incorporation                or Organization) |                                |

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

**(704)      366-5122**

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**Chanticleer      Holdings, Inc.**

|                           |                            |                                                                                                                           |   | Page           |
|--------------------------------|---------------------------------|--------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
|                           |                            |                                                                                                                           |   | No.            |
|                           |                            |                                                                                                                           |   |           |
| Part                I          |                            | Financial                Information (unaudited)                                                                               |   |           |
|                           |                            |                                                                                                                           |   |           |
|                           | Item                1:          | Condensed                Financial Statements                                                                                  |   |           |
|                           |                            |                                                                                                                           |   |           |
|                           |                            | Statements                of Net Assets as of June 30, 2008 and December 31, 2007                                              |   | 3              |
|                           |                            | Statements                of Operations – For the Three Months Ended June 30, 2008 and                2007               |   | 4              |
|                           |                            | Statements                of Operations – For the Six Months Ended June 30, 2008 and                2007            |   | 5              |
|                           |                            | Statements                of Cash Flows – For the Six Months Ended June 30, 2008 and                2007            |   | 6              |
|                           |                            | Statements                of Changes in Net Assets – For the Six Months Ended June 30, 2008 and                2007 |   | 7              |
|                           |                            | Financial                Highlights for the Six Months Ended June 30, 2008 and 2007                                            |   | 8              |
|                           |                            | Schedules                of Investments as of June 30, 2008 and December 31, 2007                                              |   | 9              |
|                           |                            | Notes                to Financial Statements                                                                                   |   | 13             |
|                           | Item                2:          | Management’s                Discussion and Analysis of Financial Condition and Results of                Operations      |   | 27             |
|                           | Item                3:          | Quantitative                and Qualitative Disclosure about Market Risk                                                       |   | 32             |
|                           | Item                4:          | Controls                and Procedures                                                                                         |   | 32             |
|                           |                            |                                                                                                                           |   |           |
| Part II    |                            | Other                Information                                                                                               |   | 33             |
|                           |                            |                                                                                                                           |   |           |
|                           | Item                1:          | Legal                Proceedings                                                                                               |   | 33             |
|                           | Item 1A:    | Risk                Factors                                                                                                    |   | 33             |
|                           | Item                2:          | Unregistered                Sales of Equity Securities and Use of Proceeds                                                     |   |  33  |
|                           | Item                3:          | Defaults                Upon Senior Securities                                                                                 |   |  33  |
|                           | Item                4:          | Submission                of Matters to a Vote of Security Holders                                                             |   |  33  |
|                           | Item                5:          | Other                Information                                                                                               |   |  33  |
|                           | Item                6:          | Exhibits                                                                                                                       |   |  33  |

----

**PART      1: FINANCIAL INFORMATION**

**ITEM      1: CONDENSED FINANCIAL STATEMENTS**

**Chanticleer      Holdings, Inc.**

**Statements      of Net Assets**

**June      30, 2008 and December 31, 2007**

|                                                                                                                                                                                                       |   | **2008**    |       | **2007** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|------------|----------|--------|
|                                                                                                                                                                                                       |   | (Unaudited) |       |     |   |
| **ASSETS**                                                                                                                                                                                                 |   |        |       |     |   |   |   |
| Investments:                                                                                                                                                                                               |   |        |       |     |   |   |   |
| Non-affiliate                (cost: 2008 - $872,565; 2007 - $942,565)                                                                                                                                      |   | $           | 706,407    |     | $      | 992,345 |   |
| Affiliates:                                                                                                                                                                                                |   |        |       |     |   |   |   |
| Uncontrolled                (cost: 2008 - $1,114,221**;**cost: 2007 -                $1,114,221)                                                                                                           |   |        | 514,251    |     |   | 964,221 |   |
| Controlled                (cost: 2008 - $1,355,443; 2007 - $1,235,443)                                                                                                                                     |   |        | 1,900,000  |     |   | 1,780,000 |   |
| Total                investments                                                                                                                                                                           |   |        | 3,120,658  |     |   | 3,736,566 |   |
| Cash                and cash equivalents                                                                                                                                                                   |   |        | 169,543    |     |   | - |   |
| Accounts                receivable, controlled affiliate investment                                                                                                                                        |   |        | 43,436     |     |   | 18,900 |   |
| Prepaid                expenses and other assets                                                                                                                                                           |   |        | 10,061     |     |   | 19,560 |   |
| Fixed                assets, net                                                                                                                                                                           |   |        | 41,499     |     |   | 45,537 |   |
| Deferred                acquisition costs                                                                                                                                                                  |   |        | 233,050    |     |   | - |   |
| Deposits                                                                                                                                                                                                   |   |        | 3,980      |     |   | 3,980 |   |
| **TOTAL                ASSETS**                                                                                                                                                                            |   |        | 3,622,227  |     |   | 3,824,543 |   |
|                                                                                                                                                                                                       |   |        |       |     |   |   |   |
| **LIABILITIES**                                                                                                                                                                                            |   |        |       |     |   |   |   |
| Accounts                payable                                                                                                                                                                            |   |        | 134,873    |     |   | 25,554 |   |
| Accrued                expenses                                                                                                                                                                            |   |        | 2,265      |     |   | 4,150 |   |
| Notes                payable                                                                                                                                                                               |   |        | 388,500    |     |   | 165,272 |   |
| Deferred                revenue                                                                                                                                                                            |   |        | -          |     |   | 128,555 |   |
| Bank                overdraft                                                                                                                                                                              |   |        | -          |     |   | 25,736 |   |
| **TOTAL                LIABILITIES**                                                                                                                                                                       |   |        | 525,638    |     |   | 349,267 |   |
| **NET                ASSETS**                                                                                                                                                                              |   | $           | 3,096,589  |     | $      | 3,475,276 |   |
|                                                                                                                                                                                                       |   |        |       |     |   |   |   |
| Commitments                and contingencies                                                                                                                                                               |   |        |       |     |   |   |   |
|                                                                                                                                                                                                       |   |        |       |     |   |   |   |
| **COMPOSITION                OF NET ASSETS**                                                                                                                                                               |   |        |       |     |   |   |   |
| Common                stock, $.0001 par value. Authorized 200,000,000 shares; issued and                outstanding 941,726 shares at June 30, 2008 and 833,122 shares at                December 31, 2007 |   | $           | 94         |     | $      | 83 |   |
| Additional                paid in capital                                                                                                                                                                  |   |        | 4,610,706  |     |   | 3,850,517 |   |
| Accumulated                deficit:                                                                                                                                                                        |   |        |       |     |   |   |   |
| Accumulated                net operating loss                                                                                                                                                              |   |        | (1,299,866 | )        |   | (826,887 | ) |
| Net                realized gain on investments                                                                                                                                                            |   |        | 7,226      |     |   | 7,226 |   |
| Net                unrealized appreciation (depreciation) of investments                                                                                                                                   |   |        | (221,571   | )        |   | 444,337 |   |
| **NET                ASSETS**                                                                                                                                                                              |   | $           | 3,096,589  |     | $      | 3,475,276 |   |
| **NET                ASSET VALUE PER SHARE**                                                                                                                                                               |   | $           | 3.288      |     | $      | 4.171 |   |

----

**Chanticleer      Holdings, Inc.**

**Statements      of Operations**

**For      the Three Months Ended June 30, 2008 and 2007**

**(Unaudited)**

|                                                                                                                             |   | **2008** |     | **2007** |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|----------|----------|----------|--------|
| **Income                from operations:**                                                                                       |   |     |     |     |   |   |   |
| Interest                and dividend income:                                                                                     |   |     |     |     |   |   |   |
| Non-affiliates                                                                                                                   |   | $        | -        |     | $      | 1,514 |   |
| Affiliate                                                                                                                        |   |     | 11,500   |     |   | 11,500 |   |
| Management                fee income - affiliates                                                                                |   |     | 25,000   |     |   | 153,555 |   |
|                                                                                                                             |   |     | 36,500   |     |   | 166,569 |   |
| **Expenses:**                                                                                                                    |   |     |     |     |   |   |   |
| Salaries                and wages                                                                                                |   |     | 111,273  |     |   | 66,460 |   |
| Professional                fees                                                                                                 |   |     | 132,679  |     |   | 37,214 |   |
| Shareholder                services                                                                                              |   |     | 1,790    |     |   | 1,479 |   |
| Interest                expense                                                                                                  |   |     | 5,947    |     |   | 3,315 |   |
| Insurance                expense                                                                                                 |   |     | 11,573   |     |   | 10,296 |   |
| Dues                and subscriptions                                                                                            |   |     | 7,933    |     |   | 3,801 |   |
| Franchise                taxes                                                                                                   |   |     | 26,735   |     |   | 15,775 |   |
| Rent                expense                                                                                                      |   |     | 12,426   |     |   | 13,217 |   |
| Travel                and entertainment expense                                                                                  |   |     | 48,767   |     |   | 29,427 |   |
| Other                general and administrative expense                                                                          |   |     | 20,618   |     |   | 24,886 |   |
|                                                                                                                             |   |     | 379,741  |     |   | 205,870 |   |
| **Loss                before income taxes**                                                                                      |   |     | (343,241 | )        |   | (39,301 | ) |
| **Income                taxes**                                                                                                  |   |     | -        |     |   | - |   |
| **Loss                from operations**                                                                                          |   |     | (343,241 | )        |   | (39,301 | ) |
|                                                                                                                             |   |     |     |     |   |   |   |
| **Net                realized and unrealized gains (losses):**                                                                   |   |     |     |     |   |   |   |
| Net                realized gain on investments, with no income tax provision                                                    |   |     | -        |     |   | 9,193 |   |
| Change                in unrealized depreciation of investments, net of deferred tax benefit                of                $0 |   |     | (627,470 | )        |   | (9,821 | ) |
| **Net                decrease in net assets from operations**                                                                    |   | $        | (970,711 | )        | $      | (39,929 | ) |
|                                                                                                                             |   |     |     |     |   |   |   |
| **Net                decrease in net assets from operations per share, basic and                diluted**                        |   | $        | (1.087   | )        | $      | (0.051 | ) |
| **Weighted                average shares outstanding**                                                                           |   |     | 893,312  |     |   | 789,355 |   |

----

**Chanticleer      Holdings, Inc.**

**Statements      of Operations**

**For      the Six Months Ended June 30, 2008 and 2007**

**(Unaudited)**

|                                                                                                                             |   | **2008** |       | **2007** |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|----------|------------|----------|--------|
| **Income                from operations:**                                                                                       |   |     |       |     |   |   |   |
| Interest                and dividend income:                                                                                     |   |     |       |     |   |   |   |
| Non-affiliates                                                                                                                   |   | $        | -          |     | $      | 3,166 |   |
| Affiliate                                                                                                                        |   |     | 23,000     |     |   | 23,000 |   |
| Management                fee income - affiliates                                                                                |   |     | 178,555    |     |   | 178,555 |   |
|                                                                                                                             |   |     | 201,555    |     |   | 204,721 |   |
| **Expenses:**                                                                                                                    |   |     |       |     |   |   |   |
| Salaries                and wages                                                                                                |   |     | 188,926    |     |   | 122,977 |   |
| Professional                fees                                                                                                 |   |     | 254,108    |     |   | 79,834 |   |
| Shareholder                services                                                                                              |   |     | 4,437      |     |   | 2,413 |   |
| Interest                expense                                                                                                  |   |     | 7,994      |     |   | 6,423 |   |
| Insurance                expense                                                                                                 |   |     | 22,137     |     |   | 20,089 |   |
| Dues                and subscriptions                                                                                            |   |     | 14,122     |     |   | 4,010 |   |
| Rent                expense                                                                                                      |   |     | 24,585     |     |   | 20,902 |   |
| Travel                and entertainment expense                                                                                  |   |     | 76,575     |     |   | 48,921 |   |
| Other                general and administrative expense                                                                          |   |     | 81,650     |     |   | 58,887 |   |
|                                                                                                                             |   |     | 674,534    |     |   | 364,456 |   |
| **Loss                before income taxes**                                                                                      |   |     | (472,979   | )        |   | (159,735 | ) |
| **Income                taxes**                                                                                                  |   |     | -          |     |   | - |   |
| **Loss                from operations**                                                                                          |   |     | (472,979   | )        |   | (159,735 | ) |
|                                                                                                                             |   |     |       |     |   |   |   |
| **Net                realized and unrealized gains (losses):**                                                                   |   |     |       |     |   |   |   |
| Net                realized gain on investments, with no income tax provision                                                    |   |     | -          |     |   | 19,105 |   |
| Change                in unrealized depreciation of investments, net of deferred tax benefit                of                $0 |   |     | (665,908   | )        |   | (122,750 | ) |
| **Net                decrease in net assets from operations**                                                                    |   | $        | (1,138,887 | )        | $      | (263,380 | ) |
|                                                                                                                             |   |     |       |     |   |   |   |
| **Net                decrease in net assets from operations per share, basic and                diluted**                        |   | $        | (1.300     | )        | $      | (0.338 | ) |
| **Weighted                average shares outstanding**                                                                           |   |     | 876,247    |     |   | 779,207 |   |

----

**Chanticleer      Holdings, Inc.**

**Statements      of Cash Flows**

**For      the Six Months Ended June 30, 2008 and 2007**

**(Unaudited)**

|                                                                                                                                                      |   | **2008** |       | **2007** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|------------|----------|--------|
| **Cash                flows from operating activities**                                                                                                   |   |     |       |     |   |   |   |
| Net                decrease in net assets from operations                                                                                                 |   | $        | (1,138,887 | )        | $      | (263,380 | ) |
| Adjustments                to reconcile net decrease in net assets from operation to net cash                used in                operating activities: |   |     |       |     |   |   |   |
| Purchase                of investments                                                                                                                    |   |     | (120,000   | )        |   | - |   |
| Proceeds                from sale of investments                                                                                                          |   |     | -          |     |   | 107,225 |   |
| Change                in unrealized depreciation of investments                                                                                           |   |     | 665,908    |     |   | 122,750 |   |
| Gain                on sale of investments                                                                                                                |   |     | -          |     |   | (19,105 | ) |
| Depreciation                                                                                                                                              |   |     | 5,859      |     |   | 4,067 |   |
| Consulting                and other services rendered in exchange for investment                securities                                                |   |     | -          |     |   | (514,221 | ) |
| Deferred                acquisition costs                                                                                                                 |   |     | (233,050   | )        |   | - |   |
| Change                in other assets and liabilities:                                                                                                    |   |     |       |     |   |   |   |
| (Increase)                decrease in accounts receivable                                                                                                 |   |     | -          |     |   | (27,479 | ) |
| (Increase)                decrease amounts due from subsidiary                                                                                            |   |     | (24,535    | )        |   | - |   |
| (Increase)                decrease in prepaid expenses and other assets                                                                                   |   |     | 9,500      |     |   | 8,520 |   |
| Increase                (decrease) in accounts payable and accrued expenses                                                                               |   |     | 107,433    |     |   | 4,541 |   |
| Increase                (decrease) in deferred revenue                                                                                                    |   |     | (128,555   | )        |   | 385,666 |   |
| Net                cash used in operating activities                                                                                                      |   |     | (856,327   | )        |   | (191,416 | ) |
| **Cash                flows from investing activities**                                                                                                   |   |     |       |     |   |   |   |
| Purchase                of fixed assets                                                                                                                   |   |     | (1,822     | )        |   | (4,603 | ) |
| Net                cash provided by (used in) operating activities                                                                                        |   |     | (1,822     | )        |   | (4,603 | ) |
| **Cash                flows from financing activities**                                                                                                   |   |     |       |     |   |   |   |
| Proceeds                from sale of common stock                                                                                                         |   |     | 760,200    |     |   | 250,000 |   |
| Loan                repayment                                                                                                                             |   |     | -          |     |   | (150,704 | ) |
| Cash                overdraft                                                                                                                             |   |     | (25,736    | )        |   | - |   |
| Loan                proceeds                                                                                                                              |   |     | 293,228    |     |   | - |   |
| Net                cash provided by financing activities                                                                                                  |   |     | 1,027,692  |     |   | 99,296 |   |
| Net                increase (decrease) in cash and cash equivalents                                                                                       |   |     | 169,543    |     |   | (96,723 | ) |
| Cash                and cash equivalents, beginning of period                                                                                             |   |     | -          |     |   | 124,311 |   |
| Cash                and cash equivalents, end of period                                                                                                   |   | $        | 169,543    |     | $      | 27,588 |   |
|                                                                                                                                                      |   |     |       |     |   |   |   |
| **Supplemental                cash flow information**                                                                                                     |   |     |       |     |   |   |   |
| Cash                paid for interest and income taxes:                                                                                                   |   |     |       |     |   |   |   |
| Interest                                                                                                                                                  |   | $        | 6,594      |     | $      | 6,764 |   |
| Income                taxes                                                                                                                               |   |     | -          |     |   | - |   |
| Non-cash                investing and financing activities:                                                                                               |   |     |       |     |   |   |   |
| Rescission                of investment purchased with a note                                                                                             |   | $        | 70,000     |     | $      | - |   |

----

**Chanticleer      Holdings, Inc.**

**Statements      of Changes in Net Assets**

**For      the Six Months Ended June 30, 2008 and 2007**

**(Unaudited)**

|                                                                 |   | **2008** |       | **2007** |   |
|----------------------------------------------------------------------|--------|----------|------------|----------|--------|
| **Changes                in net assets from operations**             |   |     |       |     |   |   |   |
| Net                loss from operations                              |   | $        | (472,979   | )        | $      | (159,735 | ) |
| Realized                gains on sale of investments, net            |   |     | -          |     |   | 19,105 |   |
| Change                in unrealized depreciation of investments, net |   |     | (665,908   | )        |   | (122,750 | ) |
| Net                increase (decrease) in net assets from operations |   |     | (1,138,887 | )        |   | (263,380 | ) |
|                                                                 |   |     |       |     |   |   |   |
| **Capital                stock transactions**                        |   |     |       |     |   |   |   |
| Common                stock issued for cash                          |   |     | 760,200    |     |   | 250,000 |   |
| Net                increase in net assets from stock transactions    |   |     | 760,200    |     |   | 250,000 |   |
|                                                                 |   |     |       |     |   |   |   |
| Net                increase (decrease) in net assets                 |   |     | (378,687   | )        |   | (13,380 | ) |
| Net                assets at beginning of period                     |   |     | 3,475,276  |     |   | 2,413,389 |   |
| Net                assets at end of period                           |   | $        | 3,096,589  |     | $      | 2,400,009 |   |

----

**Chanticleer      Holdings, Inc.**

**Financial      Highlights**

**For      the Six Months Ended June 30, 2008 and 2007**

**(Unaudited)**

|                                                                                                                                         |   | **2008** |      | **2007** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|-----------|----------|--------|
|                                                                                                                                         |   |     |      |     |   |
| **PER                SHARE INFORMATION**                                                                                                     |   |     |      |     |   |   |   |
| Net                asset value, beginning of period                                                                                          |   | $        | 4.171     |     | $      | 3.139 |   |
| Net                decrease from operations                                                                                                  |   |     | (0.539    | )        |   | (0.205 | ) |
| Net                change in realized gains (losses) and unrealized appreciation                (depreciation) of investments, net           |   |     | (0.759    | )        |   | (0.133 | ) |
| Net                increase from capital transactions                                                                                        |   |     | 0.415     |     |   | 0.182 |   |
| Net                asset value, end of period                                                                                                |   | $        | 3.288     |     | $      | 2.983 |   |
|                                                                                                                                         |   |     |      |     |   |   |   |
| **PER                SHARE MARKET VALUE ****                                                                                                 |   |     |      |     |   |   |   |
| Beginning                of period                                                                                                           |   | $        | 5.20      |     | $      | 11.00 |   |
| End                of period                                                                                                                 |   |     | 7.00      |     |   | 8.00 |   |
|                                                                                                                                         |   |     |      |     |   |   |   |
| Investment                return, based on market price at end of period (1)                                                                 |   |     | 35        | %        |   | -27 | % |
|                                                                                                                                         |   |     |      |     |   |   |   |
| **RATIOS/SUPPLEMENTAL                DATA**                                                                                                  |   |     |      |     |   |   |   |
| Net                assets, end of period                                                                                                     |   | $        | 3,096,589 |     | $      | 2,400,009 |   |
| Average                net assets                                                                                                            |   |     | 3,359,797 |     |   | 2,289,875 |   |
|                                                                                                                                         |   |     |      |     |   |   |   |
| Annualized                ratio of expenses to average net assets                                                                            |   |     | 40.2      | %        |   | 25.2 | % |
| Annualized                ratio of net increase (decrease) in net assets from operations to                average                net assets |   |     | -55.9     | %        |   | -23.0 | % |
|                                                                                                                                         |   |     |      |     |   |   |   |
| Common                stock outstanding at end of period **                                                                                  |   |     | 941,726   |     |   | 805,700 |   |
| Weighted                average shares outstanding during period **                                                                          |   |     | 876,247   |     |   | 779,207 |   |

----

**Chanticleer      Holdings, Inc.**

**Schedule      of Investments**

**As      of June 30, 2008**

**(Unaudited)**

|                                                  |                                       |         |   |   |   |                                                                                                                                                                                                        |   |      |    | **Percent** |   |
|-------------------------------------------------------|--------------------------------------------|--------------|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|---------|-------------|--------|
| **Shares/**                                           |                                       | **Quarter**  |   |   |   | **Original**                                                                                                                                                                                                |   | **Fair**  |    | **Net**     |   |
| **Interest**                                          |                                       | **Acquired** |   |   |   | **Cost**                                                                                                                                                                                                    |   | **Value** |    | **Assets**  |   |
|                                                  |                                       |         |   |   |   |                                                                                                                                                                                                        |   |      |    |        |   |
| **NON-AFFILIATE                  INVESTMENTS**        |         |         |   |   |   |                                                                                                                                                                                                        |   |
|                                                  |                                       |         |   |   |   |                                                                                                                                                                                                        |   |      |    |        |   |
| **NON-INCOME                  PRODUCING INVESTMENTS** |                                       |         |   |   |   |                                                                                                                                                                                                        |   |
| 1,046,900                                             |                                       |         | Sep-05 |   |   | Special                  Projects Group (Pink Sheets:SPLJ)                                                                                                                                                  |   | $         | 144,349 |        | $      | 31,407 |   |   | 1 | % |
|                                                  |                                       |         | Sep-07 |   |   | distributor                  and marketer of security and                                                                                                                                                   |   |      |    |        |   |   |   |   |   |   |
|                                                  |                                       |         | Dec-07 |   |   | defense                  products and training manuals                                                                                                                                                      |   |      |    |        |   |   |   |   |   |   |
| 33.3%                                                 |                                       |         | Mar-06 |   |   | LFM                  Management, LLC, dba 1st Choice Mortgage (Privately held); Direct                  to                  consumer brokerage company                                                      |   |      | 250,000 |        |   | 50,000 |   |   | 2 | % |
| 5%                                                    |                                       |         | Mar-06 |   |   | EE                  Investors, LLC, whose sole asset is a 33.3% interest in Bouncing                  Brain                  Productions, LLC (Privately held); Inventor promotion                  company |   |      | 250,000 |        |   | 350,000 |   |   | 11 | % |
|                                                  |                                       |         |   |   |   |                                                                                                                                                                                                        |   |      | 644,349 |        |   | 431,407 |   |   | 14 | % |
| **LOAN                  INVESTMENT**        |                                       |         |   |   |   |                                                                                                                                                                                                        |   |      |    |        |
| Loan                                                  |                                       |         | Jun-06 |   |   | Lifestyle                  Innovations, Inc. (OTCBB:LFSI); note and accounts receivable investment                  of                  approximately $1,200,000, non-interest bearing                      |   |      | 100,000 |        |   | 125,000 |   |   | 4 | % |
|                                                  |                                       |         |   |   |   |                                                                                                                                                                                                        |   |      |    |        |   |   |   |   |   |   |
| **OIL                  AND GAS PROPERTY INVESTMENTS** |                                       |         |   |   |   |                                                                                                                                                                                                        |   |      |    |
| 37.5%                                                 |                                       |         | Mar-06 |   |   | Signature                  Energy, Inc; working interest in two oil and gas properties in                  Washington                  County, OK                                                           |   |      | 128,216 |        |   | 150,000 |   |   | 5 | % |
|                                                  |                                       |         |   |   |   | Total                  non-affiliate investments                                                                                                                                                            |   |      | 872,565 |        |   | 706,407 |   |   | 23 | % |

----

**Chanticleer      Holdings, Inc.**

**Schedule      of Investments, continued**

**As      of June 30, 2008**

**(Unaudited)**

|                                       |   |                                         |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |      |      | **Percent** |   |
|--------------------------------------------|--------|----------------------------------------------|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|-------------|--------|
| **Shares/**                                |   | **Quarter**                                  |   |   |   | **Original**                                                                                                                                                                                                                                                                                                                                                                                   |   | **Fair**  |      | **Net**     |   |
| **Interest**                               |   | **Acquired**                                 |   |   |   | **Cost**                                                                                                                                                                                                                                                                                                                                                                                       |   | **Value** |      | **Assets**  |   |
|                                       |   |                                         |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |      |      |        |   |
| **AFFILIATE                  INVESTMENTS** |   |                                         |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |
|                                       |   |                                         |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |      |      |        |   |
|                                       |   | **UNCONTROLLED                  AFFILIATES** |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |      |      |        |   |
| 642,814                                    |   |                                         | Jun-07 |   |   | SYZYGY                  Entertainment, Ltd. (SYZG); owner/operator                                                                                                                                                                                                                                                                                                                             |   | $         | 1,114,221 |        | $      | 514,251 |   |   | 17 | % |
|                                       |   |                                         | Sep-07 |   |   | of                  casino in Turks and Caicos Islands                                                                                                                                                                                                                                                                                                                                         |   |      |      |        |   |   |   |   |   |   |
|                                       |   |                                         | Dec-07 |   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |      |      |        |   |   |   |   |   |   |
|                                       |   | **CONTROLLED                  AFFILIATES**   |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |      |      |        |   |
| 23%                                        |   |                                         | Mar-06 |   |   | Chanticleer                  Investors LLC (Privately held);                                                                                                                                                                                                                                                                                                                                   |   |      | 1,150,000 |        |   | 1,610,000 |   |   | 52 | % |
|                                       |   |                                         | Jun-06 |   |   | Investment                  LLC with note receivable from Hooters                                                                                                                                                                                                                                                                                                                              |   |      |      |        |   |   |   |   |   |   |
|                                       |   |                                         | Dec-06 |   |   | of                  America, Inc. in the amount of $5,000,000                                                                                                                                                                                                                                                                                                                                  |   |      |      |        |   |   |   |   |   |   |
| 50%                                        |   |                                         | Dec-07 |   |   | Confluence                    Partners, LLC, whose sole asset is an investment in Lank Acquisition,                    LLC                    which was formed to facilitate the creation of Lank Acquisition                    Corporation which is formed to raise equity capital through an                    IPO to                    acquire or merge with an operating business  |   |      | 50,000    |        |   | 50,000 |   |   | 1 | % |
| 100%                                       |   |                                         | Mar-07 |   |   | Chanticleer                    Advisors LLC; wholly owned subsidiary; provides management services                    for                    Chanticleer Investors II, LLC                                                                                                                                                                                                                     |   |      | 15,443    |        |   | 100,000 |   |   | 3 | % |
| 100%                                       |   |                                         | Mar-08 |   |   | Rights                    agreement with Hooters of America, Inc. to open and operate Hooters                    restaurants in Las Vegas                                                                                                                                                                                                                                                      |   |      | 120,000   |        |   | 120,000 |   |   | 4 | % |
| 100%                                       |   |                                         | Dec-06 |   |   | Option                    agreement with Hooters of America, Inc. to purchase the right                    to open and                    operate Hooters restaurants in the Republic of South                    Africa                                                                                                                                                                       |   |      | 20,000    |        |   | 20,000 |   |   | 1 | %  |
|                                       |   |                                         |   |   |   | Total                  controlled affiliate investments                                                                                                                                                                                                                                                                                                                                        |   |      | 1,355,443 |        |   | 1,900,000 |   |   | 61 | % |
|                                       |   |                                         |   |   |   | Total                  affiliate investments                                                                                                                                                                                                                                                                                                                                                   |   |      | 2,469,664 |        |   | 2,414,251 |   |   | 78 | % |
|                                       |   |                                         |   |   |   | Total                  investments at June 30, 2008                                                                                                                                                                                                                                                                                                                                            |   | $         | 3,342,229 |        |   | 3,120,658 |   |   | 101 | % |
|                                       |   |                                         |   |   |   | Cash                  and other assets, less liabilities                                                                                                                                                                                                                                                                                                                                       |   |      |      |        |   | (24,069 | ) |   | -1 | % |
|                                       |   |                                         |   |        |   | Net                  assets at June 30, 2008                                                                                                                                                                                                                                                                                                                                                   |   |      |      |        | $      | 3,096,589 |   |   | 100 | % |

----

**Chanticleer      Holdings, Inc.**

**Schedule      of Investments**

**As      of December 31, 2007**

|                                                                     |   |         |   |   |   |                                                                                                                                                                                                                                                                                                          |   |      |    | **Percent** |   |
|--------------------------------------------------------------------------|--------|--------------|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|---------|-------------|--------|
| **Shares/**                                                              |   | **Quarter**  |   |   |   | **Original**                                                                                                                                                                                                                                                                                                  |   | **Fair**  |    | **Net**     |   |
| **Interest**                                                             |   | **Acquired** |   |   |   | **Cost**                                                                                                                                                                                                                                                                                                      |   | **Value** |    | **Assets**  |   |
|                                                                     |   |         |   |   |   |                                                                                                                                                                                                                                                                                                          |   |      |    |        |   |
| **NON-AFFILIATE                  INVESTMENTS**                           |   |         |   |   |   |                                                                                                                                                                                                                                                                                                          |   |
|                                                                     |   |         |   |   |   |                                                                                                                                                                                                                                                                                                          |   |      |    |        |   |
| **NON-INCOME                  PRODUCING INVESTMENTS**                    |   |         |   |   |   |                                                                                                                                                                                                                                                                                                          |   |
| 1,046,900                                                                |   |         | Sep-05 |   |   | Special                  Projects Group (Pink Sheets:SPLJ)                                                                                                                                                                                                                                                    |   | $         | 144,349 |        | $      | 52,345 |   |   | 2 | % |
|              |   |         | Sep-07 |   |   | distributor                  and marketer of security and                                                                                                                                                                                                                                                     |   |      |    |        |   |   |   |   |   |   |
|                                                                     |   |         | Dec-07 |   |   | defense                  products and training manuals                                                                                                                                                                                                                                                        |   |      |    |        |   |   |   |   |   |   |
| 33.3%                                                                    |   |         | Mar-06 |   |   | LFM                    Management, LLC, dba 1st Choice Mortgage (Privately held); Direct                    to                    consumer brokerage company                                                                                                                                                  |   |      | 250,000 |        |   | 250,000 |   |   | 7 | % |
| 5%                                                                       |   |         | Mar-06 |   |   | EE                    Investors, LLC, whose sole asset is a 33.3% interest in Bouncing                    Brain                    Productions, LLC (Privately held); Inventor promotion                    company                                                                                           |   |      | 250,000 |        |   | 350,000 |   |   | 10 | % |
| 125,000                                                                  |   |         | Sep-07 |   |   | HealthSport,                    Inc. (OTCBB:HSPO); fully integrated developer, manufacturer and                    marketer                    of unique and proprietary branded and private label edible film                    strip                    nutritional supplements and over-the-counter drugs |   |      | 70,000  |        |   | 65,000 |   |   | 2 |                  % |
|                                                                     |   |         |   |   |   |                                                                                                                                                                                                                                                                                                          |   |      | 714,349 |        |   | 717,345 |   |   | 21 | % |
| **LOAN                  INVESTMENT**                                     |   |         |   |   |   |                                                                                                                                                                                                                                                                                                          |   |      |    |        |
| Loan                                                                     |   |         | Jun-06 |   |   | Lifestyle                    Innovations, Inc. (OTCBB:LFSI); note and accounts receivable                    investment                    of  approximately $1,200,000,                    non-interest bearing                                                                                    |   |      | 100,000 |        |   | 125,000 |   |   | 4 | % |
|                                                                     |   |         |   |   |   |                                                                                                                                                                                                                                                                                                          |   |      |    |        |   |   |   |   |   |   |
| **OIL                  AND GAS PROPERTY INVESTMENTS**                    |   |         |   |   |   |                                                                                                                                                                                                                                                                                                          |   |      |    |
| 37.5%                                                                    |   |         | Mar-06 |   |   | Signature                    Energy, Inc; working interest in two oil and gas properties in                    Washington                    County, OK                                                                                                                                                       |   |      | 128,216 |        |   | 150,000 |   |   | 4 | % |
|                                                                     |   |         |   |   |   | Total                  non-affiliate investments                                                                                                                                                                                                                                                              |   |      | 942,565 |        |   | 992,345 |   |   | 29 | % |

----

**Chanticleer      Holdings, Inc.**

**Schedule      of Investments, continued**

**As      of December 31, 2007**

|                                       |   |                                         |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                            |   |      |      | **Percent** |   |
|--------------------------------------------|--------|----------------------------------------------|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|-------------|--------|
| **Shares/**                                |   | **Quarter**                                  |   |   |   | **Original**                                                                                                                                                                                                                                                                                                                                                                                    |   | **Fair**  |      | **Net**     |   |
| **Interest**                               |   | **Acquired**                                 |   |   |   | **Cost**                                                                                                                                                                                                                                                                                                                                                                                        |   | **Value** |      | **Assets**  |   |
|                                       |   |                                         |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                            |   |      |      |        |   |
| **AFFILIATE                  INVESTMENTS** |   |                                         |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                            |   |
|                                       |   |                                         |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                            |   |      |      |        |   |
|                                       |   | **UNCONTROLLED                  AFFILIATES** |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                            |   |      |      |
| 642,814                                    |   |                                         | Jun-07 |   |   | SYZYGY                  Entertainment, Ltd. (SYZG); owner/operator                                                                                                                                                                                                                                                                                                                              |   | $         | 1,114,221 |        | $      | 964,221 |   |   | 28 | % |
|                                       |   |                                         | Sep-07 |   |   | of                  casino in Turks and Caicos Islands                                                                                                                                                                                                                                                                                                                                          |   |      |      |        |   |   |   |   |   |   |
|                                       |   |                                         | Dec-07 |   |   |                                                                                                                                                                                                                                                                                                                                                                                            |   |      |      |        |   |   |   |   |   |   |
|                                       |   | **CONTROLLED                  AFFILIATES**   |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                            |   |      |      |        |   |
| 23%                                        |   |                                         | Mar-06 |   |   | Chanticleer                  Investors LLC (Privately held);                                                                                                                                                                                                                                                                                                                                    |   |      | 1,150,000 |        |   | 1,610,000 |   |   | 46 | % |
|                                       |   |                                         | Jun-06 |   |   | Investment                  LLC with note receivable from Hooters                                                                                                                                                                                                                                                                                                                               |   |      |      |        |   |   |   |   |   |   |
|                                       |   |                                         | Dec-06 |   |   | of                  America, Inc. in the amount of $5,000,000                                                                                                                                                                                                                                                                                                                                   |   |      |      |        |   |   |   |   |   |   |
| 50%                                        |   |                                         | Dec-07 |   |   | Confluence                  Partners, LLC, whose sole asset is an investment in Lank Acquisition,                  LLC                  which was formed to facilitate the creation of Lank Acquisition                  Corp-                  oration which is formed to raise equity capital through an IPO                  to acquire                  or merge with an operating business |   |      | 50,000    |        |   | 50,000 |   |   | 1 | % |
| 100%                                       |   |                                         | Mar-07 |   |   | Chanticleer                    Advisors LLC; wholly owned subsidiary; provides management services                    for                    Chanticleer Investors II, LLC                                                                                                                                                                                                                      |   |      | 15,443    |        |   | 100,000 |   |   | 3 | % |
| 100%                                       |   |                                         | Dec-06 |   |   | Option                    agreement with Hooters of America, Inc. to purchase the right                    to open and                    operate Hooters restaurants in the Republic of South                    Africa                                                                                                                                                                        |   |      | 20,000    |        |   | 20,000 |   |   | 1 |                  % |
|                                       |   |                                         |   |   |   | Total                  controlled affiliate investments                                                                                                                                                                                                                                                                                                                                         |   |      | 1,235,443 |        |   | 1,780,000 |   |   | 51 | % |
|                                       |   |                                         |   |   |   | Total                  affiliate investments                                                                                                                                                                                                                                                                                                                                                    |   |      | 2,349,664 |        |   | 2,744,221 |   |   | 79 | % |
|                                       |   |                                         |   |   |   | Total                  investments at December 31, 2007                                                                                                                                                                                                                                                                                                                                         |   | $         | 3,292,229 |        |   | 3,736,566 |   |   | 108 | % |
|                                       |   |                                         |   |   |   | Cash                  and other assets, less liabilities                                                                                                                                                                                                                                                                                                                                        |   |      |      |        |   | (261,290 | ) |   | -8 | % |
|                                       |   |                                         |   |   |   | Net                  assets at December 31, 2007                                                                                                                                                                                                                                                                                                                                                |   |      |      |        | $      | 3,475,276 |   |   | 100 | % |

----

**Chanticleer      Holdings, Inc.**

**Notes      to Financial Statements**

**(Unaudited)**

| **A.** | **Nature                of Business and Significant Accounting                Policies** |
|--------|------------------------------------------------------------------------------------------|

|   | **(1)** | **Organization –**                Chanticleer Holdings, Inc. (the “Company”, “we”, or “us”) 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 business development company (“BDC”)                under the Investment Company Act of 1940, as amended (the “1940 Act”) and                (ii) the reverse split of the Company’s issued and outstanding common                stock at a ratio of 1:10. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **(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. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | **(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 will result 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 cost, or under the equity method.                In                addition, our statements will be consolidated with our wholly owned                subsidiary. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **(5)** | **Investment                Company** –                On June 1, 2005, the Company filed a notification on Form N-54a with                the                SEC indicating its election to be regulated as a BDC under the 1940                Act.                Under this election, the Company has adopted corporate resolutions                to                operate as a closed-end management investment company as a BDC. The                Company has been organized to provide investors with an opportunity                to                participate, with a modest amount in venture capital, in investments                that                are generally not available to the public and that typically require                substantially larger financial commitments. In addition, the Company                provides professional management and administration that might otherwise                be unavailable to investors if they were to engage directly in venture                capital investing. The Company will operate as a non-diversified                company                as that term is defined in Section 5(b)(2) of the 1940 Act and will                at all                times conduct its business so as to retain its status as a BDC. The                Company may not change the nature of its business so as to cease                to be, or                withdraw its election as, a BDC without the approval of the holders                of a                majority of its outstanding voting stock as defined under the 1940                Act. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a. | Cash, |
|--------|----|-------|

|   | b. | Cash                equivalents, |
|--------|----|----------------------------------|

|   | c. | U.S.                Government securities, or |
|--------|----|-----------------------------------------------|

----

|   | d. | High-quality                debt investments maturing in one year or less from the date of                investment. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------|

|   | · | Does                not have a class of securities registered on an exchange or included                in                the Federal Reserve Board’s over-the-counter margin                list; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Is                actively controlled by a BDC and has an affiliate of a BDC on its                board of                directors; or |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Meets                such other criteria as may be established by the                SEC. |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | **(6)** | **Investments                in Affiliates and Non-Affiliates**                -                Pursuant to the requirements of the 1940 Act, our Board of Directors                is                responsible for determining, in good faith, the fair value of our                securities and assets for which market quotations are not readily                available. In making its determination, the Board of Directors will                consider valuation appraisals provided by an independent valuation                service                provider, when considered necessary. Equity securities in public                companies                that carry certain restrictions on resale are generally valued at                a                discount from the market value of the securities as quoted on a national                securities exchange or by a national securities                association. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**B.**
**Investments**

|                                                       |   | 2008   |      | 2007   |   |
|------------------------------------------------------------|--------|--------|-----------|--------|--------|
|                                                       |   |   |      |   |   |
| Investments                at cost                         |   | $      | 3,342,229 |   | $      | 3,292,229 |   |
| Unrealized                appreciation of investments, net |   |   | (221,571  | )      |   | 444,337 |   |
| Fair                value of investments                   |   | $      | 3,120,658 |   | $      | 3,736,566 |   |

| Investments                at cost, December 31, 2007 |   | $      | 3,292,229 |   |
|-------------------------------------------------------|--------|--------|-----------|--------|
| Purchases                                             |   |   | 120,000   |   |
| Rescinded                transaction                  |   |   | (70,000   | )      |
|                                                  |   |   |      |   |
| Investments                at cost, June 30, 2008     |   | $      | 3,342,229 |   |

**VALUATION      OF INVESTMENTS**

----

|  | · | Total                amount of the Company's actual investment. This amount shall include                all                loans, purchase price of securities and fair value of securities                given at                the time of exchange. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Total                revenues for the preceding twelve months. |
|--|--------|----------------------------------------------------------------|

|  | · | Earnings                before interest, taxes and                depreciation. |
|--|--------|---------------------------------------------------------------------------------|

|  | · | Estimate                of likely sale price of investment. |
|--|--------|-------------------------------------------------------------|

|  | · | Net                assets of investment. |
|--|--------|------------------------------------------|

|  | · | Likelihood                of investment generating positive returns (going concern). |
|--|--------|--------------------------------------------------------------------------------------|

----

|   | - | Where                no or limited revenues or earnings are present, then the value shall                be                the greater of the investments: a) net assets, b) estimated sales                price,                or c) total amount of actual                investment. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Where                revenues and/or earnings are present, then the value shall be the                greater                of one-times (1x) revenues or three-times (3x) earnings, plus the                greater                of the net assets of the investment or the total amount of the actual                investment. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Under                any scenario, the value of the investment shall be adjusted down                if there                is a reasonable expectation that the Company will not be able to                recoup                the investment or if there is reasonable doubt about the investment’s                ability to continue as a going concern. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

**C.**
**Note      Payable**

**D.**
**Composition      of Net Assets (Stockholders’ Equity)**

----

**E.**
**Related      Party Transactions**

**F.          **
**Commitments          and Contingencies**

**Hooters,      Inc. **

----

**Lease**

**G.          **
**Subsequent          Events**

**Texas      Wings**

----

**Reverse      Split of Common Stock**

**Withdrawal      of Election to be treated as a BDC**

**H.          **
**Pro          forma Financial Statements**

----

**Chanticleer      Holdings, Inc.**

**Historical      and Consolidated Pro Forma Balance Sheets**

**June      30, 2008**

**(Unaudited)**

|                                                                                               |   | **Historical** |       | **Pro                Forma** |   |
|----------------------------------------------------------------------------------------------------|--------|----------------|------------|------------------------------|--------|
| **ASSETS**                                                                                         |   |           |       |                         |   |   |   |
| **Current                assets**                                                                  |   |           |       |                         |   |   |   |
| Cash                and cash equivalents                                                           |   | $              | 169,543    |                         | $      | 169,793 |   |
| Accounts                receivable, controlled affiliate investment                                |   |           | 43,436     |                         |   | 11,150 |   |
| Prepaid                expenses and other assets                                                   |   |           | 10,061     |                         |   | 10,061 |   |
|                                                                                               |   |           | 223,040    |                         |   | 191,004 |   |
| Investments                at fair value                                                           |   |           | 3,120,658  |                         |   | 545,658 |   |
| Other                investments, principally accounted for under the equity                method |   |           | -          |                         |   | 2,027,913 |   |
| Fixed                assets, net                                                                   |   |           | 41,499     |                         |   | 41,499 |   |
| Deferred                acquisition costs                                                          |   |           | 233,050    |                         |   | 233,050 |   |
| Deposits                                                                                           |   |           | 3,980      |                         |   | 3,980 |   |
| **TOTAL                ASSETS**                                                                    |   | $              | 3,622,227  |                         | $      | 3,043,104 |   |
|                                                                                               |   |           |       |                         |   |   |   |
| **LIABILITIES**                                                                                    |   |           |       |                         |   |   |   |
| Accounts                payable                                                                    |   | $              | 134,873    |                         | $      | 134,873 |   |
| Accrued                expenses                                                                    |   |           | 2,265      |                         |   | 2,265 |   |
| Notes                payable                                                                       |   |           | 388,500    |                         |   | 388,500 |   |
| **TOTAL                LIABILITIES**                                                               |   |           | 525,638    |                         |   | 525,638 |   |
|                                                                                               |   |           |       |                         |   |   |   |
| Commitments                and contingencies                                                       |   |           |       |                         |   |   |   |
|                                                                                               |   |           |       |                         |   |   |   |
| **STOCKHOLDERS'                EQUITY**                                                            |   |           |       |                         |   |   |   |
| Common                stock, $.0001 par value. Authorized 200,000,000 shares;                      |   |           |       |                         |   |   |   |
| issued                and outstanding 941,726 shares at June 30, 2008                              |   |           | 94         |                         |   | 94 |   |
| Additional                paid in capital                                                          |   |           | 4,610,706  |                         |   | 4,610,706 |   |
| Unrealized                loss on available for sale securities                                    |   |           | -          |                         |   | (712,912 | ) |
| Accumulated                deficit                                                                 |   |           | (1,514,211 | )                            |   | (1,380,422 | ) |
| **TOTAL                STOCKHOLDERS' EQUITY**                                                      |   |           | 3,096,589  |                         |   | 2,517,466 |   |
| **TOTAL                LIABILITIES AND STOCKHOLDERS' EQUITY**                                      |   | $              | 3,622,227  |                         | $      | 3,043,104 |   |

----

**Chanticleer      Holdings, Inc.**

**Historical      and Consolidated Pro Forma Statements of Operations**

**For      the Three Months Ended June 30, 2008**

**(Unaudited)**

|                                                                          |   | **Historical** |     | **Pro                Forma** |   |
|-------------------------------------------------------------------------------|--------|----------------|----------|------------------------------|--------|
| **Income                from operations:**                                    |   |           |     |                         |   |   |   |
| Interest                and dividend income - affiliates                      |   | $              | 11,500   |                         | $      | - |   |
| Management                fee income - affiliates                             |   |           | 25,000   |                         |   | 25,000 |   |
|                                                                          |   |           | 36,500   |                         |   | 25,000 |   |
| **Expenses:**                                                                 |   |           |     |                         |   |   |   |
| General                and administrative expenses                            |   |           | 373,794  |                         |   | 392,367 |   |
| Interest                expense                                               |   |           | 5,947    |                         |   | - |   |
|                                                                          |   |           | 379,741  |                         |   | 392,367 |   |
| **Loss                before income taxes**                                   |   |           | (343,241 | )                            |   | (367,367 | ) |
| **Income                taxes**                                               |   |           | -        |                         |   | - |   |
| **Loss                from operations**                                       |   |           | (343,241 | )                            |   | (367,367 | ) |
| **Other                income (expense):**                                    |   |           |     |                         |   |   |   |
| **Equity                earnings (loss) of investments**                      |   |           | -        |                         |   | (2,778 | ) |
| **Interest                expense**                                           |   |           | -        |                         |   | (5,947 | ) |
| **Net                realized and unrealized gains (losses):**                |   |           |     |                         |   |   |   |
| Net                realized gain on investments, with no income tax provision |   |           | -        |                         |   | - |   |
| Change                in unrealized depreciation of investments,              |   |           |     |                         |   |   |   |
| net                of deferred tax benefit of $0                              |   |           | (627,470 | )                            |   | - |   |
| Other,                net                                                     |   |           | (627,470 | )                            |   | (8,725 | ) |
| **Net                loss**                                                   |   |           | (970,711 | )                            |   | (376,092 | ) |
| **Other                comprehensive income (loss):**                         |   |           |     |                         |   |   |   |
| **Unrealized                loss on available-for-sale securities**           |   |           | -        |                         |   | (427,470 | ) |
| **Comprehensive                loss**                                         |   | $              | (970,711 | )                            | $      | (803,562 | ) |
|                                                                          |   |           |     |                         |   |   |   |
| **Net                loss per share, basic and diluted**                      |   | $              | (1.087   | )                            | $      | (0.421 | ) |
| **Weighted                average shares outstanding**                        |   |           | 893,312  |                         |   | 893,312 |   |

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**Chanticleer      Holdings, Inc.**

**Historical      and Consolidated Pro Forma Statements of Operations**

**For      the Six Months Ended June 30, 2008**

**(Unaudited)**

|                                                                          |   | **Historical** |       | **Pro                Forma** |   |
|-------------------------------------------------------------------------------|--------|----------------|------------|------------------------------|--------|
| **Income                from operations:**                                    |   |           |       |                         |   |   |   |
| Interest                and dividend income - affiliate                       |   | $              | 23,000     |                         | $      | - |   |
| Management                fee income - affiliates                             |   |           | 178,555    |                         |   | 178,555 |   |
|                                                                          |   |           | 201,555    |                         |   | 178,555 |   |
| **Expenses:**                                                                 |   |           |       |                         |   |   |   |
| General                and administrative expenses                            |   |           | 666,540    |                         |   | 691,009 |   |
| Interest                expense                                               |   |           | 7,994      |                         |   | - |   |
|                                                                          |   |           | 674,534    |                         |   | 691,009 |   |
| **Loss                before income taxes**                                   |   |           | (472,979   | )                            |   | (512,454 | ) |
| **Income                taxes**                                               |   |           | -          |                         |   | - |   |
| **Loss                from operations**                                       |   |           | (472,979   | )                            |   | (512,454 | ) |
| **Other                income (expense)**                                     |   |           |       |                         |   |   |   |
| **Equity                earnings (loss) of investments**                      |   |           | -          |                         |   | 570 |   |
| **Interest                expense**                                           |   |           | -          |                         |   | (7,994 | ) |
| **Net                realized and unrealized gains (losses):**                |   |           |       |                         |   |   |   |
| Net                realized gain on investments, with no income tax provision |   |           | -          |                         |   | - |   |
| Change                in unrealized depreciation of investments,              |   |           |       |                         |   |   |   |
| net                of deferred tax benefit of $0                              |   |           | (665,908   | )                            |   | - |   |
|                                                                          |   |           | (665,908   | )                            |   | (7,424 | ) |
| **Net                loss**                                                   |   |           | (1,138,887 | )                            |   | (519,878 | ) |
| **Other                comprehensive income (loss):**                         |   |           |       |                         |   |   |   |
| **Unrealized                loss on available-for-sale securities**           |   |           | -          |                         |   | (465,908 | ) |
| **Comprehensive                loss**                                         |   | $              | (1,138,887 | )                            | $      | (985,786 | ) |
|                                                                          |   |           |       |                         |   |   |   |
| **Net                decrease in net assets from operations per share,**      |   |           |       |                         |   |   |   |
| **basic                and diluted**                                          |   | $              | (1.300     | )                            | $      | (0.593 | ) |
| **Weighted                average shares outstanding**                        |   |           | 876,247    |                         |   | 876,247 |   |

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**ITEM      2:**
**MANAGEMENT'S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS**

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**Critical      Accounting Policies and Estimates**

**Financial      Condition**

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**Comparison      of three months ended June 30, 2008 and 2007**

**Comparison      of six months ended June 30, 2008 and 2007**

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**ITEM      3:**
**QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**ITEM      4:**
**CONTROLS      AND PROCEDURES**

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**PART      II – OTHER INFORMATION**

**ITEM      1:**
**LEGAL      PROCEEDINGS**

**ITEM      1A:**
**RISK      FACTORS**

**ITEM      2:**
**UNREGISTERED      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

* *

**ITEM      3:**
**DEFAULTS      UPON SENIOR SECURITIES**

**ITEM      4:**
**SUBMISSION      OF MATTERS TO A VOTE OF SECURITY HOLDERS**

**ITEM      5:**
**OTHER      INFORMATION**

**ITEM      6:**
**EXHIBITS      **

| Exhibit                31 | 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 1350             |
|                      | Section                906 of the Sarbanes-Oxley Act of                2002 |

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**SIGNATURE**

|                                 |   | CHANTICLEER                HOLDINGS, INC.  |
|--------------------------------------|--------|-------------------------------------------------|
|                                 |   |                                            |   |
| Date:                August 11, 2008 |   | By:                                             | /s/                Michael D. Pruitt |
|                                 |   |                                            | Michael                D. Pruitt, |
|                                 |   |                                            | Chief                Executive Officer and |
|                                 |   |                                            | Chief                Financial Officer |

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