UNITED
STATES SECURITIES AND EXCHANGE COMMISSION





WASHINGTON,
DC  20549





FORM
10-Q





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





For
Quarter
Ended:                                           March 31, 2009





Commission
File Number:               000-29507





CHANTICLEER HOLDINGS,
INC.


(Exact
name of registrant as specified in its charter)





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





4201 Congress Street, Suite
145, Charlotte, NC  28209


(Address
of principal executive office) (zip code)





(704)
366-5122


(Issuer’s
telephone number)





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





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





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





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





The
number of shares outstanding of registrant’s common stock, par value $.0001 per
share, as of April 23, 2009, was 946,376 shares.





Chanticleer
Holdings, Inc. and Subsidiaries





INDEX





PageNo.Part
      I
                Financial
      Information (unaudited)Item
      1:
                Condensed
      Consolidated Financial Statements
                
                3Balance
      Sheets as of March 31, 2009 and December 31, 2008
                
                3Statements
      of Operations – For the Three Months Ended March 31, 2009 and
      2008
                
                4Statements
      of Cash Flows – For the Three Months Ended March 31, 2009 and
      2008
                
                5Notes
      to Financial Statements
                
                6Item
      2:
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                
                12Item
      3:
                Quantitative
      and Qualitative Disclosure about Market Risk
                
                15Item
      4:
                Controls
      and Procedures
                
                15Part
      II
                Other
      Information
                
                16Item
      1:
                Legal
      Proceedings
                
                16Item 1A:
                Risk
      Factors
                
                16Item
      2:
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                
                16Item
      3:
                Defaults
      Upon Senior Securities
                
                16Item
      4:
                Submission
      of Matters to a Vote of Security Holders
                
                16Item
      5:
                Other
      Information
                
                16Item
      6:
                Exhibits
                
                16


2





PART
      1:  FINANCIAL INFORMATIONITEM
      1:  CONDENSED FINANCIAL STATEMENTSChanticleer
      Holdings, Inc. and SubsidiariesConsolidated
      Balance SheetsMarch
      31, 2009 (Unaudited) and December 31, 20082009
                                                      
                                                      
                                                      2008ASSETSCurrent
      assets:Cash
      and cash equivalents
                                                      
                                                      $
                                                      27,819
                                                      
                                                      
                                                      $
                                                      14,151Due
      from affiliate
                                                      
                                                      
                                                      6,807
                                                      
                                                      
                                                      
                                                      5,150Prepaid
      expenses
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      4,255Total
      current assets
                                                      
                                                      
                                                      34,626
                                                      
                                                      
                                                      
                                                      23,556Property
      and equipment, net
                                                      
                                                      
                                                      34,010
                                                      
                                                      
                                                      
                                                      36,161Deferred
      acquisition costs
                                                      
                                                      
                                                      279,050
                                                      
                                                      
                                                      
                                                      279,050Investments
      at fair value
                                                      
                                                      
                                                      69,976
                                                      
                                                      
                                                      
                                                      108,545Other
      investments, principally accounted for under the equity
    method
                                                      
                                                      
                                                      2,037,598
                                                      
                                                      
                                                      
                                                      1,773,969Deposits
                                                      
                                                      
                                                      3,980
                                                      
                                                      
                                                      
                                                      3,980Total
      assets
                                                      
                                                      $
                                                      2,459,240
                                                      
                                                      
                                                      $
                                                      2,225,261LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable
                                                      
                                                      $
                                                      194,493
                                                      
                                                      
                                                      $
                                                      178,325Accrued
      expenses
                                                      
                                                      
                                                      500
                                                      
                                                      
                                                      
                                                      500Notes
      payable
                                                      
                                                      
                                                      500,000
                                                      
                                                      
                                                      
                                                      500,000Deferred
      revenue
                                                      
                                                      
                                                      302,083
                                                      
                                                      
                                                      
                                                      -Due
      to related party
                                                      
                                                      
                                                      55,550
                                                      
                                                      
                                                      
                                                      7,300Total
      current liabilities
                                                      
                                                      
                                                      1,052,626
                                                      
                                                      
                                                      
                                                      686,125Commitments
      and contingenciesStockholders'
      equity:Common
      stock, $.0001 par value.  Authorized 200,000,000
      shares;issued
      and outstanding 946,376 shares at March 31, 2009 andat
      December 31, 2008
                                                      
                                                      
                                                      946
                                                      
                                                      
                                                      
                                                      946Additional
      paid in capital
                                                      
                                                      
                                                      4,642,347
                                                      
                                                      
                                                      
                                                      4,642,347Accumulated
      other comprehensive loss
                                                      
                                                      
                                                      (1,188,594
                                                      )
                                                      
                                                      
                                                      (1,150,025
                                                      )Accumulated
      deficit
                                                      
                                                      
                                                      (2,048,085
                                                      )
                                                      
                                                      
                                                      (1,954,132
                                                      )Total
      stockholders' equity
                                                      
                                                      
                                                      1,406,614
                                                      
                                                      
                                                      
                                                      1,539,136Total
      liabilities and stockholders' equity
                                                      
                                                      $
                                                      2,459,240
                                                      
                                                      
                                                      $
                                                      2,225,261




See
accompanying notes to condensed consolidated financial
statements.


3





Chanticleer
      Holdings, Inc. and SubsidiariesConsolidated
      Statements of OperationsFor
      the Three Months Ended March 31, 2009 and 2008(Unaudited)2009
                                                
                                                
                                                2008RevenueManagement
      fee income from affiliate
                                                
                                                $
                                                25,000
                                                
                                                
                                                $
                                                25,000Consulting
      income
                                                
                                                
                                                78,417
                                                
                                                
                                                
                                                128,555103,417
                                                
                                                
                                                
                                                153,555Expenses:General
      and administrative expense
                                                
                                                
                                                205,004
                                                
                                                
                                                
                                                298,641205,004
                                                
                                                
                                                
                                                298,641Loss
      from operations before income taxes
                                                
                                                
                                                (101,587
                                                )
                                                
                                                
                                                (145,086
                                                )Income
      taxes
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Loss
      from operations
                                                
                                                
                                                (101,587
                                                )
                                                
                                                
                                                (145,086
                                                )Other
      income (expense)Unrealized
      loss from marketable equity securities
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (17,500
                                                )Equity
      in earnings of investments
                                                
                                                
                                                11,500
                                                
                                                
                                                
                                                3,348Interest
      expense
                                                
                                                
                                                (3,866
                                                )
                                                
                                                
                                                (2,047
                                                )Total
      other income (expense)
                                                
                                                
                                                7,634
                                                
                                                
                                                
                                                (16,199
                                                )Net
      loss
                                                
                                                
                                                (93,953
                                                )
                                                
                                                
                                                (161,285
                                                )Other
      comprehensive loss:Unrealized
      loss on available-for-sale securities
                                                
                                                
                                                (38,569
                                                )
                                                
                                                
                                                (20,938
                                                )Net
      comprehensive loss
                                                
                                                $
                                                (132,522
                                                )
                                                
                                                $
                                                (182,223
                                                )Net
      loss per share, basic and diluted
                                                
                                                $
                                                (0.10
                                                )
                                                
                                                $
                                                (0.19
                                                )Weighted
      average shares outstanding
                                                
                                                
                                                946,376
                                                
                                                
                                                
                                                859,292


See
accompanying notes to condensed consolidated financial statements.
  4


Chanticleer
      Holdings, Inc. and SubsidiariesConsolidated
      Statements of Cash FlowsFor
      the Three Months Ended March 31, 2009 and 2008(Unaudited)2009
                            
                            
                            2008Cash
      flows from operating activitiesNet
      loss
                            
                            $
                            (93,953
                            )
                            
                            $
                            (161,287
                            )Adjustments
      to reconcile net loss to net cash used inoperating
      activities:Change
      in unrealized (gain) loss of marketable securities
                            
                            
                            -
                            
                            
                            
                            17,500Depreciation
                            
                            
                            3,000
                            
                            
                            
                            2,930Equity
      in (earnings) loss of investments
                            
                            
                            (11,500
                            )
                            
                            
                            (3,348
                            )Change
      in other assets and liabilities:(Increase)
      decrease in accounts receivable
                            
                            
                            (1,657
                            )
                            
                            
                            -(Increase)
      decrease in prepaid expenses and other assets
                            
                            
                            4,255
                            
                            
                            
                            (15,250
                            )Increase
      (decrease) in accounts payable and accrued expenses
                            
                            
                            16,169
                            
                            
                            
                            11,152Increase
      (decrease) in deferred revenue
                            
                            
                            (72,917
                            )
                            
                            
                            (128,555
                            )Net
      cash used in operating activities
                            
                            
                            (156,603
                            )
                            
                            
                            (276,858
                            )Cash
      flows from investing activitiesPurchase
      of fixed assets
                            
                            
                            (850
                            )
                            
                            
                            (1,822
                            )Purchase
      of investments
                            
                            
                            -
                            
                            
                            
                            (120,000
                            )Distributions
      from equity investments
                            
                            
                            11,500
                            
                            
                            
                            11,500Proceeds
      from sale of investments
                            
                            
                            111,371
                            
                            
                            
                            -Net
      cash provided by (used in) operating activities
                            
                            
                            122,021
                            
                            
                            
                            (110,322
                            )Cash
      flows from financing activitiesProceeds
      from sale of common stock
                            
                            
                            -
                            
                            
                            
                            200,000Cash
      overdraft
                            
                            
                            -
                            
                            
                            
                            (25,736
                            )Loan
      from related party
                            
                            
                            48,250Loan
      proceeds
                            
                            
                            -
                            
                            
                            
                            214,228Net
      cash provided by financing activities
                            
                            
                            48,250
                            
                            
                            
                            388,492Net
      increase in cash and cash equivalents
                            
                            
                            13,668
                            
                            
                            
                            1,312Cash
      and cash equivalents, beginning of period
                            
                            
                            14,151
                            
                            
                            
                            183Cash
      and cash equivalents, end of period
                            
                            $
                            27,819
                            
                            
                            $
                            1,495Supplemental
      cash flow informationCash
      paid for interest and income taxes:Interest
                            
                            $
                            3,866
                            
                            
                            $
                            2,047Income
      taxes
                            
                            
                            -
                            
                            
                            
                            -





See
accompanying notes to condensed consolidated financial statements.




5


Chanticleer
Holdings, Inc. and Subsidiaries


Notes
to Consolidated Financial Statements
 (Unaudited)


NOTE
      1:
            NATURE
      OF BUSINESS





(1)
            Organization – The
      consolidated financial statements include the accounts of Chanticleer
      Holdings, Inc. (“Holdings”) and its wholly owned subsidiaries Chanticleer
      Advisors LLC (“Advisors”), Avenel Ventures LLC ("Ventures") and Avenel
      Financial Services LLC ("Financial") (collectively the “Company”,
      "Companies," “we”, or “us”).  All significant intercompany
      balances and transactions have been eliminated in
      consolidation.  Holdings was organized October 21, 1999, under
      the laws of the State of Delaware.  On April 25, 2005, the
      Company formed a wholly owned subsidiary, Chanticleer Holdings,
      Inc.  On May 2, 2005, Tulvine Systems, Inc. merged with and
      changed its name to Chanticleer Holdings, Inc.  Ventures has
      entered into consulting agreements with two clients and has received
      common stock from the clients for its business management and consulting
      services.  Financial was organized to provide unique financial
      services to the restaurant, real estate development, investment
      advisor/asset management and philanthropic
      organizations.  Initial services have not yet commenced and are
      expected to include captive insurance, CHIRA and trust
      services.





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





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





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





(3)
            General - The financial
      statements included in this report have been prepared by the Company
      pursuant to the rules and regulations of the Securities and Exchange
      Commission for interim reporting and include all adjustments (consisting
      only of normal recurring adjustments) that are, in the opinion of
      management, necessary for a fair presentation.  These financial
      statements have not been
audited.


6





Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations for interim reporting.  The Company believes that the
disclosures contained herein are adequate to make the information presented not
misleading.  However, these financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company’s Annual Report for the period ended December 31, 2008, which is
included in the Company’s Form 10-K.




NOTE
      2:
            CHANGE
      IN REPORTING ENTITY





From May
23, 2005 until July 21, 2008, the Company operated as a business development
company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940
Act”).  As such, the Company was subject to different reporting
requirements and methods of accounting for its investments.  With the
change back to being an operating company, the Company is no longer subject to
the requirements of a BDC and the Company was required pursuant to SFAS No. 154,
“Accounting Changes and Error Corrections” (“SFAS 154”) to retroactively modify
its financial statements as if it were not subject to the requirements of a BDC
during all periods presented.





The
following reports the effect of the change on net earnings (loss), other
comprehensive income and net earnings per-share for the three months ended March
31, 2009 and 2008:





2009
                                
                                
                                2008Net
      decrease in net assets from operations
                                
                                $
                                -
                                
                                
                                $
                                (168,176
                                )Fair
      value decrease recorded for available-for-sale
      securities now included in othercomprehensive
      loss
                                
                                
                                -
                                
                                
                                
                                20,938Equity
      in loss of investments
                                
                                
                                -
                                
                                
                                
                                (8,152
                                )Net
      loss of wholly-owned subsidiary notpreviously
      consolidated
                                
                                
                                -
                                
                                
                                
                                (5,895
                                )Net
      loss
                                
                                
                                (93,953
                                )
                                
                                
                                (161,285
                                )Other
      comprehensive loss:As
      originally reported
                                
                                
                                -
                                
                                
                                
                                -Unrealized
      losses on available-for-sale
      securities
                                
                                
                                (38,569
                                )
                                
                                
                                (20,938
                                )Net
      comprehensive loss
                                
                                $
                                (132,522
                                )
                                
                                $
                                (182,223
                                )Net
      loss per share, basic and diluted:As
      originally reported
                                
                                
                                N/A
                                
                                
                                $
                                (0.20
                                )Restated
                                
                                $
                                (0.10
                                )
                                
                                $
                                (0.19
                                )


7





NOTE
      3:
            INVESTMENTS





Investments
are summarized as follows at March 31, 2009 and December 31, 2008:





2009
                        
                        
                        2008Available
      for sale securities:Cost
                        
                        $
                        1,258,571
                        
                        
                        $
                        1,258,571Unrealized
      loss
                        
                        
                        (1,188,595
                        )
                        
                        
                        (1,150,026
                        )Total
                        
                        $
                        69,976
                        
                        
                        $
                        108,545Other
      investments:Investments
      using the equity method:Balance,
      beginning of period
                        
                        $
                        1,241,371
                        
                        
                        $
                        1,410,482Equity
      in earnings (loss)
                        
                        
                        11,500
                        
                        
                        
                        (123,111
                        )Distributions
      from investments
                        
                        
                        (52,871
                        )
                        
                        
                        (46,000
                        )Balance,
      end of period
                        
                        
                        1,200,000
                        
                        
                        
                        1,241,371Investments
      at cost
                        
                        
                        817,598
                        
                        
                        
                        442,598Investment
      deposits
                        
                        
                        20,000
                        
                        
                        
                        90,000$
                        2,037,598
                        
                        
                        $
                        1,773,969





Equity
investments consist of the following at March 31, 2009 and December 31,
2008:





2009
                        
                        
                        2008Carrying
      value:Chanticleer
      Investors, LLC (23%)
                        
                        $
                        1,150,000
                        
                        
                        $
                        1,150,000First
      Choice Mortgage (33 1/3%) (a)
                        
                        
                        -
                        
                        
                        
                        41,371Confluence
      Partners, LLC (50%)
                        
                        
                        50,000
                        
                        
                        
                        50,000$
                        1,200,000
                        
                        
                        $
                        1,241,371Equity
      in earnings (loss):Chanticleer
      Investors, LLC
                        
                        $
                        11,500
                        
                        
                        $
                        46,000First
      Choice Mortgage
                        
                        
                        -
                        
                        
                        
                        (169,111
                        )$
                        11,500
                        
                        
                        $
                        (123,111
                        )Distributions:Chanticleer
      Investors, LLC
                        
                        $
                        52,871
                        
                        
                        $
                        46,000Undistributed
      earnings (loss) included in accumulated deficit
                        
                        $
                        11,500
                        
                        
                        $
                        (208,629
                        )




(a)
liquidated in January 2009.


8





The
Company received investments in two companies in exchange for providing
management services for one year.  The Company recorded the
investments at their estimated fair market value and is amortizing the related
deferred revenue over the one year period in which services are being
provided.





NOTE
      4:
            RELATED
      PARTY TRANSACTIONS





Michael
D. Pruitt, the Company’s Chief Executive Officer, is also CFO and the sole
director of Syzygy Entertainment, Ltd.





The
Company had non-interest bearing advances in the amount of $55,550 and $7,300 at
March 31, 2009 and December 31, 2008, respectively, from a company partly owned
by Mr. Pruitt.





On July
31, 2006, the Company formed Chanticleer Investors II, LLC (“Investors
II”).  Investors II began raising funds in January 2007 for the
purpose of investing in publicly traded value securities and is managed by
Advisors.





The
Company’s CEO contributed 300,000 shares of SYZG to the Company in
2007.  The shares were valued at $600,000 based upon a liquidity
discount to the price at which SYZG was trading at the time.





NOTE
      5:
            COMMITMENTS
      AND CONTINGENCIES





PENDING
ACQUISITIONS


Hooters,
Inc.





On March
11, 2008, the Company entered into a Stock Purchase Agreement for the purchase
of Hooters, Inc., Hooters Management Corporation and their related restaurants
(collectively “HI”) from the nine current individual HI shareholders, many of
whom will continue to stay involved in the ongoing operation as shareholders of
Chanticleer.  The transaction is valued at approximately $55.1 million
and could close in the second quarter of 2009.





The
closing of the transaction is subject to Chanticleer raising the necessary debt
and equity financing to complete the acquisition.  Chanticleer has
retained an investment banking firm to assist in securing the equity capital
necessary to close the proposed transaction.  Chanticleer has
completed all other conditions and is in process of raising the necessary debt
and equity financing to complete the transaction.  (See current status
below.)





HI was
founded in 1983 and was the creator of the Hooters brand and
concept.  In 1984, HI licensed Neighborhood Restaurants of America,
n/k/a Hooters of America, Inc. (“HOA”), owned by a separate group of
shareholders, to be its exclusive licensee in the development and expansion of
its restaurant business.  In 2001 HI went on to sell the Hooters
trademarks and other related proprietary rights to HOA.  HI retained
and continues to own certain rights including a perpetual irrevocable license
agreement with greatly reduced royalties, to operate its restaurants in its
retained territories and, most importantly, to acquire franchisees within the
Hooters system.  These rights will be acquired by Chanticleer as a
part of the transaction.


9





Chanticleer
has an existing relationship with HOA through its position as the lead investor
in a $5 million, 6% convertible three-year promissory note from the Estate of
Robert Brooks, the former Chairman of HOA.  This note is secured by
and contains conversion options into 2% of Hooters of America outstanding
stock.  Chanticleer was also granted a right of first refusal and a
right to match any equity financing proposed to, or sought by,
HOA.  Additionally, Chanticleer currently holds an Option Agreement
with HOA to open Hooters franchises in the Republic of South Africa which is
under development.  The entire Hooters system, consisting of 433
restaurants in 28 countries, is currently celebrating its 25th
anniversary with events on the 25th of each
month and a grand pageant in Miami on July 23, 2008.





HI
currently owns and operates 22 restaurants, which comprise the highest average
unit gross sales within the Hooters system, and includes locations in and around
Tampa, Florida, Chicago, Illinois and the Manhattan regions, including the
original Hooters restaurant located in Clearwater, Florida.  These are
the operations of HI being acquired by Chanticleer.





Through
March 31, 2009, the Company has recorded $279,050 in deferred acquisition costs
related to the planned acquisition of HI.





Texas
Wings





On July
8, 2008, the Company entered into an Asset Purchase Agreement to acquire
substantially all of the assets of Texas Wings Incorporated and its 45 related
Hooters branded restaurants (collectively “Texas Wings”) for total consideration
of approximately $106 million, including approximately $53 million in cash,
approximately $37 million in Chanticleer common stock and convertible notes with
an aggregate principal amount of approximately $16 million (the
“Transaction”).





The
Company will create an operating company and combine Texas Wings with HI and its
22 Hooters restaurants, which the Company agreed to acquire in March
2008.





The
Transaction is subject to a number of customary closing conditions and could
close during the second quarter of 2009, concurrently with the closing of the HI
acquisition.  (See current status below.)





Current
Status





The
termination date for the Company’s pending acquisition of the stock of HI and
certain of its related entities followed immediately by the subsequent
acquisition of Texas Wings and certain of its related entities has
passed.  Although the sellers have not, to date, exercised their
rights to terminate the agreements and the Company continues to seek to
consummate these transactions, there is no assurance that the Company will be
able to close the pending acquisitions.


10





In
addition, the commitment letters from certain financial institutions to provide
one or more related entities of the Company the $85,000,000 Senior Secured
Credit have expired, primarily due to the inability of the Company to raise the
necessary equity portion of the financing at acceptable terms in today’s
financial environment.  The Company continues to communicate with the
financial institutions that agreed to provide the credit facility; however,
there can be no assurance that the Company will be successful in obtaining any
financing or that the terms of any credit facility in the future will be
acceptable to the Company.





NOTE
      6:
            GOING
      CONCERN





At March
31, 2009 and December 31, 2008, the Company had current assets of $34,626 and
$23,556; current liabilities of $1,052,626 and $686,125; and negative working
capital of $1,018,000 and $662,569, respectively.  The Company
incurred a loss of $93,953 during the three month period ended March 31,
2009.  The Company receives quarterly cash inflow of $25,000 from
management fees and $11,500 from investment distributions, but expects quarterly
cash requirements of approximately $130,000 per quarter commencing in the second
quarter of 2009, assuming the acquisitions discussed above are not
completed.





The
Company expects to have sufficient funding available from related party loans,
private placements of its common stock and sales of a portion of its investments
until the possible second quarter of 2009 close of the acquisitions of HI and
Texas Wings.  Subsequent to the close, the overhead requirements will
be covered by distributions from the operations of HI and Texas
Wings.





In the
event the acquisitions do not close, the Company expects to fund its reduced
overhead of approximately $130,000 per quarter from management income,
distributions from its investments and a short-term loan of no more than
$100,000 until May 2009, when the Company is scheduled to receive a distribution
from an investment in the amount of approximately $1,275,000.  At that
time, the Company plans to repay the line of credit, any other short-term
borrowings and have sufficient cash to cover all overhead requirements for at
least another year while increasing the funds which Advisors
manages.





The
Company formed Chanticleer Holdings, Ltd., a Jersey corporation, during the
first quarter of 2009.  The Company plans to transfer the franchise
rights for South Africa to this company and raise funds in Germany to develop up
to four restaurant locations.  The Company has a partner for half of
the development costs.





If the
above events do not occur or if the Company does not raise sufficient capital,
substantial doubt about the Company’s ability to continue as a going concern
exists.  These consolidated financial statements do not reflect any
adjustments that might result from the outcome of these
uncertainties.


11





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





The
following discussion should be read in conjunction with our financial statements
and notes thereto included elsewhere in this Form 10-Q.  This Form
10-Q contains forward-looking statements regarding the plans and objectives of
management for future operations.  This information may involve known
and unknown risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different from future
results, performance or achievements expressed or implied by any forward-looking
statements.  Forward-looking statements, which involve assumptions and
describe our future plans, strategies and expectations, are generally
identifiable by use of the words “may,” “will,” “should,” “expect,”
“anticipate,” “estimate,” “believe,” “intend,” “project” or the negative of
these words or other variations on these words or comparable
terminology.  These forward-looking statements are based on
assumptions that may be incorrect, and we cannot assure you that the projections
included in these forward-looking statements will come to pass.  Our
actual results could differ materially from those expressed or implied by the
forward-looking statements as a result of various factors.





We
registered our common stock on a Form 10-SB registration statement filed
pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule
12(g) thereof.  We filed with the Securities and Exchange Commission
periodic and episodic reports under Rule 13(a) of the Exchange Act, including
quarterly reports on Form 10-QSB and annual reports on Form 10-KSB until we
became a BDC when we began filing reports on Form 10-Q and Form
10-K.





On June
1, 2005, we filed a notification on Form N54a with the U.S. Securities and
Exchange Commission, (the “SEC”) indicating our election to be regulated as a
business development company (a “BDC”) under the Investment Company Act of 1940
(the “1940 Act”).  Under this election, we adopted corporate
resolutions to operate as a closed-end management investment company as a
BDC.  We operated as a non-diversified company as that term is defined
in Section 5(b)(2) of the 1940 Act and at all times conducted our business so as
to retain our status as a BDC.  We could not change the nature of our
business so as to cease to be, or withdraw our election as, a BDC without the
approval of the holders of a majority of our outstanding voting stock as defined
under the 1940 Act.





Withdrawal
of the Company’s election to be treated as a BDC under the 1940 Act became
effective on July 21, 2008, when the Company filed Form N-54c with the SEC,
following approval by a majority of the Company’s shareholders.





Critical
Accounting Policies and Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements.  Critical accounting policies are those that are both
important to the presentation of our financial condition and results of
operations and require management’s most difficult, complex, or subjective
judgments.  Our most critical accounting policy relates to the
valuation of our investments.


12





Liquidity
and capital resources





At March
31, 2009, we had a working capital deficit of $1,018,000 as compared to $662,569
at December 31, 2008.  Our working capital declined
$355,431.  The decline consisted primarily of the increase in deferred
revenue of $302,083 and the net loss for the period of $93,953.





As
discussed in more detail in Note 5 to the condensed consolidated financial
statements, on March 11, 2008, the Company entered into a Stock Purchase
Agreement for the purchase of Hooters, Inc., Hooters Management Corporation and
their related restaurants (collectively “HI”) from the nine current individual
HI shareholders, many of whom will continue to stay involved in the ongoing
operation as shareholders of Chanticleer.  The transaction is valued
at approximately $55.1 million and could close in the second quarter of
2009.





On July
8, 2008, the Company entered into an Asset Purchase Agreement to acquire
substantially all of the assets of Texas Wings Incorporated and its 45 related
Hooters branded restaurants (collectively “Texas Wings”) for total consideration
of approximately $106 million, including approximately $53 million in cash,
approximately $37 million in Chanticleer common stock and convertible notes with
an aggregate principal amount of approximately $16 million (the
“Transaction”).





The
Company will create one operating company and combine Texas Wings with HI and
its 22 Hooters restaurants, which the Company agreed to acquire in March
2008.  Texas Wings is one of the strongest franchises in the Hooters
restaurant system and when combined with HI, which was the original creator of
the Hooters concept, are expected to become the standard bearer for the Hooters
brand.





The
closing of the transactions are subject to Chanticleer raising the necessary
debt and equity financing to complete the acquisition and other customary
closing conditions.  Chanticleer has retained an investment banking
firm to assist in securing the equity capital necessary to close the proposed
transaction.





When HI
sold the Hooters brand to Hooters of America, HI retained unique acquisition and
operational rights, which will benefit the Company going forward.  HI
has the right to acquire existing Hooters franchisees without the consent of the
franchisor, and HI has significant flexibility in the manner in which it
operates its restaurants, rights that will benefit the Texas Wings business upon
the closing of the Transaction.





On April
1, 2008, the Company advanced $120,000 to Tyler NV, Inc. for the initial
required deposit to Hooters of America for development rights within the state
of Nevada for Hooters restaurants.  The Company had $50,000 of this
amount returned in December 2008 and received the balance of $70,000 in the
first quarter of 2009.


13





On April
12, 2007, the Company filed an Offering Circular under Regulation E promulgated
under the Securities Act of 1933 to raise up to $5,000,000 by selling between
400,000 and 714,286 shares of its common stock at prices ranging between $7.00
and $12.50 per share.  The offering was closed on February 11, 2008
with $650,000 received for 92,859 shares of common stock during the offering
period.





On March
27, 2008, the Company filed a new Offering Circular under Regulation E to raise
up to $4,500,000 by selling between 500,000 and 1,000,000 shares of its common
stock at prices ranging between $4.50 and $9.00 per share.  The
Company sold 83,532 shares for $584,700 pursuant to this 1-E, which was closed
on July 18, 2008.





Comparison
of three months ended March 31, 2009 and 2008





Revenues
amounted to $103,417 in the three months ended March 31, 2009, as compared to
$153,555 in the year earlier period.  In both periods, the Company
received equity investments for its management services and cash management fees
of $25,000 in each period from an affiliated partnership it
manages.





General
and administrative expense amounted to $205,004 in the 2009 quarter as compared
to $298,641 in the 2008 quarter.  The principal decreases were
professional fees of $69,705, printing and reproduction of $14,315 and travel
and entertainment of $10,732.  The professional fees in 2008 were
higher due to the initial work being done to raise capital for the pending
acquisitions.





Other
income (expense) amounted to $7,634 in 2009 and ($16,199) in
2008.  The Company recorded an unrealized loss in 2008 from marketable
equity securities in the amount of $17,500.  All marketable equity
securities were sold by the end of 2008.


14





ITEM
      3:
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Market
risk is the risk of loss arising from adverse changes in market rates and
prices.  We are primarily exposed to equity price
risk.  Equity price risk arises from exposure to securities that
represent an ownership interest in our portfolio companies.  The value
of our equity securities and our other investments are based on quoted market
prices or our Board of Directors’ good faith determination of their fair value
(which is based, in part, on quoted market prices).  Market prices of
common equity securities, in general, are subject to fluctuations, which could
cause the amount to be realized upon sale or exercise of the instruments to
differ significantly from the current reported value.  The
fluctuations may result from perceived changes in the underlying economic
characteristics of our portfolio companies, the relative price of alternative
investments, general market conditions and supply and demand imbalances for a
particular security.




ITEM
      4:
              CONTROLS
      AND PROCEDURES
  (a) Evaluation of Disclosure
Controls and Procedures





The
Company’s Chief Executive Officer has reviewed and evaluated the effectiveness
of the Company’s disclosure controls and procedures (as defined in Rules
240.13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of
1934) as of March 31, 2009.  Based on that review and evaluation,
which included inquiries made to certain other employees of the Company, the CEO
concluded that the Company’s current disclosure controls and procedures, as
designed and implemented, are effective in ensuring that information relating to
the Company required to be disclosed in the reports the Company files or submits
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms, including insuring that such information is
accumulated and communicated to the Company’s management, including the CEO, as
appropriate to allow timely decisions regarding required
disclosure.





(b)  Changes in
Internal Controls





There
have been no significant changes in internal controls or in other factors that
could significantly affect these controls during the quarter ended March 31,
2009, including any corrective actions with regard to significant deficiencies
and material weaknesses.




15


PART II – OTHER
INFORMATION







ITEM
      1:
            LEGAL
      PROCEEDINGS




Not
applicable.





ITEM
      1A:
            RISK
      FACTORS





Not
applicable.




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




Not
applicable.




ITEM
      3:
            DEFAULTS
      UPON SENIOR SECURITIES




Not
applicable.




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




Not
applicable.




ITEM
      5:
            OTHER
      INFORMATION




Although
the Company does not currently employ a Chief Financial Officer, Michael D.
Pruitt, President and Chief Executive Officer, is also the principal accounting
officer.




ITEM6:
            EXHIBITS





The
following exhibits are filed with this report on Form 10-Q.





Exhibit
      31
            Certification
      pursuant to 18 U.S.C. Section 1350Section
      302 of the Sarbanes-Oxley Act of
2002





Exhibit
      32
            Certification
      pursuant to 18 U.S.C. Section 1350Section
      906 of the Sarbanes-Oxley Act of
2002


16


SIGNATURE





Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





CHANTICLEER
      HOLDINGS, INC.Date:
      May 1, 2009
              By:
              /s/ Michael D. PruittMichael
      D. Pruitt,Chief
      Executive Officer andChief
      Financial Officer


17